Business Flow:-

Requestor creates Purchase Requsition (PR)-->

Get it Approved --> Buyer converts Approved
PR into Standard Purchase Order -->
Warehouse team Receives and performs Put
Away/Delivery (i.e. taking the stock into
Inventory location)--> AP Team records Invoice
received from Vendor--> AP team makes the
payment --> Cash Management team performs
Payment reconciliation

Scenario I PO Creation without Inventory Items

PR Creation
No Accounting Entry gets created

PO Creation

Accounting Entry:- Source of Account

No Entry at PO Stage

PO Receipt:-
Receiving
AP AccrualAccount
A/c for Inventory Dr Cr Receiving Options
Purchasing Options

PO Deliever/Put Away

Inventory Material Value A/c Dr Inventory Org Definition (Costing Information tab) This is at Standard Cost price
Difference between PO Price and
Purchase Price Variance A/c (if any) Dr Standard Cost Price
Receiving Account for Inventory Cr This is at PO Price

AP Invoice:-
Account Code combination is derived from PO
AP Accrual A/c Dr Receipt
Account Code combination is derived from
AP Liability A/c Cr Vendor Site Setup

AP Payment:-
Account code combination is derived from AP
AP Liability A/c Dr invoice
Account code combination is derived from Bank
Cash Clearing A/c Cr account setup

Payment Reconciliation Via Cash Management

Account code combination is derived from Bank
Cash Clearing A/c Dr account setup
Account code combination is derived from Bank
Cash/Bank A/c Cr account setup
 PO Creation without Inventory Iteam and PO
Scenario II Line Type :- EXPENSE

Accounting Entry:- Source of Account

PO Creation/Receiving/Delivery:-
- No Entry at PO Stage and Receiving stage

AP Invoice:-
In General, Charge Account is derived in PO based
Charge A/c used in PO A/c Dr on PO Auto Account Generator
Account Code combination is derived from
AP Liability A/c Cr Vendor Site Setup

AP Payment:-
Account code combination is derived from AP
AP Liability A/c Dr invoice
Account code combination is derived from Bank
Cash Clearing A/c Cr account setup

Payment Reconciliation Via Cash Management

Account code combination is derived from Bank
Cash Clearing A/c Dr account setup
Account code combination is derived from Bank
Cash/Bank A/c Cr account setup

Scenario III Non PO Based Invoices

Standard AP Invoice:-
Account Code combination entered by user in AP
AP Expense A/c Dr Invoice Distributions
Account Code combination is derived from
AP Liability A/c Cr Vendor Site Setup

Credit Memo/Debit Memo:-

Account Code combination is derived from
AP Liability A/c Dr Vendor Site Setup
Account code combination derived from AP
AP Expense A/c Cr invoice to which CM/DM is matched

AP Prepayment Invoice:-
Account Code combination derived from Vendor
Prepayment A/c Dr Site Setup
Account Code combination is derived from
AP Liability A/c Cr Vendor Site Setup

Applying of Prepayment to Standard Invoice:-

 Account derived from the original AP invoice to
AP Liaibility A/c Dr which prepayment is applied
Account derived from the Prepayment invoice
Prepayment A/c Cr distribution

Standard AP Invoice with Withholding Tax:-

Original Invoice from Vendor
Account Code combination entered by user in AP
AP Expense A/c Dr Invoice Distributions
Account Code combination is derived from
AP Liability A/c Cr Vendor Site Setup

Account Code combination is derived from

AP Liability A/c Dr Vendor Site Setup

Withhilding Tax A/c Cr Account derived from Withholding tax code setup

Withholding Tax Invoice in the name of Tax

Authority

Withhilding Tax A/c Dr Account derived from Withholding tax code setup
Account Code combination is derived from
AP Liability A/c Cr Vendor Site Setup
 Business Flow:-

Sales guy raised a Sales Quote --> This is converted into

Sales Order --> SO is booked/Picked/Packed and then
Shipped --> AR Invoice is created --> Revenue is
recongnized --> AR Receipt --> Cash Management
reconcilition (if any)

Scenario I SO Based Invoices

Accounting Entry:- Source of Account
SO Booking
No Accounting Entry

SO Shipping
Deferred Cost of Goods Sold A/c Dr Inventory Org Parameters
Inventory Valuation A/c Cr Inventory Org Parameters

AR Invoice Creation
Account derived based on AR Auto
Receivable A/c Dr Accounting Rules
Account derived based on AR Auto
Revenue A/c Cr Accounting Rules

After Running Revenue recognition and COGS

Recoginition programs
Cost of Goods Sold A/c Dr Inventory Item used in Sales Order

Deferred Cost of Goods Sold A/c Cr Sales Order type/Inventory Org Parameters

Receipt with Remittance

AR Receipt
Receipt Confirmation A/c Dr Receipt Class
Unidentified Receipt A/c Cr Receipt Class

Unidentified Receipt A/c Dr Receipt Class

Unapplied Receipt A/c Cr Receipt Class

Unapplied Receipt A/c Dr Receipt Class

From the Invoice against which receipt is
Receivable A/c Cr created

Payment Reconciliation Via Cash Management

Cash/Bank A/c Dr Bank Account setup
Receipt Confirmation A/c Cr Receipt Class

AR Credit Memo
Account derived based on AR Auto
Revenue A/c Dr Accounting Rules
Account derived based on AR Auto
Receivable A/c Cr Accounting Rules

AR Debit Memo
Account derived based on AR Auto
Receivable A/c Dr Accounting Rules
Account derived based on AR Auto
Revenue A/c Cr Accounting Rules

AR Chargeback
Account derived based on AR Auto
Receivable A/c Dr Accounting Rules
 Account derived from Chargeback
Chargeback Clearing A/c Cr Receivable Activity

Account derived from Chargeback

Chargeback Clearing A/c Dr Receivable Activity
Receivable account of the invoice against
Receivable A/c Cr which Chargeback invoice is created

AR Deposit
Account derived based on AR Auto
Receivable A/c Dr Accounting Rules
Account derived based on AR Auto
Deposit A/c Cr Accounting Rules

AR Guarantee
Account derived based on AR Auto
Unbilled Receivable A/c Dr Accounting Rules
Account derived based on AR Auto
Unearned Revenue A/c Cr Accounting Rules

Invoicing Rules - In Advance - 3 Month Fixed Duration

Scenario II Rule
Account derived based on AR Auto
Receivable A/c Dr 3000 Accounting Rules
Account derived based on AR Auto
Unearned Revenue A/c Cr 3000 Accounting Rules

Account derived based on AR Auto

Unearned Revenue A/c Dr 1000 Accounting Rules
Revenue A/c Cr Account derived based on AR Auto
1000 Accounting Rules

At the start of second month

Account derived based on AR Auto
Unearned Revenue A/c Dr 1000 Accounting Rules
Revenue A/c Cr Account derived based on AR Auto
1000 Accounting Rules

At the start of Third month

Account derived based on AR Auto
Unearned Revenue A/c Dr 1000 Accounting Rules
Revenue A/c Cr Account derived based on AR Auto
1000 Accounting Rules

Invoicing Rules - In Arrears - 3 Month Fixed Duration Rule

Account derived based on AR Auto
Unbilled Receivable A/c Dr 1000 Accounting Rules
Revenue A/c Cr Account derived based on AR Auto
1000 Accounting Rules

At the start of second month

Account derived based on AR Auto
Unbilled Receivable A/c Dr 1000 Accounting Rules
Revenue A/c Cr Account derived based on AR Auto
1000 Accounting Rules

At the start of Third month

 Account derived based on AR Auto
Unbilled Receivable A/c Dr 1000 Accounting Rules
Revenue A/c Cr Account derived based on AR Auto
1000 Accounting Rules

Receivable A/c Dr
3000
Unbilled Receivable A/c Cr
3000
Business Flow:-

AP Team records the invoice (Note:- It

can be PO based Invoice) --> Validate
and Account the invoice -> Run Mass
Additions program to push the data to
FA --> run Prepare Mass Additions
process in FA and Post which will create
FA Asset --> Run Depreciation --> Close
the period

Accounting Entry:- Source of Account

AP Invoice:-
Asset Clearing A/c
Dr Account Code combination manually entered by user
AP Liability A/c Account Code combination is derived from Vendor
Cr Site Setup

AP Payment:-
AP Liability A/c
Dr Account code combination is derived from AP invoice
Account code combination is derived from Bank
Cash Clearing A/c Cr account setup

Payment Reconciliation Via Cash

Management
Cash Clearing A/c Account code combination is derived from Bank
Dr account setup
Cash/Bank A/c Account code combination is derived from Bank
Cr account setup

Asset Addition (after Mass Additions

Process)
Account Code combination derived from Asset
Asset Cost A/c Dr Category setup
Account Code combination derived from Asset
Asset Clearing A/c Cr Category setup

After running of Depreciation Process

Account Code combination derived from Asset
Depreciation A/c Dr Assignment level of Asset
Account Code combination derived from Asset
Accumulated Dep A/c Cr Category setup

CIP Asset Addition

CIP Asset Cost A/c Account Code combination derived from Asset
Dr Category setup
CIP Asset Clearing A/c Account Code combination derived from Asset
Cr Category setup

AP Invoice:- (For adding ot CIP Assets)

CIP Asset Clearing A/c
Dr Account Code combination manually entered by user
AP Liability A/c Account Code combination is derived from Vendor
Cr Site Setup

Capitalizing of CIP Assets

Asset Cost A/c Account Code combination derived from Asset
Dr Category setup
CIP Asset Cost A/c Account Code combination derived from Asset
Cr Category setup

Retirement of Assets
Proceeds of Sale Clearing Account Account code combination is derived from Book
Dr Controls
Account Code combination derived from Asset
Accumulated Depreciation Dr Category setup
Account code combination is derived from Book
Cost of Removal Dr Controls
Account code combination is derived from Book Balancing
Net Book Value Retired Dr Controls Figure
Account Code combination derived from Asset
Asset Cost Cr Category setup
Account code combination is derived from Book
Proceeds of Sale Cr Controls
Account code combination is derived from Book
Cost of Removal Clearing Account Cr Controls

Create AR Receipt
Bank A/c Dr
Proceeds of Sale Clearing Account Cr

Create AP Invoice
Cost of Removal Clearing Account Dr
AP Liability A/c Cr

Making Payment of AP Invoice

AP Liability A/c Dr
Bank A/c Cr