Using Daybooks
Daybooks, also known as journals, are system or user‑defined views of the general ledger and contain all transactions.
The use of daybooks is mandatory in all modules. Daybooks provide many advantages in terms of analysis, segregation of transactions, numbering, and consequently, speed of period close.
Using different types of daybooks lets you group GL transactions to satisfy legal reporting requirements or to ensure that GL reporting is consistent with common business practices:
• Financial daybooks accept postings that originate from financial functions, such as the general ledger, AR, and AP. See
here.
• Operational daybooks are used for postings that originate from operational functions, such as Sales, Inventory Control, Fixed Assets, and Manufacturing. They are created as unposted transactions, which then require a separate posting activity to update the general ledger with the transaction amounts. Operational daybooks are also used to generate invoice numbers during the invoice posting process. See
here.
• External daybooks can be used with an interface to external systems, such as payroll systems. See
here.
Daybooks can be used to distinguish between different types of journal entries, such as auditor adjustments, payroll entries, GAAP adjustments, and manually prepared accruals.
Once daybooks are defined, you can use the Daybook field as a selection criterion on many GL reports and views.
Daybooks provide the ability to separate records by transaction. You use different daybooks to separate transaction types, for example, to distinguish between credit notes and invoices, and inventory receipts and stock receipts. If you use a particular daybook code for certain types of transaction, you can then browse and filter based on that code. The ability to filter based on the daybook code facilitates period close because you can easily identify and review transactions of a certain type and identify unusual activity. For example, when reconciling sub-ledger balances to the general ledger, daybooks provide a clearer analysis of the transactions, making it easier to identify any unusual activity against an account. How many daybooks are required depends on your particular accounting practices.
Daybooks record transactions chronologically, and, as such, provide dated records of the entire financial activity of the entity.
Daybooks also provide a controlled mechanism for having several different transaction numbering sequences. The numbering system prevents fraud, since each daybook produces its own integral numbering sequence.
These numbers can be maximum 22 characters in length and consist of:
• Year (YYYY)
• Slash character (/) to act as a separator
• Daybook Code (maximum eight characters)
• Sequence number (000000001)
At the beginning of the year, the sequence resets to 000000001 and the year is incremented accordingly.