Chapter 7. PeopleSoft General Ledger Module

So far we have discussed the sub-modules in the PeopleSoft financial applications. As we previously saw, all these modules create accounting entries and send them to General Ledger. It would not be an exaggeration to say that General Ledger is the heart of the PeopleSoft financial applications. This module performs the critical function of consolidating the accounting information from various sources (PeopleSoft modules as well as non-PeopleSoft systems) and performing management reporting. We can generate important financial statements such as the Income Statement, Balance Sheet, and Cash Flow Statement from the data consolidated by the module. We discussed most of the important building blocks of General Ledger (such as chartfields, journals, and ledgers) in Chapter 1, PeopleSoft Financials Fundamentals.

In this chapter, we will discuss the following topics in greater detail:

• Understanding journal entry methods (such as manual journal entry, using...

Understanding journal processing

Journal is a mechanism to record accounting entries in a summarized form. There are multiple ways in which journals are created in the General Ledger. In Chapter 1, PeopleSoft Financials Fundamentals, we saw how we can configure accounting entry definitions, accounting entry templates, and journal sources. Now we'll explore other aspects such as journal creation, editing, and posting.

Journal creation

There are four ways in which journals can be created:

1. Manually from journal entry pages

2. Using the Journal Generator process to create journals from other PeopleSoft modules as well as non-PeopleSoft systems

3. Spreadsheet journal upload

4. Flat file import

Let's discuss these methods in detail.

Using the Journal Generator process

Journal Generator is used to create journals from PeopleSoft sub-modules as well as accounting entries generated and sent by external non-PeopleSoft systems. As we have previously discussed, each sub-module such as Billing, Accounts Receivable...

Understanding interim and year-end closing

Closing is an important process in the accounting calendar of an organization. Before discussing how PeopleSoft handles this function, we'll spend some time in understanding this important accounting concept.

All accounts are categorized based on the financial statement they appear on. Thus all Revenue and Expense accounts are called Profit and Loss Accounts, as they appear on the Profit and Loss statement, while Asset, Liability, and Equity accounts are known as Balance Sheet Accounts.

While the profit and loss statement, also known as the Income Statement, shows an organization's revenue and expense status at a particular moment in time, the balance sheet shows the accumulated balance of its assets, liabilities, and owners' equity. At the end of the financial year, all profit and loss accounts need to be closed and their balances transferred to the balance sheet in the form of net profit or loss. This net balance is transferred to a special purpose...

Understanding allocations

Processing allocations is an integral part of accounting processes. An organization incurs various expenses that later need to be allocated (distributed) among various units using certain parameters. These expenses typically include, but are not limited to, rent expenses, utility expenses, salaries for support functions such as human resources and IT support, general expenses such as advertising, and so on.

Let's consider a simple example to understand this concept. Assume that an organization has 400 employees working in its two departments—hardware sales and software services. This organization also has an administration support department. For the sake of simplicity, we'll assume that it uses only two chartfields: Account and Department. Let's say the chartfield values are as follows:

Account		Department
Value	Description	Value	Description
900000	Salary expenses	A300	Hardware sales
		A400	Software services
		A500	Administration

The salary for the...

Summary

PeopleSoft General Ledger is the central repository of all accounting information created by accounting transactions. All other modules (such as Billing, AR, AP, and so on) send their accounting details to the General Ledger in the form of journals. Journals can be created manually using online pages, imported from non-PeopleSoft systems as flat files, or uploaded using Microsoft Excel spreadsheets. Journal Generator is an important batch process used to create journals from accounting entries from other PeopleSoft modules. Journal Edit and Journal Post are other important components of journal processing.

Once journals are posted, they update the account balances in the LEDGER table.

At the end of an accounting year, the balances of revenue and expense accounts need to be transferred to the retained earnings account in the balance sheet. This process is known as Closing. Organizations can perform interim closing (optional) apart from the year-end closing. PeopleSoft uses the closing...

The rest of the chapter is locked

Summary

PeopleSoft General Ledger is the central repository of all accounting information created by accounting transactions. All other modules (such as Billing, AR, AP, and so on) send their accounting details to the General Ledger in the form of journals. Journals can be created manually using online pages, imported from non-PeopleSoft systems as flat files, or uploaded using Microsoft Excel spreadsheets. Journal Generator is an important batch process used to create journals from accounting entries from other PeopleSoft modules. Journal Edit and Journal Post are other important components of journal processing.

Once journals are posted, they update the account balances in the LEDGER table.

At the end of an accounting year, the balances of revenue and expense accounts need to be transferred to the retained earnings account in the balance sheet. This process is known as Closing. Organizations can perform interim closing (optional) apart from the year-end closing. PeopleSoft uses the closing...