May be it is hard to believe that we can process accounting data using Open Office Spreadsheet (Calc) with high degree of automation. As we know Open Office Spreadsheet is free multi purpose spreadsheet software that not designed specially for accounting data processing. Some of you may have been familiar with aplication software specially designed to process accounting data. Such a software automate most of clerical work needed, user only enter journal entries or transaction data and the software will do the rest. But using such a software will cost you some. The company with complex and numeoures transactions may be have no choice but using the accounting software.
Company with less complex transactions such as service companies and some trading companies can use open office spreadsheet to process accounting data. By adopting method explained here we can process accounting data with high degree of automation.
Figure above shows us the basic concept of processing accounting data using open office spreadsheet. Each box represents sheet that should be created. General journal and Summary of General Ledger have different colour to stress that this two have very important aspects in data processing. Most of works, after all sheet have been set, are done in General Journal. I can say that the only thing to do is entering journal entries in General Journal and we can automatically get General Ledger and Financial Statement. Summary of General Ledger considered as important one because as the figure suggest all data needed to prepared Financial Statement is flowed from here.
The Chart of Account, consist of account numbers, account titles and normal balance. These are supporting data mainly needed by General Journal and Summary of General Ledger. The General Journal is sheet where transactions are recorded. Almost no automation done here. We have to enter all transactions quite similar to manual process. But this is the only sheet that we have to enter the transactions because the other sheets will use data that available here. Transactions data in General Journal summarized for each account in Summary of General Ledger using “Sumif” formula so that ending balance of each account will be available here. This accounts' ending balance used by all financial statements by getting the figure form the cell in Summary of General Ledger sheet. Unlike in manual data processing, where figures used in preparing financial statement are taken from General Ledger, data processing using Open office Spreadsheet doesn't need General Ledger to do so. But General Ledger is standard record that must be kept. General ledger is created by filtering transactions data form General Journal using “If” formula, no more transaction entries needed. So the miticulous and timeconsuming manual posting from General Journal to General ledger can be omitted.
The detailed explanation of how to use Open Office spreadsheet (Calc) to process accounting data can be found in other part of this blog.
I feel some people had the same reaction when they download, installed and opened openoffice calc. They were overwhelmed by it and made it harder than it really is. It responds very similar as Excel, but is not Excel.
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