Coding in accounting software
Account group:
A one-digit code is usually assigned to the account group.
Usually, account groups are the same everywhere and have slight differences in definition, starting with assets and ending with administrative accounts.
If we consider the order of liquidity, we will have the following order:
Assets, liabilities, equity, revenues, expenses and administrative accounts. These groups may be divided into current assets, fixed assets, liabilities, and long-term liabilities based on customer needs.
Total account:
The total account is one of the most important parts of #accounting coding. Given that this heading of the account must be registered in legal books (general ledger), its definition is very important.
The definition of the coding of the general account should be in a way that is accountable to the finance department.
The balance sheet, ledger and other reports that are extracted from the accounting software at the overall level should show the financial status of a group.
These reports include taxable income, tax-exempt income, operating expenses, non-operating expenses, cash assets and more. are. For total coding, two or three digits including the group code are usually enough.
Certain account:
The specific account is used to specify the details of the total account, for example, the cash and bank balance includes the details of banks, funds and payroll.
The importance of this account is not less than the total account, this account plays an essential role in controlling the account circulation and separating the balance of accounts, expenses and incomes, and it will help in managerial decisions and financial follow-up.
For a certain account, usually between 4 and 6 digits of the code including the total account code are considered in the accounting software.
Preferred account:
Special account is the most detailed level of accounts.
In every economic enterprise, the detailed account is determined completely based on its activities, the names of customers, bank accounts and other personal headings of each group are placed at this level.
Also, the method of dealing with the detail level of accounts and the number of detail levels used in each economic enterprise is different.
Today, many financial software allow the use of floating detail, this type of detailed account is defined independently of the specific one, and an account code is assigned to each account in the entire accounting software.
When registering the document, it is determined which account this account belongs to. This coding method provides the accountant with very strong and comprehensive reports.
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This post is written by mda140