Computerised and Manual Ledger

Policy	Ledger accounts are maintained accurately and updated regularly in a timely manner in compliance with ATO requirements and GST legislation. 

Definitions	An audit trail contains clearly defined document and ledger account references to enable a transaction to be traced through the accounting records.

	A Chart of Accounts is a list of all ledger account titles and their relevant account numbers.

	A General Ledger is a list of all account balances in the organisation.

	Payable Reports are listings of balances from supplier cards.

	A Trial Balance is a list of General Ledger account balances and is used to check the accuracy of the General Ledger.

Procedure

Compliance
All records must be maintained within the guidelines of the Australian Taxation Office, GST legislation, taxation legislation and Australian Accounting and Auditing Standards.

Chart of Accounts
Ensure that all ledger entries are allocated to accounts in the standard Chart of Accounts.

If a new ledger account is required, identify the following information and discuss it with the Accountant:
•	name of account, e.g. Motor Vehicles
•	classification or group of accounts, e.g. Non-current Assets
•	account number reference
•	reason for creating new account.

A new ledger account must not be created without the Accountant’s authorisation.

Source documents
All documents must be checked and initialled prior to data entry. If possible, the person checking the documents should not enter the data.

Journal/Cashbook entry
The following documents are to be used as a source of data for entry into ledger accounts:
•	cheques issued, direct debits (e.g. payroll deductions) and cash deposited either manually by an employee or through a direct deposit from outside the organisation
•	miscellaneous source documents for General Journal transactions, e.g. accounts payable or accrued expenses at the end of the financial year where expenses have been incurred by the organisation but a payment has not yet been made

As a document is entered in the relevant journal, the document must be ticked and the date of entry recorded on the document. All document numbers must be entered accurately in the accounting records to ensure there is an audit trail. All journal entries must be checked against and reconciled with the batch of relevant documents

The following journals/books are to be completed as relevant:
•	Cash book (to record receipts and payments)
•	General Journal (to record adjustments)
•	General Ledger (to record summary totals from cash book and adjustments from general journal)

Posting to Ledgers
Journal entries must be posted to the General Ledger, either at the end of the month or at the end of the financial year.

Trial Balance
At the end of each accounting period, a Trial Balance must be printed within three working days to check the accuracy of data entry in the General Ledger. Any errors must be identified and corrected before the Trial Balance is presented to the Accountant.

Error correction
Errors identified prior to processing of reports
If an error is found in the current period’s accounts, the error is generally adjusted by correcting the entry for that transaction.  

Errors identified after processing of reports
If an error is found after processing the financial reports and presenting the data, or in transactions from previous periods, the error is generally adjusted as follows:
•	Cash book – Correct through reversing the incorrect entry and then re-entering the data.
•	General Ledger – Correct through reversing the incorrect entry through the General Journal and then re-entering the data.

Refer errors to the Accountant where you are doubtful about how the adjustment should be made.

Related documents
Nil