Finance Module FAQ

General Ledger

What's the difference between cash and accrual accounting?

Angage supports both methods:

• Cash Basis: Records transactions when cash changes hands
• Accrual Basis: Records when earned/incurred regardless of payment Most businesses use accrual for better matching of revenues and expenses.

How many levels can I have in my chart of accounts?

The system supports unlimited hierarchical levels, though 3-4 levels are typically sufficient:

• Level 1: Account Type (Assets)
• Level 2: Category (Current Assets)
• Level 3: Account (Cash)
• Level 4: Sub-account (Checking Account #1)

Can I change account codes after transactions are posted?

No, account codes cannot be changed once used. However, you can:

• Create a new account with desired code
• Transfer balances via journal entry
• Inactivate the old account
• Map old to new for reporting

Journal Entries

When do I need to create manual journal entries?

Manual entries are needed for:

• Month-end accruals
• Depreciation (if not automated)
• Corrections and reclassifications
• Allocations between departments
• Non-standard transactions

What's the difference between posting date and document date?

• Document Date: When transaction occurred (e.g., invoice date)
• Posting Date: When entered in system
• Period: Determined by posting date Important for cutoff and accurate period reporting.

Can I create recurring journal entries?

Yes, perfect for:

• Monthly rent
• Insurance amortization
• Depreciation
• Standard allocations Set frequency, start/end dates, and auto-post options.

Cash Management

How far out should I forecast cash flow?

Recommended horizons:

• Daily: Next 7-14 days for immediate needs
• Weekly: 13-week rolling forecast
• Monthly: 12-month projection
• Annual: For strategic planning

What's the best way to manage multiple bank accounts?

1. Set up each account in the system
2. Use cash pooling for optimization
3. Automate bank reconciliations
4. Configure approval rules by account
5. Monitor consolidated cash position

How do I handle foreign currency transactions?

System handles automatically:

• Uses transaction date exchange rate
• Calculates realized gains/losses on settlement
• Runs periodic revaluation for balances
• Maintains audit trail in both currencies

Period Closing

How long should month-end close take?

Industry benchmarks:

• Best in class: 1-3 days
• Average: 5-7 days
• Initial implementations: 7-10 days Focus on automation and standardization to improve.

What's a soft close vs hard close?

Soft Close: Quick close for management reporting

• Key accruals only
• Estimates acceptable
• 1-2 days

Hard Close: Full close for external reporting

• All procedures completed
• Full reconciliations
• 3-5 days

Can I reopen a closed period?

Yes, but with controls:

• Soft closed periods: Supervisor approval
• Hard closed periods: CFO approval only
• Year-end closed: Special process required
• All changes tracked in audit trail

Budgeting

Should I use top-down or bottom-up budgeting?

Best practice is combination:

• Top-down: Set overall targets
• Bottom-up: Department detail
• Reconciliation: Iterate to balance This ensures buy-in while meeting objectives.

How do I handle budget transfers?

1. Create transfer request with justification
2. Route for approval based on amount
3. System maintains original budget
4. Tracks all changes
5. Reports show original vs revised

What's the difference between budget and forecast?

• Budget: Fixed annual plan, baseline for measurement
• Forecast: Updated projection based on actuals + estimates
• Rolling Forecast: Continuous update (e.g., always 12 months out)

Tax Management

How does multi-state sales tax work?

System handles automatically:

• Determines nexus requirements
• Applies correct rates by jurisdiction
• Tracks exemption certificates
• Generates returns by state
• Monitors thresholds

What's reverse charge VAT?

For B2B cross-border EU transactions:

• Supplier charges 0% VAT
• Buyer self-assesses VAT
• System tracks and reports appropriately
• Maintains compliance documentation

How do I manage tax audits?

System provides:

1. Complete transaction detail
2. Tax calculation history
3. Exemption certificate storage
4. Filed return archives
5. Export capabilities for auditors

Financial Reporting

What's the difference between balance sheet and income statement?

• Balance Sheet: Snapshot of financial position at specific date (assets, liabilities, equity)
• Income Statement: Performance over period (revenues, expenses, profit)
• Both essential for complete financial picture

How do I create consolidated financial statements?

1. Set up company hierarchy
2. Map accounts across entities
3. Define elimination rules
4. Run consolidation process
5. System handles currency conversion and minority interests

Can I create custom financial reports?

Yes, using Report Builder:

• Drag-drop interface
• Custom calculations
• Multiple data sources
• Flexible formatting
• Save as templates

Cost Centers

What's the benefit of using cost centers?

Cost centers enable:

• Departmental P&L analysis
• Budget vs actual by department
• Profitability by segment
• Better cost control
• Informed decisions

How do I allocate shared costs?

Common methods:

• Headcount (for HR, IT)
• Square footage (for rent, utilities)
• Revenue percentage (for corporate overhead)
• Usage-based (for specific services)
• Custom formulas

Can I have multiple dimensions?

Yes, track by combinations:

• Department + Project
• Location + Product
• Customer + Service
• Any combination needed Provides flexible analysis options.

Compliance & Audit

What reports do auditors typically need?

Standard audit requests:

• Trial balance
• General ledger detail
• Bank reconciliations
• Aged receivables/payables
• Journal entry listing
• Supporting documentation

How do I maintain an audit trail?

System automatically tracks:

• Who: User making change
• What: Detailed change log
• When: Timestamp
• Why: Comments/approvals No transaction can be deleted, only reversed.

What controls prevent fraud?

Built-in controls include:

• Segregation of duties
• Approval workflows
• Audit trails
• Access restrictions
• Automated reconciliations
• Exception reporting

Integration

How does finance integrate with other modules?

Seamless integration:

• Sales → AR and revenue
• Purchasing → AP and expenses
• Inventory → COGS and valuation
• Payroll → Expense and liabilities
• All automatic with audit trail

Can I integrate with my bank?

Yes, options include:

• Direct bank feeds
• File import (BAI2, MT940)
• API connections
• Check printing
• ACH/wire initiation

What about external reporting tools?

Data accessible via:

• Excel exports
• API access
• Direct database views
• Scheduled extracts
• Real-time connectors

Troubleshooting

Why doesn't my trial balance balance?

Check for:

• Partial journal entries
• Rounding differences
• Multi-currency issues
• System configuration
• Posting interruptions

Why are my reports different from last month?

Possible causes:

• Prior period adjustments
• Report definition changes
• Exchange rate updates
• Backdated entries
• Correction entries

How do I fix out-of-balance issues?

1. Run integrity check report
2. Identify discrepancies
3. Review transaction detail
4. Create correcting entries
5. Document resolution
6. Prevent recurrence

Monthly Best Practice

Complete bank reconciliations before running financial statements to ensure accuracy and catch any discrepancies early.