Things to Know: General Ledger

How do I void a check and what if it has already been charged on a client's bill?

To void a check go to the Void Check function located under the menu where the check was originally entered ( i.e. A/P for Operating checks, Trust for Trust checks, Payroll for Payroll checks) . You must enter the cash account Chart of Account number the check was drawn on and the check number you would like to void. Click on the Retrieve button. AbacusLaw by CARET will then display the check information, at this point you have the option to change the date of the void , but generally, you want to void the check on the current date. You then must click the Void button. AbacusLaw by CARET will automatically update the general ledger, vendor ledger and client's financial ledger, if it was a cost incurred check, or the trust ledger if it was a trust check.

If the check has already been charged on a client's bill there are two options.

1. If you will incur additional costs on this matter you do not need to do anything. The system will generate a credit amount on the client‘s financial ledger that will then appear on the client’s next invoice, and be off set by the additional costs incurred.
2. If you will not incur any additional costs on the matter, and the client has already paid this cost, you will have to issue a refund to the client.

What is a subsidiary ledger?

The subsidiary ledgers are the financial records of the Firm. This includes detailed records of every entry made in the system that effects one of the general ledger Chart of Account numbers setup in the AbacusLaw by CARET system. The total of the subsidiary ledgers is called the General Ledger.

How do I deposit money coming from somewhere other than a client (i.e. refund from a vendor)?

Money received from somewhere other than a client needs to be processed through Post Journal Entries. The Type of entry would be Cash Receipt. The account Debited would be the cash account the money was actually deposited in. The account Credited would be the account the payment was for (i.e. a refund from a vendor for overpayment would be the account that was debited when the payment was made.)

When viewing the General Ledger details what is meant by source?

The source indicates which module posted the transaction.

When should I do my year-end closing?

There is no rush in doing the year-end closing. We recommend you wait at least until the tax return for the year has been filed and all adjusting entries have been made. The only reports that will be affected by not closing out your year are the Balance Sheet and the Trial Balance. These reports are cumulative and will reflect numbers from prior unclosed years.

Unlike Month-End Closing, Year-End Closing cannot be reversed! Please verify the reports listed in this guide before proceeding with any Year-End Closing.

What happens during the year-end closing?

The year-end closing is used to clear the detail data from the general ledger for the timeframe specified. The system will delete the detail for the income and expense accounts and roll the net profit/loss into the general ledger account setup in the Default Account Setup for Profit/Loss. The system will delete the detail for the Asset, Liability and Capital accounts and roll the balances into a summary file. For these accounts you will have a balance forward, but no detail for the time frame closed. The entries in the cash disbursement and cash receipt table are deleted for items cleared on the bank reconciliation for the year closed. The vendor detail tables are cleared of all invoices that were paid during the year closed.

What is Unclose Month used for?

Generally it is a good habit to close each month when you have completed all entries and finished the bank reconciliation for a month. This way the financials you have provided to your Accountant will not change. Now, if you have closed a month and then find you have additional entries that need to be made within that particular month, you would use this function to “unclose” the month so that the entries can be made. Simply change the Last Month-End Closing Date to a date BEFORE the date that you need to modify.

Can I change the date, check number, description, or dollar amount on any entry?

You may not just modify a journal entry as you can the Matter Billing Activity or trust ledger. However, you can reverse an entry, void a check or make an adjusting entry that will “zero out” the entry with the incorrect information, and then re-enter the entry correctly.

What difference does it make if you call a journal entry a cash receipt, cash disbursement, or general type entry?

The “ Type ” of journal entry you choose for an entry will determine which reports, other than the Subsidiary Ledger, it will appear on (ALL entries will appear in the Subsidiary Ledger). Cash Receipt type entries will appear on the Cash Receipt Listing and in the Bank Reconciliation as a deposit. Cash Disbursement type entries will appear on the Cash Disbursement Listing and the Bank Reconciliation as a disbursement (listed with the journal entry number).

In Payments Received and Trust Deposits, you enter the posting date. What is the importance of the posting date?

The posting date is the date the entries will appear in your general ledger. For example, you may receive client payments each day during the week, but you only deposit them into the bank once a week. The posting date would be the date of the actual deposit. This is important when doing the bank reconciliation. If you are out of balance, check the dates of your deposits to be sure they were included in the proper month.

Why would I reverse a journal entry? How does this affect a client or trust ledger?

You would use the Reverse Journal Entry function only when you want to reverse one complete journal entry. When you reverse a journal entry there is NO integration with the client's financial or trust activities. There is also no integration with the vendor ledgers.

How do I enter firm incurred disbursements that were not checks (i.e. bank charges, wire transfers)?

Firm incurred disbursements that are not checks are entered through Post Journal Entries with the Type of entry being a Cash Disbursement. In this way it will appear on the Cash Disbursement Listing and Bank Reconciliation.

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