Page 302 - Accounting Best Practices

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Implementation Issues for General Ledger Best Practices
Exhibit 14.1 Summary of General Ledger Best Practices 291
Best Practice Cost Install Time
Chart of Accounts
14–1 Eliminate small-balance accounts
14–2 Modify account code structure for storage
of ABC information
14–3 Reduce the chart of accounts
14–4 Use identical chart of accounts for
subsidiaries

Data Warehousing
14–5 Use data warehouse for report distribution
14–6 Use forms/rates data warehouse for
automated tax filings
14–7 Use the general ledger as a data warehouse

General
14–8 Restrict use of journal entries
14–9 Have subsidiaries update their own data
in the central general ledger
System Additions
14–10 Construct automated interfaces to software
that summarizes into the general ledger
14–11 Create general ledger drill-down capability
14–12 Overlay the general ledger with a
consolidation and reporting package
14–13 Use automated error-checking

involve major programming work or significant alterations to the way in which a
company conducts its business. For example, one best practice is to switch the
chart of accounts over to a structure that will allow a company to accumulate
information for an activity-based costing system more easily; however, altering
the chart of accounts always involves setting up new methods for collecting data,
which can require major procedural changes throughout a company. In short,
since the general ledger is the core data collection point in a company, alterations
to it will have a ripple effect that may impact distant corners of the organization
that the change initiator never anticipated.
Though many of the implementations listed in Exhibit 14.1 are described as
being of long duration or expensive, many of them can still be cost-effective