Financial reporting is critical to any business, manufacturing being no exception. Maintaining good, clean financial statements will keep you organized and on top of how your business is performing from month to month, and year to year; however, like with any function in your organization, the information you get out of your system is only as good as what is put into it. Some systems allow you to review all information before it is updated and posted to your general ledger. Other systems are fully automated and others are a combination of both, allowing you to choose what fits you best. Regardless of how your system works, there are key elements to ensure the numbers are clean and accurate every month.
With that said, here is a set of guidelines and good practices that you can take to maintain and ensure a smooth month end in your financial application.
1. Always review subordinate ledger journals prior updating the information to the General Ledger (or G/L). This will help the user find any discrepancies before they are posted and no longer accessible to be changed. This will allow the user to make adjustments prior to final posting. In systems that automatically post transactions to the G/L as completed, be sure to review those same sub ledgers for accuracy and make any appropriate adjusting entries.
2. Be sure ALL entries are posted in the General Ledger. Control logs are a good way to be sure this is happening monthly.
3. Reconcile/Balance Customer Aged Receivables Report to the General Ledger Accounts Receivable account at month end.
4. Reconcile/Balance Vendor Aged Payables Report to the General Ledger Accounts Payable account at month end.
5. Reconcile Bank Statements – Simply Put
6. Print financial reports and review for any possible adjustments prior to rolling the General Ledger period forward. a. Balance Sheet b. Profit & Loss Statement
7. Make any changes/adjustments needed through Journal Entries and Post Entries.
8. When all is in balance run final reports – Roll the General Ledger Period forward.
Profitkey’s Rapid Response Manufacturing ERP has a strength and focus in all of these processes. The financials are fully integrated with the core ERP components and allow users the flexibility to post daily, weekly or monthly based on preference. System generated reports provide all the detail needed to ensure accurate and timely financial reporting.Written and posted, collectively, by ProfitKey International