A systems application and processes (SAP) general ledger is a software system that culls external and internal data from a variety of ancillary software modules: sales and shipping, payroll and human resources, purchasing, maintenance and repairs, quality control management, inventories, including raw materials, storeroom supplies and finished goods.
SAP software is designed for companies to track critical client and internal business activities. A manufacturing company that needs to track multiple internal and external departments would incorporate SAP software as its data management system.
The general ledger is the core element of a company's business and financial endeavors. A general ledger summarizes all of a company's financial transactions including sales and income, asset management, retained earnings, inventory supplies and expenditures, payroll, including taxes and benefits and vendor expenses.
Sales and Client Data
Sales reflect income, which is recorded in a company's general ledger. Client data includes client name, payment or invoice information, ship to information, purchase trends and associated internal sales representative or account executive information for commission purposes and cost of goods sold.
When raw materials are received, storeroom supplies are issued or finished goods are put into or taken out of inventory, these transactions all have a financial value associated with the transaction. These transactions need to be recorded in a company's general ledger either manually or electronically.
Cost accounting allows for the pricing of finished products by determining the cost associated with a specific product's creation. Complicated cost modules by finished product feed into the general ledger system as goods are created and entered as the cost of goods sold. These activities also generate inventory control entries, both raw materials and finished goods.
Storeroom supply inventories are used to replace or repair machinery or items on the manufacturing line or are used by employees to complete necessary job tasks. As items are issued from a storeroom, software tracks supplies and creates reports for reorder at key inventory set-points and feeds financial transaction data into the general ledger.