Overview
In Custodia, General Ledger accounts are not applied directly to expenses in most cases. Instead, expenses inherit their GL coding from the activity they are associated with.
Understanding how GL values flow through the system is important, especially if you are using Budgets or Purchase Orders (POs). This article explains how GL accounts are assigned and how you can control them when creating a spend permission.
Please note the following are out-of-box default configurations. For more detailed mapping rules, please see How to Configure Expense → GL Account Mapping
How GL Accounts Flow to Expenses
1. Standard Flow
When an expense is applied to an approved activity
- The expense inherits the GL account of the activity
- The activity serves as the source of financial coding
In this scenario, whatever GL is assigned to the activity will automatically apply to all related expenses.
2. When Using Budgets
If your organization utilizes Budgets, the GL hierarchy works as follows:
- The Budget contains the GL account
- The Activity inherits the GL account from the Budget
- The Expense inherits the GL account from the Activity
Flow structure:
Budget → Activity → Expense
This ensures that all activity and expense coding aligns with the financial structure defined at the budget level.
3. When Using Purchase Orders
If a Purchase Order is involved, the GL inheritance works similarly:
- The PO contains the GL account
- The Activity inherits the GL account from the PO
- The Expense inherits the GL account from the Activity
Flow structure:
PO → Activity → Expense
This keeps expenses aligned with the financial coding defined at the PO level.
Forcing a GL Account on an Activity
When creating a Spend Permission (Activity), you have the ability to force a GL account directly on the activity in the Advanced Settings.
This means:
- The applied GL will be explicitly assigned at the activity level
- All related expenses will inherit this GL
- This can override other inherited logic depending on your configuration