Accounting Best Practices, Fifth Edition

14–12. Construct Automated Interfaces to Software That Summarizes into the General Ledger

A large number of transactions must be moved from subsidiary ledgers to the general ledger at the end of each accounting period. In most cases, there is some reasonable degree of integration so that this transfer of information occurs automatically. However, the majority of organizations have a few outlying ledgers that are not directly connected to the general ledger; for example, the fixed assets register or payroll. In these instances, the general ledger accountant must wade through a considerable pile of information to determine the correct amounts to shift into the general ledger. This is a time-consuming process and subject to error.

It may be possible to construct an automated interface between these outlying ledgers and the general ledger. By doing so, there is a considerable advantage in eliminating the time required to move data to the general ledger manually, particularly important if an accounting department is committed to reducing the time needed to issue financial statements. Unfortunately, because of the programming required, this can be both a difficult and expensive best practice to implement. The company’s programming staff must analyze the interface requirements, design the interface, program it, and test it, all of which can add up to a cost that greatly exceeds the benefit of having the automation. The best cases in which this is still a viable option are for a large ...