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Accounting Best Practices, Fifth Edition by Steven M. Bragg Englewood, Colorado

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Total Impact of Best Practices on the General Ledger Function

This section describes how the best practices described earlier in this chapter can be brought together as a group to achieve a more efficient general ledger function that also provides better information to management.

The best practices can be clustered into three groups: those impacting the chart of accounts, the general ledger, and the general ledger to improve the reporting of information. These clusters are shown in Exhibit 14.2. The first cluster focuses on streamlining the chart of accounts, as well as various methods for incorporating the charts of accounts of subsidiaries into those of the parent organization. These best practices focus on improving the efficiency of the general ledger function. The second cluster uses a number of techniques not only to improve the ability of the general ledger accountant to research information in the general ledger (such as with drill-down inquiries or restricting the use of journal entries), but also to reduce the amount of work needed to maintain it. In this latter category are such best practices as having subsidiaries load their own financial results into the master general ledger, using automated error-checking, and automating the interfaces with subsidiary ledgers. When coupled with the previously noted improvements to the chart of accounts, these best practices can result in a significant enhancement to the overall efficiency of the general ledger function. Finally, ...

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