Financial secretarial component of an ERP package provides companywide control and addition of financial information. This module provides the ability to centrally track financial accounting data within a framework of multiple companies, languages, and currencies.
The General Ledger (GL) module is the heart of finance package of an ERP system. Through integration with logistics, business processes as well as with accounting sub ledgers of other finance modules such as accounts payable, accounts receivable, cash management, GL provides a central pool of accounting data required for finance reporting (including statutory reports) and other purpose. One of the important functions of GL is to real time update of sub ledger, thus eliminating the time consuming settlement. GL also provides summarized data for use in planning, control and reporting.
One of the important processes of GL is setting up the chart of Accounts, which is a complete structure of ledger accounts used by the organization. Chart of Accounts can be flexibly structured both at a parent and individual company level. Chart of Account may also be defined unconnectedly for statutory purpose as well as well as for the purpose of reporting to management. In some packages, the concept of dimension is used which gives a vertical view on ledger account. Another important parameter of GL is transaction type which identifies different categories of transactions such as journal voucher, sales invoice, cash, and corrections. Other important parameters of GL are i) parent company and company parameters (this will contain accounts for profit and loss, currency fluctuations etc. ii) Periods (Fiscal and Tax), iii) Tax code by countries
Integration mapping scheme needs to be defined for the posting of logistics transactions into finance. Examples of logistics transactions (for different transaction origins) that result in a corresponding financial transaction and for which the corresponding chart of accounts are needed to be defined, are given below:
If a period or year is past its end date, it needed to be closed and the result is to be posted in next period/ year. Before closing any period it is necessary to check the status of the period. Next, auditing, understanding, passing of final correction entries and rebuilding of ledger history is carried out.
In the last part of this process, closing of the periods, final closing of the periods and closing the year and archiving of data is done.