Welcome to General Ledger Training!

Welcome to OSAS General Ledger Training!

From South Coast ESD Coos Bay, Oregon

Budget vs

General Ledger Why do I need both?

• BUDGET really only deals with:– Revenues– Expenditures

• GENERAL LEDGER covers things like:– Cash - how much do I have in the bank?– How much money is owed to the district?– How much money do we owe to our

vendors?

Budget and General Ledger How do they work together?

WHEN YOU POST PAYROLL OR ACCOUNTS PAYABLE INVOICES:

- BUDGETIncreases Budget Expenditures

(DETAIL of Expenditure transactions)

- GENERAL LEDGER• Increases Budget Expenditure Control

(TOTAL of transactions only – No detail)

• Increases amounts owed to vendors

Budget and General Ledger How do they work together?

WHEN YOU POST CASH RECEIPTS:

– BUDGET• Increases Budget Revenues

(DETAIL of transactions)

– GENERAL LEDGER• Increases Budget Revenue Control

(TOTAL of transactions only – No detail)

• Increases Cash

Hmmmm….that sort of sounds like a sub ledger……..

That’s exactly right!• Budget expenditures are a sub ledger

of G/L account 60200. All the expenditures in your budget should add up to this total in each fund.

• Budget revenues are a sub ledger of G/L account 30200. All the revenues in your budget should add up to this total in each fund.

Budget and General Ledger How do the entries get made?

• WHEN YOU POST:– PAYROLL– PAYROLL VENDOR CHECKS– ACCOUNTS PAYABLE INVOICES– ACCOUNTS PAYABLE CHECKS– CASH RECEIPTS…..

the G/L entries are automatically created for you by the system using pre-defined interface codes.


•

These entries are called

NON-GENERAL JOURNALS.

•

You print an edit listing and then post these entries to the G/L by month.

•

We recommend that you post the NGJN after every check run, invoice batch, etc. you do. That way if there are problems you can deal with them right away.

•

You may choose to wait until the end of the month (or year) to post. Your choice!


•

You probably expected we would spend this time talking about how to make JEs. We’ll get to that later. We’d rather start by explaining how to set things up so that you rarely have to make journal entries.

So let’s talk about how to get those NGJN entries right in the first place…...


Before posting Payroll

or Accounts Payable

You need to set up interface codes

so that the system knows which G/L accounts to use when making these automatic entries. This set up only has to be done once.


If these interface codes aren'tin place, some of the entries will not be made. This can cause problems (like being out of balance).


Of course, not all entries are made automatically.

WHEN YOU ENTER:–

GENERAL JOURNAL ENTRIES

–

CASH RECEIPTS–

ACCOUNTS RECEIVABLE

YOU supply the G/L account numbers...

Feel like hiding at this point????

Come on out, it’s not as bad as you imagined…...

General

Ledger -

Getting Started

• G/L account numbers are 5 digits• Some accounts are required for the various

accounting modules to work properly. 10100 Cash 30200 Budget Revenue42100 Accounts Payable60200 Budget Expenditure77000 Fund Balance

Because each fund has it’s own G/L, these will need to exist for each fund.

Oregon Department of Education has guidelinesfor the rest of the accounts.

At present, you don’t have to report G/L to ODE,but that could change…

….so it’s a good idea to at least look at theODE standards:

General

Ledger -

Getting Started

More information on ODE standards is available on their website. To

download the Budget and Accounting Manual,

click on the following link:http://www.ode.state.or.us/service

s/ssf/finance/estwarrants/2006- pbam-manual-with-strikeouts-

revised.pdf

http://www.ode.state.or.us/services/ssf/finance/estwarrants/2006-pbam-manual-with-strikeouts-revised.pdf

How do I set up NEW G/L accounts on the OSAS system?

First you’ll need:

The five digit account number

& an account description.

EVERYTHING STARTS WITH THE CHART OF ACCOUNTS ON THE MAIN BUDGET MENU….

Select #2 from the main budget menu….

Type the G/L account to be defined and press enter.

BUDGET CHART OF ACCOUNTS ACCESS

Note that you are just defining the NAME of the G/L account without regard to any FUND Number. This description will carry forward to ANY Fund for which you set up this G/L account.

OK, how do we set up the accounts in the G/L itself?

You need: The five digit G/L account number

The fund number needing this account

Remember, each fund has its own general ledger.

The description you assigned in the Budget Chart of Accounts will be used.

The G/L Master File is where you access the GL accounts by FUND.

DESCRIPTIONS came from BUDGET Chart of Accounts

Here’s the balance forward from last year.

These figures are a summary of net activity in account 100-42100.

Want to see detail of these figures?

Check this out

This option will present a screen that looks just like the G/L Master File.The difference is that historical detail is available, but non of the figures

can be changed.

Here are the monthly and quarterly totals available on the Master File, but this F3 key will show the detail behind

the figures.

Debits are shown as positive, credits as negative.

To get a list of which GL accounts are set up in which FUNDS, print a G/L Chart of Accounts.

OK, now let’s talk about those G/L interface codes…...

We’ll start with the PAYROLL interface codes. There are 2 places that need some setup:

1. Payroll to G/L Interface CodesAccess these through the Payroll Variables File.

2. Payroll Vendor G/L CodesAccess these through Payroll Vendor Master File.

From the Main Payroll Menu, Option 3 will access the Payroll System Variables.

First, let’s work on the Payroll to G/L Interface Codes

Here is where the interface codes are defined…...

These are the fields you need to fill in…..

Why do I need these interface codes for my

payroll?

The most important reason is that you probably have salaries and other payroll costs which must be paid out of funds other than the General Fund. The OSAS payroll posting program charges these other funds for the total cost (gross pay + fringes) of the payroll with an entry charging each fund's Expense Control account (60200) and crediting inter-fund payables (40200). These other funds then transfers the same amount back to fund 100 by crediting cash (10100) and charging inter-fund payables(40200). All of this is handled automatically by the OSAS Payroll posting process, so that there is only one set of liability accounts to reconcile. These interface codes are what allow these automatic entries to happen.

PAYROLL TO G/L INTERFACE CODES

Enter the G/L Acct #s to be used in P/R Posting:

Here you are defining what CASH accounts are to be reduced when writing Payroll, Payroll Draw, and Payroll Liability checks. These can each be written from different cash accounts, if desired.

Enter the G/L Acct #s to be used in P/R Posting:

These Inter-fund accounts are used to transfer cash to cover the total cost of the payroll FROM the various funds TO Fund 100.

PAYROLL TO G/L INTERFACE CODES

Enter the G/L Acct #s to be used in P/R Posting:PAYROLL TO G/L INTERFACE CODES

The Payroll Draw ‘Vendor’ (which is always Vendor #099) MUST be set up with the same G/L account used here so that the draws will “clear” after the payroll is posted.

Here’s what we’re talking about…..in the Payroll Vendor Master File.

The total cost of the payroll is charged to the Budget Expense Control Account.

Now we’ll look into the Payroll Vendor G/L Interface Codes. For this we’ll need to go to the Payroll Vendor Master File.

PAYROLL VENDOR TO G/L INTERFACE CODES

When setting up Payroll Vendor G/L codes,two issues are important:

First, you need to decide whether to have one G/L liability account for all payroll liabilities, or whether to assign each vendor it’s own G/L account.If you choose to put all the liabilities in one G/L account……….

…you may spend a lot of time trying to keep things balanced.


It may make things easier if you make all of these different.


These Payroll Liabilities are all rolled together into one

lump sum.

But in this example, individual accounts make analysis much easier!

This is especially useful when you need to make adjustments or corrections before paying these vendors.

The other important setup issue is related to Payroll Draws. The Draw Vendor (the District) must be assigned

Payroll Vendor Number 099.



The G/L liability account used for Vendor 099 must be the same account used when setting up the Payroll Interface Codes. If not, the draws won’t clear and the G/L will be out of balance!

OK, now let’s talk Accounts Payable…...

ACCOUNTS PAYABLE has it’s own set of Interface codes.

The AP to GL Interface Codes

And that means that we finally have to talk about ……..DEBITS and CREDITS

What do you meanDebits and Credits?... Oh, No!!!!!

Now really isn’t a good time. My

hamster just died….

Oh Great!I never have

gotten the whole Debit / Credit

thing…. I guess it won’t kill me….right?

Look at what happens in the G/L

When you post an Accounts Payable InvoiceThe G/L Expenditure Control Account (60200) increases &

The amount owed to the Vendor increases

When you post an Accounts Payable CheckThe G/L Cash account (10100) is reduced &

The amount owed to the Vendor is reduced.

• WHEN YOU POST AP INVOICES

This relationship has to be defined up front so that the invoice and the payment will “clear”. You create a set of interface codes that will take care of most situations that arise in accounts payable.

Once this is done, most AP invoices can be processed without even having to think about GL account codes.

Understanding Debits & Credits

……when you really have to. And sooner or later, you’ll have to….

ASSETS are DEBIT Balance Accounts.

The DEBIT part means that the accounts would normally have a positive balance and are increased by positive (debit) entries.


ASSETS are things the district owns, such as CASH, BUILDINGS, EQUIPMENT….

Or things the district will own in the future, such as ACCTS RECEIVABLE or PREPAID EXPENSES (bills paid ahead for future services).


ASSETS are …uh..POSITIVE things:

Cash

Prepaid Expenses

Accts Receivable

Equipment

Buildings

…but there is another side to this story…...

Understanding Debits & CreditsLIABILITIES ARE CREDIT BALANCE ACCOUNTS and …NEGATIVE things:

Cash

Prepaid Expenses

Accts Receivable

Equipment

Buildings

Accounts Payable

Payroll Deductions

Accrued Liabilities

Outstanding Loans

And here is the REALLY important part to remember:


The DEBITS have to equal the CREDITS!!

Understanding Debits & CreditsHere is what keeps them in balance:

ASSETS

Debits CreditsLIABILITIES

FUND BALANCE

For the Debits to equal the Credits

Assets = {Liabilities + Fund Balance}

ASSETS


FUND BALANCE

It really does make sense. If your assets (such as cash) are greater than your liabilities (what you owe) you have a remaining fund balance left to spend.

What is a little confusing... is that the remaining fund balance is a CREDIT.


Expenditures are DEBITS Revenues are CREDITS

ASSETSDebits Credits

LIABILITIES

FUND BALANCE

Budget Expenditures Budget Revenues

It seems like money left over would be an asset (debit), but try to think of it as unexpected revenue. That’s a credit!


ASSETS


FUND BALANCE

If your Revenues are greater than your Expenditures ….you have money left. And this remaining net between them is a CREDIT !

And at year end, that excess CREDIT gets moved to Fund Balance…….

Whatever is leftBudget Expenditures Budget Revenues

• A debit balance account (such as cash) is increased by positive (debit) entries.

• A credit balance account (such as accts payable) is increased by negative (credit) entries.


You must create a set of interface codes that will take care of most situations that arise in accounts payable.

This allows you to pre-define what accounts will be debited and credited when posting an accounts payable invoice and/or the check to written to pay it.

That’s enough about Debits & Credits!Let’s get back to A/P and those interface codes. Before you post invoices or invoice payments :

The A/P to G/L interface codes are maintained in the A/P Variables File.

This defines what happens in G/L when the invoice is posted.

This defines what happens in G/L when the check is posted.

The “N” (for Normal) Interface Code

IF the Budget Expense is Y, the invoice debit must be to 60200 (increase expenditure) or 30200 (decrease revenue). Otherwise, the Budget Expense flag should be N.

The ‘N’ code is a default on our system

The Interfund

Transfer is an optional feature.

In the 200 or above fund, you would see a credit to Cash & a debit to 60200 (Budget Expenditure Control).

This option moves cash automatically from funds 200 or above into fund 100 to pay the accounts payable invoices.

In fund 100, you would see a credit to Accounts Payable & a debit to Cash (to cover writing the checks).

The “L” (for Last Year) Interface Code

The Budget Expense is N, because the invoices was already EXPENSED this in the prior year. No debit to 60200.

This code enables you to pay an invoice this year that was expensed by a Journal Entry in the prior fiscal year.

Here is an example of a code to refund (reduce) revenue:

Budget expense is Y, but since we’re effecting revenue, the debit is to 30200.

To summarize what you’ve been up to:

1. You have set up all the G/L accounts in the funds where they would be needed.

2. You have defined the Payroll to GL interface codes

3. You have defined the A/P to GL interface codes.

As a result of this set-up, the Non-General Journals from Payroll and Accounts Payable should provide you will all the entries necessary to keep things in balance.

Does that mean it’s safe to come out now?

Or do we need to check to be sure?

Here you can print an edit of your Non-General Journals.

Absolutely! You can (and should) check!

A good place to start is the General Ledger Menu.

The entries are printed and posted by month. This makes it really important to use the correct dates when you do payroll, accounts payable, etc.

……the result of all of the earlier set up you did!

NON-GENERAL JOURNALS

Checking your NGJN edit

•

Look for errors due to missing G/L account numbers. If some are missing, add the accounts before you post and all will be well.

•

Do the debits equal the credits?

If not, the cause is probably a missing interface code.

•

Check for G/L Edit Error Codes :1. Debit Account does not exist in the G/L Master File 2. Credit Account does not exist in the G/L Master File 3. Date Problems

If you get errors due to GL accounts not set up, you can resolve this before you post. Just add the missing accounts to the GL Master File & run a fresh edit before you post.

In this case, none of the G/L accounts necessaryhave been set up for Fund 224.

Check to be sure (fund by fund) that the debits equal the credits.

This one looks good!

This one’s not in balance and we’ll have to figure out why.

Checking over your NGJN edit

If the debits do not equal the credits, you must post the Non General Journals unbalanced. Then make a Journal Entry

to add the

missing amount.

• General Journal Entries – Made from the General Ledger Menu.

Entries made here will only effect the General Ledger.

2. Budget Journal Entries – Made from the Budget Menu.

Budget Journal Entries can be used to effect not only the General Ledger, but the Budget and Payroll Cost History, as well. It’s

the easiest place to make Journal Entries because you can tailoryour entries for the desired effect.

There are two places in which you can make Journal Entries.

We’ll look at both and compare them.

From the General Ledger Menu, Option 6 -

ENTER General Journals

This is the General Journal Entry Screen. Each entry requires only a date, amount, Fund and G/L account

Code (s). Single sided entries are supported to allow for completion/correction of system generated non general journals.

The $ amount of a General Journal Entry is always positive.

General Journal Entries

From the Main Budget Menu, Budget Journal Entries can be made at Option 7.

The date is very important. You can make entries using any VALID date within the Fiscal Year.

The SS# field is for entries related to payroll costs for a particular employee. It is not mandatory but it does affect the cost history by employee. You will get a warning on the edit listing if the JE includes objects in the 100 or 200 series but a SSN isn’t supplied, however, the entry will post without one.

Budget Journal Entries

For a JE that affects only the G/L, enter only the Fund number and G/L Account Codes.

For a JE that must affect both the Budget and G/L, enter the full budget account number and the G/L numbers. Enter the $ amount as it would effect the budget. In this example, we are reducing expenditure, so the $ amount is a negative.

An ‘A’ in this field will apply the journal entry against the Appropriations figure for this budget account.

Journal Date_081502__ SS#_578397847_Account Number

Fund Func Obj Cnt Aor Sa Amount Description

_100_1111_250_001_320_00___55500_______whatever___

G/L Debit Account----> _60200__

G/L Credit Account---> ________

Access Budget Journal Entries

If you are increasing Budget Expenditures:(1) The budget acct# must have an object

(2) The dollar amount is positive

(3) The G/L Debit is to 60200

(4) The G/L Credit will depend upon what you are doing

Rule!!!


Journal Date_083102__ SS#_879852471_Account Number


_100_1111_250_001_320_00___53500--______whatever___

G/L Debit Account----> ________

G/L Credit Account---> _60200_______If you are decreasing Budget Expenditures:

(1) The budget acct# must have an object

(2) The dollar amount is negative

(3) The G/L Credit is to 60200

(4) The G/L Debit will depend upon what you are doing

Rule!!!

Revenues are the same, but different….

A positive amount is still an increase

A negative amount is still a decrease

But the Debits and Credits are different.

Why? Because Expenditures are Debit Balance Accounts, and Revenues are Credit Balance Accounts.


Journal Date_080502__ SS#___________Account Number


_100_1500_000_000_000_00___55500_______whatever___


G/L Credit Account---> _30200__

If you are increasing Budget Revenues:(1) The budget acct# must have ZERO object

(2) The dollar amount is positive

(3) The G/L Credit is to 30200

(4) The G/L Debit will depend upon what you are doing

Rule!!!




_100_1500_000_000_000_00___55500--_____whatever___

G/L Debit Account----> _30200__

G/L Credit Account---> ________If you are decreasing Budget Revenues:

(1) The budget acct# must have NO object

(2) The dollar amount is negative

(3) The G/L Debit is to 30200

(4) The G/L Credit will depend upon what you are doing.

Rule!!!

Uhh….just a minute….what is that part about

“ it depends upon what you are doing???”

If you feel stuck, call OSAS support and we’ll help you figure that part out.

541-266-4041

General Journal EntriesJournal Date_092502__ SS#___________Account Number


__________________________________________________



If your entry needs to hit the G/L only:1. The dollar amount will always be positive.

2. Enter only the Fund and leave the rest of the Budget Account info blank.

205

7500 Reclass Depos

1810119102

Rule!!!



__________________________________________________



OK, but what if the amounts are in different funds?

205 7500 Reclass Depos

1010119102 You would need two

entries (one for each fund). Use cash as your offset.




__________________________________________________



100 7500 Reclass Depos

1810110101 Here is the

second entry with cash as the offset.

And because it was GL only, the amounts for both entries are positive.



Journal Date__100302_ SS#___________Account Number


__________________________________________________



IF my NGJN is “out of balance” how do I use a JE to make corrections?

100 7500 PR Deductn

47135You can make a “1 sided” entry to supply just what was missing!

If you do this faithfully every time you have a difference in your NGJN, your G/L will stay in balance.

And what does the “in balance” part actually mean??

First of all, it means that the total debits equal the total credits within each fund.

But that is really just the beginning. The G/L can be “in balance” and still have

errors.How can that be??

The amounts in the individual accounts may not match the actual condition.

For example, when your cash account balance does not agree with the bank reconciliation; or maybe you have a balance in a liability account that you don’t really owe because the amount has already been paid.

Situations like these take Journal Entries to correct.

Now let’s look at some of the reports you can use for verifying balances and researching problems when you’re out of balance.

Verifying that G/L & Budget Agree

It’s a good idea to run this report at least once a month to be sure that GL and budget are in sync.

If these are not in balance

So, for instance, the payroll expense to the Budget for August ‘09 can be compared to what hit the G/L for that same month. If these are not in agreement, you’ll need to understand why. The situation may or may not call for a Journal Entry.

This report gives totals for each month by transaction type.

You can see expenses separately from revenues. If you identify any problems, you can make JEs

to correct them.

Verifying that G/L is Correct

The trial balance report will show you the ending balances for each account within a fund so you can verify that they are correct.

This fund is in balance. The debits equal the credits.

Note that the credit figures all have minus signs. But they go into the GL as positive numbers.

Do the cash figures agree with your “checkbook” ?

Are the liabilities correct?

And speaking of cash…..

This report that lets you see balances across all funds for up to ten GL accounts.

They don’t even have to be cash accounts, actually….

But this report is mostly used for a bird’s eye view of cash balances.

Fund Cash Acct 1 Cash Acct 3Cash Acct 2 Cash Acct 4 Cash Acct 5

Here is something else you might find useful:

If you change the month ending date to zero, you will get the opening balances for that fund.

This can be helpful if you are having trouble balancing your current GL. This allows you to verify that the starting balances for the current year match the ending balances for last year.

00/00/00

If you’re stumped, call OSAS support they’ll help you figure it out.

541-266-4041

Always remember

….

Documents

Welcome to General Ledger Training!