On-Line Manual
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Setting up the General Ledger:
In
brief, a business has "income" and "expenditure". Income is generated mostly by
sales but also by means like bank interest. (Sorry, attempt at humor!)
Expenditure is any money you pay out in day to day business which includes
things like parts, wages, rent, insurance, power, phone, superanuation, the list
seems endless! All going well, your income is greater than your expenditure and
you make a profit.
To generate accurate,
functional reports, you must set up the ledger in an appropriate fashion so G-E
can calculate the figures correctly. Remember, a computer can't think, only
compute, which it can do extremely fast and without getting bored. G-E tells the
processor where to find figures etc. and what to do with them. We set up the
program to make it as easy as we can for you to enter the figures etc. in the
correct places. When the program sends the processor to fetch a number, we can
only expect to get the correct number. It is up to you to ensure figures etc.
are entered correctly. Unfortunately, we can't check for incorrect entries here
as we don't know your business and therefore don't know if the numbers you enter
are correct.
Layout:
The
"layout" consists of "Categories" and "Columns". (Just like a cash book). It is
in the columns that G-E stores the information. An example of a category could
be "PARTS SUPPLIERS". An example of a column could be "Auto One Spares". In this
example, "Auto One Spares" would be a sub-category of "PARTS SUPPLIERS". We call
this sub-category a "Column" as it would normally be a column in a general
ledger book. The number of categories and columns in categories is unlimited,
but bear in mind a general ledger categorized too far could be a monster to work
with.
G-E has two default columns, "Bank" and "Cash". Bank and Cash are
categories and columns rolled together. The "Bank" lists all transactions you
enter, money you deposit, cheques you write etc. "Cash" is the cash-on-hand you
have in the kitty. If you take a payment from someone, you put the money in the
kitty until you bank it. G-E does this automatically. All payments received are
added to the cash column automatically. The total in the cash column should
match the physical total in the kitty.
"Categories" are represented in
G-E by all upper case characters. You create categories and give them a name.
The same applies to "Columns". You create a column and name it.
Before
the General Ledger can be of any use, you must create some categories and
columns.
Transfers:
Now that the layout of the Ledger is understood and categories and columns have
been created, the ledger becomes a useful tool. Like any ledger, it functions by
moving funds from one column to another. The funds are injected into the ledger
mainly from payments being taken from clients. When a payment is entered, the
payment is recorded in the Cash Column and the amount in the Cash Column
increases. The total amount in the Cash Column should match the physical cash on
hand. Regular comparisons between the two is useful for catching missed client
payments and cash expenditure that has not been entered in the ledger. When the
physical amount of cash on hand is great enough, we do the banking. Doing the
banking in the ledger involves transferring the banked amount from the Cash
Column to the Bank Column. Generally, we pay our suppliers with cheques. When we
do this, we transfer funds from the Bank Column to the Supplier columns.
The ledger
system in G-E is completely editable. Any errors in transfers can be easily
corrected and transfers can be deleted from the system.
Tips:
G-E's
Ledger system is pretty vast. It is capable of recording all
your business finances and every financial transaction you
perform. Like any ledger system, it is going to be only as good
as the input from you. If you feed it garbage, expect garbage out!
The ledger forms an integral component in GST calculations. All GST expenditure information is calculated from ledger columns. It is therefore advisable to keep the ledger up to date and ensure your figures are accurate.
Bank
Account reconciliation is the normal method of ensuring most business
figures are correct. G-E has a bank reconciliation function to compare
the ledger figures with your bank statements. Use the "Reconcile
Bank" function when you get your bank statements. The more
you delay with bank reconciliation after receiving the bank statements,
the more difficult it is to track down balancing errors, just like
a cash book!
Before
proceeding with the Ledger, please review the Categories and Columns as these
are the fundamental building blocks of the ledger system.
Do the Banking
=>
Pay Supplier
Other Transfers
=>
Edit Transfer =>
Category =>
Column =>
Column Listing
Transactions Report
Outstanding Debtors
Uncleared Payments
Creditors
Owed
Process Creditor
Reconcile Bank
Income / Expenditure
GST Report