This section has the settings for the General Ledger module. There are several tabs to complete data entry that include; General, Fiscal Periods, Segments, Groups, Subgroups, and Special Accounts.
General
Enable General Ledger – Select this option to create transactions in the General Ledger for posted sub-ledger transactions. If unchecked, postings will only go to the sub ledgers. Typically you would always have this setting enabled, except for when company data is initially set up with opening balances. Users will be warned when logging into the company if the General Ledger is set as disabled.
Enable Divisions – Divisions are used to differentiate company accounting within defined entities that require fully separate trial balance reports and financial statements for all accounts. When enabled, a Divisions tab is revealed in order to create additional divisions, which are associated with your chart of accounts. Each Ledger account has a division value attached, and generally every account is replicated for each division. Creating a new division will copy the entire chart of accounts. Division code 000 represents the consolidated company. A Division code is then assigned to transactions. When a user posts the transaction – to a selected division that is not the consolidated 000 division – amounts are updated for accounts with division 000 in addition to the selected division on the transaction.
Segmentation
Location – Before selection of a Location segment value is possible, you first have to configure the account number layout from the General Ledger Segments tab and the Structure sub-tab. If one of your segments in the GL account structure has been designated for Location, select that segment name here.
When you log into Spire, the Location chosen will default on sales, purchase and inventory transactions, but can be edited if user security allows. Posting transactions with a Location value will direct amounts to Ledger accounts that have this value as a segment, when they exist. This is a much easier method to separate posted amounts into different groups than using GL divisions, if you only require separation for particular accounts such as certain revenue or expenses. As from the label, the location segment typically denotes a branch of the company which maintains separate balance sheet and income statement accounts.
Profit Center – Similar to locations, one segment from the account number structure can be designated as a profit center. Choose from the segment name list to assign. Then specific postings can be re-directed as required, typically from sales orders. As from the label, the profit center segment denotes a function of the company for which separate income statement accounts are maintained.
Reconciliation
Allow account reconciliations to be posted with a variance – Enable this option to prevent posting an account reconciliation where the total of the selected transactions to reconcile does not equal the difference between the opening and ending balances, or in other words, that the calculated variance is not 0.00. If you do not enable this option, you are still warned about the variance having a non-zero value but you can still continue. When reconciling a bank account, you wouldn’t want to post with a non-zero variance, but it might be desirable when reconciling a different type of account such as for taxes.
Contract Cost
Differential GL Account – When using contract costs for customers, a GL account can be selected to post cost differences . This way, each customer can have their own cost. The cost amount of an inventory item for a customer is entered in a price matrix record and the Contract Cost field, which is only visible if this differential account has been configured.
The difference between average cost and the contract cost gets posted to this account. Inventory is always relieved of the average cost, the cost of goods account is posted to with the customer’s contract cost, and difference is accounted for here. This then achieves the proper cost of goods and profit even if the customer’s contract cost is lower than average cost.
For more complete information, read the Contract Cost topic and watch the video.