Fiscal Year Setup
Finance General Ledger
Finance general ledger is used to track all the financial transactions and it the primary accounting record for a business. The finance general ledgers holds the accounting information that is needed to prepare company’s financial statements, including the Balance sheet and the Income statement and includes accounts for assets, liabilities, owner’s equity, expense and revenue.
Chart of Accounts
Chart of Account is a unique record of each type of asset, liability, equity, income/revenue, and expense. A very important reason to have COA in the system is to let the users quickly get a glance at a company’s financial health and segregate assets, revenue, liabilities, and expenses. It provides the complete listing of each account in the accounting system and ERP Mark7 has the flexibility to tailor the company’s COA that best suit its business process. It is available for recording transactions in the finance general ledgers.
The following basic chart of accounts should be created in the system.
|Chart of Account Name||Record Type|
|Cost of Goods Sold||Expense|
|Sales Tax Payable||Liabilities|
|Goods Received Not Invoiced||Liabilities|
To start a New Business Process, Create a "Stockholders Equity" or "Owners’ Equity" COA with opening balance as per the requirement.
Note: When creating a new Account (Organisation) or existing Account (Organisation) make sure the field Account Type is set to "Organisation". If the field is not found on the page, add it to the layout. And on the Account (Organisation) detail page Default checkbox should be checked.
Chart of Account Mapping
Chart of accounts mapping allows processing of balance and supports the ability to correlate a source chart of account to target chart of accounts. The posting functionality in ERP Mark7 enables the finance general ledgers to create a relevant finance general ledger entry with the relevant chart of account information and transaction in it. To create the chart of account mapping follow the following steps
Create the accounting period for the fiscal year, i.e., create the accounting period for all the months of the fiscal period for which the financial statements are prepared. It basically imitates the basic twelve-month calendar.
The Finance module in Aqxolt ERP Mark 7 provides real-time insight into the overall financial status of the organisation. It provides, automates and streamlines the entire financial management process, as well as simplifies user adoption and processes by its seamless integration. Aqxolt ERP Mark 7 provides a complete suite of components involved in financial processes like General Accounting, Accounts Receivable, Accounts Payable, Commission Accounting and Reconciliation with bank feeds. It has been intelligently designed to handle multiple business units. It is completely integrated with other ERP modules like Order Management, Manufacturing Management, Supply Chain Management and Employee Management. It empowers you to track all entries into comprehensive general entries. It also enhances decision making with insightful reports and dashboards.
This is a combination of all the processes related to financial activities in an organisation, such as providing the financial report form balance sheet, profit and loss statements and trial balance. To begin with the configuration every organisation requires a finance general ledger and a chart of accounts for the financial year.
Note: When creating a new Account (Organisation) or existing Account (Organisation) make sure the field Account Type is set to "Organisation". If the field is not found on the page, add it to the layout.
|Is Contra:||If the contra checkbox is checked, the chart of the account will be a contra account.|
|Opening Balance:||The balance brought forward at the beginning of a new accounting period, on the credit or the debit side of the ledger.|
|Closing Balance:||The amount remaining in an account within a chart of accounts, positive or negative, at the end of an accounting period or at year end.|
|Total Credit:||The total credit amount of the financial year.|
|Total Debit:||The total debt amount of the financial year.|
|Financial Year:||Select the financial year of the organisation; usually the financial year is the period between 1 April and 31 March.|
|Calculated Ending Balance:||The calculated balance of the account for the given financial year. This is used to identify the starting balance of the next financial year account.|
|Bank Account:||Selects the bank account of the organisation used to do all the accounting transactions|
|Account Code:||A six-digit number that indicates the type of revenue, expenditure or transfer being recorded.|
|Account Type:||Indicates the account's purpose. For example, the account type could be Current Liabilities or Long-Term Liabilities.|
|Accounting Period Start Date:||Start date of the accounting period; it can be the same as the start date of the financial year.|
|Accounting Period End Date:||End date of the accounting period, it can be the same as the end date of the financial year.|
Trial BalanceThe trial balance helps ensure that the total amount of debits is equal to the total amount of credits. The trial balance shows, for the given organisation and general ledger, the account balance as of a selected date, the total sum of debits and the total sum of credits as of the selected date. At the end of the trial balance report, the total sum of debits must equal the total sum of credits.
Use the Filters section to view the trial balance for the selected organisation and the selected dated specification. Select the organisation for which the trial balance is required; the trial balance post transactions of the finance general ledgers inherited by the selected organisation. Select the “From” date when the total balance will be considered. Select the “To” date when the total balance will be calculated.
The system offers an option to download the trial balance for the selected criteria in PDF format on your local system; click the “Download PDF” button.
The balance sheet is one of the core financial statements used by the accountants. Financial statement that summarises a company’s assets, liabilities and shareholder’s equity at a given point in time. It gives owners an idea as to what the company owns and owes.
To access Balance sheet, navigate to the Financial Management module and click the Balance sheet tab.
The report generated is based on the current fiscal year. This will display amounts till the present posted transaction.
You can use the filters and calendar tool to drill down the balance sheet and know the company’s financial position at any point in time or as opposed to a given period. The balance sheet is divided in to two columns, one is for assets and the other is for liabilities and stockholders’ equity. Fundamentally, the balance sheet must balance the total amount of assets with the total amount of liabilities and stockholders’ equity.
The balance sheet is auto-calculated using the latest data from the company’s accounts, which means the balance sheet is created in real time. With Aqxolt ERP’s balance sheet, you don’t have to be a professional to do manual calculations. Whenever a transaction record is created, all the calculations and finance general entries are created automatically, eliminating errors in the balance sheet.
View the data that matters to you by using the filters provided to you. You can import the balance sheet for the selected organisation and duration in PDF format by clicking “Download PDF”. To make good decisions by comparing financial data, click “Compare Financial Data”. Compare the data of your interest by using filter criteria and viewing the chart data annually, quarterly and monthly. View and download the tabular data by clicking “Download PDF” for the financial year.
Let’s drill down the balance sheet closely. Depending on the nature of the business, the asset side of the balance sheet may contain many items, some of the examples includes Cash, Inventory, Accounts, receivable, Checking etc.,
The basic equation of the balance sheet states that the liability and the owner’s equity of a business are equal to the total sum of its assets.
Assets = Liabilities + Owner Equity
The other side of the balance sheet displays liabilities and stockholders’equity. Liabilities are obligations and debt payable to the other entity. Some of the examples of liabilities includes Sales tax, Accounts payable, Sales tax payable, Goods received not invoiced etc.,
Equity is the value of company’s capital. The basic equation of assets can be used to calculate the owners’ equity
Owners’ Equity = Liabilities – Assets
If the equation returns negative value then it is dangerous to the growth of your business and difficult to secure the finance of the company. Some of the examples of equity includes Retained earnings, Owners’ equity, Remuneration etc.,
Let’s illustrate an example to understand balance sheet. One of the customers in Universal stores purchases Phone and its selling price is $1200 and the cost price is $900. The system generates a sales order for the customer with the invoice amount $1200. The profit made by Universal store is calculated using the following equation.
Profit = Selling Price – Cost Price
Therefore, the profit made by Universal Store is $300.
The sales order summary is illustrated in the table below
|Sales order||SO-xxxx||Customer: Serah|
|Qty||Unit Price||Total Price|
The payments on the balance sheet are recorded only when the invoice is posted.
|When we make a sale, and Post the Invoice|
|Chart of Account||Credit||Debit|
|Sales Tax Payable||240|
|Balance After Sale|
|Sales Tax Payable||240|
Customer Serah makes the payment against the Invoice
|Serah Pays to Invoice||Amount|
|Sales Order Status||Paid|
|Sales Order Stage||Shipped|
|When customer makes payment (Cash) to Invoice|
|Chart of Account||Credit||Debit|
|Accounts Receivable (Serah)||1296|
|Balance After Customer Payment Against Invoice|
|Accounts Receivable (Serah)||0|
|Sales Tax Payable||240|
Let’s illustrate an example to understand balance sheet when sales return happens. Serah the customer of Universal Stores would like to return one of the items from the sales order purchased by her. The system generates a Return Merchandise Authorisation for the customer and the net sales is calculated by the following formula.
Net Sales Formulae = Sales - (Sales Return + Sales Discount)
|When a sale Return|
|Chart of Account||Credit||Debit|
|Sales Tax Payable||240|
|Balance After Sales Return|
|Accounts Receivable (Serah)||0|
|Sales Tax Payable||0|
Similarly, let’s illustrate an example understand balance sheet when Universal stores purchases an item. Aqxolt ERP helps in accounting of vendor invoices that the vendor bills towards the order. When the user raises the Purchase order to purchase item A and item B, the system creates a voucher against the purchase order. Every time a voucher is posted a general ledger entry is created in the system reflecting the credit and debit balance of the chart of accounts created for purchases.
|Product Name||Serial No||Cost Price||Selling Price||Profit(SP-CP)||Available Stock||Stock Inward|
|After Voucher is Posted the Following Ledger Entries Will be Created|
|After Stock In Ward (Item A (2345-5436-2356)) is Posted The Following Ledger Entries Will be Created|
|After Stock In Ward (Item B (2345-5436-2378)) is Posted The Following Ledger Entries Will be Created|
When an Universal store returns an item purchased the system creates a transaction entry for the return purchase order and the following chart of accounts are affected.
|The Following Ledger Entries Will be Created If Not paid|
|The Following Ledger Entries Will be Created If Paid with Cash|
The profitability of a company for a specified period of time is shown on an Income statement. The business can choose the time period the statement covers. It is an organisation’s ability to record net profit or loss over a specific accounting period. The income statement provides an overview of the organisation’s sales and net income. Aqxolt ERP covers both the operating and non-operating portions of the income statement. The operating part of the income statement discloses records about expenses and revenue that are directly associated with regular business operations, whereas the non-operating part of the income statement discloses records of expenses and revenue that are not directly associated with regular business operations.
The income statement is important because investors can use it to analyse the profitability of the organisation. It plays a significant role in making decisions about whether to invest in the organisation.
Aqxolt ERP allows the user to use the income statement for comparison. It is used to compare fiscal year data and fiscal quarter data. It typically allows users to compare the present year with two years of historical data.
Aqxolt ERP provides the user with accurate chart data based on the selected filter criteria. Click on the links on the right-hand side next to the chart to view the chart data Annually, Quarterly and Monthly.
Payment using prepayment credit
Using Aqxolt ERP, you can make prepayments in the following ways:
Prepayment credit payments from the ePoS page
Prepayments from the Invoice detail page
Aqxolt ERP enables tax calculation and eliminates manual processes that are subject to human error.
Taxes in Aqxolt ERP can be applied in the following ways;
Create a Tax Record
Assign the Taxes on the Sales Order
Every Sales Order is generated for a Customer and the Customer is associated with a Customer Profile.
In the related list of Customer Profile, Tax record will be available if created as mentioned in the above steps.
Assign the Taxes on Products
When a tax record of type Sales or Service Tax is created with the product in it, the system applies the tax on the sales order line item that contains the same product in it.
Assign the Taxes on Shipment
When a tax record of type 'Shipping' is created, the system applies the tax on the Sales Order Shipping Amount field.
The Shipping Tax will be calculated based on the Tax Sourcing Rule on the Customer Profile which can be Source or Destination.
Fields to Note:
|Tax Code||Describes the Tax record Name.|
|Country||Tax codes are unique for every country. This describes the country for which a Tax record is created.|
|Province||Every province differs in the tax rate. This field describes the province for which the Tax record is created.|
|Type||Describes the type of Tax, whether it is a Sales, Service or Shipment Tax.|
|Effective Date||Describes the date from when the Tax record is effective for use.|
|Expiry Date||Describes the date from when the Tax record can no longer be used.|
|Tax Rate||Describes the percentage of tax applied.|
|Product||Describes the product associated with the Tax record. This field is mainly used when product-specific taxes are created.|
|Apply Tax On||Describes whether the tax is applied to 'Selling' or 'Cost' price of the product|
|Account Profile||Different Taxes can be applied for different Account Profiles. Account Profile (Customer Profile) should always be selected while creating a Tax record|
Generally, every organisation operates its finances with at least one bank account. An organisation can have one or more bank accounts operating on multiple currencies. An organisation makes daily, weekly or monthly deposits depending on the nature of the business. The deposits could be in the form of cheques, cash or credit/debit card receipts. Aqxolt ERP’s Bank Reconciliation ensures that payments of any form are processed and deposited in the bank.
The biggest concern in terms of project failure involves establishing an unrealistic time and cost to drive a project. An unrealistic time and cost lead to poor decision making. A good project management system requires the organisation to collaborate with all the departments because not all the information is available at the beginning of the project in project lead manufacturing companies. Aqxolt ERP provides the solution to handle project management issues.
Create Budget Account:
Aqxolt ERP helps project managers develop estimates for cost and project timelines based on the company revenue, assets and workforce involved. A quick way to estimate project cost is by calculating the machine usage cost, workforce cost, material cost and overhead costs associated with each process and schedule involved within the project. This will help project managers manage projects and control budgets proactively.
Fields to note:
|Budget Name||Describes the name of the budget account allocated to the project for its identification|
|Chart of Account||Describes the account available for transactions in its general ledger|
|Approver||Provides the name of the person responsible for approving the budget|
|Approved Date||Describes the date on which the budget was approved|
|Submitted Date||Describes the date on which the budget account was submitted for approval|
|Financial Start Date||Describes the start date of the financial year|
|Financial End Date||Describes the end date of the financial year|
|Carry Over Budget Account||Describes the remaining amount that can be carried for the commitment to the new financial year|
|Status||Describes the status of the budget account whether it is submitted for approval, committed or approved|
|Budget Carry Forward||Indicates whether the budget account is of the type carry forward|
|Spend Amounts||Describes the amount spent from the allocated budget|
|Amount||Describes the amount allocated to the budget|