General Ledger User Guide

This guide provides comprehensive instructions for using the General Ledger (GL) module within the Encore OS Finance & Accounting system.

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Table of Contents

1. Overview
2. Journal Entry Management
3. Recurring Entries
4. Trial Balance
5. Period Controls
6. Best Practices
7. Troubleshooting

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Overview

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What is the General Ledger?

The General Ledger (GL) is the core financial transaction engine that records all financial transactions using double-entry accounting principles. Every transaction affects at least two accounts, with total debits always equaling total credits.

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Key Features

• Double-Entry Accounting: Every transaction is balanced with equal debits and credits
• Fund Accounting: Track funds with donor restrictions and purpose restrictions
• Period Controls: Prevent posting to closed fiscal periods
• Immutable Transactions: Posted entries cannot be modified, only reversed
• Audit Trail: Complete tracking of who created/posted/reversed entries
• Recurring Entries: Automate repetitive monthly/quarterly/annual transactions

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Access Requirements

• View Journal Entries: All organization users
• Create/Edit Draft Entries: Finance staff and administrators
• Post Entries: Finance administrators only
• Close Periods: Finance administrators only

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Journal Entry Management

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Creating a Draft Journal Entry

1. Navigate to Journal Entries
   • Go to Finance → Journal Entries
   • Click + New Entry button
2. Enter Header Information
   • Transaction Date: The date the transaction occurred
   • Posting Date: The date to post to the GL (defaults to today)
   • Period: Select the fiscal period (must be open)
   • Description: Brief summary of the transaction
   • Source Type: Manual, System, Import, etc.
   • Notes: Optional detailed explanation
3. Add Journal Entry Lines
   • Click + Add Line
   • Account: Select GL account from Chart of Accounts
   • Debit: Enter debit amount (or 0)
   • Credit: Enter credit amount (or 0)
   • Fund: Optional fund assignment
   • Department: Optional department assignment
   • Program: Optional program assignment
   • Description: Line-level description
4. Balance Validation
   • The form displays running totals of debits and credits
   • Save as Draft button enables when debits = credits
   • Unbalanced entries cannot be saved
5. Save the Entry
   • Click Save as Draft
   • Entry status: draft
   • Entry can be edited or deleted while in draft status

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Example: Recording a Cash Sale

Scenario: Received $500 cash for services rendered. Total Debits: $500 **Total Credits**:$500
Status: Balanced ✓

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Editing Draft Entries

1. Navigate to Finance → Journal Entries
2. Click on the draft entry to open
3. Modify header or line information
4. Click Update Entry

Note: Only draft or pending entries can be edited.

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Posting a Journal Entry

What Posting Does:

• Changes entry status from draft to posted
• Updates account balances in fa_account_balances
• Stamps posted_at and posted_by
• Makes entry immutable (cannot be edited/deleted)

Steps:

1. Open the draft entry
2. Review all details for accuracy
3. Click Post Entry button
4. Confirm the posting action
5. System validates:
   • Entry is balanced
   • Period is open
   • All required fields present
6. Entry status changes to posted

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Reversing a Posted Entry

When to Reverse:

• Correct an error in a posted entry
• Cancel a transaction
• Adjust prior period entries

Reversal Process:

1. Open the posted entry
2. Click Reverse Entry button
3. Select Reversal Period (current or next period)
4. Enter Reversal Description
5. Click Confirm Reversal

What Happens:

• System creates new journal entry with opposite debits/credits
• New entry is automatically posted
• Original entry status changes to reversed
• Both entries link via reversal_of_entry_id and reversed_by_entry_id

Example Reversal: Original Entry: Reversal Entry:

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Deleting Entries

• Draft Entries: Can be deleted via Delete Entry button
• Posted Entries: Cannot be deleted (use reversal instead)
• Reversed Entries: Cannot be deleted

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Recurring Entries

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What are Recurring Entries?

Recurring entries are templates for transactions that repeat on a regular schedule (monthly rent, quarterly insurance, annual dues, etc.).

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Creating a Recurring Entry Template

1. Navigate to Recurring Entries
   • Go to Finance → Recurring Entries
   • Click + New Recurring Entry
2. Configure Template
   • Template Name: Descriptive name (e.g., “Monthly Rent Payment”)
   • Description: Optional details
   • Frequency: Monthly, Quarterly, Annually
   • Start Date: When to begin generating entries
   • End Date: Optional expiration date
   • Is Active: Enable/disable template
3. Define Template Lines
   • Add journal entry lines as you would for a manual entry
   • Lines must be balanced (debits = credits)
   • Account assignments are saved in template
4. Save Template
   • Click Create Template
   • Template is now active and ready to generate entries

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Example Recurring Entry: Monthly Rent

Template Name: Monthly Office Rent
Frequency: Monthly
Start Date: 2025-01-01

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Generating Entries from Templates

Automated Generation (if enabled):

• System checks next_generation_date for each active template
• Generates draft journal entry automatically
• Updates last_generated_date and calculates next date

Manual Generation:

1. Open recurring entry template
2. Click Generate Entry Now
3. Select target period
4. Review generated draft entry
5. Post entry when ready

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Managing Recurring Entries

• Edit Template: Modify frequency, dates, or line items
• Deactivate Template: Set is_active = false to stop generation
• Delete Template: Remove template (does not affect previously generated entries)

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Trial Balance

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What is a Trial Balance?

A trial balance is a report showing ending balances for all GL accounts in a given period. It verifies that total debits equal total credits.

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Running a Trial Balance

1. Navigate to Trial Balance
   • Go to Finance → Trial Balance
2. Select Filters
   • Fiscal Period: Required (e.g., “Period 3 - March 2025”)
   • Fund: Optional filter by specific fund
   • Show Inactive Accounts: Toggle to include inactive accounts
3. View Results
   • Account Number: GL account number
   • Account Name: GL account name
   • Account Type: Asset, Liability, Equity, Revenue, Expense
   • Fund: Fund assignment (if applicable)
   • Beginning Balance: Balance at start of period
   • Period Debits: Total debits during period
   • Period Credits: Total credits during period
   • Ending Balance: Calculated ending balance
4. Verify Balance
   • Total debits should equal total credits
   • If unbalanced, investigate journal entry errors

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Interpreting Trial Balance Results

Normal Balances by Account Type:

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Exporting Trial Balance

• Click Export button (future feature)
• Download as CSV or PDF
• Use for external reporting or analysis

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Period Controls

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Fiscal Periods Overview

The fiscal year is divided into periods (typically 12 monthly periods). Each period has a status:

• Open: Journal entries can be posted
• Closed: Journal entries cannot be posted (period is locked)
• Adjusting: Special period for year-end adjustments

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Closing a Fiscal Period

Prerequisites:

• All entries for the period are posted
• Reconciliations are complete
• Management approval obtained

Steps:

1. Navigate to Finance → Fiscal Periods
2. Select period to close
3. Click Close Period
4. Enter closing notes
5. Confirm closure

Effects of Closing:

• Status changes to closed
• closed_at and closed_by timestamps recorded
• No new entries can be posted to this period
• Existing posted entries remain unchanged

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Reopening a Period

When to Reopen:

• Discovered error requiring correction
• Late transactions need recording
• Year-end adjustments

Steps:

1. Navigate to Finance → Fiscal Periods
2. Select closed period
3. Click Reopen Period
4. Enter reason for reopening
5. Confirm reopening

Best Practice: Minimize period reopening. Use reversing entries in current period when possible.

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Best Practices

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Month-End Close Procedures

1. Review Draft Entries
   • Post or delete all draft entries
   • Ensure no entries are stuck in draft status
2. Reconcile Bank Accounts
   • Compare GL cash balance to bank statements
   • Record any missing transactions
   • Post bank fees, interest, etc.
3. Review Account Balances
   • Run trial balance for the period
   • Verify debits = credits
   • Investigate unusual balances
4. Record Accruals
   • Accrue revenue earned but not yet invoiced
   • Accrue expenses incurred but not yet paid
   • Prepaid expenses and deferred revenue
5. Close the Period
   • Follow period closing steps above
   • Document any issues or anomalies

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Data Entry Standards

• Descriptive Entries: Write clear descriptions that explain the “why”
• Consistent Naming: Use standard terms for common transactions
• Attach Documentation: Link source documents when possible
• Review Before Posting: Double-check amounts and accounts
• Use Memos/Notes: Add context for complex entries

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Security & Access Control

• Segregation of Duties: Separate entry creation from posting approval
• Role-Based Access: Grant minimum necessary permissions
• Audit Trail: Review created_by and posted_by regularly
• Period Locks: Close periods promptly to prevent backdated entries

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Troubleshooting

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Common Errors

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”Entry is not balanced”

Cause: Total debits ≠ Total credits Solution:

• Recalculate line amounts
• Check for missing lines
• Verify debit/credit sides are correct

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”Cannot post to closed period”

Cause: Selected fiscal period is closed Solution:

• Check period status in Fiscal Periods
• Reopen period if correction is required
• Or post reversal/adjustment to current period

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”Entry has already been reversed”

Cause: Attempting to reverse an entry that was already reversed Solution:

• Check entry status (should show reversed)
• Review reversed_by_entry_id to find reversal entry
• Create new entry if additional adjustment needed

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”Account does not allow posting”

Cause: Selected account has allows_posting = false (control account) Solution:

• Use a different account (child account, not parent)
• Check Chart of Accounts for posting-enabled accounts

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”Invalid fund assignment”

Cause: Account requires fund but none selected, or fund is inactive Solution:

• Select active fund for the line
• Check account settings for requires_fund flag

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Performance Issues

Slow Trial Balance Queries:

• Use fund filter to limit results
• Balances are materialized, so queries should be fast
• Contact system admin if performance degrades

Timeout on Large Journal Entry Posting:

• Break large entries into smaller batches
• System limit is typically 1000 lines per entry
• Consider bulk import tools for high volume

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Getting Help

• Finance Department: For policy and procedural questions
• System Administrator: For technical issues or access problems
• Documentation: Refer to FA-02 Specification
• Support: Email support@encoreos.io or call 1-800-XXX-XXXX

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Keyboard Shortcuts

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Appendix: GL Transaction Examples

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Example 1: Cash Purchase of Supplies

Transaction: Purchased office supplies for $150 cash.

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Example 2: Accounts Receivable Collection

Transaction: Collected $2,500 from customer on account.

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Example 3: Payroll Accrual

Transaction: Accrued $8,000 in wages for employees (not yet paid).

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Example 4: Loan Payment (Principal + Interest)

Transaction: Made loan payment of $1,200 ($1,000 principal, $200 interest).

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Maintained by: Finance & Accounting Team
Questions? Contact finance@encoreos.io