A company's general ledger holds the most treasured financial data. In it is all individual transactions that occurred throughout the year. Without an efficiently managed general ledger, access to the information can be confusing and difficult to find. Some ways to practice efficiency are as follows:
1. Delete small balance accounts: There are usually accounts in your general ledger that you stop using due to no longer paying for that specific expense, or maybe the account doesn't get used that often. What is often needed in this case is to move the amount into a larger balance account, thus helping streamline finding account totals more quickly.
2. Cut down on the number of general ledger accounts your company has: With time, companies general leger accounts grow as business or divisions grow, or more expenses come up. When there are too many accounts, it makes it more difficult to figure out exactly where a transaction should go, which becomes a time consuming project. You can fix this problem by merging similar accounts together.
3. Use the same chart of accounts for other entities: When a company has multiple entities, a master chart of accounts should be used. This helps make the month-end and year end closing process much easier for all entities.
4. Journal entry process managed: When you allow only one employee create journal entries, the entries flow better and can be tracked easier through one person.
5. Use the same journal entries monthly: Unless the same journal entries are done consistently each month (for repeat journal entries), there can be confusion as to how the account is used. So, keeping it consistent helps smooth process and eliminate questions.
Copyright Jeanine Pfeiffer