The following document will be helpful in understanding how the Perfection Software chart of accounts works.  This will allow you to get the maximum benefit out of the Perfection GL system as it will help in determining the proper structure of your current chart of accounts.

Each account in the chart of accounts has a header account, and an account type.  The header account tells which account a particular GL account falls under, and is totaled under.  The account type for each GL account can be A, L, E, R, or X (Asset, Liability, Equity, Revenue, or Expense).

The example below illustrates the structure of the Perfection GL:

1 Assets                                        Asset

   10 Current Assets                        Asset

       100 Cash In Bank                        Asset

       120 Inventory                        Asset

2 Liabilities and Owner's Equity        Liability

   20 Current Liabilities                        Liability

       200 Accounts Payable                Liability

       220 Loan Payable                        Liability

Looking at this example, we can say that account 100 and account 120 have the same header account of account 10.  These 3 accounts are Asset type accounts.

We can also say that the total of the balances in accounts 100 and 120 will be the balance of account 10.  A better way to say this is that in the Perfection GL, the sum total of the Children account balances equals the Parent account balances.  The Parent account is the header account.  The Children accounts are the accounts that have the same header account.

Parent and Children accounts must all have the same type (A L E R X).  The exception is Liability and Equity type accounts.  Liability accounts can have equity account headers and vice versa.

In a multiple location environment, the Perfection GL will automatically create sub accounts for each GL account.  So, in the example above, if you have 4 locations, your chart of accounts would have a 100 account, and also 100-1, 100-2, 100-3, and 100-4.  The 100 account would be the sum total of each of the "100-" accounts.  100-1, 100-2, 100-3, and 100-4 are the account balances for each location for account 100.

So, with Perfection Software, you can get separate Financial Reports for each location, and a sum total report for all locations very easily.

Finally, the Perfection GL has 2 Accounts to track current year profit and loss.  On the Liability/Equity (balance sheet side) there is an account called CURRENT YEAR PROFIT/LOSS.  On the Expense (income/expense side) there is an account for CURRENT YEAR PROFIT/LOSS.  These accounts are automatically maintained in the GL. A manual journal entry must be made to move monies from the balance sheet CURRENT YEAR PROFIT/LOSS to retained earnings as the GL is closed out each fiscal year.  Of course, the income and expense CURRENT YEAR PROFIT/LOSS account will reset to zero as the GL is rolled each fiscal year.