Flexible GL Postings, a Cloud ERP Win ...and Warning
As off-the-shelf desktop accounting solutions have evolved to cloud-based ERP solutions, so has the need for flexible accounting configuration to control how and when transactions post to the general ledger.
When implemented well, a Flexible GL Posting design can foster clear and useful reporting, while also creating system controls to ensure completeness and accuracy of those financial reports. Internal stakeholders, auditors, and implementation consultants should be concerned with the underlying design of these Flexible GL Postings as they are designed, controlled, and maintained by the company’s Admin users, not necessarily by the product author.
Flexibility in designing general ledger impact can be a win for your organization, but not without warning. Consider the following before selection and after implementation of any new, highly configurable general ledger system.
Win — The accountant is in control. No matter where your business transactions originate or how they flow, flexible general ledger configuration allows you, the accountant, to create any number of process steps with posting or no posting impact to the general ledger. Further, you can leverage a single transaction definition to direct different postings based on any combination of item, location, warehouse, or customer/vendor. You can also assign custom permissions, visibility, printed document templates, and numbering to each of these transactions.
Win — Plays well with integrations. Once transaction definitions have been created and GL postings are configured, they control how and when transactions are posted and can prevent any third-party integration from posting anything other than what has been pre-defined. This creates opportunities for automation of high-volume transaction types with high confidence that GL postings will be accurate.
Warning — Don’t forget to lock down. Custom transaction workflows can be a powerful tool granted to one or more of your employee users. Ideally, this power rests with the system administrator who is either part of the accounting team or who is only authorized to make updates or changes as directed by the accounting team. Workflow design is a merging of operations, accounting and systems knowledge and should not be set up or maintained lightly. At a minimum, the accounting team should be involved in such design and should perform adequate testing to ensure that all transaction use case scenarios have been considered and are impacting the general ledger as desired.
Warning — Review as part of audit. Internal and external financial statement auditors typically do not request to examine or review the basis of custom transaction configuration. Auditors should realize that modern, configurable accounting systems hold custom transactions that have been configured by their clients and their client’s consultants, not necessarily by the accounting system publisher. An audit plan that fails to review this part of the configuration may miss something obvious and with possible material impact.
If you do decide to move forward with a highly configurable cloud ERP system, be sure to:
Plan and document the transaction scenarios within your workflows and get accounting approval before designs are put into place.
Limit the number of users who can edit these transaction definitions and related postings to only those with accounting authority and understanding of the GL impact desired for financial reporting.
Choose implementation consultants and internal administrators with accounting experience rather than general systems or IT knowledge alone.
Should you need assistance in this area of Flexible GL Postings (Advanced Workflow) within your Sage Intacct environment, lean on Ticktie Consulting to share best practices or to provide a review of your existing Sage Intacct configuration. Ticktie consultants are licensed CPAs focused on Sage Intacct implementation, integration, and optimization.