Generally accepted accounting practice requires that an organization’s financial information be periodically compiled in two financial statements: a balance sheet and an income statement. The balance sheet provides a summary of an organization’s assets, liabilities, and equity at a given point in time. The income statement shows profit or loss for a given time period. In order to satisfy these reporting requirements, a general ledger (GL) is used.

To set up a GL, you must first determine what kinds of information must appear on the financial statements. Organizations normally produce a range of different types of GL statements, from interim reports for management purposes to official statements that comply with statutory regulations. GL reporting is embedded in the system, which means that you can produce customized statements at any stage of the GL process.

GL reports include trial balance, transactions in a given GL period, open items, and monthly closing. Each report is filtered by criteria; for example, by GL calendar year and period, daybook code, currency, or posting date. See GL Reports for more information on generating GL reports.

Next, you set up a chart of accounts (COA). Accounts show values for financial elements such as cash, inventory, and sales. The individual account balances show values at a given point in time, and these values change as a result of transactions. Account balances provide the content for financial statements.

For more detailed financial reporting, you can use sub-accounts, cost centers, and projects. Sub-accounts provide a further level of detail within an account, and can be linked to customers and suppliers and their individual transactions. See Sub-Accounts.

You can refine account and sub-account information further by defining cost centers. For example, a cost center can be a profit center or department within the account or sub-account. Balances in sub-accounts and cost centers can be listed separately or summarized under account codes. See Cost Centers.

Project codes provide analysis on costs and revenue for the projects defined in your organization. See Projects.

A company that is part of a larger organization may be required to define an alternate COA according to local GAAP, and then report to their head office using the operational COA. The Alternate COA function provides the ability to generate reports using alternate COAs, in addition to a company’s operational COA. See Alternate Chart of Accounts. Alternate COA cross-references let you specify mappings from source GL combinations to target alternate accounts. You can also create cross-reference mappings for use in consolidation. See COA Cross-References and Consolidation.

You can verify valid combinations of COA elements using a COA mask. A COA mask is a matrix that defines the combinations of GL accounts, sub-accounts, cost centers, and projects to which you can post transactions. The mask you define applies to all transactions posted for the current domain. See COA Masks.

Use supplementary analysis fields (SAFs) to provide additional reporting on specific areas within GL accounts, cost centers, or projects. SAFs are typically used to track the volume of sales or purchases of a product in a region in a given period. See Supplementary Analysis Fields.

Accounting layers let you define different types of transaction postings, from official postings to statutory books to temporary postings for analysis or simulation. See Accounting Layers.

Daybooks are system- or user‑defined views of the general ledger, and contain the transaction posting lines. Using different types of daybooks lets you group GL transactions to satisfy legal reporting requirements. Each daybook is assigned to an accounting layer. Depending upon the daybook type, the layers to which the daybook can be assigned may be restricted; for example, Customer Payments can be assigned to the official layer only. See Using Daybooks for more information.

The financial calendar consists of user-defined GL calendar years and GL periods. You can define custom start and end dates for each GL period to correspond with your accounting cycles. See Defining the GL Calendar.

Costs and revenues can be allocated directly to the relevant GL accounts, sub-accounts, cost centers, and projects during journal entry. However, for some costs, such as utility bills, organizations may prefer to define and run an allocation after the journal entry is created, depending on how the organization chooses to apportion such overhead costs across departments and divisions. See Financial Allocations for information on defining an allocation structure.