General Ledger or Ledger is the second step of accounting cycle after recording transaction journal. The ledger consists of the mutation result of journal post serves to collect the set of each account mutation, beginning balance, and ending balance that will be used to create the adjustment journal to financial statement.
In general, to post the ledger requires accuracy in calculating each account in the ledger, by adding or subtracting the value based on the position in debit or credit. When the final value is set, the ending balance value is entered to the ledger account, as well as other accounts so that the value of assets and liabilities are balanced. Surely it is very complicated and risk of error mostly happened. The most common happen is the imbalance between the position of assets and liabilities in the ledger. If this problem occurred, then the next step in creating financial report shall not be done. To avoid this matter, it is recommended to find the reliable devices that support the automatic record. The device needed is GL or General Ledger Software.
GL Software is an accounting software to record all journal transactions, ledgers, to produce financial statements such as Balance Sheet, Profit-Loss, Cash Flow, etc automatically. In general GL software is simply made to record master data (account, name, etc.) and double entry journal which the debit and credit position is in the existing menu. Users only need to enter the accounts to be stated in the journal, then enter the supporting data, such as delivery name, exchange rate (if foreign currency applied), department, and so forth. . When the user has decided to record the journal transaction, the system directly has posted the journal to the ledger as well as producing the financial statements without end month closed book first.
Since GL Software is very simple and only support the double entry journal, then it is suitable for businesses with simple business flow without inventory control. Most GL software provider make this application based on request thus it has many various attached features.
In general the features and facilities in General Ledger software include:
- Master data (name, account, department, etc.)
- General Journal of double entry (debit-credit)
- View and print journal vouchers (journal vouchers)
- Ledger
- Trial balance
- Balance sheet
- Income statement
- Export report
Some advantages of using General Ledger software:
- It is very simple that anyone can run it, even with basic accounting knowledge.
- Users only enter the general journal in certain post by entering related account without setting the control account.
- Financial report will be automatically made without end month closed book
- Light database size because it does not have complicated flow.
The disadvantages in the General Ledger Software are:
- Does not provide user friendly display since only focus on the simple recording
- Human error may occurred when entering account for journal since it is done freely.
- Not reliable for business with complicated flow. Examples include procurement transactions, goods transaction, fixed assets, production, etc.
- Less efficient for business with frequent transaction, such as recurring transaction
- Can not control inventory, due date payable, etc.
These advantages and disadvantages at least can be used as a reference whether your business needs GL software or more than that.
