Defining a company

The company is the highest organizational element in the General Ledger application. It can represent any business or legal entity of an organization, such as a corporation, holding company, division, or region. You can assign a chart of accounts, base operating currency, fiscal calendar, and optional security safeguards to a company. This procedure describes the process for defining a general ledger company.

Note: Before you define your company, you must define your chart of accounts. You should also review your options and determine the number of companies you require.
Procedure flow: defining a company

Defining a company

  1. Access Company (GL10.1).
  2. On the Main tab, specify a company number and name.
  3. Specify the required information on the Main tab, including the chart of accounts, base currency, and accounting periods using these guidelines:
    Status

    Select the status of the general ledger company. These are the available options:

    • Live: this is the default and represents an active company.

    • Test: indicates that the company is used for testing purposes only. You can clear balances and transactions for a company with a test status.

    • Delete: marks the company for deletion before running the company delete program.

    • Consolidation: indicates the company is used to consolidate financial information for an organization. See What Is a Consolidation Company?.

    • Elimination: indicates the company is used to hold intercompany eliminating journal entries.

    Number of Periods

    Specify the number of accounting periods in the company fiscal year. A company can have as few as 1 period or as many as 13 periods. Consider how period 13 is used by the Budgeting system and when you auto reverse journal entries. If you spread an annual budget amount, then it is spread over all periods.

    Zones

    Select whether the company will use zones. If you use zone balancing, then you must specify a default zone. See What Is a Zone?.

    Note: You can change a level's description at a later date, but you cannot change a level's size. You can also add new levels in the future.
  4. Define levels using the Budget tab using these guidelines:
    Budget Edit Date Range

    Select how the system will edit your budget. These are the budget edit range options:

    • N: no edit

    • P: period budget edits against the detailed or summarized budget for the period

    • Y: year to date budget edits based on the current period year-to-date budget amount

    • A: annual budget edits against the total detailed or summarized budget for the year

    Note: A warning message will display if you select a budget edit date range but have not defined a commitment budget.
    Budget Edit Type

    Select the type of edit that you want:

    • Detail: The system will use a specific accounting unit and account to edit the budget.

    • Summary:The system will use a budget edit group, defined on Budget Edit Group (FB11.1), to edit the budget. If a budget edit group does not exist for the account, then a detail edit is performed.

    Note:  To learn how to define a budget edit group, see the General Ledger Budgeting User Guide.
    Tolerance

    (Optional) Specify a percent by which commitments, encumbrances, and actuals may exceed the budgeted amount.

  5. Define levels using the Hierarchy tab using these guidelines:
    Description

    Specify a description of the levels in the company structure. Examples of levels are division, department, region, and store. You can define up to five levels of accounting units. Specify only the levels you need immediately, and add more levels, as needed.

    Size

    Specify the size of the level, which determines the maximum number of accounting units you can define at that level. Most organizations find that a level size of 3 or 4 suits their needs.

    Note: Ensure that you select the correct level size. Once you specify a level size, you cannot change it. Selecting a size that is too small limits the future growth options, and selecting a size that is too large unnecessarily slows reporting and can limit future growth for any unused levels.
  6. Specify the period end dates for the company using the Calendar tab. Use these guidelines to enter field values:
    Current Year Date

    Specify the period end dates for the current year.

    Last Year Date, Next Year Date

    The system automatically generates last year and next year dates when you add the company. You can change these dates if you need to reflect a unique calendar, such as if you use a 4-4-5 calendar.

    Note: You can only change a period date if there are no postings in that period.
  7. If the company uses more than one currency, then you must specify the currency options on the Currency tab. Consider these fields:
    Table

    If the company processes transactions in more than one currency, then you can use a currency table that identifies currency relationships, exchange rates, and translation rates that one or more companies can use.

    The table must exist in CU00.1 (Currency Table).

    Currency Ledger

    If you need to produce balanced balance sheets by transaction currency in order to access currency rate risk exposure, then select Yes in the Currency Ledger field.

    Note: This is a common business requirement for financial services organizations.

    When you select Yes, these transactions are automatically balanced. The default setting is No, which converts amounts associated with the transaction code to the base currency when you release the journal entry.

    Flagging currency ledger allows you to produce balanced transaction amounts by transaction currency and maintain the undistributed retained earnings and retained earnings account for each transaction currency. You can set up a report for transaction currency on General Ledger Report Setup (GL50.1) or by using the Financials Data Mart. See Using Lawson Business Intelligence to create data marts.

    Auto Base Balance

    Select Yes if automatic balancing in base currency is to be performed when a journal entry is released. If you select Yes, then you must use System Accounts (GL00.7) to select the balancing account to be used for balancing adjustment entries.

    Note: This option creates entries for rounding differences if you are processing in multiple currencies.
    Currency Exchange, Currency Translation

    If you will be using currency exchange or currency translation, then select Yes in one or both of these currency conversion fields. Click the Currency Accounts button to specify the currency gain/loss accounts. See the Currency User Guide.

    Report Currency

    You can select one or two existing currency codes to use as report currencies. Report currency is an additional nonbase currency that you use for reporting and analysis. Report currencies are included on journal entries and stored for account balances.

    Note: You can use Report Currency Purge (GL310) if you ever need to purge a report currency. See the Currency User Guide.
    Note: See the Currency User Guide for detailed concepts and procedures related to currency setup.
  8. Specify the journal options on the Journal tab using these guidelines:
    Auto Journal Numbering

    Select whether you want the system to automatically number journal entries. This flag applies to General Ledger journal entries only; subsystem journal entries are numbered automatically.

    Allow Unrelease of Released Entries

    Select Yes to be able to unrelease journal entries that were released. Use this feature to be able to make changes to entries after release.

    To modify transactions that have Activity information, you must select Unrelease without AC from the FC field. This will prevent the modifications from being posted to AC when the transaction is re-released.

    Allow Backout of Posted Entries

    Select Yes to be able to back out (unpost) journal entries. When you back out a journal entry, you leave no audit trail of the original posting. When a period is closed, journal entries are assigned a status of History and can no longer be backed out.

    Note: An alternative to backing out a journal entry is copying the entry, reversing it, and creating a new, corrected entry. This method provides an audit trail.
    JE Approval Amount

    To flag journal entries over a minimum amount for Workflow approval, specify the minimum journal entry amount that requires approval. Upon release, journal entries with an amount greater than or equal to the defined approval amount are routed to the Workflow system for approval. You must also select Yes in the Workflow field. If you leave this field blank and select Yes in the Workflow field, then all journal entries are routed to the Workflow system for approval.

    Note: As an option, you can assign security to the Unrelease and Backout line actions for Journal Control (GL45.1). Use security to define the users who are authorized to unrelease or back out entries instead of allowing this for all users in a company.
  9. To provide address and communication information to the Report Writer application, select an address code and provide additional contact information on the Address tab.
  10. To define additional information for use in the Report Writer application, specify up to three user fields on the User Fields form tab.

Related reports and inquiries

To Run
List company parameters Company Listing (GL210)
Copy an existing company, zero out company balances and transactions, or delete a company Company Copy Delete (GL110)
Related topics