Interfacing Journals with the General Ledger (GL)
Interfacing journals with the General Ledger (GL) involves two components. The first component is the source of data from which accounting transactions are created that will be posted to the GL. The second component is the actual interfacing process. Below are topics which will help clarifying elements of each component.
What is a GL interface?
GL interface is the means whereby accounting data is electronically passed to the University’s general ledger from a method utilized by a department to facilitate its business processes. The department method to gather source data may be as formal as a sub-system (see What is a sub-system?) or as simple as an excel spreadsheet.
What is the purpose/benefit of a GL interface?
Generally, interfaces are used to record regular, frequent, and/or high volume accounting transactions resulting from the sale of goods or services within the campus community. Utilization of a GL interface significantly reduces duplicate data entry and increases the accuracy of the transactions being posted to the GL (see What is Web Journal Processing?).
What is a sub-system?
A sub-system (subsidiary system) is the method used by departments to facilitate their business processes and which is not part of the University’s administrative systems. It may be developed in-house by University personnel or purchased from a software vendor.
Considerations when developing/purchasing a sub-system?
Departments desiring to purchase a new software system may be required to allow vendors to submit a bid in response to a Request for Proposal (RFP) prepared by the department. Please contact the Purchasing Department for clarification.
Preparation of the RFP or development of an in-house system should include consultation with Business Analysis & Support Services or General Accounting, who will coordinate with the Information Technology Council (ITC) as appropriate, to ensure all requirements are identified to make the final product successful. The purpose of the ITC is to facilitate the development of the University’s information technology and e-commerce infrastructure, resources, and applications. The ITC is a representative body with members from most colleges and administrative departments.
Involvement of Business Analysis & Support Services and/or General Accounting will occur in varying degrees depending on what the proposed system will do and the complexity of the business processes involved. Departments should carefully consider this as they begin the process of software selection and during the process of planning implementation timelines. Other Financial & Business Services’ departments such as Grants & Contracts Accounting, Accounts Payable, Property Accounting, Tax Services, and Income Accounting & Student Loans may be involved as well.
In addition, University Policy 3-070, Payment Card Acceptance, provides specific requirements for new systems involving credit cards or e-commerce.
How do I establish a new GL interface?
If you think a GL interface may be appropriate and beneficial to your department, General Accounting should be contacted to discuss the business reasons pertinent to the request. If it is determined that a GL interface is appropriate, both the requesting department and Financial Solution/General Accounting have a few tasks which must be completed. Not every business process warrants an interface, but General Accounting will work with departments to determine what options might be available.
Business Analysis & Support Services/General Accounting Tasks
1. Identify a unique Journal Source, Journal Sub-source(s), and Journal ID(s) for the journal(s) to be used to post the department’s transactions.
2. Set up the list of “Account” values which are valid for the Journal Source and Journal Sub-source(s) as identified by the department.
3. Provide the department with the file layout required to upload the journal into the University’s accounting system.
4. Establish a “Directory” into which the journal file will be uploaded.
5. Instruct the department in the use of the ”Web Journal Processing” tool (see What is Web Journal Processing?).
1. Create a journal file from the department’s sub-system (see What is a sub-system?) or other data source.
2. Determine, in consultation with General Accounting, what “Account” values are appropriate for recording the accounting transactions.
3. Reconcile the data in the journal file with the data in the source system.
4. Provide test files to process to identify problems before “going live”.
5. Provide the customer, or have available for review, appropriate documentation which supports each journal line in the journal.
6. Provide General Accounting with a contact person (name, phone number. and email address) who will be responsible for the interface process.
7. Provide a detailed walk through of business processes and system controls so that data integrity, prior to passing to the General Ledger, is assured. Depending on the complexity of the transactions and business processes, this can be a very time consuming step.
What is Web Journal Processing?
Web Journal Processing is the tool by which departments validate their journal file and upload it to the University’s accounting system. The tool will perform a series of edits to determine the accuracy of the data. Any errors will be noted and the file will not be uploaded. Once the file passes all edits it will be uploaded.
How does the Journal File actually become a journal?
Once a GL interface journal file has been uploaded to the University’s accounting system, General Accounting runs a process which actually creates the journal from the journal file. The journal is then processed normally, like all other journals, and posted to the General Ledger.