The general ledger system enables you to create, combine and delete accounts, group accounts for financial statements, query transaction data affecting all accounts, make journal entries, and print reports, lists and statements reflecting the status of your finances. In addition to the typical trial balance, balance sheet and income statement reports, the general ledger system also enables you to create customized reports.
Ideal software is an integrated system. Transactions occurring in the various program modules affect the general ledger automatically. This reduces the need to make journal entries to the general ledger and means that accurate financial statements can be produced whenever desired.
Ideal software is delivered with a default general ledger. However, you have complete control over your general ledger configuration, including adding and deleting accounts, account names and descriptions, where your balance sheet accounts end and income and expense accounts begin.
Because of the integration of the general ledger with the other program modules, the setup of your general ledger is very important. In its default setup, the general ledger integrates correctly with the other modules. When customized changes are made, the G/L references in other system modules must also be changed accordingly for the integration to work correctly.
We highly recommend that if you wish to make changes to the default general ledger that you speak to your Ideal consultant. He or she will work with you to ensure that any modifications made to the general ledger setup integrate correctly with the rest of the system.
Journal entries can be made to any account. However, journal entries made to control accounts that receive automatic postings from other modules will throw the general ledger out of balance with those modules affected. For this reason, a warning message is always displayed during journal entry when a control account is specified. When adjustments must be made to control accounts, the best procedure is to make the adjustments in the system module affected, not the general ledger. For example, the accounts receivable and inventory systems allow adjustments to be made which affect the A/R or inventory systems respectively as well as the general ledger, maintaining overall system balance. The A/P system allows the reversal of posted invoices and cheques. These reversals will also automatically adjust the relevant general ledger control accounts.
When a general ledger adjustment must be made to a control account, it is recommended that a second adjusting account be created that groups with the control account on financial statements, and the adjusting journal entry made only to the secondary adjusting account. This procedure maintains balance between the general ledger and the affected module, and also displays the desired adjustment on financial statements. A trial balance shows the individual account balances of each account within a group.