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Case Study Sub-Ledger Accounting


Introduction
This section is aimed to guide you through the definition of rules to
account for a Payables invoice. The environment to be used does
not have the adequate ledger setup to accommodate each user to
be able to create accounting using her/his own rules. Remember
that a primary or secondary ledger can have a single accounting
method effective at any given date for a given application.
Therefore, with a single primary ledger definition (Vision
Operations, USA), it will not be possible for all users to create
accounting concurrently for the same ledger. We will be
concentrating on the definition of the rules in this class.

Define Rules to Account for Payables Invoices


Exercise 1 - Copy and Modify Flow
Task
Using the seeded Payables definitions, copy and create your own
rule to account for an invoice. Your rule should:
-

Have your own description on the liability line,

Have a separate liability line for each invoice line, i.e. not
summarized.

Detailed Steps
Copy the seeded journal line definition Accrual, Invoices All and
perform the following changes for your copy:
1. Define a journal entry description to be used on the liability
line. The description should contain your name as a
constant and the supplier name. It should appear only on
invoices having invoice date of February 21, 2007.
Responsibility: Payables, Vision Operations
Navigation: Setup -> Accounting Setup -> Accounting Methods
Builder -> Methods and Definitions -> Journal Line Definitions
Field
Journal Description Code
Journal Description Name
Enabled
Transaction Chart of Accounts
Description
Priority
Details

Value
Enter a code.
Enter a name.
Yes
Null
Enter a description for this component you are
defining; can leave null.
1
This is what will show on the liability line as the

Conditions

description. Define such that your name as


well as your suppliers name is displayed.
Define a condition such that this description is
used only when invoice date is February 21,
2007.

2. Liability lines of the entry should not be summarized i.e.


there should be a liability entry for each invoice line. To
accomplish this, copy the seeded journal line type Liability,
Basic, and modify it such that journal entry lines with
matching criteria are not merged.
3. Modify your copied JLD to use above components.
4. Copy and modify the seeded Payables application definition
Accrual Basis to use your JLD.
5. Modify the Subledger Accounting Method Standard Accrual
to de-activate the seeded Payables AAD and activate yours
as of February 1st, 2007.

Solution
Navigation: Setup -> Accounting Setups -> Subledger
Accounting Setup -> Accounting Methods Builder -> Journal
Entry Setups -> Journal Entry Descriptions
1. Your description should look like below:

Figure 1 JED for Liability Line

Figure 2 - JED Detail

Figure 3 - JED Condition


2. To ensure that liability lines with matching criteria (GL
account, accounting class being a few of many. For the full
list, please refer to the SLA Implementation guide) are not
merged into a single line and that the granularity of the
invoice lines are preserved, set the Merge Matching Lines
option to No on your JLT. In order to make the definition
easier, instead of creating the JLT from scratch, use the
copy functionality on the seeded JLT Liability, Basic and
change the desired option. Your JLT should be similar to
below:

Figure 4 New Liability JLT

3. Remove or de-activate the seeded Liability, Basic JLT from


your copied JLD, and assign your JLT, instead. Do not forget
to assign your description to this JLT, as well as the same
account derivation rule as was on the seeded JLT that you
removed/de-activated. Your JLD should look like below:

Figure 5 New Invoice JLD

4. Copy the seeded AP AAD; replace the JLD for the event
class Invoice with your own. Remember to validate your
AAD; the validation will check for inaccuracies in the setup
and compile the code to create accounting per these rules.
Your AAD should look like below:

Figure 6 New AP AAD

5. Copy the seeded Standard Accrual SLAM, put an end-date


of January 31st, 2007 on the seeded Payables AAD. Add a
new row and activate your AAD as of February 1st, 2007.
The SLAM should look like below:

Figure 7 - Modified SLAM

Exercise 2 Create Flow


Task
Define an AAD for the accounting chart of accounts Operations
Accounting Flex, such that it will generate a journal entry:
-

Only for the validation of AP invoices,

with only item expense and liability lines i.e. no tax,


freight etc,

booking the liability line to the account: 01-000-22200000-000,

booking the expense line to the distribution account on


the invoice line, but with the account segment value
overwritten with 7740.

Detailed Steps
Define the following components and build your SLAM:
1. Liability JLT: Copy your liability JLT defined in the previous
exercise and modify it such that lines with matching criteria
are merged. Call your Liability JLT
<FIN_XX>_LIABILITY_MERGED
2. Expense JLT: to create a line for invoice lines of type Item,
Field
Event Class
Line Type Code
Accounting Class

Name
Rounding Class

Description
Enabled
Balance Type
Side
Switch Debit/Credit

Value
Invoices
Enter <FIN_XX>_INVOICE_EXPENSE
- Item Expense.
- This value will be on the entry line and is used
to categorize lines, primarily for reporting
purposes.
Enter a name.
- Enter the same value as in Accounting Class.
- Along with the Rounding Reference, this value
is used to determine at what level transaction
rounding should be performed (advanced
topic).
Enter a description for the component you are
defining; can leave null.
Yes
Actual, as we are not looking to create budget or
encumbrance entries.
Debit. Expense amount should be debited to the
expense account.
- No.
- Determines if the side on a line with a
negative amount should be switched and the
negative made positive, or both the negative
and the side preserved. For example, an

Merge Matching Lines

Subledger Gain/Loss

Transaction Chart of Accounts

Business Flow Method

Business Flow Class

Multiperiod

Transfer to GL

Conditions
Accounting Attribute
Assignments

amount of -100 may generate an entry line


with DR -100 or CR 100.
- No.
- Determines if lines with matching criteria
should be merged into a single line.
- No.
- Will this JLT be used to create an exchange
gain/loss line calculated by the transacting
application for the primary ledger (advanced
topic)?
- Null.
- Used in interpreting or converting an
accounting flexfield source carrying a value
from the transaction for the primary ledger
(advanced topic).
- None.
- Determines if certain attributes of the journal
line should be inherited from another line. For
example, for a liability line, copy the BSV from
the corresponding expense line in the same
entry; or, on a payment, back out from the
same liability account that was used on the
invoice of this payment (advanced topic).
- Null.
- Used together with the above when Prior
Entry is selected.
- None.
- Determines if/how a payment should be
recognized as expense over multiple
accounting periods (advanced topic).
- Summary.
- Determines whether the lines should be
transferred to GL in the same level of
granularity as in SLA or summarized by
accounting flexfield and other criteria.
Define a condition such that this JLT is used only
for invoice lines with distribution type = Item.
- Review the sources assigned to the
accounting attributes to be used in deriving
values for this journal entry line.
- Uncheck the Event Class Default box for the
attribute Party Identifier, and select Invoice
Supplier Site Identifier from the list of values.
This will result in the journal entry line
showing the party site identifier as both the
party and the party site. Note that you can
change the event class default only if there
have been multiple source assignments to an
accounting attribute on the event class level.
Note: This may not work in our current training
environment

3. Liability ADR: a constant based ADR deriving accounting


flexfield 01-000-2220-0000-000, defined for accounting
chart of accounts Operations Accounting Flex,

Field
Rule Code
Rule Name
Enabled
Description
Chart of Accounts-Transaction

Chart of Accounts-Accounting

Output Type
Priority
Value Type
Value

Value
Enter a code. <FIN_XX>_LIABILITY
Enter a name. <FIN_XX> Liability Account
Yes
Enter a description for the component you are
defining; can leave null.
- Null
- Used in interpreting or converting an
accounting flexfield source carrying a value
from the transaction for the primary ledger
(advanced topic).
- Operations Accounting Flex
- Will allow defining constant values by
validating against the COA.
Flexfield
1
Constant
01-000-2220-0000-000

4. ADR for invoice distribution account: already exists as


seeded rule (see the ADR Invoice Distribution Account
attached on the JLT Item Expense JLT on seeded JLD Accrual,
Invoices All),
5. ADR for account segment: a constant based ADR deriving
value 7740 for account segment, defined for accounting
chart of accounts Operations Accounting Flex,
Field
Rule Code
Rule Name
Enabled
Description
Chart of Accounts-Transaction

Chart of Accounts-Accounting

Output Type
Priority
Value Type
Value

Value
Enter a code. <FIN_XX>_EXPENSE
Enter a name. <FIN_XX> Expense Account
Yes
Enter a description for the component you are
defining; can leave null.
- Null
- Used in interpreting or converting an
accounting flexfield source carrying a value
from the transaction for the primary ledger
(advanced topic).
- Operations Accounting Flex
- Will allow defining constant values by
validating against the COA.
Segment Account
1
Constant
7740

6. JED (optional): you can use the JED already defined in the
previous exercise,
7. JLD for invoice validation event type: defined for accounting
chart of accounts Operations Accounting Flex:
-

Assign the liability JLT from step #1 and the


liability ADR from step #3. Note that this ADR

will determine the value for all the segments of


the accounting flexfield.
-

Assign the expense JLT from step #2 and the


ADR for invoice distribution account from step
#4 and ADR for account segment from step #5.
Note that the former will determine the value
for all the segments of the accounting flexfield,
and the latter will overwrite the account
segment value.

8. Payables AAD: defined for accounting chart of accounts


Operations Accounting Flex, to generate an entry only for
invoice validation events. Assign the JLD from step #7. Use
the Definition Code <FIN_XX> OPERATIONS_COA_AAD.
Hit the Header Assignments button, and check the source
assigned to the GL Date accounting attribute. The value of
this source from the transaction will determine what the GL
date will be on the accounting entry. Optionally, assign a
description for the header of the entry.
Remember to Validate your AAD.
9. SLAM: defined for accounting chart of accounts Operations
Accounting Flex, to generate accounting only for Payables
application. Note that you can also assign your COAspecific AAD on a COA-generic SLAM. However, for the
purposes of this exercise, define a new one, called
<FIN_XX>_OPERATIONS_SLAM.

Solution
Navigation: Setup -> Accounting Setup -> Subledger
Accounting Setup -> Accounting Methods Builder -> Journal
Entry Setup -> Journal Line Types
1. Your new liability JLT should be similar to below:

Figure 8 - New Liability JLT

2. Your JLT for the expense line should be similar to below:


(Note: You may have to set the Subledger Gain/Loss field to
NO)

Figure 9 - New Expense JLT

Figure 10 - Expense JLT Condition

Figure 11 - Expense JLT Accounting Attributes


3. Your liability ADR should be similar to below:
Setup -> Accounting Setup -> Subledger Accounting Setup
-> Accounting Methods Builder -> Journal Entry Setups ->
Account Derivation Rules

Figure 12 - Liability ADR

4. Seeded ADR Invoice Distribution Account will read the value


of the source Invoice Distribution Account from the
transaction, and will use the same account on the journal
line.

Figure 13 - Seeded ADR for Invoice Distribution Account

5. Expense account ADR should be similar to below:

Figure 14 - Expense ADR for Account Segment


6. The JED is defined in the previous exercise.

7. Your JLD should be similar to below:


Setup -> Accounting Setups -> Subledger Accounting Setup
-> Accounting Methods Builder -> Methods and Definitions
-> Journal Lines Definitions

Figure 15 - JLD for Invoice Validation Event

8. Your AAD should look like below:


Setup -> Accounting Setups -> Subledger Accounting Setup
-> Accounting Methods Builder -> Methods & Definitions ->
Application Accounting Definition

Figure 16 - AAD for Operations Accounting Flex

Figure 17 - AAD Header Assignments


9. Your SLAM should be similar to below:
Setup -> Accounting Setups -> Subledger Accounting Setup
-> Accounting Methods Builder -> Methods and Definitions
-> Subledger Accounting Method

Figure 18 - SLAM for Services Accounting Flex

Exercise 3 - Create Accounting Using Seeded SLAM with


Custom AAD
Task
In the Copy and Create flow above in Exercise 1, you created your
own AMB components by copying and modifying the seeded
definitions. You assigned your AAD to the seeded SLAM Standard
Accrual. When you create accounting for any ledger that has this
SLAM assignment, the invoices will be accounted per your rules.
This exercise involves entering a transaction and generating
accounting for it per your definition in Exercise 1.
Detailed Steps
1. Create a standard Payables invoice for operating unit
Vision Operations (USA), with 2 item lines, validate
the invoice, and create online accounting in final
mode to post to GL.
Note: If you use Supplier number 1005, you should
remove the Distribution Set name that will default
into the invoice header, otherwise this will generate
confusing results.
2. View the accounting lines generated.
3. View the journal entry.
4. View the details of one liability line.
5. View the entry in t-account format. (Warning: this
might take a long time to appear go for a coffee!)

Solution
1. Use the Actions button to submit online accounting for the
invoice.

Figure 19 - Create Online Accounting for a Payables Invoice


2. Use the toolbar to access accounting entry for the invoice,
displaying all lines generated. Note that if there are
multiple representations i.e. reporting currencies and
secondary ledgers, a separate entry will be generated for
each; but all lines belonging to all entries will be displayed
on this page.

Figure 20 - Accessing Accounting Entry from Invoice Workbench

Figure 21 - View Journal Entry Lines

3. Use the button View Journal Entry to access more details of


the entry with the header information. Notice that the
liability lines have not been summarized per the liability JLT
definition you had created.

Figure 22 View Journal Entry


4. Select the link Show for one of the liability lines to view the
details. Notice the description is created per your JED.

Figure 23 - Journal Line Details and Description

5. Select the button View T-Account.

Figure 24 - View Journal Entry in T-Account Format

Exercise 4 - Create Accounting Using Custom SLAM with


Custom AAD
Task
In the Copy and Create flow above in Exercise 2, you created your
own AMB components including the SLAM. In order to use your
SLAM, you need to assign it to the ledger you are using. When you
create accounting for any ledger that has this SLAM assignment,
the invoices will be accounted per your rules. This exercise
involves entering a transaction and generating accounting for it
per your definition in Exercise 2.
Detailed Steps
1. Create a standard Payables invoice for operating unit Vision
Operations (USA), with 2 item lines, validate the invoice,
and create online accounting in final mode to post to GL.
2. On Subledger Accounting Journal Entries page, search for
the two invoices you have entered in this exercise and the
previous one.
3. Select the two entries and hit Compare button.
4. Switch to GL responsibility and view the new journal.
5. Drill down to the SLA entry.
6. Drill down to the transaction.

Solution
1. Create an invoice with the same date, amount, and
distribution accounts as in the previous exercise.
2. Depending on your search criteria, multiple entries may be
returned.

Figure 25 - Search Journal Entries


3. Compare the details of the two entries, and notice the
difference in the accounts and liability line summarization.

Figure 26 - Compare Journal Entries


4. Notice that the entry in GL has two lines with the expense
lines summarized, whereas the entry was created in SLA
with 2 expense lines to the same account. This is because

of the Transfer to GL setting on the expense JLT, which was


set to Summary. Hence, during transfer to GL, lines hitting
the same account are summarized into a single one, with
the details being preserved in SLA. SLA entries are more
detailed than the GL entries.

Figure 27 - Entry Viewed in GL


5. Using the Line Drilldown button for the debit line, you
navigate to the SLA page to view the detail lines that were
summarized together to create the line as seen in GL.

Figure 28 - Detail Lines in SLA


6. From the lines view, you can drill back to the transaction on
Payables invoice workbench.

Figure 29 - Drilldown to Transaction

Exercise 5 - Troubleshoot Accounting Errors


Create Accounting Using Custom SLAM with Custom AAD
Task
In this exercise, you will be running diagnostics to troubleshoot an
error in accounting. Use your own SLAM, AAD, and JLD for invoice
validation, but replace the Item Expense JLT with the following one
already defined as a template for you: LP Item Expense (error).
Of course, you should not be using this JLT, but copying it and
creating your own exact copy with no modifications.
Detailed Steps
1. Create a standard Payables invoice for operating unit Vision
Operations (USA), validate the invoice, and create
accounting in final mode to post to GL.
2. When the process errors, run the Create Accounting
program through SRS in batch mode so you can see the
errors.
3. Enable diagnostics for your user if not already done; and
run the diagnostics report.
4. Identify and fix the error.

Solution
1. Following error will be displayed:

Figure 30 - Online Accounting Error

2. Set the profile option SLA: Enable Diagnostics to Yes for


your user, and submit the Transaction Objects Diagnostics
program.

Figure 31 - Enable Diagnostics

3. Submit Create Accounting program for your ledger, and


when completed, view the output for errors.

Figure 32 - Create Accounting Offline

Figure 33 - Error on Accounting Report

Figure 34 - Submit Transaction Object Diagnostics


4. On the output, locate the accounting attribute that the error
was reported for, i.e. Accounted Amount. Notice the source
and its value mapped to this attribute for the JLT that was
expected to create the entry line, Quantity Variance
Amount in Ledger Currency with no value. This shows that
the accounting program was trying to create the entry line
using the value of this source, and was unable to create a
successful entry as the there was no value. A valid journal
entry line must always have a value for accounted amount.
For a list of validations on a journal entry, please see the
appendix of the SLA Implementation Guide.
To fix the error, you will need to change the source
mapped to this accounting attribute on the JLT that was
in error, i.e. your copy of the LP Item Expense (error)
JLT. Note that after modifying any component used in
it, your AAD will need to be revalidated to compile the
code with the new settings.
When you generate accounting after these changes
(offline or online), you will see an entry successfully
created.

Figure 35 - Diagnostics Report

Figure 36 - Accounting Attribute Assignments on the JLT

Figure 37 - Revalidating the AAD