Running your business with LedgerSMB 1.10 DRAFT / WORK IN PROGRESS Erik Hülsmann Neil Tiffin Chris Travers Contents Preface Intended audience Organization of the book Comments and questions Acknowledgments I Overview 1 What is LedgerSMB 1.1 Introduction 1.2 Supported functionality 1.3 Feature comparison with alternatives 1.4 System requirements 1.5 Application architecture 1.6 License 2 Reasons to use LedgerSMB 2.1 Internal control 2.2 Accounting principles 2.3 Impact of tight integration 3 Introduction to accounting 3.1 Double-entry accounting 3.2 Cash versus accrual basis 3.3 Valuation of inventory II Getting started 4 Overview 4.1 Introduction 5 Creating a company database 5.1 Using setup.pl 5.1.1 Step 1: setup.pl login 5.1.2 Step 2: Company creation 5.1.3 Step 3: Selection of a Chart of Accounts 5.1.4 Step 4: Load template 5.1.5 Step 5: Initial user 6 The first login 6.1 Introduction 6.2 Steps to the first login 6.2.1 Login screen 6.2.2 Selecting a password 6.2.3 Setting user preferences 6.2.4 Setting system defaults 6.3 Setting up a bank account or credit card 6.4 Checking and adjusting the chart of accounts 6.4.1 Accounts list 6.5 Checking sales tax rates 7 Building up stock 7.1 Overview 7.2 Defining parts 7.2.1 Single items 7.2.2 Combining single-item and “multi-item pre-packaged” sales 7.3 Defining part groups 7.4 Defining vendors 7.5 Requesting quotations 7.6 Following up on a quotation 7.7 Receiving ordered items 7.8 Receiving an invoice 7.9 Paying an invoice 8 Ramping up to the first sale 8.1 Sending out a quote 8.2 Sending out a sales order 9 Shipping sales 10 Invoicing 10.1 Handling sales taxes 10.1.1 Invoices with taxes included 10.1.2 Invoices with explicit tax amounts 10.2 Invoice Editing 11 Collecting sales invoice payments 11.1 Customer payments 11.2 Customer payment mismatch 11.2.1 Choosing between pardoning and registering underpayment 11.2.2 Large ones, as in partial payments or largish under/over payments 11.2.3 Pardoning small mismatches 12 Paying vendor invoices 12.1 Handling vendors who match amounts to exact invoices 12.2 Handling vendors with running balances 12.3 Handling bounced checks 12.3.1 Voiding checks to undo payments of vendor invoices relating to bounced checks 13 Monitoring arrears 13.1 Handling interest on arrears 14 Branching out: services 14.1 Creation / assignment to different accounts 14.2 Recording service hours 14.3 Customer approval on service hours 14.4 Invoicing services 15 Branching out II: service subscriptions III Configuration 16 Overview 16.1 Introduction 17 Global configuration 17.1 Apache 17.1.1 Differences between Apache 1.3 and 2+ 17.2 PostgreSQL 17.3 LedgerSMB version numbers 17.4 LedgerSMB Configuration 17.4.1 ledgersmb.yaml 18 Per company configuration 18.1 Matching your business processes 18.2 Administrative user 18.3 Chart of accounts 18.3.1 Special accounts 18.4 System menu settings 18.4.1 Audit control 18.4.2 Taxes 18.4.3 Defaults 18.4.4 Year end 18.4.5 Admin users 18.4.6 Chart of accounts 18.4.7 Warehouses 18.4.8 Departments 18.4.9 Type of business 18.4.10 Languages 18.4.11 Standard Industry Code (SIC) 18.4.12 Templates IV Administration 19 Overview 19.1 Introduction 20 New install 21 Within-application tasks 22 DBA tasks from setup.pl 23 Outside-application tasks 24 User management 24.1 Introduction 24.2 User creation 24.3 User authorization 24.4 Maintaining users 24.4.1 Editing user information and authorizations 24.4.2 Changing user preferences 24.4.3 Deleting users 24.5 User imports 24.6 setup.pl users 25 Definition of goods and services 25.1 Definition of goods 25.1.1 Definition of parts 25.1.2 Definition of part groups 25.1.3 Definition of assemblies 25.1.4 Definition of overhead or labor 25.1.5 The use of parts versus assemblies for multi-item-package sales 25.2 Definition of services 25.2.1 Taxation of services 26 Chart of accounts 26.1 Accounts and headers 26.2 Account configuration 26.2.1 Account options 26.2.2 Summary accounts 26.2.3 Account inclusion in drop down lists 26.3 Alternative accounts (GIFI) 26.3.1 Maintaining GIFI 26.4 Reporting 27 Taxes 27.1 Overview 27.2 Tax account configuration 27.3 Tax calculation examples 27.4 Tax calculation plug-ins 27.5 Tax forms 27.5.1 Overview 27.5.2 Creating tax forms 28 Pricing 28.1 Introduction 28.2 Definition of types of business 28.3 Definition of price groups / price matrix 29 Auditing 30 Contingency planning 30.1 Backup and restore 30.1.1 Backup using setup.pl 30.1.2 Backup using PostgreSQL administration tools 30.1.3 Restore 30.2 Advanced PostgreSQL: replication 31 Software updates 31.1 Introduction 31.2 Backups 31.3 Software upgrade 31.4 Database upgrade 32 Optional Features 32.1 PDF and Postscript Documents 32.2 Attaching Uploaded Files to PDF Invoices 32.3 OpenDocument Spreadsheet Output 32.4 Microsoft Excel Output V Business processes 33 Overview 34 Customers and vendors 34.1 Introduction 34.2 Creating customers and vendors 34.2.1 Creating a Company 34.2.2 Creating a customer account 34.2.3 Creating a vendor account 34.3 Multiple customers within one company 34.4 Creating vendors from customers 34.5 Maintaining contact information 35 Quotations from Vendors and for Customers 35.1 Creating Quotations and RFQs 35.2 Expediting quotations 35.2.1 Printing 35.2.2 Sending by e-mail 35.3 Attaching files to quotations 36 Sales and vendor orders 36.1 Creating new orders 36.2 Creating orders from quotations 36.3 Creating orders from projects 36.4 Creating purchase orders from sales orders 36.5 Combining orders 36.6 Recurring orders 36.7 Incomplete orders 37 Inventory management 37.1 Shipping 37.1.1 Pick lists 37.1.2 Packing list 37.2 Receiving 37.3 Partial shipments or receipts 37.4 Handling returns 37.5 Transferring between warehouses 37.6 Inventory reporting 37.6.1 Inventory status report 37.6.2 Inventory activity report 38 Sales and vendor invoice handling 38.1 Creating invoices from orders 38.2 Creating new invoices 38.2.1 Invoices 38.2.2 Transactions 38.2.3 Email Invoices 38.3 Recurring invoices 38.4 Invalidating invoices 38.5 Correcting and deleting invoices 38.6 Handling invoice disputes 38.6.1 Credit and debit invoices 38.6.2 Credit and debit notes 38.6.3 AR and AP Vouchers 38.7 Remarks 39 Shop sales 39.1 Opening and closing the cash register 39.2 Shop sales invoices 40 Manufacturing management 40.1 Producing sales orders 40.1.1 Work orders 41 Managing accounts receivable and payable 41.1 Creating generic AR/AP items 41.2 Handling refunds, over-payments and advances 41.3 Handling returns 42 Credit risk management 42.1 Introduction 42.2 Limit management 42.3 Granting payment terms 42.4 Managing arrears 42.4.1 Monitoring AR aging 42.4.2 Tracking invoice history 42.4.3 Special treatment of invoices 42.5 Interest on arrears 42.6 Allowance for doubtful accounts 42.7 Writing off bad debt 42.7.1 Direct write-off 42.7.2 Allowed-for write-off 43 Receipts and payment processing 43.1 Introduction 43.2 Single receipts or payments 43.3 Batch receipts and payments 43.4 Check payments 43.5 Using over payments 43.6 Receipt and payment reversal 43.7 Over payment reversal 43.8 Receipts and payments in foreign currencies 44 Accounting 44.1 Separation of duties: Transaction approval 44.2 Entering non sales transactions 44.2.1 Corrections 44.2.2 Transfer of money between bank accounts 44.2.3 Wages 44.2.4 Entering other general accounting documents 44.3 Bank reconciliation 44.3.1 Importing bank transactions - OFX 44.3.2 Importing bank transactions - CAMT.053 44.3.3 Importing bank transactions - CSV 44.4 Period closing 44.5 Year-end processing 44.6 Fixed asset accounting 44.7 Reporting 44.7.1 Tax reporting 44.7.2 Tax reporting using tax forms 44.7.3 Income statement 44.7.4 Balance sheet 44.7.5 Trial balance VI General Operation 45 User Interface 45.1 Reports VII Customization 46 Batch data import methods 46.1 Custom bank statement import 46.2 Data imports back port from 1.4 46.2.1 Chart of Accounts import 47 Add-ons and plug-ins 48 Company creation 48.1 Template sets VIII Workflows 49 Overview IX Appendices A Differences between version 1.2 and 1.3 A.1 Users B Why deleting invoices is not supported B.1 Invoices are debt claims B.2 Cost Of Goods Sold become ambiguous C Migration C.1 Introduction C.2 From older LedgerSMB versions C.3 From SQL-Ledger 2.8 C.4 From older SQL-Ledger versions C.5 From other accounting packages C.5.1 Overview C.5.2 Migrating customers C.5.3 Migrating parts, services, … C.5.4 Migrating the balance C.6 Migrating between PostgreSQL versions D Listing of application roles E Deprecated Content E.1 ledgersmb.conf F Open source explained F.1 An open source application F.2 An open source book G Project history H Copyright and license H.1 License summary H.2 Legal full text Index List of Figures 5.1 setup.pl login screen 5.2 Chart of accounts - country selection 5.3 Chart of accounts - selection 5.4 Template selection 5.5 setup.pl initial user creation screen 5.6 setup.pl successful completion screen 6.1 login.pl opening screen 6.2 login.pl welcome screen 6.3 Password change screen 6.4 User preferences 6.5 System defaults 6.6 Bank account setup - menu items 6.7 Bank account setup - account setup screen 6.8 Tax rate adjustment screen 7.1 Add first part 7.2 Company entry screen 7.3 Vendor account screen 7.4 Vendor account screen - with purchase discount account 7.5 RFQ entry screen 7.6 RFQ e-mail screen 7.7 RFQ entry screen 7.8 Order receipt entry screen 18.1 System templates screen 18.2 Templates edit invoice screen 24.1 Screen for user creation - step 1 24.2 Screen for user creation - step 2 24.3 User preferences screen 27.1 Tax account configuration screen 35.1 RFQ entry screen 37.1 Saved purchase order 37.2 Search screen for purchase order item receipts 37.3 Search results screen for purchase order item receipts 37.4 Purchase order receipt screen List of Tables 5.1 Create first user entry data 6.2.1 Login screen 6.2 First Login - Change initial password data 6.3 First Login - Change user defaults data