The Business Master (3rd Edition)

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NONPROFIT GENERAL LEDGER USER MANUAL Version 1.11 by William Meacham April 1, 1989 This is a user-supported product. It is not public domain and it is not free. You are granted a limited license to use this product on a trial basis. If you wish to continue using the product after evaluating it, please register. Send $40 (manual on disk) or $55 (to get a printed manual) to the address below. You may make copies of this software for your friends or computer club, etc. You may not resell the software for your own profit. See Chapter 2 for more information. BENEFITS OF REGISTRATION: (a) Additional utility program to print an audit trail and reconstruct your files after disk errors; (b) notice of future upgrades; (c) reduced price on future upgrades. Copyright (c) 1989 William Meacham Reliance Software Services 1004 Elm Street, Austin Tx 78703 DISCLAIMER OF WARRANTY AND LIMITED WARRANTY THIS SOFTWARE AND ACCOMPANYING WRITTEN MATERIALS, INCLUDING INSTRUCTIONS FOR USE, ARE PROVIDED "AS IS" WITHOUT WARRANTY AS TO THEIR PERFORMANCE, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE. THE ENTIRE RISK AS TO THE RESULTS AND PERFORMANCE OF THE SOFTWARE IS ASSUMED BY YOU. If you purchased the software directly from me, William Meacham, dba Reliance Software Services, I'll replace a defective diskette without charge for 90 days after you purchase it. IN NO EVENT SHALL WILLIAM MEACHAM, RELIANCE SOFTWARE SERVICES, OR ANYONE ELSE WHO HAS BEEN INVOLVED IN THE CREATION, PRODUCTION OR DELIVERY OF THIS SOFTWARE BE LIABLE FOR ANY DIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING DAMAGES FOR LOSS OF BUSINESS PROFITS, BUSINESS INTERRUPTION, LOSS OF BUSINESS INFORMATION, AND THE LIKE) ARISING OUT OF THE USE OR INABILITY TO USE THE PRODUCT, EVEN IF WE HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. Contents Chapter 1 About This Manual 1.1 What is in this manual . . . . . . . . . . . 1.1 How to use this manual . . . . . . . . . . . 1.2 Novice: New to accounting . . . . . . . . 1.2 Professional: Know accounting but new to computers . . . . . . . . . . . . . . . . 1.3 Expert: Experienced with both computers and accounting . . . . . . . . . . . . . . . . 1.3 Everybody . . . . . . . . . . . . . . . . 1.3 Typography . . . . . . . . . . . . . . . . . 1.3 Chapter 2 About The Software 2.1 The Nonprofit General Ledger program . . . . 2.1 Not just for nonprofits . . . . . . . . . 2.2 An "On-line" System . . . . . . . . . . . 2.2 How to use the program -- Overview . . . . . 2.3 Experience necessary . . . . . . . . . . . . 2.4 Equipment Needed . . . . . . . . . . . . . . 2.4 About Shareware . . . . . . . . . . . . . . . 2.4 Why register . . . . . . . . . . . . . . . 2.5 Restricted permission to copy . . . . . . 2.6 Other Reliance software . . . . . . . . . . . 2.6 Reliance Mailing List . . . . . . . . . . 2.6 User Interface source code . . . . . . . . 2.7 Chapter 3 Fundamental Concepts 3.1 Account numbers and codes . . . . . . . . . . 3.1 Major Categories . . . . . . . . . . . . . 3.2 Functional Categories . . . . . . . . . . 3.3 Service Programs . . . . . . . . . . . . . 3.3 Funding Sources . . . . . . . . . . . . . 3.3 Examples . . . . . . . . . . . . . . . . . 3.3 The InterFund Clearing Account . . . . . . . 3.3 The budget process . . . . . . . . . . . . . 3.4 The accounting cycle . . . . . . . . . . . . 3.5 Funding cycles that do not match your fiscal year . . . . . . . . . . . . . . . . . . . . 3.5 Preparing an income statement for the funding cycle -- procedure . . . . . . . . . . . . 3.6 Setting up a budget for the funding cycle -- procedure . . . . . . . . . . . . . . . . 3.6 Using the system without codes . . . . . . . 3.7 i Chapter 4 Getting Started 4.1 What is on the diskette . . . . . . . . . . . 4.1 To copy the software for others . . . . . 4.2 How to install the software . . . . . . . . . 4.2 Floppy disk . . . . . . . . . . . . . . . 4.3 Hard disk . . . . . . . . . . . . . . . . 4.4 How to use the keyboard . . . . . . . . . . . 4.5 Using the cursor control keys . . . . . . 4.5 Entering dates . . . . . . . . . . . . . . 4.5 Entering a negative number . . . . . . . . 4.6 Yes/No Answers . . . . . . . . . . . . . . 4.6 Correcting mistakes . . . . . . . . . . . 4.6 Caution . . . . . . . . . . . . . . . . . . . 4.6 Chapter 5 The Startup Program 5.1 Introduction . . . . . . . . . . . . . . . . 5.1 Caution . . . . . . . . . . . . . . . . . 5.2 Plan ahead . . . . . . . . . . . . . . . . . 5.2 Starting the program . . . . . . . . . . . . 5.3 Two floppy disk drives . . . . . . . . . . 5.3 Hard disk . . . . . . . . . . . . . . . . 5.3 Fiscal year dates . . . . . . . . . . . . . . 5.3 The Startup Menu . . . . . . . . . . . . . . 5.5 Overview of the Startup Menu . . . . . . . 5.5 Change colors . . . . . . . . . . . . . . . . 5.7 Change dates . . . . . . . . . . . . . . . . 5.8 Enter organization information . . . . . . . 5.8 Set up your printer . . . . . . . . . . . . 5.10 Compressed print . . . . . . . . . . . . 5.10 New page method . . . . . . . . . . . . 5.11 Add ledger accounts . . . . . . . . . . . . 5.12 Account number . . . . . . . . . . . . . 5.12 Account title . . . . . . . . . . . . . 5.12 Debit/Credit . . . . . . . . . . . . . . 5.12 Year-to-date balance . . . . . . . . . . 5.13 This period balance . . . . . . . . . . 5.13 Yearly budget and period budget . . . . 5.13 Remaining in budget . . . . . . . . . . 5.13 Max accounts, Number used and Number left . . . . . . . . . . . . . . . . . . 5.13 Procedure . . . . . . . . . . . . . . . 5.14 Change ledger accounts . . . . . . . . . . 5.15 Displaying different accounts . . . . . 5.15 Changing an account . . . . . . . . . . 5.16 Delete Ledger Accounts . . . . . . . . . . 5.17 Print trial balance . . . . . . . . . . . . 5.18 Display system control information . . . . 5.19 Print system control information . . . . . 5.21 Chapter 6 The General Ledger Program 6.1 Introduction . . . . . . . . . . . . . . . . 6.1 Caution . . . . . . . . . . . . . . . . . 6.1 Starting the program . . . . . . . . . . . . 6.1 Two floppy disk drives . . . . . . . . . . 6.1 ii Hard disk . . . . . . . . . . . . . . . . 6.1 System dates . . . . . . . . . . . . . . . . 6.2 Current processing date . . . . . . . . . 6.3 The Main Menu . . . . . . . . . . . . . . . . 6.4 Post ledger accounts . . . . . . . . . . . . 6.6 Posting transactions . . . . . . . . . . . 6.7 General journal postings . . . . . . . . . . 6.8 Procedure . . . . . . . . . . . . . . . . 6.8 Example . . . . . . . . . . . . . . . . 6.10 Making corrections . . . . . . . . . . . 6.15 Debit one account with multiple credits . . 6.16 Procedure . . . . . . . . . . . . . . . 6.17 Credit one account with multiple debits . . 6.19 Posting more than eight debits or credits . . . . . . . . . . . . . . . . 6.19 View transactions . . . . . . . . . . . . . 6.20 View chart of accounts . . . . . . . . . . 6.21 Print reports . . . . . . . . . . . . . . . 6.22 Procedure . . . . . . . . . . . . . . . 6.23 Transaction Journal . . . . . . . . . . 6.24 Close books -- end of period . . . . . . . 6.27 Overview . . . . . . . . . . . . . . . . 6.27 Procedure . . . . . . . . . . . . . . . 6.27 Close books -- end of year . . . . . . . . 6.29 Overview . . . . . . . . . . . . . . . . 6.29 Procedure . . . . . . . . . . . . . . . 6.30 To cancel the process . . . . . . . . . 6.30 To continue and not cancel . . . . . . . 6.31 Add ledger accounts . . . . . . . . . . . . 6.34 Delete ledger accounts . . . . . . . . . . 6.34 View Ledger Accounts . . . . . . . . . . . 6.34 View/change system control information . . 6.35 Organization Information . . . . . . . . . 6.35 Printer Setup . . . . . . . . . . . . . . . 6.36 Dates and control information (view only) . 6.37 Transaction journal . . . . . . . . . . 6.37 Change colors . . . . . . . . . . . . . . . 6.39 The Transaction Information program . . . . 6.39 Chapter 7 The Utility Program 7.1 Installing the program . . . . . . . . . . . 7.1 Starting the program . . . . . . . . . . . . 7.1 The Main Menu . . . . . . . . . . . . . . . . 7.1 Audit . . . . . . . . . . . . . . . . . . . . 7.4 List . . . . . . . . . . . . . . . . . . . . 7.5 Fix . . . . . . . . . . . . . . . . . . . . . 7.6 Introduction . . . . . . . . . . . . . . . 7.6 Procedure . . . . . . . . . . . . . . . . 7.6 Zero the Budget . . . . . . . . . . . . . . . 7.9 Chapter 8 Protecting your data 8.1 Backing up your data . . . . . . . . . . . . 8.1 Floppy disk . . . . . . . . . . . . . . . 8.1 Hard disk . . . . . . . . . . . . . . . . 8.1 iii Caution . . . . . . . . . . . . . . . . . 8.2 Insufficient disk space . . . . . . . . . 8.2 Restoring your data . . . . . . . . . . . . . 8.2 Floppy disk . . . . . . . . . . . . . . . 8.3 Hard disk . . . . . . . . . . . . . . . . 8.3 End of month backup . . . . . . . . . . . . . 8.3 Using the BACKUP program . . . . . . . . . . 8.4 If things go wrong with BACKUP . . . . . . 8.5 Using the RESTORE program . . . . . . . . . . 8.5 If things go wrong with RESTORE . . . . . 8.7 Do not copy BACKUP files . . . . . . . . . . 8.7 Chapter 9 Error messages 9.1 Chapter 10 Understanding the Reports 10.1 Report Heading . . . . . . . . . . . . . . 10.1 Trial Balance . . . . . . . . . . . . . . . 10.2 Budget listing . . . . . . . . . . . . . . 10.2 Budget Variance Report . . . . . . . . . . 10.2 Acct # . . . . . . . . . . . . . . . . . 10.3 Acct title . . . . . . . . . . . . . . . 10.3 Current period actual . . . . . . . . . 10.3 Current period budgeted . . . . . . . . 10.3 Current period variance . . . . . . . . 10.4 Current period var% . . . . . . . . . . 10.4 Year to date actual . . . . . . . . . . 10.4 Year to date budgeted . . . . . . . . . 10.4 Year to date variance . . . . . . . . . 10.4 Year to date var% . . . . . . . . . . . 10.4 Remaining . . . . . . . . . . . . . . . 10.4 Totals . . . . . . . . . . . . . . . . . 10.5 Income Statement . . . . . . . . . . . . . 10.5 Functional category totals . . . . . . . 10.5 Percentages . . . . . . . . . . . . . . 10.5 Major category totals . . . . . . . . . 10.5 Income statement summaries . . . . . . . 10.5 Balance Sheet . . . . . . . . . . . . . . . 10.6 Functional category totals . . . . . . . 10.6 Fund balances and InterFund Clearing Account . . . . . . . . . . . . . . . . 10.6 Percentages . . . . . . . . . . . . . . 10.6 System Control Information . . . . . . . . 10.6 Organization . . . . . . . . . . . . . . 10.6 Dates . . . . . . . . . . . . . . . . . 10.7 Data files . . . . . . . . . . . . . . . 10.7 Ledger accounts . . . . . . . . . . . . 10.7 Transaction journal entries . . . . . . 10.7 Printer . . . . . . . . . . . . . . . . 10.8 Chart of Accounts . . . . . . . . . . . . . 10.8 Transaction Journal . . . . . . . . . . . . 10.8 Date . . . . . . . . . . . . . . . . . . 10.9 TN . . . . . . . . . . . . . . . . . . . 10.9 Acct # . . . . . . . . . . . . . . . . . 10.9 Acct title . . . . . . . . . . . . . . . 10.9 iv Dr and Cr amounts . . . . . . . . . . . 10.9 Memo description . . . . . . . . . . . . 10.9 Audit Trail Report . . . . . . . . . . . . 10.9 Appendix A Fundamentals of Nonprofit Accounting A.1 Fundamental Principles . . . . . . . . . . . A.1 Assets . . . . . . . . . . . . . . . . . . A.2 Liabilities . . . . . . . . . . . . . . . A.2 Owners' Equity and Fund Balances . . . . . A.2 Profits . . . . . . . . . . . . . . . . . A.3 Revenues . . . . . . . . . . . . . . . . . A.3 Expenses . . . . . . . . . . . . . . . . . A.4 Debits and Credits . . . . . . . . . . . . A.4 Example: For-profit . . . . . . . . . . . . . A.5 Example: Nonprofit . . . . . . . . . . . . . A.6 Cash vs. Accrual Accounting . . . . . . . . . A.7 Cash basis . . . . . . . . . . . . . . . . A.7 Accrual basis . . . . . . . . . . . . . . A.7 The Balance Sheet . . . . . . . . . . . . . . A.9 The Income Statement . . . . . . . . . . . . A.9 A note on depreciation . . . . . . . . . . A.10 The yearly accounting cycle . . . . . . . . A.10 Appendix B Examples of Use B.1 The East West Center . . . . . . . . . . . . . . B.1 Chart of accounts . . . . . . . . . . . . . . B.1 Monthly cycle . . . . . . . . . . . . . . . . B.4 Cash receipts and disbursements . . . . . B.4 Accruals . . . . . . . . . . . . . . . . . B.5 Closing the month . . . . . . . . . . . . B.6 Community Services, Inc. . . . . . . . . . . . . B.6 Service programs and funding sources . . . . B.7 Chart of accounts . . . . . . . . . . . . . . B.7 The budget . . . . . . . . . . . . . . . . B.11 Budgeting for different funding cycles . B.13 Appendix C Using a Laserjet printer C.1 Compressed print . . . . . . . . . . . . . . C.1 On-disk documentation . . . . . . . . . . . . C.1 Laserjet Utilities . . . . . . . . . . . . . C.2 Appendix D Technical Information D.1 Data files . . . . . . . . . . . . . . . . . D.1 Record type declarations . . . . . . . . . D.2 Types and constants for TACCESS . . . . . D.3 Using the data files . . . . . . . . . . . . D.4 Appendix E Reliance Software Order form E.1 Other Reliance software . . . . . . . . . . . E.1 The Reliance Mailing List program . . . . E.1 User Interface source code . . . . . . . . E.2 Order Form . . . . . . . . . . . . . . . . . E.3 v Figures Figure 5.1: Dates . . . . . . . . . . . . . . . . . 5.4 Figure 5.2: Startup menu . . . . . . . . . . . . . 5.5 Figure 5.3: Change Colors . . . . . . . . . . . . . 5.7 Figure 5.4: Organization information . . . . . . . 5.8 Figure 5.5: Set Up your Printer . . . . . . . . . .5.10 Figure 5.6: Add ledger accounts . . . . . . . . . .5.12 Figure 5.7: System Control Information . . . . . .5.19 Figure 6.1: System Dates . . . . . . . . . . . . . 6.2 Figure 6.2: The Main Menu . . . . . . . . . . . . . 6.4 Figure 6.3: Post Ledger Accounts Menu . . . . . . . 6.6 Figure 6.4: Data entry screen for posting transactions . . . . . . . . . . . . . 6.8 Figure 6.5: View Transactions . . . . . . . . . . .6.20 Figure 6.6: View Chart of Accounts . . . . . . . .6.21 Figure 6.7: Print Reports . . . . . . . . . . . . .6.22 Figure 6.8: Transaction Journal . . . . . . . . . .6.25 Figure 6.9: Close Books at End of Period . . . . .6.27 Figure 6.10: Close Books at End of Year . . . . . .6.29 Figure 6.11: End-of-year Closing Dates . . . . . .6.32 Figure 6.12: View/Change System Control Information . . . . . . . . . . . . .6.35 Figure 6.13: System Control Information . . . . . .6.37 Figure 7.1: Utility program Main Menu . . . . . . . 7.2 vi Chapter 1 About This Manual This manual tells you how to use the Nonprofit General Ledger program, a powerful, yet easy-to-use accounting program. Like any software manual, it has two purposes: 1. To teach you how to use the software. 2. To serve as a reference once you have learned the fundamentals. If you know accounting and know computers you can probably figure out how to use the program without much help, but I encourage you to read the manual. Things will go faster if you do. What is in this manual Here is what you'll find in each chapter: Chapter 1 About this manual. Tells you how to use the manual. 2 About the software. What the software does. Equipment needed. About Shareware. Overview of how to use the software. 3 Fundamental Concepts. Fundamental principles of how the program works. 4 Getting Started. What's on the diskettes. How to install the software. How to use the keyboard. 5 The Startup Program. Reference for the NGLSTART program. An explanation of each function in the Startup program. 6 The General Ledger Program. Reference for the NGL program. An explanation of each function in the main Nonprofit General Ledger program. Also covers the TRANINFO program. Page 1.1 Nonprofit General Ledger User Manual Page 1.2 Chapter 1, About This Manual 7 The Utility Program. Reference for the NGLUTIL program. An explanation of each function in the Utility program. 8 Protecting Your Data. How to back up data you have saved. 9 Error messages. Explains the error messages that may appear in the program and what to do about them. 10 Understanding the Reports. Explains each of the reports the program prints. Appendix A Fundamentals of Nonprofit Accounting. Some basic points on how nonprofits are different. B Examples of Use. One real and one fictional example of how organizations can use the NGL program to keep their books. C Using a Laserjet printer. Tells how to use the Hewlett Packard Laserjet and similar printers with the program. D Technical information. Tells about the data structure. This is for programmers who need to know how to extract data from the files on disk. E Order Form. Order the Registered User version of this and other Reliance software. How to use this manual This section tells what to read depending on your experience with computers and accounting. Find the description that applies to you and follow the instructions there. Novice: New to accounting Read Chapter 2 first. It gives you an overview of the program. Next, skip to Appendix A for an introduction to accounting for nonprofits. You need to understand this first. You may also wish to read Appendix B, "Examples of Use," at this point, to get a feel for how the program can work for you through the accounting cycle. When you feel comfortable with accounting concepts, read Chapter 3. It tells how the program does what it does. When you are ready to start, carefully follow the instructions in Chapter 4 to install the software, then proceed through Chapters 5 and 6 to run the software. Nonprofit General Ledger User Manual Page 1.3 Chapter 1, About This Manual Professional: Know accounting but new to computers You too should read Chapter 2 to find out what the software does. You can get by with skimming Chapter 3, but pay attention to how the account numbers are set up. You probably won't need to read Appendix A. You may wish to read Appendix B to see examples of how to use the software. When you are ready to start, carefully follow the instructions in Chapters 4, 5 and 6. Expert: Experienced with both computers and accounting I know you are anxious to get started, so you can skim Chapter 3 -- pay attention to how the account numbers are set up -- and then jump right into Chapter 4 and go to it. When you have questions, refer to Chapters 5 and 6. Everybody When you need help with a specific topic, look in Chapters 5 through 7. These explain each program function. Be sure to follow the instructions in Chapter 8 to back up your work after a session with the program! Look in Chapter 9 for an explanation of any error messages you encounter. Typography When specific instructions are given, what you are to type is underlined like this: Enter: NGL What the computer shows on the screen is set off like this: ================================================================== PRESS SPACE BAR TO CONTINUE OR UP-ARROW TO GO BACK ================================================================== Chapter 2 About The Software This chapter gives an overview of what the program does and what you can do with it. It also tells you what equipment you'll need to run the program, and how the Shareware concept works. Finally it mentions some other fine software you can get from Reliance Software Services. The Nonprofit General Ledger program The Nonprofit General Ledger program is a powerful, yet easy-to-use accounting program designed specifically for the small nonprofit organization. Accounting for nonprofits is different from accounting for for-profit organizations. Nonprofits need to keep track of how much money is spent on different service programs. They also need to know where the money from different funding sources goes. This program keeps track of both. Specifically, the program does the following: - Separates revenues and expenses according to service program and funding source. This makes it easy to report expenses to funding organizations. - Prints a consolidated income statement and balance sheet as well as detailed income statements for each service program and funding source. You get an accurate picture of the organization's financial position. - Prints a great variety of other reports, including a trial balance and budget variance reports. - Provides a complete audit trail of all transactions. Your auditor can easily verify the accuracy of your financial statements. - Compares actual to budgeted expenses and receipts. This helps you to manage the organization effectively. - Shows the effect of transactions on the budget immediately, as they are posted. If an expenditure would exceed the budget, you can post it to another budget category instead. This eliminates the need to go back and make adjustments later. Page 2.1 Nonprofit General Ledger User Manual Page 2.2 Chapter 2, About The Software - Is extremely easy to use; data entry is simple and intuitive, and all program functions are menu-driven. Your books will always balance; the program prevents you from making an unbalanced entry. In developing this program I have worked closely with nonprofit administrators and accountants. I have used this program myself for over a year to keep the books for an educational nonprofit in Austin, Texas (See Appendix B). In the course of using it and watching others use it I have learned what works and what doesn't, and I have continually refined the program. I think you'll like it. You should be aware, however, of two limitations: - Account number categories are predefined and you cannot change them. Asset accounts, for instance, always begin with 1, and Liability accounts always begin with 2. You may have to revise your chart of accounts to fit this scheme. - The program prints a consolidated balance sheet, but not separate balance sheets for separate funds. It does print income statements for separate funds. If there is enough interest, I'll add true fund accounting to a future version of this program. Please contact me if you need this feature. Not just for nonprofits You can use this software for personal or business use too. Businesses can treat "service programs" as cost centers or divisions. This way you can keep track of each area of your business as well as the firm as a whole. If you want, you can totally ignore "service programs" and "funding sources." Just don't set up any codes for them. That way this is a plain-vanilla general ledger system. It is based on fundamental principles, and the way it keeps track of your accounts is valid regardless of the type of enterprise. An "On-line" System The Nonprofit General Ledger system is an "on-line," not a "batch" system; your accounts are posted, or updated, as soon as you make an entry. This has the advantage of speed and immediacy; you can print financial statements and check the balance in an account at any time without having to wait for a batch posting cycle. (It also means that the only way to correct mistaken entries after you post them is to post a reversing entry later.) Nonprofit General Ledger User Manual Page 2.3 Chapter 2, About The Software How to use the program -- Overview The Nonprofit General Ledger system consists of two programs, a Start-up program and the General Ledger program itself. (A third program, the Utility program, is available only to registered users.) First use the Start-up program to set up your chart of accounts and other essential information and to enter account balances from your previous system. After you have entered your account balances, use the General Ledger program to keep your books. The process is as follows: 1. Plan your chart of accounts for the computerized system. You'll need to translate your previous chart of accounts, since the Nonprofit General Ledger uses special codes to keep track of service programs and funding sources. You'll need to decide how you will use the codes to fit your organization. This is an unexciting but vitally necessary step. The more thought you give to this step, the more helpful the program will be to you. 2. Balance your books before converting to the computerized system. When you enter your existing account balances, if you are not in balance the Start-up program will "plug" the difference to ensure that the computerized system is always in balance. It is best to be sure your books balance correctly before making the conversion so there won't be any surprises. 3. Convert to the computerized system. Use the Start-up program to enter the account balances from your previous system. You may also enter budget amounts for revenues and expenses at this time. 4. To maintain a complete audit trail, you should print the Trial Balance report when you have entered all your accounts in the Start-up program. 5. Maintain your books using the General Ledger program. Post entries from your checkbook and receipts journal monthly, after you have balanced your checkbook. Make accruals at the end of the month and then close your books to clear out the monthly totals. You may print budget variance reports and financial reports at any time. 6. Print the Transaction Journal report after you close out the month and save it for your accountant or auditor. Whenever you post a transaction to ledger accounts the program keeps an audit trail in the Transaction Journal. You can print this at any time. With the initial Trial Balance report and a complete set of Transaction Journal reports, your books can be fully reconstructed if anything damages your computer or your data. Nonprofit General Ledger User Manual Page 2.4 Chapter 2, About The Software 7. Use the budget variance reports to maintain control of expenses. Timely reports mean you know how much you can spend. 8. Use the reports generated by the system to report to your funding organizations; they show exactly how grants and donations were spent. 9. Close your books at the end of the year. This clears out all revenue and expense accounts and adjusts your fund balances in preparation for the next year. Experience necessary You don't need to know a lot about computers to run this software, but the more you know, the better off you'll be. I assume you have a basic knowledge of how to use DOS to copy files and run programs. If you don't, refer to your DOS manual. You should have some acquaintance with bookkeeping and accounting. An appendix explains some of the principles of Nonprofit accounting, but if you are a complete novice you should get someone to help you. This program is designed for people who keep books, either for Nonprofits or for themselves or a small business. Equipment Needed - An IBM PC, XT, AT, PS/2 or compatible computer with two floppy disk drives or a hard disk and one floppy disk drive. NOTE -- I supply the software on a 5 1/4" 360K diskette. If your computer has 3" diskettes you'll need to find a way to copy the program. - At least 256K of RAM (Random access memory). - A printer that can print 132 columns of information. An 80-column printer that can print 132 columns in compressed mode will work. - Diskettes, paper, printer ribbon, etc. About Shareware This program is Shareware. That means you may try it out without paying for it first. It also means you may make copies of it for your friends or computer club and upload it to computer bulletin board systems. If you continue to use it after trying it out, please register and pay for it. Nonprofit General Ledger User Manual Page 2.5 Chapter 2, About The Software Why register If you bought a disk from a user group or shareware distributor, you have not purchased the program. You've only purchased the disk itself and the right to try out the software. But now you've got the software, so why should you pay for it? Here are some good reasons: - You can get a printed copy of this manual. - You'll get an additional utility program, described in this manual but not included in the Shareware version. The Utility program does the following: * Prints an audit trail sorted by account number. The General Ledger program prints transactions by date. If you want to find all the transactions that affect a particular account number, the sorted audit trail is a big help. * Prints the transaction log report for transaction history files as well as the current one. Once a transaction log is saved as a history file, the General Ledger program cannot print it, but the Utility program can. You'll need this if you lose your printed reports from the past. * Fixes damaged files. If the power goes out or there is a problem with your disk, your data files could be damaged. The Utility program can read your data files and make a new copy with new indexes, so your data is repaired. * Zeros out the budget. When you start a new year and want to set up a new budget, it's a big help to be able to zero out the old one all at once instead of account by account. - I'll notify you of future upgrades and you'll be able to get the upgrades at a greatly reduced price. - You'll be supporting the Shareware concept. You get to try out software before purchasing it. Because I don't advertise, I can keep the prices low. By registering you help continue this trend. - If you use it, you should pay for it. That's fair to everybody. Nonprofit General Ledger User Manual Page 2.6 Chapter 2, About The Software Restricted permission to copy You may make copies of the Shareware version of this program for your friends, for your computer club, and for other non- business uses. You may place the Shareware version on computer bulletin boards for others to download. You may not sell the software for your own profit. User groups may charge a fee to cover the cost of the disk and administration as long as this does not exceed $10, U.S. If you make copies for others, you may not modify the software or documentation in any way. You may add a description of your user group or software distribution group if you wish, as long as you don't modify any of the other files. You may NOT give away or sell the non-Shareware Utility program, NGLUTIL.EXE. You may make a copy of the Utility program for your own backup, but that's all. Other Reliance software This is one of several software products from Reliance Software Services. Others include the Reliance Mailing List program and the source code to the user interface used in the General Ledger and the Mailing List program. Reliance Mailing List The Reliance Mailing List program maintains a data file of names and addresses and other information. You can print out lists and mailing labels in various formats. It features the same easy-to-use, menu-driven interface as the Nonprofit General Ledger program. It's a natural for individuals, nonprofits and small businesses. Features include: - Holds over 2 billion names (limited by disk space) - A standard 360K diskette holds about 1,200 names - Prints mailing labels, one, two or three across - Prints lists in four different formats - Writes a "mailmerge" file to export data to other programs - Contains eight sublists within the data file, selected by Yes/No criteria - A three-character user code allows thousands of selection criteria - Sorts output by last name or zip code Nonprofit General Ledger User Manual Page 2.7 Chapter 2, About The Software You can get the Shareware version of this program for only $6. The Registered User version contains an additional Utility program that does three things: - Merges files on several diskettes onto one disk, such as a hard disk. - Splits files on a hard disk onto several diskettes. - Fixes files that have become damaged because of power failures or a bad disk, etc. The Utility program recovers all the good data in your data file and creates a new data file containing only undamaged data. The Registered User version costs $30. You get the Mailing List program and the Utility program with complete documentation on disk. Use the order form at the back of this manual. User Interface source code The menu-driven user interface used in Reliance products was written up in Computer Language magazine, October 1987, page 57 and April 1988, page 117. Features include: - On-screen data entry forms with complete cursor control - "Bullet proof" data entry of strings, real numbers, integers, booleans and dates - Control of screen attributes and colors You can get the Turbo Pascal source code for only $6. You can freely use the source code in your own applications without paying any royalties. Use the order form at the back of this manual. Chapter 3 Fundamental Concepts This chapter goes into some detail about how the program accomplishes what it does. It tells you how the account numbers include codes for service programs and funding Sources. It explains: - The codes used to identify your ledger accounts, service programs and funding sources. How to set up your chart of accounts using these codes. - The budget process: how to utilize the Nonprofit General Ledger program to maintain your monthly and yearly budgets. - How the program handles the monthly and yearly accounting cycle. - How to handle funding cycles that do not match your fiscal year. Some familiarity with fundamental accounting principles is assumed; if you need to refresh your knowledge, please read the Appendix A, Fundamentals of Nonprofit Accounting, first. Account numbers and codes The financial and budget reports produced by the program are distributed according to service program and funding source (you also get consolidated statements for the entire organization). Note -- A service program is an activity that the organization spends money on. This includes "program services," or social service activities, and "support services" such as administration and fund-raising. A funding source is a person, entity or class of people where the organization gets its money. This includes individual donors, foundations, and fund-raising activities. You can find out exactly how much you have spent as well as how much remains in the budget for each service program and funding source. In order to get this information out of the system, however, you must first put it in. You do this by defining codes Page 3.1 Nonprofit General Ledger User Manual Page 3.2 Chapter 3, Fundamental Concepts for your service programs and funding sources. These codes are part of each account number. When you post revenues and expenses, the codes tell you to which account to post them. You must understand the codes embedded in the account number in order to use the system effectively. All account numbers are six digits, and the digits have the following meaning: Digit Meaning Valid codes --------------------- Major Categories 1 - 6 | | ------------------- Functional Categories 00 - 99 | | | | ---------------- Service Programs 0 - 9 | | | | | | -------------- Funding Sources 00 - 19 | | | | 1 23 4 56 Major Categories These are the fundamental divisions of the income statement and balance sheet. Only numbers 1 through 6 are allowed, and each has the following meaning: 1 -- Assets 2 -- Liabilities 3 -- Fund Balances (This corresponds to Owner's Equity in for-profit accounting) 4 -- Clearing Accounts (Unique to the Nonprofit General Ledger system; used to transfer amounts between budget categories) 5 -- Revenues 6 -- Expenses You may not redefine these categories. Any account number that begins with an "1" is an asset category, any account that begins with a "2" is a liability, etc. The major categories are characterized as "debit accounts" or "credit accounts," according to whether the usual balance of the accounts in the category is a debit or credit balance. Assets and Expenses are debit accounts; all the the other categories are credit accounts. If a debit account has a credit balance (for instance if your checking account is overdrawn) or a credit account has a debit balance, the amount is shown with a minus sign. Contra accounts are the opposite of the other accounts in the category. All the Asset accounts, for instance, are debit accounts, but the contra account "Accumulated Depreciation" Nonprofit General Ledger User Manual Page 3.3 Chapter 3, Fundamental Concepts should be a credit account. You designate an account as a contra account when you first add the account to the system. Functional Categories The second and third digits of the account number identify subdivisions within the major categories. Within Assets, for instance, you might have Cash, one or more Checking Accounts, Savings Accounts, Furniture and Fixtures, Equipment, Vehicles, etc., as well as Accumulated Depreciation. You can define these as you wish; and you may have 100 of each, numbered 00 through 99. The only exception to this is Fund Balances. The functional category for Fund Balances can only be 00. Service Programs You may define up to ten service program codes, 0 - 9, corresponding to activities or projects in which your organiza- tion engages. I recommend that you use service program 0 for Administration, but this is up to you. Funding Sources You may define up to 20 codes, 00 - 19, for funding sources, the entities or activities from which your organization gets money. I recommend that you reserve funding source 00 for Public Support, but again this is up to you. Examples Appendix B, Examples of Use, contains two examples of how these codes are to be used. You may wish to look at that appendix before you go on. The InterFund Clearing Account The InterFund Clearing account (IFC), number 400000, is the only account that is predefined in the program. You will always have this account; you do not need to set it up yourself, and you cannot delete it. It serves a number of purposes. - When you first set up your accounts with their starting balances, the IFC account is used to balance the ledger. If the accounts you enter are out of balance, the difference is placed in the IFC so the ledger as a whole is always in balance. - When the program computes the balance sheet or closes the books at the end of the year, any revenues and expenses that cannot be closed to a fund balance are closed instead to the IFC account. This ensures that the books can always be closed. Nonprofit General Ledger User Manual Page 3.4 Chapter 3, Fundamental Concepts - You may use the IFC as a temporary holding account when posting expenses that would exceed a certain budget category (we'll get to the budget process shortly). Instead of posting to the account that would exceed the budget you may instead post to the IFC and later transfer that amount to a different budget account. - You may set up any other Clearing accounts (accounts that begin with "4") you wish and may use them in any way you wish, but you must close them or transfer their balances elsewhere before the program closes the books. The program will not do it for you. On the balance sheet, Clearing accounts appear after Fund Balances and are treated as fund balances. In other words, Assets will always equal Liabilities plus Fund Balances plus Clearing accounts. The budget process The Nonprofit General Ledger system allows you to enter budget amounts for each revenue and expense account. (The budget amounts are applicable only to revenue and expense accounts. This program does not do balance sheet budgeting.) You may enter both a yearly and a period (normally monthly) budget amount, and you may do so at any time. For example, suppose you wish to limit your postage expense to $100 per month, or $1,200 per year, and to allocate the expense equally between two service programs. You would enter $600 for the yearly budget and $50 for the monthly budget for each of the two programs. You could then use this information in two ways: - When you enter an expenditure for postage, the General Ledger program computes and displays the amount remaining in your budget for the year. You have instant feedback as to how much you have left to spend. If the amount would exceed the budget for one service program you would know it right away and could instead allocate it to the other program. - You may print budget variance reports at any time, although typically you should do so at the end of the month, after all the expenditures for the month have been entered. The report lists what percentage of the budget has been spent in the month and in the year to date, as well as the amount remaining for the rest of the year. With this information, you can plan expenditures (or additional fund raising efforts!) accurately. It is good management practice to plan your budget on a yearly basis, then track actual revenues and expenses against the budget as the year goes by. However, you can change the budget amounts at any time. There is no audit trail for the budget amounts, since they do not affect the financial condition of the organization. You have complete flexibility to adjust your budget as circumstances change. Nonprofit General Ledger User Manual Page 3.5 Chapter 3, Fundamental Concepts The accounting cycle The flow of accounting information runs in monthly and yearly cycles. The monthly cycle is concerned with budget comparisons and the yearly cycle is concerned with budget comparisons and with updating your fund balance accounts to prepare for the next year. The Nonprofit General Ledger program keeps two ledger totals and two budget amounts, monthly and yearly, for each ledger account. The only function of the monthly totals is for comparison with your monthly budget. At any time during the month you can see how much you have posted to the account during that month and how this compares to your monthly budget. At the end of each month you will select a menu option to close the books for the month. This has no effect on your fund balances; all it does is to set the monthly totals to zero, in preparation for the next month. The yearly totals accumulate over the course of your fiscal year, and are not cleared out at the end of the month. At any time you can see how much you have posted to the account during the year and how this compares to your yearly budget. At the end of the year you will select a menu option to close the books for the year. This does have an effect on your fund balances; it closes the revenue and expense yearly totals to the fund balances. The fund balances are updated and the revenues and expenses are set to zero in preparation for the next year. You have to close the books for a month in order to start making entries for the next month, and you will have to close the books for the year in order to start a new year. When you close the books the current processing date is automatically set to the first day of the next period. Funding cycles that do not match your fiscal year The Nonprofit General Ledger program works on a fiscal year basis (which you determine -- it need not run from January to December). However, a grant may run for less than a year or span two fiscal years, covering several months in one and several months in the next. This will require special treatment at the end of the fiscal year, when you close your books, and at the end of the funding cycle. At year-end, all the revenue and expense accounts are closed to the appropriate fund balances and are set to zero in preparation for the next year. This will distort the income statement for the funding cycle; any statement produced in the next year will not include amounts entered in the prior year, even though they are included in the funding cycle. It will also throw off budget calculations for the next year. Nonprofit General Ledger User Manual Page 3.6 Chapter 3, Fundamental Concepts The solution is as follows: - Save the year-end income statement. For reporting purposes you will have to add the figures from that statement to the income statement produced at the end of the funding cycle in the next year. - Adjust your budget amounts after the books are closed and before you start making entries for the following year. Preparing an income statement for the funding cycle -- procedure Here are the steps involved in preparing an income statement for a service program whose funding cycle that spans two different fiscal years: 1. Save the income statement produced when you close your books at the end of the year. 2. Print an income statement at the end of the funding cycle. 3. To report expenses to your funding source, add the figures on the year-end statement to those on the statement at the end of the funding cycle. If the service program is again funded for another year an additional step is necessary: 4. Set up new codes for the service program and funding source for the next funding cycle and a new set of revenue and expense accounts for these codes. If you simply continue to use the same accounts, expenses for two different funding cycles will be mixed, distorting your financial reports. Instead, set up a whole new revenue account and set of expense accounts for the combination of the new service program and the new grant. As soon as you enter the new funding cycle, post revenues and expenses to the new accounts, not to the old accounts. Setting up a budget for the funding cycle -- procedure The same considerations apply to the budget process for service programs whose funding cycles do not coincide with your fiscal year. For instance, if you budgeted $1,200 for an expense category for a service program which is funded for eight months in one year and four in the next you would do the following: 1. For the first eight months, budget $800 for the year. This is, in effect, an eight-month budget. 2. Just before closing the books for the year, run the budget variance report so you will know how much remains in the eight-month budget. Nonprofit General Ledger User Manual Page 3.7 Chapter 3, Fundamental Concepts 3. Before posting anything in the following year, adjust the budget amount to equal $400 for the four months remaining plus whatever was left at the end of the previous eight months. 4. If the program is funded for another cycle, set up new accounts with new service program and funding source codes, as outlined above, and set up the budget for these accounts for the eight months left in the second fiscal year. If you follow these steps, you will keep each funding cycle separate so you can accurately report your expenses to your funding organizations and effectively monitor the budget for each service program. Using the system without codes If your organization is extremely small, has only one service program or primary activity, and does not need to report expenses to a funding organization, you may do without service program and funding source codes. When you set up your chart of accounts, simply end each account number with "000." In other words, only the first three digits of the account number, the major category and the functional category, will be meaningful. Since the program is based on fundamental accounting principles, the program could be used in this way to keep the books for a small business or an individual as well as a nonprofit organization. Chapter 4 Getting Started This chapter tells what is on your diskettes, how to install the software, and how to use the keyboard to enter data. Follow the instructions for installing the software carefully. What is on the diskette The following files are on the diskette you got from Reliance Software Services. If you got the diskette from another source, be sure these files are present. - NGL111.ARC This is an Archive file. It contains within it, in compressed format, the following files: - NGLSTART.EXE The Startup program. You must run this program first to create data files, set up ledger accounts and enter beginning account balances. - NGL.EXE The Nonprofit General Ledger program. This is the program you'll work with on an ongoing basis to keep your books. - TRANINFO.EXE A small utility program that tells you what transactions are in a Transaction Journal file or a transaction journal History file. - NGL111.DOC The documentation for the Nonprofit General Ledger program, version 1.11. This file. - ARCE.COM The program that extracts the files from the Archive file. - HINSTALL.BAT Installs the program on hard disk. - FINSTALL.BAT Installs the program on a floppy disk. - READTHIS A text file describing how to install the program. In addition, if you have the Registered User version of the software, there is a subdirectory named REGISTER. The Utility program, NGLUTIL.EXE is in this subdirectory. This is available only to registered users; it is not on the Shareware disk. The Page 4.1 Nonprofit General Ledger User Manual Page 4.2 Chapter 4, Getting Started Utility program lets you print an Audit Trail of transactions sorted by account number and reconstruct damaged data files. To copy the software for others If you want to make a copy of the software for someone else, please do NOT use the Diskcopy command. Instead, do this: 1. Format a blank diskette. Use the DOS Format command. If you do not know how to do this, refer to your DOS manual. 2. Place the distribution diskette (the diskette you got from me) in drive A:. If you have two floppy disk drives, place the newly-formatted diskette in drive B:. 3. Type: COPY A:*.* B: and press the Enter key. This copies all the files except those in the Register subdirectory from the distribution diskette to the newly- formatted diskette. The program in the Register subdirectory is for registered users only; please do not copy it for others. If you have only one floppy disk drive, the computer will tell you when to insert the Source diskette (the one you are copying from) and the Target diskette (the one you are copying to). If all you have is the Archive file, NGL111.ARC, you may copy the file for others and upload it to computer bulletin board systems (BBSs) for other to download. Please do not copy or upload the Registered User program, NGLUTIL.EXE. How to install the software There are two installation batch files on the diskette, one to install on floppy disks and one for hard disks. They extract the program files and the manual from the Archive file and copy them to another floppy disk or a hard disk. The program and manual won't all fit on one floppy disk, so you'll need two, one for the program and one for the manual. The installation batch files do nothing to your Autoexec.bat and Config.sys files. If you have already extracted this manual from the Archive file but have not installed the software, then you probably know enough to do it without the batch files. If you have two floppy disks, extract and copy *.EXE to one floppy and the manual, NGL111.DOC, to another. If you have a hard disk, make a subdirectory named \NGL and then extract and copy all the files to that subdirectory. Nonprofit General Ledger User Manual Page 4.3 Chapter 4, Getting Started Following are detailed procedures for using the batch files. Floppy disk If your computer has two floppy disks drives you'll want to keep the program on one diskette and your data on another. For- mat 4 diskettes and use the FINSTALL program to copy the program files onto the first and the manual onto the second. The third diskette is your data diskette, and the fourth is to back up your data. Here is the procedure: 1. Format four blank diskettes. Put your DOS diskette in drive A: and put a new diskette or one whose information you want to erase in drive B:. Then, * Enter: FORMAT B: NOTE: When this manual says to enter information, it means to type what is shown and press the Enter key. The Enter key has a picture of an arrow going down and to the left. On many keyboards it is labeled "Enter." Follow the instructions on your screen to format the diskette. Repeat this step for all four diskettes. 2. Place the distribution diskette in drive A: and a newly- formatted diskette in drive B: * Enter: FINSTALL A B Follow the instructions on your screen. First this copies the program files to the diskette in drive B: and then tells you to remove the diskette and insert another one. When you insert the second diskette, it copies the manual. The first diskette will be your working copy of the program. The second contains the manual on disk. 3. If you have the Registered User version, install the Utility program as well. a. Put the program diskette you just made in drive B. b. Enter: COPY A:\REGISTER\*.EXE B: 4. Label the working program diskette "Nonprofit General Ledger Program" with a soft-tip pen. Label the documentation diskette "Nonprofit General Ledger manual." Remove the distribution diskette from drive A: and store it in a safe place, free from dust, magnetism and extremes of heat and cold. You can always make another copy if your working copy becomes damaged. Nonprofit General Ledger User Manual Page 4.4 Chapter 4, Getting Started 5. Label the third newly-formatted diskette "Nonprofit General Ledger Data" and the fourth, "Nonprofit General Ledger Data Backup." Hard disk If you have a hard disk, use the HINSTALL program to install the program in its own subdirectory. Both the program and its data files must be in the same subdirectory. You'll also need to format a blank diskette for backup. 1. Start your computer as you usually do. Then * Enter: C: NOTE: When this manual says to enter information, it means to type what is shown and press the Enter key. The Enter key has a picture of an arrow going down and to the left. On many keyboards it is labeled "Enter." The "C>" prompt should appear on your screen. (If your hard disk has a different letter, substitute that letter in these instructions.) 4. Place the distribution diskette in drive A:, the floppy disk drive. (If your 5 1/4 inch floppy drive is not drive A:, substitute the letter for your drive in these instructions.) Then, * Enter: A:HINSTALL A C This creates a subdirectory named \NGL and copies the program files and the manual to that subdirectory. 5. If you have the Registered User version, install the Utility program as well. * Enter: COPY A:\REGISTER\*.EXE 6. Remove the distribution diskette from drive A: and store it in a safe place, free from dust, magnetism and extremes of heat and cold. You can always make another copy if your working copy becomes damaged. 7. Place a new diskette or one whose information you want to erase in drive A:. * Enter: FORMAT A: Follow the instructions on your screen to format the diskette. 8. Label the newly formatted diskette "Nonprofit General Ledger Data Backup." Nonprofit General Ledger User Manual Page 4.5 Chapter 4, Getting Started How to use the keyboard When you run the program you'll enter data by filling in blanks on forms that are displayed on your computer screen. Simply type the information requested, then press the Enter key. When you press the Enter key the cursor moves to the next data entry field. (The "cursor" is the blinking underline or solid block that indicates where the next character you type will be displayed.) Using the cursor control keys While entering data, you may move around the screen and correct your entries by using the arrow keys to move the cursor. Here is a chart showing what keys to press: ================================================================ Labeled Arrow Ctrl Function Action key key key* key MOVE Back a character left S Next character right D To beginning of line Home A To end of line End F Previous line or field up E F3 Next line or field Enter down X F4 DELETE Character to left Backspace Character at cursor Del G Entire entry Y F2 CANCEL data entry Esc * To use a Ctrl key, press Ctrl, type the key, then release both keys. ================================================================ Entering dates To enter a date, type the month, the day and the year, six digits, then press the Enter key. For instance, to enter April 25, 1988, do the following: Enter: 042588 You may omit the century when entering the year. If you enter "88," the century is added and "1988" is displayed. If you enter a year between 80 and 99 the century is assumed to be 19; if you enter a year between 00 and 79 the century is assumed to be 20. Nonprofit General Ledger User Manual Page 4.6 Chapter 4, Getting Started You may enter any century you wish by typing all four digits. For instance, to enter April 25, 1950, Enter: 04251950 Entering a negative number To enter a negative number type a minus sign first, then the number, then the enter key. For instance, to enter "-123.58," Enter: -123.58 Yes/No Answers Sometimes a question will appear, such as "Do you wish to add another Ledger Account?" Type Y for Yes or N for No. Do not press the Enter key. In some cases the answer to the question ("Yes" or "No") is already displayed. To accept the answer displayed, press the Enter key. To change the answer displayed, type Y or N without pressing the Enter key. Correcting mistakes If you make an error, use cursor commands to correct it. The easiest way is: 1. Move the cursor to the line where the mistake is. 2. Press the "delete entire entry" key (Ctrl-Y or F2). 3. Enter: the correct information Caution Please do NOT reset or turn off your computer before you exit the program, or you may lose some of the data you have entered. The operating system keeps the data you have entered in an internal area, called a "buffer," in the computer's memory and only periodically actually writes it to disk. If the power goes off before the data is written, you will lose it. For safety's sake, always exit the program before turning off your computer. Also note -- please do NOT change data diskettes while you are in the program. There should be no need to change data diskettes unless you are keeping the books for more than one organization. In this case, always exit the program before you change data diskettes. If you do not, data from the first diskette still stored in the computer's memory may damage the data stored on the second diskette. Always exit the program before changing data diskettes. Chapter 5 The Startup Program Introduction This chapter gives detailed instructions for running the Startup program. You must run the Startup program before running the Nonprofit General Ledger program itself. In the Startup program you will define certain information the program needs, including: - The beginning and end of your fiscal year and the current fiscal period. - The name and employer ID number of your organization to print on the reports. - Any special codes your printer needs to print in compressed print mode, if you have an 80-column printer. - Your initial chart of accounts, account balances and budget amounts. You will enter information about each ledger account; when you finish, your ledger accounts will be ready for use by the General Ledger program. The Startup program creates four data files on the disk drive that you specify, all with the extension "NGL." LEDGER.NGL contains the ledger account information; INDEX.NGL contains an index which allows fast access to any ledger account; SCR.NGL, the System Control Record, contains such information as the system dates and printer control codes, etc.; and TRANJRNL.NGL, the Transaction Journal file, contains a record of the transac- tions that affect the balances in the ledger accounts. When you enter your accounts, the program ensures that you will always be in balance. If the debits you have entered exceed the credits or vice versa, the difference is posted to the Inter- Fund Clearing (IFC) account. The balance in the IFC account is recomputed whenever you return to the Startup Menu after entering or deleting accounts. You may run the Startup program as many times as you wish in order to enter all your account information. Once you post tran- sactions from within the General Ledger program, however, you may not run the Startup program again. (You may add new ledger Page 5.1 Nonprofit General Ledger User Manual Page 5.2 Chapter 5, The Startup Program accounts within the General Ledger program, should you need to do so.) After you enter all your accounts and are satisfied that they are correct, you should print the Trial Balance report and save it. This will serve as the beginning of your audit trail. Caution Please do NOT reset or turn off your computer while you are still in the Startup program, or you may lose some of the data you have entered. Always exit the program before turning off the computer. Please do NOT change data diskettes while you are in the program. There should be no need to change data diskettes unless you are keeping the books for more than one organization. In this case, always exit the program before changing data diskettes. If you do not, data from one diskette may damage the data stored on another diskette. Plan ahead Before running the Startup program you need to plan your chart of accounts. If you are converting from a manual system or another computerized system, translate your existing chart of accounts to the system used by the Nonprofit General Ledger system; see Chapter Three for a complete explanation. Each ledger account in your old system should have a corresponding account in the new system. Get an accurate trial balance from your old system so you can compare it to the Trial Balance report produced by the Startup program. If you are starting out all new, plan your chart of accounts to give you the management information you need. Consult your accountant. Although you can add accounts at any time, your system will make more sense if it is thoroughly designed ahead of time. If you plan to use the budgeting feature, plan your budget also. Then enter your budget in the Startup program at the same time as you enter your account balances. You can also enter your budget in the General Ledger program, but it will go faster in the Startup program. Nonprofit General Ledger User Manual Page 5.3 Chapter 5, The Startup Program Starting the program Two floppy disk drives 1. Place the working copy of your program diskette in drive A and your data diskette in drive B. Be sure you are "logged on" to drive A (the cursor is at the "A>" prompt). 2. Enter: NGLSTART Hard disk 1. Change to the appropriate subdirectory of your hard disk. Assuming that you have installed the program in the NGL subdirectory, Enter: CD \NGL 2. Enter: NGLSTART After you enter the program name the title screen appears. Press the space bar to go on or Esc to cancel the program. When you press the space bar the following message appears: ================================================================== On which drive do you want your data files? _ ================================================================== If you have a computer with two floppy diskettes, the data files should normally be kept on drive B. If you have a computer with a hard disk, keep your data files on the hard disk, usually C. Enter: the letter for your drive. If you have run the program before, your entry from last time is displayed; press Enter to accept it. You may also press ESC to cancel and return to the operating system. Fiscal year dates If this is the first time you have run the Startup program, the program asks you the dates of your fiscal year and then creates the four data files on the drive you have specified. If this is not the first time you have run the Startup program, you will go directly to the Startup Menu; skip to "Startup Menu," below. If it is the first time, the following screen appears: Nonprofit General Ledger User Manual Page 5.4 Chapter 5, The Startup Program ================================================================== DATES Please enter the following dates. All four dates are required. Press ESC to cancel. Beginning of fiscal year: __/__/____ Beginning of current period: MM/DD/YYYY End of current period: MM/DD/YYYY End of fiscal year: MM/DD/YYYY ================================================================== Figure 5.1: Dates This screen enables you to define your fiscal year and current budget period. Normally the budget period would be one month, but you may define it as a quarter or a half-year or whatever you wish. Enter each date. The dates must be consistent; for instance, the beginning of the current period may not be before the beginning of the fiscal year, etc. If you enter an inconsistent date an error message will appear and you will not be able to proceed without correc- ting the error. Nonprofit General Ledger User Manual Page 5.5 Chapter 5, The Startup Program The Startup Menu After you have entered the dates, the data files are created and the Startup Menu appears: ================================================================== NONPROFIT GENERAL LEDGER STARTUP MENU Please select: 1 Change colors 2 Change dates 3 Enter organization information 4 Set up your printer 5 Add ledger accounts 6 Change ledger accounts 7 Delete ledger accounts 8 Print trial balance 9 Display system control information 10 Print system control information ESC Exit the program ==> __ ================================================================== Figure 5.2: Startup menu Overview of the Startup Menu Here is what each of the options on this menu is for: 1 Change colors. If you have a color screen you can change the program's colors. This does not work on a monochrome screen. If you have a Compaq computer that emulates color on a monochrome screen, use this to adjust the brightness. 2 Change dates. This allows you to change your fiscal year and fiscal period. 3 Enter organization information. Enter your organization's name and address and federal Employer ID Number (EIN) as well as your state tax or ID number, if any. The organi- zation's name and EIN appear on all reports. 4 Set up your printer. Install your printer so the program can make it print in compressed print and go to the top of the page correctly. Nonprofit General Ledger User Manual Page 5.6 Chapter 5, The Startup Program 5 Add ledger accounts. Enter information for each ledger account, including the account number and title, the begin- ning balance, and the budget amounts for the period and the year. 6 Change ledger accounts. This lets you change information for ledger accounts already added. 7 Delete ledger accounts. If you add the wrong account number for a ledger account, you can delete it with this option. 8 Print trial balance. Print the trial balance report after you enter all the ledger accounts and before you enter transactions in the General Ledger program in order to verify that you have entered everything correctly. When you are sure all the information is correct, save the report for your audit trail. 9 Display system control information. This displays the fiscal year dates, the number of ledger accounts entered so far, the organization's name and address, etc. Use this display to verify your data entry. 10 Print system control information. This gives you a printed copy of the system control information. ESC Exit the program. The Esc key always gets you out of whatever function you are in. In this case it gets you out of the program altogether. You are asked if you really want to quit, so don't worry about hitting the Esc key accidentally. The rest of this chapter explains each of these options. To select a menu option, Type: the number and press the Enter key. Nonprofit General Ledger User Manual Page 5.7 Chapter 5, The Startup Program Change colors If you have a color monitor or a Compaq computer, which emulates color on a monochrome screen, you can change the text and background colors. This option does nothing if you have a monochrome monitor. When you select this option, the following screen appears: ================================================================== CHANGE COLORS Please enter your choice of colors or press ESC to cancel. DARK COLORS BRIGHT COLORS -------------- ------------------- 0 - Black 8 - Dark Grey 1 - Blue 9 - Bright Blue 2 - Green 10 - Bright Green 3 - Cyan 11 - Bright Cyan 4 - Red 12 - Bright Red 5 - Magenta 13 - Bright Magenta 6 - Brown 14 - Yellow 7 - Light Grey 15 - White This is reverse video This is emphasized Background color (0-7): 0 Text color (0-15): 7 Is this OK? (Y/N) ___ ================================================================== Figure 5.3: Change Colors When you enter both a background and text color, the colors change on the screen. When you are happy with what you see, type Y to answer the question, "Is this OK?" If you type N, the cursor goes back to the background color entry. To cancel and return to the colors in effect before you selected this option, press Esc. The colors are stored in a configuration file on the program diskette. If that file gets erased or if you start the program from a different drive or subdirectory, the colors will change back to the original. You can choose this option any time to change them. Nonprofit General Ledger User Manual Page 5.8 Chapter 5, The Startup Program Change dates This option lets you change the dates you entered when you first started the program. The Dates screen appears, with the dates you entered filled in. Use the arrow keys to move to the date you wish to change, press F2 to delete the date, and enter the new date. Enter organization information Use this option to enter data describing your organization. The data entry screen looks like this: ================================================================== ORGANIZATION INFORMATION Name: ______________________________ Address: Address: Address: Federal Employer ID Number: State Tax or ID Number: ================================================================== Figure 5.4: Organization information Some of the information on this screen is optional. Only the Organization Name and the Federal Employer ID Number appear on the reports. An accountant or bookkeeper keeping books for several organizations would want to fill in the rest in order to be able to verify whose books he or she was working on. Enter the information requested. You can use the arrow keys to go up and down over the data entry fields and make correc- tions. If you press ESC, you return the Startup Menu without saving any of the information you have typed. For the Federal Employer ID Number, enter all nine digits with no dash. The program prints a dash after the first two digits automatically on all the reports. When you press the Enter key on the last line, the following message appears: Nonprofit General Ledger User Manual Page 5.9 Chapter 5, The Startup Program ================================================================== PRESS SPACE BAR TO CONTINUE OR UP-ARROW TO GO BACK ================================================================== This allows you one more chance to go back and make correc- tions if you wish. To complete the data entry, press the space bar. You do not need to press the Enter key. The information you have entered is stored in your data files and the Startup menu reappears. Nonprofit General Ledger User Manual Page 5.10 Chapter 5, The Startup Program Set up your printer Use this option to install your printer. The program prints both 80-column and 132-column reports. To print 132 columns on paper that is 8 1/2" wide (9 1/2" counting the holes on each side), it must print in compressed print. Most dot matrix printers and a few daisy wheel printers can do this; the program has to send the printer special non-printing control codes to make it do so. Most printers advance the paper to a new page when they receive a code called a form-feed, but some do not. If yours does not, you can tell the program to advance a line at a time instead. Use this option to enter the codes. The data entry screen looks like this: ================================================================== SET UP YOUR PRINTER This program prints reports that are 132 columns wide. Are you using an 80-column printer in compressed print mode? YES COMPRESSED PRINT ON Enter up to four control codes to turn compressed print on: ==> 15 ==> 0 ==> 0 ==> 0 COMPRESSED PRINT OFF Enter up to four control codes to turn compressed print off: ==> 18 ==> 0 ==> 0 ==> 0 NEW PAGE METHOD Does the Form Feed code (12, or control-L) make your printer go to a new page? YES ================================================================== Figure 5.5: Set Up your Printer Compressed print To answer the question whether you will print in compressed print, type Y for Yes or N for No. If you answer No, the cursor skips the control codes. If you answer Yes, you must enter them. The codes are the decimal equivalents of the control characters used for your printer. The program comes set up for the Epson printers (FX-80, etc.); the codes shown above are just like entering \015 and \018 in Lotus 123. Your printer manual Nonprofit General Ledger User Manual Page 5.11 Chapter 5, The Startup Program should list the control codes to put your printer into compressed print, and then back to normal print. They are often found as part of a BASIC program to control the printer, like this: 10 LPRINT CHR$(15); REM TURN ON COMPRESSED PRINT The number you want here is 15. (Note -- the actual number or numbers will differ from printer to printer; this is only an example.) Sometimes the codes are listed in a table as the names of the characters to be sent to the printer, like this: ESC "P" 16.5 lines per inch In this example you should send two characters, first the Escape character, then an upper-case "P." You will have to find the decimal equivalents of each character and enter them; do not try to enter the characters themselves. Look for an ASCII chart in the printer manual which lists all the characters and their numeric equivalents (use decimal equivalents, not hexadecimal). If you cannot find the codes for your printer, try using the Epson codes shown above; many printers use the same codes. If that does not work, you may be able to set a switch on the printer itself to make it print compressed all the time. In this case, set the switch before you run the Nonprofit General Ledger program and answer No to the question "Will you use an 80-column printer ...?" To test the codes, print the Trial Balance report. New page method Most printers advance the paper to the top of the next page when they receive a form-feed code (decimal 12, hexadecimal 0C, or control-L). Some older printers do not do this, so the program can advance a line at a time instead. The form-feed method is faster and quieter. If your printer recognizes the form-feed code, answer Yes; if it does not, answer No. Nonprofit General Ledger User Manual Page 5.12 Chapter 5, The Startup Program Add ledger accounts Use this option to enter information for each of your ledger accounts, including the balance in the account on the date when you'll begin using the Nonprofit General Ledger system to keep your books. When you select this option, the following data entry screen appears: ================================================================== ADD LEDGER ACCOUNTS Press ESC to cancel without saving the information Account number: ______ Account title: Debit/Credit (D/C) : Year-to-date balance: $ This period balance: $ Max accounts: 32000 Yearly budget: $ Number used: 1 Period budget: $ Number left: 31999 Remaining in budget: $ ================================================================== Figure 5.6: Add ledger accounts Following is an explanation of each data entry item: Account number You must enter a six-digit number, from 100000 to 699919. Invalid or duplicate numbers are rejected with an error message. See Chapter Three for an explanation of the structure of the account number. Account title This descriptive title appears on the reports and on the data entry screen for posting journal entries. Debit/Credit Enter D for a debit account or C for a credit account. The appropriate code for the account number you entered is displayed automatically. You should change it only if the account is a contra account. To accept the code as displayed, just press the Enter key. Nonprofit General Ledger User Manual Page 5.13 Chapter 5, The Startup Program Year-to-date balance Enter the balance in the account as of the date when you will start using the Nonprofit General Ledger system to keep your books. By doing this for each account you enter your initial trial balance, which, of course, should be the same as the ending trial balance before converting to the Nonprofit General Ledger system. Before you start making journal entries in the General Ledger program you can change this balance by using the option Change Ledger Accounts on the Startup Menu. After you start making journal entries, the only way to change it is to post a transaction in the General Ledger program. This period balance You may not enter anything in this field. You should convert from your previous system to the Nonprofit General Ledger system at the beginning of a budget period, when this amount is zero. Whenever you make journal entries, the program computes this balance. It is zeroed out when you close the books at the end of a period. Yearly budget and period budget You enter these fields only for revenue and expense accounts; for other account categories, the cursor skips them. The yearly budget is the amount you budget for the account for the whole fiscal year. The period budget is the amount budgeted for each fiscal period. You may change these amounts at any time. Remaining in budget You do not enter this field. For revenue and expense accounts it is computed and displayed after you enter the yearly budget amount. For other major account categories, nothing is displayed. Max accounts, Number used and Number left You do not enter these fields. The program computes and displays them so you will know how many accounts you have entered and how many remain available. "Max accounts" is predefined in the program. "Number used" is the number of accounts already entered; this does not include the account you are currently entering. "Number left" is the difference between the two. Before you add any accounts the number used is one, not zero. This is because the program creates the InterFund Clearing account when it creates the data files. Nonprofit General Ledger User Manual Page 5.14 Chapter 5, The Startup Program Procedure 1. The cursor starts at the Account Number. For each field on the screen, enter the appropriate data. You can use the arrow keys to move up and down through the fields and enter or correct data. Press ESC if you wish to cancel data entry for this account. 2. After you enter the last field (yearly budget for revenue and expense accounts, year-to-date balance for all other accounts), the following message appears: ================================================================== Do you wish to save this information? (Y/N or up arrow) ___ ================================================================== If you wish to store the information in your data files, type Y; otherwise use the arrow keys to go back and make changes or type N to throw away this information. 3. The message "SAVED" or "NOT SAVED" appears, depending on how you answered the question. The following appears: ================================================================== Do you wish to enter another ledger account? (Y/N) ================================================================== Type Y or N. If you choose to enter another ledger account, the input fields are blanked and the cursor returns to the Account number, otherwise the Startup Menu reappears. Nonprofit General Ledger User Manual Page 5.15 Chapter 5, The Startup Program Change ledger accounts This option allows you to change ledger account information that you have already entered. First you are asked for the account number: ================================================================== CHANGE LEDGER ACCOUNTS Please enter the account number, or press ESC to cancel ==> ______ ================================================================== Enter the account number. If you enter an account that is not on file, the following message appears: ================================================================== ACCOUNT NOT FOUND Do you wish to view the closest one found? (Y/N) ___ ================================================================== If you type N or press the up-arrow, you go back to entering the last name. If you type Y or if the program found the account you entered, the data entry screen appears. At the bottom of the screen, the following choices are displayed in a reverse-video box: ================================================================== Account: P=Previous N=Next F=First L=Last; C=Change information Esc=Quit ================================================================== Displaying different accounts You can now browse forward and backward through the file. In the Choices box you need only type the letter; do not press Enter after it. P Takes you to the previous ledger account. If you are at the first account you stay there. N Takes you to the next ledger account. If you are at the last account you stay there. F Takes you straight to the first account on file. Nonprofit General Ledger User Manual Page 5.16 Chapter 5, The Startup Program L Takes you straight to the last account on file. When you have found the account you want, press C to change the information. If you press Esc, you go back to entering the account number. Press Esc again to return to the menu. Changing an account When you type C, the choices disappear and the cursor goes to the account title. (You cannot change the account number. If you have entered the wrong account number, you'll have to delete it and re-enter it.) Use the arrow keys to move up and down over the screen and change the information. When you get to the end, the following message appears: ================================================================== Do you wish to save this information? (Y/N or up arrow) ___ ================================================================== If you wish to store the changes in your data files, type Y; otherwise use the arrow keys to go back and make changes or type N or press Esc to throw away the changes. The message "SAVED" or "NOT SAVED" appears, depending on how you answered the question, and the Choices box appears. If you are done, press Esc to go back to entering the account number, then press Esc again to go back to the menu. Nonprofit General Ledger User Manual Page 5.17 Chapter 5, The Startup Program Delete Ledger Accounts Use this menu option to delete an account entered incorrect- ly. When you select this option, you are asked for the account number: ================================================================== DELETE A LEDGER ACCOUNT Please enter the account number, or press ESC to cancel ==> ______ ================================================================== Enter the account number. If you enter an account that is not on file, an error message appears. You do not get to look at different accounts, as you do in Change Ledger Accounts. This is to help prevent deleting the wrong account. If you enter a valid account number, the data entry screen appears, with the following message at the bottom: ================================================================== Is this the ledger account you wish to delete? (Y/N) ================================================================== The account information is shown so you can verify that you have chosen the correct account. Type Y or N. You do not need to press the Enter key. The message "DELETED" or "NOT DELETED" appears, depending on what you have chosen, and the following message is displayed: ================================================================== Do you wish to delete another ledger account? (Y/N) ================================================================== Type: Y or N. If you choose to delete another account, you are again asked for the account number. If you choose not to delete another account, the Startup Menu reappears. Nonprofit General Ledger User Manual Page 5.18 Chapter 5, The Startup Program Print trial balance Use this menu option to print the Trial Balance report in order to verify that you have entered all your accounts correctly, or to see which accounts you have entered already. After you have entered all your ledger accounts and are satisfied that they are correct, you should print the Trial Balance report once more and save the output. This will serve as the beginning of your audit trail. A complete explanation of the Trial Balance report is given in Chapter Ten. The procedure for printing the report is as follows: 1. Make sure your printer is turned on and has paper in it. The paper should be positioned so the top of a new page is at the print head. 2. From the Startup Menu, Enter: 8 3. The report is printed, and the following message appears: ================================================================== Printing Trial Balance Report Press ESC to cancel ================================================================== To stop printing before the report is finished, press Esc. You'll be asked if you really want to quit, so don't worry about pressing Esc by accident. After the report is printed, the Startup menu reappears. Nonprofit General Ledger User Manual Page 5.19 Chapter 5, The Startup Program Display system control information When you select this option, the following screen appears: ================================================================== SYSTEM CONTROL INFORMATION Dates Current processing date 1/ 1/1988 Beginning of fiscal year 1/ 1/1988 Beginning of current period 1/ 1/1988 End of current period 1/31/1988 End of fiscal year 12/31/1988 Data files are on drive C; 1,461,568 bytes are free. Ledger accounts Maximum number of accounts 32000 Number used 69 Number left 31931 Transaction journal entries Maximum number allowed 32000 Number used 0 Number left 32000 Last transaction number 0 PRESS SPACE BAR TO CONTINUE ================================================================== Figure 5.7: System Control Information You cannot change the information on this screen, you can only look at it. When you are done, press the space bar to return to the menu. Following is an explanation of the items on this screen which may not be self-explanatory: - Current processing date. In the Startup program this is the same as the beginning of the current period. In the General Ledger program you enter this when you start the program. - Ledger accounts. This section shows how many ledger accounts you are using and how many more you may add before reaching the maximum allowed. The maximum is 32,000, which should be plenty. - Transaction Journal entries. This section shows how much of the Transaction Journal has been filled and how many entries remain free. In the Startup program the number used will always be zero because once you have started posting transactions you can no longer run the Startup program. See Nonprofit General Ledger User Manual Page 5.20 Chapter 5, The Startup Program page 6.37 for more information about the transaction journal entries. - Last transaction number. In the Startup program this will always be zero. See page 6.37 for more information about the transaction number. Nonprofit General Ledger User Manual Page 5.21 Chapter 5, The Startup Program Print system control information The System Control Information report lists all the infor- mation displayed on the System Control Information screen as well as the organization name and address, etc. and the printer control codes. The procedure for printing the report is as follows: 1. Make sure your printer is turned on and has paper in it. The paper should be positioned so the top of a new page is at the print head. 2. From the Startup Menu, Enter: 10 3. The report is printed and then the Startup Menu reappears. Chapter 6 The General Ledger Program Introduction After you have entered all your accounts in the Startup program and your beginning trial balance matches the ending trial balance from your previous bookkeeping system, you are ready to use the Nonprofit General Ledger program to keep your books. This chapter tells how to use the General Ledger program. It also tells how to use an additional program, the Transaction Information program, to find out what is in a transaction history file. Caution Please do NOT reset or turn off your computer while you are still in the Startup program, or you may lose some of the data you have entered. Always exit the program before turning off the computer. Please do NOT change data diskettes while you are in the program. There should be no need to change data diskettes unless you are keeping the books for more than one organization. In this case, always exit the program before changing data diskettes. If you do not, data from one diskette may damage the data stored on another diskette. Starting the program Two floppy disk drives 1. Place the working copy of your program diskette in drive A and your data diskette in drive B. Be sure you are "logged on" to drive A (the cursor is at the "A>" prompt). 2. Enter: NGL Hard disk 1. Change to the appropriate subdirectory of your hard disk. Assuming that you have installed the program in the NGL subdirectory, Enter: CD \NGL Page 6.1 Nonprofit General Ledger User Manual Page 6.2 Chapter 6, The General Ledger Program 2. Enter: NGL After you enter the program name the title screen appears. Press the space bar to go on or Esc to cancel the program. When you press the space bar the following message appears: ================================================================== On which drive do you keep your data files? _ ================================================================== Your entry from last time is displayed; press Enter to accept it or press F2 to delete and then enter a different letter. You may also press ESC to cancel and return to the operating system. System dates After you enter the disk drive, the following screen appears: ================================================================== SYSTEM DATES East West Center of Austin Last processing date: 3/31/1988 Beginning of fiscal year: 1/ 1/1988 Beginning of current period: 3/ 1/1988 End of current period: 3/31/1988 End of fiscal year: 12/31/1988 Please enter the current processing date ==> 03/31/1988 ================================================================== Figure 6.1: System Dates The name of your organization is displayed as well as the dates defining your fiscal year and current period. The last processing date is the date you entered as the current processing date the last time you ran the program (the first time you run the program it is the first day of the current period). The initial value for the current processing date is the same as the last processing date. Nonprofit General Ledger User Manual Page 6.3 Chapter 6, The General Ledger Program Current processing date The current processing date is used as follows: - Whenever you post a transaction, it is dated with the current processing date. This date appears on the Transaction Journal report as an audit trail. Note that this indicates only when the transaction was posted, not when it took place. For instance, you may wait until the end of the month to post all the checks you have written during the month. If it is important to you to note the exact date of each check, enter it in the memo field. - The current processing date appears in the heading of each report so you will know when the report was printed. - The date ensures that all transactions are posted in order. The program only goes forward in time. You cannot enter a date for the current processing date that is earlier than the last processing date. (It can be the same as the last processing date.) NOTE -- This means that after you close the books at the end of a period or the end of your fiscal year, you cannot go back and post more transactions for the prior period. In other words, you cannot make prior period adjustments except as transactions in the current period. You need to make sure you have posted all the transactions for the period before you close the books for that period. - There is no provision for changing the current processing date from the Main Menu. If for some reason you wish to change the current processing date after you have completed the System Dates screen, exit the program and start it up again. To accept the date shown, just press the Enter key. To enter a different date, press F2 to delete the date shown and then enter the new one. Nonprofit General Ledger User Manual Page 6.4 Chapter 6, The General Ledger Program The Main Menu After you enter the current processing date, the Main Menu appears: ================================================================== NONPROFIT GENERAL LEDGER MAIN MENU East West Center of Austin Please select: 1 Post ledger accounts 2 Print reports 3 Close books -- end of period 4 Close books -- end of year 5 Add ledger accounts 6 Delete ledger accounts 7 View ledger accounts, change title & budget 8 View/change system control information 9 Change colors ESC Exit the program ==> _ ================================================================== Figure 6.2: The Main Menu Following is a brief explanation of each Main Menu option: 1 Post ledger accounts. This is where you will do most of your work with the General Ledger program. Using this option you make journal entries which are immediately posted to ledger accounts. 2 Print reports. The program offers a wide variety of reports including financial statements, budget reports for manage- ment and a transaction journal for an audit trail. This menu option allows you to print these reports. 3 Close books -- end of period. Use this menu option to close the books at the end of each budget period, zeroing out the totals in preparation for the next period. Don't do this at the end of the last period in the year, though; use the next option instead. 4 Close books -- end of year. At the end of the fiscal year use this menu option to close all revenue and expense accounts to the appropriate fund balances in preparation for Nonprofit General Ledger User Manual Page 6.5 Chapter 6, The General Ledger Program the next year. This option also prints your year-end financial statements. 5 Add ledger accounts. If you need additional ledger accounts, use this option to add them. Unlike the Startup program, in this option you cannot enter an initial balance; you add the account with a zero balance and then post entries to it using Option 1. 6 Delete ledger accounts. Use this option to delete unused ledger accounts. The account must have a zero balance or you cannot delete it. 7 View ledger accounts, change title and budget. This option allows you to check the balance in an account by viewing it on the screen. You may also change the account title and the budget amounts. Use this option when you want to revise your budget. 8 View/change system control information. This option allows you to view the system control information that you entered in the Startup program. You may change noncritical infor- mation such as your organization's name and address and the printer control codes. Use this option when you change printers. 9 Change colors. If you have a color screen you can change the program's colors. This does not work on a monochrome screen. If you have a Compaq computer that emulates color on a monochrome screen, use this to adjust the brightness. ESC Exit the program. The Esc key always gets you out of whatever function you are in. In this case it gets you out of the program altogether. You are asked if you really want to quit, so don't worry about hitting the Esc key accidentally. The rest of this chapter explains each of these options. To select a menu option, Type: the number and press the Enter key. Nonprofit General Ledger User Manual Page 6.6 Chapter 6, The General Ledger Program Post ledger accounts When you select this option, another menu appears: ================================================================== POST LEDGER ACCOUNTS Please select: 1 General journal postings 2 Debit one account with multiple credits (post Deposits) 3 Credit one account with multiple debits (post Checks) 4 View transactions 5 View chart of accounts ESC Return to Main Menu ==> _ ================================================================== Figure 6.3: Post Ledger Accounts Menu The following options are available on the Post Ledger Accounts menu: 1 General journal postings. Use this option to post multiple debits and multiple credits in the same entry or to make several entries in a row, to different debit and credit accounts. 2 Debit one account with multiple credits (post Deposits). Use this option to post one or more credits with the corresponding debit going to one account. You enter only the credits and the program computes the total and posts the debit automatically. You would use this to post entries from your cash receipts journal or deposits into your checking account. 3 Credit one account with multiple debits (post Checks). Use this option to post one or more debits with the correspond- ing credit going to one account. You enter only the debits and the program computes the total and posts the credit automatically. You would use this to post entries from your checkbook, crediting the cash account and "spreading" the debits over various expense accounts. Nonprofit General Ledger User Manual Page 6.7 Chapter 6, The General Ledger Program 4 View transactions. You can view the transactions you have posted to see where you left off the last time you were entering data. 5 View chart of accounts. If you forget your account numbers and don't have a printed chart of accounts handy, use this to look them up. Posting transactions We'll look at each of these transactions shortly. First, here are some comments about posting ledger accounts in general, regardless of which type of transaction is used. The process of posting transactions is, in standard accoun- ting terms, two processes in one: (1) making journal entries and (2) posting the entries to the ledger accounts. In the Nonprofit General Ledger system there is no general journal as such. When you post a transaction the debits and credits are posted immedi- ately to the ledger accounts, not recorded in a journal and posted later. In computing terms, the system is an "on-line," not a "batch" system. This has the advantage that your ledger accounts are always up to date. You do not have to wait until a batch posting run is completed to see the balance in any account. You can run the Trial Balance report or any of the financial statement reports at any time and your information is always up to date. What takes the place of a general journal is the Transaction Journal. Every transaction you post is recorded in the Transac- tion Journal file, and the entries in the file can be printed at any time by printing the Transaction Journal report. Together with your initial Trial Balance report, the Transaction Journal reports serve as a complete audit trail. If anything should hap- pen to your computer or your data, your books could be completely reconstructed from these reports. In addition, the program will not let you post out-of- balance entries; your books will always balance. You can use the Nonprofit General Ledger system with complete assurance that your accounting is always on a sound basis. You are limited to eight debits and eight credits per transaction. If you need to post more, you must break up the transaction into two or more transactions, making sure that each balances, before posting. Nonprofit General Ledger User Manual Page 6.8 Chapter 6, The General Ledger Program General journal postings When you select this option from the Post Ledger Accounts menu, the following screen appears: ================================================================== ------ DEBITS ------ Remaining ------ CREDITS ----- Remaining Acct # Amount in budget Acct # Amount in budget ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ TOTALS: Memo: Press ESC to cancel; move cursor to end to post Transaction # 599 ================================================================== Figure 6.4: Data entry screen for posting transactions This data entry screen is common to the first three options of the Post Ledger Accounts menu. You may post up to eight debits in the left column and up to eight credits in the right column. As you do so, the total debit and credit amounts are calculated and displayed on the Totals line. The Memo line is for the memorandum description of the transaction. Transactions are numbered sequentially; the number for this transaction is shown at the bottom, below the instructions. Procedure 1. The cursor is at the upper left, at the first debit account number. Enter: the debit account number 2. The account title appears below the account number. This allows you verify the account number. The cursor moves to the right, to the amount field. Nonprofit General Ledger User Manual Page 6.9 Chapter 6, The General Ledger Program Enter: the debit amount 3. The debit amount entered is added to the total debits and the total is displayed below, on the Totals line. The cursor moves down to the next debit account number. Repeat steps 1 and 2 for each debit entry. 4. As soon as you press the Enter key on a blank debit account number, the cursor moves to the right column, the first credit account number. Enter: the credit account number 5. The account title appears below the account number. The cursor moves to the right, to the amount field. Enter: the credit amount 6. The credit amount entered is added to the total credits and the total is displayed below, on the Totals line. The cursor moves down to the next credit account number. Repeat steps 4 and 5 for each credit entry. 7. As soon as you press the Enter key on a blank credit account number, the cursor moves to the Memo field at the bottom of the screen. Enter: the memo description of the transaction 8. The following message appears: ================================================================== Do you wish to save this information? (Y/N or up arrow) ___ ================================================================== This allows you to go back and change your entries if necessary. When you are sure your entries are correct and you wish to store the information in your data files, type Y; otherwise use the arrow keys to go back and make changes or type N to throw away this transaction. 9. The message "POSTED" or "NOT POSTED" appears, depending on how you answered the question. The following appears: ================================================================== Do you wish to post more? (Y/N) ================================================================== Nonprofit General Ledger User Manual Page 6.10 Chapter 6, The General Ledger Program Type Y or N. If you choose to post another transaction, the data you entered is erased and the cursor moves back to the upper left, enabling you to start over with a new transac- tion. Otherwise, the Post Ledger Accounts menu reappears. Example Here is an example of posting multiple debits and multiple credits at the same time. Let's suppose that the East West Center owns a photocopier which was purchased for $3,000 and which has an accumulated depreciation of $500, so its book value is $2,500. The Center does not need the photocopier and can trade it for a new computer whose retail price is $3,000. The Center will gain a $3,000 asset and give up only $2,500, so it makes a gain on the trade of $500. The journal entry for this transaction would be as follows: Item Description Dr Cr 160000 Computer Equipment 3000 151000 Accum. depr. furn & fix. 500 150000 Furniture & fixtures 3000 (photocopier) 513000 Other income 500 To record trade of photocopier for computer, record gain on sale, and remove the accumulated depreciation from the books. The procedure for entering this transaction would be as follows: 1. From the Post Ledger Accounts menu, Enter: 1 2. The data entry screen appears, with the cursor at the first debit account number. Enter: 160000 3. The account title appears and the cursor moves to the Amount field. The screen looks like this: Nonprofit General Ledger User Manual Page 6.11 Chapter 6, The General Ledger Program ================================================================== ------ DEBITS ------ Remaining ------ CREDITS ----- Remaining Acct # Amount in budget Acct # Amount in budget 160000 _________ ______ _________ Computer equipment ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ TOTALS: 0.00 0.00 Memo: Press ESC to cancel; move cursor to end to post Transaction # 601 ================================================================== Enter: 3000 4. The cursor moves down to the next account number field, and the total at the bottom of the debit column is increased to 3000: Nonprofit General Ledger User Manual Page 6.12 Chapter 6, The General Ledger Program ================================================================== ------ DEBITS ------ Remaining ------ CREDITS ----- Remaining Acct # Amount in budget Acct # Amount in budget 160000 3000.00 ______ _________ Computer equipment ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ TOTALS: 3000.00 0.00 Memo: Press ESC to cancel; move cursor to end to post Transaction # 601 ================================================================== Enter: 151000 5. Again, the description appears and the cursor moves to the amount field. Enter: 500 6. The cursor moves down to the next account number field and the debit total is again increased. The screen now looks like this: Nonprofit General Ledger User Manual Page 6.13 Chapter 6, The General Ledger Program ================================================================== ------ DEBITS ------ Remaining ------ CREDITS ----- Remaining Acct # Amount in budget Acct # Amount in budget 160000 3000.00 ______ _________ Computer equipment 151000 500.00 ______ _________ Accum. Depreciation, FFE ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ TOTALS: 3500.00 0.00 Memo: Press ESC to cancel; move cursor to end to post Transaction # 601 ================================================================== You have now entered all the debits and are ready to enter the credits. Press the Enter key without typing anything. 7. The cursor jumps to the first account number on the credit side of the screen. Enter: 150000 8. The account description is displayed and the cursor moves to the amount field. Enter: 3000. 9. The credit total is increased and the cursor moves to the next account number. Enter: 513000. 10. The account description is displayed and the cursor moves to the amount field. Enter: 500. Nonprofit General Ledger User Manual Page 6.14 Chapter 6, The General Ledger Program 11. The credit total is updated and the cursor moves to the next account number, as usual. This time, however, something new happens; an amount is displayed under "Remaining in budget." ================================================================== ------ DEBITS ------ Remaining ------ CREDITS ----- Remaining Acct # Amount in budget Acct # Amount in budget 160000 3000.00 150000 3000.00 Computer equipment Furniture, Fixtures & Equip. 151000 500.00 513000 500.00 Accum. Depreciation, FFE Other income 29500.00 ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ TOTALS: 3500.00 3500.00 Memo: Press ESC to cancel; move cursor to end to post Transaction # 601 ================================================================== The revenue account has a budget, and the screen displays the amount remaining in the budget after the $500 credit is subtracted. In this case, the display means that after posting the gain of $500 on the trade of assets, $29,500 remains to be raised in "other income" from public support. The amount remaining will be displayed whenever you post an amount to a revenue or expense account that has a budget figure associated with it. Press the Enter key without typing anything. 12. The cursor moves to the Memo field. Enter: Trade photocopier for computer, gain on sale, remove accum. deprec. 13. The message "Do you wish to save this information" appears and the screen looks like this: Nonprofit General Ledger User Manual Page 6.15 Chapter 6, The General Ledger Program ================================================================== ------ DEBITS ------ Remaining ------ CREDITS ----- Remaining Acct # Amount in budget Acct # Amount in budget 160000 3000.00 150000 3000.00 Computer equipment Furniture, Fixtures & Equip. 151000 500.00 513000 500.00 Accum. Depreciation, FFE Other income 29500.00 ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ TOTALS: 3500.00 3500.00 Memo: Trade photocopier for computer, gain on sale, remove accum. deprec. Press ESC to cancel; move cursor to end to post Transaction # 601 Do you wish to save this information? (Y/N or up arrow) ___ ================================================================== 13. At this point the data entry for this transaction is complete. In order to post the transaction, you would type Y. The message "POSTED" would appear and you would be asked if you want to post another transaction. Making corrections As you can see, you can easily move from field to field on the data entry screen to enter several debits and several credits at one time. The example did not show that you can just as easily move back to correct your entries. Use the Backspace or Delete key to erase incorrect entries in order to retype them, and use the up-arrow to move to a previous field. (Even though the account and the amount fields are on the same line, you must use the up-arrow to move from the amount back to the account field.) To delete an entry (both account number and amount) altogether, press F2 to erase the account number and press the Enter key or the up-arrow. Experiment with this screen, entering data and deleting it, moving the cursor forward and backward through different fields, etc. Just be sure to cancel the entry with the Esc key or answer No to the question "Do you wish to post this information?" to avoid posting erroneous entries. Nonprofit General Ledger User Manual Page 6.16 Chapter 6, The General Ledger Program Debit one account with multiple credits Using this menu option, you enter one or more credits and the program computes the total and posts the offsetting debit. This can be used to post deposits into your bank account. One deposit may have several revenue components, and it is convenient to post them all and have the program calculate the total debit. When you select this option you must enter the account to debit; the following message appears: ================================================================== Please enter the debit account number: ______ ================================================================== Enter: the number of the account you wish to debit. You can also press the up-arrow or Esc to select a different menu option. The data entry screen appears, with the debit account number and title already entered: ================================================================== ------ DEBITS ------ Remaining ------ CREDITS ----- Remaining Acct # Amount in budget Acct # Amount in budget 101000 0.00 ______ _________ Checking Acct FKLN 067000847 ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ ______ _________ TOTALS: Memo: Press ESC to cancel; move cursor to end to post Transaction # 599 ================================================================== Nonprofit General Ledger User Manual Page 6.17 Chapter 6, The General Ledger Program The account number on the debit side is an illustration only; the account number you select will be displayed. The cursor is positioned at the first credit account number. This screen is nearly the same as the screen for general journal postings. The only difference is that you make entries only on the credit side; you cannot move the cursor to the debit side. You may post up to eight credits; as you do so the debit total is computed and displayed. Procedure 1. The cursor is at the first credit account. Enter: the account number. 2. The account title is displayed on the line below so you may verify the account number. The cursor moves to the amount field. Enter: the amount. 3. The credit amount entered is added to the total credits and the total is displayed below. In addition, the amount is added to the debit amount and the debit total and both are displayed on the debit side. The debit total will always equal the credit total. If the debit or credit account is a revenue or expense account with a budget amount entered, the amount remaining in the budget is also computed and displayed. Repeat steps 1 and 2 for each credit you wish to enter. 4. As soon as you press the Enter key on a blank credit account number or on the eighth credit account number, the cursor moves to the Memo field. Enter: the memo description of the transaction 5. The following message appears: ================================================================== Do you wish to save this information? (Y/N or up arrow) ___ ================================================================== This allows you to go back and change your entries if necessary. When you are sure your entries are correct and you wish to store the information in your data files, type Y; otherwise use the arrow keys to go back and make changes or type N to throw away this transaction. 6. The message "POSTED" or "NOT POSTED" appears, depending on how you answered the question. The following appears: Nonprofit General Ledger User Manual Page 6.18 Chapter 6, The General Ledger Program ================================================================== Do you wish to post more? (Y/N) ================================================================== Type Y or N. If you choose to post another transaction, the data you entered is erased and the cursor moves back to the upper left, enabling you to start over with a new transac- tion. The debit account remains the same; its amount is reset to zero. If you type N, the Post Ledger Accounts menu reappears. Nonprofit General Ledger User Manual Page 6.19 Chapter 6, The General Ledger Program Credit one account with multiple debits Using this menu option, you enter one or more debits and the program computes the total and posts the offsetting credit. This is typically used to post checks. Various expenses are the debits and the checking account is the credit account. For your audit trail, you should note the check number on the Memo line. When you select this option you must enter the account to credit. The data entry screen appears, with the credit account number and title already entered. The procedure for this screen is exactly the same as for debiting one account with multiple credits, except you make your entries on the debit side instead of on the credit side. See the preceding section for the complete procedure. Posting more than eight debits or credits You are limited to eight debits and eight credits per trans- action because a transaction cannot span more than one data entry screen. You may find that you need to post more than eight debits or eight credits at once. In this case you'll need to split the transaction into two. For instance, if there are 10 revenue accounts to credit for a single deposit, enter eight on one screen and the last two on the next screen. Be sure to enter the same information in the Memo field to identify them. Nonprofit General Ledger User Manual Page 6.20 Chapter 6, The General Ledger Program View transactions This option on the Post Ledger Accounts menu allows you to view transactions that have already been posted. You can only see transactions that are in the Transaction Journal. After you clear the Transaction Journal (see below, page 6.25), you can no longer view the transactions that were contained in it. The main reason for this option is to find out where you left off if you are interrupted in your work. When you select this option, the last transaction you posted appears, with the following choices at the bottom: ================================================================== Transaction: P=Previous N=Next F=First L=Last; C=Change memo Esc=Quit ================================================================== Figure 6.5: View Transactions You can now browse forward and backward through the Transac- tion Journal. In the Choices box you need only type the letter; do not press Enter after it. P Takes you to the previous transaction. If you are at the first transaction you stay there. N Takes you to the next transaction. If you are at the last transaction you stay there. F Takes you straight to the first transaction on file. L Takes you straight to the last transaction on file. When you have found the transaction you want, press C to change the information. You can change only the Memo field, not the account numbers or amounts, because these have already been posted. When you press C, the Choices box shows the following instructions: ================================================================== Press Enter (<┘) to save changes or Esc to cancel ================================================================== Enter any changes you want to make to the Memo field, and then press Enter to save the changes or Esc to put the field back the way it was. When "P=Previous," etc. appears in the Choices box, press Esc to quit viewing transactions and return to the menu. Nonprofit General Ledger User Manual Page 6.21 Chapter 6, The General Ledger Program View chart of accounts This is here in case you forget an account number and do not have a printed chart of accounts handy. It displays the chart of accounts on the screen. When you select this option, a screen similar to the following appears: ================================================================== ACCT # TITLE Dr/Cr Service Funding Program Source ASSETS 100000 Cash on hand D 0 00 101000 Checking Acct FKLN 067000847 D 0 00 110000 Savings Acct FKLN D 0 00 120000 Accounts Receivable D 0 00 130000 Inventory -- Food D 0 00 131000 Inventory -- Books D 0 00 132000 Inventory -- Other Merch. D 0 00 133000 Paper goods for food service D 0 00 140000 Prepaid expenses D 0 00 150000 Furniture, Fixtures & Equip. D 0 00 151000 Accum. Depreciation, FFE C 0 00 LIABILITIES 200000 A/P -- Food C 0 00 201000 A/P -- Books C 0 00 202000 A/P -- Other Merchandise C 0 00 210000 A/P -- Utilities C 0 00 211000 A/P -- Phone C 0 00 212000 A/P -- Other C 0 00 220000 Salaries & Wages Payable C 0 00 230000 Sales Taxes Payable C 0 00 Press Enter (<┘) to continue or Esc to quit ================================================================== Figure 6.6: View Chart of Accounts The screen shows the first 21 lines of your chart of ac- counts. The column labeled "Dr/Cr" contains a D if the normal balance is a debit balance or a C if the normal balance is a credit balance. "Service Program" and "Funding Source" show the codes embedded in the account numbers. Press Enter to view the next 21 lines. You can only go forward, not backwards. When you are done, press Esc to go back to the menu. Nonprofit General Ledger User Manual Page 6.22 Chapter 6, The General Ledger Program Print reports This menu option allows you to print all the reports pro- duced by the Nonprofit General Ledger system. A complete expla- nation of each report is given in Chapter Ten. This section explains the procedure for printing the reports. When you select this option, the Print Reports selection screen appears: ================================================================== PRINT REPORTS Type "Y" next to each report you wish to print. "No" will be assumed if you just press ENTER. Press ESC to cancel. Trial Balance .......................... NO Budget listing ......................... NO Budget Variance Report all accounts ......................... NO by service program ................... NO by funding source .................... NO functional summary ................... NO Income Statement all accounts ......................... NO by service program ................... NO by funding source .................... NO Balance Sheet .......................... NO System Control Information ............. NO Chart of Accounts ...................... NO Transaction Journal .................... NO ================================================================== Figure 6.7: Print Reports Here is a brief description of each report: - Trial Balance. Lists each account number and title and its balance, either in the debit column or the credit column. To the right there are blank columns for you to pencil in adjustments. Total debits and credits are shown at the end of the report. - Budget Listing. This lists the budget, both period and year-to-date, but not actual amounts or variances. - Budget Variance Report. Lists the period budget, the year- to-date budget, the amount actually received or spent in the period and year to date, and the variance or difference between the two for revenue and expense accounts. It also lists the amount remaining in the yearly budget. The report can be summarized in four ways: Nonprofit General Ledger User Manual Page 6.23 Chapter 6, The General Ledger Program - All accounts. Each revenue and expense account is listed. - By Service Program. Figures are summarized by service program; different funding sources are added together. - By Funding Source. Figures are summarized by funding source; different service programs funded by the same source are added together. - Functional summary. Figures are summarized by functional category (for instance, Salary expense, Phone expense, etc.) regardless of service program or funding source. - Income Statement. Because ledger accounts are posted immediately, you can obtain a current income statement at any time. The report can be summarized in three ways: - All accounts. Each revenue and expense account is listed. This also includes a functional summary. - By Service Program. Figures are summarized by service program; different funding sources are added together. - By Funding Source. Figures are summarized by funding source; different service programs funded by the same source are added together. - Balance Sheet. The balance sheet shows what the books would look like if they were closed, but this option does not actually close the books. - System Control Information. A listing of the organization's name and address, the number of ledger accounts available and used, the number of transaction records used and remaining, etc. - Chart of Accounts. Lists each account number and title and whether it is a debit or a credit account. - Transaction Journal. Prints a record of each transaction posted. This serves as your audit trail; you should save all these reports for your accountant or auditor. Procedure 1. Before printing reports do the following: - Be sure your printer is turned on and is properly connected to your computer. - See that it has plenty of paper. Nonprofit General Ledger User Manual Page 6.24 Chapter 6, The General Ledger Program - Line up the top of the first sheet with the print head so the report will print properly on each page. 2. You may select any combination of reports for printing. Type Y for each report you wish to print. For reports you don't want, just press the Enter key. To change a selection from Yes to No, type N over the Yes displayed. You can press the up-arrow key to return to a report and change your selection. 3. After you press Y, N, or the Enter key on each Yes/No field, the following message appears: ================================================================== PRESS SPACE BAR TO CONTINUE OR UP-ARROW TO GO BACK ================================================================== This allows you one more chance to go back and make correc- tions. When you press the space bar your reports are printed. 4. For each report, the following message is displayed: ================================================================== Printing Income Statement -- all accounts Press ESC to cancel ================================================================== If you want to stop printing, press Esc. You'll be asked if you really want to stop, so don't worry about pressing Esc by accident. 5. When all the reports have been printed, the Main Menu is redisplayed. Transaction Journal When you select the Transaction Journal for printing, there is one more step. After the report is printed, the following screen appears: Nonprofit General Ledger User Manual Page 6.25 Chapter 6, The General Ledger Program ================================================================== TRANSACTION JOURNAL Maximum entries allowed: 32000 Number used: 291 Number left: 31709 The Transaction Journal should be cleared to make room for more entries only if your Transaction Journal Report was printed correctly. Did you receive a complete, legible report? ================================================================== Figure 6.8: Transaction Journal The Transaction Journal file contains a record of each transaction you have posted. This file can hold 32000 entries; if it fills up you cannot post any more ledger account transac- tions. You'll have to clear it out to make room for more entries, and you can clear it out only after printing it. This ensures that you will always have a printed audit trail. NOTE -- The number of entries in the Transaction Journal is not the same as the number of transactions. A transaction with one debit and one credit takes one entry; a transaction with more than one debit or more than one credit takes one entry for each debit and one for each credit. For more information, see page 6.37. Before you clear the Transaction Journal, make a backup of your data files. See Chapter Eight for the procedure. This way you can go back and post more transactions if there are some you forgot to post. You can clear the Transaction Journal only if you answer Yes to two questions: - "Did you receive a complete, legible report?" - "Do you wish to clear the Transaction Journal to make room for more entries?" If you answer No to either question, the Transaction Journal is not cleared. If you answer Yes to the first question, the second appears. If you answer Yes to it as well, the following message appears: Nonprofit General Ledger User Manual Page 6.26 Chapter 6, The General Ledger Program ================================================================== TRANSACTION JOURNAL CLEARED -- HISTORY FILE IS D:TR00598.NGL PRESS SPACE BAR TO CONTINUE ================================================================== The Transaction Journal is emptied out and a new file is created, a history file. This file is a copy of the Transaction Journal with a different name. The numbers in the file name refer to the last transaction number. In the above example, the last transaction in the file is number 598. The Utility program, available to registered users, can print the Transaction Journal report and an additional audit trail report from the history files. You may print the Transaction Journal report as often as you like in order to verify your entries. We recommend that you print an audit trail copy of the report and clear the Transaction Journal at the end of each month. Write "audit trail copy" clearly on the report and store it in a safe place for your accountant or auditor. Nonprofit General Ledger User Manual Page 6.27 Chapter 6, The General Ledger Program Close books -- end of period Here is the screen that appears when you select this option from the Main Menu: ================================================================== CLOSE BOOKS AT END OF PERIOD This zeroes out all the period revenue and expense amounts and resets the processing dates for the next period. BACK UP YOUR FILES BEFORE YOU DO THIS! IF YOU HAVE NOT BACKED UP YOUR FILES, PRESS ESC TO CANCEL, EXIT THE PROGRAM, AND THEN BACK THEM UP! Enter period ending date or press ESC to cancel Current processing date: 3/31/1988 Current period ends: 3/31/1988 Current year ends: 12/31/1988 Next period begins: 4/ 1/1988 Next period ends ==> __/__/____ ================================================================== Figure 6.9: Close Books at End of Period Overview Closing the books at the end of the period does two things: - It changes the current processing date to the first day of the next period. This is the only way you can bring the current processing date forward from one period to the next. - It zeroes out the period totals. This has no effect on the year-to-date totals or on the fund balances. The only purpose of the period totals is for comparison with the period budget. NOTE -- Use this option at the end of every period but not at the end of the year. At the end of the year, use option 4, Close Books -- End of Year, instead. Procedure Before you close the books at the end of the period, do the following: Nonprofit General Ledger User Manual Page 6.28 Chapter 6, The General Ledger Program 1. Make an extra backup copy of your data files. Label the backup "Prior to closing, MM/DD/YY." If you should ever need to go back and make corrections to a prior period, you can use this backup copy. (Of course, you will then have to re-enter all the activity that happened since you made the backup, and you should throw away any subsequent Transaction Journal reports you may have printed.) See Chapter Eight for how to make a backup. Make the backup before you clear the Transaction Journal. 2. Print the Budget Variance report if you are using the program to keep track of your budget. 3. Print and clear the Transaction Journal (see page 6.25). 4. Then select this option. The Close Books -- End of Period screen appears. The program computes the beginning of the next period; it is the day following the end of the current period. The cursor is positioned at the ending date of the next period. If you have not made a backup, press Esc. Otherwise, Enter: the next period ending date. The program sets all the period revenue and expense balances to zero and changes the current processing date. When it is done, the Main Menu reappears. Nonprofit General Ledger User Manual Page 6.29 Chapter 6, The General Ledger Program Close books -- end of year Here is the screen that appears when you select this option from the Main Menu: ================================================================== CLOSE BOOKS AT END OF YEAR Press ESC to cancel This closes all revenue and expense accounts to the appropriate fund balances. It prints the trial balance and financial statements beforehand and the transaction journal and a post-closing trial balance afterwards. Be sure your printer has plenty of paper. BACK UP YOUR FILES BEFORE YOU DO THIS! IF YOU HAVE NOT BACKED UP YOUR FILES, PRESS ESC TO CANCEL, EXIT THE PROGRAM, AND THEN BACK THEM UP! You have 273,408 bytes free on drive D. If the Transaction Journal fills up during the process the program will print it and will not proceed until you clear it out to make room for more transactions. You'll need about 88 entries. Transaction Journal Maximum entries allowed: 32000 Number used: 291 Number left: 31709 Do you wish to print the Transaction Journal first? (Y/N) YES ================================================================== Figure 6.10: Close Books at End of Year Overview Closing the books at the end of the year does a number things: - It closes all revenue and expense accounts to the appropriate fund balances, zeroing out the year-to-date totals and increasing or decreasing the fund balance accounts accordingly. - It zeroes out the period totals, just as closing the books at the end of a period does. - It changes the current processing date to the first day of the next fiscal year, which is also the first day of the next budget period. This is the only way you can bring the current processing date forward from one year to the next. - It prints a number of reports: Nonprofit General Ledger User Manual Page 6.30 Chapter 6, The General Ledger Program - optionally, the Transaction Journal before closing - a pre-closing trial balance - the income statement and balance sheet - a post-closing Transaction Journal - a post-closing trial balance Procedure Before you close the books at the end of the year, do the following: 1. Make an extra backup copy of your data files. Label the backup "Prior to closing, MM/DD/YY." If you should ever need to go back and make corrections to a prior year, you can use this backup copy. (Of course, you will then have to re-enter all the activity that happened since you made the backup, and you should throw away any subsequent Transaction Journal reports you may have printed.) See Chapter Eight for how to make a backup. Make the backup before you clear the Transaction Journal. 2. Print the Budget Variance report if you are using the program to keep track of your budget. 3. Print and clear the Transaction Journal (see page 6.25). 4. Then select this option. (Do not select Close Books -- End of Period. This option zeroes out the period totals as well as the year-to-date totals.) The Close Books -- End of Year screen appears. It tells what closing the books at the end of the year will do and gives you the opportunity to print the Transaction Journal. If there are any entries in the Transaction Journal, the answer to the question "Do you wish to print ..." is displayed as Yes, other- wise it is displayed as No, but you can change it. To cancel the process If you change your mind and decide to cancel the process of closing the books at the end of the year, you may do so at three places: - On the initial screen, displayed above - On the date screen, displayed below - After printing the Income Statement and Balance Sheet Nonprofit General Ledger User Manual Page 6.31 Chapter 6, The General Ledger Program To cancel at these places, press Esc. You may no longer cancel the process after you print the Income Statement and Balance Sheet and the program begins to update the account balances. If you cancel, the books are not closed and the system dates are not changed. To continue and not cancel Put plenty of paper and a dark ribbon in your printer; this procedure produces many pages of reports. If there are any entries in the Transaction Journal, we recommend that you print the Transaction Journal report first and clear it out to make room for more entries (see page 6.25). The process of closing the books at the end of the year creates one entry in the Transaction Journal for each revenue and expense account with a nonzero balance, plus one for the memo description. In most cases this will be a sizable number of entries, and it is best to clear the Transaction Journal to make room for as many of them as possible. Type Y to print the Transaction Journal or N to bypass this step. If you type Y, the Transaction Journal prints and you are asked if you wish to clear it. If you received a legible report, go ahead and clear it. If you did not receive a legible report and wish to print the Transaction Journal again, do this: 1. Type: N to indicate that you did not receive a legible report. 2. Press the space bar to continue. 3. On the next screen, press the up-arrow. This returns you to this screen, where you may print the report again. Next, the following screen appears: Nonprofit General Ledger User Manual Page 6.32 Chapter 6, The General Ledger Program ================================================================== CLOSE BOOKS AT END OF YEAR Enter period and year ending dates Press ESC to cancel Current processing date: 12/31/1988 Current period ends: 12/31/1988 Current year ends: 12/31/1988 Next year begins: 1/ 1/1989 Next period begins: 1/ 1/1989 Next period ends ==> __/__/____ Next year ends ==> MM/DD/YYYY ================================================================== Figure 6.11: End-of-year Closing Dates 1. The program has computed the beginning of the next period and the next year; it is the day following the end of the current year. The cursor is positioned at the ending date of the next period. Enter: the next period ending date. 2. The cursor moves to the year-end date. Enter: the next year ending date. The following message appears: ================================================================== PRESS SPACE BAR TO CONTINUE OR UP-ARROW TO GO BACK ================================================================== This allows you to review your entries and change them if you wish. On this screen the up-arrow takes you all the way back to the previous screen if you would like to print the Transaction Journal again. You may also press ESC to cancel and return to the Main Menu without closing the books or changing the dates. To continue closing the books, press the space bar. You do not need to press the Enter key. The reports begin to print, first the Trial Balance, then the Income Statement and finally the Balance sheet. The date on the reports is the last day of the current fiscal year. After the Balance Sheet is printed, the following message appears: Nonprofit General Ledger User Manual Page 6.33 Chapter 6, The General Ledger Program ================================================================== Last chance to cancel! Press space bar to continue or ESC to cancel. PRESS SPACE BAR TO CONTINUE ================================================================== If you wish to cancel, press the ESC key. The books will not be closed, the dates will be restored as they were before you selected this option, and the Main Menu will reappear. To continue, press the space bar. After this point you may no longer cancel the process. When you press the space bar the following message appears: ================================================================== Closing the books . . . please do NOT interrupt! ================================================================== The program processes the revenue and expense accounts, closing them to the appropriate fund balances. Do not stop this process by resetting or turning off your computer! If you do, your data will be damaged and your books will not balance. The program makes an entry in the transaction journal for each revenue and expense account whose balance is not zero. If the transaction journal gets filled up, it will print so that you can clear it. You must clear it out in order to proceed. After the books are closed, the post-closing Transaction Journal report and Trial Balance are printed. We recommend that you clear the Transaction Journal after the report is printed (see page 6.25) in order to start the new year off with a clean slate. The date on these reports is the first day of the new fiscal year. Finally, the Main Menu reappears. The books are now closed and you are in the next fiscal year. Nonprofit General Ledger User Manual Page 6.34 Chapter 6, The General Ledger Program Add ledger accounts You may add new accounts at any time. The only restriction is that you may not enter an initial balance. To change the balance you'll have to enter a transaction so that there will be an audit trail in the Transaction Journal. For revenue and expense accounts you may enter period and yearly budget amounts if you wish. The procedure is exactly the same as in the Startup program, except that you cannot enter an initial balance. Refer to page 5.12. Delete ledger accounts Use this menu option to delete an unused account. The year-to-date balance and the period balance must both must be zero or you will not be able to delete it. This ensures the integrity of your ledger accounts and audit trail. If the year- to-date balance is zero but the period balance is not, close the books for the period and then delete the account. Closing the books for the period zeroes out the period balance. The procedure is exactly the same as in the Startup program, except that the balance must be zero. Refer to page 5.17. View Ledger Accounts Use this menu option to find out the balance in any account. At the end of the month when you are balancing to your bank account it is convenient to use this option to check the account balance. For revenue and expense accounts, you can find out the amount remaining in the budget as well. You can also change the budget amounts for revenue and expense accounts and the account title. The procedure is exactly the same as the Startup program option Change Ledger Accounts except that you cannot change the balance. Refer to page 5.15. Nonprofit General Ledger User Manual Page 6.35 Chapter 6, The General Ledger Program View/change system control information This option lets you view and change the system control information you entered in the Startup program. When you select this option the System Control Information menu appears: ================================================================== VIEW/CHANGE SYSTEM CONTROL INFORMATION Please select: 1 Organization information 2 Printer setup 3 Dates and control information (view only) ESC Return to Main Menu ==> _ ================================================================== Figure 6.12: View/Change System Control Information "System control information" includes the organization's name, address and employer ID number, the codes for controlling your printer, system dates and number of ledger accounts used, etc. You may change the organization and printer information by using this menu, but you may only view, not change, the system dates, etc. Organization Information When you select this option from the View/Change System Control Information Menu the Organization Information screen appears. For information about this screen, see page 5.8. If you only want to look at this information and not change it, press the Esc key when you are done looking. If you wish to change the information, 1. Use the cursor control keys to move to the field you wish to change. 2. Press F2 to delete the incorrect information. 3. Enter: the new information. When you press the Enter key on the last line, the following message appears: Nonprofit General Ledger User Manual Page 6.36 Chapter 6, The General Ledger Program ================================================================== PRESS SPACE BAR TO CONTINUE OR UP-ARROW TO GO BACK ================================================================== This allows you to review your entries and change them if you wish. You can press the Esc key to return to the System Control Information menu without changing any of the organization information. To store the changes you have made in your data files, press the space bar. The data is saved and you return to the System Control Information menu. Printer Setup If you ever change printers, you may use this option on the View/Change System Control Information Menu to enter the codes needed for your new printer. The procedure is the same as in the Startup program. Refer to page 5.10. Nonprofit General Ledger User Manual Page 6.37 Chapter 6, The General Ledger Program Dates and control information (view only) This option on the View/Change System Control Information Menu allows you to view the System Control Information screen: ================================================================== SYSTEM CONTROL INFORMATION Dates Current processing date 3/31/1988 Beginning of fiscal year 1/ 1/1988 Beginning of current period 3/ 1/1988 End of current period 3/31/1988 End of fiscal year 12/31/1988 Data files are on drive C; 1,272,384 bytes are free. Ledger accounts Maximum number of accounts 32000 Number used 84 Number left 31916 Transaction Journal entries Maximum number allowed 32000 Number used 291 Number left 31709 Last transaction number 598 PRESS SPACE BAR TO CONTINUE ================================================================== Figure 6.13: System Control Information You may not change any of this information. The procedure is the same as in the Startup program. Refer to page 5.19. Transaction journal The System Control Information screen shows the number of transaction entries used and the last transaction number used. The transaction number is not the same as the number of entries. Each transaction may use one or more entries in the Transaction Journal. If the transaction consists of one debit and one credit, it uses only one entry, otherwise it uses an entry for each debit and each credit. (Closing the books at the end of the year uses two additional entries, one for the memo description for closing the revenue accounts and the other for the memo description for closing the expense accounts.) The screen shows the maximum number of transaction journal entries allowed (this is preprogrammed), the number currently used and the number left. If the number left is very small, you should print the transac- tion journal and clear it (see page 6.25). Nonprofit General Ledger User Manual Page 6.38 Chapter 6, The General Ledger Program The last transaction number is the same as the "Last tran" number that appears on the reports, and is used as an audit trail. You know you have a complete audit trail if you have Transaction Journal reports for all the numbers from the beginning of the year to the present. Nonprofit General Ledger User Manual Page 6.39 Chapter 6, The General Ledger Program Change colors If you have a color monitor or a Compaq computer, which emulates color on a monochrome screen, you can change the text and background colors. This option does nothing if you have a monochrome monitor. The procedure is the same as in the Startup program. Refer to page 5.7. The Transaction Information program There is one more program on your diskette, TRANINFO.EXE, which displays information about your Transaction Journal file. Its main use program is to find out what period a transaction journal file on a backup diskette covers. To run it, Enter: TRANINFO You are asked for the name of the file: ================================================================== This displays information about a Nonprofit General Ledger Transaction Journal file. Name of file? (Ctrl-Break to quit) _ ================================================================== You may enter the name of the Transaction Journal or any Transaction History file. Enter the full name and extension. If the file is on a different disk, be sure to include the drive letter as well. For instance you would enter "B:TRANJRNL.NGL" if your Transaction Journal file were on drive B. If you want to exit the program instead of entering the file name, press the Ctrl key and Break key at the same time. You can also enter the file name after the name of the program, for instance: TRANINFO B:TRANJRNL.NGL The program displays information similar to the following: ================================================================== B:TRANJRNL.NGL contains transactions numbered from 495 through 598 and dated from 3/ 1/1988 through 3/31/1988. It contains 291 physical records. ================================================================== The number of physical records is the same as the number of entries as displayed on the System Control Information screen. Chapter 7 The Utility Program This chapter tells how to use the Nonprofit General Ledger Utility program. The Utility program is available only to registered users. To find out how to register, see Appendix E. Installing the program The program is on a separate distribution disk, the Registered User diskette. This diskette is not distributed as shareware. (If you received this program from any source other than me, you have an illegal copy. Please notify me right away!) To install the program, copy all the files on the disk to another disk. Instructions are given in Chapter 4 on page 4.3 for floppy disks and 4.4 for hard disks. Starting the program The program file, NGLUTIL.EXE, must be present on the logged disk and subdirectory. 1a. If you are using two floppy diskettes, place the working copy of your program diskette in drive A:. 1b. If you are using a hard disk, log on to the disk and the subdirectory where you have installed the program. These instructions assume that the disk is C: and the subdirectory is MAIL. If your system is different, substitute the letter and subdirectory name for your system in the commands below. - Enter: C: - Enter: CD \NGL 2. Enter: NGLUTIL This is the command that starts the program. The Main Menu The Main Menu, which is also the title screen, appears: Page 7.1 Nonprofit General Ledger User Manual Page 7.2 Chapter 7, The Utility Program ================================================================== NONPROFIT GENERAL LEDGER UTILITY PROGRAM Version 1.11 Copyright (c) 1989 Wm. Meacham Reliance Software Services, 1004 Elm Street, Austin Tx 78703 ALL RIGHTS RESERVED, DO NOT COPY! This program is provided only to registered users of the Nonprofit General Ledger program. ═════════════════════════════════════════════════════════════════════════ 1 AUDIT -- Prints transactions sorted by account number. 2 LIST -- Prints transactions in transaction order. 3 FIX -- Reconstructs a damaged index. Reads the account file and writes a new account file and index file on a different disk or on the same disk. (Be sure there's enough room.) 4 ZERO THE BUDGET -- Zeros out all budget amounts. Esc Exit the program ==> _ ================================================================== Figure 7.1: Utility program Main Menu The options on this menu are as follows: 1. Audit. This prints the Transaction Journal or a Transaction History file sorted by account number instead of chronologi- cally by transaction number. This provides a clearer audit trail of what transactions affect each account. 2. List. This prints the Transaction Journal report just like the General Ledger program. The difference is that you can print the report for a Transaction History file in addition to the Transaction Journal. 3. Fix. This fixes damaged data files. Files can get damaged in a number of ways; the symptoms are strange things displayed on the screen or cryptic error messages that end the program abnormally. The Utility program recovers all the data that is not damaged and writes it to a new set of files on the same or another disk. Accounts with bad data in them are not written to the new files. This builds a new set of indexes for the files, so problems with indexes go away too. However, you may lose some data; the InterFund Clearing account is used to balance your books, if needed. Nonprofit General Ledger User Manual Page 7.3 Chapter 7, The Utility Program 4. Zero the Budget. This quickly zeroes out all your budget amounts. This is quicker than going through each account one by one. The rest of this chapter explains each of these options. To select a menu option, Type: the number and press the Enter key. Nonprofit General Ledger User Manual Page 7.4 Chapter 7, The Utility Program Audit The General Ledger program provides the Transaction Journal report as an audit trail, but that report is listed chronologi- cally by transaction number. To find out what transactions affected a particular account, you'd have to look at each transaction in turn. This menu option prints a different kind of audit trail report, one sorted by account number. You can look up an account number and find out what transactions were posted to it. The report is explained in Chapter 10; this section tells how to print it. When you select this option, the following message appears: ================================================================== On which drive do you keep your data files? C ================================================================== Your normal data drive is displayed; press Enter to accept it, or press F2 and enter a different letter to change it. You can also cancel by pressing Esc. Enter the drive for your regular data files even if the file you wish to print is on a different drive. The program has to read the Index and Ledger files to get the account names. Next you are asked for the name of the file to print: ================================================================== Enter the full name and path of the transaction file: C:TRANJRNL.NGL_________________________________________________ ================================================================== The Transaction Journal file on the data drive you entered is displayed, but you can change it and print another file instead. To accept the Transaction Journal file, just press Enter. To change it, press Backspace or F2 and then enter the file name you want. You can enter the name of a Transaction History file. Remember, a Transaction History file is created each time you clear the Transaction Journal (see page 6.25). The file name is TRnnnnn.NGL, where "nnnnn" is the number of the last transaction on file. For instance, the last transaction number in TR00465.NGL is 465. You can enter a full drive and path name, so you can print a file that is on another disk or in a different subdirectory on your hard disk. When you have entered the name, informative messages appear and the report is printed. Nonprofit General Ledger User Manual Page 7.5 Chapter 7, The Utility Program List This prints the Transaction Journal report, just like in the General Ledger program. The only difference is that you can print the report for a Transaction History file as well as the Transaction Journal, and you can print it for a file on a different drive or subdirectory. When you select this option, you are asked for the drive where you keep your data files and for the name of the transaction file (Transaction Journal or Transaction History file) to print. The procedure is just like in the Audit function, above. When you enter the information requested, the report is printed. Nonprofit General Ledger User Manual Page 7.6 Chapter 7, The Utility Program Fix Introduction Data files can get damaged in a number of ways. A diskette might be bad, or the power might go out while the program is writing to the disk, or random electricity might write incorrect data on the disk. The symptoms of bad data are: - Strange characters appear on the screen. - Strange characters are printed, or the printer does strange things. - The program ends abnormally with a cryptic error message, such as "Turbo Access Error 100 -- Disk Read Error." The first two errors are caused by bad data in the Ledger file of account information. Error 100 is caused by a bad Index file; the index says there is a account record at a certain place in the Ledger file, but that location does not exist in the Ledger file. The Fix option reads the Ledger file and writes a new file with new indexes, either on the same disk or on another one. In the process it examines each account record, and if it contains bad data it does not write it out. As it writes, it creates new index files, so the end result is that the new Ledger file contains nothing but good data and the new Index files are all correct. If the program discards an account record, your books will be out of balance. To fix this condition, a balancing entry is made to the InterFund Clearing (IFC) account, account 400000. After you run this option, you should print a Chart of Accounts report and a Trial Balance report. If some accounts are missing from your Chart of Accounts, use the General Ledger program to add new ledger accounts to replace them. They'll have zero balances. If the IFC account has a balance in it, post a transaction to transfer the balance to another account or accounts, probably the ones you have just added. Procedure When you select this option, the following screen appears: Nonprofit General Ledger User Manual Page 7.7 Chapter 7, The Utility Program ================================================================== FIX Please enter: SOURCE drive and path, where the file to be fixed is located: _____________________________________________________ TARGET drive and path, where the new file is to be written: _____________________________________________________ ================================================================== First you specify the Source and Target drives. You can specify a path and you can specify the same drive and path for both the Source and Target files or a different one. This allows you to write the Target files in the same subdirectory or in a different subdirectory on the same disk. You are then told to insert the Source and Target disks. ================================================================== Insert Source and Target disks PRESS SPACE BAR TO CONTINUE OR UP-ARROW TO GO BACK ================================================================== If you need to change your entries you can press the up- arrow. You can also cancel by pressing Esc. When both disks are in place, press the space bar. If General Ledger files exist on the Target drive and directory, and the Target is not the same as the Source, you are asked if you want to overwrite them. If you say Yes, they are erased before the new files are written. The program reads the Source files and writes the Target files, eliminating bad name records as it goes. The Target files have the extension $$$ during this process. This is so they can be written on the same drive and directory as the Source files (extension NGL) if necessary. When it is finished, the program tells you how many records it has read and written. Nonprofit General Ledger User Manual Page 7.8 Chapter 7, The Utility Program ================================================================== Number of accounts in the Source file: 84 Number of accounts in the Target file: 84 All done! Now make a backup of the new files. Run the General Ledger program to make sure everything is OK. If it is, delete the Source files. The Source files now have the extension BAK instead of NGL. PRESS SPACE BAR TO CONTINUE ================================================================== If the number of Source and Target accounts are different, you know that some bad account records have been eliminated. The last line appears only if the Source and Target files are on the same drive and directory. In that case the Source files are renamed to have an extension of BAK (for Backup). If the Source and Target paths are different, the files are not renamed. At the end of the process the Target files are renamed from extension $$$ to NGL. Print your Chart of Accounts and Trial Balance reports for the new files, and then add accounts or transfer balances as needed to get the books as they were before your files became damaged. When everything is OK, you can erase the old files. Be sure to make a backup of the new ones. Nonprofit General Ledger User Manual Page 7.9 Chapter 7, The Utility Program Zero the Budget This is here as a convenience. If you want to stop using the budget feature of the program, just run this option to set all the budget amounts to zero. Or, when a new fiscal year starts and you want to change your budget, you may find it easier to enter the new budget if the old one is all gone. This option goes through all the accounts and sets each budget amount to zero. When you run this option you are first asked if you really want to do it: ================================================================== This will zero out all the budget amounts in all your accounts. Is this what you wish to do? (Y/N) ___ ================================================================== Enter Y or N. You can also cancel by pressing Esc. If you answer Yes, you are asked where your data files are, and then the budget amounts are zeroed out. Chapter 8 Protecting your data Like it or not, sometimes disks get damaged or data files are accidentally erased. You should always make a backup copy of your files whenever you have entered, changed or deleted data. Store the backup diskette separately from your everyday data diskette. If something should happen to your data diskette, make a copy of the backup diskette and use it. Diskettes are cheap; your time and data are not, so always make a backup! This chapter tells you how to back up your data files and how to restore them if they get damaged. This chapter tells you the procedure for making a backup. Look in Appendix B, "Examples of Use," for ideas about when to do backups in your monthly accounting cycle. Backing up your data The Nonprofit General Ledger data files all have the ex- tension NGL. The procedure for backing up your files is quite simple. Just exit the program and copy them to a floppy diskette. Floppy disk This procedure assumes that your program disk is in drive A: and your data disk is in drive B:. 1. When you have exited the program and are at the operating system prompt, remove the program disk and put a formatted floppy diskette in drive A:. 2. Enter: COPY B:*.NGL A: This copies all the data files from B: to A: When you are done, label the diskette "Nonprofit General Ledger data backup" and write the date on it. Hard disk This procedure assumes that your data is on drive C:. If your system is different, substitute your drive letter in these instructions. Page 8.1 Nonprofit General Ledger User Manual Page 8.2 Chapter 8, Protecting your data 1. When you have exited the program and are at the operating system prompt, put a formatted floppy diskette in drive A:. The "C>" prompt should be showing. 2. Enter: COPY *.NGL A: This copies all the data files from the drive you are on, C:, to A:. When you are done, label the diskette "Nonprofit General Ledger data backup" and write the date on it. Caution If it appears that your files have become damaged, do not back them up! If you back up damaged files, your backups will be damaged too. Instead, restore the backup files. See below for instructions. Insufficient disk space If you have too many files to fit on a single diskette or if your files are too big, the following message appears: ---------------------------------------- Insufficient disk space ---------------------------------------- The most likely cause for this messages is having too many files. Unless you have a very large number of accounts, no one data file will become too big to fit on a diskette. Each time you clear the Transaction Journal, however, a new history file is created, named TRnnnnn.NGL, where "nnnnn" is the number of the last transaction in the file. After a while you may accumulate too many of these to fit on a diskette. The solution is simply to start using a different backup diskette. If you are using a hard disk and have a lot of accounts, your files may be too big to fit on a floppy diskette. In that case, see "Using the Backup Program," below, page 8.4. Restoring your data To "restore" means to copy the backup files onto the data disk. When you do this, the files on your data disk become as they were the last time you backed them up. Do this only if your data files are damaged or accidentally erased. The procedure is simple. Exit the program and copy the files from the floppy diskette to the data disk. Nonprofit General Ledger User Manual Page 8.3 Chapter 8, Protecting your data Floppy disk 1. When you have exited the program and are at the operating system prompt, remove the program disk and put the backup diskette in drive A:. 2. Enter: COPY A:*.NGL B: This copies all the data files from A: to B:. Hard disk This procedure assumes that your data is on the hard disk in the NGL subdirectory. If your system is different, substitute your subdirectory name in these instructions. 1. When you have exited the program and are at the operating system prompt, put the backup diskette in drive A:. 2. Be sure you are in the correct subdirectory. If necessary, change to it by entering CD \NGL. 2. Enter: COPY A:*.NGL This copies all the data files from A: to the hard disk. End of month backup This section tells how to make a special backup at the end of each month (or quarter, etc., whatever your normal accounting period is.) What you want to do is save a copy of your files before you clear the transaction journal and close the month. That way you can go back and add more transactions to the month if you have to. Note: If you do go back and add more transactions, you'll also have to re-enter everything in the months following. The program does not have the ability to keep an accounting period "open" while you are entering data for a subsequent period. After you have entered all the transactions for the month and are sure they are correct and complete, do the following: - Print final statements for the month, but do not clear the Transaction Journal yet. (See page 6.25.) - Format a new disk. See your DOS manual for how to format a disk. If you know enough about DOS to understand sub- directories, you can make a subdirectory on your regular backup disk for the month instead. Call it, for instance, JUL89, if the month is July, 1989. Nonprofit General Ledger User Manual Page 8.4 Chapter 8, Protecting your data - Copy the files LEDGER.NGL, INDEX.NGL, SCR.NGL and TRANJRNL.NGL to the new disk or to the subdirectory. - Label the new disk "Pre-closing backup" plus the month and year and store it in a safe place. Using the BACKUP program The rest of this chapter tells you how to back up your files when they are too big to fit on a single diskette. This can happen if you have a lot of accounts and are using a hard disk. Your DOS (Disk Operating System) diskettes contain a program named BACKUP. This program program splits large files over more than one diskette. The following procedure tells how to use it. (There are different ways to do this, but this is one of the simplest. Please read your DOS manual for complete details.) 1. You will need a number of blank formatted floppy diskettes; the exact number depends on how big your data files are. To be safe, have five or six blank formatted diskettes ready. 2. Be sure you are in the NGL subdirectory. Enter: CD \NGL You must already have copied the BACKUP and RESTORE programs from your DOS diskette to the hard disk in this directory. If you have not done this, you must have entered a Path command that names the subdirectory where they are found. (See your DOS manual for more information about the Path command.) 3. Enter: BACKUP *.NGL A: Leave a space between "BACKUP" and "*.NGL" and between "*.NGL" and "A:." Type a colon, not a semicolon. This will cause all the files with the extension "NGL" to be backed up on the floppy diskette(s) in drive A. The following message appears: ---------------------------------------- Insert backup diskette 01 in drive A: Warning! Diskette files will be erased Strike any key when ready ---------------------------------------- 4. Place a blank formatted diskette in the floppy diskette drive and press any key. Nonprofit General Ledger User Manual Page 8.5 Chapter 8, Protecting your data The following message appears: ---------------------------------------- *** Backing up files to diskette 01 *** ---------------------------------------- and the file names are displayed as they are backed up. 5. Label the diskette -- use a felt-tip pen so you won't damage it -- with the program name, the number of the backup diskette and the date, so you will know when your last backup was and the order in which to use the diskettes to restore your files. 6. If more than one diskette is required, the following message is displayed: ---------------------------------------- Insert backup diskette nn in drive A ---------------------------------------- where "nn" is the disk number. Repeat steps 4 and 5 until the "C>" prompt appears, indicating that all files have been backed up. If things go wrong with BACKUP The BACKUP program displays the file names as they are backed up. If file names are not displayed, something is wrong. Check the following: - If the message "Bad command or file name" appears, the BACKUP program is not in the same directory as your data or you are not in the right directory. Use the CD command to change to the right directory and copy the BACKUP program from your DOS diskette. - Be sure you have typed the command correctly. There must be a space after the word "BACKUP" and after the file name ("*.NGL" in the example shown), but nowhere else. Type a colon, not a semicolon. Using the RESTORE program This section tells how to use the RESTORE program to copy files back onto your hard disk. You must use the RESTORE program to restore files backed up with the BACKUP program. (This is only an outline; there are different ways to do this, but this is Nonprofit General Ledger User Manual Page 8.6 Chapter 8, Protecting your data one of the simplest. Please read your DOS manual for complete details.) 1. Be sure you are in the NGL subdirectory. Enter: CD \NGL The RESTORE program should be on the hard disk, in this directory. The "C>" prompt should be displayed. You may also enter a Path command that names the subdirectory where they are found. (See your DOS manual for more information about the Path command.) 2. Enter: RESTORE A: *.NGL Leave a space between "RESTORE" and "A:" and between "A:" and :*.NGL." This will cause all the files with the extension "NGL" to be restored from the floppy diskette in drive A. (Note -- instead of "NGL," type the extension for your program's data files -- this is an example only.) The following message appears: ---------------------------------------- Insert backup diskette 01 in drive A: Strike any key when ready ---------------------------------------- 3. Insert the first backup diskette in the floppy disk drive and press any key. The following message is displayed: ---------------------------------------- *** Files were backed up MM/DD/YYYY *** *** Restoring files from diskette 01 *** ---------------------------------------- and the file names are displayed as each is copied from the floppy diskette to the hard disk. 4. If it took more than one floppy diskette to back up your files, the following message is displayed: ---------------------------------------- Insert backup diskette nn in drive A ---------------------------------------- Nonprofit General Ledger User Manual Page 8.7 Chapter 8, Protecting your data where "nn" is the disk number. Repeat step 3 for each backup diskette until the C> prompt appears, indicating that all your files have been restored. NOTE -- When you restore your files like this, the files copied from the floppy diskette(s) replace the files on your hard disk. You may have to re-enter data you entered after the last time you backed up your files. If things go wrong with RESTORE The RESTORE program displays the file names as they are backed up. If file names are not displayed or the message "No files found to restore" appears, something is wrong. Check the following: - If the message "Bad command or file name" appears, the RESTORE program is not in the same directory as your data or you are not in the right directory. Use the CD command to change to the right directory and copy the RESTORE program from your DOS diskette. - Be sure you have typed the command correctly. There must be a space after the word "RESTORE" and after the colon, but nowhere else. Type a colon, not a semicolon. - Be sure you have the right backup diskettes; use the DIR command to view the directory. The files should have the same extension as your data files. Do not copy BACKUP files Do not use the DOS COPY command to copy files from your backup diskettes to the hard disk. Although the files on the diskette have the same name as your data files, they have a different internal format; and the Mailing List program cannot use them. If you copy these files onto your hard disk you will destroy your data files on the hard disk. Don't do it. Chapter 9 Error messages This chapter explains the error messages that may appear in the programs. Some error conditions just make a noise without displaying a message. This happens when you don't need a message, for instance when you try to enter too many characters in a field. Correct the entry and proceed. An error message is displayed when more explanation is called for. All error messages make a noise and display "PRESS SPACE BAR TO CONTINUE" below the message. When you see an error message, do this: 1. Press the space bar. Do not press the Enter key. The message disappears and the cursor returns to the field in error. 2. Correct the entry and proceed. Following are the error messages that appear in the programs. ACCOUNT NUMBER ALREADY EXISTS This appears when you are adding an account and the account number you have entered is already on file. You may not have duplicate account numbers. Enter a different account number. ACCOUNT NUMBER MUST BE NUMERIC This appears when you are adding an account and you enter letters or characters in the account number. You must enter digits, 0 through 9. ACCOUNT NUMBER MUST BE SIX DIGITS This appears when you are adding an account and what you enter is not long enough. Enter all six digits for the account number. Page 9.1 Nonprofit General Ledger User Manual Page 9.2 Chapter 9, Error messages ACCOUNT NUMBER NOT FOUND This appears when you are entering an account number, to post an amount to it or to change or delete it, and the number you have entered is not on file. Enter the correct number. If you forget your account numbers, you can remind yourself in two ways: - On the Main Menu, select "Print Reports" and then print the Chart of Accounts report. This gives you a list on paper to which you can refer. - On the Main Menu, select "Post Ledger Accounts." On the Post Ledger Accounts menu, select "View Chart of Accounts." This shows you a list on the screen. CAN'T DELETE -- BALANCE IS NOT ZERO This appears when you try to delete an account and the year-to-date balance or the period balance is not zero. If you were to delete the account, your books would be out of balance, so the program won't let you do it. Post an adjusting entry to make the year-to-date balance zero. If this also makes the period balance zero, you can delete the account. If the period balance is not zero, you can delete it after you close the books for the period. Closing the books for the period makes the period balance zero, but does not affect the year-to-date balance. CAN'T POST -- NOT ENOUGH ROOM IN TRANSACTION FILE This appears when you are posting ledger accounts. It means that the transaction file cannot hold more transaction records. Press Esc to stop posting, then return to the Main Menu. Select "Print Reports" and print the Transaction Journal. After it has printed you are asked if you want to clear it. If you got a full and complete copy of the Transaction Journal, go ahead and clear it. This makes room for more transactions, and you can then go back and continue posting. CANNOT CREATE <filename> This appears program when the programs are creating files. If the message says "IOResult = 5," it means that the disk directory is full. If it says "IOResult = 101," it means there is no more room on the disk. In either case, you'll have to erase some files or use another disk. Nonprofit General Ledger User Manual Page 9.3 Chapter 9, Error messages CANNOT OPEN <filename> This may mean that you specified an incorrect drive or path, or it may mean that your disk is damaged. Either enter the correct drive or path, or restore your files from your backup disk to a different disk and try again. CRITICAL ERROR This message appears when the operating system, not the program, detects an error accessing the disk or the printer. A message box pops up over the screen and tells you what kind of error it is. If you can fix the error -- for instance by closing the drive door or turning on the printer -- do so and then press Enter. If you cannot fix the error, the only thing you can do is press Esc to exit the program. If you exit the program, run the Fix option of the Utility program to be sure that your data files are not damaged. Printer error There are many causes for a critical printer error. Check to see if the printer is turned on, connected to the computer and on-line (usually indicated by a switch or light on the printer's control panel). Make sure there is paper in the printer and the ribbon is not used up. DATA FILES NOT FOUND ON DRIVE X The program cannot find all the files it needs on the drive you have entered. Enter the correct drive or restore your files from your most recent backup. DATE MAY NOT BE EARLIER THAN BEGINNING OF CURRENT PERIOD The current processing date must be within the current period, as shown on the System Dates screen when you start the General Ledger program or in the Startup program. Enter a different current processing date or change the current period. To change the current period in the General Ledger program you must select one of the "Close Books" options on the Main Menu. In the Startup program you can use the "Change Dates" option on the Main Menu. Nonprofit General Ledger User Manual Page 9.4 Chapter 9, Error messages DATE MAY NOT BE EARLIER THAN BEGINNING OF FISCAL YEAR This appears in the Startup program when you are entering or changing the system dates. The beginning of the current period may not precede the beginning of the year. Correct either the beginning of the year or the beginning of the period. DATE MAY NOT BE EARLIER THAN BEGINNING OF NEXT PERIOD This appears when you are closing the books for the current period or for the year and are entering the end of the next period. The program fills in the beginning of the next period for you; it is the next day after the end of the current period. The end of the next period may not come before its beginning. To proceed you'll have to correct your entry. DATE MAY NOT BE EARLIER THAN END OF CURRENT PERIOD The current processing date must be within the current period, as shown on the System Dates screen when you start the General Ledger program or in the Startup program. Enter a different current processing date or change the current period. To change the current period in the General Ledger program you must select one of the "Close Books" options on the Main Menu. In the Startup program you can use the "Change Dates" option on the Main Menu. DATE MAY NOT BE LATER THAN END OF CURRENT YEAR This appears when you are closing the books for the current period and are entering the end of the next period. You have to enter the end of the next period, and it may not be after the end of the year. To proceed you'll have to correct your entry. DATE MAY NOT BE EARLIER THAN END OF NEXT PERIOD This appears in "Close Books -- End of Year." The date you enter for the end of the next fiscal year must not be earlier than your entry for the end of the next period. Correct your entry for the end of the period or the end of the year. DATE MAY NOT BE EARLIER THAN LAST PROCESSING DATE The current processing date must on or after the last processing date shown on the System Dates screen when you start the General Ledger program or in the Startup program. You cannot go backwards in time in this program, so you must correct your Nonprofit General Ledger User Manual Page 9.5 Chapter 9, Error messages entry. In the Startup program you can also change the other system dates. DEBIT/CREDIT MUST BE 'D' OR 'C' When you are adding accounts, the code for whether it is a debit account or a credit account must be 'D' for debit or 'C' for credit. Correct your entry. DIDN'T FIND AN ACCOUNT FOR XXX This appears when the program is printing the budget report and indicates that your data files are damaged. Run the Fix option of the Utility program to repair them. ERROR CREATING CLEARING ACCOUNT This appears in the Startup program when you are setting up your accounts for the first time. The InterFund Clearing account, required by the program, could not be created. Your disk or directory may be full, or the disk may be damaged. Erase unneeded files or use a different disk and try again. FATAL ERROR -- CAN'T FIND CLEARING ACCOUNT This means that your data files are damaged. Run the Fix option of the Utility program to repair them. FIFTH DIGIT MUST BE 0 OR 1 In all account numbers the fifth digit, indicating the funding source, may only be 0 or 1. Funding source codes are limited to 00 through 19; see Chapter 3 for an explanation of the account number codes. Correct your entry and try again. <filename> CONTAINS NO TRANSACTIONS This appears in the Utility program when you are printing the Audit Trail report and the file you have specified does not contain any transactions. Enter a different file name and try again. <filename> NOT FOUND This appears in the Utility program when you are running the "Audit" option and the transaction file you have specified does not exist. Correct your entry and try again. Nonprofit General Ledger User Manual Page 9.6 Chapter 9, Error messages FIRST DIGIT MUST BE 1 THROUGH 6 In all account numbers the first digit, indicating the major category (Assets, Liabilities, etc.), may only be 1 through 6. See Chapter 3 for an explanation of the account number codes. Correct your entry and try again. INVALID PATH This appears when you are entering a path and file name and the name is not formed according to the rules of DOS. See your DOS manual. You'll have to correct your entry to proceed. NOT IN BALANCE This appears when you are posting ledger accounts and the debits do not equal the credits. Correct either the debits or the credits and make them equal; then you'll be able to post the transaction. PERIOD BUDGET MAY NOT BE GREATER THAN YEARLY BUDGET When you are entering budget information for an account, the budget for one accounting period may not be larger than the budget for the entire year. Correct either the yearly budget or the period budget. SORT CANCELED BY USER SORT FAILED -- RESULT CODE IS nn These appear in the Utility program, in the Audit option. The program is sorting the Transaction file and the sort cannot proceed. Some of the result codes are as follows: 3 You need more RAM (Random Access Memory) in your computer. If you have installed any "pop-up" or "terminate and stay resident" programs such as Sidekick, exit the program and remove them from memory, and then try again. Otherwise, you'll have to install more memory. 10 There was an error writing to the disk. Either the disk is full or there is a bad area on the disk. Exit the program and erase unneeded files, and then try again. 11 There was an error reading the disk. Your disk is probably defective. Copy your data files to a different disk and try again. Nonprofit General Ledger User Manual Page 9.7 Chapter 9, Error messages 12 A temporary work file could not be created, probably because the disk or the directory is full. Exit the program and erase unneeded files, and then try again. If the message contains a different result code, your data files may be damaged. Run the Fix option of the Utility program to repair them. SOURCE FILES NOT FOUND This appears in the Fix option of the Utility program. The program cannot find the data files in the path you have entered. Correct your entry, or insert the correct disk and try again. THE LEDGER FILE IS FULL This appears when you are adding ledger accounts to your system. You cannot have more than 32,000 accounts. THE TRANSACTION FILE CONTAINS NO TRANSACTIONS This appears when you try to view transactions on the Post Ledger Accounts menu and no transactions have been recorded. You'll have to post some transactions before you can view them. It also appears in the Utility program when you are printing the Audit report. There are no transactions recorded in the file you have named, so you cannot print the report. Enter a differ- ent file name and try again. THERE IS NOT ENOUGH SPACE ON DRIVE X The current operation cannot proceed because you do not have enough free disk space. You'll have to exit the program and erase unneeded files before you can finish the operation. THIS IS A RESERVED ACCOUNT -- YOU MAY NOT CHANGE IT THIS IS A RESERVED ACCOUNT -- YOU MAY NOT DELETE IT You cannot change or delete the InterFund Clearing account. Choose a different account. THIS IS A SYSTEM-GENERATED TRANSACTION. YOU CANNOT EDIT THE MEMO. This appears when you are viewing transactions on the screen and a transaction has too many components to fit on the screen. The only transactions this big are those generated by the program Nonprofit General Ledger User Manual Page 9.8 Chapter 9, Error messages when it is closing the books. In this case, only part of the transaction is shown and you cannot change the memorandum field. TRAN JOURNAL IS FULL -- YOU MUST PRINT AND CLEAR IT This appears when you are closing the books for the year. The program creates transactions and records them in the transaction journal. If it becomes full during this process you have to print and clear it before you can go on. You can avoid this by clearing the transaction journal before you close the books for the year. TRANSACTIONS HAVE BEEN POSTED YOU MAY NOT RUN THE STARTUP PROGRAM NOW This appears if you run the Startup program, NGLSTART, after having posted transactions in the General Ledger program. Once you have started posting transactions you may not run the Startup program because in it you can change balances without creating an audit trail. If you need to add or delete accounts, you can do so in the General Ledger program. You'll have to post a transac- tion to change the balance from zero. TURBO ACCESS ERROR This indicates a problem reading, writing or creating a file. The following table shows the most common errors: Error number What it means What to do 4 Too many The operating system Create a CONFIG.SYS open files cannot open another file on your boot file. You do not have disk on in the root a CONFIG.SYS file on directory of your on your boot disk or hard disk. The file you have one but it must include the does not have a FILES command "FILES = n," command or the FILES where n is at least command does not 16. See your DOS specify a high enough manual For more number. FILES must be information about at least 16. the CONFIG.SYS file. Nonprofit General Ledger User Manual Page 9.9 Chapter 9, Error messages 100 Disk The program is trying Run the Fix option Read to read past the end of the Utility Error of the file. This is program. It was caused by a bad index designed for just file. The index says this type of there is a name record problem. at a certain place in the master file, but that location does not actually exist in the master file. For errors not in this table, use the Fix option of the Utility program to rebuild your data files and then try again. If that does not work, contact me. YOU CANNOT CHANGE COLORS ON A MONOCHROME MONITOR This means just what it says. YOU MAY NOT POST TO THE CREDIT ACCOUNT This appears when you have selected "Credit one account with multiple debits" on the Post Ledger Accounts menu and you enter the credit account number under the debits. The program won't let you do this; enter a different account number. YOU MAY NOT POST TO THE DEBIT ACCOUNT This appears when you have selected "Debit one account with multiple credits" on the Post Ledger Accounts menu and you enter the debit account number under the credits. The program won't let you do this; enter a different account number. Chapter 10 Understanding the Reports This chapter explains each of the reports produced by the Nonprofit General Ledger system. Sample reports are shown at the end of the chapter; these do not appear in the on-disk version of this manual. You print the reports through the Main Menu option, "Print reports;" see page 6.23. Since the program posts transactions to the ledger accounts as they are entered, without waiting for a "batch" posting run, you may print any of these reports at any time and the information will be current. Report Heading Each report contains the following information at the top of each page: - Organization Name - Federal Employer ID Number (EIN) - "Eff. date", or effective date -- the Current Processing Date when the report was printed. - The report title - The page number - The date and time the report was printed. Unlike the effective date, this is the actual date and time from your computer's clock when the report was printed. - "Last Tran" -- the number of the last transaction that was entered before the report was printed. The effective date and the last transaction number provide an audit trail; the information in each report is current as of the date shown and reflects all data entry up to and including the last transaction number. Page 10.1 Nonprofit General Ledger User Manual Page 10.2 Chapter 10, Understanding the Reports Trial Balance The Trial Balance report lists each account and its debit or credit balance. The total for each major category (Assets, Liabilities, etc.) is printed below the category, and final totals of all debits and credits are at the bottom. The program will not accept out-of-balance transactions, so the debits always equal the credits. To use this report as a worksheet for making accruals and adjusting entries, print it at the end of each fiscal period, before closing the books or printing the Income Statement and Balance Sheet. To the right of the account balances is some space for you to pencil in adjustments. Budget listing This lists each revenue and expense account and its budgeted balance for the period and the year. It also shows total budgeted revenues, expenses and net income. Budget Variance Report This report is for management's use; it shows the amount received or spent for each revenue and expense category, the amount budgeted, and the variance or difference between the two. In addition, it shows the amount remaining in each category. The report may be printed in four ways: - for all individual revenue and expense accounts - by service program - by funding source - as a functional summary. All four show the same information, but classified differently. You can see the differences in the account numbers. - The report by All Accounts shows the actual amount booked and the budget for each ledger account, regardless of service program or funding source. Each account number is shown in full. - The report by Service Program sums the accounts in each functional category for all funding sources for a particular service program, and one report is printed for each service program. The account number shows only the functional category (first three digits) and the service program (fourth digit), but leaves off the funding source code (last two digits) because accounts for different funding sources are summed. Nonprofit General Ledger User Manual Page 10.3 Chapter 10, Understanding the Reports - The report by Funding Source sums the accounts in each functional category for all service programs funded by a particular funding source, and one report is printed for each funding source. The account number shows only the functional category (first three digits) and the funding source (last two digits), leaving off the service program code (fourth digit) because accounts for different service programs may be summed by funding source. - The report by Functional Summary sums the accounts in each functional category for all service programs and funding sources; thus only the functional category (first three digits) is shown. This allows you to see if you are spending too much, for instance, on consulting fees or travel, without regard to the service program or funding source. Following is an explanation of each column on the report. Acct # The full account number is shown only in the report for all accounts. In the others an abbreviated account number indicates that certain items have been summed. For instance, in the service program report only the first four digits are shown, three for the functional category (phone expense, postage expense, etc.), and one for the service program. The last two digits are left off because amounts from all funding sources for the service program are included in one line item. Acct title Since more than one account may have been summed into one line item, the account title is the title of the first account for the functional category and service program shown. In the example report for Service Program 1, for instance, the account title for the revenue account, 5001, is the title of account 500100, but the amount shown under each column is the sum of two accounts, 500100 and 500101. Current period actual The amount actually received (for revenues) or expended (for expenses) in the current period. This figure reflects all amounts posted to the account during the period. Current period budgeted The amount budgeted for the period. You can change this figured by using the Main Menu option "View ledger accounts, change title & budget." Nonprofit General Ledger User Manual Page 10.4 Chapter 10, Understanding the Reports Current period variance For revenues, this is the amount actually booked less the amount budgeted. For expenses, this is the amount budgeted less the amount actually booked. A positive variance means more was received or less spent than budgeted; a negative variance means less was received or more spent than budgeted. A positive variance is favorable and a negative variance is unfavorable. Current period var% The variance expressed as a percent of the budget. Year to date actual The amount actually received (for revenues) or expended (for expenses) since the beginning of the fiscal year. This figure reflects all amounts posted to the account during the year. Year to date budgeted The amount budgeted for the year to date. In the example reports, with an effective date of 3/31/84, the year to date budget is one fourth of the yearly budget, reflecting the budget for one quarter. If your revenues or expenses are not typically spread evenly over the year, this could be misleading. You can change this figured by using the Main Menu option "View ledger accounts, change title & budget." Year to date variance For revenues, this is the amount actually booked less the amount budgeted. For expenses, this is the amount budgeted less the amount actually booked. A positive variance means more was received or less spent than budgeted; a negative variance means less was received or more spent than budgeted. A positive variance is favorable and a negative variance is unfavorable. Year to date var% The variance expressed as a percent of the budget. Remaining This is the total yearly budget less the year-to-date actual amount. For management purposes this may be more meaningful than the variances. On the example report for Service Program 1 the Remaining column shows that all the budgeted revenue has already been raised and $31,876.74 remains to be spent in the budget for that service program. Nonprofit General Ledger User Manual Page 10.5 Chapter 10, Understanding the Reports Totals Totals for revenues and expenses are shown at the end of the report. Grand Totals for the entire organization are shown at the end of the last service program and funding source report. Grand totals sum all service programs or all funding sources. Income Statement The Income Statement may be produced at any time and all information will be current as of the date and last transaction shown in the heading of the report. A separate income statement is produced for all accounts -- this is a consolidated statement for the entire organization -- and each service program and funding source. Functional category totals Each account is shown on a separate line. When there is more than one account for a functional category, the total for that functional category is printed to the right. In the example report for All Accounts, for instance, there are two accounts for functional category 616, Salary and Wages. The total for all the 616 accounts is shown on a separate line in a column to the right. The account number is printed as the functional category only (first three digits), indicating that it is a sum of more than one funding source. Percentages Each line is shown as a percent of total revenues. Major category totals Total Revenues are shown below all the revenue items; Total Expenses are shown below all the expense items; and Net Income, Revenues less Expenses, is shown at the bottom of the report. Income statement summaries After the income statements for each service program and funding source the totals are summarized according to service program and funding source. The total revenues, total expenses and net income for each service program or funding source are listed on a single line, and the total for the entire organi- zation is given below them. The amount on each line is shown as a percentage of the amount for the entire organization. On the Service Program summary, for instance, 14.53% of the organization's revenues came from Service Program 0, 77.82% from Service Program 1, and 7.66% from Service Program 2. This enables you to see relative size, in financial terms, of each service program and funding source. Nonprofit General Ledger User Manual Page 10.6 Chapter 10, Understanding the Reports Balance Sheet The balance sheet may be produced at any time and all information is current as of the date and last transaction shown in the heading of the report. The balance sheet is produced as if the books were being closed, but they are not in fact closed. You must close the books at the end of the year by using the Main Menu option "Close books -- end of year;" a final income state- ment and balance sheet are produced as part of that process. The program only prints a consolidated balance sheet for the entire organization, not for each service program and funding source. It does not support true fund accounting. You should set up a fund balance account for each combination of service program and funding source that is valid for your organization, as explained in Chapter Three, but assets and liabilities for all funds are commingled. Functional category totals As in the income statements, each account is shown on a separate line and if there is more than one account for a functional category, the total for that category is printed to the right. On the example report shown, this applies only to fund balances; the sum of all the fund balances is printed on a total line to the right. Fund balances and InterFund Clearing Account Please note that the InterFund Clearing Account (account 400000) and any other accounts beginning with "4" are treated as fund balances and are added in with the 300 accounts to get total fund balances. Before closing your books for the year, we recommend that you post adjusting entries as needed to clear all accounts beginning with 4 to the appropriate fund balances. Percentages Each line is shown as a percent of total assets. Because your books always balance, total liabilities and fund balances always equal total assets. System Control Information The System Control Information report lists pertinent information having to do with the state of your whole general ledger system. Following is an explanation of each section of the report. Organization The organization's name, address and ID numbers are shown. Nonprofit General Ledger User Manual Page 10.7 Chapter 10, Understanding the Reports Dates The current processing date and the dates that define the current period and fiscal year are shown. There are only three ways to change the current processing date: - Exit the program and start it up again, entering a new date. - Close the books for the period. This sets the current processing date to the first day of the next period. - Close the books for the year. This sets the current processing date to the first day of the next year. Data files This shows the disk drive on which your data files were located when the report was printed. Ledger accounts The maximum number of accounts is predefined in the program; you cannot change it. The number used is the number of ledger accounts you currently have in use. The number left is the maximum less the number used. Transaction journal entries This section shows how much of the Transaction Journal has been used up and how many entries remain free. When all the entries are used up you cannot post any more transactions. To clear the Transaction Journal file to make room for more entries you must first print the Transaction Journal report. This section also shows the last transaction number used. This is not the same as the number of entries. Each transaction may take one or more entries in the Transaction Journal file. If the transaction consists of one debit and one credit, then there is one transaction journal entry for it; if there is more than one debit or more than one credit then there is a transaction journal entry for each debit and each credit. (Closing the books at the end of the year uses two additional entries, one for the memo description for closing the revenue accounts and the other for the memo description for closing the expense accounts.) This section shows the maximum number of transaction journal entries allowed (this is predefined), the number currently used and the number left. If the number left is very small then you should print the transaction journal and clear it. The last transaction number is the same as the "Last tran" number that appears on the other reports, and is used as an audit trail. You know you have a complete audit trail if you have Transaction Journal reports for all the numbers from the beginning of the year to the present. Nonprofit General Ledger User Manual Page 10.8 Chapter 10, Understanding the Reports Printer This section shows - Whether your printer uses compressed print mode - If so, what its initialization and reset codes are - Whether it uses a form feed code to advance the paper to a new page. You can change all this by using the Main Menu option "View/change system control information." Chart of Accounts This report lists each account number, its title, whether the normal balance of the account is a debit or a credit, and its service program and funding source code. You should keep this chart handy whenever you are posting transactions so you can make sure you post to the proper accounts. You may wish also to write down a list of the name of each service program and funding source next to its code as a further aid to posting. At the end of the report the maximum number of accounts, the number used and the number left available is shown. Transaction Journal This report lists each transaction that you posted, in chronological order. It serves as an audit trail and as a way for you to check the accuracy of your postings. Because transactions are posted directly to the journal accounts as they are entered, there is no way to edit the transaction amounts in a batch before they are posted. If you made a mistake, you must make a correcting entry. Examine the transaction journal after you post transactions to verify that you have posted them correctly. Save all copies of the transaction journal for your accoun- tant or auditor. You can be sure that you have a record of all transactions by noting the transaction number, labeled "TN" beneath the date. Your file of transaction journal reports should contain a record of each transaction number in sequence, with none missing. Following is an explanation of the items in each transaction journal entry. Nonprofit General Ledger User Manual Page 10.9 Chapter 10, Understanding the Reports Date This is the "current processing date" in effect when you posted the transaction. If you save up your checks to post at the end of the month, this will not be the date of each check; it is the date the transaction was actually posted. TN Beneath the date is shown the Transaction Number. Each transaction is given a number in sequence; this serves as an audit trail to make sure you have a record of each transaction. Please note that this number is the number of the transac- tion taken as a whole, regardless of the number of debit and credit entries within the transaction. A complete transaction may take one or more entries in the transaction journal. The Transaction Number does not reflect the number of entries in the transaction journal file. When the transaction number reaches 32767, the next transaction starts over at number 1. Acct # The account number of each debit and credit account affected by the transaction is shown, the credits indented four spaces to the right under the debits. Acct title The account title of each debit and credit account is shown next to the account number. Dr and Cr amounts The debit and credit amounts posted are shown under the captions "dr" for debits and "cr" for credits. Memo description Beneath the debit and credit entry lines is printed the memo description of the transaction. Audit Trail Report This report is printed from the Utility program, available only to registered users. Chapter Seven describes the program and Appendix E tells how to order it. The report is similar to the Transaction Journal, but lists the debit and credit amounts by account number, not by transaction number. Use this report to track down all the transactions that affected an account during the period covered by the report. You can print this for the Nonprofit General Ledger User Manual Page 10.10 Chapter 10, Understanding the Reports current transaction journal file or for a transaction history file. The file name and its transaction numbers and dates are printed at the top of each page. The body of the report shows, for each account number, the transactions that affected it and the debit and credit amounts. The last line for the account number shows the net change in the account balance, either a debit amount if the debits exceed the credits, or a credit amount if the credits exceed the debits. Appendix A Fundamentals of Nonprofit Accounting This chapter explains basic accounting principles as they apply to nonprofit accounting. It is not a substitute for a textbook on the subject; it is meant only to give an overview. It explains fundamental accounting principals with examples from both for-profit and nonprofit accounting. It shows how nonprofit accounting resembles and also differs from for-profit accounting. Fundamental Principles A nonprofit organization differs from a for-profit in that its purpose is not to make money for its owners but instead to provide some benefit or service to the public. The organization might in fact make a profit, but the owners of the organization may not take the profits out of the organization. In most cases the only owner is a corporation set up for a benevolent or charitable purpose. Despite this basic difference there are also fundamental similarities between nonprofits and for-profits. Both nonprofits and for-profits are economic entities. Their activities have economic effects both on others and on themselves, internally. (Their activities have all sorts of other effects too, but all we are concerned with are the economic ones.) The task of accounting is to record and report the economic effects of organization's activity on the organization itself. More precisely, "Accounting focuses on the measurement and reporting, in monetary terms, of the flows of resources into and out of an organization, of the resources controlled by the 1 organization, and of the claims against those resources." There are generally accepted accounting principles that govern the process of measuring and reporting, and these are the same for nonprofits and for-profits. Following are three fundamental accounting equations: 1. Assets = Liabilities + Owners' Equity (Fund Balances) _________________________________________________________________ 1. Welsch, Glenn A. and Anthony, Robert N., Fundamentals of Financial Accounting (Homewood, IL: Richard D. Irwin, Inc., 1974), page 3. Page A.1 Nonprofit General Ledger User Manual Page A.2 Appendix A, Fundamentals of Nonprofit Accounting 2. Profits = Revenues - Expenses 3. Debits = Credits Assets Assets are those things owned by the organization that have value expressed in dollar terms. Cash on hand or in the bank, furniture and equipment, and someone's promise or obligation to pay you money are all assets. Assets should be valued at their original cost less any accumulated depreciation or other reduction in value (fire damage, for instance). Organizations that are exempt from federal income tax may not be required to depreciate their assets, but I recommend that you do so because anybody from a for-profit environment will not trust your financial statements if you do not show depreciation. Liabilities Liabilities are the debts of the organization, or claims that other people have on the organization. In general, liabilities are either (1) assets you have borrowed or (2) expenses incurred that have not yet been paid. If someone lends you money or you buy something on credit, the amount of money you owe is a liability. Owners' Equity and Fund Balances The concept of owner's equity is where nonprofits differ from for-profits the most. In nonprofit organizations this is called "Fund Balances" instead of "Owner's Equity." To understand the concept, we shall look at for-profits first. Owners' Equity represents assets that have been placed in the organization by the owners rather than from borrowing. Equity enters an organization in two ways: (1) through investment by the owners, and (2) through profits retained in the organization. Equity leaves an organization (1) when the owners withdraw assets for their own use, and (2) through business losses. The terms "capital" and "net worth" mean owners' equity. In nonprofit organizations nobody invests any money if by "investment" we mean hoping to get more money back later. In nonprofit organizations the owners may not withdraw assets for their own use. Instead assets are donated, to be used for the charitable purpose of the organization. For this reason what corresponds to equity in for-profits is not called "equity" but "fund balances." This term is used because money earmarked for specific purposes is treated as being in separate funds. A "fund" is defined as "a group of self-balancing accounts, which are used to account separately for the receipt and use of contributions.... Each fund group is treated as a separate entity with self- Nonprofit General Ledger User Manual Page A.3 Appendix A, Fundamentals of Nonprofit Accounting 2 balancing assets, liabilities and fund balances." Nonprofit organizations often need to make sure that certain funds are used for specific purposes; they may be morally or legally obligated to the people who donate money to them to see that money donated for one purpose is not used for another. The total of all fund balances corresponds to equity in for-profit accounting. Each separate fund balance shows the amount of "equity" dedicated to its fund. Note: The Nonprofit General Ledger program only partially supports this concept of fund balances. You can assign revenues and expenses to different categories and print income statements by funding source and by service program. You can only print a consolidated balance sheet, however. Just as equity can increase or decrease in a for-profit organization, fund balances can increase or decrease in a nonprofit. They increase through profits retained in the organization, that is when the organization takes in more money than it spends, and they decrease through the equivalent of "business losses," that is when the organization spends more money than it takes in. The first accounting equation states that assets must equal liabilities plus equity. This just means that of all the things of value held by the organization, creditors can legally claim a certain portion and the owners (for-profit) or the organization itself (nonprofit) can legally claim what's left. To go further, in nonprofits "what's left" is often divided into separate fund balances, corresponding to the different charitable activities to which the funds are dedicated. Profits Profits are the money made by an organization during a specified period of time, determined by subtracting all expenses for the period from the revenues generated during the period. Profit is also known as "net income." Nonprofits may in fact make a profit in this sense or take a loss if expenses are greater than revenues. Revenues Revenues are the gross amount of money generated by organization operations during a specified period of time. For most businesses, revenues equal sales. For nonprofits revenues come from donations and grants as well as, to a lesser extent, _________________________________________________________________ 2. Accountants for the Public Interest, How To Keep a Nonprofit Organization's Books (Newark, NJ: Accountants for the Public Interest, no date, pp 55, 56). This is a very useful book, and contains a good bibliography. Nonprofit General Ledger User Manual Page A.4 Appendix A, Fundamentals of Nonprofit Accounting sales of goods and services. Revenues are often called "support" to differentiate them from the sales revenues of a for-profit. In the Nonprofit General Ledger program, however, they are called "revenues." Expenses Expenses are the cost of performing the organization's function during a specified period of time. Expenses for a for- profit are the cost of doing business; for a nonprofit they are the cost of providing the services the organization is set up to provide. In the accrual method of accounting, explained below, revenues and expenses are matched so that all the expenses incurred in generating revenues during a certain period of time are recorded for that same period. Debits and Credits Debits and credits are simply a conventional way of categorizing assets, liabilities, equity or fund balances, revenues and expenses. Whenever a bookkeeping debit entry is made, a corresponding credit entry must also be made. This ensures that the books balance and that the information flow is correct. For assets, a debit increases the account and a credit decreases the account. For liabilities and equity or fund balances, the reverse is true. Expenses decrease fund balances and revenues increase them, so a credit increases a revenue account, and a debit increases an expense account. Here is a chart: Type of Normal account Increase Decrease Balance Asset Debit Credit Debit Liability Credit Debit Credit Fund Bal. Credit Debit Credit Revenue Credit Debit Credit Expense Debit Credit Debit The following chart puts all three accounting equations together: Nonprofit General Ledger User Manual Page A.5 Appendix A, Fundamentals of Nonprofit Accounting Assets = Liabilities + Equity Dr Cr Dr Cr Dr Cr + - - + - + Revenues Expenses Dr Cr Dr Cr - + + - Example: For-profit To explain these concepts, let's follow an extremely simplified for-profit example. Suppose you buy $1000 worth of clothes on credit which you then sell for $1100, making a $100 profit. In accounting terms what happens is this: Item description Dr Cr Balance 1. Inventory $1000 1000 dr Accounts Payable 1000 1000 cr (Purchase inventory on credit) 2. Cash 1100 1100 dr Revenue 1100 1100 cr (Sell inventory at a profit) 3. Expense (cost of goods sold) 1000 1000 dr Inventory 1000 -0- (Record reduction of inventory) At the end of these transactions your financial statements would look like this: Balance Sheet Assets: Cash $1100 Inventory -0- Total Assets: 1100 Liabilities: Accounts Payable 1000 Equity: Retained Earnings 100 --- Total Liabilities & Equity 1100 Nonprofit General Ledger User Manual Page A.6 Appendix A, Fundamentals of Nonprofit Accounting Income Statement Sales 1100 less: Cost Of Goods Sold 1000 Net Sales 100 Other Expenses -0- --- Profit 100 All three accounting equations have been satisfied: - Your business has $1100 in assets, namely cash. Of this you owe $1000; this is a liability. The remainder, your profit of $100, is owner's equity. - Your profit of $100 equals your revenues of $1100 less the expense of purchasing the goods, $1000. - For each bookkeeping entry, the debits equaled the credits, thereby preserving the integrity of the accounting equation. Example: Nonprofit A similar scenario for nonprofits would differ in one main respect. You would not sell anything to make a profit; instead you would incur expenses to perform a service. Let us suppose that you raise $1000 in donations from the general public and spend $900 to buy food for hungry people and contract with a trucker to transport it to them for $50. In accounting terms, what happens is this: Item description Dr Cr Balance 1. Cash $1000 1000 dr Revenue 1000 1000 cr (Public support) 2. Food 900 900 dr Cash 900 100 dr (To record purchase of food) 3. Food expense 900 900 dr Food 900 -0- (To record reduction of food inventory as food is distributed) 4. Transportation expense 50 50 dr Accounts payable 50 50 cr (To record cost of transporting food) At the end of these transactions your financial statements would look like this: Nonprofit General Ledger User Manual Page A.7 Appendix A, Fundamentals of Nonprofit Accounting Balance Sheet Assets: Cash $ 100 Food Inventory -0- Total Assets: 100 Liabilities: Accounts Payable 50 Fund Balance: 50 --- Total Liabilities & Fund Balance 100 Income Statement Revenue (Public support) 1000 Food Expense 900 Transportation Expense 50 --- Net Income 50 As you can see, the accounting process is quite similar to for-profit accounting. The same types of economic events take place, they are simply called by different names. Cash vs. Accrual Accounting There are two methods of recording the revenues and expenses for a given period, the cash basis and the accrual basis. Which method you should use depends on the requirements of the people who fund your organization. Cash basis The cash basis is so simple that it hardly needs explaining. Revenues are recognized when the organization receives cash and expenses are recognized when the organization disburses cash. In the for-profit example, the cash basis would grossly misstate the profits because the business received $1100 but did not pay out any cash. In the nonprofit example, treating expenses on a cash basis would overstate the fund balance by $50. Accrual basis When computing the for-profit's net income under the accrual method, cash receipts and disbursements are disregarded. In- stead, when the business sells goods or performs services, income is earned regardless of whether cash was received or not. Simi- larly, expenses incurred in order to produce the revenues for the period are recorded in that period regardless of when cash is Nonprofit General Ledger User Manual Page A.8 Appendix A, Fundamentals of Nonprofit Accounting paid out. In the for-profit example the expense, Cost of Goods Sold, was recorded for the period even though no cash had been disbursed. Thus, profits were accurately stated. Similarly, in the nonprofit example the transportation expense was recognized during the period even though no cash was paid out. This shows that the organization is obligated to pay the trucker. At the end of the period, the trucker has a legal claim to $50 of the organization's assets; the other $50 is retained in the organization. This $50 is not equity because no owner can withdraw it for his or her own benefit; instead it is called a "fund balance," meaning that these funds are available for future benevolent activities of the organization. You would also exclude expenses incurred to provide services in the future from the current period's income statement. Perhaps the organization must pay in advance before receiving the food it intends to distribute. If it pays in the current period for goods to be received in a future period, the expense would be posted in the future period, not the current period. Similarly, the cost of acquiring a fixed asset should be allocated over the useful life of the asset, not all in the period in which it was acquired (this is called "depreciation"). The idea of accrual accounting is to allocate to each period (1) the income that comes from the operations for that period, and (2) the sum of all expenses connected with earning that income. This is called the "matching principle," because costs are matched to revenues in each period. For nonprofits, you allocate to the period all expenses connected with providing service for the period. The accrual method is clearly more accurate. You may, however, need to use the cash method or a combination, depending on your funding source. - Most nonprofits use a modified accrual system. They are on a cash basis throughout the year, and convert to an accrual system at the end of the year. Throughout the year, expen- ses are counted as expenses when actual cash disbursements are made, not before. At the end of the year, general journal entries record expenses that have been incurred but not yet paid. The reason for this is simple. When com- paring a monthly expenditure report against an organiza- tion's records, auditors want to see canceled checks, not unpaid bills. This is particularly true of governmental agencies. Most have strict guidelines regarding accrued expenses, and many will allow accrued expenses only in the last month of the contract or grant. - When you receive grant money, you may have to call it a payable (deferred support) instead of revenue. If it is a reimbursement for expenses already incurred, it is indeed revenue; in effect, it is payment of a contract or grant Nonprofit General Ledger User Manual Page A.9 Appendix A, Fundamentals of Nonprofit Accounting receivable. If it is an advance, however, it is a contract or grant payable, a liability, not revenue. You owe someone so many dollars in services. Since this is usually laid out in line item categories, you actually "earn" this money (recognize revenue) as you pay the bills incurred in providing the services. The earning of revenue is triggered by your cash disbursements. Monies left over in deferred support at the end of the year are either applied in the next fiscal year (carryover funds) or sent back to the source (uncaptured funds). - If all your support is from members or the general public, and not from foundations or governmental agencies, you have more flexibility. I recommend that you accrue expenses but treat revenues on a cash basis. On an accrual basis, you would record a pledge of support as income even though you have not yet received the cash. But a pledge of support is not a legal obligation. Even if it were, you would not sue the donor if they failed to pay because it would alienate other donors. In other words, you cannot really count on getting the support until you actually get it. With accrued expenses (incurred, but not yet paid), however, you can count on the fact that you must pay. The Nonprofit General Ledger program will accommodate all these methods. It is up to you, with advice from your accoun- tant, to set up your chart of accounts as appropriate. The Balance Sheet The balance sheet depicts the financial condition of an organization at a particular point in time. It is a summary of the assets, liabilities and owners' equity, or fund balances of the organization. The Income Statement The income statement summarizes the operations of the organization over a specified period of time. The beginning and ending dates must be specified; a caption reading "for the month (or year) ending ..." is OK. The income statement for a non- profit is often called the "Statement of Support, Revenues and Expenses," although the Nonprofit General Ledger program just calls it the "Income Statement." It lists the revenues received and the expenses incurred by the organization during the period, with the net income (profit or loss) shown at the bottom. Nonprofit General Ledger User Manual Page A.10 Appendix A, Fundamentals of Nonprofit Accounting A note on depreciation Accumulated depreciation measures how much of the value of a fixed asset on the books has been used up, or expensed, as of the balance sheet date. As the assets are consumed by the organi- zation, the consumption is recognized through depreciation. For instance, if the organization purchases a truck whose useful life is three years, one method of depreciation (the straight-line method) would allocate one third of the cost to the first year, one third to the second year, and one third to the last year. Each year one third of the value would be debited to depreciation expense and credited to accumulated depreciation. Thus, the "book value" of the asset is the cost less accumulated depre- ciation. Nonprofit organizations which are exempt from federal income tax are not required by the Internal Revenue Service to depreciate their assets. Nevertheless, I encourage you to do so because your financial statements will make a lot more sense to people from a for-profit background. Also, assets do in fact deteriorate over time; a three-year-old truck is worth less than a brand new one. Depreciation more accurately reflects the real state of your assets than failing to depreciate. For each of your depreciable assets, set up a contra-account called "Accumulated depreciation." This should immediately follow the associated asset account and will normally have a credit balance in order to offset the debit balance of the asset. At the end of each year you should post a debit to depreciation expense and a credit to accumulated depreciation for each depreciable asset according to a predetermined schedule. The yearly accounting cycle Revenue and expense accounts start off with a zero balance at the beginning of the fiscal year and increase throughout the year as donations are received and expenses incurred. The fund balance accounts are not changed throughout the year. (In for- profit accounting the owners equity account may increase or decrease if the owner contributes or withdraws capital directly, or if the company sells or buys back stock. Such transactions do not take place in nonprofit organizations.) The fund balances change only at the end of the fiscal year when the books are closed. The revenue and expense accounts are zeroed out then, and the net income or loss is posted to the fund balance accounts. The revenue and expense accounts are thus prepared for the next year, and the fund balances are updated to reflect the net effect of all the transactions during the year. Appendix B Examples of Use This appendix gives two examples of how organizations can use the General Ledger program to keep their books. One is real, the East West Center of Austin, whose books I have kept for over a year using this program. The East West Center has several service programs but only one funding source. The other, Community Services, Inc., is made up, to give an example of how to set up your system for more than one funding source as well. The East West Center example shows a simple chart of accounts and gives procedures for the monthly bookkeeping cycle. The Community Services, Inc. example shows a more complex chart of accounts and also discusses budgeting. The East West Center The East West Center is a nonprofit, educational organiza- tion whose purpose is to educate the public about the effects of nutrition on health and in particular to teach the benefits of a macrobiotic diet and life-style. The Center does not receive any foundation support. Its support comes from three sources: member dues and donations, admissions to educational events such as cooking classes and seminars in macrobiotic philosophy, and sales of macrobiotic meals. The meal program introduces people to the benefits of macrobiotics by offering a delicious meal and letting them feel the healthy effects for themselves. Chart of accounts The Center's chart of accounts is set up for three service programs and only one funding source. "Service programs" are activities that the organization spends money on. The three programs are as follows: Program Service program code Administration and overhead 0 The meal program 1 Education 2 Page B.1 Nonprofit General Ledger User Manual Page B.2 Appendix B, Examples of Use Funding comes directly from the service programs. Member dues and donations are applied to administration and overhead; sales of meals fund the meal program; and admissions to the classes fund the education program. There is no need for keeping track of separate funding sources, so the funding source code for all accounts is 00. The organization's chart of accounts looks like this: (This is one of the reports produced by the Nonprofit General Ledger program.) ================================================================== East West Center of Austin Chart of Accounts Acct # Title Dr/Cr Service Funding Program Source Assets 100000 Cash on hand D 0 00 101000 Checking Acct FKLN D 0 00 110000 Savings Acct FKLN D 0 00 120000 Accounts Receivable D 0 00 130000 Inventory -- Food D 0 00 131000 Inventory -- Books D 0 00 132000 Inventory -- Other Merch. D 0 00 133000 Paper goods for food service D 0 00 140000 Prepaid expenses D 0 00 150000 Furniture, Fixtures & Equip. D 0 00 151000 Accum. Depreciation, FFE C 0 00 Liabilities 200000 A/P -- Food C 0 00 201000 A/P -- Books C 0 00 202000 A/P -- Other Merchandise C 0 00 210000 A/P -- Utilities C 0 00 211000 A/P -- Phone C 0 00 212000 A/P -- Other C 0 00 220000 Salaries & Wages Payable C 0 00 230000 Sales Taxes Payable C 0 00 231000 Federal W/h Tax payable C 0 00 232000 Unemp. Taxes Payable (TEC) C 0 00 233000 FICA (Soc'l Sec) tax payable C 0 00 240000 Short-term loans payable C 0 00 241000 Curr. maturities of L/T debt C 0 00 242000 Rent received in advance C 0 00 243000 Meal ticket meals "payable" C 0 00 250000 Rental Deposits C 0 00 260000 Long term loans payable C 0 00 261000 Back taxes payable C 0 00 Fund Balances 300000 Fund Balance C 0 00 Nonprofit General Ledger User Manual Page B.3 Appendix B, Examples of Use 300100 Fund Balance -- Food Service C 1 00 300200 Fund Balance -- Education C 2 00 Clearing Accounts 400000 InterFund Clearing Account C 0 00 Revenues 501100 Lunch revenue C 1 00 502100 Dinner revenue C 1 00 503100 Brunch revenue C 1 00 504000 Sales of books C 0 00 505000 Sales of other merchandise C 0 00 506100 Dessert sales C 1 00 507100 Food for resale C 1 00 508200 Classes C 2 00 509200 Workshops C 2 00 510000 Membership dues C 0 00 511000 Donations C 0 00 512200 Fees from Consultations C 2 00 513000 Other income C 0 00 514000 Rental revenue C 0 00 515000 T-shirts C 0 00 516000 Interest income C 0 00 Expenses 601000 Books for resale D 0 00 602000 Other merchandise for resale D 0 00 603100 Paper goods for meals D 1 00 604100 Kitchen supplies D 1 00 605000 Office supplies D 0 00 606000 Other supplies D 0 00 607000 Equipment D 0 00 608000 Postage D 0 00 609000 Advertising D 0 00 610000 Rent D 0 00 611000 Utilities D 0 00 612000 Telephone D 0 00 613200 Workshop expenses D 2 00 614000 Maintenance D 0 00 615000 Other expenses D 0 00 616000 Salary and wages D 0 00 616100 Salary & wages, food service D 1 00 617000 Non-food contract labor D 0 00 617100 Contract labor - meal service D 1 00 617200 Contract Labor -- education D 2 00 618000 FICA (Soc'l Sec.) expense D 0 00 618100 FICA expense -- food service D 1 00 619000 Donations D 0 00 621100 Food -- Texas Health Distr. D 1 00 622100 Food -- Whole Foods Market D 1 00 623000 Universe, food for resale D 0 00 Nonprofit General Ledger User Manual Page B.4 Appendix B, Examples of Use 623100 Food -- Universe D 1 00 624100 Food -- Other miscellaneous D 1 00 625100 Food -- Produce D 1 00 626000 Freight (non-food) D 0 00 626100 Freight (food) D 1 00 627100 Dessert expense D 1 00 630000 Bank service charges D 0 00 632000 Copying expense D 0 00 640200 Cooking class expense D 2 00 ================================================================== You can see how the service program code, position 4 in the account number, marks revenues and expenses for different pro- grams. Accounts 617000, 617100 and 617200 are a good example. 617 means contract labor expense. This expense can be applied to administration, meal service or education depending on the number in the fourth position. Please note the fund balances. It is important to set up a fund balance for each valid combination of service program and funding source codes so that the program can close the revenues and expenses to the appropriate account. Monthly cycle This section outlines how the program fits into the Center's monthly accounting cycle. After the month is over, we first reconcile the checkbook and post all the cash receipts and disbursements. Then we make adjusting entries to accrue expenses, etc. Finally we print statements and back up the data files. The steps we go through are outlined as follows, in the form of instructions to the bookkeeper: Cash receipts and disbursements - Reverse A/P and A/R adjustments from the prior month, if you have not done so already. - Reconcile the checking account, and the savings account statement. The cash should have been counted at the end of the month. - Code the checkbook stubs with the account numbers to which the disbursements should be posted. - Do the checking account. Post all checks and receipts, and all interest payments and service charges. Balance to the checkbook. If not in balance, find the error and post an adjusting entry to fix it. Nonprofit General Ledger User Manual Page B.5 Appendix B, Examples of Use For payroll checks, post the amount of the check to Salary Expense for the appropriate service program. Don't worry about payroll taxes at this point. - Do the savings account. Post all disbursements and re- ceipts, including interest payments and service charges. Balance to the savings account statement. If not in bal- ance, find the error and post an adjusting entry to fix it. - Do cash disbursements and receipts. Balance to the cash count. If not in balance, fix it. Accruals - Exit the program and start it up again. When you do so, set the date to the end of the month. The date on the following transactions should be the end of the month. - Post adjustments. These include the following: * Meal ticket adjustments. The meal tickets should have been counted at the end of the month. This adjustment is to record how many meals members have paid for but not yet eaten. (This is unique to the East West Center and may not apply to you.) * Accounts payable. Record all the unpaid bills for the month; for each one, post entries to an expense account and a liability (accounts payable) account. * Accounts receivable. If anybody owes you money, post an entry to a revenue account and to an asset (accounts receivable) account. * Payroll taxes. Record salary expense for taxes withheld, FICA (social security) expense, and FWT (federal withholding tax) and FICA payable. (We use a manual payroll journal, with separate columns for FWT and FICA withheld from the paycheck and another column for the employer's matching FICA. The sum of the columns for FWT and FICA withheld are posted as salary expense and as FWT and FICA payable. The sum of the employer's matching FICA column is posted as FICA expense and as FICA payable. We separate each of these into the three service programs. Ask your accountant to set up a similar payroll journal for you. It is a lot easier to make these entries at the end of the month than to do it while you are posting cash disbursements from the checkbook.) - Print statements for the month. If all is OK, go on; otherwise post adjustments to fix the errors. When all errors are fixed, print final statements for the month, but do not clear the Transaction Journal. (See page 6.25.) Nonprofit General Ledger User Manual Page B.6 Appendix B, Examples of Use Closing the month - Now do the pre-closing monthly backup. See "End of month backup" on page 8.3. One way to do it is as follows: * Exit the program. * Make a subdirectory on the backup disk for the month. Call it, for instance, MAY89, if the month is May, 1989. * Copy the files INDEX.NGL, LEDGER.NGL, SCR.NGL and TRANJRNL.NGL to the subdirectory. This way you can always go back to a particular month if you forgot to enter something. If you do go back, however, you'll have to re-enter everything that you entered after that in succeeding months. - Start the program again and clear the Transaction Journal. To do this, you'll have to print it first; see page 6.25. - Close the books for the month (See "Close books -- end of period," page 6.27). This changes the date to the first of the next month. - Reverse the A/P and A/R adjustments. Having done this, you are ready for a new month. Example: If you had posted $50 as a debit to Telephone Expense and a credit to A/P Phone to record the unpaid phone bill, you would now post $50 as a debit to A/P Phone and a credit to Telephone Expense. Now when you post the cash disbursements you won't have to remember to post the phone bill as a debit to A/P Phone. You can post the debit to the expense account, like all the other checks. - Exit the program and do a regular backup (see Chapter 8). Community Services, Inc. This section introduces a hypothetical nonprofit agency, Community Services, Inc. (CSI), that receives support from more than one funding source. It shows how you would set up your chart of accounts for more than one funding source as well as more than one service program. CSI's mission is to teach the economically disadvantaged youth of the community marketable skills and to develop their self-esteem so they can become productive members of the community instead of relying on welfare or crime to support themselves. Nonprofit General Ledger User Manual Page B.7 Appendix B, Examples of Use Service programs and funding sources CSI currently operates two service programs. The Prison Visitation Project sends counselors to the county prison to provide young inmates with counseling and information about job and rehabilitation opportunities. The Youth Computer Literacy Project is a new project to provide computer-based training in literacy and the use of computers for various business-related tasks such as word processing, spread sheet analysis, etc. It is a pilot project and, if successful, will be replicated throughout the country. CSI is funded through donations from the general public and through three grants. The national Foundation for Social Progress (FSP) has been a longtime funder of the Prison project and is underwriting a large part of the Computer project; these are two separate grants. In addition the County Agency for Aid to Disadvantaged Children is providing a grant to support a portion of the Computer Project. Chart of accounts Here is how this information is coded in the ledger account numbers: - Service Program 0 is reserved for overhead. - Service Program 1 is the Prison project. - Service Program 2 is the Computer project. - Funding Source 00 is Public Support, donations from the general public. - Funding Source 01 is the grant from FSP for the Prison project. - Funding Source 02 is the grant from FSP for the Computer project. - Funding Source 03 is the grant from the County for the Computer project. Thus, for CSI there are only six valid combinations of Service Program and Funding Source codes: - 000 -- overhead funded by public support - 100 -- Prison project funded by public support - 101 -- Prison project funded by FSP - 200 -- Computer project funded by public support Nonprofit General Ledger User Manual Page B.8 Appendix B, Examples of Use - 202 -- Computer project funded by FSP - 203 -- Computer project funded by the county Other combinations are invalid. The grant from FSP for the Computer project does not fund the Prison project and the county does not fund the Prison project at all, so there is no code 102 or 103. Note: this limitation is not built into the General Ledger program; it would accept combinations 102 and 103 as valid. The limitation is imposed by how CSI makes use of the program. Following is CSI's chart of accounts. (This is one of the reports produced by the Nonprofit General Ledger program.) This example is somewhat simplified; your organization may have more and will certainly have different account titles. It is meant to represent the types of accounts a small social service agency would have and to illustrate how the service program and funding source codes are applied. ================================================================== Community Services, Inc. Chart of Accounts Acct # Title Dr/Cr Service Funding Program Source Assets 100000 Cash D 0 00 101000 Checking Account D 0 00 102000 Money Market account D 0 00 103000 Misc Accts Receivable D 0 00 110000 Furniture & fixtures D 0 00 111000 Accumulated depreciation C 0 00 120200 Computer equipment D 2 00 121200 Accumulated depreciation C 2 00 Liabilities 200000 FWT payable C 0 00 201000 FICA payable C 0 00 202000 FUTA payable C 0 00 203000 State emp. taxes payable C 0 00 204000 Misc A/P C 0 00 205000 Loans payable C 0 00 Fund Balances 300000 Fund balance C 0 00 300100 Fund balance C 1 00 300101 Fund Balance C 1 01 Nonprofit General Ledger User Manual Page B.9 Appendix B, Examples of Use 300200 Fund Balance C 2 00 300202 Fund Balance C 2 02 300203 Fund Balance C 2 03 Clearing Accounts 400000 InterFund Clearing Account C 0 00 Revenues 500000 Donations -- Public support C 0 00 500100 Don., public, Prison program C 1 00 500101 Grant, FSP, Prison program C 1 01 500200 Don., public, computer prog. C 2 00 500202 Grant, FSP, Computer prog. C 2 02 500203 Grant, County, Computer prog C 2 03 Expenses 600000 Executive Director salary D 0 00 600101 Executive Director salary D 1 01 600202 Executive director salary D 2 02 601000 Admin. Assistant salary D 0 00 601101 Admin. Assistant salary D 1 01 601202 Admin Assistant salary D 2 02 602000 Business Manager salary D 0 00 602101 Business manager salary D 1 01 602202 Business Manager salary D 2 02 603000 Staff Salaries D 0 00 603101 Staff Salaries D 1 01 603202 Staff Salaries D 2 02 603203 Staff Salaries D 2 03 606000 FICA (Social Security) D 0 00 606101 FICA D 1 01 606202 FICA D 2 02 606203 FICA D 2 03 607000 FUTA (Fed Unempl. Tax) D 0 00 607101 FUTA D 1 01 607202 FUTA D 2 02 607203 FUTA D 2 03 608000 State unempl. tax D 0 00 608101 State unempl. tax D 1 01 608202 State unempl. tax D 2 02 608203 State unempl. tax D 2 03 609000 Workers' compensation ins. D 0 00 609101 Work. comp. D 1 01 609202 Work. comp. D 2 02 609203 Work. comp. D 2 03 610000 Occupancy D 0 00 610101 Occupancy D 1 01 610202 Occupancy D 2 02 611000 Utilities D 0 00 611101 Utilities D 1 01 611202 Utilities D 2 02 Nonprofit General Ledger User Manual Page B.10 Appendix B, Examples of Use 611203 Utilities D 2 03 612000 Phone D 0 00 612101 Phone D 1 01 612202 Phone D 2 02 . . . etc. ================================================================== Note that the service program and funding source codes apply to the revenue and expense categories, not to the assets and liabilities. For each functional expense category there are three or four accounts, depending on the combination of service program and funding source which is expected to pay for the expense. The Executive Director's salary, for instance, can be paid from any of three combinations. For completeness there could be six accounts for each expense category, one for each valid combination of service program and funding source, but combinations such as public support for the prison program for which nothing is budgeted are omitted to help prevent data entry errors. Additional accounts can be added at any time if need be. There are only two accounts for Depreciation Expense, 640000 and 640200. The only depreciable assets are furniture and fixtures and the computers used in the Computer project, and neither FSP nor the county make any provision in their grants for depreciation expense, so the only possible combinations are 000, overhead funded by public support, 100, the Prison project funded by public support, and 200, the Computer project funded by public support. Since management has elected to include all deprecia- tion expense other than that for the computers in overhead, there are only two Depreciation Expense accounts. The program prints income statements for each service program and funding source; the information for these reports comes from the codes embedded in each account number. The program prints a balance sheet only for the entire organization, however, so the service program and funding source codes are not needed in the asset and liability categories. (For clarity's sake the asset accounts Computer Equipment and the associated Accumulated Depreciation are coded for service program 2. This is not strictly necessary and makes no difference for the balance sheet report.) Please note the fund balances. It is important to set up a fund balance for each valid combination of service program and funding source codes so that the program can close the revenues and expenses to the appropriate account. In the example there are six fund balances, one for each valid combination. Nonprofit General Ledger User Manual Page B.11 Appendix B, Examples of Use The budget To illustrate how to plan the budget, here is Community Services, Inc.'s expense budget for the year. (This is not a report from the Nonprofit General Ledger program. You'll have to build your budget outside the program, perhaps using a spread- sheet program. You can then enter the budget in the General Ledger program, and it will report revenues and expenses as compared to the budget.) ================================================================== Community Services, Inc. Expense Budget Ovhead Prison Prison Comp. Comp. Comp. Functional Public Public FSP Public FSP County TOTAL Category 000 100 101 200 202 203 600 Executive Dir. 12000 6000 6000 24000 601 Admin Assist. 4000 12000 16000 602 Bus. Manager 5000 15000 20000 603 Staff 16000 32000 16000 64000 Total salary 12000 31000 65000 16000 124000 606 FICA expense 840 2170 4550 1120 8680 607 FUTA expense 360 930 1950 480 3720 608 St. unemp exp. 60 155 325 80 620 609 Work Comp exp. 240 620 1300 320 2480 Total pers. 13500 34875 73125 18000 139500 610 Occupancy 600 1800 2400 611 Utilities 300 900 600 1800 612 Phone 300 900 1200 613 Postage 150 450 600 614 Off. supplies 150 450 600 615 Pgm. supplies 600 1200 1200 3000 616 Copying/dup. 300 300 600 617 Equip. rental 600 600 620 Contract serv. 600 600 621 Consult. fees 600 600 1200 622 Prof. fees 200 600 800 630 Travel -- pgm 300 300 631 Trav., fundrais 600 600 640 Deprec. exp. 1000 30000 30000 651 Insurance exp. 1200 1200 652 Maintenance 600 600 653 Interest exp. 0 654 Bank charges 60 60 TOTAL 15760 0 37775 30000 82725 20400 186660 ================================================================== There are several things to notice about this budget: Nonprofit General Ledger User Manual Page B.12 Appendix B, Examples of Use - The budget amounts for each functional category are spread across the various combinations of service programs and funding sources according to what the funding sources agree to fund. For instance, FSP is funding most of the Computer project, but the county has agreed to fund one staff position and part of the utilities and program supplies, as well as the fees for one computer consultant. Spreading the budget across several columns like this allows you to picture the organization as a whole as well as each combination of service program and funding source. - Many functional categories are funded by more than one funding source. When you are posting entries, the program displays the amount remaining in the budget for each account. This helps you adjust expenditures between funding sources as you enter the amounts so you can remain within the budget for each category. - Several combinations have nothing budgeted for them. For instance, there is nothing budgeted for public support of the prison project. You have the option of simply not setting up accounts for such combinations or of setting up the accounts but entering no budget for them. You can always add new ledger accounts after you have started using the program, so the choice is not critical. In the CSI example, accounts have been set up for public support for the prison project in case they are needed. The revenue budget follows directly from the expense budget: ================================================================== Community Services, Inc. Revenue Budget Ovhead Prison Prison Comp. Comp. Comp. Functional Public Public FSP Public FSP County TOTAL Category 000 100 101 200 202 203 500 Revenue 15760 0 37775 30000 82725 20400 186660 ================================================================== Shown under each combination of service program and funding source are the amounts needed to meet the expense budget. In actual practice, of course, you will adjust your expense budget to meet the funds you think you can raise and you will adjust your funding targets according to the services you wish to offer. The point of this illustration is that all you really need for your revenue accounts is one for each combination of service program and funding source that you expect to have. Once you have determined what your revenue accounts will be, you can budget your revenues just as you budget your expenses. Nonprofit General Ledger User Manual Page B.13 Appendix B, Examples of Use Budgeting for different funding cycles In this example each grant is assumed to run for the same twelve-month period as the organization's fiscal year. In real life, things are seldom so easy. Please refer to the discussion of funding cycles that do not match the fiscal year on page 3.5. If a new funding cycle for CSI's prison project started before the fiscal year end, they would set up a new service program code, 3, and a new funding source code, 04, for the renewal of the FSP grant. They would then add a whole set of expense accounts, each ending in 304, as well as a revenue account, 500304. If they are careful to post revenues and expenses only to the new accounts, their income statements for the program and funding source will be accurate. Appendix C Using a Laserjet printer This tells you how to use the Hewlett Packard Laserjet, Laserjet II and similar printers. There are two problems. - The program lets you enter only four control codes. These are not enough to put the Laserjet printers into compressed print mode. - The documentation on disk is intended for continuous-form paper. There is a form-feed and a page header every 63 lines. Because the Laserjet ejects to a new page every 60 lines, every other page contains only a few lines. Compressed print If you wish to print in compressed print, answer No to the question "Are you using an 80-column printer in compressed print mode?" on the Printer Setup screen. Then, before you run the program, put the printer into compressed print mode from the control panel or by using another program. If you answer No to this question, the program won't send anything to the printer, so it will remain in compressed print mode. There exist Shareware utilities that control the Laserjet. I can send them to you or you can get them directly from the author (See "Laserjet Utilities," below). When you send the registration fee, make a note on your registration form and I'll include them with the Registered User disk. If you have already registered, send me a diskette in a mailer with return postage and I'll send them to you. On-disk documentation Set your printer to print 66 lines per page. The shareware Laserjet utilities will do this. Then, Enter: COPY NGL111.DOC PRN: Page C.1 Nonprofit General Ledger User Manual Page C.2 Appendix C, Using a Laserjet printer Laserjet Utilities You can get the program LASERJET.COM and its documentation directly from the author: Guy Gallo P.O. Box 344 Piermont, NY 10968 It would be polite to send a diskette in a mailer with return postage along with a small payment. Appendix D Technical Information ======== THIS SECTION HAS BEEN OMITTED FROM THE ON-DISK DOCUMENTATION TO MAKE THE MANUAL SMALL ENOUGH TO FIT ON A DISK. ======== Appendix E Reliance Software Order form Other Reliance software The Nonprofit General Ledger program is one of several software products from Reliance Software Services. Others include the Reliance Mailing List program and the source code to the user interface used in the General Ledger and the Mailing List program. To order your Registered User copy of the Nonprofit General Ledger or any of the other products, use the order form below. The Reliance Mailing List program The Reliance Mailing List program is a powerful database program for names, addresses, phone numbers and other information. Successfully used in an Austin political campaign, it is also good for individuals, charitable organizations or small businesses. It is extremely easy to use; menus show all program functions. Features include: - Maximum of over 2 billion names (limited by disk size). - A standard 360K diskette holds about 1,200 names. - Mailing labels, one, two, three or four across, including Cheshire format. - Four different formats to list names in the data file. - A "mailmerge" file to export data to other programs. - Eight sublists within the data file, selected by Yes/No criteria. - An additional three-character user code provides thousands of selection criteria. - Seven different ways to select output. - Sorts output by last name or zip code. Page E.1 Nonprofit General Ledger User Manual Page E.2 Appendix E, Reliance Software Order form User Interface source code The menu-driven user interface used in Reliance products was written up in Computer Language magazine, October 1987, page 57 and April 1988, page 117. Features include: - On-screen data entry forms with complete cursor control - "Bullet proof" data entry of strings, real numbers, integers, booleans and dates - Control of screen attributes and colors You can get the Turbo Pascal source code for only $6. You can freely use the source code in your own applications without paying any royalties. Specify Turbo Pascal 3.0 or 4.0. Nonprofit General Ledger User Manual Page E.3 Appendix E, Reliance Software Order form Order Form Use this form to order the Registered User versions of Reliance software. Mail the form to: William Meacham Reliance Software Services 1004 Elm Street Austin, Tx 78703 Make checks payable to William Meacham. Your name: ____________________________________________ Address: ____________________________________________ ____________________________________________ City, State, Zip: ____________________________________________ Product Price Nonprofit General Ledger, manual on disk $ 40 ____ Reliance Mailing List, manual on disk 30 ____ User interface source code, Turbo Pascal 6 ____ Total enclosed: _______ What version of the Nonprofit General Ledger do you have? (Version number appears on the opening screen.) _______ Where did you get your copy of the program? ____________________________________________ ____________________________________________ ____________________________________________ THANK YOU!