Cash Basis Accounting - InterDyn
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1. Advanced Financial Analysis General Ledger Trial Balances etc it is possible to prepare cash basis and accrual basis financial reports simultaneously Cash Basis Reporting 10 0 2007 AIM Technologies All Rights Reserved Technical Support AIM Technologies Technical Support is available Monday through Friday from 9 00 am to 5 00 pm Central time Technical Support can be reached via any of the following methods 985 951 7580 voice 253 295 0740 fax Support AIM Technologies com http www AIM Technologies com suprequest htm Please include the following information with any support request Your company name and phone number Your name The name of the product you are working with Microsoft Dynamics GP or Small Business Financ ials The version of Cash Basis Reporting you are running from the registration window A brief description of the problem Cash Basis Reporting 10 0 2007 AIM Technologies All Rights Reserved Installation The installation of Cash Basis Reporting requires the following steps 1 Install Cash Basis Reporting Code Unzip the CBR10b zip file that was downloaded from our web site double click the Setup exe file to run the setup routine The Cash Basis Reporting 10 0 InstallShield Wizard window opens gt Click Next gt Review the Software License Agreement and confirm or deny your acceptance of the terms described within If desired you can click the Print button to p2. to Accrual Basis Accounts AND related Cash Basis Accounts After opening the general ledger Transaction Entry or the Quick Journal Entry window of Microsoft Dynamics GP or SBF an additional Cash Basis JE window opens automatically F Cash Basis JE Journal Entry Number This window includes the option to Mirror this Journal Entry in the Cash Basis journal By selecting checking this option any entries to accruatbasis accounts in the Transaction Entry window will AUTOMATICALLY create mirrored transaction entries in the appropriate cash basis accounts when the journal entry is posted Furthermore direct entries to cash basis accounts will NOT be permitted with this option selected The default selection for this option can be set in the Cash Basis Setup window as described in Setup section above Adjustments to Cash Basis Accounts ONLY Direct entries to cash basis general ledger accounts ARE permitted in the general ledger Transaction Entry and the Quick Journal Entry windows However because the casl basis ledger accounts are automatically created with the Allow Account Entry option disabled unchecked in the Account Maintenance window the user will need to enable check the Allow Account Entry option in the Account Maintenance window for the appropriate cash basis accounts before proceeding After posting the cash basis account journal entry it is HIGHLY RECOMMENDED that the Allow Account Entry option be re
3. AIM Technologies Cash Basis Reporting For Microsoft Dynamics Microsoft Dynamics GP Microsoft Small Business Financials Installation Setup and User Manual Version 10 0 Cash Basis Reporting 10 0 2007 AIM Technologies All Rights Reserved Cash Basis Reporting Product Overview Technical Support Installation 1 Install Cash Basis Reporting Code Include the New Code Modify Account Format 3 Enter Cash Basis Registration and Setup Information 4 Initialize and Setup Additional Companies Transaction Processing Payables Transactions Receivables Transactions Bank Transactions Bank Transfers Bank Reconciliation Transactions Payroll Transactions General Journal Transaction Entry and Quick Journal Entry Cash Basis Account Link Editing Financial Reporting Year End Closing Trademarks Microsoft Dynamics GP and Small Business Financials are trademarks of Microsoft Dynamics Other company or product names mentioned may be trademarks or registered trademarks of their respective holders Cash Basis Reporting 10 0 2007 AIM Technologies All Rights Reserved Product Overview The ability to prepare operating financial reports on a cash basis is a common requirement found across a wide range of industries Whether needed for internal management or external reporting purposes this need to report operations on a cash basis is typically satisfied by the utilization of non integrated spreadsheets a
4. cation of a previously posted payment transaction to a previously posted invoice or other document will create the corresponding cash basis transactions as of the Apply Posting Date following the same logic as in scenarios b and c above Voided Payments The voiding of a payment transaction will create the appropriate reversal of the cash basis transactions that had been created by the original payment entry as of the Posting Date indicated for the void transaction Cash Basis Reporting 10 0 2007 AIM Technologies All Rights Reserved 2 Receivables Transactions a Unapplied Cash Receipts A receivables cash receipt or any portion of a disbursement that is NOT APPLIED to an invoice or other receivables document in the system when posted will create a credit to the Unapplied Cash Receipts account as defined in the Cash Basis Setup window Fully Applied Cash Receipts A receivables cash receipt that is applied in full to an invoice or other available document in the system will create the appropriate credits and debits to cash basis accounts that correspond to the accruaL basis accounts to which the originating invoice or other document had been distributed For example if a 100 payment is applied to a 100 invoice that had originally been distributed and posted to account 000 4540 00 A Other Sales Revenue the Cash Basis Reporting system will accordingly create a 100 credit to 000 4540 00 C at the time of the payment posting to re
5. cord the cash basis revenue related to this transaction The same logic holds for multiple distributions on one invoice or across multiple invoices Partially Applied Cash Receipts A receivables cash receipt that is applied to an invoice or other document on which the remaining amount to be applied is GREATER than the amount of the cash receipt will create the appropriate credits and debits to cash basis accounts that correspond to the accrual basis accounts to which the originating invoice or other document had been distributed in amounts equal to the ratio of the receipt as it relates to the document applied to For example if a 100 receipt is applied to a 500 invoice that had originally been distributed and posted to account 000 4540 00 A Other Sales Revenue the Cash Basis Reporting system will accordingly create a 100 credit to 000 4540 00 C at the time of the check posting to record the cash basis revenue related to this transaction The same logic holds for multiple distributions on one invoice or across multiple invoices Subsequent Apply To Transactions The subsequent application of a previously posted cash receipt transaction to a previously posted invoice or other document will create the corresponding cash basis transactions as of the Apply Posting Date following the same logic as in scenarios b and c above Voided Receipts NSF The voiding of a cash receipt transaction will create the appropriate reversal of the cash basis tra
6. e to remove this module and continue to utilize the core accrual basis reporting functionality of SBF and Microsoft Dynamics GP Master records related to Cash Basis Reporting data are created automatically on an as needed basis Because many companies have general ledgers consisting of thousands of accounts this enhancement does not require the creation of cash basis accounts unless they are needed for transaction posting and the creation of those accounts is transparent to the user Cash transactions originating in several Microsoft Dynamics GP and SBF modules are addressed by this enhancement including gt Purchasing including Payables Management Purchase Order Processing and Project Accounting manual payments computer checks immediate payments voided checks and manually applied payments Sales including Receivables Management Invoicing Sales Order Processing and Project Accounting cash receipts deposits immediate payments NSF transactions voided payments and manually applied receipts Bank Reconciliation bank transactions bank transfers and bank reconciliation transactions U S Payroll manual checks computer checks and voided checks General Ledger General Journal Transactions and Quick Journal entries Able to use all standard reporting tools of Microsoft Dynamics GP and Small Business Financials By using the standard reporting tools of the core Microsoft Dynamics GP and SBF applications FRx SmartList
7. eaa O 1 es E Aam Segment iD Account Separate with d ri E Sorting pa 2 Cancel f Click the OK button to save your changes At that point you will receive a message dialog similar to the following Microsoft Dynamics GP Please run the Check Links procedure on the Account Master logical file g Click the OK button on the dialog box click OK on the Account Format Setup window and then run Check Links on the Account Master in the Financial series under File gt Maintenance gt Check Links Cash Basis Reporting 10 0 2007 AIM Technologies All Rights Reserved 3 Enter Cash Basis Registration and Setup Information a b c d Open the AIM Product Registration window Microsoft Dynamics GP gt Tools gt Setup gt Financial gt CBR Registration Enter the registered company name and keys as provided to you Click OK to save the registration information and close the window Open the Cash Basis Setup window Microsoft Dynamics GP gt Tools gt Setup gt Financial gt CBR Setup The window should appear similar to the illustration below but will vary based on your particular setup options selected lash Accread Segment Cash Accrual x Cash Segment ID C Accrual Segment iD Unapplied Cash Disbursements 000 9000 00 C Unapplied Cash Receipts 000 9100 00 C I Default all new journal entries to be mirrored in the cash basis ledger IV Enable Cash Basis Reporting Update Accrual Segmen
8. ger Trial Balance or Financial Statement insert a restriction in the report design window to include ONLY accounts that contain the Cash Segment ID e g C in the Cash Accrual segment Likewise to generate an accruatbasis Trial Balance or Financial Statement insert a restriction in the report design window to include ONLY accounts that contain the Accrual Segment ID e g A in the Cash Accrual segment Furthermore all other segment date account and other criteria remain available for selection to create reports by particular departments divisions etc from the cash basis or accruakbasis ledger accounts The illustration below represents an example of how a casI basis Profit amp Loss statement could be generated Li Financial Statement Report Options fel X fe Save Cea X Delete Sh Print Option Cash Basis x Report Profit and Loss Amounts Description Include Detail e First Account I Zero Balances D Gate aon Hoy Segment ID Ql I individual Report From i aleulate Hato amp Individual All To fi Restrictions Columns Insert gt gt Segment ID Cash Accrual From C To C Adjust Remove Revert Destination wi Cash Basis Reporting 10 0 2007 AIM Technologies All Rights Reserved Year End Closing To enable true on going cash basis financial reporting Cash Basis Reporting modifies the general ledger Year End Closing procedu
9. ing Microsoft Dynamics GP you will see a prompt asking if you want to include new code similar to the following illustration New code must be included in the C Program Files Microsoft Dynamics GP Dynamics set dictionary Do you wish to include new code now Click Yes and allow the code to be included A progress bar will display while the unchunking process is executing This installation step performs the following tasks gt The DYNAMICS SET file is modified to include the information required to run Cash Basis Reporting gt A dictionary named CASH3122 DIC is created in your Microsoft Dynamics GP SBF application folder Perform steps 1 and 2 from above on every workstation that is running Microsoft Dynamics GP SBF Installation of Cash Basis Reporting is now complete and you are ready to begin the Setup process Cash Basis Reporting 10 0 2007 AIM Technologies All Rights Reserved Setup The procedures to setup and activate Cash Basis Reporting for your company are as follows 1 Login as System Administrator and Initialize System a Login to the system as a system administrator sa or DYNSA b Select the first company in which you want to setup Cash Basis Reporting c Ifthe Cash Basis Reporting tables and procedures have not been created previously you will receive the following prompt to initialize the Cash Basis Reporting system Microsoft Dynamics GP Cash Basis Reporting needs to be in
10. itialized by the system administrator or access has not been granted to the Cash Basis Reporting tables Would you like to proceed with the initialization now d Click Yes to initialize all Cash Basis Reporting tables and stored procedures and to grant access to those tables After completion you will receive the following message Microsoft Dynamics GP A Initialization for Cash Basis Reporting has been completed e Click OK to close the message Cash Basis Reporting 10 0 2007 AIM Technologies All Rights Reserved 2 Modify Account Format a Open the Account Format Setup window Tools gt Setup gt Company gt Account Format b Increase the Account Length field by AT LEAST 1 c Increase the Segments field by AT LEAST 1 d Identify the Segment ID row that you want to use to identify cash basis and accrual basis transactions typically this will be the segment that was just added and make the following changes i Edit the segment Name as desired e g Cash Accrual etc ii Edit the segment Length if needed ii Change the segment Display Width if desired The Account Format Setup window will appear similar to the illustration below but will vary based on your individual system setup rules E Account Format Setup k 10 x Maximum Account Length 20 Maximum Segments 5 Account Length o E Segments 5 Segment 10 hee Nata lengh pisah Papauma T T E a e ae aswaa a aws o a C
11. nd reconciliation routines because traditional accounting systems tend to focus on accruatbasis reporting to the exclusion of cash basis And in many instances entities that must report primarily on a cash basis may by pass the built in features and functionality of traditional accrual systems such as tracking and aging accounts payable and accounts receivable to ensure their ability to quickly and properly generate cash basis financial statements This Cash Basis Reporting enhancement enables users of Microsoft Dynamics GP GP and Small Business Financials SBF to easily prepare cash basis and accrual basis financial reports by simply selecting the appropriate criteria at the time the reports are designed or generated Such functionality is accomplished by implementing a fully integrated cash basis reporting system to complement the built in accrual basis reporting provided by each of those products Some of the basic functional features provided by Cash Basis Reporting are listed below The user is able to utilize Cash Basis Reporting regardless of the company s specific account format structure For instance whether a company utilizes a 1 segment 4 digit account format or a 6 segment 50 digit account format in the case of Microsoft Dynamics GP the setup process and functionality will be the same The tables and transactions created by this enhancement are independent of core accounting system data In other words the user is abl
12. nsaction processes such as PM checks RM receipts etc However if preferred you can create the corresponding cash basis ledger accounts that correspond to ALL accrual basis ledger accounts by executing the Create Cash Basis Accounts routine as part of the setup process If you do wish to run the Create Cash Basis Accounts routine the Update Accrual Segment routine MUST be run PRIOR to the Create Cash Basis Accounts routine x Save Changes Click the OK button to save your changes and close the window 4 Initialize and Setup Additional Companies a While logged into the system as a system administrator sa or DYNSA log into each additional company that is setup in your system b Repeat step 1 above for EVERY company This step MUST be done for every company to initialize the Cash Basis Reporting tables and procedures regardless of whether Cash Basis Reporting will be activated for the company c Repeat steps 2 and 3 above for eachcompany in which you want to activate and utilize Cash Basis Reporting Cash Basis Reporting 10 0 2007 AIM Technologies All Rights Reserved Transaction Processing Once Cash Basis Reporting is registered and enabled in the Cash Basis Setup window all cash basis transaction processing is handled automatically by the Cash Basis Reporting code completely transparent to the user Below is a summary of the processes that occur to create the cash basis general ledger For all cash transactions pa
13. nsactions that had been created by the original cash receipt entry as of the Posting Date indicated for the void transaction Bank Transactions Bank Transfers Bank Reconciliation Transactions a Bank Transactions All Bank Transactions Bank Transfers and Bank Reconciliation Transactions are by definition cash basis transactions Accordingly the Cash Basis Reporting system will automatically create the appropriate debits and credits to the cash basis accounts that correspond to the accrua basis accounts to which the originating bank transactions are distributed b Voided Bank Transactions All voids of Bank Transactions will create the appropriate reversal of the cash basis transactions that had been created by the original Bank Transaction entry Payroll Transactions a Required Payroll Posting Setup Rules The standard payroll posting routines of Microsoft Dynamics GP and SBF require users of Cash Basis Reporting and Payroll to confirm that the payroll posting rules setup in the Payroll Posting Accounts Setup of Microsoft Dynamics GP adhere to the following rules If these account posting rules are not followed the cash basis reports will not be accurate a For the Payroll Account Type of Federal Tax Withholding CR the account s specified for the employer FICA tax liabilities EFICA M and EFICA S must be different than the account s specified for the employee FICA withholdings FICA M and FICA S For the Payroll Account Ty
14. pe of Federal Tax Withholding CR the account s specified for the employer FICA tax liabilities EFICA M and EFICA S must be different than the account specified for the employee Federal withholdings FED Cash Basis Reporting 10 0 12 2007 AIM Technologies All Rights Reserved b Payroll Checks Whether computer checks or manual checks all Payroll Check Transactions are by definition in the SBF Microsoft Dynamics GP system cash basis transactions Accordingly the Cash Basis Reporting system will automatically create the debits and credits to the appropriate cash basis accounts that correspond to the accrua basis accounts to which the originating Payroll Check Transactions are distributed c Voided Payroll Checks All voids of Payroll Checks will create the appropriate reversal of the cash basis transactions that had been created by the original Payroll Check Transaction entry 5 General Journal Transaction Entry and Quick Journal Entry a Cash Basis Controls Similar to other control accounts in the Microsoft Dynamics GP and SBF system cash accounts payable accounts receivable etc general journal entries to cash basis ledger accounts should be needed only in the case of corrections or adjustments As a result cash basis ledger accounts that are automatically created by the Cash Basis Reporting module are created with the Allow Account Entry option disabled unchecked in the Account Maintenance window Adjustments
15. provides an example of what the Cash Basis Account Links window might look like Accrual Account Number SI Cash Account Number Accrual Account Description Cash ccount Description 000 1100 00 A 00O 1110 00 A 000 1220 01 A 000 1300 01 A 000 1300 02 A 000 3030 00 A 100 6180 00 A 200 6180 00 A 300 6180 00 A 400 6180 00 A 400 6520 00 A 500 6150 00 A 000 1100 00 C 000 1110 00 C 000 1220 01 C 000 1300 01 C 000 1300 02 C 000 3030 00 C 100 6180 00 C 200 6180 00 C 300 6180 00 C 400 6180 00 C 400 6520 00 C 500 6150 00 C Furthermore if the user would like to manually create certain accruak basis cash basis account relationships simply scroll to the bottom of the Cash Basis Account Links window and either key in or lookup the accrual basis account for which you want to create the cash basis account then tab off of the Accrual Account Number field and the related cash basis account will be created for you Cash Basis Reporting 10 0 2007 AIM Technologies All Rights Reserved Financial Reporting As a result of the configuration and transaction processes described in the sections above the preparation of cash basis and or accrual basis reports can be achieved by simply limiting the particular report to the appropriate segment restrictions using the normal reporting tools provided by Microsoft Dynamics GP and SBF For example to run a cash basis General Led
16. re However the modified Year End Closing process is transparent to the end user Cash Basis Reporting will close out all cash basis Profit amp Loss accounts to the cash basis Retained Earnings account that corresponds to the accrual basis Retained Earnings account that is setup for the particular company in addition to the normal close of the accruak basis Profit amp Loss accounts and the balance forward transaction entries for all balance sheet accounts This process ensures that the cash basis and accruak basis ledgers remain in balance from year to year Cash Basis Reporting 10 0 2007 AIM Technologies All Rights Reserved
17. rint a copy of the Software License Agreement for your records If you agree select I accept the terms of the license agreement and click Next to continue If you disagree select I do not accept the terms of the license agreement and click Cancel to exit the installation wizard Specify the folder where the Microsoft Dynamics GP SBF application is installed This folder is typically located on your lcal hard drive Important The installation routine will default the installation to a directory on the workstation If this is not the location where Microsoft Dynamics GP SBF is installed on your machine you will need to specify the correct directory Verify that it is the correct directory or use the Change button to select the location of the desired version of Microsoft Dynamics GP SBF gt After confirming the installation path click Next gt The Ready to Install window opens gt Click Install to copy all files to the appropriate directories The InstallShield Wizard Completed window opens when installation is done gt Click Finish Cash Basis Reporting 10 0 2007 AIM Technologies All Rights Reserved 2 Include the New Code After the Cash Basis Reporting files have been copied to your system Microsoft Dynamics GP or SBF must then include the code For Small Business Financials After launching SBF the code will be included automatically For Microsoft Dynamics GP After launch
18. set to disabled unchecked to prevent unintentional postings to these accounts Also entries to cash basis accounts are NOT allowed if the option to Mirror this Journal Entry in the Cash Basis journal has been selected Cash Basis Reporting 10 0 2007 AIM Technologies All Rights Reserved Cash Basis Account Link Editing To further facilitate the user s ability to have the Cash Basis Reporting system create corresponding cash basis ledger entries in accordance with specific operational or procedural preferences the Cash Basis Account Links window is available Microsoft Dynamics GP gt Tools gt Setup gt Financial gt CBR Account Links The Cash Basis Account Links window allows the user to manually override the accruakbasis cash basis account relationships that are automatically created by the Cash Basis Reporting system For example if a cash disbursement is processed and applied to a payables invoice that was originally distributed to the accruak basis Prepaid Insurance asset account the Cash Basis Reporting system will AUTOMATICALLY create a corresponding cash basis Prepaid Insurance asset account However if the user would prefer that payment of invoices originally coded to this asset account ACTUALLY be recorded to a cash basis expense account e g Insurance Expense this Cash Accrual Account Link window provides the flexibility to modify such accruakbasis casl basis account relationships The illustration below
19. t Create Cash Basis Accounts a OK Cancel e Populate the Cash Basis Setup options as follows i Cash Accrual Segment Select from the drop down box the appropriate account segment to be used to identify cash basis and accruakbasis transactions ii Cash Segment ID Enter the character alpha numeric to be used by the system to identify cash basis accounts This field is limited to the number of characters allowed in the Account Format Setup for this segment iii Accrual Segment ID Enter the character alpha numeric to be used by the system to identify accrua basis accounts This field is limited to the number of characters allowed in the Account Format Setup for this segment iv Unapplied Cash Disbursements Enter the cash basis account to be used to identify cash disbursement transactions that are not applied to invoices or other documents This account number MUST include the Cash Segment ID character created in step ii above in its Cash Accrual Segment Because this account has not yet been created you will be prompted to add a new account Add the account following the normal Account Maintenance process v Unapplied Cash Receipts Enter the cash basis account to be used to identify cash receipt transactions that are not applied to invoices or other documents This account number MUST include the Cash Segment ID character created in step 11 above in its Cash Accrual Segment Because this account has not yet been created yo
20. u will be prompted to add a new account Add the account following the normal Account Maintenance process vi Default all new journal entries to be mirrored in the cash basis ledger When posting journal entries via the Transaction Entry function of the general ledger the user has the ability to mirror the accruaktbasis entry being posted automatically in the cash basis ledger by simply selecting the option in the Cash Basis JE window Checking or unchecking this option in the Cash Basis Setup window will change the default setting for subsequent general journal transactions vii Enable Cash Basis Reporting Checking this box will activate the Cash Basis Reporting functionality for future transactions Likewise unchecking this box will disable Cash Basis Reporting functionality for future transactions Cash Basis Reporting 10 0 9 2007 AIM Technologies All Rights Reserved viii Update Accrual Segment The Update Accrual Accounts routine will automatically edit all existing general ledger accounts that have a BLANK Cash Accrual Segment to reflect the defined Accrual Segment ID in the Cash Accrual Segment This utility MUST be run at least once to ensure the ability to prepare accrual basis reports after the Cash Basis Reporting functionality has been enabled ix Create Cash Basis Accounts By design the Cash Basis Reporting module will create corresponding cash basis ledger accounts that do not exist during normal cash basis tra
21. which the originating invoice or other document had been distributed For example if a 100 payment is applied to a 100 invoice that had originally been distributed and posted to account 000 6540 00 A Office Supplies Expense the Cash Basis Reporting system will accordingly create a 100 debit to 000 6540 00 C at the time of the check posting to record the cash basis expense related to this transaction The same logic holds for multiple distributions on one invoice or across multiple invoices Partially Applied Cash Disbursements A payables cash disbursement that is applied to an invoice or other document on which the remaining amount to be applied is GREATER than the amount of the cash disbursement will create the appropriate debits and credits to cash basis accounts that correspond to the accrual basis accounts to which the originating invoice or other document had been distributed in amounts equal to the ratio of the payment as it relates to the document applied to For example if a 100 payment is applied to a 500 invoice that had originally been distributed and posted to account 000 6540 00 A Office Supplies Expense the Cash Basis Reporting system will accordingly create a 100 debit to 000 6540 00 C at the time of the check posting to record the cash basis expense related to this transaction The same logic holds for multiple distributions on one invoice or across multiple invoices Subsequent Apply To Transactions The subsequent appli
22. yables computer checks payables manual checks cash receipt transactions payment transactions entered with payables or receivables invoice transactions payment voids bank transactions payroll checks etc the Cash Basis Reporting system AUTOMATICALLY creates a series of entries to cash basis general ledger accounts IN ADDITION to the NORMAL accruab basis distributions created by SBF Microsoft Dynamics GP The specific cash basis accounts that are debited or credited will vary based on different situations as outlined below Also the Cash Basis Reporting system will AUTOMATICALLY create corresponding casl basis general ledger accounts needed at the time of transaction processing IF those accounts did not previously exist See the Cash Accrual Account Link Editing section below for more information on the ability to edit these automatically created account relationships 1 Payables Transactions a Unapplied Cash Disbursements A payables cash disbursement or any portion of a disbursement that is NOT APPLIED to an invoice or other payables document in the system when posted will create a debit to the Unapplied Cash Disbursements account as defined in the Cash Basis Setup window b Fully Applied Cash Disbursements A payables cash disbursement that is applied in full to an invoice or other available document in the system will create the appropriate debits and credits to cash basis accounts that correspond to the accruakbasis accounts to
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