Accounting Settings

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Accounting

Accounting Settings

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Published on

September 6, 2023

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Actualizado en

Updated on

December 20, 2023

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Introduction
Chart of accounts adjustments
Setting up multi-currency
Ledger account determination
Tips and best practices
Common issues

Introduction

In this article, we will break down the multiple accounting configuration options available in Cashflow, designed to accommodate the specific needs of your financial operation.

We will cover basic adjustments, such as simplifying the numbering of your account catalog, to advanced functionalities, like activating and configuring the Multi-Currency module and determining specific accounting accounts for each type of transaction in the system.

These flexible and detailed options provide you with precise control over your accounting operations, allowing you to maximize the efficiency and accuracy of your financial records. We will guide you through each step to ensure you can make the most of these configuration options.

2. Chart of Accounts Numbering

Cashflow provides a predefined account catalog designed to meet the tax and financial needs of most businesses. This catalog is divided into five levels, which can result in fairly long account numbers. However, Cashflow offers you the option to simplify these numbers to make them shorter and easier to manage.

To simplify the structure of account numbers, follow these steps:

Go to the main menu and select Settings > Accounting > General Settings.
In the Features section, enable the "Simple chart of accounts" option.
Click Save to save your changes.
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Once you have done this, account numbers will be displayed with a simpler structure, ranging from 1 to 5 digits. Here's an example of how an account would look with standard numbering and simplified numbering:

Standard numbering: 1-01-01-02-0002
Simplified numbering: 11122

3. Multi-Currency Configuration

For companies that deal with different currencies in their operations, Cashflow offers the multi-currency feature. This option allows you to record transactions, manage accounts, and generate reports in multiple currencies. Below, we will explain step by step how to activate and configure this option:

1. Activate and Configure Multi-Currency

Go to the main menu, select Settings, under the Accounting section, click on Multi-Currency.
Enable the "Enable Multiple Currencies" option.
Set the account for Exchange Rate Difference.
In Currencies and Rates, choose whether the rate updates automatically or manually. In Manual mode, you will need to enter the rate each day, while in Automatic mode, the system will update it for you.
Define if you want to allow users to adjust the rate when generating a transaction in the "Adjust Rate" option.
In Currencies & Rate History, you can add the rates you will use in your business. Continued...

2. Add a New Currency

From the previous screen, click the "+ New Currency" button.
Choose the currency and select its configuration, either Automatic or Manual. This option determines whether the system will create the accounts receivable and accounts payable accounts for this currency automatically or if you will define them yourself. We recommend choosing the Automatic option.
Click Save to confirm.
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3. Edit Currency Configuration

Search for the currency you want to edit in the list of currencies.
Click on the action menu (three horizontal dots).
In the new window, choose whether you want to configure accounts receivable and accounts payable manually, then select the corresponding accounts.
Click Save to confirm the changes.

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4. Update the Rate Manually

In the list of currencies, click "Update."
Enter the new Rate in the window that appears.
Click Save to confirm.

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5. Consult the Rate History

Click on the Rate of the currency you're interested in from the list.
In the new window, you can view and filter the rate history.
To close the window, click on X.

Once you have activated and configured the multi-currency feature, you will have the ability to choose the currency when creating transactions, and you will see a field to enter the exchange rate. If you have enabled the "Adjust Rate" option, you can change the exchange rate when recording a transaction. Remember, if you chose to manage the rate manually, you will need to update the rate regularly following the steps described in section (d).

4. Account Determination

The account determination configuration allows accounting users to define which accounts will be affected by each transaction within the system modules. Cashflow comes with this configuration by default, allowing for a quick and seamless implementation. However, it also offers the flexibility to define these accounts in a customized manner to meet specific needs.
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1. Global Account Determination

In this section, accountants can determine the accounting accounts associated with different types of transactions. Here is a step-by-step guide:

Go to the main menu and click on Settings.
Navigate to the Accounting section and click on Account Determination.
Here, you can select and define the accounting accounts that will be affected by each type of transaction.
Be sure to click Save to apply the changes.

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2. Account Determination by Masters

In addition to the global account determination configuration, Cashflow also offers the possibility of making specific determinations in other areas, such as creating warehouses, product groups, and products and services. These additional configurations provide more detailed and precise control over the accounting accounts affected by transactions in these areas.

You will commonly find this configuration in the "Accounting" section within the form for the entity you are creating or editing (warehouses, product groups, etc.).

To determine accounts in these modules:

Access the Entity Form: Navigate to the section of the corresponding entity, such as warehouses or products and services.
Go to the Accounting Section: Look for the Accounting section within the form.
Select the Accounts: In each field, select the corresponding accounting account you want to determine.
Save the Changes: Make sure to save any changes made.

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Important Considerations
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Default Determination
Keep in mind that Cashflow comes with a default account determination that will suit most situations.
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Manual Determination
Modifying this determination is a more complex task and, in general, should be performed by a user or accountant with advanced experience in system configuration.

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The ability to define the ledger accounts that will be affected by each transaction provides detailed control and great flexibility in managing the company's finances. Make sure to review and configure these options carefully to accurately reflect the needs and accounting structure of your business. If you have any questions or need additional assistance, don't hesitate to contact technical support.

Tips & Best Practices

When working with the various accounting configuration options in Cashflow, there are some tips and best practices that can help you optimize the use of these tools and avoid common errors:

Plan Before Implementing
Before making significant changes to the configuration, make sure you understand how each adjustment will affect your accounting operations. If necessary, consult with an accountant or finance expert.
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Use Default Settings
Cashflow provides default settings that will work for most scenarios. If you don't have specific needs, it may be advisable to stick with the default configuration to avoid unnecessary complications.
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Consider Multi-Currency
Managing multiple currencies can be complex. If you choose manual configuration of exchange rates, make sure to keep them updated. Consider the automatic option if you don't have the capacity to update rates regularly.
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Understand Account Determination
Account determination is a powerful feature, but improper configuration can lead to accounting errors. Familiarize yourself with the options and use manual determination only if you have a clear understanding of the accounts to be selected.
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Perform Testing
If you plan to make significant changes, consider testing them first in a demo or test environment. This will allow you to understand the effects of the changes without affecting your live data.
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Train Your Team
Ensure that all users who will work with the accounting configuration are adequately trained and understand how to use the functions correctly.

If you have questions or encounter problems, don't hesitate to contact Cashflow's technical support. An expert can help you navigate the configuration options and ensure they align with your needs.

Common Issues

In the configuration and use of Cashflow's accounting options, you may encounter some common challenges or issues. Here is a list of some of these problems, along with possible solutions and recommendations to address them:

Account Numbers are Too Long or Too Short
Check the settings in the General Settings menu and make sure you have selected the correct option. If there is confusion, consider documenting the changes made to the numbering.
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Issues with Multi-Currency
Review whether you have selected the Automatic or Manual option for exchange rates and ensure that the configuration aligns with your needs. If it's manual, keep exchange rates updated regularly.
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Transactions are Recorded in Incorrect Accounts
Review the configuration in the Account Determination section and ensure that you have selected the correct accounts. Consult with an accountant if necessary.
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Inconsistencies in Reports
Review the settings related to the accounts and transactions in question. Consider regenerating reports after verifying and correcting the configuration.
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Outdated Exchange Rate
If you are using the manual exchange rate option, ensure you update the rate regularly. If it's automatic, verify your internet connection and settings in the Multi-Currency section. If the problem persists, it may be necessary to contact technical support.
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Unable to Update Exchange Rate When Creating a Transaction
Make sure you have enabled the "Adjust Rate" option in the Multi-Currency settings. If this option is not enabled, you won't be able to modify the exchange rate during the transaction.
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Some Transactions Entered with Incorrect Accounts, How Do I Correct Them?
First, verify the account determination to ensure the correct accounts are selected. Then, you will need to void and re-enter the transaction with the correct accounts.

Remember that if you cannot resolve the problem, it is always best to contact technical support for assistance and to avoid potential errors that could affect your accounting records.

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