---
title: "General Ledger Postings"
canonical: "https://kb.myframeworks.com.au/space/FRAM/28390426/General%20Ledger%20Postings"
format: markdown
---
# Overview
To understand how Frameworks updates the General Ledger (GL) Chart of Accounts, it's important to grasp the relationship between the GL Control accounts and the system's setup. Control Accounts in Frameworks are automatically updated as you carry out daily transactions, ensuring the GL reflects real-time values of stock, sales, GST liabilities, Cost of Good Sold (COGS), and gross profit. While adjustments may be needed for specific scenarios like unusual product costs or stock write-offs, these can be made using the inventory system's stock adjustment programs, which automatically generate the necessary General Ledger entries during the process of updating stock take results.
# General Ledger Postings Examples
The following examples are representations of the General Ledger postings that occur automatically as you process transactions.
## Sales Transactions and the General Ledger
As you process a sale, the software calculates the sell price from the inventory and pricing mechanisms. The cost price of the item is picked up from:
- The standard cost of the item if you are not running average costing or
- The average cost of the item if you are running average costing
Frameworks uses both the sell price and the cost price to calculate the gross profit of each line of every transaction.
### Account Sales
GST Inclusive Sales to an Account Customer -** Sale of $1,100.00** (inc. GST) with a **cost of $700.00** and a settlement **discount of 2.5%** on the payment.
| **Component** | **GL Account** | **Debit** | **Credit** |
| --- | --- | --- | --- |
| **The Sale** |
| Sell Value | Debtors | 1,100.00 | |
| | Sales Account | | 1,000.00 |
| GST | GST Sales | | 100.00 |
| Cost Value | Cost of Goods Sold | 700.00 | |
| | Stock | | 700.00 |
| **The Payment** |
| Debtors Payment | Cash at Bank | 1075.00 | |
| Reduction on Debtors account | Trade Debtors | | 1,100.00 |
| Settlement Discount | Settlement Discount | 22.50 | |
| GST | Settlement Discount | 2.50 | |
### Cash Sales
Cash Sales - **Sale of $1,000.00** with a **cost of $700.00** with a Branch Cash Clearing Account set up, followed by the reconciliation of the till where we have a **till variation of $5.00.** The money is then taken to the bank.
| **Component** | **GL Account** | **Debit** | **Credit** |
| --- | --- | --- | --- |
| Sell Value | Cash Clearing Account | 1,000.00 | |
| | Cash Sales | | 1,000.00 |
| Cost Value | Cost of Goods Sold | 700.00 | |
| | Stock | | 700.00 |
| Till Reconciliation | Cash Clearing Account | | 5.00 |
| | Till Variation | 5.00 | |
| Go to the bank | Cash Clearing Account | | 995.00 |
| | Cash at bank | 995.00 | |
---
## Purchasing Transactions and the General Ledger
### Stock Purchases
As you process a Purchase Order receipt, the software will pick up the cost of the transaction using the costs keyed for each product on the Purchase Order. A purchase of **$700.00 worth of stock **in this example.
| **Component** | **GL Account** | **Debit** | **Credit** |
| --- | --- | --- | --- |
| Receipt to Stock | Stock | 700.00 | |
| | Purchases Clearing | | 700.00 |
| Creditors Invoice | Purchases Clearing | 700.00 | |
| | GST Purchases | 70.00 | |
| | Trade Creditors | | 770.00 |
| Creditors Payment | Trade Creditors | 770.00 | |
| | Cash at Bank | | 770.00 |
> ⚠️ If you are running Average Costing, once a receipt has been processed the system will, if necessary, recalculate and update the average costs for each receipted product.
### Stock Purchases/Stock Return where PO Cost > Std
In a standard costing environment, if you purchase stock at a cost that is greater than the standard cost, the difference is sent to the purchases gain/losses account defined for the products group.
- If a stock return is processed for the return of these goods, the journal created when the goods were receipted is reversed.
- If a stock return is processed but for a change in the purchase cost. That is, allowance:
| **Component** | **GL Account** | **Debit** | **Credit** |
| --- | --- | --- | --- |
| Allowance Return | Purchases Clearing | | 1000.00 |
| | Creditors Control | 1100.00 | |
| | GST Purchases | | 100.00 |
| Creditors Invoice Approval | Purchases Clearing | 1000.00 | |
| | Creditors Control | | 1100.00 |
| | GST Purchases | 100 | |
| (supplier only agrees to 900.00 claim) | Purchases Clearing | | 900 |
| | Creditors Control | 990 | |
| | GST Purchases | | 90 |
### Supplies Purchases
When purchasing consumable supplies, such as stationery, you can have items defined in the inventory system as either Miscellaneous items or normal stocked products.
These items are purchased on a normal Purchase Order, receipted to stock and the creditors' invoice is processed as a Supplier invoice.
**If setup as normal stocked products**
- The products can reside in a normal stock product group
- The products must be accounted for in a stock take and written off to an appropriate expense account when the consumable items are used.
| **Component** | **GL Account** | **Debit** | **Credit** |
| --- | --- | --- | --- |
| Receipt of Supplies | Consumables Stock | 700.00 | |
| | Purchases Clearing | | 700.00 |
| Creditors Invoice | Purchases Clearing | 700.00 | |
| | GST Purchases | 70.00 | |
| | Trade Creditors | | 770.00 |
| Creditors Payment | Trade Creditors | 770.00 | |
| | Cash at Bank | | 770.00 |
| Use Consumable | Consumable Stock | | 700.00 |
| (By way of Stock Adjustment) | Consumables Expense | 700.00 | |
**If setup as Miscellaneous items**
- The products will not have stock movements.
- These products MUST be segregated into a special product group for consumables where the stock and purchase clearing accounts are both mapped to the relevant expense account.
- These products are not included on the stock take and the expense is recognised when the supplier invoice is entered.
| **Component** | **GL Account** | **Debit** | **Credit** |
| --- | --- | --- | --- |
| Receipt of Supplies | Consumable Expense | 700.00 | |
| | Consumable Expense | | 700.00 |
| Creditors Invoice | Consumable Expense | 700.00 | |
| | GST Purchases | 70.00 | |
| | Trade Creditors | | 770.00 |
| Creditors Payment | Trade Creditors | 770.00 | |
| | Cash at Bank | | 770.00 |
### Credit Claims
When **FeatureSCC **is active, a credit claim of equal value is created alongside any value claim or stock return raised against a supplier. The credit claim is deducted from the supplier’s account when the claim is applied or the return is receipted, and is reversed when the invoice/credit note is approved and posted.
> Macro (excerpt)
>
> | **Component** | **GL Account** | **Debit** | **Credit** |
> | --- | --- | --- | --- |
> | Apply Value Claim or Receipt Stock Return | Credit Claim Clearing | | 100.00 |
> | | GST Paid | | 10.00 |
> | | Trade Creditors | 110.00 | |
> | Approve Invoice/Credit Note of Return/Claim | Credit Claim Clearing | 100.00 | |
> | | GST Paid | 10.00 | |
> | | Trade Creditors | | 110.00 |
---
## Supplier Prepayments
| **Transaction** | **Debit** | **Credit** |
| --- | --- | --- |
| 1. Create prepay invoice | Prepayments | Creditors control |
| 2. Pay prepay invoice | Creditors control | Bank |
| 3. Receipt goods | Stock | Purchases clearing |
| 4. Stock Invoice Approval (SIA) - post invoice | Purchases clearing and GST purchases | Creditors control |
| SIA - auto reversal of prepay invoice | Creditors Control | Prepayments |
| 5. Pay supplier invoice/take up prepay invoice | Creditors control | Bank |
| Optional - Cancel (paid) prepay invoice | Bank | Creditors control |
| **If Supplier invoice is entered at Receipting the postings are as follows** |
| 3. Receipt Goods (enter invoice details) | Stock | Purchases clearing |
| Supplier invoice is created | Purchases Clearing & GST purchases | Creditors Control |
| Auto-reversal of prepay invoice | Creditors Control | Prepayments |
---
## Stock Adjustments
Stock Adjustments and Stocktake Application:
| **Component** | **GL Account** | **Debit** | **Credit** |
| --- | --- | --- | --- |
| Stock Adjustment | Stock Adjustment | 700.00 | |
| | Stock | | 700.00 |
---
## Stock Transfers
Transfer of stock from one branch to another:
| **Component** | **GL Account** | **Debit** | **Credit** |
| --- | --- | --- | --- |
| **Supplying Branch** |
| Transfer (Sell price) | Inter Branch Control | 700.00 | |
| | Internal Sales (Transfers) | | 700.00 |
| Cost price | Internal Cost of Sales | 700.00 | |
| | Stock | | 700.00 |
| **Receiving Branch** |
| Internal Stock Receipt | Stock | 700.00 | |
| Internal Stock Receipt | Inter Branch Control | | 700.00 |
---
## Manufactured Items
When the order is released, GL movement occurs between Finished Stock –v- COGS Accounts and the Sale Time Recovery Accounts –v- Sale Time COGS. This movement to separate COGS accounts will permit the GP of each overhead to be monitored on a monthly basis.
| **GL Account** | **Debit** | **Credit** |
| --- | --- | --- |
| **At Production Time** |
| Finished Goods | 120.00 | |
| Stock | | 100.00 |
| Labour Recovery | | 2.00 |
| Factory Overheads | | 3.00 |
| Labour On-Cost Recovery | | 4.00 |
| MFG On-Cost Recovery | | 5.00 |
| Detail On-Cost Recovery | | 6.00 |
| Loading Overhead Recovery | | 7.00 |
| Delivery COGS - MF | | 8.00 |
| **At Sale Time** |
| Debtors | 220.00 | |
| Sales | | 200.00 |
| GST Sales | | 20.00 |
| COGS | 100.00 | |
| Finished Stock | | 120.00 |
| Labour COGS | 2.00 | |
| Factory Overheads | 3.00 | |
| Labour On-Cost COGS | 4.00 | |
| MFG On-Cost COGS | 5.00 | |
| Detail On-Cost COGS | 6.00 | |
| Loading Overhead COGS | 7.00 | |
| Delivery Recovery | 8.00 | |
The system tailoring flag **'JobFrtComp'** allows the freight component of a manufactured product to be added to the line cost of a job after WC Completion without any G/L movement occurring for this freight component until the physical delivery occurs. That is, Order Release.
So, all order and job reports as well as the Re-pricing program will display the full cost and margin.
A **'freight'** product needs to be flagged as Product Type 6 and Manufacturing Type '**F**' - these flags are determined in Product Maintenance option More Data, General Info:
If a 'Freight' product is added as a component of the job:
- At the End of Production, that is, WC Completion, no GL or stock movement occurs for the freight component. the Finished Goods component will comprise stock and ALL factory overheads. However, when you view the costs, run a report or reprice the order, the 'freight' will be included in the display.
- Prior to release, users are able to update the freight component to determine the final delivery fee without having to un-complete the job.
- At Order Release, G/L movement will occur from the freight Stock Account to the freight COGS account.
> ⚠️ There is no stock movement for the freight product if it is a component.
---
## Sundry Payments
Sundry General Ledger payments:
| **Component** | **GL Account** | **Debit** | **Credit** |
| --- | --- | --- | --- |
| Payment | Expense Account | 700.00 | |
| | GST Purchases | 70.00 | |
| | Cash at Bank | | 770.00 |