Tip of the day #28 - General Ledger
Barbara Steckly
General Ledger- ITIS Got You on Edge?
The law of gravity dictates what goes up must come down and there’s just not much you can do about it. The programming of accounting software dictates what goes in as general ledger posts is what comes out in management reports, and there is, in fact, a whole heck of a lot you can and should do about it to end up with the relevant, practical information, you need to more effectively run your business.
As bookkeepers, we’ve noticed the spread of a debilitating malaise out there in “entrepreneur land”, a scourge that’s devastating the files and financial statements of business owners using accounting program templates, and, unwittingly, falling victim to what we call "GENERAL LEDGER-ITIS”.
Dadundun!
Now GL-ITIS occurs when well-meaning individuals fail to personalize their online accounting expense categories to their own needs and objectives and, instead, just let them run amok in wild abandon.
A simple total expenditure on office supplies can suddenly be divided into separate disbursements for paper, pencils, pens, printer cartridges, planners, push pins, paper clips, power bars. You get the picture!... and that’s just one alphabetic letter!!!!
Yes GL—ITIS
Dadundun
The symptoms manifest in an overabundance of trivial, unnecessary information which leads to wasted time, errors, potential redundancy and ultimately costs you an overabundance of important, necessary MONEY when the “accounting doctors” have to step in and sort it out.
Is there a cure? Yes, bless the bookkeeper, there is. (Note: this is said like “bless the lord”)
Begin at the end. Imagine the final outcome of all this GL posting. Take control of your program’s expense categories by reviewing your budget and deciding exactly what you need to see coming back on your management reports. Then, you simply include only THOSE categories when you set up your bookkeeping system.
Expenditures for couriers, cleaning supplies, postage stamps, shredding, vodka and what have you, can all go under the blanket category of “Office Supplies” and that’s that.
After all, they don’t call it a general ledger for nothing!
Preferred Client Services, professional bookkeepers in Edmonton, AB working as business partners to make a positive difference in your bottom line.