Ledger Structure


All of the data in the system, including the General Ledger, is structured as follows: 

You have a

Company
Companies have Divisions
Divisions have Departments 

So for example, if you have a business with multiple locations, you can set up the system as follows: 

Company = Main Store
Divisions = Each Individual Store
Department = Department within each store. 

Or you can do something like this: 

Company = Main Parent Company
Divisions = Geographical Regions
Departments = Individual Businesses within that Geographical Region 

The best way to determine how many levels to use is to determine how many individual ledgers you require. 

For example, EACH Company / Division / Department Combination has it's OWN Ledger (And all of the supporting data as well, it's own customers, vendors, employees, etc) 

When you run the financials, the system ROLLS-UP the ledgers into the parent company. 

So, for example, if you have 10 stored organized thusly: 

Company = Main Store (For example "Parent Corp")
Divisions = Each Individual Store (for Example "North Division" / "South Division")
Department = Department within each store. (For Example "Store One" / "Store Two" /  "Store Three")

If you run the Financial Statements for "Parent Corp" the financials will be consolidated automatically and reported like this: 

Company       Division                      Department
Parent Corp   Northern Division      Store One                                               
                                                           Store Two                                               
                                                           Store Three
                        Southern Division     Store One                                               
                                                           Store Two                                               
                                                           Store Three

If you run the Financial Statements at the Division Level,
lets
say the "Northern Division" for this example, the Financial Statements will look like this:            

Northern Division                       
               Store One                       
               Store Two                       
               Store Three 

If you log into an individual store and run the financial statements, you will get just that stored financial statement            

Store One 

This is all automatic.  

The best way to determine how to structure your company and how many of our "level" to implement is to determine how many ledgers you need and if you need each of the business locations to have their own complete ledgers and financials. Some companies, even large ones, only use one main ledger and have multiple groups of sub-accounts. Your terminology may vary but these are sometimes called "Cost Centers".

So, for example, a company that
uises
Cost Centers will have One Company, Parent Corp, and the divisions will be some kind of Ledger "Group" and the Stored can be "Sub-Groups" Or you can keep the ledger "flatter" and just have the Parent Corp Ledger and individual stores being Account Groups or Sub-Account Groups.  

We support Ledger Accounts, with an unlimited amount of groups and an unlimited amount of sub-groups, but, for data entry purposes we always recommend that you keep your ledger as flat as possible. 

A Cost Center Type Structure looks as follows: 

Parent                 Account Group              Sub-Account Group
Parent Corp       Stores (For example)     Departments (For example)  

And the ledger structure would look as follows: 

Parent                Account Group           Sub-Account Group
Parent Corp       Store A                         Department A
Parent Corp       Store A                         Department B
Parent Corp       Store A                         Department C
Parent Corp       Store B                         Department A
Parent Corp       Store B                         Department B
And so on…                                                     

So, if you are going to have a ledger with Account Groups and Sub-Account Groups, the first step is to determine what the Account Groups are going to be, and what sub-accounts are part of each account group. 

For example, a simple set-up could be where Group =
Store,
 and Sub-Account would be the departments in each store. 

Example: 

Sub-Account Groups:
Department A
Department B
Department C 

Account Groups:
Store A
Store B
Store C 

Once you determine what you ledger groups and sub groups  are going to be, then you can key these into the Ledger Set-up screens. You always need  to key in the Ledger Accounts in this order, since one depends upon the other: 

Ledger Account Sub-Groups
- Use the "General Ledger -> View Ledger Account Sub Group Screen" to enter the sub-accounts

Then

Ledger Account Groups- Use the "General Ledger -> View Ledger Account Group Screen" to enter the Account Groups If there are child sub-accounts to your account groups, you can select them here from a drop down of the groups you entered in the prior step.

Then

Individual Ledger Accounts- Use the "General Ledger -> View Chart Of Accounts" to enter the individual GL Accounts. If there are Account groups, you can select them here from a drop down of the account groups you entered in the prior step. The Financial Statements will automatically adjust to how you set-up your ledger and will display all of the included Financial Statements correctly. 



Chart of Accounts

The Chart of Accounts is the heart of any accounting system. It is a list of all the accounts that a company uses to record the transactions within their accounting system. 

Integral Accounting Enterprise comes shipped with a default Chart of Accounts suitable for most companies. This default Chart of Accounts can and should be customized to meet your company's needs by adding or removing accounts during the initial setup process. 

The Chart of Accounts in Integral Accounting Enterprise is broken down into six categories. Each category is assigned a number which indicates the "type" of category. 

Account Type
Number
Example
Assets
1
Cash, Accounts Receivable, Inventory, Current Assets, Fixed Assets, Other Assets
Liabilities
2
Accounts Payable, Taxes Payable Current Liabilities, Long Term Liabilities
Equity
3
Owners Equity, Retained Earnings, Capital Stock
Income, Revenue or Sales
4
Income or Sales
Cost of Goods Sold
5
Cost of Goods Sold, Sales Discounts
Expenses
6 - 9
Operating Expenses, Administrative Expenses, Utilities, Advertising, Depreciation.

In the Chart of Accounts that ships with the Integral Accounting Enterprise the category numbers are 6-digit numbers with the first digit being the category number. You can customize the account numbers in the Chart of Accounts to use up to 36 digits with the restriction that accounts must begin with the specific category digit as detailed in the table above. This is extremely important to remember when adding new accounts to the Chart of Accounts. For new accounts, the account number must begin with the corresponding digit for that category, but the remaining numbers can be any number you specify.

Adding a New Account

To add a new account to the Chart of Accounts, click the New button at the top of the screen. This will bring up a blank account setup form with four sections. Click on a link for the details about that section. 

Main - Used for setting up a new account

Current - automatically populated by the system, used to view the current balances on this account.

Budget - used to enter budget information about this account

History - automatically populated by the system, used to view the history on this account.

Main Section

When setting up a new account, enter the information in the fields as follows.

GL Account Number: Enter the account number for this General Ledger account. Keep in mind that the account number must start with the category number corresponding to the type of account being set up.

GL Account Name: Enter the account name for this GL Account.

GL Account Description: Enter a brief description for this GL Account.

GL Account Use: Enter the specific use for this account if necessary. For example, if an account is going to be a contra-asset account for depreciation, that can be noted in this field. Otherwise, this field can be left blank.

GL Account Type: Select from the drop down list the type of account this is. 

GL Balance Type: Select from the drop down list the normal balance type (account type) for this account. This selection must correspond with the first digit of the account number entered in the GL Account Number Field.

GL Other Notes: Enter any notes about this GL Account in this field.

Current

The fields on the Current screen are populated automatically by the system. They display the balances in the account according to each period. The screen can be reviewed for informational purposes, but the fields should not be edited. 

Budget

If the company is following a budget for this account, the budget amounts by period can be entered in the fields on this screen. This is an optional screen that does not need to be completed if a budget is not being used.

History

The fields on the History screen are automatically populated by the system. They display the balances in the account in prior periods. The prior period balances for the GL Account can be entered during the initial set up, if the information is available. Otherwise, the fields can be left blank.