Wiki: GENERAL LEDGER ACCOUNTS

DEFINE GENERAL LEDGER ACCOUNTS#

G/L Accounts codes are short names or abbreviations that point to a more detailed account or account mask.

Users less familiar with accounting systems and general ledger accounts usually find G/L account codes simpler to work with than account numbers.

A G/L account code represents either a distribution code or a distribution mask. That distribution code may be a general ledger account, but distribution codes are not limited to containing general ledger accounts only. They may also contain additional segments for costing or other accounting purposes.

An error message will be issued in the UPGL report if any of the account usages are not set up. It is therefore recommended to set up at least one account for each account usage.

If the account is not needed the Description field can be identified as ‘Not Used’, the Distribution Mask field may be left blank (null), and the account does not need to be attached to a pay component.

When a G/L account code points to a distribution mask rather than a distribution code, this indicates that one or more portions of the distribution code cannot be completed until some context sensitive information is supplied at data entry time.

The system wide edit mask of the distribution code is set up in the G/L Company form (IDGC). This provides basic editing whenever a distribution code is entered.

G/L Codes are referred to in the Payroll Bank Set Up (IPBA) form and the Pay Component (IPPC) form. These forms are discussed further in the next topic in this manual.

Pre Payroll – Labor G/L Logic#

Pre Payroll distribution or Labor G/L, is used if it is necessary to account for labor costs prior to the processing of the payroll cycle, perhaps on a daily or weekly basis, and is usually needed to support a separate costing system or High Line’s Financial Cost Control application.

On the IDGA form, you must check the ‘Pre-Payroll’ toggle for all Wages G/L accounts that need to be posted by Labor G/L.

If labor costs of $1000 were to be journalized for 2004-05 Fiscal period for wages then the Labor journal entries would be as follows:

: 2004-05 Labor G/L Report

Account	Debit	Credit
Reg.$	800.00
OT $	200.00
Labor Clearing		1000.00
	1000.00	1000.00

Then after the Pay Cycle, the wages will be posted to clear the previous Labor journal entries. The Payroll journal entries are as follows:

: 2004-05 Payroll G/L Report

Account	Debit	Credit
Labor Clearing	1000.00
Fed Tax		75.00
United Way		5.00
ER Health	100.00	100.00
Check		920.00
	1100.00	1100.00

Post Payroll – Payroll G/L Logic#

Post Payroll distribution, or Payroll G/L, is the costing of employee earnings, employee deductions, employer contributions, and employee net pays that have been calculated, and approved, for a pay run or several pay runs.

On the IDGA form, you must check the ‘Post Payroll’ toggle for all G/L accounts that need to be posted by Payroll G/L.

In addition, on the IDGA form, each G/L account specifies a ‘Posting Date Method’ that determines the fiscal period of the payline transactions and internally generated amounts in UPCALC.

If all G/L accounts use either the ‘Period End Date’ or ‘Pay Issue Date’ method, then a single pay will journalize all entries to one fiscal period only, depending on the pay period end date or pay issue date.

A standard G/L Report where the posting method is by 'Period End' or 'Pay Issue' would be as follows:

: 2004-04

Account	Debit	Credit
Reg. $	800.00
OT $	50.00
Fed Tax		75.00
United Way		5.00
ER Health	100.00	100.00
Check		770.00
	950.00	950.00

If the posting method is by ‘Derived Fiscal’ and the pay period spans across two fiscal periods, then the G/L would be posted by the pay line transaction date and the internally generated amounts will be posted by the Pay Issue date.

: 2004-04

Account	Debit	Credit
Reg. $	800.00
OT $	50.00
Payroll O/S		850.00
	850.00	850.00

: 2004-05

Account	Debit	Credit
Payroll Clear	850.00
Fed Tax		75.00
United Way		5.00
ER Health	100.00	100.00
Check		770.00
	950.00	950.00

You should use the ‘Derived Fiscal’ posting date method for most G/L accounts except for certain employee deductions that are manually entered either on the IPSN or IPPH form and may be entered with Period End date but should be posted by Pay Issue date.

Accrual Logic#

Accruals happen automatically as part of the Payroll G/L Journalize Pays process, provided you have set up the accrual rules and you are running an accruable pay period.

You must indicate which General Ledger Account codes you wish to accrue in the IDGA form by turning on the ‘Accrual Required’ toggle. The accrual rule is set up in the ‘Accrual Method’ field at the Group level on the IDGR form.

During the last full pay period of a month the Journalize Pays (UPGL) function calculates the percentage of the payroll to be accrued by looking forward to the next pay period (which spans the month end). Based on the number of days (calendar or worked, as indicated on the Group form) that are in that pay period that falls into the current fiscal period, divided by the total number of days (calendar or worked) in the pay period. This will determine a percentage to accrue against the current payroll.

: For example:

: The pay period of 2004-12 (fiscal 2005-04) needs to make an accrual for the 13 calendar days of March that falls into pay period 2004-14 (March 19- April 01) (fiscal 2005-05).

: The system performs the following calculations:

: Mar 19-31 = 13 days = 92.86% of a 14-day pay period

: If the Payroll wage expense for pay period 2004-12 is $1000.00, then the accrual is calculated as $1,000.00 * 92.86% = $928.60.

The Payroll Journal Entries Report (RPGL) will indicate the following:

: 2005-04 Accrual G/L Report

Account	Debit	Credit
Accrual Clearing		928.60
Wages	928.60
	928.60	928.60

: 2005-05 Accrual G/L Report

Account	Debit	Credit
Accrual Clearing	928.60
Wages		928.60
	928.60	928.60

: 2005-05 Payroll G/L Report

Account	Debit	Credit
Wages	1000.00
Deductions		450.00
Contributions	375.00	375.00
Net		550.00
	1375.00	1375.00

Inter-Company G/L Logic#

There are several account usages (lexicon X_ACCOUNT_USAGE) that need to be set up in order to facilitate inter-company accounting:

: 0121 - I/C DR

: 0122 - I/C CR

: 0124 - I/C Suffix Mask

: 0125 - I/C DR Suffix

: 0126 - I/C CR Suffix

On IDGA screen, the following G/L Account entries are examples of set up:

G/L Account	Account Usage	Distr Mask
DUE FROM	SUFFIX 0124 - I/C Suffix Mask	??-XXXX-????-??????
DUE FROM	0121 - I/C DR	01-0880-0000-131000
DUE FROM	0100 0125 - I/C DR Suffix	01-0880-0000-131100
DUE FROM	0885 0125 - I/C DR Suffix	01-0880-0000-131885
DUE TO	0122 - I/C CR	??-????-0000-207088
DUE TO 0100	0126 - I/C CR Suffix	??-????-0000-207088
DUE TO 0885	0126 - I/C CR Suffix	??-????-0000-207088

Account Usage '0124 - I/C Suffix Mask' entry indicates that from:

Distr Mask ??-XXXX-????-??????

: Positions 4 - 7 ( XXXX ) contain the ‘Fund’ portion, which will be used as a suffix to read Account Usage '0125', '0126' entries.

Account Usage '0121 - I/C DR' must be set up (used as the default).

: If suffix entries are not set up for Account usage 0125, this entry will be used.

: The G/L Account Code 'DUE FROM' is then concatenated with the ‘Fund' portion of the distribution to read IDGA again with Account Usage '0125' and G/L Account code = 'DUE FROM 0100'.

Account Usage '0122 - I/C CR' must be set up (used as the default).

: Same process as Account Usage '0121'.

Inter-Company & Fringe#

In Fund accounting, each agency (Police, Airport, etc. – 99 different funds) have a “share” in the General Fund bank account. All checks are paid by a single fund from the General Fund bank account. (There is only one bank account.)

For all monies paid out of the general fund on behalf of the various agencies, a transfer of “cash” is required in the general ledger. In this example, the liabilities are recorded and paid out of the general fund.

Example Definitions#

1. G/L Distribution Segment

: Fund - Department - Object - Project

: ??? - ???? - ????? - ?????

: (The project is optional.)

2. Funds

: 341 – Agency 1 – operational area

: 400 – Agency 2 – operational area

: 001 – General Fund – general operating fund

3. Employer portion of health insurance is included in the fringe element.

: Note that the Health Expense GL account does not have the I/C toggle turned ON since net expense charged to the agency is from the Fringe Expense Account. If the health expense (GL Account Code) has the inter-company toggle turned ON it will result in incorrect entries.

4. Inter-Company feature is controlled by the individual IDGA entries.

5. Fringe Benefit feature controlled by the group (IDGR) and element definitions. This example uses hours worked to pro-rate the employer paid fringe benefits.

Example Entry – with the Inter-Company and Fringe features turned OFF#

Wages are paid for an employee who usually works at Agency 1. In this pay, the employee worked on a special project for Agency 2 for 10 of the 80 hours. UPGL creates the following entries:

GL Acct	PC Desc	GL Code	Dr Amt	Cr Amt	Fund	I/C	Fringe
341-0615-4000	Reg $	Wage-Ex	$800.00		Agency 1	Off	Off
400-0775-4000	Reg $	Wage-Ex	$200.00		Agency 2	Off	Off
001-4171-2122	Fed Tax	Fdtax-Liab		$250.00	General	Off	Off
001-0615-3400	EE Health	Hth-Liab		$100.00	General	Off	Off
341-0615-1100	ER Health	Hth-Exp	$120.00		Agency 1	Off	Off
001-0615-3400	ER Health	Hth-Liab		$120.00	General	Off	Off
001-1000-0220	Net Pay	Bank-Liab		$650.00	General	Off	Off
Journal Total			$1,120.00	$1,120.00

Example Entry - the Inter-Company feature turned OFF and the Fringe feature turned ON#

Total Fringe Costs $120.00 (ER Health)

: Agency 1 - 60 hours / total 80 hours X $120.00 = $90.00

: Agency 2 – 20 hours / total 80 hours X $120.00 = $30.00

GL Acct	PC Desc	GL Code	Dr Amt	Cr Amt	Fund	I/C	Fringe
341-0615-4000	Reg $	Wage-Ex	$800.00		Agency 1	Off	Off
400-0775-4000	Reg $	Wage-Ex	$200.00		Agency 2	Off	Off
001-4171-2122	Fed Tax	Fdtax-Liab		$250.00	General	Off	Off
001-0615-3400	EE Health	Hth-Liab		$100.00	General	Off	Off
341-0615-1100	ER Health	Hth-Exp	$120.00		Agency 1	Off	On
001-0615-3400	ER Health	Hth-Liab		$120.00	General	Off	Off
001-1000-0220	Net Pay	Bank-Liab		$650.00	General	Off	Off

ADDITIONAL FRINGE ENTRIES

341-0615-1100	ER Health	Frng-Liab		$120.00	Agency 1	Off	On
341-0615-1100	ER Health	Frng-Exp	$90.00		Agency 1	Off	On
400-0615-1100	ER Health	Frng-Exp	$30.00		Agency 2	Off	On
Journal Totals			$1,240.00	$1,240.00

Since the employee also worked in Agency 2, the additional entries relieve the health costs charged to Agency 1 based on the hours worked.

Agency 1 Health Expense

: $120.00 Original Entry

: $90.00 Health expense create by the fringe feature (Fringe Expense)

: $120.00 Health expense clear by the fringe feature. (Fringe Liability)

: $90.00 Net Health Costs

Agency 2 Health Expense

: $30.00 Health expense create by the fringe feature (Fringe Expense)