Under the new "Chart of Accounts" option in the sidebar, you can:
1. Set up your general ledger (GL) columns to mirror those in your GL
In the first tab of Chart of Accounts, you can set up your GL columns. Cradle's default setting is two columns named "GL Code" and "Cost Center":
In Cradle, you can customize the number of columns (there has to be at least one) and the name of the columns. For example:
These are the columns that will show up in your journal report:
Fore more details on how to run your journals do the product tour "Export journals"
2. Order the columns in your journal report
You can then organize the order of the columns in the journal report. To do that, select the tab "Journal Column Order". Then, click and drag to rearrange the columns:
This order will then flow through to the journal report:
3. Set up GL templates to apply at a company or agreement level
In the above image of the journal report, you will notice that several GL columns are blank. Instead of filling out each GL column at the company or agreement level, you can create a template and apply it to the applicable company or agreement. You can set up as many GL templates as you like.
To do this select "GL Templates" and "+ New GL Template"
Once you have created the template you will be taken to this screen:
Select "+ Add code" to the applicable account. At the very least, all portfolios will have an ROU asset, Lease liability, and Cash accounts in the journal report.
Split Accounts
If you want to split an account because for example you have multiple cost centres using a right of use asset click "+ Add Code" the select the percentage you want to allocate, for example 25%/75%. You can split the account as much as 12 times by continuing to click "+ Add code"
Once you have input the GL codes, click "Save" at the bottom of the screen.
The accounts at minimum that require a GL codes are:
ASC 842:
Lease liability: This is a liability that is the present value of the future lease payments
ROU asset: This is an asset that represents the right to use the leased asset
Lease expense: For an operating lease, the amortization of the ROU Asset and interest incurred on the lease liability is classified as a lease expense
Cash: When reducing the lease liability, the journal entry is Dr Lease liability Cr Cash; most customers put this to a GL clearing account.
If there are finance leases, the additional accounts are:
Amortization expense: this is the amortization of the right of use asset
Interest: this is the interest incurred on the lease liability
IFRS 16:
Lease liability: This is a liability that is the present value of the future lease payments
ROU Asset: This is an asset that represents the right to use the leased asset
Depreciation expense: this is the depreciation of the right of use asset
Interest: this is the interest incurred on the lease liability
Hint: To check if you've input all of your applicable GL codes for each account, e.g. ROU asset, run and export the journal report and that will show any account that a GL code has not been input.
Then select the applicable company or agreement and apply the GL template:
You've now customized your general ledger codes in Cradle!
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