AD-A General Ledger Defaults

Purpose of Program

Use this program to enter or change system wide General Ledger default account codes, as well as to set posting controls.

Setup Tab Field Descriptions

GL Posting Defaults

You may choose not to have some types of GL transactions generated by the manufacturing system post to the General Ledger.  Regardless whether GL posting occurs, the manufacturing side of the system tracks all transactions and costs and reports can be used as supporting documents to make Journal entries.  If GL Posting is set to Y for any of the transaction types, the GL accounts posted to will be the System Default accounts defined later in this program unless specific Item Class GL accounts are defined in SM-C  Enter Item Classes for a given Item Class and Inventory Location.

Post COGS transactions?

If this flag is set to Y, then when invoices are posted in SO-G Post Invoices a GL transaction will be posted debiting COGS and crediting Inventory for the cost of the items on the invoice.  Invoice posting will make GL postings to Accounts Receivable, Sales, and Sales Tax Withheld, Commission Expense and Freight Out as applicable regardless of this flag setting.

Post PO transactions?

If this flag is set to Y, then when Purchase Orders are received in PO-C  Receive Purchase Orders , a GL transaction will be posted debiting Inventory or WIP and crediting Purchase Orders Received/Not Invoiced.  When the vendor invoice is entered in AP-C  Enter Purchase Order Invoices , a GL transaction will be posted crediting Accounts Payable and debiting Purchase Orders Received/Not Invoiced and PO Freight In and PO Sales Tax Expense, as applicable.

Post Inventory Adjustments?

If this flag is set to Y, then adjustments to inventory made using either IN-C  Enter Inventory Adjustments or IN-K  Adjust Physical Levels will post a transaction between Inventory and COGS, either debiting or crediting depending whether the inventory is increased or decreased by the adjustment.

Post WO transactions?

If this flag is set to Y, then all transactions in and out of WIP will create GL Transactions.  Materials Issued to Work Orders will debit WIP and credit Inventory.  Labor charged to Work Orders will debit WIP and credit the Absorbed Labor and Overhead accounts.  Finished Production will credit WIP and debit inventory and any variance posting will post between WIP and WIP Variance with the debit or credit determined by whether the variance is positive or negative.

Permit use of Item Class GLs?

If this flag is set to N, then all GL posting will use the system default accounts for Inventory, COGS, Sales, WIP, and Absorbed Labor and Overhead for all postings.  If this is set to Y, then the system default GL accounts can be overridden for a given Item Class and Location by making an entry in SM-C  Enter Item Classes .

Fiscal Year Date

If you are on a calendar year, this would be 1/01/01, 1/01/02, etc.  If you are on a non-calendar fiscal year, then this is the starting date of your year.  This is automatically updated when you run AM-B  Fiscal Year End Routine.

CAUTION: Once the Fiscal Year Date is set, it is never manually re-set.  The only time you should ever make an entry in this field is during system startup.

Open Period Start Date

This is the first day of the current open period that postings will be allowed.  Should you need to make a backdated entry to a period prior to this date, simply change the date here, post the entry and then change the date back.

Open Period End Date

This is the last day of the current open period that postings will be allowed.

Future Post Date Control (P/G)

P means that no transactions later than the Period End Date can be posted.  A G means that Journal entries in GL-B are allowed but transactions from other modules are not.

Accounting Open Period Start Date

This is the first day of the current open period that postings to GL-B  Enter/Post General Journal Trxns, AP-B  Enter Vouchers and AR-C Record Payments will be allowed based on individual default settings for each program.  Should you need to make a backdated entry to a period prior to this date, simply change the date here, post the entry and then change the date back.

Use Open Period Start Date in GL-B

Enter Y if you want   GL-B  Enter/Post General Journal Trxns to use the Accounting Open Period Start date rather than the overall Open Period Start Date.

Use Open Period Start Date in AR-C

Enter Y if you want AR-C Record Payments to use the Accounting Open Period Start date rather than the overall Open Period Start Date.

Use Open Period Start Date in AP-B

Enter Y if you want AP-B  Enter Vouchers to use the Accounting Open Period Start date rather than the overall Open Period Start Date.

Default GL Account Codes

None of the GL account code fields described below can be left blank.  If you do not plan to use a particular account, you should enter the same account number you will use as your GL Clearing Account (see below).  These are the default accounts to which your transactions will be posted.

NOTE: All account codes you enter can also include a department code.  We recommend confining the use of department codes to income and expense accounts.  See AM-D, Enter General Ledger Departments, for a discussion of department codes.

ACCOUNTING/SALES GL ACCOUNT CODES TAB

GL  Current Earnings

Current Earnings is the account where the net income/loss for the current year is posted when printing a balance sheet in GL-F  Print Financial Statements or in GL-N  Print Custom Statements.  This is always a calculated amount without any actual posted entries in the General Ledger transaction file.  This is an owner's equity account.

GL  Retained Earnings

The income/loss for years prior to the current fiscal year are maintained in this account.  When you run AM-B  Fiscal Year End Routine at fiscal year end, each income and expense account for the fiscal year gets a year end entry that brings its balance down to zero, and a single corresponding entry is made to this account that represents the net income or loss for the year.  Entries posted to prior years for income and expense accounts also automatically have a closing entry posted to this account.   Transactions may be posted to this account as for example a payment of profit or dividends to owners.  Adjustments to prior year earnings should be posted to the appropriate income or expense account and the Retained Earnings will automatically be updated.  This is an owner's equity account.

GL  Clearing Account

This account is used if a GL account code is not found during a posting.  You must enter a GL clearing account code.  If you do not set up this account, any GL account not found during a posting will result in a transaction that will put your accounts out of balance.  By using this clearing account, you can ensure that no transactions will be lost.  We recommend an account number such as 99999, so that it is always at the end of your chart of accounts.  It is important that this account be made a type O" account (Owner¡¦s Equity).

AP  Accounts Payable

The account code for your Accounts Payable GL account.  This is a liability account.

AP  Discounts Taken

If your vendors offer discount terms on their payables, the system will post those discounts to this account.  This can be either an expense or income account.

AP  Deposits

The account code for advance payments of deposits to vendors.  This is an asset account.

AR  Accounts Receivable

The account code for your Accounts Receivable GL account.  This is an asset account.

AR  Discounts Taken

If you offer discount terms on your receivables, the system will post those discounts to this account.  This can be either an expense or income account.

AR  Interest Charged

If you charge your customers interest on overdue invoices, the system will post the interest to this account.  This is an income account.  Interest charges are made by running AR-D  Charge Interest on Invoices

AR  Customer Deposits

The account code for any customer deposits (prepayments) that will eventually get applied to invoices.  Deposits are kept in a separate account so as not to be mingled with Accounts Receivable.  Customer deposits can be entered through AR-N  Enter/Print Sales Order Deposits or through AR-C  Record Payments.  This is a liability account.

SO  Taxable Sales

The revenue account for taxable sales to customers.  This is the system default account and can be overridden at the Item Class level by defining an account in SM-C  Enter Item Classes

SO  Non-taxable Sales

The revenue account for non-taxable sales to customers.  This is the system default account and can be overridden at the Item Class level by defining an account in SM-C  Enter Item Classes

SO  Invoice Freight Out

The account you charge for freight that is invoiced to customers.  This can be either an income or expense account.

SO  Sales Tax Withheld

The system default account for sales tax withheld when posting customer invoices.  This a liability account and can be overridden by entering a specific account in SM-E  Enter Tax Codes

SO  Retention

This account is only needed if you are planning on using the sales order retention billing feature.  A GL account is needed to temporarily hold retention amounts when the original invoice gets posted, but the newly created sales order for the retention does not get posted.  When the retention sales order finally gets posted, the dollars get credited from the retention GL account and get debited to your default AR account.  This should be an asset account.

CS  Agents Comm Payable

Whenever invoices or customer payments are posted that include sales commissions payable to agents, the program will credit the commission amount to the GL account entered here.  A corresponding debit will be posted to the Agents Commission Expense account entered in the next field below.  When agent commissions are transferred to Accounts Payable through CS-D  Transfer Sales Commissions, this account gets debited and your default Accounts Payable account gets credited.  This should be set up as a liability account.

CS  Agents Comm Expense

When invoices or customer payments  are posted that included commissions payable to agents, this account gets debited for the commission amount.  This should be set up as an expense account.

Misc Cost GL Acct for AP-C

Enter the GL Account to be suggested when entering Miscellaneous Cost associated with a Purchase Order in AP-C  Enter Purchase Order Invoices

Susp Acct for Deleted COA Accounts

Prior to the 2/7/07 update, it was possible to delete an account from the Chart Of Accounts that had transaction activity more than 2 years.  When the 6 year past financial history was introduced, it became necessary to run UT-K-D  Recalc GL Chart of Accounts and if transactions exist for an account that no longer exists, they need to be put someplace.  This account should be an Owner's Equity account, out of the range of normal account activity, such as 99998.  It can not be the same as the Clearing Account.

MANUFACTURING GL DEFAULTS TAB

IN  Inventory (Asset)

The default account for all on-hand inventory.  This should be an asset account and can be overridden at the Item Class level by defining an account in SM-C  Enter Item Classes

IN  Inventory Cost of Goods Sold

This is the expense account that will be posted to when invoices are posted in SO-G  Post Invoices or inventory adjustments are made via IN-C  Enter Inventory Adjustments or IN-K  Adjust Physical Levels   It  can be overridden at the Item Class level by defining an account in SM-C  Enter Item Classes

IN  Absorbed Freight In

If you will be using the Freight Pct field in IN-B  Enter Inventory to absorb freight into your inventory cost, this is the account to which the credit side of the entry will be posted (the debit will be to the item's Asset account).  If you plan on absorbing all your freight into the inventory, you can contrast the month end value of this account with your actual Freight In account to see how close to reality your Freight Pct settings are.  This is an expense account.

PO's Received Not Invoiced

This is a holding account for purchase orders which have been received but have not yet been invoiced.  When an item gets received in PO-C  Receive Purchase Orders, its expense or asset account gets debited and the PO's Received Not Invoiced account gets credited.  When the vendor invoice is recorded in AP-C  Enter Purchase Order Invoices, PO's Received Not Invoiced gets debited and Accounts Payable gets credited.  This is a liability account, normally located adjacent to your Accounts Payable account.

PO  Freight In

This is the account that registers the amount of freight vendors add to their invoices for shipping orders to you.  This is an expense account.

PO  Tax Expense

If you are charged tax on purchase orders, the system will post these amounts to this account.  This is an expense account.

PO  Purchase Price Variance

If you are using Standard Costing, then any difference between standard cost and the price on a PO will post to this account.  This is an expense account.

WO  Extra Costs

If you plan on entering any costs through WO-H  Enter Misc/Extra Costs, this field provides GL posting with a credit entry to offset the debit entry to the WIP account of the item being manufactured.  This is an accrual expense account that will ultimately be washed out when an invoice gets received and the debit expense brings the credit amount back to zero.

WO  Miscellaneous Costs

If you plan on entering any miscellaneous costs through WO-H  Enter Misc/Extra Costs, this field provides GL posting with a credit entry to offset the debit entry to the WIP account of the item being manufactured.  This is an accrual expense account that will ultimately be washed out when an invoice gets received and the debit expense brings the credit amount back to zero.  Miscellaneous costs are tied to specific routing sequences, whereas extra costs are to the work order as a whole.

WO  Absorbed Labor

The General Ledger account for absorbed labor, normally an expense account adjacent to your direct labor expense account.  As transactions are entered through WO-F  Enter Labor or posted in DC-H  Post Labor Transactions  or WO-N  Post Labor Batches  or Type L (Labor) parts are issued to Work Orders in WO-G Issue Materials or by backflushing in WO-I  Enter Finished Production, labor costs are credited to this account and debited to the WIP account of the item being manufactured.  This is the system default account and can be overridden at the Item Class level by defining an account in SM-C  Enter Item Classes

WO  Absorbed Fixed Overhead

The GL account for absorbed fixed overhead, normally an expense account adjacent to your fixed overhead expense accounts.  As transactions are entered through WO-F  Enter Labor ,  or posted in DC-H  Post Labor Transactions  or WO-N  Post Labor Batches or Type L (Labor) parts are issued to Work Orders in WO-G Issue Materials or by backflushing in WO-I  Enter Finished Production, fixed overhead costs are credited to this account and debited to the WIP account of the item being manufactured.  This is the system default account and can be overridden at the Item Class level by defining an account in SM-C  Enter Item Classes .

WO  Absorbed Variable Overhead

The GL account for absorbed variable overhead, normally an expense account adjacent to your variable overhead expense accounts.  As transactions are entered through WO-F  Enter Labor, or posted in DC-H  Post Labor Transactions  or WO-N  Post Labor Batches or Type L (Labor) parts are issued to Work Orders in WO-G Issue Materials or by backflushing in WO-I Enter Finished Production  variable overhead costs are credited to this account and debited to the WIP account of the item being manufactured.  This is the system default account and can be overridden at the Item Class level by defining an account in SM-C  Enter Item Classes

WO  WIP Inventory

The GL Asset Account for Work In Process inventory.  This is the system default account and can be overridden at the Item Class level by defining an account in SM-C  Enter Item Classes.

WO  WIP Variance

If any cost changes are made in AP-C  Enter Purchase Order Invoices to a work order that has already been closed, the cost differences are posted to this account.  A posting to this account will also occur to zero out the net cost in WIP when a Work Order is closed in WO-I  Enter Finished Production or WO-J  Close/Cancel Work Orders and has residual costs (actual costs in do not equal finished production out).  This is normally an expense account that is adjacent to your Cost-of-Goods-Sold account.