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Unlocking the Power of the General Ledger in Excel for Accountants


As an accountant working in audit, financial due diligence (FDD), or client accounting services (CAS), you know the importance of having accurate, accessible, and analyzable financial data. The general ledger (GL) is the backbone of any accounting system, providing a comprehensive record of all financial transactions within an organization. While various accounting software offers built-in GL functionalities, these tools do not offer the ability to perform flexible and detailed analysis. That’s where Excel comes in. This blog post will explore what a general ledger is, why having it in Excel is so important, how to get the GL into Excel, and why the GL extracted in the Strongbox output is so special.

 

What is a General Ledger?

The general ledger is a complete record of all financial transactions conducted by a business. It encompasses all accounts used in the company's accounting system, including assets, liabilities, equity, revenues, and expenses. Each transaction recorded in the GL consists of a debit and a credit entry, ensuring that the accounting equation (Assets = Liabilities + Equity) remains balanced.


The GL serves as the primary source of information for preparing financial statements and is crucial for audit, TAS, and CAS processes. It provides the detailed transactional data necessary to verify account balances, identify discrepancies, and ensure the accuracy and completeness of financial records.

 

Why Having the General Ledger in Excel is So Important

While accounting software provides various tools for managing and analyzing financial data, exporting the GL to Excel offers several unique advantages:

  1. Flexibility and Customization: Excel allows accountants to customize their analyses according to specific needs. You can create tailored reports, apply unique filters, and design custom pivot tables and charts without being limited by the constraints of standard accounting software.

  2. Data Manipulation: Excel's powerful data manipulation features, such as sorting, filtering, and using formulas, make it easier to analyze large datasets. This capability is essential for identifying trends, outliers, and anomalies in the financial data.

  3. Integration with Other Data: Often, financial data needs to be integrated with non-financial data for comprehensive analysis, especially in the audit space. Excel provides a platform to combine various data sources seamlessly, enabling more holistic insights.

  4. Ease of Sharing: Excel files are easily shareable and can be opened on almost any device. This ease of access is crucial for collaboration among various parties in a transaction (like the buy-side accounting firm or the PE firm), auditors conducting an audit, and clients for ongoing accounting services.


Once the general ledger is in Excel, a wide range of analyses can be conducted, enhancing the depth and breadth of financial insights. By using Excel's charting and graphing tools, you can visualize data or trends over time, such as revenue growth, expense patterns, and changes in asset and liability balances.


Excel also makes it easy to compare actual financial results to budgets or forecasts, allowing you to identify significant variances and investigate their causes. You can calculate key financial ratios, such as liquidity, profitability, and solvency ratios, to assess the financial health of the business.

And so much more.

 

How to Get the General Ledger into Excel

Knowing the power of having the GL in Excel is one thing. Getting the GL into Excel is a completely different story – one that historically is long and mundane.

Accounting systems and ERPs often include their own reporting and exporting features. However, these tools are built not for accountants. They’re there for the business owner who does not do the advanced reporting that accountants do.


Therefore, the reports generated from these systems will require a lot of manual manipulation to get the data in a usable format. Rows may need to be deleted, cells may need to be split, and that’s just the beginning.


Additionally, native reports rarely contain 100% of the data that an accounting firm will need. At best, the system will generate multiple reports that then can manually be combined, but even then, there may be data that the system intentionally doesn’t produce in an export.


It’s a slow, arduous process that has always been considered a necessary evil.

Strongbox simplifies this process. In just a few clicks, Strongbox extracts the general ledger, including extra details, and delivers it directly to Excel. The connection is secure, read-only, and the entire process only takes a few minutes.

Currently, Strongbox can extract the general ledger out of QuickBooks Desktop, QuickBooks Online, Oracle Netsuite, Sage Intacct, Xero, and Myob with Microsoft Dynamics coming later this year.

 

Why the General Ledger Extracted in the Strongbox Output is Special

In addition to speeding up and easing the process of getting the GL into Excel, the general ledger extracted in the Strongbox output offers several unique features that enhance its usability and effectiveness for detailed financial analysis:

  • Standardized Flat Table: The GL is presented in a standardized flat table format, making it easy to sort, filter, and create pivot tables. This format avoids the complications of split columns and ensures a clean, organized dataset.

  • Comprehensive Entry View: All sides of each transaction entry are shown together, even if multiple debits and credits are involved. This comprehensive view simplifies the reconciliation process and provides a complete picture of each transaction.

  • Clean Qualitative Characteristics: The Strongbox output breaks out qualitative characteristics into separate columns (e.g., location, department, class, customer, vendor), rather than lumping them together in a single, messy description or memo column. This organization makes it easier to analyze and filter data based on these attributes.

  • Pre-Reconciled Transaction Data: All transaction-level data from the GL is pre-reconciled with the trial balance on the TB-CHK tab. This feature ensures that the data is accurate and ready for analysis, saving time and reducing the risk of errors.



Conclusion

Having the general ledger in Excel provides accountants in audit, TAS, and CAS with unparalleled flexibility, customization, and analytical capabilities. Excel's powerful tools and functions allow for detailed trend analysis, variance analysis, ratio analysis, audit trail examination, and segmentation analysis, all of which are crucial for making informed financial decisions and ensuring the accuracy and integrity of financial records.


The general ledger extracted in the Strongbox output stands out due to its standardized flat table format, comprehensive entry view, clean qualitative characteristics, and pre-reconciled transaction data. These features make it an invaluable resource for accountants seeking to maximize the effectiveness of their financial analyses.


By leveraging the power of Excel and the unique advantages of the Strongbox GL output, accountants can gain deeper insights, improve accuracy, and enhance the overall quality of their financial reporting and analysis. Contact us today to see the Strongbox output for yourself!

 

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