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Table of Contents (Online Help)

Chart of Accounts

In Loan Performer, the American Chart of Accounts is kept as the default. In this system, Accounts starting with 1 are Assets, 2 - Liabilities, 3 - Equity, 4 - Income and 5 - Expenses. However you can Import your own Chart of accounts to replace the default one at System/Configuration/Accounting/Import Chart of Accounts and if you already have data entered then you can replace it at Tools->Replace Chart of Accounts but this will require you to have supervisory rights set at System/Configuration/Users.

Balance accounts start with 1; 2 or 3, whereas Profit and Loss Accounts start with 4 and 5. In the American system you should not use or create accounts that start with 6, 7, 8 or 9. Each account number will by default have 6 digits. However you can change and increase this at System/Configuration/Accounting/Accounts Settings.

However most Francophone charts of accounts such as BCEAO for West African states and DRC have 9 classes compared to the Anglophone and American accounting system which have 5 (1 – Assets, 2 – Liabilities, 3 – Equity, 4 – Income, 5 – Expenses). However the Balance Sheet shows only 3 items i.e. Assets, Liabilities and Equity.

The user is free to choose his preferred chart of accounts for a fresh empty database. Afterwards, the field is greyed out when data is entered into the system. In LPF, the chart of accounts is defined once.

To view the Chart of Accounts you go to Accounting->Chart of Accounts

How to create a new GL account/Sub-account

To create a new account/sub-account you go to Accounts/Chart of Accounts and a screen will appears as follows:

• Account: Enter the account number, e.g., "121000"
• Account Type: Select the type of account that the new GL will be classified as, e.g., "Balance".
• Active: If you want the account to be registered as active in the system select "Yes" from the drop-down menu. This means that you will be able to post transaction to this account at Accounts/Manual GL Transactions, However if you select "No" the account will be registered as inactive and you will not be able to post anything on this account. In both cases the GL accounts will appear both on the Trial Balance and the Balance Sheet.
• Label: Enter the account name (label), e.g., "Stock".
• Sub-account: If the new account is a sub-account, tick the Sub-account checkbox and from the drop-down list select the account number of the parent account, e.g, "100000".
• Budget Item: If you want to link the new account to specific budget item, then select it from the drop-down list. This list will have all the budget items that were created at Accounts/Budgeting/Create Budgets.
• 
• Cross referenced:This option allows you to define the accounts to be lettered. Cross reference codes or Accounting lettering is an operation that makes it possible to establish a link between an invoice and its payment by entering a character or a combination of characters. For more information, go to the topic Cross reference codes concerning the menu Accounting\Lettering codes.

Note:

Accounting lettering is used to verify the status of payment of invoices by assigning a mark, most often a letter or a combination of letters. This system is often used to verify the correct payment of invoices (issued or received from suppliers) and thus identify invoices awaiting payment, or whose payment does not correspond to the expected amount.

In general, the matching is mainly done on supplier and client accounts


.

• Direct Posting allowed: If you want the direct posting to this account select "Yes" from the drop-down list. This means that you will be able to directly post transaction to this account at Accounts/GL Transactions, However if you select the "No" option then you will not be able to make bookings to that account but the account will still be on the Trial Balance and the Balance Sheet.
• Overdraft Protection?: If you want to stop the account from being overdrawn then select, "Yes" from the drop-down menu. This means that the account cannot therefore have negative balances.
• Currency: From the drop down select the currency in which the new account will be operated, e.g., "UGX".
• Revalue: Indicate whether the new account will be revalued by ticking this checkbox. This means that the value for this account in base currency will always be recalculated whenever a new exchange rate is added at Support Files/Exchange Rates.

To modify/delete an account, the user will highlight that account, enter the modifications and click the Update/Delete button. Once you have transactions on an account, you can only delete the account if you transfer the balance so the account becomes zero and you then do a year closure.

• You may want to add or modify account numbers or account labels, especially if you are not using the American chart of accounts. Click on an account in the list, modify the label and/or account number and click on the "Update" or "Add" button. Loan Performer checks if the new account doesn’t exist as yet. If it does, Loan Performer will refuse the update. If the old account has transactions in the current financial year, you won’t be able to change the account number.
• Click on the Add button to add the new account
• Before the end of the financial year, you have to create a new account and transfer the balance of the account that you want to delete to this account with menu “Accounts\Transactions”.
• You can then close the financial year and - now that the balance of the old account became zero - you can delete the old account.
• However there is one danger to this procedure: if ever you want to produce reports that cover periods that begin before the start of the financial year, Loan Performer cannot find the account anymore and will produce incorrect results. So we advise to leave the account with the zero balance in the chart of accounts and just produce reports with the checkbox “Only for non-zero balances” activated.
• In addition to the “system accounts” you can add your own accounts. Each non-system account can be activated/de-activated. Each non-system account can be deleted as long as there are no bookings made on the account. You have to indicate to which header your account belongs and you may link your account to a budget item.
• Export/Import: To export/import the Chart of Accounts, the user will use the corresponding button.
• Click on the Close button to exit.

Related Topics

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