GENERAL LEDGER
MANAGEMENT AND
MONTH END REPORTING
Practical Accounting Academy
CLASS RULES
Use your Name on Zoom
Everyone Contributes
Be on mute at all times except when unmuted
Use the Chat box to ask questions while the class in ongoing
We are all learning, no question is a bad question
ADVICE FOR OPTIMAL RESULT
Join with a laptop and Have MS Excel on it
Choose a spot at home with Minimal Distraction
Join with a Good internet connection and have a backup plan
All recordings would be shared with participants
WHO AM I
Accountant
Teacher and Youtuber
Decade Experience FA&A
Financial controller
Tell me your
Expectation Financial Planner and Analyst
AKA Mr Right , Prof
A SHORT STORY
EXPECTATION OF THE MODULE
Tell me your Expectation
OBJECTIVE OF THE SECTION
Knowing how to review a General Ledger
Things to look out for the General ledger review
How to improve the quality of the general ledger
How to prepare a few schedules tied to general ledger
ANY QUESTION(S) ?
General ledger Management
The Management Account is
only as good as the general
ledger and never better
GOOD TO
KNOW
Garbage in Garbage out
(GIGO)
Transactions posted into
general ledger
TRANSACTION Trial balance is summary of
FLOW AND General ledger
FROM
GENERAL Financial statement
mapping is a summary of
LEDGER TO trial balance
MANAGEMENT Note is a summary of
ACCOUNT financial statement
mapping
Primary 3 statement are a
summary of the notes to the
account
General ledger Risk Management
7 LAYERS OF RISK MITIGATION FOR GL
Establish
Selecting the Right Training and Transaction Regular General
Team Knowledge Approval Ledger Review
Workflows
Month Closing Meaningful
Detailed
Checklist and Comparatives and
Schedules
Closing Financial Ratios
Good knowledge of the
business
SKILLSET OR
KNOWLEDGE Being Informed on key
REQUIRED TO business decision that has
financial implication
REVIEW A
GENERAL Strong relationship with key
individuals in other units
LEDGER
Understanding the link
between between different
financial statement lines
Knowledge of each general
ledger and nature of transactions
SKILLS OR posted in it
KNOWLEDGE
REQUIRED FOR Familiarity of relevant standard
and appropriate treatment of
GENERAL transactions
LEDGER
REVIEW Sound understanding of double
entry principle
ANY QUESTION(S) ?
Common Issues with General Ledger
AND
How to review a General Ledger
General ledger-Bird eye View
Book of account
KEN DAVIDSON General Ledger OTIS RICHARDSON
Manager
Manager
Payable Other payable
Sales Fixed Asset
Expense Treasury And
and receivable Accounting I Inventory
and Inventory other receivable
Asset in credit balance or Liability in Debit
General ledger balance and schedules not
RED FLAGS agreeing
IN GENERAL Subledger and General ledger not agreeing
LEDGER OR
TRIAL
Transaction posted not inline nature of class of
general
BALANCE Reversal without a corresponding initial
transactions
Unusual spike in balances or expense or income
that cannot be explained
Knowing if the GL is tied
Income statement or Statement
of Financial Position
HOW TO GO Is thereGL tied to an activity in
ABOUT A SOFP. Eg Depreciation to PPE,
Interest Expense to Borrowing
GENERAL
LEDGER Would recomputing provide
REVIEW
better Insight
A report on transaction: Sales
report
Spool the relevant general
ledgers
HOW TO GO Clean the dataset to to have
ABOUT A key attributes such as date,
GL description, Amount
GENERAL
LEDGER Do a pivot of the data to
REVIEW
show monthly trend
Identify potential unusual
trends
ANY QUESTION(S) ?
Class Exercise on GL Review
Review a Sample General
Ledger of a business and lets
see what you identify as
CLASS wrong and what actions.
EXERCISE
Review the Senior
management minutes of
meeting and identify areas
CLASS you would pay attention
EXERCISE when reviewing the general
ledger and potential issues
that can be noted in such
general ledgers.
Introduction to Month End
Reporting
OBJECTIVE OF THE SECTION
Knowing our role as accountant in Month End
Reporting/Closing(MERC)
Things to look out for MERC
Identify Possible bottlenecks in MERC
Knowing Relevant schedules required in MERC
At the end of every month,
accountants prepare financial
reports (FR) to enable management
WHAT IS
assess the performance of the
business and support
management’s decision making
process. MONTH
END
As we progress in our accounting
career knowing how to manage REPORTING
this process as a doer, a reviewer,
a supervisor or end user of the
process is critical.
This preparation of monthly FR is
popularly termed ‘monthly closure’
WHAT IS
or ‘month end closure’ or ‘month
end reporting.
MONTH
This is a popular interview question
END
as such interviewer pay close REPORTING
attention to people who can
provide solution on managing
month end deliver timely report.
The goal is to ensure that all material transactions that relate to
each month (or the period covered to the end of each month) are
captured accurately and completely in the accounting records.
It reduces the financial reporting burden at year end when
accounts are to be finalised and it also gives room for timely
assessment of performance by management before year end.
GOAL OF MONTH END REPORTING
End Users Requirement
WHY
SHOULD WE Assessment of Performance
HAVE A
MONTH
END Aid decision Making
REPORTING
Reduce burden for year end closing
ANY QUESTION(S) ?
Month End Closing
Activities
These are typically day to day task carried out by
members of a finance unit. This activities result in
entries being posted into the general ledger.
WHAT IS
MONTH It is critical for the general ledger to be COMPLETE with
transactions and also have ACCURATE records of
END transactions that have occurred
CLOSING
ACTIVITIES Depending on the role of the individual a person may
be responsible for one or more activities. One can be a
preparer, reviewer and approval of these activities
depending on your role
Invoicing of customers
Booking receipt and payment
LIST OF
Booking vendor invoices
MONTH
END Receive or issue out of inventory items
CLOSING
ACTIVITIES Accrue for services or items
Passing of amortisation and depreciation
Reconciling of
Stock count
bank accounts
LIST OF
MONTH Treatment of
related party Posting of payroll
END transactions cost
CLOSING
ACTIVITIES Booking of
Petty cash cash interest accrued
count on loans and
fixed deposit
ANY QUESTION(S) ?
For the listed roles mention a month
end activity and their likely type of
role(preparer, reviewer, approver)?
• Account payable officer
• Treasury accountant
• Fixed asset Accountant
CLASS • Account receivable Intern
EXERCISE • Finance manager
Mention at least two activity per person
Virtual 1,2, and 5
Physical 3 and 4
Payable – Inventory, expense and Asset
Every transaction entered between a vendor
and a business could lead into the creation of the following;
Payable-
Asset
inventory
All items received must be All asset delivered should be
booked. booked this would also
This would result in a liability
Expense result in a liability
being created
All service or product
provided or delivered should
be booked this would also
result in a liability created
It is key during month end to ensure that completed transactions are captured in the books of account. This could
either be done by the actual submission of invoice by the vendor or booking of accrual based on agreed fees and
level of completion.
ANY QUESTION(S) ?
Month End Closing
Schedule
Month end schedules
Once activities around month end have been completed each process owner is required to
prepare a schedule to support balances and transaction for the period.
01 02 03 04 05
Bank Fixed Asset Loan Accrual and Inventory
Reconciliation register And repayment provision Detailed List
Movement schedule schedule
schedule
Month End Schedules
Bank Reconciliation Prepayment schedule
Fixed Register and
Movement schedule Accrual and Provision schedule
Loan repayment schedule Inventory detailed list
Aging of trade debtor Open AP and AR
Good to Know
It is good note that schedules may
not be required to prepared
monthly as they do not change
often however some schedule
change every month and would be
required to prepared.
Please note it is important that all
schedule reconcile to general ledger
and if there re difference they
should be noted and investigated
and corrected in the month if
material otherwise you can correct
in the following month.
Popular Month End Schedules
Fixed Asset(PPE)
WHAT YOU NEED TO KNOW ABOUT A
FIXED ASSET REGISTER
It is a detailed list of all property plant equipment owned by a business .
It has different classes Furniture's and fittings, Computer Equipment,
Asset Under Construction, Building, Motor Vehicle etc
It is not the same a fixed asset movement schedule.
It must reconcile to the general ledger for it to be accurate
Below are a list of attributes you would find on an
asset register.
Asset class: which
Asset Code: Unique
category of asset Asset Name: Lenovo
identifier for each asset
Furniture and Fittings, Core I5 - Financial
and no two asset have
Computter Equipment, controller
the same code
Building, Motor Vehicle
Cost: All cost incurred to
make the asset available
for use
FIXED ASSET REGISTER
Below are a list of attributes you would find on an
asset register.
Accumulated
Depreciaiton year to
Depreciation: All Location: Where the
date: Deepreciaiton
depreciation suffered by asset can be found in
suffered by the asset to
an asset from inception business premises
the last reporting date
to the last reporting date
Department: the unit
that is responsible or
owns the asset
FIXED ASSET REGISTER
Below are a list of attributes you would find on an
asset register.
Date of Net book
capitalization value
FIXED ASSET REGISTER
A SAMPLE FIXED ASSET MOVEMENT
SCHEDULE
A SAMPLE FIXED ASSET REGISTER
Bank Reconciliation
Gives comfort over the general
WHAT YOU ledger tied to each bank account
NEED TO
KNOW Explains difference between bank
ABOUT balance per bank statement and
BANK general ledger
RECONCILIA
TION You need bank statement, GL
spool for Bank account, Previous
report on bank reconciliation
Identification of duplicate
payments
WHY BANK
Has a ripple effect on assets and ACCOUNTS
liability if not done
NEEDS TO
Gives comfort on the General BE
ledger for liquidity planning RECONCILED
?
Identification of fraud around cash
mismanagement
DATA REQUIRED FOR BANK
RECONCILIATION
Bank statement for period you want to reconcile
General ledger spool for the period you want to
reconcile
Bank reconciliation report for the period just before
current reconciliation
Have features to upload bank statement
BANK using a preset template
RECONCILI
ATION ON Opening balance must agree to closing
balance on the last upload
ACCOUNTI
NG A dashboard informing if the bank
satatement balance agrees with the
SOFTWARE General edger for bank
S AND ERP Some may have a general ledger loaded
with transaction and some may not
Loan or Borrowing Schedule
WHAT YOU NEED TO KNOW ABOUT
LOANS
A business can either be funded via debt or equity
Loan is a example of debt
It could be short or or long term like overdraft, Commercial
paper, term loan
It be can issued by a bank, Shareholders, Director, Related
parties, External lenders
Loan agreement and offer letter provide details about the
loan
DATA REQUIRED IN LOAN
APPLICATION
A business plan
Cashflow forecast covering the loan tenor at a minimum
Loan application request letter
12 Bank statement of key operational account
DATA REQUIRED IN LOAN
APPLICATION- ‘CONT
Profile of shareholders, directors, and senior management
Schedule of indebtedness
Audited financial statement and Recent management Account
12 Bank statement of key operational account
ATTRIBUTES TIED TO A LOAN
PRINCIPAL AMOUNT TENOR DISBURSEMENT INTEREST RATE REPAYMENT OF
DATE PRINCIPAL AND
INTEREST
LOAN SCHEDULE
ANY QUESTION(S) ?
Accrual and Provision
ACCRUAL:
As we tend towards reporting period not all
transactions would have be captured
Estimate the cost implication of some transactions
Historical cost, contract and end user estimate
Example Cleaning service, bonus, security,
ANY QUESTION(S) ?
Class Excercise
MENTION A
SCHEDULE TO
BE
MAINTAINED
MENTION A
SCHEDULE TO
BE
MAINTAINED
MENTION A
SCHEDULE TO
BE
MAINTAINED
CLASS
EXERCISE:
SPOT THE
ISSUE
CASE STUDY
ABC Limited paid an advance for delivery of Branded Jotter to Jasper Ltd
Each Jotter is 300 per Unit and ABC issued a PO to buy 10,000 Unit.
The company paid a 50% advance worth 1,500,0000 on 1st May 2023
Jasper limited delivered 10,000 unit to ABC limited store with waybill
and GRN that confirmed the quantity.
The items were delivered in four batches of 2,500 each.
Kunle the store keeper had received the items into the ERP for
7,500 unit as 4 June 2023
Tosin the payabe officer was reviewing the PO for the item and noticed
that the PO unit price was 150 instead of 300.
Tosin approached the head of Payable to advice what can be done
given that 7,500 has been received on the system and inventpry and
payablehas been recognized based on the 150 unit price.
THANK YOU
