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Phase 2: Entering Initial Information |
  
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Phase 2: Entering Initial Information |
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Enter your chart of accounts. Standard function keys will help you to add and modify accounts quickly.
If you have decided to modify the chart of accounts provided with Advanced Accounting 7 and only need to delete extra accounts that do not apply, use F2 to view a list of the accounts, select an account that you wish to delete, and then press F4 to delete the account.
You should only put account codes and descriptions in at this time. As an option, you can put in your budget amounts. Do not put in beginning balances; this will be done in step 5 below.
2. SY-F Create G/L Department (Optional)
| If you are going to use department codes, you can set up G/L departments now. You also can set up departments later if you are not yet sure whether you want to use departments or not. Read the documentation on this particular program to decide if you need to use departments. |
3. GL-H Print G/L Code and Description
Now that you have set up your chart of accounts, you need to have a printout of this information for future reference. The printout will be similar to the chart of accounts printout in Appendix E.
4. SY-A Enter/Chg Company Info
You will be entering information in all four sub-options to this program.
Use the start of your fiscal year as your start date.
Don't forget to assign a clearing account, as this is the account where amounts will be posted whenever a transaction cannot identify an existing account.
| The accounts you enter as current earnings and retained earnings will be used as the basis of your balance sheet when you print it in step 8 below. |
b) SY-A-B - Enter/Change Invoicing Defaults
You are setting up these defaults so that they will be available whenever you create an sales order/invoice; however, the sales order process allows you to override the defaults as you create an individual invoice.
c) SY-A-C - Enter/Change A/P P/O Defaults
These defaults will be available whenever you create purchase orders; however, you can override the defaults for an individual purchase order.
d) SY-A-D - Enter/Change Checking Accounts
Enter your bank accounts. The names can be a bank name, an account number, or any other convention. Type in the starting balance of your checking account(s) as of your system startup date (for example, end of quarter). You will add outstanding transactions in the final phase of this checklist.
5. GL-B Enter/Chg/Print G/J Entries (Beginning Balance Only)
Enter beginning balances for all your Balance Sheet accounts (asset, owner's equity, and liability--don't forget Retained Earnings!) as General Journal entries (Type 4: Beginning Balance). Use your fiscal year start date and amounts for these entries. If you are starting in the middle of a fiscal year, enter the date of your last or final balance. All beginning balance entries should have the same date.
The inventory asset account(s), Accounts Payable liability, and Accounts Receivable asset account will require entry of detail information in phase 3 of this procedure. The detail information that you enter later MUST result in figures that will equal the summary figures you are entering in this step. For example, the total of the individual open A/R items (invoices) that you will enter in phase 3 must equal your Beginning Balance entry here.
If you are starting in the middle of a fiscal year, you may choose to enter these figures as a lump sum year-to-date figure or you can separate your beginning balance into month-to-date subtotals for the current year by creating a separate transaction for each month. The sum of these MTD entries must equal the YTD figure for that account.
To enter beginning balances for your Income and Expense accounts, you can either roll these amounts up into the beginning balance of Retained Earnings or perform the following steps to put beginning balances into the individual Income and Expense accounts:
| a) | Go to SY-A-A, Enter/Chg Company Info, and change the G/L Current Earnings field to some account number other than the actual Current Earnings account number (e.g., use an Asset account). The number really doesn't matter; this step just allows you to use the Current Earnings account to balance your journal entries made for the Income and Expense account beginning balances. After you've made the change, press <F10> to save the information. |
| b) | Return to GL-B, Enter/Chg/Print G/J Entries, and put in the beginning balance transactions for each Income and Expense account using Type 1: General Journal. Use the date of your last or final balance. Balance your Income account entries (typically a credit) with a debit to the (true) Current Earnings account. Balance your Expense account entries (typically a debit) with a credit to Current Earnings. Continue with all your Income and Expense accounts and then press ESC to return to the main menu. |
| c) | Go back to SY-A-A and change the G/L Current Earnings field back to the true Current Earnings account number. Press <F10> to save, and then you're ready for step #6. |
You should not create beginning balances for individual Income and Expense accounts if you are setting up your system as of the start of a new fiscal year.
Advanced Accounting 7 keeps a detailed transaction file as your audit trail. With this step, you are posting the beginning figures entered in step 5 above to your G/L Detailed Transaction file and your chart of accounts.
7. GL-F Enter Financial Statements
Use the information you went over with your accountant in part C of the section Before You Set Up Advanced Accounting 7 to help you set up the information for this screen. You can now enter any modifications to the Advanced Accounting 7 default ranges for accounts in your Income Statement and Balance Sheet.
The printout of your account codes and descriptions from Step 3 will help you in setting up these formats.
Be sure the account ranges that you set up for these statements include only accounts intended for each group. For example, do not include an asset account range in the group intended for liabilities.
You can also create a custom financial statement formatting this information to your own specifications using GL-O, Format Custom Statements.
8. GL-G Print Financial Statements
Print out the Balance Sheet for YTD. (Fill in C for current, 1 for beginning month, 12 for ending month, and Y for beginning balance. Press <Escape> to bypass the remainder of the fields on this screen.)
When you are asked if you want to close the accounts, answer Y. (This is a non-destructive close.) Closing at this point will allow Advanced Accounting 7 to update your current earnings from the income and expense accounts that you entered in step 5. This will provide a current year-to-date balance sheet. The printout from this step will help confirm that your chart of accounts was entered correctly and that your accounts balance.
Look at Total Assets and Total Owner's Equity/Liability on the Balance Sheet. Do these figures match?
If these figures don't balance, return to GL-B (Enter/Chg/Print G/J Entries) and GL-C (Post G/J Transactions) to make the necessary adjustments in order to balance. (This is essentially a repeat of steps 5 and 6 using new adjusting information.) Print the Balance Sheet again (remembering to close the accounts each time) so that you have a final printout that shows that your accounts balance.
If you created a custom financial statement format for your balance sheet (using GL-O in step 7 above), you can print your balance sheet using GL-P, Print Custom Statements.
You must enter at least one term type; we suggest 'Net 30' for the first term. Terms will be used when entering invoices, purchase orders, and vouchers. You can use term information to handle automatic discounts for prompt payments or to bypass A/R and A/P and directly update the check register when specifying 'cash' as the payment type.
You can enter all your vendors at this time. At a minimum, you must enter payroll vendors and tax authority vendors now in order to set up for payroll and for setting up your customers. Suggested vendors for payroll and tax authorities are listed below. Some categories may not apply to your state.
Federal Income Tax:
The bank you use as a depository, or the IRS
FICA:
The bank you use as a depository for Social Security, or the IRS
FUTA:
The bank you use as depository for unemployment deductions, or the IRS
State:
The applicable department within state government for state income tax
SUTA:
The applicable department within state government for unemployment deductions
SDI:
The applicable department within state government for disability insurance
Taxing Authority:
The authorities for sales tax collection (such as the state or any county/municipality) for any location where you operate
11. SY-D Enter/Chg PR/GL Interface
This step sets up necessary information for running payroll. The vendors for payroll that you created in the previous step should be set up in the right hand column so that your payroll tax liability amounts will post to A/P properly. You will be naming at least one division at this time; if you have employees working in different states or for some other reason need to have more than one default for the benefits and deductions, you can set up multiple divisions.
Refer to your state and federal payroll tax pamphlets for rates and limits needed to complete this screen.
Refer to the employee W-4 forms for the information required for this program.
If you have elected to use G/L departments to track expenses for each employee in a department, you must use department codes in those employees' payroll expense accounts.
If you are planning to use Advanced Accounting to track commissions to salespeople's payroll information, you should assign your employee numbering system carefully. With some forethought, the ranges of employee numbers used for reports on salespeople's commissions will be more useful to you.
13. PR-H Enter Salespeople (optional)
Advanced Accounting 7 allows you to identify a specific salesperson for a customer's sales order. You will then have the capability assign a commission structure to each salesperson and then transfer all or part of the commission due to the salesperson's payroll record. The salesperson number is the same as the employee number assigned in step 12.
14. IC-H Enter Price Matrix (optional)
Advanced Accounting 7 allows you to set up a price matrix of up to 9 levels of discount percentages for multiple products. A specific level of that matrix can then be assigned to a customer. For example, a dealer of your product could occupy a different level of your price matrix than a customer that is buying at a higher price.
Because this kind of matrix can be applied across multiple inventory items, you should set up these price matrices before you enter your inventory items.
If you don't want to use this cross-product discount structure, you can bypass this step. You will still be able to assign flat discount amounts by product as you enter your inventory in the next step.
In all cases, use of a price matrix is optional and you may see little need for the extra structure involved in this pricing approach. If you do decide to use either type of price matrix, you should read the discussion in Inventory Control and consider the overall system you want to implement in order to use a price matrix effectively.
Build your inventory information. Before you start the process of entering your inventory information into the system, you should determine the following:
| · | Do you want to compile and enter historical information for your products? |
Gathering this type of information can be a sizable task. Many users can elect to leave the historical information blank and let the system automatically accumulate a new history as they process new business. The historical information fields that you can choose to use or to leave blank are described below:
Date of Last Sale Date of Last Receipt
Date of Last P/O Last Vendor
Last Cost
· Do you want to enter units on hand at this time?
If your inventory is not large, you may be able to gather all product profile information, current on-hand quantity information, and historical product information at one time. If so, you can enter all your inventory information in one pass. Otherwise, use the procedure described below.
| · | Do you need to use multiple inventory locations? |
If you currently have one location for your inventory or do not need to track the availability of inventory relative to multiple locations, you should bypass all options for creating multiple locations in your inventory records, one will be enough. If the nature of your business requires tracking on-hand quantities at several locations, you should set up your location codes for each product at this time. In this way, you can enter units on hand based on location in the WBKBEGINV program in step 19.
If you enter a new location you will be able to enter the Units on Hand value. This will be added in to the amount already on hand for this item. If you have sales orders outstanding, when you enter them the appropriate units will be removed from on hand and put in on sales order.
The approach of entering all inventory information including history and units on hand in one pass may be too time-consuming because of the size or complexity of your inventory. If so, the procedure below will allow entry of basic inventory information without having to check on-hand quantities before proceeding to the next step.
| a) | If you know you will be using multiple locations, you can enter them now. |
1.Omit any historical information. Let the system start accumulating data as you do business using Advanced Accounting 7.
2.Do not enter on-hand quantity at this point, as you will be able to do this in Phase 3 below.
| b) | Add, review and revise your inventory item entries until you are satisfied that the item information is correct. |
When you are satisfied with your inventory information, use IC-E, Print Physical Check to print out your inventory. You will use this printout in Step 19 in phase 3 to record your units on hand information. Be sure that you are printing this information for all locations that you set up in the previous step.
Tax authority information must be entered here in order to complete the tax information for your customers. You will identify a liability account and an ID number identifying your company to that taxing authority. This will allow sales taxes for each customer to be based on the applicable taxing authority.
If you are using a price matrix (either flat rate or percentage discount), you can now assign a price level (1-9) to customers.
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