GL - Journal Entry & Import
This article explains the process of entering and importing general ledger journals in automated accounting systems. Learn about the basic validations that must happen before the accounting data can be imported from any internal or external sub-system to the general ledger. Finally, understand what we mean by importing in detail or in summary.
Recording Journals in General Ledger:
Journals can either be directly entered in General Ledger or can be imported from Sub Ledgers. Most of the journals are created along-with business transactions like sales, purchases, receipts, and payments and get recorded in respective sub-ledgers. As sub-ledgers generally capture data at a more granular level, the relevant accounting information must flow to the general ledger for posting and subsequent reporting. From sub-ledgers, they need to be imported to the general ledger for financial recording and reporting.
Journal Entries can also be created manually in General Ledger by entering all the relevant accounting information. ERPs can also automate certain types of Journal Entries like recurring, reversing, or allocating journals. In case of manual entry follow the steps and guidelines outlined in the Recording Journals tutorial.
Importing – Detail V/s Summarized:
While importing journals from Sub Ledgers, journals can be clubbed together for the same accounts and posted in General Ledger as summarized.
Various general ledger systems provide the functionality to create Summary Journals which summarize all transactions for the same account, period, and currency into one debit or credit journal line. This results in fewer transactions in the general ledger systems and makes financial reports more manageable in size. In the case of summary journal users, lose the one-to-one mapping of detail transactions in the sub-ledger to the summary journal lines created by the import process. However most of the organizations use this feature as this prevents too many transactions in GL Accounts and transactions get clubbed based on category, type, or transaction source.
Using the drill-down functionalities available in most of the modern general ledger systems, users can still perform various review and analysis functions, as even if the system creates summary journals, it can still maintain a mapping of how Journal Import summarizes sub-ledger detail transactions from feeder systems into general ledger journal lines.
Journal Import Validations:
ERP’s and automated accounting systems must have built in validations during the import process to ensure that the data is correct and complete. An effective Journal Import program should validate key accounting information before it creates journal entries in the General Ledger application to prevent errors and reconciliation efforts.
Given below are some of the common data validations that can happen during the GL Import process:
1. Suspense Posting:
Suspense posting puts the remaining amount in the suspense account in case the debits and credits of the journal are not matching. In case it is not required, Journal Import should reject all invalid lines that do not balance.
2. Duplicate Batch Name:
If the batch name is a unique field then Journal Import should ensure that a batch with the same name does not already exist for the same period in the General Ledger application. Similarly, it must also check to ensure that more than one journal entry with the same name does not exist for a batch.
3. Other Attributes:
Attributes that can be validated to ensure that journals contain the appropriate accounting data could be accounting books, period, source, currency, category, accounting date, reversal period, account validation, account code combinations, effective date, roll date, and any other required validations.
Import Using Excel:
In today’s accounting world, financial and operational data typically is stored in a variety of programs and formats. Excel is one of such tools, most widely used by the accountants! When accountants need to prepare a report based on data from various systems, the first step is to export the data into Excel. Many times accounting information is stored in chronological order in excels by the accountants, and examples include adjusting entries and recurring entries.
Benefits of using the excel upload feature are that it makes life much easier for data operator and accounts executives. The great flexibility of excel based application increases productivity and results in reduced training costs as most users are already familiar with the excel functionalities and also improves user acceptance for automated systems. The biggest benefit comes from the fact that excel upload can also work in disconnected environments.
Typically, most of the automated systems provide the functionality to import accounting data from Excel to the general ledger and create journals. Most ERPs provide the ability to upload journals using the MS Excel worksheet. You can create journals in Excel Template and upload directly to General Ledger.
Related Links
You May Also Like
-
An allocation is a process of shifting overhead costs to cost objects, using a rational basis of allotment. Understand what is the meaning of allocation in the accounting context and how defining mass allocations simplifies the process of allocating overheads to various accounting segments. Explore types of allocations and see some practical examples of mass allocations in real business situations.
-
General Ledger - Advanced Features
Modern automated general ledger systems provide detailed and powerful support for financial reporting and budgeting and can report against multiple legal entities from the single system. These systems offer many advanced functionalities right from journal capture to advanced reporting. This article will provide an overview of some advanced features available in today's General Ledgers.
-
Different Types of Organizational Structures
Modern business organizations run multiple product and service lines, operate globally, leverage large number of registered legal entities, and operate through complex matrix relationships. To stay competitive in the current global business environment, they must often develop highly diverse and complex organizational structures that cross international borders.
-
GL - Journal Posting and Balances
In this tutorial, we will explain what we mean by the posting process and what are the major differences between the posting process in the manual accounting system compared to the automated accounting systems and ERPs. This article also explains how posting also happens in subsidiary ledgers and subsequently that information is again posted to the general ledger.
-
In this article we will discuss various types of "Management Entities". Various types of operational units, are created by management, to effectively run, manage and control their business. Different types of functional units, and divisional units, are widely used across industry.
-
For any company that has a large number of transactions, putting all the details in the general ledger is not feasible. Hence it needs to be supported by one or more subsidiary ledgers that provide details for accounts in the general ledger. Understand the concept of the subsidiary ledgers and control accounts.
-
Defining Organizational Hierarchies
A hierarchy is an ordered series of related objects. You can relate hierarchy with “pyramid” - where each step of the pyramid is subordinate to the one above it. One can use drill up or down to perform multi-dimensional analysis with a hierarchy. Multi-dimensional analysis uses dimension objects organized in a meaningful order and allows users to observe data from various viewpoints.
-
In some of the ERP tools, there are more than 12 accounting periods in a financial year. This article discusses the concept of accounting calendar and accounting periods. Learn why different companies have different accounting periods. Understand some of the commonly used periods across different organizations and the definition & use of an adjustment period.
-
Matrix Organizational Structures
In recent times the two types of organization structures which have evolved are the matrix organization and the network organization. Rigid departmentalization is being complemented by the use of teams that cross over traditional departmental lines.
-
An account inquiry is a review of any type of financial account, whether it be a depository account or a credit account. In this tutorial, you learn what we mean by drill through functionality in the context of the general ledger system. We will explain the concept of drill-down and how it enables users to perform account and transaction inquiry at a granular level and the benefits of using this functionality.
