Advanced Grower Solutions GrowPoint Documentation

GrowPoint document id: 38 

Accounts Receivable - Setup (Page 5)

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GL Accounts

The term ‘posting’ is used to describe the process of updating account balances in a general ledger. Prior to computer based accounting software, a bookkeeper would manually post entries to the account ledger book for each business transaction. This concept still exists with computer software. When a business transaction is completed, the account balances are updated by posting the entries to specific general ledger account numbers.

In GrowPoint, posting is used to complete a sales, payment, credit or interest transaction and to update account balances. Posting usually occurs in ‘batches’, which group many transactions together for processing. A posting batch may contain one transaction or several.

Depending on the general ledger system being used, GrowPoint provides an external file that holds batch detail for each posted batch. GrowPoint assigns a unique number to the batch, called a Batch Number.

Prior to posting transactions in GrowPoint, general ledger account numbers for various accounts receivable categories must be defined for the system to know the accounts to update. This tab is used to set up the default G/L accounts for the categories listed. (Account numbers must be set up in General Ledger>Maintenance>Chart of Accounts.)

Account numbers can be entered by typing in directly, or choosing from the drop down menu attached to each field.

Bottom section of this tab (Default FOB GL Accounts and Tax Codes) is only for users of the FOB function (see FOB described in AR Setup, Lookups Tab, FOB sub-tab.). If applicable, select the FOB from the drop down menu. Click on ‘Use Defaults for this FOB’ button to duplicate the general ledger numbers entered in the upper section, or enter the numbers individually

Accounts Receivable:
GrowPoint maintains one Accounts Receivable account number for all sales, credit and payment transactions. When a sales order is posted, the system debits the A/R account number. When a payment or credit is posted, the system credits the A/R account number. The A/R account number cannot be changed for any sales order.
Sales Income:
Each item code entered on a sales order may have a sales g/l account number assigned through the Inventory Products screen. If you use only one sales account, don’t bother setting up the same account number on all item code records in inventory. The sales account entered here will default as the g/l account number used for posting sales and credit memos.

When an item is added to a sales order, the system chooses the g/l sales account number from a list of possible accounts. The following is the sequence the system uses to assign the sales g/l account to a line item on a sales order:

  • 1. If the item code has a sales g/l account setup on the Inventory Details screen, the system use that account.
  • 2. If the Ship To Customer record has a sales g/l account setup, the system assigns that number to the sales order item.
  • 3. If the Ship To Customer is assigned a Customer Type, the sales g/l account setup on the Customer Type record is used.
  • 4. If none of the above sales g/l accounts are used, the system uses the Sales Income G/L account number setup here, in A/R setup>General Ledger tab.

Sales Tax:
On sales orders or credits with tax calculations, the system posts the tax amount to an account number. Each tax code set up on the Lookups tab>Sales Tax sub tab can have a unique g/l account number. If the tax code does not have a unique g/l account number set up on the tax code record, the system uses this default account for tax posting.
Cost of Goods Sold:
When sales orders are posted, the system does not post a cost of goods or inventory asset transaction. This default account number is used by the Daily Sales Report to include a Cost of Goods calculation, which may be used to manually update the general ledger account balance.

The Daily Sales Report includes costs for sales order line items or line item allocations. Each item code and each item location record has a default Cost of Goods and Asset account number. If these accounts are not used, the Daily Sales Report uses the default accounts set up on this screen.

Inventory Asset:
When sales orders are posted, the system does not post a cost of goods or inventory asset transaction. This default account number is used by the Daily Sales Report to include an Inventory Asset calculation, which may be used to manually update the general ledger account balance.

The Daily Sales Report includes costs for sales order line items or line item allocations. Each item code and each item location record has a default Cost of Goods and Asset account number. If these accounts are not used, the Daily Sales Report uses the default accounts set up on this screen.

Checking Account:
When a payment-received record is created, the system uses this G/L account number as the default checking account. At payment entry, the account can be changed to a different G/L account for a different checking (banking) account.
Order Discount:
When a customer is given a discount, the sales order balance is reduced by the discount amount. For sales orders or credit transactions, the system posts the sales order discount amount to a specific general ledger account. One discount account is used in GrowPoint for sales orders and credits. This account cannot be changed for each sales or credit transaction. (Note: See line item discount for another option.)
Allowance:
Use this G/L account when applying a customer payment that is less than the amount due, and the user wants to ‘forgive’ the amount due rather than leave the balance owing.
Freight:
When freight is charged on a sales order or credited on a credit memo, the system needs a general ledger account for this amount. One freight account is used in GrowPoint for sales and credits.

You may choose to credit an (inventory) item code for freight, which can have its own account number. Freight entered as a line item on a sales order or credit can have the account number changed for each transaction.

Interest Income:
Customer interest is calculated when statements are printed. Each time interest is calculated, an entry is created in the Interest screen. Depending on how interest is posted, all interest amounts are posted to the same account number. Interest is typically posted to an income account number. Refer to Customer Statements for information on how interest is calculated.
Payment Discount:
Payment discounts are also referred as discounts taken. When a customer ‘takes’ a discount by paying an invoice within a specific date, the customer payment is less then the balance of the invoice. To balance the payment, a discount amount is included when the payment is posted.

Typically, a discount entered on the payment is considered an expense of the business because you are allowing customers to pay a reduced amount for early payment. On the payment screen, when a discount is entered, the system requires an account number. Although the default account number appears, the account can be changed if necessary. Prepayment Account: Enter the G/L liability account number used to accrue prepayments made for sales orders not yet shipped.

Line Item Discount:
Enter the G/L account to use for individual line discounts on a sales order. This account could be the same as sales order discounts. The G/L account for discounts based on the total selling price of a sales order is entered in the field labeled “Order Discount.”


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