The primary files in the  General Ledger Module are the Chart Of Accounts, Budgets and Transactions.

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Click below for greater detail on the following subjects:

Account Structure Transactions
Divisions and Pools Post Transactions
Other Direct Costs Sort General Ledger
Accounting Periods Print General Ledger

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ACCOUNT STRUCTURE

The structure of the General Ledger Account Number is as follows:

A 7-digit number comprised of a 4-digit account number (nnnn), two digit division (dd), and a 1-digit pool (p).  The first digit in the account number indicates the classification of the account:

bullet1 = Assets
bullet2 = Liabilities
bullet3 = Equity
bullet4 = Income
bullet5 = Direct Expenses
bullet6 = Indirect Expenses (Overhead and G&A)
bullet7 = Fringe Benefit expenses
bullet8 = Non-Allocable expenses
bullet9 = Bids and Proposals (B&P) and Independent Research and Development (I R&D) costs

The second, third, and fourth digits indicate the function of the account, and are alpha-numeric characters.

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DIVISIONS AND POOLS

The fifth and sixth digits indicate the division and are alpha-numeric characters. The division code can be used to indicate a division, location, or department. This field is used as a method of recording income and expenses that can be identified with either an activity or a location.

The seventh digit indicates the pool (i.e., Overhead / G&A) and is an alpha-numeric  character. Pools indicate the collection of a specific type of indirect expense (e.g., On-site, Off-site, G&A). The example below illustrates the use of the divisions and pools.

EXAMPLE:  ABC Company has an office in Washington and one in Virginia Beach. The Washington Office uses on-site (at their facility) and off-site (at a government facility) overhead rates. Virginia Beach uses only the on-site rate. One company-wide G&A rate is used. Their divisions/locations and pools could be structured as follows:

Divisions:

bulletWashington = 10
bulletVirginia Beach = 20
bulletG&A - All Departments = 01

Pools:

bulletOn-site Overhead = A
bulletOff-Site Overhead = B
bulletG&A Expenses = G

Each income, direct, and overhead account in the General Ledger would have 10A, 10B, 20A as the division and pool, as follows:

Income :  (4001)

bullet400110A - Washington On-site
bullet400110B - Washington Off-site
bullet400120A - Virginia Beach On-site

Direct Labor:  (5010)

bullet501010A - Washington On-site
bullet501010B - Washington Off-site
bullet501020A - Virginia Beach On-site

Overhead -Rent:  (6510 )

bullet651010A - Washington On-site
bullet651010B - Washington Off-site
bullet651020A - Virginia Beach On-site
bullet651001G - G & A

This account structure allows for the printing of financial statements showing division 10A, 10B, 20A, all of division 10 (Washington) regardless of pool, 20A, all On-Sites (Pool A for Washington and Virginia Beach combined), and all divisions combined (All of Washington regardless of Pool and Virginia Beach).

The concept of divisions and pools also extends to the job costing aspect of the system. Each contract is assigned to a division and pool, and can be shared by more than one such group.

EXAMPLE: ABC Company has a CPFF contract with 2 tasks, each of which are subdivided into 3 subtasks. Subtask 1 of both tasks uses the off-site overhead rate (Pool B); all others use the on-site rate (Pool A). The contract belongs to the Washington Office (Division 10) but the Virginia Beach Office (Division 20) is also working on Task 2, Subtask 3. The contract would be numbered as follows:

bulletA1000 001 01 10B
bulletA1000 001 02 10A
bulletA1000 001 03 10A
bulletA1000 002 01 10B
bulletA1000 002 02 10A
bulletA1000 002 03 10A
bulletA1000 002 03 20A

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OTHER DIRECT COSTS

 

ODC's are posted to the Contract Cost Master Record in based on the 3 digit of the General Ledger Account numbers.

EXAMPLE: If you want to breakdown the travel expenses in the G/L use the following type of structure. (All items comprising Travel (5100 - 5109) would be posted to the Contract Record Other Direct Cost and labeled TRAVEL.)

bullet5100 Travel
bullet5101 Location Mileage
bullet5102 Airfare
bullet5103 Taxi
bullet5104 Meals
bullet5105 Hotel
bullet5106 Auto Rental
bullet5107 Conferences
bullet5108 Other Transportation
bullet5109 Miscellaneous

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ACCOUNTING PERIODS

 

The user defines the Accounting cycle. A calendar year, fiscal year or 52-53 week year may be entered. The Chart of Accounts contains 27 dates -- 13 closing dates for the current year, 13 closing dates for the previous year, and the current year opening account balance. When an accounting period is closed, the appropriate date is marked as having been closed. The system keeps track of the 'open' accounting period for purposes of posting transactions (see the discussion below on POST TRANSACTIONS), printing general ledgers, trial balances, and financial statements. Transactions for a period beyond the current accounting period may be entered, but cannot be posted until the Transaction date falls within the current accounting period (i.e., February Transactions may be entered in January, but may not be posted until January is closed and February becomes the 'Current Accounting Period').

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TRANSACTIONS

 

As in most double entry accounting systems, the basic ingredient in CLOSER is a transaction consisting of balancing debits and credits. In many batch-type systems, transactions are summarized in modules (e.g., Accounts Payable) and then posted to the General Ledger at month-end.  In CLOSER, transactions are posted (on a daily basis if applicable), reviewed, un-posted, corrected, and posted as many times as needed during the current accounting period, to ensure the information is correct.

Transactions are stored in CLOSER for the entire fiscal year. They are numbered sequentially within the various types of journals (General, Accounts Payable, Disbursement, Contract Billing, Cash Receipts, Employee Payroll). All transactions, regardless of where they originate (e.g., Accounts Payable, Payroll, etc.) or how they are generated (e.g., manually or automatically by the system), are in the same format to allow sorting and printing of the General Ledger.

SIGNIFICANCE OF JOURNALS

The journals used for transactions are:

bulletBilling (B)
bulletDisbursements (D)
bulletGeneral (G)
bulletPayroll (E)
bulletPurchases (P)
bulletReceipts (R)

The significance of each of these journals is discussed below.

The Billing and Receipts journals are used to record Accounts Receivable invoices, and cash receipts.

The Purchase and Disbursements journals are used to record the distribution, and payment, of Accounts Payable. Purchase journal entries are created automatically when the Accounts Payable Invoice is entered. Disbursement entries are created when checks are generated. Manual checks are also entered as Disbursement entries.

Two Payroll journal entries are created automatically in the Payroll Module. One entry records the labor expense and credits Accrued Salaries. The other records the cash and withholdings (Gross-To-Net) and debits Accrued Salaries.

General Journal entries are typically used to correct entries from a previous month. General journal entries can be entered manually, or by using Recurring Journal entries or Reversing Journal entries.

All accounting data in CLOSER is eventually reflected in a transaction. Some transactions are created by the system , and some are manually entered directly into the system. When entering a transaction the following editing functions are performed by the system. These include:

bulletensuring the transaction is in balance;
bulletvalidating a Contract Number;
bulletverifying that a Contract has not been closed to future charges;
bulletcomparing the Vendor Number to the Accounts Payable Invoice number to ensure they are a proper match;
bulletverifying that the General Ledger account number is in the Master file;
bulletensuring that when the account number represents a direct cost (i.e., a 5000 series account), that a Contract Number is present;
bulletensuring that the division and pool reference on a contract agrees with the division and pool on the General Ledger account number;
bulletensuring that the correct type of contract is being referenced for the account number being charged (e.g., a proposal (P) contract for a B & P expense).

Transactions are entered continually during an accounting period, with the majority of the activity being generated through Accounts Payable. Transactions are printed, proofread, and corrected as necessary. Until posted, the transactions are not reflected in any of the subsidiary records. There are, however, general ledger prints that, at the users option, will reflect un-posted transactions.

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POST/UNPOST TRANSACTIONS

 

Until a transaction is posted it does not affect the Chart of Accounts or any of the other subsidiary records which are referenced on the transaction. Posting a Transaction updates all the subsidiary record referenced on the transaction. These subsidiary records are:

bulletContract Cost Record for THIS MONTH.
bulletVendor Record for Month-To-Date INVOICES [Purchase Transactions] or Month-To-Date PAYMENTS [Disbursement Transactions]
bulletAccounts Payable Invoice Status and Amount Paid.
bulletGeneral Ledger Chart of Accounts for the current accounting period.

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SORT THE GENERAL LEDGER

 

In order to print a General Ledger, the transactions are first sorted in an order appropriate to the account(s) being printed. They are sorted on any four of the six items recorded on a transaction:

  1. TRANSACTION NUMBER
  2. DATE
  3. CONTRACT NUMBER
  4. VENDOR/EMPLOYEE NUMBER
  5. INVOICE/CHECK NUMBER
  6. ACCOUNT NUMBER

For most General Ledgers, the transactions will first be sorted by the Account Number; thus enabling the printing of accounts in a sequential order. The second sort criteria is the most important in determining the order in which transactions in a certain account are printed. The third and fourth sort options are less important, since the first and second options ensure that most of the transactions will be in a sensible order.

EXAMPLE: In order to do bank reconciliations, the cash accounts should be in numeric order [first sort option by ACCOUNT NUMBER]; the checks should be listed in numeric order [second sort option by INVOICE/CHECK NUMBER]; the deposits should be listed in order by date [third sort option by DATE]. The fourth sort option is, at this point, not material. However, in the event there are transactions in the cash accounts that have no check number (Debit Card, Wire Transfers and Electronic Payments), they can be put in order by vendor number [fourth sort option by VENDOR/EMPLOYEE NUMBER].

The sort order which would be used for cash would have no relevance to the order needed for Accounts Receivable or Accounts Payable, for example. Therefore, typical sort orders for various account types are provided to make this process easier.

  1. CASH 6-5-2-4 (Sort by account, check number, date, vendor number)
  2. ACCOUNTS RECEIVABLE 6-3-5-2 (Sort by account, contract, invoice number, date)
  3. OTHER ASSETS 6-4-5-2 (Sort by account, vendor, invoice/check number, date)
  4. ACCOUNTS PAYABLE 6-4-5-2 (Sort by account, vendor, invoice, date)
  5. INCOME AND ODC'S 6-3-4-2 (Sort by account, contract, vendor, date)
  6. ODC REPORT 3-6-4-2 (Sort by contract, account, vendor, date)
  7. INDIRECT COSTS 6-4-5-2 (Sort by account, vendor, invoice, date)
  8. OTHER Select your own sort order.

Note that the first sort order for the ODC REPORT is by contract, and the second by account. This allows a report to be printed which lists the ODC's by contract by account.

A single account, a sequential range of accounts, or the entire General Ledger can be sorted. Based on the sort order selected, appropriate account numbers to be sorted will be prompted. These can, and should, be changed when appropriate or desired.

We recommend that the final month-end General Ledgers be sorted and printed in groups of accounts which use the same sort sequence. This means that the General Ledger must be printed in pieces rather than in one step. This procedure, however, results in more meaningful and helpful General Ledger reports. It also makes more sense to print the Balance Sheet accounts year-to-date, but it may not be necessary to print the income and expense accounts year-to- date every month. Once the sort is completed, the general ledger can be printed.

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PRINT THE GENERAL LEDGER

 

When printing the General Ledger, numerous options are available that control, for example, the time period printed, where subtotal levels are shown, and at what level contracts are summarized.

The General Ledger can be printed year-to-date, current month-to-date (which is the normal default), any particular month in the fiscal year, or any range of dates in the fiscal year. It is possible, for example, to print the first quarter of the year by selecting periods 01-03.

Contract or Vendor subtotals within accounts can be selected when printing the General Ledger. For example, if a General Ledger for Accounts Payable is being printed, subtotals by vendor would be the appropriate selection. For Accounts Receivable or direct costs, subtotals by contract would be the normal response. Contracts can be totaled at the subtask, task, or contract level.

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