General Ledger (GL) is the core financial system that tracks all monetary transactions, maintains the chart of accounts, and generates financial reports using double-entry bookkeeping principles.
Overview
The GL system provides:
- Chart of Accounts management
- Journal entry creation and editing
- Financial reports with custom formulas
- Trial balance and account activity
- Automatic integration from all modules
- Period closing and historical tracking
Chart of Accounts
The chart of accounts is the foundation of your financial system.
1 Access Chart of Accounts
Navigate to Accounting → General Ledger → Chart of Accounts
2 Account Structure
Each account has:
- Account Number: Unique identifier (e.g., 1000, 4000, 5100)
- Account Name: Descriptive name (e.g., "Cash - Operating", "Sales Revenue")
- Account Type: Asset, Liability, Equity, Revenue, Expense
- Subtype: Further classification (Current Asset, Fixed Asset, etc.)
- Status: ACTIVE or INACTIVE
- Description: What the account is used for
3 Account Types
| Type | Normal Balance | Examples |
|---|---|---|
| Asset | Debit | Cash, Inventory, Equipment, Accounts Receivable |
| Liability | Credit | Accounts Payable, Loans, Purchase Clearing |
| Equity | Credit | Owner's Equity, Retained Earnings, Common Stock |
| Revenue | Credit | Sales, Service Revenue, Interest Income |
| Expense | Debit | Cost of Goods Sold, Salaries, Rent, Utilities |
4 Creating a New Account
- Click "+ New Account"
- Enter account number (must be unique)
- Enter account name
- Select account type and subtype
- Enter description (optional but recommended)
- Click "Save"
💡 Account Numbering Best Practices
Typical numbering scheme:
- 1000-1999: Assets (1000-1499 Current, 1500-1999 Fixed)
- 2000-2999: Liabilities (2000-2499 Current, 2500-2999 Long-term)
- 3000-3999: Equity
- 4000-4999: Revenue (4000-4499 Sales, 4500-4999 Other Income)
- 5000-5999: Cost of Goods Sold
- 6000-7999: Operating Expenses
- 8000-8999: Other Expenses
- 9000-9999: Non-Operating Items
Journal Entries
Journal entries record financial transactions using double-entry bookkeeping.
1 Access Journal Entry
Navigate to Accounting → General Ledger → Journal Entry
2 Entry Header
- Entry Date: Effective date of transaction
- Reference: Description or document reference
- Entry Type: Manual, Automatic, Adjustment, Closing
- Notes: Detailed explanation (recommended)
3 Adding Lines
For each account affected:
- Select GL account from dropdown
- Enter debit amount OR credit amount (not both)
- Enter line description (optional)
- Click "Add Line"
- Repeat for all accounts
💡 Double-Entry Bookkeeping Rule
Total Debits MUST equal Total Credits
Every transaction affects at least two accounts:
- To increase Asset or Expense → Debit
- To decrease Asset or Expense → Credit
- To increase Liability, Equity, or Revenue → Credit
- To decrease Liability, Equity, or Revenue → Debit
4 Example Journal Entry
Scenario: Company pays $1,500 rent for the month
| Account | Debit | Credit |
|---|---|---|
| 6100 - Rent Expense | $1,500 | |
| 1000 - Cash | $1,500 | |
| Total | $1,500 | $1,500 |
5 Save Entry
System validates:
- Debits = Credits (entry must balance)
- At least 2 lines required
- All accounts are ACTIVE
- Date is not in a closed period
Click "Save Entry" when balanced.
Financial Reports
MeTEY's report builder creates custom financial reports with formulas.
1 Access Report Builder
Navigate to Accounting → General Ledger → Financial Reports
2 Report Types
- Income Statement: Revenue and expenses for a period
- Balance Sheet: Assets, liabilities, and equity at a point in time
- Cash Flow Statement: Cash inflows and outflows
- Custom Reports: Any combination of accounts and formulas
3 Report Elements
Each report consists of lines that can be:
- Account Line: Single GL account balance
- Account Range: Sum of accounts (e.g., 4000-4999 = All Revenue)
- Formula Line: Calculated from other lines
- Header/Subheader: Section titles
- Spacer: Blank line for formatting
4 Formula Types
| Formula | Description | Example |
|---|---|---|
| SUM | Add lines together | SUM(A,B,C) = A + B + C |
| SUBTRACT | Subtract second from first | SUBTRACT(A,B) = A - B |
| MULTIPLY | Multiply values | MULTIPLY(A,0.10) = A × 10% |
| DIVIDE | Divide first by second | DIVIDE(A,B) = A ÷ B |
| PERCENT | Calculate percentage | PERCENT(A,B) = (A ÷ B) × 100 |
| RANGE_SUM | Sum account range | RANGE_SUM(4000,4999) = All Revenue Accounts |
5 Example Income Statement
| Line | Type | Value/Formula |
|---|---|---|
| Revenue | RANGE_SUM | 4000-4999 (all revenue accounts) |
| Cost of Goods Sold | RANGE_SUM | 5000-5999 (all COGS accounts) |
| Gross Profit | SUBTRACT | Revenue - COGS |
| Operating Expenses | RANGE_SUM | 6000-7999 (all expense accounts) |
| Net Income | SUBTRACT | Gross Profit - Operating Expenses |
6 Running Reports
Select report parameters:
- Date Range: From/To dates for period reports (Income Statement)
- As of Date: Single date for point-in-time reports (Balance Sheet)
- Comparison: Show prior period or budget comparison
- Format: Summary or detailed with account numbers
Click "Generate Report".
Automatic GL Integration
Most transactions create GL entries automatically:
Invoice (Sales)
- Debit: Accounts Receivable
- Credit: Sales Revenue
- Debit: Cost of Goods Sold
- Credit: Inventory
Customer Payment
- Debit: Cash/Bank Account
- Credit: Accounts Receivable
Purchase Receipt
- Debit: Inventory
- Credit: Purchase Clearing
Supplier Invoice
- Debit: Purchase Clearing
- Credit: Accounts Payable
- (Price variance debited/credited to variance account if applicable)
Supplier Payment
- Debit: Accounts Payable
- Credit: Cash/Bank Account
Inventory Adjustment
- Debit: Inventory Adjustment Expense (if reducing inventory)
- Credit: Inventory
- (Reversed if increasing inventory)
⚠️ Modifying Automatic Entries
Important notes:
- GL entries created by system transactions are marked "AUTOMATIC"
- Cannot be edited or deleted directly
- To correct, must reverse the source transaction
- This maintains audit trail integrity
- Manual adjusting entries can be created if needed
Account Activity Report
View all transactions for a specific account:
- Navigate to Chart of Accounts
- Click on any account
- Click "Activity" button
- Select date range
- Report shows: Date, Reference, Description, Debit, Credit, Balance
- Running balance helps reconciliation
Trial Balance
The trial balance lists all accounts with their balances:
- Purpose: Verify debits = credits before closing period
- Shows: Account number, name, debit balance, credit balance
- Totals: Total debits must equal total credits
- Use: Identify unbalanced entries before financial reporting
💡 Best Practices
- Review trial balance monthly before generating financial statements
- Reconcile bank accounts monthly and create adjusting entries
- Use descriptive references in journal entries for easy tracking
- Add notes to complex entries explaining the transaction
- Review account activity regularly for unusual entries
- Backup financial data before closing accounting periods
- Keep Chart of Accounts organized and remove unused accounts
- Document custom report formulas for future reference