General Ledger Accounts, Categories, and Category Types

 

Every product in MarginEdge is coded to a Category and every Category is given a Category Type[1] and mapped to a GL account[2] in your accounting system. Because more than one Category in MarginEdge can be mapped to a GL account in your accounting system, you are able to have a more granular set of “Categories” in MarginEdge than you have set up in your Chart of Accounts while still keeping the two systems in sync.

Categories are mapped on the Accounting > Categories page in MarginEdge[3]. Each Category in MarginEdge is set to a Category Type. The Category Types are Food, Beer, Wine, Liquor, N/A Bev, Retail & Other. The Category Type has no impact on how your data is exported to your accounting system but does have an impact on several key areas within the MarginEdge platform.

 

Reporting

Where a category’s purchases will appear on your Controllable P&L[4] is determined by which category type they have been assigned. For Food, Beer, Wine, Liquor, N/A Beverage, and Retail, a categories purchases will appear in the Cost of Goods Section of the P&L under its respective category type. Categories set to Category Type “Other” will appear under the Expenses section of the P&L. 

The Cost of Goods Sold calculation is made by comparing the total value of purchases and inventory adjustments in a Category Type (e.g. Food or Beer) vs the total value of the sales attributed to the same Category Type in a given period.[5]

 

PMIX Mapping & Recipes

Only Products in Cost of Goods Sold Categories (FBWL) can be added to recipes or PMIX mapped. If you have a category like To Go Supplies that you sell directly on their own or as part of a recipe you will need to set them to a Cost of Goods Category Type.

Adjusting Settings 

Changing a Category Mapping 

Category settings are configured by going to Accounting > Categories

mceclip0.pngHere you will see a list of all of your MarginEdge categories (in the Name column), the Category Type they are set to, and the GL Account Mapped the Category is mapped to (in the Accounting System Account column).

To change how this is mapped, triple-click the GL Account in the Accounting System Account column, and you’ll see all of the accounts from your Chart of Accounts appear in a drop-down menu, select which account you’d like to change the mapping to and press the save button on the bottom of the screen.  

  

Changing a Category Type

To change a category type, triple-click the selected cell in the Category Type column and select from the available list of Category Types. When you’re done, scroll to the bottom of the screen and press “Save” to apply your changes

Remember that Categories will appear on your P&L under the Category Type they are set to and any Category set to Category Type “Other” will appear under Expenses (not COGs) and will not be available to use in recipes or PMIX mapping.

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Inventory Accounts

If you intend to post your Inventory Adjustments to your Accounting System, you’ll also need to map an Inventory Account for every account containing products you intend to inventory. If you do not intend to post Inventory Adjustments to accounting, you can skip this step.

To map you inventory accounts, triple-click the cell the Inventory Accounts column and you’ll see all of the accounts from your Chart of Accounts appear in a drop-down menu, select which asset account you’d like to see report adjustments[6] to and press the save button on the bottom of the screen.  

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Reports & Budgets

The Reports column denotes if a category will be included on your Controllable P&L. By default, all categories are included. If you triple-click on this field in any row you can change the settings. This has no impact on how data will flow over to your accounting system. The Budgets column can not be set from this menu but will show if a category is included in any of your budgets.

 

Adding a Category  

 To add a category, press the "+ Add a new Category" button above the search bar. This will add a blank line at the bottom of the page.

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From here, you can add a name (whatever you want the Category to be called in MarginEdge), pick what Category Type you want the purchases to be included under, map the GL account from your accounting system, etc...

If you have products currently in the system you want to be included in this category, you'll need to recategorize them. Follow this link for instructions on how to change a Product's category.

 

Changing A Category Name 

Your Accounting System Account names come from your accounting system, but the names in the Category Name column are completely customizable. To edit a name, double click it and type in the field to change the name

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[1] This article is focused on the Category Types in the context of purchases. For more on Category Types and their relationship to sales, see our articles on Sales Mapping

[2] A general ledger (GL) is a set of numbered accounts a business uses to keep track of its financial transactions and to prepare financial reports. Each account is a unique record summarizing each type of asset, liability, equity, revenue, and expense.

[3] You must have an accountant user role in MarginEdge to access this page.

[4] The controllable P&L can be found under the Performance tab

[5] Cost of Goods Sold = Starting Inventory + Purchases – Ending Inventory

[6] Any change in the value of an inventory in a category will be reported as both a change in the Cost of Goods Account (e.g. Cost of Goods Liquor) and an Inventory Account (e.g. Liquor Inventory). To record this change both accounts need to be mapped in MarginEdge.

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