General Ledger Multiple locations

[Alvin Martin]

Hello Dev

In setting up the General Ledger, I am not sure how to use the account sequences or sections?

How every I will want to generate income statements that would separate income and expenses by location as well as overall.  I may want to do the same with the balance sheet.  Without having to do a bunch of trial and error, what would be the best account structure for this?

Thanks, AM


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[Nathan Gray]

On 8-May-08, at 9:32 AM, Alvin Martin wrote:

> In setting up the General Ledger, I am not sure how to use the  
> account sequences or sections?

Neither am I... :-)


> How every I will want to generate income statements that would  
> separate income and expenses by location as well as overall.  I may  
> want to do the same with the balance sheet.  Without having to do a  
> bunch of trial and error, what would be the best account structure  
> for this?

I'm just about to start making the Income Statement more flexible &  
accurate, but for sequences and sections:
Sequences are usually your 5 basic account types: Asset, Liability,  
Equity, Income, Expense.
Sections will show up on your reports, and tend to be things like  
Sales, Cost of Goods Sold, Sales Expenses, Marketing, Administration  
expenses, Amortization, Utilities, Foreign Exchange Loss.  You will  
probably want to split them into Location A Sales, Location B Sales,  
Location A COGS, Location B COGS, etc. so they show up separately on  
the reports.

Nathan Gray
nathan at goarctic dot com


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[Alvin Martin]

I will split up the accounts as you mention below "Location A Sales, Location B Sales, Location A COGS, Location B COGS, etc."  But when financial reports are generated there may need to be a way to filter out unwanted accounts, as in an income statement for just location B
 
Nathan Gray wrote:

On 8-May-08, at 9:32 AM, Alvin Martin wrote:

In setting up the General Ledger, I am not sure how to use the account sequences or sections?

Neither am I... :-)

How every I will want to generate income statements that would separate income and expenses by location as well as overall.  I may want to do the same with the balance sheet.  Without having to do a bunch of trial and error, what would be the best account structure for this?

I'm just about to start making the Income Statement more flexible & accurate, but for sequences and sections:
Sequences are usually your 5 basic account types: Asset, Liability, Equity, Income, Expense.
Sections will show up on your reports, and tend to be things like Sales, Cost of Goods Sold, Sales Expenses, Marketing, Administration expenses, Amortization, Utilities, Foreign Exchange Loss.  You will probably want to split them into Location A Sales, Location B Sales, Location A COGS, Location B COGS, etc. so they show up separately on the reports.

Nathan Gray
nathan at goarctic dot com

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[Alvin Martin]

I am a little unclear about these account sections and groups, You say I should divide up sections into locations?  In the chart of accounts the accounts are assigned an account group,  an account group is assign an account section,  So then I would first create a section for each location, then account groups for that section-location, then accounts for that group.

Is this thinking correct?

This is what I have now:
sections
1000 Asset Accounts
2000 Liability Accounts
3000 Equity Accounts
4000 Revenue Accounts
5000 Cost of Goods Sold
6000 Expenses

account groups
1000 Current Assets
1200 Long Term Assets
1800 Other Assets
2000 Current Liabilities
2500 Long Term Liabilities
3000 Equity
4000 Income
5000 Cost of Goods
6000 Expenses


Nathan Gray wrote:

On 8-May-08, at 9:32 AM, Alvin Martin wrote:

In setting up the General Ledger, I am not sure how to use the account sequences or sections?

Neither am I... :-)

How every I will want to generate income statements that would separate income and expenses by location as well as overall.  I may want to do the same with the balance sheet.  Without having to do a bunch of trial and error, what would be the best account structure for this?

I'm just about to start making the Income Statement more flexible & accurate, but for sequences and sections:
Sequences are usually your 5 basic account types: Asset, Liability, Equity, Income, Expense.
Sections will show up on your reports, and tend to be things like Sales, Cost of Goods Sold, Sales Expenses, Marketing, Administration expenses, Amortization, Utilities, Foreign Exchange Loss.  You will probably want to split them into Location A Sales, Location B Sales, Location A COGS, Location B COGS, etc. so they show up separately on the reports.

Nathan Gray
nathan at goarctic dot com

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[Nathan Gray]

On 8-May-08, at 1:18 PM, Alvin Martin wrote:

> ... there may need to be a way to filter out unwanted accounts, as  
> in an income statement for just location B

I'm about 1/3 done a way to do this.

Nathan Gray
nathan at goarctic dot com


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[Nathan Gray]

On 8-May-08, at 6:10 PM, Alvin Martin wrote:

> I am a little unclear about these account sections and groups, You  
> say I should divide up sections into locations?  In the chart of  
> accounts the accounts are assigned an account group,  an account  
> group is assign an account section,  So then I would first create a  
> section for each location, then account groups for that section-
> location, then accounts for that group.
>
> Is this thinking correct?

That looks like it would work.  One of the big problems is there are  
so many ways that would work.  We separate our locations at the GL  
Account level, and that works for us, but we can't break out reports  
for one location.  Our account groups are for product lines (and the  
other stuff), so we can get summaries for them.
You'll have to decide what will work best for your company.

> This is what I have now: ...

To me, it looks like that would certainly work, but I am not an  
accountant.
As an example, we've pushed what you have as groups into sections, and  
use groups to break things down further.  For example in
the Cost of Sales Section, we have the groups Cost of Goods, Material  
Cost and Labour Cost.
Some of the smaller businesses I've worked with have one group per  
section, because they don't need any more detail.
You may want to keep your sections as you have them, but break up your  
groups into:
1000 Current Assets
1001 Location A Current Assets
1002 Location B Current Assets
1200 Long Term Assets
1201 Location A Long Term Assets
....

Then create appropriate accounts in each group.  Again, you'll have to  
decide what will work best for your company.

Nathan Gray
nathan at goarctic dot com


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[Alvin Martin]

I believe our company would face the same as any company with multiple locations. What it comes down to here is the end result (reports) As a new install I have not tried to generate any reports yet.  I understand you are working on a more flexible income statement now.  We will want to use an account structure that would facilitate extracting data from the general ledger.  I would think that location separation would be best at the GL account level as that is were you make your entries, it would then only be a matter of report making, coming up with a good report maker to filter out accounts should do it. With the two reports, Income Statement and Balance Sheet, with the ability to pick or drop accounts.  I do not know how difficult this will be.  As a coder you will have to let me know what is the best to separate location.

AM



Nathan Gray wrote:

On 8-May-08, at 6:10 PM, Alvin Martin wrote:

  

I am a little unclear about these account sections and groups, You  
say I should divide up sections into locations?  In the chart of  
accounts the accounts are assigned an account group,  an account  
group is assign an account section,  So then I would first create a  
section for each location, then account groups for that section- 
location, then accounts for that group.

Is this thinking correct?
    

That looks like it would work.  One of the big problems is there are  
so many ways that would work.  We separate our locations at the GL  
Account level, and that works for us, but we can't break out reports  
for one location.  Our account groups are for product lines (and the  
other stuff), so we can get summaries for them.
You'll have to decide what will work best for your company.

  

This is what I have now: ...
    

To me, it looks like that would certainly work, but I am not an  
accountant.
As an example, we've pushed what you have as groups into sections, and  
use groups to break things down further.  For example in
the Cost of Sales Section, we have the groups Cost of Goods, Material  
Cost and Labour Cost.
Some of the smaller businesses I've worked with have one group per  
section, because they don't need any more detail.
You may want to keep your sections as you have them, but break up your  
groups into:
1000 Current Assets
1001 Location A Current Assets
1002 Location B Current Assets
1200 Long Term Assets
1201 Location A Long Term Assets
....

Then create appropriate accounts in each group.  Again, you'll have to  
decide what will work best for your company.

Nathan Gray
nathan at goarctic dot com


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[Nathan Gray]

On 9-May-08, at 2:54 PM, Alvin Martin wrote:

> I believe our company would face the same as any company with  
> multiple locations. What it comes down to here is the end result  
> (reports) As a new install I have not tried to generate any reports  
> yet.  I understand you are working on a more flexible income  
> statement now.  We will want to use an account structure that would  
> facilitate extracting data from the general ledger.  I would think  
> that location separation would be best at the GL account level as  
> that is were you make your entries, it would then only be a matter  
> of report making, coming up with a good report maker to filter out  
> accounts should do it. With the two reports, Income Statement and  
> Balance Sheet, with the ability to pick or drop accounts.  I do not  
> know how difficult this will be.  As a coder you will have to let me  
> know what is the best to separate location.

To be able to pick and choose, for the most part this is done at the  
group level, so you would want to have your locations as groups at the  
lowest, rather than at the account level.  The Income Statement report  
as I'm working on it will let you choose which groups you want for eg  
Sales, Cost of Sales, Expenses, etc.

Nathan Gray
nathan at goarctic dot com


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