Maintain your general ledger accounts

Following are the major types of general ledger accounts. Account numbers must be prefixed in a logical order for an organized and meaningful appearance on financial reports. The following structure is commonly recognized and may serve as a guideline for clients converting from QuickBooks or other systems without G/L account numbers. For additional guidance, please consult with management or external CPA .

• Asset (1000-1999)
• Liability (2000-2999)
• Owner’s Equity (3000-3999)
• Revenue (4000-4999)
• Cost of Sales (5000-5999)
• Operating Expense (6000-6999)
• Selling, General & Administrative Expense (7000-7999)
• Other Income (8000-8999)
• Other Expense and Income Tax (9000-9999)

The standard format of the account is as follows: 4000-02-00

The first 4 digits represent the actual account number. The remaining digits are used as the branch suffix for organizations operating more than one physical location. If you operate only one location, then the suffix should contain all zeros. When creating a new account number, do not use more than 4 digits if you operate multiple branches.

1. Does the account already exist?
2. Will another similar account be sufficient rather than creating a new one?
3. Is the account positioned in the correct numerical sequence?
4. Does the account meet the requirements for branch G/L suffixing?

1. Go to Accounting > General Ledger > G/L Account and choose New.
2. Enter the desired account number, based on your knowledge of the account number structure and whether or not there are branch suffixes in place.
3. Assign the account to a group for inclusion on a financial report.  Refer to the next section for rules on grouping accounts.
4. To activate the account for use, click Save.  It will become immediately available for posting, inquiry, and display.

Inform is preloaded with recommended general ledger account groups. These groups are also present on the default financial reports.  Users may also create custom groups and insert them into the reports.

There are two approaches to grouping accounts:

• From the account level:  Accounting > General Ledger > G/L Account.  This method works best when a new account is added.
• Balance Sheet accounts require one category group for inclusion on the report (as illustrated in the first image below).

  

• Income Statement accounts require a category group plus the “Income Summary” group (as shown in the second image).

  

• From the group level: Accounting > General Ledger > G/L Group.  This method works best for setup of a new system, when many accounts are being added.
  

Please note that you may not delete an account if any of the following are true:

• The account has transaction history.
• The account is designated as an expense or liability account in the vendor master. Change the account on the vendor before proceeding.
• The account in linked to a Miscellaneous Charge Code. Change the account associated with the code before proceeding.
• The account is defined as a Bank.
• The account is assigned in the G/L Control Table. Change the account in the G/L control table before proceeding.
• The account is present in Product Line specifications. Change the Product Line settings before proceeding.

1. Run a full year G/L inquiry for the current fiscal year (Accounting > General Ledger > G/L Inquiry > enter in year in YY format > Search). You'll see all G/L accounts, regardless of their balance. Note that a monthly Trial Balance won't be helpful because zero balance accounts are not listed at all.
2. For zero balance accounts, click the + to the left of the account to expand the transaction detail.  This step is required to ascertain whether there was any "in and out" activity. If so, the account should not be deleted, even if it has a zero balance.
3. List the accounts that have no activity at all for the current year.
4. Repeat the process for each prior year to narrow this list down.
5. Delete the account (Accounting > General Ledger > G/L Account: Edit, Delete).  Note that the system will not allow deletion if the following are true.
   1. The account has a transaction history.
   2. The account is designated as an Expense or Liability account on a vendor.  Change the account on the vendor before proceeding.
   3. The account in linked to a Miscellaneous Charge Code.  Change the account associated with the code before proceeding.
   4. The account is defined as a Bank.  This is unlikely unless the account has had activity.
   5. The account is assigned in the G/L Control Table.  Accounts contained herein have special internal system properties and should not be removed.
   6. The account is present in Product Line specifications.  Change the Product Line settings before proceeding.
   7. The account has transaction history.

Note for users of Inform versions prior to 21.0.12: If you accidentally remove an account with a balance, the system will continue to display a "Description Not On File" account with a balance in G/L Inquiry screens, but this balance will be ignored in Financial Reports.  To restore it, go to Accounting > General Ledger > G/L Account > New and enter the "old number".   Be certain to define the account in its original G/L Groups for inclusion on financial reports.