About General Ledger

what is General Ledger

GL serves as core of any Financial Management system.

It's objective is to keep detail and summary accounting information and produce numerous financial reports for your organization. Typical, you will hear Cash Flow, Income and Balance Sheet statements as SEC filings as financial reports indicating Organizations financial growth. In general, accountants, statistical analysts strongly feel that financial reports from General Ledger are true indicator of organizations growth.

Often Small, Medium organizations see General Ledger as luxury application, the reason behind this belief is, it's not easy to setup and start using General Accounting principles to organize and operate business process to implement and follow accounting processes on daily basis.

Big organizations do not have option to skip General Ledger implementation, because, GL is the only way to manage their business processes, this is why it's normal for big organizations to invest in Big ERP systems like SAP, Oracle, PeopleSoft, JDEdwards, Workday, Coupa etc.

However, recent popularity of new generations of ERP software like Quickbook, Tally etc. is the proof the implementing General Ledger accounting processes is the way to manage any size of organization.

Even a small vendor now a days use mobile devices to scan vendor invoice, prefer to pay online and record transactions to appropriate General Ledger accounts.

"Read, Write & Understand" are three important aspects of data. ERP users realize how important it is to invest in a system where they can write their business processes data.

Writing business processes data/transactions, helps Business understand their processes and improved on it. ERP Data Analysis brings extraordinary benefit to manage business efficiently.

Technical Analysis

is the process of forecasting future Organization growth or stock prices based on studying (using advance charting and applying mathematical formulas) past stock prices and trading volume. Technical analysis strongly believes that at any given point of time, stock price and trading volume reflects it current value and charting accurately captures all factors which can cause upwards or downwards stock prices movement.

Fundamental Analysis

is the process of forecasting future Organization growth or stock prices based on studying company Financial Statements like Finance Ledger, Balance Sheet, Income, Cash Flow Statements.

Techno-Fundamental Analysis

In this notebook and all my follow-up GL notebooks, I am proposing to use 3rd type of analysis. With the use of Machine Learning, one can apply ML algorithms to GL and SUB Ledger (accounting entries) Books.

Techno-fundamental analysis is not new, however, its seen very difficult because its requires big data and large computation.

Julia language provides fast computations for large data sets and great assets for Statistical programming.

Abstract

In a nutshell, GL is simply about Credit & Debit, You Credit you saving accounts once you generate revenue on your sales, and make money. You debit your cash accounts because you have to pay your workforce, or invest in your assets.

Credit & Debit difference (often mistakenly interpreted as Organization growth) is for you to keep, and totally up to you decide how to wisely spend you earnings and eventually drive Organization's business process contributing to growth, vision and goals.

Obviously, its not this simple, its a typical for large Organizations to employ 1000+ people just to do these operations. Due to complexity of these business processes It's very easy to get distracted and lose focus, So throughout this MLforGL journey discussed in this package, we will stick to these fundamentals and quickly come back to core GL and avoid jumping into sub-ledger operations too much in depth.