Feature: Enterprise Accounting System

Environment: Comsense Enterprise

Purpose: Record and manage your company's financial transactions.

How it works:

Double-Entry Accounting & T-Accounts

Enterprise uses the double-entry accounting method. In double-entry accounting, the transaction amount comes out of one general ledger account as a credit and goes into a different general ledger account as a debit i.e. double-entry accounting documents where money comes from and where money goes. 

T-Accounts are a visual representation of double-entry accounting, where the account is represented in a T-shaped table with one side as debit side and one side as credit. The debit side represents money coming into the account and the credit side represents money leaving the account.

Reporting Structure

Enterprise's reporting structure functions using companies and divisions. Company in Comsense is the top level of your organization and the top level of the accounting system. Company entities hold the balance sheet information and are supported by the division sub-ledger detail reports. Comsense can accommodate multiple companies and intercompany financial transactions. For any intercompany transactions, the system automatically creates journal entries to record the asset (receivable) and liability (payable) impact between the companies.

A division is a specific type of business unit or geographical unit e.g. branch operation. A division can only be associated with one company and all companies in the system must exist with one or more divisions. A division must be assigned to each account line item in a journal entry. 

Journal Entries

Enterprise records each double-entry transaction in a journal entry. Journal entries are the record of a financial transaction in the system with the following data:

• Date of transaction
• Division code
• Name and account number of the affected general ledger accounts
• Transaction debit amount and credit amount
• Journal entry reference number
• Journal entry description

Comsense Enterprise has two methods of recording journal entries:

• Automatic journal entries
• Manual journal entries

Automatic Journal Entries

Comsense Enterprise creates automatic journal entries for all internal operation transactions that have a financial impact on the organization. This means the system creates a journal entry when a user saves a transaction as Completed e.g. If you complete a bank deposit, the system records a journal entry with a debit amount to the Bank general ledger account and a credit to the Undeposited Funds general ledger account. 

Manual Journal Entries

Comsense Enterprise has a manual journal entry function to manage any financial transactions that are not directly related to an internal operation transaction e.g. recording bank charges from a bank statement. Control accounts are general ledger accounts that have automated journal entries as the only source of transaction records. Manual journal entries are restricted on control accounts to maintain the integrity of the account balances to the sub-ledgers.

You can only make manual journal entries on accounts with non-control account classes such as Other Assets (Assets) and Other Liabilities (Liabilities).

Related Articles

See the list below for articles related to journal entries in Comsense Enterprise:

• Transitioning Your Accounting System to Enterprise
• Creating a General Ledger Account

Fiscal Years & Periods

Comsense Enterprise's fiscal years and periods are dynamic and maintained by System Administrators. The System Administrator must establish start and end dates for the fiscal years and periods in the Company window. The general ledger trial balance and financial reporting always reflect any subsequent changes to fiscal years and periods.

Dynamic fiscal years and periods are useful because they:

• Accommodate change in a corporate year-end date
• Eliminate the traditional need for year-end closing entry
  • The system automatically maintains this data based on the current fiscal period date settings
• Allows for a 4-4-5 accounting cycle, 13 accounting period cycle, or any other combination of accounting period dates

Related Articles

See the list below for articles related to fiscal years & periods in Comsense Enterprise:

• Managing Fiscal Years & Fiscal Periods
• Year-End Closing Entry (Retained Earnings)

Reading the Example Enterprise Accounting Transaction Excel Sheet

Attached to this article is an Excel sheet detailing an example of accounting transactions in Comsense Enterprise. The first tab shows T-account representations for all the general ledger accounts. Each general ledger account has debit and/or credit amounts that are offset by the same value in another account. Refer to the transaction reference numbers to see the debit and credit amounts in the associated accounts.

*Note: Division codes are not shown in the article photos or Excel attachment to simplify the T-account example.

The Income Statement tab, Balance Sheet tab, and Shop Cost Center Report tab detail the reports based on the T-account entries.