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Clients & Profits X is built
around a one-write, double-entry general ledger.
This comprehensive, accrual accounting system automatically
tracks your income, costs, and expenses using a
custom, user-defined Chart of Accounts. Your G/L
accounts track activity totals for 24 accounting
periods. The system provides agency-tailored financial
statements, including income
statements, balance
sheets, trial
balances, detailed
general ledgers, journals, and audit
trails.
The General Ledger is used for financial accounting. This is different
than job accounting, which deals with costs, billings, and expenses from
the job’s point-of-view. The General Ledger consolidates all of
the work you do -- both job costs and overhead expenses -- to provide
a true look at the shop’s net income.
 Clients & Profits
X has everything you need to produce financial statements,
so it replaces any existing accounting systems you may be
using. You do not need additional software programs to manage
your books.
To use the general ledger
1 Choose Accounting > General Ledger
The General Ledger window opens.
2 Use the find and next buttons
to browse through journal entries, or use the find
function to search for specific journal entry numbers.
To add a journal entry
General journal entries can be added any time during the month for payroll,
insurance expenses, bank fees, etc. That is, anything that doesn't involve
Accounts Payable, Accounts Receivable, Client Payments, Checkbook, or
Employee Expense reports. Click here for step-by-step
instructions.
To clone a journal entry
Cloning makes an exact duplicate of an existing transaction's debit and
credit journal entries. You can clone any general journal entry, even
from previous periods. Click here for step-by-step
instructions.
To edit a journal entry
The Edit G/L Amounts window lists the transaction's debit and credit
journal entries. You can edit these amounts by simply typing in the new
amounts over the old ones. The total debits must equal the total credits
or else your changes won't be saved. Click
here for step-by-step instructions.
To delete a journal entry
Only unposted journal entries can be deleted. (Once a journal entry is
posted, it can't be deleted -- however, adjusting entries can be made
to reverse it or it can be unposted.) Journal entries are deleted by
transaction, not by individual entry, to prevent unbalanced entries. Click
here for step-by-step instructions.
Unlike other systems you may have used, not everything affects your General
Ledger. In fact, only those transactions that involve actual money (such
as purchases, checks, and client payments) update the G/L; job costs
(such as time, out-of-pocket expenses, and purchase orders) do not affect
your financial statements. This is important to understand, since it
determines how you’ll manage your books with Clients & Profits.
Financial reports provide comprehensive auditing and analysis information.
Financial accounting takes into consideration every expense and income
dollar in the shop, not just job profitability. Overhead expenses, salaries
and miscellaneous income are included on the Income
Statement along with job-related transactions. Assets, accumulated
depreciation, liabilities, and equity are reported on the Balance
Sheet. Audit
trails, journals, and ledgers help track the transactions included
in the financial statement calculations. General Ledger account budgets
are easily added and printed to analyze the account activity more closely.
Verifying Journal Entries
When you highlight a journal entry in the General Ledger window then click the verify button, Clients & Profits will verify the accuracy of the currently displayed journal entry. These journal entries must be posted before verifying. Clients & Profits will not verify unposted JEs. The verify function compares posted entries in the General Ledger against it's source. It will automatically fix any common problems with this posted entry.
Cash
vs. accrual explained Cash basis and
accrual basis accounting are the two most
widely recognized methods of tracking a
companies income and expenses. The primary
difference between the two methods has
to do with when the recognition of income
and expenses occur. Under the cash method,
income is recognized when a payment is
received and expenses when a check is written.
This method does not let you match revenues
generated with the costs associated to
them, an important financial accounting
concept. Under the accrual method (the
one used by Clients & Profits), income
is recognized when the invoice is sent
to the client (posted) and expenses are
recognized when the payable is recorded
on the company's books. It's a better way
of recognizing income and expenses for
financial purposes as it relates the income
and expenses more closely to the actual
events causing them and gives you the ability
to properly match the income generated
with the expenses incurred to produce them. |
Using the Out of Balance
Checker
It’s
possible for your general ledger to become out-of-balance
because of system crashes during posting.
This happens when one side of a transaction (either
a debit or credit) is posted, but the system crashes
before the other side is finished. The problem can
happen at any time, and it is difficult to prevent
(since it is always system related). Find out more
about the Out of Balance Checker here.
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