Reporting and Operations
The general ledger documents all of the organization’s transactions over the course of a year for all accounts. Every time a check is written, the transaction reduces cash and increases an expense account. Every time a check is deposited and recorded, cash is increased and revenue is increased.
The transactions are accumulated over the year and the totals maintained.
The account balances are the basis for all reporting activity. Account balances are sorted to generate all financial statements produced throughout the year.
Access to the general ledger should be limited to a very few individuals. Most transactions are posted automatically through receipts and payables modules. All modifications to the accounts should be made by posting a journal entry. This procedure ensures an audit trail will be maintained and all activity is recorded and monitored.
All accounts in the general ledger should be analyzed and/or reconciled each month to ensure the accuracy of the balances.