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The General Ledger is the financial foundation of MLS 2026.
Every major activity in the system eventually affects the G/L:
•Workorders
•Payments
•Accounts Receivable
•Accounts Payable
•Payroll
•Deposits
•Inventory
•Banking
The General Ledger provides the information necessary to understand the true financial condition of your business.
The General Ledger is the master accounting record for the business.
It tracks:
•Income
•Expenses
•Assets
•Liabilities
•Equity
Every financial transaction ultimately affects the General Ledger.
The G/L provides:
•Financial statements
•Profit analysis
•Tax information
•Business performance data
•Audit trails
Without accurate G/L records, it is impossible to truly understand business profitability.
The Chart of Accounts is the organized list of all accounting categories used by the business.
Examples:
•Cash
•Accounts Receivable
•Inventory
•Sales
•Payroll Expense
•Rent
•Taxes
A good Chart of Accounts:
•Simplifies reporting
•Improves analysis
•Helps tax preparation
•Reduces accounting confusion
A Debit generally:
•Increases Assets
•Increases Expenses
•Reduces Liabilities
A Credit generally:
•Increases Income
•Increases Liabilities
•Reduces Assets
Because the terms depend on:
•The type of account
•The nature of the transaction
The important point:
Every transaction must remain balanced.
The accounting equation must always remain true:
Assets = Liabilities + Equity
Every transaction affects at least two accounts.
MLS automatically posts:
•Income
•Tax
•Receivables
•Inventory changes
•Cost adjustments
Into the proper G/L accounts.
Automatic posting:
•Reduces mistakes
•Saves time
•Maintains balance
•Improves accuracy
Incorrect posting causes:
•Financial statement errors
•Balancing problems
•Tax inaccuracies
•Audit concerns
Daily Closing:
•Finalizes transactions
•Posts accounting entries
•Updates journals
•Transfers workorders to history
Regular closing:
•Keeps reports accurate
•Prevents transaction confusion
•Maintains accounting integrity
Absolutely.
Always review:
•Daily Receipts
•Drawer Summary
•Balancing reports
Before performing closing.
Period Closing finalizes an accounting period such as:
•Month-end
•Quarter-end
•Year-end
It:
•Locks financial activity
•Maintains aging accuracy
•Prevents duplicate processing
•Stabilizes reporting
Delayed closing may cause:
•Incorrect statements
•Aging problems
•Duplicate reporting
•Reconciliation confusion
The Income Statement shows:
•Income
•Expenses
•Profit or loss
For a specific period of time.
The Balance Sheet shows:
•Assets
•Liabilities
•Equity
At a specific point in time.
They help evaluate:
•Profitability
•Stability
•Debt levels
•Business performance
The Trial Balance verifies:
Total Debits = Total Credits
It is used to confirm accounting balance.
Assets are things the business owns.
Examples:
•Cash
•Inventory
•Equipment
•Accounts Receivable
Liabilities are obligations the business owes.
Examples:
•Accounts Payable
•Loans
•Taxes owed
•Payroll liabilities
A Journal Entry records:
•Financial transactions
•Adjustments
•Corrections
Directly into the accounting system.
Poor documentation creates:
•Audit concerns
•Confusion
•Incorrect reporting
Every entry should clearly explain:
•Why it was made
•Who made it
•What it affected
Reconciliation verifies:
•Correct balances
•Proper posting
•Missing transactions
•Accounting integrity
Important reconciliations include:
•Bank accounts
•Accounts Receivable
•Accounts Payable
•Payroll liabilities
•Tax accounts
Unreconciled accounts eventually create:
•Financial inaccuracies
•Tax problems
•Missing money
•Reporting confusion
An Audit Trail tracks:
•Changes
•Adjustments
•Deletions
•Corrections
Within the accounting system.
Audit Trails:
•Protect the business
•Detect fraud
•Explain discrepancies
•Support accounting reviews
Inventory impacts:
•Asset accounts
•Cost of Goods Sold
•Profit calculations
Incorrect inventory causes:
•Incorrect profits
•Distorted margins
•Inaccurate taxes
•Poor financial analysis
Payroll affects:
•Wage expenses
•Tax liabilities
•Cash accounts
•Benefits accounts
Payroll mistakes can create:
•Tax problems
•Incorrect financial statements
•Employee disputes
Sales Tax:
•Is collected for government agencies
•Is NOT business income
MLS tracks tax separately for reporting and payment purposes.
Tax reports:
•Verify collected tax
•Simplify reporting
•Support audits
No.
Gross profit only considers:
•Parts
•Labor
•Sublet costs
True profitability must also include:
•Rent
•Utilities
•Payroll
•Insurance
•Equipment
•Taxes
A job may appear profitable while the business itself loses money.
Year-end processing:
•Finalizes accounting periods
•Prepares tax records
•Locks reporting periods
•Resets accounting cycles
Because year-end procedures affect:
•Permanent accounting records
•Financial history
•Tax information
Always create verified backups first.
Common causes:
•Incorrect manual entries
•Incomplete posting
•Damaged indexes
•Duplicate entries
•Missing transactions
Do NOT guess.
Instead:
•Review recent transactions
•Re-run balancing reports
•Check audit logs
•Restore backups if necessary
•Contact support if needed
Improper manual changes may:
•Hide problems
•Distort reports
•Break balancing
•Create audit issues
Small discrepancies grow larger over time.
Creates confusion and audit concerns.
Distorts reports and aging.
Errors remain hidden.
Misclassifies financial activity.
Problems go unnoticed.
A profitable business can still run out of cash.
Inventory errors distort profitability.
Financial history may become unrecoverable.
Managers must understand the numbers driving the business.
Successful businesses:
•Perform Daily Closing consistently
•Reconcile accounts regularly
•Review financial statements monthly
•Maintain accurate inventory
•Document adjustments carefully
•Use clear account structures
•Back up data consistently
•Address discrepancies immediately
The General Ledger is not simply an accounting tool.
It is the financial story of your business.