2 Understanding the General Accounting System

This chapter contains the following topics:

2.1 General Accounting Features

This table describes some of the features that are available in the JD Edwards EnterpriseOne General Accounting system:

Feature Description
Reporting The JD Edwards EnterpriseOne General Accounting system provides standard reports to supplement online summary information. Managers often use these reports to perform detailed analysis.

For additional reporting and analysis, you can create one or more organizational structures that are based on category codes that you assign to business units to simulate a parent-child relationship. A graphical interface is available for reviewing the structure, expanding and collapsing the nodes of the structure, and dragging the components to reorganize the structure.

You can maintain a chart of accounts according to the requirements of both a parent company and its subsidiaries. Various reports are provided to satisfy the statutory reporting requirements of a country.

Account Balance Consolidations At any time during the accounting period, you can access account balances and consolidated information. Whether you review your financial information online or print reports, you can review information at the level of detail that is most meaningful to you.

While reviewing account balances online, you can easily access the detail of the originating transactions. This feature provides timely resolution when questions about a transaction arise.

You can review your consolidated financial reports online at any time and across multiple currencies and languages.

You can consolidate account balances from multiple locations, including locations that do not use JD Edwards EnterpriseOne software.

Multiple Ledger Flexibility Multiple ledgers provide flexibility without requiring you to enter unnecessary and redundant data. With multiple ledgers, you can:
  • Define any number of unit or monetary ledger types, such as actual or budgeted.

  • Retrieve data about anything from global revenue by product to an individual employee's expenses, without creating separate account numbers.

  • Maintain transactions in the appropriate ledger and post to the general ledger by summary or detailed transaction.

  • View two ledgers simultaneously. For example, you can view budget and actual ledgers, with the variance calculated online.

Budgeting You determine the amount of detail to include in your budgets. For example, you can create budgets at the project or business unit level, or by major account category or specific account. You can also create journal entries for each account and budget amount. This detailed method provides a formal audit trail and is used by construction companies and government agencies that need to record supplemental appropriations for an original budget.

You can compare your budget-to-actual figures online using year-to-date, period-to-date, or any other time frame. This comparison enables you to quickly respond to variances. If your budget changes, you can create journal entries that explain the reason for the change to ensure that next year's budgets are more accurate.

Managers can create their department budgets using a PC spreadsheet and then upload the figures into the JD Edwards EnterpriseOne General Accounting system and produce a final budget.

Allocations Allocations can be defined for many purposes, such as to distribute expenses and to create annual or period budgets. Using one simple allocation, you can create budgets that reflect an increase or decrease over last year's budget or actual amounts.

You can allocate from one account to another account based on values in a third account. For example, you can allocate your monthly utilities expense from an overhead account to individual departments based on their percentage of square footage. You can also create allocations based on other allocations and process them together.

The four types of allocations in the JD Edwards EnterpriseOne General Accounting system are recurring journal entries, indexed allocations, variable numerator allocations, and advanced variable numerator allocations.

Account Reconciliation After you perform the initial setup requirements, you can reconcile your accounts on a periodic basis. You can reconcile selected expense accounts and bank accounts as well as bank statements. The JD Edwards EnterpriseOne General Accounting system has both manual and automatic bank statement reconciliation programs.

Some countries have banking practices that rely heavily on magnetic media processing, electronic fund transfers, and direct bank involvement in the settlement of outstanding debts. For these countries, the bank statement serves as a source document for all banking activity.

Intercompany Settlements Intercompany settlements ensure that each company's net balance equals zero (that is, debits equal credits). If your business enters transactions between companies, the companies will be out of balance unless you create and post intercompany balancing entries. You can either create these settlements yourself or choose a method of intercompany settlements to use and have the system create them automatically.
Reorganization Flexibility Traditionally, when organizations have changed their reporting structure, the process has entailed reworking the chart of accounts, followed by a time-consuming data conversion to get the historical data into the new account coding design.

With the JD Edwards EnterpriseOne General Accounting system, when you change an account number, the associated transaction detail and balance histories are transferred automatically by the system, eliminating the need for data conversions.

A free-form account number that can be used as a cross-reference to an old account number is available for the initial conversion to the JD Edwards EnterpriseOne General Accounting system.