According to earlier methodolgy we were maintaining ledger but now we have erp:

Demrits that are solved by erp are:

1. Duplicate data entry
2. Lack of automation

Duplicate data entry and Lack of automation result in producativity sink and more manpower is requied without erp.

Why use ERP for accounting?

1. All relevant transactional data from other modules (e.g., HR, sales, purchases, inventory, etc.) will automatically sync with your accounting data.
2. All your data’s in one place
3. Considerably smaller chance of errors.
4. Financial reports can easily generated.

Introduction to setup and accounting

Company Setup

Details about the structure, domain, defaults (e.g., default finance book, letterhead, holiday list, standard working hours, T&C, country, tax ID, various accounts, etc.).

This setup is important because it ensures that every other part of the accounting module works in accordance with this data.

Opening Balance

Opening balance is the balance that is brought forward at the beginning of an accounting period from the end of the last accounting period.

Cost center

Fiscal year

A fiscal year is used to record and report the transactions for the year.

Accounting Period

An accounting period defines a period of time in which financial statements are recorded.

It is a subset of Fiscal year it may be or month, quater, year.

Chart of Accounts

This is a multiple types of accounts under any organization. All such accounts come under Chart of Accounts.

Like : balance sheet accounts, profit and loss accounts, groups and ledger accounts e.t.c

General Ledger

The General Ledger is a birds-eye view of all your accounting transactions.

Any movement of money has been added here. It wil help in sumurising expenditure, loss, profit, e.t.c

Accounting Entries

This section tell us about that for every transation their is effect in atleast 2 accounts.

Like if someone send money their must be someone who recived it.

A = 100                      // intial balance of A
B = 500                     // intial balance of B
A sent 50 rupess to B       // Transtion happening
A = A-50 and B = B + 50     //  Transtion happening
A = 50                     // Final balance of A
B = 550                    // Final balance of B

Sales Invoice and Purchase Invoice

Self Expalnator terms. Invoice or record of any sale or purchase.

Sales invoices are bills that you send to your customers for the products and services you provide.

The bills you receive from your Suppliers for a purchase order against which you need to make the payment are called purchase invoices.

journal entries.

Every transation is recorder in General Ledger are knowsn as journal entries.

Banking

Saving your company’s bank accounts, supplier and customer bank accounts, etc.

Share Management

Managing company shares can be done directly within your ERP system. There are two key elements to this:

1. Creating shareholders in the system ( any person, company, or other institution that owns at least one share of your company’s stock.)
2. Logging share transfers

ERP using share transfer entries if we required we explore this too.

Billing and Invoicing

Alredy talked above.

Taxes

We have to set tax rules and tax categories for automation of tax on each transtaion in form of (TDS, VAT, GST e.t.c).

For item-wise taxation, you can create item tax templates. This is useful if some of your items have different tax rates from the standard tax rate, as it lets you assign modified tax rates to specific items (or group of items). Then, when transactions are made with these items, the custom tax rate overrides the standard tax rate.

Returns and Credit

When allocating credit to a customer, So, that we can provide goods or servised without clearing upfront money. We can also set credit limit.