Accounting Transactions - The ERP Systems Behind the Scenes

Accounting Transactions
The ERP System Behind the Scenes

It is important for an accounting team to understand the impact of recording a transaction in the ERP system.

Understanding of how many modules or G/L accounts are impacted with each transaction.

A lot goes behind the scenes when you record a single accounting transaction in an ERP system.

There was a time when most transactions were recorded by manually debiting or crediting the G/L account codes.

Every accountant knew their debits and credits thoroughly.

These days, we do not even get to see what transactions are taking place behind the scenes in an ERP system.

You have a screen where you enter the information, and the ERP system handles the accounting.

And that is great!

However, the issue arises when there are integration or reconciliation issues between sub-ledgers and the general ledger.

Or any other system issue where the knowledge of transactions an ERP system records becomes helpful. For instance, a partial posting of transactions in a batch.

Understanding what happens behind the scenes helps you resolve these issues.

With the help of five transactions, I have attempted to demonstrate how many modules and G/L account codes are impacted by one transaction.

You will also appreciate how the ERP systems help seamlessly enhance efficiency and performance by handling these transactions.

I have taken the following transactions as an example:

1- Procure to Pay
2- Order to Cash
3- Fixed Assets Recording
4- Commitments and Payment for Projects
5- Hire to Retire

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