01/13/11

With the release of GP2010, Microsoft has added the ability for GP users to utilize up to three ledgers. While the main impetus was to support IFRS reporting (the second ledger), Microsoft also enables you to use the third “LOCAL” ledger for additional purposes.

The base ledger, as it exists today, continues to manage GAAP accrual-based transactions and reporting. The second IFRS ledger will be used if and when the US transitions to European reporting standards. This leaves the third “LOCAL” ledger as a means for reporting operating results on a cash basis. Here’s how:

At the end of each month, in the LOCAL ledger, back out the accruals with a reversing entry (should reverse the first of the next month). These reversing entries can include un-paid accounts payable invoices and accounts receivable invoices, prepaid expenses and accrued payroll. This will work well for organizations who report on a modified cash basis as well.

GP can generate a trial balance in both ledgers (accrual and LOCAL). Using Management Reporter, you can report on both an accrual basis and a cash basis to give you a better financial picture each month.

To learn more about cash basis accounting in GP, contact Gilchrist Scott at 207.761.2133 or email@gilchristscott.com

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