Using a Modern General Ledger
In a recent white paper “The 10 Essentials of an Effective Financial Solution”, the first point identified as essential in the paper is a “modern general ledger”. Let’s see how Sage 50 meets this criteria.
Premise: The modern general ledger (G/L) is the core of every accounting system and must be dynamic, flexible, scalable and unconstrained by rigid code-block structures.
- A modern G/L system must allow for a predefined chart of accounts for a wide range of industries.
The flexible nature of the Sage 50 chart of accounts allows the use of numerical, alphabetical and alpha-numeric assignment of account codes, as well as segmentation of those codes as discussed below. Sage 50 also provides embedded, industry-specific charts of accounts, if needed. Sage 50 has the added feature of being able to change a G/L account code and have all transaction using that code changed to the new account code automatically. This feature also changes any default information for customer and vendor specific G/L account assignments.
- The G/L should be transformative; not a static, one size fits all structure but a dynamic asset that enables companies to tailor G/L processes to meet their unique business needs and changing conditions.
Sage 50 provides a 15 character chart of accounts code, which can include up to five segments. Financial statements and other reports can be produced using any of the five segments, to enable management to hone in on specific areas of importance
- The G/L must be capable of handling an unlimited number of accounts to power a company’s innovation and growth.
In our more than 20 years experience working with Sage 50, and Peachtree before that, with all different sizes and types of companies, we have never had a problem with the number of accounts in the G/L.
- The G/L must allow the user to define their own starting and ending points for accounting periods.
We have seen Sage 50 clients with companies using”normal” calendar periods, off calendar periods – such as 52-53 week years – and quarterly periods. The periods in a Sage 50 year can vary from 1 to 13. The starting and ending dates of a year are totally customizable by the user.
- The G/L must have the ability to build automated processes.
This criteria is handled via memorized transactions, recurring entries, copying of entries, and a totally flexible general journal functionality.
Based on the above, we believe that Sage 50 meets all the requirements of a “Modern General Ledger”.
Our typical starting point for any new Sage 50 project, either a company new to Sage50, one converting from an earlier edition of Sage 50, or one converting from another software product, is a review of the General Ledger chart of accounts, and a redesign of the chart to meet the specific needs of financial management. Our approach typically is to “start at the end”, determine the company’s reporting requirements, and then work backward to design a chart of accounts that meets those reporting requirements, while also allowing ample room for growth and change.
Do you have reporting issues with your own Sage 50 system? Perhaps a “wish list” of reports you would like to produce more easily? Give the Sage 50 Wizards at TriStar Data Systems a call at 610-941-2116, or email us at email@example.com, to see how we can help you improve your reporting capabilities.