A ledger is a set of accounts and from these accounts all financial statements are produced.
The General Ledger operates in a base currency which will normally be that of the country of operation. You can enter transactions in another currency together with the exchange rate and the system will calculate the conversion for you.
All transactions are entered in batches. A batch consists of one or more journals and a journal contains two or more transactions. Any batch must balance before it can be posted.
If your system crashes whilst posting a batch, it will either be all posted or not posted at all. With PETRA there is no risk of having a half-posted batch.
PETRA has a logical and flexible chart of accounts which allows for multi-lingual account descriptions. The way in which a ledger is structured is completely flexible, for example one ledger may be made up of divisions, another may be made up of projects.
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The OM standard chart of accounts and list of fund numbers must be used, otherwise consolidation across ledger and International Clearing House transactions is not possible. See the OM Bookkeepers manual for a list of standard accounts and a list of fund numbers. The standard OM chart of accounts will be set up for you on installation of PETRA. |
In order to progress with the Finance Module of PETRA you will need a working knowledge of the other modules of the system, in particular the Partner system, as each ledger, or person dealt with in the accounting functions must also be set up on the Partner system. For instructions on the Partner system refer to the Partner section of the user manual since the material will not be repeated here.
Here is a brief summary of the procedures available in the Finance Module:
In the processing of transactions you can perform the following functions:
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Create a batch of ordinary or recurring transactions
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Edit a batch and add transactions to an existing batch
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Post a balanced batch
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Reverse a posted batch
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Produce a batch report
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Set up different fees payable or receivable on gifts (admin. grants)
No posting will ever be accepted unless it is part of a balanced batch. At any stage a trial balance can be extracted in order to verify that the entire system is in balance.
The reason for using batch processing is that you do not post every time you have a transaction to enter but that you accumulate the transactions and then process them together. When all the details are complete, and the batch balances, then it is posted to the ledger.
It is possible to work on a particular batch and then save it for posting at a later time.
You can do the following with a batch:
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display a batch and check the details before accepting
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accept a balanced batch for posting
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cancel a batch before it is posted
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save an unbalanced or incomplete batch for later completion or correction
The system allows each user to be entering data for a different batch simultaneously. Each batch is uniquely identified with a batch identifier which is generated automatically by the system.
If an entire batch has been processed in error the system can reconstruct the entire batch and create reversal journals for each entry. It has the facility to edit the original batch to prevent re-entry of all the data. Note that a batch can never simply be cancelled or deleted once it has been posted
A ledger will operate in a base currency but handle transactions in any currency. A transaction will always hold its original amount, currency and exchange rate for audit trail purposes.
PETRA has corporate and daily exchange rates. The rate is selected at the time the transaction is input and will default to the most recent rate, but the user is always given the option of entering a new rate. If the rate was incorrect at time of input, then the whole batch would have to be reversed out and posted again with the correct rate.
Corporate rates are set by the International Finance Office. An exchange rate for each currency is set for the entire month at the beginning of the month.
PETRA uses the corporate exchange rates for any automatic currency conversions, that is, converting your base currency amount to the international currency amount.
The daily exchange rate is used when you enter a journal in a foreign currency. You will be prompted to enter a rate if you have not already entered one for the transaction date.
Any number of daily exchange rates can be used. When holding a cash balance in another currency you may request a revaluation to ensure that a realistic value of the balance is held since the actual value may be constantly changing. The change in valuation is posted to a foreign exchange revaluation account.
Cash balances can be automatically revalued at each period end; PETRA asks the rate to be confirmed.
