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Default GL Accounts

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Overview 

This article provides an overview of the Default GL Accounts that are available as part of Configurations in Accounting Seed.  Default GL Accounts can be selected in this screen based upon a specific Transactional or Budget Ledger.

Do you want to review information for:

Custom Default GL Accounts can be created and added to the Default GL Accounts screen. For more information, refer to the Add a Custom Default GL Account section of the Summer ’23 Configuration Changes article.

Note: If more than four GL Accounts (including the standard and custom) display on a row in the Defaults GL Accounts screen, the additional GL Account(s) will automatically wrap to the next row.

Ledger

If you have more than one Ledger, use the Ledger drop-down list to select and define the default GL Accounts for the selected Ledger. Different default GL Accounts can be selected for each Transactional Ledger. That way, when records such as Billings, Cash Receipts, etc. are created, the default GL Accounts will automatically populate based upon the Ledger selected on the record.

If the logged in user has a Default Ledger already set up and selected, the Ledger drop-down list will automatically default to the user’s Default Ledger. If the user does not have a Default Ledger already selected, the Default Ledger for the Org will display in the Ledger drop-down list.

When setting up default GL Accounts by Ledger, keep the following points in mind:

  • With the Spring ’23 release, for new Accounting Seed users, the Transactional and Budget Ledgers that are automatically created will now be available in the Ledger drop-down list. For existing users, your Transactional and Budget Ledgers will be available in the Ledger drop-down list with the default GL Account records automatically created. If you want different GL Accounts for a particular Ledger, select it from the Ledger drop-down list, and update the GL Accounts, as necessary. If you use the Consolidations feature, GL Account Default records will automatically be created for all your existing Ledgers as part of the upgrade.

    Important: For new and existing Accounting Seed users, once the Spring ’23 release has been installed, you should review the values on the Defaults GL Accounts screen to make certain that default GL Accounts display correctly for each Transactional Ledger. If no default GL Accounts display in this screen, the Create GL Account Defaults button will be available, as in the sample screen below. Click Create GL Account Defaults to have the system automatically add default GL Accounts. For new AS users, once this button is clicked, the system will create default GL Account records based upon “out of the box” GL Accounts and populate the fields on this page with those values. For existing AS users, if this button displays and is clicked, the system will create and populate default GL Account records based upon the values on your default Ledger.

    CB_01.png
    Note: Click here to view the above image in full screen. 

  • If you create a new Ledger, when you select it from the Ledger drop-down list in the Default GL Accounts screen, the GL Accounts that are associated with your Default Ledger will automatically display for the new Ledger. The GL Accounts can be modified for the new Ledger, if necessary.
  • The following default GL Accounts are global/org and not by Ledger:
    • Default Project Task Labor GL Account - when a Project Task is created, since the Project and Project Task objects do not include a Ledger field, the Default Project Task Labor GL Account will automatically display the default GL Account.
    • Cash Flow Statement GL Accounts – these GL Accounts are set up in the Enablements You cannot include a default GL Account by Ledger for Cash Flow GL Accounts.
      • Default Cash Disbursement Category
      • Default Cash Receipt Category
      • Default Journal Entry Line Category
  • As you review the GL Accounts for each Transactional Ledger, ensure that for the Ledger being reviewed the GL Accounts are unique across all of the following fields:
    • Current Year Earnings GL Account
    • Retained Earnings GL Account
    • AR Control GL Account
    • Default Revenue GL Account
    • Customer Payment Adjustment GL Account
    • Unapplied A/R GL Account
    • AP Control GL Account
    • Vendor Payment Discount GL Account
    • Prepaid Expense GL Account
    • Labor Clearing GL Account
    • Default Project Task Labor GL Account
    • Multi-currency users will also need to include unique values on the following fields:
      • Currency Gain/Loss GL Account
      • CTA GL Account
    • Orders & Inventory users will also need to include unique values on the following fields
      • Vouchers Payable GL Account
      • Standard Cost users only: Inventory Variance GL Account and Work in Process GL Account

Multi-Currency Settings

Note: The Multi-Currency Settings will only be available on the Default GL Accounts screen if you have Multi-Currency enabled. 

GL Accounts in the Multi-Currency Settings section include the Currency Gain/Loss GL Account and the CTA GL Account.

Currency Gain/Loss GL Account

Note: If you have Multi-Currency enabled, this is a required system account. 

A realized gain or loss on currency exchange happens when the following occurs:

  • The currency exchange rate on the day the customer was billed is different from the day cash was collected from the customer.
  • The currency exchange rate on the day the vendor invoice was recorded (or the initial Inventory Receive Date was recorded) is different from the day cash was paid to the vendor.

Accounting Seed will automatically calculate, and record realized gains or losses for you. These will be posted to the default Currency Gain/Loss GL Account that is set up in the Multi-Currency Settings, The calculations and recordings to the default account include the following:

  • Cash Receipts - When a foreign denominated Cash Receipt is applied to a related foreign denominated Billing, the realized gain or loss on currency exchange will be calculated upon cash settlement and recorded to the Currency Gain/Loss GL Account.
  • Cash Disbursement - When a foreign denominated Cash Disbursement is applied to a related foreign denominated Payable, the realized gain or loss on currency exchange will be calculated upon cash settlement and recorded to the Currency Gain/Loss GL Account. This includes when the Pay & Post button is used in the Payable intermediate screen with a Cash Disbursement batch. Once a batch is posted, any realized gain or loss will also post to the default Currency Gain/Loss GL Account. 

CTA GL Account

The  Cumulative Translation Adjustment (CTA) GL Account is used in the Consolidations process as a plug to balance the Trial Balance after Foreign Currency Translation using various exchange rates.

Accounting Close

The GL Accounts in the Accounting Close section of the Default GL Accounts screen include the following:

  • Current Year Earnings GL Account is used to track the current year’s earnings/net income in the Balance Sheet. When an Accounting Period is closed, the net income from the Profit & Loss will flow through to this Balance Sheet GL account.
    Important: Once transactions are posted to the system, this setting cannot be changed. This is a required system account and transactions cannot be manually posted directly to this account.
  • Retained Earnings GL Account is used in the month end close process at year end (automatically posted when the final Accounting Period of the year is closed) to roll the prior year’s net income into the Balance Sheet.
    Important: Once transactions are posted to the system, this setting cannot be changed. This is a required system account.

Accounts Receivable

The GL Accounts in the Accounts Receivable section of the Default GL Accounts screen include the following:

  • AR Control GL Account should be set to the Accounts Receivable GL Account.
    Important: Once transactions are posted to this GL account, it cannot be changed.
  • Default Revenue GL Account should be set to the main revenue account associated with your Billings. This is just the organization-wide default, and other Billing functionality will override this like the Revenue GL account associated with a product, and the Revenue GL account entered on a Billing Line.
  • Customer Payment Adjustment GL Account is used when taking payment discounts.
  • Unapplied AR GL Account is used as a clearing account when cash is received but not yet applied to a Billing/Customer Invoice. This is a required account. It should be a Balance Sheet account, with Sub Type 1 of Assets and, most likely, a Sub Type 2 of Current Asset. Non-profit organizations may want to set this GL Account to a revenue account if they do not use Accounting Seed’s Billing functionality.

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Accounts Payable

The GL Accounts in the Accounts Payable section of the Default GL Accounts screen include the following:

  • AP Control GL Account should be set to the Accounts Payable GL Account.
    Important: Once transactions are posted to this GL account, it cannot be changed.
  • Vendor Payment Discount GL Account is used when taking payment discounts due to vendor terms in the Cash Disbursements process.
  • Prepaid Expense GL Account is used as the default for the Debit GL Account on the Cash Disbursement in the case when the Cash Disbursement does not originate from one or many Payables and the Debit GL Account field is left blank upon entry.

Cash Basis Accounting

When using Multi-book or Cash Basis Accounting, include the following GL Accounts. 

  • Unapplied Expense GL Account – Cash Disbursements will initially post to this GL Account. Once applied to a Payable, this will be reversed and posted to the Expense GL Account(s) on the Payable.
  • Unapplied Revenue GL Account – Cash Receipts will initially post to this GL Account. Once applied to a Billing, this will be reversed and posted to the Revenue and Tax GL Account(s) on the Billing.

Revenue & Expense Amortization Defaults

The GL Accounts in the Revenue & Expense Amortization Defaults section of the Default GL Accounts screen include the following:

Amortize Revenue

  • Default Deferred Revenue GL Account – the Debit GL Account will default to this value when amortizing a Billing
  • Default Revenue Recognition GL Account – the Credit GL Account will default to this value when amortizing a Billing

Amortize Expense

  • Default Deferred Expense GL Account – the Credit GL Account will default to this value when amortizing a Payable
  • Default Expense Recognition GL Account – the Debit GL Account will default to this value when amortizing a Payable

Project Accounting

The GL Accounts in the Project Accounting section of the Default GL Accounts screen include the following:

  • Labor Clearing GL Account will be the GL Account that is credited when a time card is posted. The design for the Labor GL Account is to be a liability account like accrued payroll or payroll clearing. You would relieve this liability when you post your payroll entry from your payroll provider. When a time card is posted, a debit to the Labor GL Account on the project task and a credit to this Labor Clearing GL Account is created for each time card day.
  • Default Project Task Labor GL Account is used to set the Labor GL Account automatically on the project task. When a time card is posted, a debit to the Labor GL Account on the project task, (or if blank this Default Project Task Labor GL Account) and a credit to the Labor Clearing GL Account is created for each time card day.

    Note: The same GL Account can be used to populate both the Labor Clearing GL Account and the Default Project Task Labor GL Account fields.

Project Costing

The GL Accounts in the Product Costing section of the Default GL Accounts screen include the following:

  • Vouchers Payable GL Account is a clearing account used for received inventory that does not yet have a related Payable transaction.
    Important: Once transactions are posted to this GL account, it cannot be changed.
  • Work in Process GL Account is used as the WIP account in Accounting Seed’s manufacturing process when building inventory.
  • Inventory Variance GL Account is used as the purchase price variance account between Standard Cost and the actual price paid for inventory.

Note: If Weighted-Average Cost is enabled, the Inventory Variance GL Account field does not display as it is not applicable when using this inventory valuation methodology.

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Edit Default GL Accounts

Custom Default GL Accounts can be created and added to the Default GL Accounts screen. For more information, refer to the Add a Custom Default GL Account section of the Summer ’23 Configuration Changes article.

  1. Navigate to Accounting Home and click the Setup tab. Then, under the Configurations menu, click Default GL Accounts. The Default GL Accounts screen displays.

    Important: For new and existing Accounting Seed users, once the Spring ’23 release has been installed, you should access this screen to make certain that default GL Accounts display. If no default GL Accounts display in this screen, the Create GL Account Defaults button will be available. Click Create GL Account Defaults to have the system automatically add default GL Accounts.

    Note: If the Default GL Accounts screen is accessed from the Ledger screen using the Ledger GL Defaults button, the selected Ledger will automatically display without a drop-down list to select a different Ledger as in the sample screen below.

    CB_01.png
    Note: Click here to view the above image in full screen. 

  2. Select the appropriate Ledger from the drop-down list.
  3. Click the Pencil icon that displays to the right of Default GL Accounts. Then, edit the Default GL Accounts, as necessary.  Some default accounts include the Lookup icon, which you can click to search for a GL Account number. Otherwise, just enter the GL Account number.

    Important: Please keep in mind that for some Default GL Accounts (as mentioned above in this article), once transactions are posted to the GL account, it cannot be changed.

    CB_02.png
    Note: Click here to view the above image in full screen. 

    Note: If you want to edit a GL Account record, do not click the Pencil icon. Instead, mouseover the GL Account. Then, click Edit.

    Default_GL_Accounts_03.png

    The Edit dialog box will display. Edit the record, as necessary. Otherwise, click View if you only want to view the record.

  4. Click Save.

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Winter ’24 Release

Release Notes and Schedule

  • If the logged in user has a Default Ledger already set up and selected, the Ledger drop-down list will automatically default to the user’s Default Ledger. If the user does not have a Default Ledger already selected, the Default Ledger for the Org will display in the Ledger drop-down list.
  • Field names have been updated in the Revenue & Expense Amortization Defaults section. 

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Summer_23.png

Summer '23 Release

Release Notes and Schedule

  • With this release, you can now add a custom Default GL Account(s).
  • If you create a new Ledger, when you select it from the Ledger drop-down list, the GL Accounts that are associated with your Default Ledger will automatically display for the new Ledger.

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Spring ’23 Release

Release Notes and Schedule

  • When using Multi-Ledgers, you now have the ability to configure default GL Accounts by Ledger.

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