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Technofunctional Body of Knowledge©Chartered Technofunctional InstituteProcess Area – FinanceChapter – General LedgerTopic – Introduction to General Ledgerwww.technofunc.comLearn the concept of GeneralLeader and its role in anyaccounting packageincluding ERP’s like Oracleand SAP. Understand the keyfunctional areas of anyGeneral Ledger systemTechnology Independent Expertise

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General Ledger:• The general ledger is a collection of the group of accounts thatsupports the value items shown in the major financial statements.• It is built up by posting transactions recorded in the sales daybook,purchases daybook, cash book and general journals daybook.• The general ledger can be supported by one or more subsidiaryledgers that provide details for accounts in the general ledger.• All transactions having financial impact are recorded in GeneralLedger.• In Accounting Packages/ERP’s like Oracle/SAP “General Ledger” isthe central repository of all accounting information.©Chartered Technofunctional Institutewww.technofunc.comTransactions Sub‐Ledgers General LedgerFinancial StatementsSource: Wikipedia

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Subsidiary Ledgers:• A subsidiary ledger is a group of similaraccounts whose combined balances equalthe balance in a specific general ledgeraccount.• Subsidiary Ledgers facilitate recording ofcomplete financial and other informationrelated to the transaction.• The general ledger account thatsummarizes a subsidiary ledgers accountbalances is called a control account ormaster account.©Chartered Technofunctional Institutewww.technofunc.comGeneral LedgerFixed AssetsAccounts PayableAccounts ReceivableProjectsInventory Management An Accounts Receivable(AR) subsidiary ledger includes a separate account foreach customer who makes credit purchases. The combined balance of every account in this subsidiary ledger equals thebalance of accounts receivable in the general ledger. Subsidiary ledgers contain supplemental accounts that provide the detail tosupport the balance in a control account. Subsidiary Ledgers also capture details pertaining to financial transactions likeTax Numbers, Contact Person, Telephone Number or Copy of Invoice

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Subsidiary Ledgers - Examples:Imagine what the size of your General Ledger would be if you have 8000customer accounts, 4000 supplier accounts and 2000 items you trade in.Subsidiary Ledgers help manage and store specific information regarding each ofthe control accounts in your GL.©Chartered Technofunctional Institutewww.technofunc.com• Manage Suppliers and PaymentsAccounts Payable• Manage Customers and ReceiptsAccounts Receivable• Manage Item Prices and MovementsInventory• Manage Fixed Assets and DepreciationFixed Assets• Manage various projects with their costing and billingProjects• Manage Cash and its reconciliation with BankCash Management• Manage Salaries and Wages – Calculations & PaymentPayroll

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GL in Accounting Software:• General Ledger is central repository forall financial activity.• The main purpose of a general ledgersystem is to record financial activity of acompany and to produce financial andmanagement reports to help stakeholdersmake decisions.• In an ERP/Accounting Package all othersubsidiary ledgers sends financial data toGL.©Chartered Technofunctional Institutewww.technofunc.com Enables Companies to manage their financial processes in anintegrated manner by allowing greater flexibility and control overthe journal entry process. Improves transaction processing and control. Allows for detailed report generation according to multiple reporttypes and report parameters - facilitates better and fasterdecision making.

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Accounting Cycle:• Manage AccountingPeriods/Calendars• Manage Currency• Import Transactions• Record Transactions• Review Transactions• Edit Transactions• Transaction Approval• Analyze and Manipulate• Statutory Reporting• Management Reporting• Manage Consolidation©Chartered Technofunctional Institutewww.technofunc.comManage PeriodsRecordReviewEditApprovePostAnalyzeRevalue/ TranslateConsolidateGENERALLEDGER

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GL Process Flow:©Chartered Technofunctional Institutewww.technofunc.comCreate JournalSub‐LedgerImport JournalsReview JournalsApprove JournalsPost JournalsBalances UpdatedRun ReportsCreate JournalManual

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Inquiry & Drilldown:1. Inquire Online Account Balances2. View Accounting Information3. Drill Down to Sub Ledger4. Further Drill Down to Sub Ledger Transaction5. Review all transactional details at Sub Ledger©Chartered Technofunctional Institutewww.technofunc.comDetailsTransactionSub LedgerAccounted JournalGL Balances

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GL Concepts:1. Accounting Periods/Calendars2. Adjustment Period3. Currency – Functional/Foreign4. Chart of Accounts5. Journals – Entry and Import6. Posting & Balances7. Review and Approval8. Accruals and Reversals9. Recurring Journals10. Allocations11. Intercompany12. Consolidation13. Trial Balance14. Statutory Reporting15. Management Reporting©Chartered Technofunctional Institutewww.technofunc.comIn the next part of this serieswe will focus on GL Conceptsin detail to build strongconceptual foundation.

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TECHNOFUNC©Chartered Technofunctional InstituteNext in SeriesProcess Area – FinanceChapter – General LedgerTopic –General Ledger Conceptswww.technofunc.comThank you for watching/downloading our training material. Users are free to downloadthe material for their personal use only. Commercial use is strictly prohibited withoutprior permission from the Chartered Technofunctional Institute.If you need copies of this material for corporate training or commercial use pleasecontact info@technofunc.com for further detailsAll Videos are available at www.technofunc.com for freeCreating the world’s best techno-functional talentTECHNOFUNC