Set Up Account Related Information

Content
Prepare All Account Related Documents Define Accounting Periods Modify Account Codes or Create New Ones Assign Posting Accounts and Accounting Preferences Enter Historical Documents to Update Account Balances

In this process, you will need to decide how you will define your accounting periods, create your Chart of Accounts, update your account balances, and assign default accounts for posting.

If you have historical documents from your previous system and you wish to import them; you will need to gather and organize those documents. If you are not using the default Chart of Accounts you will need to review and update the Chart of Accounts you wish to use and prepare to import the account codes with the opening balances.

You will need to organize the following information: your account grouping, account code types, account code segments (if required), all used accounts codes (with and without balances) and account budget information (if any).

At the end of this session the account codes list will be setup with opening balances along with your preferences.

Prepare All Account-Related Documents

Gather Historical Records

To complete this task, do the following:

Prepare the necessary documents you want to include (if you want to create opening transactions).

1. If you are using any accounting or business software prior to Connected Business, you can collect all the recent transactions e.g. customer invoices and have them either printed or exported into file — Excel, CSV, html or xml formats.
   
   
   
2. You need to have your latest bills, receipts, bank statements, tax reports and other financial documents dating from the start of the current fiscal year or current period depending on how far back you want to include in Connected Business.
   
   
3. You need to have your latest balance sheet and financial statement reports ready.

Prepare your account list with balances (if you will import your account balances).

1. Create an import template of your account list or restructure your existing list into an import template used by Connected Business.
   
   

   Fill up the “ChartofAccounts.xls” template.
   
   Download the import template files (XLS) if you haven’t downloaded them. Click here to download the file.

Define Accounting Periods

Create Accounting Periods

To complete this task, do the following:

1. Go to the Accounting Period page of the New Company Wizard.
   
   
   
2. Click on the New button to bring up the New Accounting Period Wizard. Use the Next buttons to move from each step to the next.
   
   
   
3. Enter the start and end date of the current fiscal year.
   
   
   
4. Select the interval of your accounting periods. (e.g. Monthly.)
   
   
   
5. Select the current period. Keep in mind the previous periods or months you want to keep open.
   
   

   Pay attention to the day, month and year of the periods you want to set up. If you make a mistake in setting up the dates, you will have to start again.
   
   Note that all periods proceeding the current period e.g. March, you created will be closed and any historical transactions you may want to include would no longer be posted on the desired period e.g. January or February.

6. Continue to the last step of the wizard and choose Finish to exit.

Modify Account Codes or Create New Ones

Define New Account Codes

To complete this task, do the following:

1. Have your account list or financial statement reports from the previous system ready.
   
   
   
2. Go to the Account Detail page of the New Company Wizard.
1. Review the list of accounts from the Account Detail page.
   
   
2. Double-click on any account code from the list to bring up the Chart of Accounts form. Switch to the Details tab and select a View to view the account list in a balance sheet or other formats.
   
   
3. Normally, you may have to create additional account codes for the following:
1. Account codes for each bank account, credit card or petty cash account you have
   
   
2. Account codes for Sales for various locations or departments
   
   
3. Account codes for various Inventory/Service Costs
   
   
4. Account codes for various Expenses
   
   
5. Account codes for various Liabilities e.g. Tax
   
   
4. Click on the New button to bring up the New Chart of Accounts Wizard. Use the Next buttons to move from each step to the next.
   
   

   The New Chart of Accounts wizard can be used to:
   
   a) create the Chart of Accounts from scratch by defining each account code
   b) add new account codes to the existing COA

5. Select how you want to set up your Chart of Accounts. The options are:
   1. Define each account code – choose this option when you need to add new account codes.
      
      
   2. Copy from a Chart of Accounts template – choose this option if you want to copy from a list of account codes. Note that you will not be able to change the account code when choosing this option.
      
      
      
6. Decide on the account structure. The options are:
   1. Simple – no segmentation. However, you can add account codes later that require segments.
      
      
   2. Segmented – segments will be added to the account code to narrow down the analysis of your finances by store or location, department or whatever group you define. When choosing to generate account codes with segments, you will need to assign a separator symbol (e.g. – or /). You also have the option to apply segments to revenue and expenses only or all account codes you will create.
      
      
      
7. Fill up the account code list. Use the Down key in your keyboard to add another line and the Left and Right keys to move through the columns. Below is an example of how account codes are set up:
   
   

   Account Code Detail
   Account Code Detail	Sample Values and Notes
   Account Code	e.g. 1070 Account Codes can be a combination of letters of numbers.
   Account Description	e.g. Bank One Savings Account
   Account Group Assets Liabilities Equities Revenues Expenses	e.g. Assets
   Sub Group	e.g. Current Assets Account Groups are completely definable.
   Account Type	e.g. Cash and Equivalents Account Types can also be defined.
   Bank/Petty Cash Account	e.g. Yes If Yes, the account code will be marked as accounts to be designated to a bank account, credit card or pretty cash account.
   Budget	Budget information can be optionally added for accounts you want to track and control by implementing a budget.

   
   
   
8. Set up the segment types and segment codes if you chose to apply segments to your accounts. Below are the default segment types you can use. You can modify or add to them. You can also delete segment type you don’t need.
   
   

   Segments Types
   Segment Type Code	Segment Type Description	Segment Length
   COUNTRY	Country	5
   DEPARTMENT	Department	5
   LOCATION	Location	5

   
   Below is an example of how to create segment codes.
   
   

   Segments Codes
   Country		Locations (in each Country)		Department (in each Location)
   Segment Code	Segment Description	Segment Code	Segment Description	Segment Code	Segment Description
   US	USA	CA	California	SG	Sales - Sporting Goods
   US	USA	NY	New York	SG	Sales - Sporting Goods
   UK	United Kingdom	LON	London	FE	Sales - Fitness Equipment

   
   

   A segmented account would then look like:

   • Account Code: 1150 – US – CA – SG
     
     
   • Account Description: Sales , USA, California, Sales – Sporting Goods.
     You still have the option to delete the segmented accounts you don’t need.
     
     
     
9. Continue to the last step in the New Chart of Accounts Wizard and choose Finish to close.
   
   
   
10. Review the accounts list in the Accounts Detail page again. Or, review the accounts in a balance sheet or other formats by through the Chart of Accounts form.

Import Account Codes

To complete this task, do the following:

1. Have the Chart of Account import file and your account list or financial reports statement reports from the previous system ready.
   
   
   
2. Get the import list and check for the information on the Import File. Below is an example of how an account code for import is set up.
   
   

   Chart of Account Import File
   Account Code Detail	Sample Values and Notes
   AccountCode	e.g. 40081 Account Codes can be a combination of letters of numbers.
   AccountDescription	e.g. Service Income – Equipment Rental
   AccountGroup Assets Liabilities Equities Revenues Expenses	e.g. Revenues
   SubGroup	e.g. Income Account Groups are completely definable. To create subgroups, select any from the options and double-click on it to bring up the Account Sub Group form.
   AccountType	e.g. Sales Account Types can also be defined.
   IsActive	e.g. Yes If Yes, the account will be set to active status.
   OpeningBalanceDate	The date you have determined as your opening balance date e.g. the first day of your current accounting period.
   OpeningBalanceAmount	The balance amount in reference to the opening balance date.
   CurrentBalanceDate	The current date.
   CurrentBalanceAmount	The balance amount as of the current date.
   LastReconciledBalanceDate	The last reconciled date for bank account balances. This is for account codes designated to a bank account.
   LastReconciledBalance	The balance from the last reconciliation of bank account balances. This is for account codes designated to a bank account.
   CurrentPostedBalance	The current posted balance.
   PreviousPostedBalance	The previous posted balance.

   
   
   
   
   

   The column in the import files can be in any order however, the column names must not be replaced. If you will put in a lot of numbers in a column, format the column into “Text” to avoid losing the actual value.
   
   The values will be imported in your home currency e.g. USD so there’s no need to indicate the currency symbol. Avoid using special symbols such as apostrophes or plus signs.

3. When ready to import, go to the Account Detail page of the New Company Wizard.
   
   
   
4. Click on the Import button to bring up the Import Wizard. Use the Next buttons to move from each step to the next.
   
   

   The New Chart of Accounts wizard can be used to:
   
   a) create the Chart of Accounts from scratch by defining each account code ;
   b) add new account codes to the existing COA

5. Click on the ellipsis button in the Source Path field or click on the Add Files button. Then, browse for the import file and select. Make sure that the file is not opened or in use.
   
   
   
6. Select ChartofAccounts as the Destination Table. This indicates the table in the database that the imported data will be placed.
   
   
   
7. Click Next to go to the next page and click on the Import button to start importing. The wizard will warn you of the problems that may occur during the import. If the import failed, refer to the Import Log to know which columns or rows you may need to check. You can also save the import log for reference.
   
   
8. If the import was a success, continue to the last step of the wizard and click Finish to exit.
   
   
   
9. You will be brought back to the Account Detail page of the New Company Wizard. To review the account list,
1. Review the accounts you have created from the Account Detail page.
   
   
2. Double-click on any account code from the list to bring up the Chart of Accounts form. Switch to the Details tab and select a View to view the account list in a balance sheet or other formats.

Modify Account Codes

To complete this task, do the following:

1. Go to the Account Detail page of the New Company Wizard. You will find the account codes that were pre-created using default values.
   
   
   
2. Double-click on an account code in the list to bring up the Chart of Accounts Wizard.
   
   
   
3. The account details are displayed in the Account Details tab.
   
   
   
4. You may change the account description, or move the account to another account group or type.
   
   
   
5. You may set the account to inactive by unchecking the Active button.
   
   
   
6. You may add budget details if necessary.
   
   
   
7. Save the changes and go to the General tab to select the next account code to edit.
   
   
   
8. Close the Chart of Account form when done.

Assign Posting Accounts and Accounting Preferences

Assign Default Posting Accounts

Default Accounts determine which GL accounts a certain amount will be posted (e.g. which income account to post or credit the sale? or which account to debit for discounts)?

To complete this task, do the following:

1. Have your account list or financial statement reports from the previous system ready.
   
   
   
2. Review the default accounts. Go to the Default Account page of the New Company Wizard. Click on the tabs or use Alt + the tab number to move between tabs.
   
   
   
3. If you need to assign account codes or replace a default, click on the Edit button to display the Default Accounts form.
   
   
   
4. Select the Posting Group you want to edit to bring you to the Details tab. Assign an account code by selecting from the dropdown list in the Account Code column.
   
   
   
5. You will notice that you can only assign one account code for each revenue [e.g. one account code for all sales income and one account code for all service income (Sales Order > Order Item Lines)].
   
   

   The Default Accounts is the central place for assigning posting accounts however; you can assign posting accounts (particularly revenue accounts like Sales) in GL Class Templates to be able to have different sales or income account per customer, category or item basis. The Accounting Preferences determines where the system will get the analysis from.

6. Configure the preferences and select where you want the system to get the values from the sales transactions. Click on Preferences under the Accounting setup category. Click on the Edit button to display the Accounting Preferences form.
   
   
   
7. Notice the first option asking you where you want to get the analysis for Sales. This option is especially useful if you are using segmented accounts or if you want to track sales from different sources. The options are:
1. Default Accounts – this is the default source for all posting accounts including revenues. However, only one account code may be assigned per revenue type – one for product sale, service/non-stock revenues, freight and tax.
   
   
2. Customer – where different revenue accounts may be assigned per customer type or class (e.g. you want to track income from customers in a specific area). To track sales by customer, select this option and define Customer GL Class Templates.
   
   
3. Category – where different revenue accounts may be assigned per item category or sub category (e.g. you want to track income from a particular product or service category). To track sales and other income by product category, select this option and define Category GL Class Templates.
   
   
4. Item – where different revenue accounts may be assigned per inventory type down to each specific item (e.g. you want to track income from a specific product or service). To track sales and other income by product, select this option and define Inventory Class Templates.
   
   

   Should you choose to any of the options for sales analysis, only the revenue accounts can be assigned in the GL Class Templates with different sales account codes. All other posting accounts e.g. Banking will come from the Default Accounts.

Enter Historical Documents to Update Account Balances

Create Opening Balance Journal Entries

To complete this task, do the following:

1. Have your account list or financial statement reports from the previous system ready. It is best to get the help of your accountant when creating journal entries.
   
   
   
2. Consider the following before creating opening journal entries.
   1. You may enter opening journal entries as of the start date of the open periods (if you kept previous periods open) or the most current date.
      
      
   2. You can enter opening journal entries for all applicable accounts except accounts receivable, accounts payable, inventory and bank accounts.
      1. AR and AP opening balances should be entered as the customer and supplier profiles are created. The opening balance transactions will generate the entries that will update the appropriate accounts and effect the aging properly.
         
         
      2. Enter opening balances for equity, bank account and credit card accounts as they are created.
         
         
      3. Enter
         
         
3. Go to the Opening Trial Balance page of the New Company Wizard.
   
   
   
4. Decide if will manually enter journal entries or import them.
   1. If entering the journal entries manually, click on the New button to bring up the Journal form.
      
      
   2. If importing the journal template, create an import template of opening journal entries or restructure your existing list into an import template used by Connected Business.
      
      
   3. Click on the Import button to bring up the Import Wizard.
      
      
5. Follow next few steps in creating opening journal entries. Below is an example of how journal entries are created:
   
   

   Opening Journal Entry
   Account Code Detail	Sample Values and Notes
   Journal Date	e.g. current date Journal Dates can be on previous dates on previous pervious but open periods
   Journal Reference 1	e.g. any primary secondary document or reference
   Journal Reference 2	e.g. any secondary supporting document or reference
   Journal Type	e.g. General Journal
   Fiscal Period	e.g. current accounting period You may choose a previous but open period.
   Items
   Account Code / Account Description	Debit/Credit		Detail Description	Tax
   	Debit	Credit		Tax Type	Tax Code
   e.g. Insurance Expense	$200		To record January portion of Prepaid Insurance	NA	NA
   e.g. Prepaid Expense		$200

   
   
   
   

   You can enter account balances as total balances or create an entry for each amount.

6. Notice that the journals you have created will be listed in the Unposted Journals list. This means that all entries would be kept amendable until finally posting them through the Batch Post routine.
   
   
   
7. Review the account balances. Go back to the Account Detail page of the New Company Wizard. Click on the Refresh button. To review the account balances, double-click on any account code from the list to bring up the Chart of Accounts form. Switch to the Details tab and select a View to view the account list in a balance sheet or other formats.