General Ledger FAQs

Applies to: [x] C&P Classic [x] C&P Pro [x] Job Tracker [x] C&P SQL [x] My C&P! See also:

Summary: Frequently-asked questions about the Clients & Profits general ledger. General Ledger accounts are the foundation of your financial accounting system. Each account (of which you can have many) represents a specific, meaningful dollar amount for your assets, liabilities, equity, income, and expenses. How your accounts are numbered is extremely important, because they'll be with you for many years. Am I stuck using the standard Clients & Profits chart of accounts? Can I set up G/L accounts for clients and jobs? Why is the account number limited to 6 digits? Will the account number ever be longer? Why can't the account number include letters? Q. Am I stuck using the standard Clients & Profits chart of accounts? No, your chart of accounts is fully customizable. There is no rigid, preformatted chart of accounts in Clients & Profits. Every account you create is user-defined, containing a custom number and description. Every account is identified by a unique number, which is entered throughout Clients & Profits to make debit and credit entries. It's possible, but not especially easy or convenient, to change account numbers once they're used. Make sure you've carefully considered your numbering system before entering data. Here's what you can do with G/L account numbers: They can contain 3, 4, 5, or 6 digits. They can contain any set of numbers (e.g., 100001) Here's what you can't do with G/L account numbers. An account can't begin with a zero. An account can't contain letters, dashes, or other characters. An account can't be deleted if it has activity (even if the balance is zero). The account number doesn't affect sub-totaling on financial statements. Financials use the account category (i.e., balance sheet or income statement), class (i.e., asset, liability, etc.), and sub-class (i.e., current assets, etc.) to make sub-totals. However, accounts are sorted by account number within these groups. This is the primary reason why account numbers are numeric fields, not character fields. Q. Can I set up G/L accounts for clients and jobs? Yes, but it's discouraged. Clients & Profits uses the job tickets and tasks to produce profitability reports, not the General Ledger. This means the General Ledger can focus on the agency's overall profit and loss. Creating and managing accounts for every client is complicated and prone to error (because you've got so many more accounts to maintain and proof). In Clients & Profits Pro, each journal entry is posted with a job number and client number for better accountability. This means you can print audit trails by client and job number. The account number doesn't need a profit center. In other accounting systems, rearranging accounts and profit centers required complicated, time-consuming adjusting entries. That's why Clients & Profits created a separate data "field" on the account for a profit center. It's not literally part of the account number (although you can make it so). This is done for flexibility: You can now move accounts around within profit centers without renumbering an account and its activity. Moving an account into a different profit center is easy--just change the account's profit center number. Given how agencies often reorganize themselves, this feature makes it easy to keep your financial statements up to date. If you want a profit center included with the account number, it should be entered at the end of the number (e.g., profit center 20 would be entered as account 1234 as 123420). Since accounts are sorted numerically on financial statements, this helps your various accounts appear in order function--and not profit center.   Q. Why is the account number limited to 6 digits? The length of the account number was designed to accommodate the needs of a typical ad agency and design firm. These shops usually have less than 200 accounts, and maybe some profit centers. A six-digit account number lets you create accounts with a 4-digit number and a 2-digit profit center, for example. A concise account number is easier to remember, and quicker to enter (which is important if you're a high-volume shop). Also, small account numbers consume less space on windows and reports, leaving more room for other information. A six-digit account code strikes the best balance between flexibility and efficiency.   Q. Will the account number ever be longer? Probably not. Since Clients & Profits isn't a large corporate accounting system, it isn't likely that the account number will be lengthened to include divisions, regions, profit centers, and special account codes. Adding a longer account number would require a fundamental redesign of the Clients & Profits software. The work involved in making this change is enormous--it means every window, dialog box, and report format would have to be modified. In many cases, the longer account number would mean other valuable fields would be shortened or removed entirely. Q. Why can't the account number include letters? Accounts are sorted numerically on financial statements, so the account number is a "number" field. Number fields can't contain letters, so they aren't accepted. Using letters would cause confusing sorting problems, as it does with job numbers, client numbers, and vendor numbers. Search the Daily Q&A database