How to Simplify General Ledger Processes in Salesforce

Keeping financial transactions and records is essential for success in the business world. Whether you’re running a start-up or a large organization, all businesses must keep detailed ledgers to perform financial transactions correctly and legally. In this aspect, a general ledger is a basic structure for financial records and reports. General ledgers tracks important information and accounts regarding various transactions. 

By managing general ledger operations in Salesforce, companies can improve data accuracy, and increase overall efficiency. Additionally using general ledger in Salesforce promotes better collaboration and ensures compliance with accounting standards and regulations. 

Why Companies Use General Ledger Accounts

A general ledger consists of five sub-ledgers which are known as assets, income, expenses, liabilities, and equity capital. Companies create a trial balance after completing each sub-ledger accounting cycle. The information obtained from this trial balance forms the basis for the preparation of companies’ financial statements. The main factors why companies use ledger accounts are;

Financial Tracking: A process of tracking a company’s income and expenses describes financial tracking. It is carried out by recording invoices, receipts, and business expenses in an accounting ledger. General ledger accounts provide a systematic method for tracking all companies’ financial transactions. These records help finance teams detect unusual transactions and ensure accurate financials.

Financial Reporting: As an important process of measuring a company’s performance at a specific point in time, financial reporting helps businesses make informed decisions. General ledgers are important for generating various financial statements for accurate financial reporting, including balance sheets, income, and cash flow statements.

Trial Balance: A trial balance is an internal financial statement showing the closing balances of all accounts in the general ledger at a specific date. The purpose of trial balances is to ensure that the entries in a company’s bookkeeping system are correct. General ledgers are used to create a trial balance in which the debits and receivables of a business are collected. 

What Are the Five Categories of a General Ledger?

1. Assets: According to International Financial Reporting Standards (IFRS), an asset is described as “a resource controlled by an entity as a result of past events and from which future economic benefits are expected to flow to the entity.” Assets include everything a company owns and has a financial value to a business such as cash, account receivables, inventory, property, and equipment. 
2. Liabilities: Opposite of assets, liabilities are what a company owes. These are the rights of creditors or third parties on the business’s assets, such as trade payables, loans, accrued expenses, and deferred revenues. Liability accounts are the debts that a business has. 
3. Equity: Equity refers to the company’s book value which is the difference between liabilities and assets on the balance sheet. It is the amount of money that a company has. On a company’s balance sheet, the difference between its liabilities and assets shows how much equity the company has.
4. Expense Ledger: Expenses refer to costs incurred during the execution of the business such as expenses related to purchases, lease payments, and employee costs. The regular expense account balance is a debit.
5. Revenue Ledger: Income is the increase in benefits provided during the accounting period. It reflects amounts such as sales revenue, service revenue, and interest income obtained from the sale of goods and services.

How a General Ledger Works on Salesforce?

The general ledger in Salesforce organizes the financial data and captures, classifies, and tracks every transaction, providing a comprehensive view of the company’s financial health. It provides a holistic approach to financial management by providing users with real-time information and streamlined processes. This information can help management make financial and data-driven decisions.

While general ledger accounts are available in Salesforce Billing Editions, it could be more beneficial to integrate Salesforce with a comprehensive finance system. Although Salesforce is a great CRM platform, it may not provide holistic financial management on its own. 

If you want to manage your company’s specific financial needs seamlessly on the Salesforce platform, you generally achieve this by integrating finances into accounting software that is built natively in the Salesforce platform. This way, you will access more financial features, including General Ledger, and facilitate all financial processes on the Salesforce platform. Check out AppExchange for great finance processes in Salesforce.

How To Simplify General Ledger Processes in Salesforce

1. Customize General Ledger With Clicks-Not-Code

Quickly adapt to changing business needs without the need for expensive coding. Use Subcategories to create the structure of your financial reports. Subcategories provide a dynamic solution to effortlessly adapt your financial reports to changing business needs. 

By structuring your ledger with Subcategories, you can quickly adapt to changing needs without the need for costly custom coding. This approach allows you to quickly customize your ledger, simplify reporting processes, and obtain real-time insights directly in the Salesforce platform. Quickly customize your ledger, simplify your reporting, and gain real-time insights that are 100% native to the Salesforce platform.

2. Simplify Your Chart of Accounts With Dimensions

Capture the business context of your transactions with user-defined dimensions. Easily track performance by profit center, project, fund, and more. With user-defined dimensions, you can capture the complex business context surrounding your transactions and gain deeper insights into your financial data.

Tracking performance by any specific dimension you want gives you a comprehensive understanding of your company’s financial environment.

3. Easily Manage Multi-Company and Multi-Currency Transactions

Manage the financials for multiple companies, each with its base currency. You can automate currency conversions and get real-time reports at the click of a button. By automating currency conversions, you eliminate manual errors and ensure accuracy in your multi-company environment.

With real-time reporting features, you can instantly access critical insights, make informed decisions, and support your business growth.

Summary

Accounting for Salesforce gives businesses more control and insight into their financial operations. Leveraging general ledger capabilities in Salesforce offers unique opportunities to streamline and simplify financial management processes. 

From customizing subcategories to capturing transaction data and using user-defined dimensions for comprehensive reporting, businesses can adapt their general ledger to meet evolving needs without the need for coding. Additionally, managing multiple companies with different base currencies becomes effortless thanks to automatic currency conversion and real-time reporting features. 

By adopting these functions, organizations can improve efficiency, accuracy, and decision-making, ultimately increasing the success of their financial operations.