> General Ledger Analysis Introduction

General Ledger Analysis Introduction

General Ledger account entries are usually a summary of several transactions. Transactions of a similar nature are generally grouped together within these ledger accounts.

General Ledger analysis provides a means of distributing transaction values to ledger accounts together with analysis information. This reduces the need to create individual ledger accounts for certain categories of expenses such as travelling, repairs and maintenance, general expenses or donations for example. It also eliminates the need to manually analyze such General Ledger accounts.

[Note]

  • G/L analysis entries are only posted from sub modules if the sub module is linked to the General Ledger in detail at company level (General Ledger Integration - General Ledger tab) or at ledger account code level (General Ledger Codes or GL Structure Definition).

  • You will not be required to enter General Ledger analysis entries for accounts defined in the General Ledger Integration program for General Ledger integration. This means that when you process a transaction and an account specified inGeneral Ledger Integration is automatically used in the transaction (i.e. you do not manually enter it), then the analysis requirements are ignored for that ledger code.

  • General Ledger analysis entries are always distributed in the local currency, irrespective of the currency in which the original transaction is processed.

  • General Ledger analysis entries cannot be distributed to accounts in the target company when processing inter company journals.

Implementation

The following steps are required to configure the General Ledger to use account analysis:

  1. Optionally use the General Ledger Setup program to select the account types against which account analysis is required.

    When you define an account type as requiring analysis and you use the General Ledger Codes program to add a ledger code with that account type, a message is displayed to remind you that analysis may be required for that ledger code.

  2. Use the GL Analysis Categories and Codes program to define:

    • the analysis categories you require.

      Up to 5 analysis levels (category types) can be defined against each category.

    • the category codes for each category type you defined against a category.

      You can define as many category codes as you require. Transaction values are processed against the category types when you use the GL Analysis program.

  3. Use either the General Ledger Codes or GL Structure Definition program to indicate the ledger accounts against which analysis is required and to define the analysis category to use for that specific ledger code.

    In addition, if you want to process analysis entries from sub modules, then the General Ledger integration method for the sub module(s) must be set to detail either at company level (General Ledger Integration) or against the individual General Ledger account code(s) (General Ledger Codes or GL Structure Definition). Failure to do this results in analysis entries not being posted.

Account Analysis Processing

The following points are applicable to analysis entries:

  • In the current version of the program, G/L analysis can only be performed on transactions originating in the following modules:

    • Accounts Payable
    • Accounts Receivable
    • Cash Book
    • General Ledger
    • Sales Order Entry - Counter Sales
    • Assets Register
    • Inventory
    • Trade Promotions

    • Work in Progress

  • An analysis number is automatically assigned to each analysis entry when you use the GL Analysis program to distribute values to analysis codes.

  • Analysis entries can be printed using the GL Trial Balance program.

  • Analysis entries can be viewed using the GL Query program.

  • Analysis entries are retained for the period defined against the setup option: Detailed transaction history (General Ledger Setup - History tab).

  • Analysis entries are deleted by the Purge function of the GL Period End program, when they are older than the period defined against the setup option: Detailed transaction history (General Ledger Setup - History tab).

Categorization Example

Following is an example of an account categorization:

  • Category - MV EXP (Motor Vehicle Expenses)

    • Category type - REGISTRATION (This category type would be defined as mandatory)

      • Category codes:

        • Registration number 1
        • Registration number 2
        • Registration number 3
        • Registration number 4

    • Category Type - FUEL

      • Category codes:

        • Petrol
        • Diesel

    • Category Type - OILS

      • Category codes:

        • Engine oil
        • Brake fluid
        • Automatic transmission fluid

    • Category type - MAINTENANCE

      • Category codes:

        • Normal service
        • Repair
        • Tyres
        • Battery

    • Category type - OTHER

      • Category codes

        • Licence & Registration
        • Insurance

In this example, all five category types were used. You could, however have combined FUEL and OILS into one category type. Alternatively, you could have defined only one category type: REGISTRATION and processed all expenses for a specific vehicle (irrespective of the type of the expense) to that vehicle's registration number.