Overview: Active Ledger allows accounts to dynamically move between classifications based on their balances, enabling automatic reclassification of accounts from Liabilities to Assets or vice versa depending on their debit or credit status.
Please refer to the Glossary for definitions of key terms used in this article.
Here's a step-by-step guide to using this feature:
Steps to Swing Accounts in Active Ledger:
Allocate Accounts: Begin by assigning the relevant accounts you wish to swing to a header/classification in the Accounts screen. For example, place them under Liabilities.
Group Accounts Under a level 3 or greater Header: If needed use the Quick Group option to group any accounts that need to swing under a level 3 or greater header account like this:
Note that how there are three headers above the swinging account.
Enable Swinging on the Account: While in the Accounts screen, edit the header account or the child account and enable the swinging option. (Refer to the accompanying video for detailed instructions on this step.)
Set Balances for Child Accounts: Ensure the child accounts have balances that trigger the swing. For example, if a liability account has a debit balance, it will swing to Assets. Conversely, if an asset account has a negative or credit balance, it will swing to Liabilities.
Post a Journal(optional): You can create a journal entry to achieve the above as well if the balance from the source does not qualify to swing.
Create a Report Pack: Create a New Special Purpose Financial Report and ensure a Balance Sheet page was added and expand all header accounts so that the swinging accounts are visible.
Generate the Report: Once the report is generated, you should observe that the accounts have swung according to your defined swing property. For example, an account may move from Other Liabilities to Other Assets.
Honouring Swing Configuration: Swung accounts now appear in the report configuration screen with the label [Child accounts]
You can directly configure the note/disclosure and see through properties now.
If you have enabled the Note at a header level, when swung the account will follow and honour the disclosure or note settings of the original account.
WARNING: When configuring a report, multiple swinging dropdown fields are available to set a swinging property. Please select the swinging property in only one dropdown field. Selecting swinging properties in multiple fields (e.g., at both the report level and the balance sheet level) will cause conflicts and may not swing as expected.
For a detailed demonstration, please watch the video linked below, which walks through these steps in action.