General Ledger Setup Overview

□	As with all the modules within the Micro Key Millennium Series, the General Ledger System has a start-up, step-by-step process that must be followed to ensure accurate Financial Reporting in the future.

•	Before continuing, be sure that the Understanding the General Ledger System has been reviewed and is understood.

□	Complete the initial Maintenance Entries.

•	Departments - These are used to identify a Work Group or Profit-Center within your Company (i.e., have the responsibility for installing, servicing and/or monitoring systems for Subscribers) and so provide another General Ledger itemization tool for Financial Reporting.

•	General Ledger Groups - These are used to sub-divide the five basic Financial Transaction Account Types (i.e., Assets, Liabilities, Equity, Sales and Expenses) into more finely defined sub-groups (or segments).

•	Understanding General Ledger (sub) Groups:

▪	These General Ledger Groups' Titles (Names) are printed as Sub-Headers when Financial Statements & Reports are created.

▪	These General Ledger Groupings also provide Sub-Totals for each of the Sub-Headers that are define. Financial Transaction Account Types (i.e., Assets, Liabilities, Equity, Sales and Expense).

1.	Assets 1000 - 1999 - Create Sub-Headers to separate Current Assets like actual Cash and Accounts Receivable accounts (by using 1000 to 1499), from Other Assets like Furniture & Fixtures or Properties (by using numbers from 1500 to 1999).

2.	Liabilities 2000 - 2999 - In a similar manner, create Sub-Headers to separate Current (Short Term) Liabilities such as Accounts Payable and Credit Card debt from Long Term Liabilities such as business loans and mortgages.

3.	Equity 3000 - 3999 - Create Sub-Headers to separate Capital accounts from Current and Retained Earnings

4.	Revenues 4000 - 4999 - You should also create Sub-Headers to separate various types of Revenue such as Sales Revenues, Recurring Revenues for Monitoring and Service Contracts, and Miscellaneous Revenues such as interest earned.

5.	Expenses 5000 - 9989 - Create Sub-Headers to separate General Expenses from Sales related Expenses (payroll, commissions, advertising, etc.), and other Miscellaneous expenses.

◆	The General Ledger Account Numbers 9990 - 9998 are used (internally) by the system and therefore should not be defined by the User.

◆	The General Ledger Account Number 9999 is the Account Number used by the system to report Profit/Loss.

•	General Ledger Accounts - The General Ledger Account Form is used to enter all of the General Ledger Account Numbers and their Descriptions.

•	The Number assigned to an Account identifies which of the five basic Financial Transaction Account Types (i.e., Assets, Liabilities, Equity, Sales and Expense) they will represent (see 1. to 5. above).

HelpFilesGeneralLedgerAccounts

General Ledger Accounts entry Form

•	A Group ID may be assigned to any Account (see the Understanding General Ledger (sub) Groups section above) thereby further sub-dividing an Account Type into smaller, more finely defined sub-groups.

•	There are several Mandatory Accounts that must also be defined prior to running the General Ledger Setup Wizard, which actually "starts" the General Ledger System.

•	Sale Purchase Items - Once you have defined your General Ledger Accounts, you must assigned each Sale Purchase Item the appropriate Sale Purchase Item Number.

•	Before using the General Ledger System, complete these fields for each each Sale Purchase Item:

HelpFilesSalePurchaseItemGLFields

▪	Sale GL # - Enter the General Ledger Account Number for this type of Sale.

▪	Purchase GL # - Enter the General Ledger Account Number for this type of Purchase.

▪	Dept - If you plan to initiate Multi-Departmental Accounting, enter the appropriate Department number using the Drop-Down Selection List provided.

►	Note: These mandatory fields will NOT be highlighted in Yellow until AFTER the General Ledger Setup Wizard is run successfully. Thereafter, they will be highlighted in Yellow.

•	Bank Maintenance - Once the General Ledger Accounts have been defined, the appropriate General Ledger Account Number must be assigned to each of the Company's Bank Account(s).

□	An Overview of the General Ledger Setup Process:

•	Determining if you are ready to Start the General Ledger System

•	Typically, you will already be using the Accounts Receivable and Accounts Payable modules, and perhaps the Job Costing & Inventory Tracking Systems, for at least a few months before you will implement the General Ledger

•	If you have an existing General Ledger System (whether manual or software driven), the setup process is fairly straightforward because you'll already have a usable Chart of Accounts, a Trial Balance, a Balance Sheet, and a Profit & Loss Statement available.

▪

If you do not have an existing General Ledger System, arrange for your accountant to prepare a Chart of Accounts, plus a Trial Balance, Profit and Loss (Income) Statement, and Balance Sheet - for a specific point in time (at the end of a financial reporting period - reporting either the end of a month or the end of a fiscal year).

•	All of the required Maintenance Entries for this General Ledger System should be completed before you start.

▪	These Maintenance Entries may be done at any time prior to beginning the actual setup process.

•	Determine when you will start the conversion to the MKMS General Ledger System.

•	It is always easier to start this module at the end of a financial reporting period (end of month or end of year), and prior to posting any financial transactions for the following period.

•	However, this is not mandatory, as you may start the General Ledger Setup Process at any time.

•	Just keep in mind that you should start this process at the beginning of the day because, once started, all transactions thereafter are immediately posted - in real time - into the MKMS General Ledger System.

•	You will have to Stop entering financial transaction in the MKMS Accounts Receivable and Accounts Payable modules at this time.

◆	Monitoring operations are unaffected by this General Ledger Setup Process, and should continue normally.

•	Execute these Steps of the General Ledger Setup Process which are outlined below, and explained in much more detail within the associated chapters:

1.	Print the Transaction Summarization Reports

2.	Summarize the Startup Transactions

3.	Run the General Ledger Setup Wizard to validate that you have made the appropriate Maintenance Entries in the appropriate places.

4.	Use the General Journal to make the initial account balance entries - based on the Trial Balance provided by your accountant or previous software - to establish your General Ledger Startup Transactions.

5.	Finally, Post the Summarized Transactions for the financial transactions that occurred after the accounting period for which that Trial Balance - provided by your accountant - was created.

•	The General Ledger System will now be ready to use!

◆	Once the General Ledger System is operational, if - for whatever reason - the Trial Balance becomes "Out of Balance", a Warning Message will be displayed at Login when the User who has Logged In is either an Administrator (Admin) or has been granted the Super User Authority.

HelpFilesGeneralLedgerOutOfBalance

□	What's Next?

•	Complete the initial Maintenance Entries as described above

•	Determine if you are ready to Start the General Ledger System

•	If so, Stop entering financial transaction in the MKMS Accounts Receivable and Accounts Payable modules at this time.

•	Execute the Five Steps of the General Ledger Setup Process outlined below, and explained in much more detail within their associated chapters:

1.	Print the Transaction Summarization Reports

2.	Summarize the Startup Transactions

3.	Run the General Ledger Setup Wizard to validate that you have made the appropriate Maintenance Entries in the appropriate places.

4.	Use the General Journal to make the initial account balance entries - based on the Trial Balance provided by your accountant or previous software - to establish your General Ledger Startup Transactions.

5.	Finally, Post the Summarized Transactions for the financial transactions that occurred after the accounting period for which that Trial Balance - provided by your accountant - was created.