Introduction to G/L Tags
As part of every company’s month end close process, the accounting team must create journal entries to account for all cash inflows and outflows. As a company grows, this process becomes more complex. Having a high volume of transactions and a short 3-5 day window at month end to “close the books,” there are a myriad of items that make this process difficult, time consuming, and labor intensive.
However, it's imperative that this process be completed in a timely fashion with to-the-penny precision. A company will not pass a financial statement audit without a sound close of the books, as it is a required step under GAAP and considered best practice in accordance with the AICPA.
G/L Tag Creation Process
The Why
The G/L Tags module was created for the many customers looking to categorize their transactions using G/L codes from their Chart of Accounts. In essence, this feature exists to support accounting teams with their month-end close journal entry process.
Users can tag all of their transactions and automate new transactions using a 2-code pair logic (G/L Debit code/Credit code) within Trovata. Through the user defined logic, bank transactions are mapped to be uploaded into the client’s accounting system (a process that takes place outside of Trovata).
G/L Tagging works very similarly to regular Transaction tagging by allowing users to create tag rules. In other words, criteria that defines how any particular transaction should be tagged. In most cases, these rules are made up of a key search term and transaction/account filters. Once the criteria is defined, the user will select the impacted debit and credit G/L codes that encompass the transaction details. G/L Tags can be applied automatically or manually, depending on the user’s preference.
G/L Tags Overview Video
G/L Tags Process Overview
First, the user will upload their Chart of Accounts to Trovata
Once G/L codes (Chart of Accounts) have been uploaded, users can create G/L tags using a 2-code pairing logic (Debit code/Credit code) using the appropriate criteria that defines how that particular set of transactions should be tagged.
Once criteria have been defined, the G/L Tags can be applied automatically or manually, by clicking (or not clicking) on the "Automatic Tag" checkbox.
Trovata also makes it easy to locate and apply any one-off transactions directly to any existing G/L tag.
Use Cases
Categorize all transactions with debit/credit GL codes to support journal entry mapping inside the ERP or accounting software
Categorize transactions that don’t automatically post to the ERP or accounting software (like certain deposits, intercompany activity, or bank fees)
Summary of G/L Tags
Once transactions have been applied with G/L Tags, the user can export their transactions data regularly (typically a daily export of prior day activity) via a direct download (Grid Mode), Workbooks, Developer Portal. Each company will have their own process for journal entry posting, so it’s recommended to work with a Solutions Consultant to best determine how to leverage G/L Tags within your current processes.