Oregon Companies Improve Audit Ability of Microsoft Dynamics GP

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Whether it’s setup or process, at no additional software cost, there are several easy things to do to tighten up Dynamics GP to provide better audit ability. When the auditors want proof, we can draw that out for them in an easy-to-scan format in Excel using SmartList, SQL Queries, or SQL Server Reporting Services (SSRS). I’m going to cover each of my topics over two blog articles and send you to the second article to find out about the “Certain fields” mentioned below and how to report on the transactions to provide the auditors with the information they seek.

Three of our Oregon clients were purchased by public companies in the last year. The due diligence auditors went looking for indicators—evidence of why general ledger adjusting entries are made and whether they are distinguishable from subledger entries.

For purposes of this article, a few definitions:

  • Automated: Entry – Has been generated by subledgers to be posted to the General Ledger
  • Manual Entry – An entry made in the General Ledger module, created in the General Ledger in a standard, recurring, or reversing entry in a General Journal; a Clearing Entry; or a Quick Journal

Posting Setup is the First Stop
It is important to note that subledger Automated Entries may still be partially edited in the General Ledger at any time with two conditions:

  1. If Transaction Posting is allowed, all entries posted without a batch will stop at the General Ledger in a batch which must then be “manually” posted. Certain fields can be edited by the user before the batch is posted.
  2. If Posting Setup is marked To the General Ledger but not Through the General Ledger, certain fields in all entries (master, series, batch, and transaction posting) may be edited before final posting in the General Ledger.

As an example let’s look at Posting Setup for the Sales series, Sales Transaction Entry

Oregon Companies Improve Audit Ability of Microsoft Dynamics GP - Sales Transaction Entry

For tighter control:

• Both “Post to General Ledger” and “Post Through General Ledger Files” would be marked
• “Allow Transaction Posting” would be unmarked
• The control for “Require Batch Approval” for General Ledger batches would be unmarked (Change the Posting Setup to Series: Financial, Origin: General Ledger)

This forces all transactions in the Series and Origin to be included in batches which will then immediately flow from Sales Order Processing (and Receivables simultaneously) and into the General Ledger. Except in the case where the batch hung in “Batch Recovery” due to an error, the transaction distributions could not be edited from within Dynamics GP.

There are exceptions to forced batch creation. Neither Payables and Receivables voids nor Bank Reconciliation module transactions post in batches.

Require Batch Approval can halt the general ledger batch from posting because the approval password needs to be manually input.

Second Stop, Company Setup Options
Auditors like to know about deleted or voided GL entries. Only an auditing software product can best disclose that information, but part of the trail can be setup within Dynamics GP. Go to the Administration landing page >> Setup >> Options >> Click Enable Posting Numbers in General Ledger.

Auditors don’t like the “control number” to skip numbers. They want to know why an entry was skipped. First of all, recognize this setting doesn’t prevent the deletion of General Ledger entries. That’s explained in the next section. To understand how Posting Numbers work, realize that General Ledger entries are seized and released frequently. You start an entry, somebody else posts something, you delete your entry and start over – a skipped number often results.

Posting Numbers are assigned in sequential order as entries are posted. So they rarely skip. To soothe your auditors, check your sequence of Posting Numbers throughout the year. Make a note why you think one may have skipped. These will be memorable occasions of the system crashing (you kicked the server when you saw a real mouse), the power went out during posting, etc. Not perfect, but it gets the auditors off your back.

Third Stop, General Ledger Setup
This setting will prevent some of those journal entry numbers from being skipped. Go to the Financial landing page >> Setup >> General Ledger. In the middle of the window unmark “Allow: Deletion of Saved Transactions.” Many fewer skipped journal entries to explain will result.

Summary
Written by Gloria Braunschweig with Computeration, the Idaho ERPSoftwareBlog partner. As a business owner, Gloria has experience across the full spectrum of business operations and management. This facilitates her relationship with her clients and increases her understanding of small business challenges. Despite the lure of new software and systems to companies, Gloria insures that an implementation is economically reasonable for the companies within which Computeration specializes with integration, implementation, and support.

Decades of experience are documented in the book, Rapid Implementation, establishing Gloria and Computeration employees as specialists using Microsoft SQL tools for implementation, integration, and business intelligence. Visit Computeration.com to find information and a series of proprietary tools for the rapid implementation and deployment of Microsoft Dynamics including a downloadable copy of the book chapter on Selection of Software.

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