General Ledger Reporting

General ledger

1. GL transaction, contains the debits and credits for each transaction on the cash and accruals basis. These transactions are generated from either the AP or AR functions, or from GL journals.
2. GL trial balance, includes a trial balance on the cash and accruals basis for each property for each period. The trial balance contains the account balance for each account for each property for each period. This balance is updated each time a transaction is processed either through accounts payable, accounts receivable or general ledger (journals).

Source of transactions

The source of the transactions is reflected in the GL transaction table which is also shown in the GL report. The source codes are AP, AR or GJ.

Cash and accruals basis

All transactions get entered on both the cash and accruals basis if applicable. This enables cash and accruals accounting which is not available on all accounting systems. The general ledger distinguishes between the two types by recording accruals transactions as method 1 and cash transactions as method 2.

Understanding cash and accruals differences – on owner reports

• Cash transactions only reflect cash received and cash paid out of a property. 
• Accruals transactions are reflected when income is earned (AR invoices are raised) or expenses are incurred (AP invoices raised).
  As such there are differences when reporting out on the two methods.
• The accruals owners statement calculates the accruals income and expenses position starting with the cash receipts and payments and making various adjustments to them in the report only to end up with the income earned or expenses paid for the period. It does not actually create any transactions.
• The general ledger however maintains a separate cash and accruals ledger. If nothing else is done then the accruals owners report will not normally agree with the GL profit & loss run on the accruals basis. To make them agree the month end needs to be run in the GL which effectively calculates the adjustments required, e.g. charges in advance or prepaid expenses and puts transactions into the GL via journal entries.
• The other difference is the accrual owners report can have accrued expenditure or accrued income which gets entered into a separate table which the accruals owner report looks at. These items should be entered into the GL as reversing  journals to make the GL profit and loss run on the accruals basis equal the accruals owners report.

Payment forms – old and beta version

• Both the payment forms utilise the GL figures to show the movements in the cash balance for the current period. Both forms also show the cashbook balance which is compared with the GL calculated bank balance. Both should come up with the same result – if different an error message is displayed on the screen. In these instances the reason for the difference should be investigated and corrected. If it is the result of a transaction put into the system not corrected reflected in the GL then this ‘bug’ should be notified to support for the development team to rectify.

The other difference is the new payment form contains drill down capability so that users can look at the transactions making up the numbers. This drills down into the general ledger.

NB. This is useful for Property Managers who sometimes want to know if tenants have paid more than one month’s rent which is relevant to the amount they pay the owner as owners like to receive consistent.