Accounting Setup

The Accounting Module covers various accounting features available on Woodcore, which includes the charts of accounts, accounting rules, automated journal entries, and management of general ledger accounts. This section handles the financial processes and procedures necessary for recording, tracking, and reporting on financial transactions and activities within your organization.

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The accounting settings and configurations can only be done by users with the assigned role and set permission.

Before proceeding, it is important to have the following accounting setup and configuration in place.

• Setup and configure your Charts of Accounts.

By setting up the CoA, transactions will be systematically organized in the general ledger (GL) accounts whenever financial transactions are carried on savings, loan, or fixed deposit account. This will enable you to track the entries on each account based on your defined accounting rule, ensuring easy access to accounting information and identification of any imbalances.

• Link products to Ledger

When setting up a new product on Woodcore, you have the option to enable accounting for that product. Through this, you can link the financial products to a ledger account. Once the setup is completed, all transactions associated with that product will be automatically imapcted in the specified account.

• Enable Accounting for loan product

For loan products, you can set the accounting method to be applied for income and expenses. Woodcore supports two different methods: accruals and cash. For detailed information on the differences between these methodologies, please refer to the "Cash and Accruals Accounting" section.

• Enable Automated journal entries.

Ledgers in the accounting system are categorized into five main types: assets, liabilities, equity, income, and expenses. These categories help organize and classify the various financial elements within the system.

• Define your Accounting rules.

Define the guidelines and general rules that determine how financial transactions and events are recorded. These rules establish the framework for how financial transactions are recorded and allocated to specific accounts within the system.

Accounting Report

Accounting reports can be generated on Woodcore. They include:

• Balance sheet
• Income Statement
• Trial Balance
• Portfolio Summary
• General Ledger
• Profit And Loss

These reports can be generated by specifying the currency and date range.

General Ledger (GL)

General Ledger represents an individual ledger account within an organization's Chart of Accounts (CoA). The ledger is assigned a name and unique number by which they can be identified. All transactions relating to a company's assets, liabilities, income, revenue, and expenses are recorded against these accounts.

The accounting records are aggregated into the general ledger, or the journal entries may be recorded in a variety of sub-ledgers, which are later rolled up into the general ledger. This information is then used to construct financial statements as of the end of a reporting period.

Entries

Account entries

Account entries are records of all transactions (credit and debit) from customers' accounts to a journal entry. These records are aggregated and automatically or manually added to a ledger.

The transaction entries are automatically logged if the general ledger (GL) is linked to any of your products. This linkage establishes a connection between the customer's account. and the corresponding ledger. For example, the Student savings product is linked to the Student account ledger. All transactions, inflow, and outflow carried out on all accounts under the Student Savings Product will be recorded on the Student account ledger. This dedicated ledger acts as an account solely focused on tracking and documenting the financial activities and movements related to the specific product.

For example, an account entry for salary payment. This entry will contain information such as the customer's (employee's) account name, the customer's saving account, amount, etc. This information is recorded in the ledger automatically whenever a transaction occurs. However, this process can be added manually.

Journal entries

Journal Entries are records of all the transactions (credit and debit) in your organization. The journal entries enables GL-to-GL posting, which involves transferring financial transactions and balances between different accounts within the general ledger of your organization. This ensures accurate and transparent accounting across various accounts.

When a transaction occurs in an account, ledgers that are debited and credited are automatically logged in the journal entries. Note that these transactions are automatically logged only if the product under which the customer's account is associated is linked to a product. However, journal entries can also be manually recorded.

All account transactions, such as deposits, withdrawals, or expenses, associated with the product will be recorded in its corresponding ledger.

The automatic recording of journal entries enables real-time data for generating accounting reports, allowing you to obtain up-to-date insights into your organization's financial position and performance. Additionally, the integration of journal entries with client account transactions simplifies the audit process, providing a comprehensive trail of financial activities and ensuring transparency and accountability.