Ledger and SubLedger Pivotal Roles in Finance

Need of Ledger and SubLedger Accounting in Business?

Companies rely on their accounting function to record and report transactions accurately. This function provides the base for the company to prepare financial statements. Initially, the process starts when a financial transaction occurs.

The accounting function processes that transaction and records it in the books. Usually, this process happens through an automated system.

All financial transactions go into the books of prime entry. Initially, it is the first area where these transactions enter the accounting system.

Similarly, these books come in several forms. They may include the cash book, sales book, purchases book, general journal, etc. There are two different accounting ledgers (General Ledger & Sub ledger) that are used to store all these financial transaction entries. That gives ideas of financial transactions that occur during the financial years.

General Ledger:

The general ledger is a set of master accounts where transaction records. It is the principal set of accounts and records all financial transactions. The general ledger contains all debit and credit entries of transactions, and entry for the same is done in different accounts mainly. There are five types of accounts: assets, liabilities, equity, income, and expense.

A ledger determines the currency, chart of accounts, accounting calendar, ledger processing options, and accounting method for its associated sub-ledgers. Each accounting setup requires a primary ledger and optionally, one or more secondary ledgers and reporting currencies. Reporting currencies are associated with either a primary or secondary ledger.

Sub-Ledger:

The sub-ledger includes a subset of several general ledger accounts. Usually, it provides details on specific areas, including accounts receivables, accounts payables, fixed assets, etc. It gives more information on particular transactions date, descriptions, and balances.

Overall, the subsidiary ledger is a secondary financial record that enhances the information in the general ledger.

Why Oracle ERP for Your Financial Accounting?

Today almost all the sectors like Banking, Financial Services, Insurance, Manufacturing, Healthcare, Retail, and Government use financial accounting ledger for different purposes. To serve the finance statement there are a number ERP’s are available in the market with different features. Some of these are ORACLE, SAP, MICROSOFT DYNAMICS 365, ODOO, RAMCO, etc.

ORACLE ERP has below list of superiority than other ERPs provides.

1) Gain Efficiencies with Highly Automated Financial Processing

Automate journal processing for recurring and allocation journals. Convert and load raw data from external systems or upload mass journal entries via spreadsheets. Run posting, reporting, translation, and consolidation processes in parallel to accelerate reporting time.

2) Establish and Maintain Superior Internal Controls

Guarantee data integrity with a single ledger to manage all financial information. Actual, budget, summary, foreign currency, statistical, and average balances are automatically synchronized, rendering reports immediately available and always accurate. Mandatory checks and balances prevent the occurrence of out-of-balance situations. The chart of accounts can be customized to best fit your company's needs and is used to control information access.

3) Increase Enterprise Visibility

Increase visibility into performance by investigating and reconciling balances online. Drill down to any level of detail including detail balances, journals, and the underlying sub-ledger transactions - all from a single drill path. Oracle Applications Desktop Integrator provides a desktop-based extension of Oracle General Ledger to analyze financial statements, create budgets, upload conversion rates, create reports, and more.

4) Capitalize on Global Opportunities

Capture and report on any number of currencies from the balance level to the sub-ledger transaction level. Currency conversion, revaluation, re-measurement, and translation are all performed in accordance with local and international accounting standards.

5) Improve Financial Services Profitability

Robust average balance functionality comes standard in Oracle General Ledger to allow companies in the financial services industry to perform sophisticated transfer pricing and profitability analysis calculations to comply with regulatory reporting requirements. Oracle General Ledger is also integrated with the Oracle Financial Services Applications.

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