Case Study – Sub-Ledger Accounting
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 description. Define such that your name as well as your supplier’s 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
JED Condition 2.Figure 3 . Basic and change the desired option. please refer to the SLA Implementation guide) are not merged into a single line and that the granularity of the invoice lines are preserved. In order to make the definition easier. use the copy functionality on the seeded JLT Liability. set the Merge Matching Lines option to “No” on your JLT. Your JLT should be similar to below:
Figure 4 – New Liability JLT
. For the full list. To ensure that liability lines with matching criteria (GL account. accounting class being a few of many. instead of creating the JLT from scratch.
Basic JLT from your copied JLD. Your JLD should look like below:
Figure 5 – New Invoice JLD
. instead. Remove or de-activate the seeded Liability. as well as the same account derivation rule as was on the seeded JLT that you removed/de-activated. and assign your JLT.3. Do not forget to assign your description to this JLT.
Remember to validate your AAD.4. Copy the seeded AP AAD. replace the JLD for the event class Invoice with your own. Your AAD should look like below:
Figure 6 – New AP AAD
. the validation will check for inaccuracies in the setup and compile the code to create accounting per these rules.
put an end-date of January 31st.Modified SLAM
. Copy the seeded Standard Accrual SLAM. 2007 on the seeded Payables AAD. The SLAM should look like below:
Figure 7 . Add a new row and activate your AAD as of February 1st.5. 2007.
with only item expense and liability lines i. Liability JLT: Copy your liability JLT defined in the previous exercise and modify it such that lines with matching criteria are merged. .No. booking the liability line to the account: 01-000-22200000-000. . freight etc. but with the account segment value overwritten with 7740.Exercise 2 Create Flow
Task Define an AAD for the accounting chart of accounts Operations Accounting Flex. this value is used to determine at what level transaction rounding should be performed (advanced topic). .Determines if the side on a line with a negative amount should be switched and the negative made positive. .This value will be on the entry line and is used to categorize lines. Enter a name. Expense JLT: to create a line for invoice lines of type Item.e. For example. an amount of -100 may generate an
Name Rounding Class
Description Enabled Balance Type Side Switch Debit/Credit
. Call your Liability JLT <FIN_XX>_LIABILITY_MERGED 2.Along with the Rounding Reference.Enter the same value as in Accounting Class. . Debit. Enter a description for the component you are defining. such that it will generate a journal entry: Only for the validation of AP invoices. can leave null. Field Event Class Line Type Code Accounting Class Value Invoices Enter <FIN_XX>_INVOICE_EXPENSE . booking the expense line to the distribution account on the invoice line. Yes Actual.Item Expense. or both the negative and the side preserved.
Detailed Steps Define the following components and build your SLAM: 1. no tax. Expense amount should be debited to the expense account. as we are not looking to create budget or encumbrance entries. primarily for reporting purposes.
. . and select Invoice Supplier Site Identifier from the list of values.Determines if/how a payment should be recognized as expense over multiple accounting periods (advanced topic).Null. No.Null.Merge Matching Lines
Transaction Chart of Accounts
Business Flow Method
Business Flow Class Multiperiod
Transfer to GL
Conditions Accounting Attribute Assignments
entry line with DR -100 or CR 100. for a liability 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)? .Determines if certain attributes of the journal line should be inherited from another line.None. back out from the same liability account that was used on the invoice of this payment (advanced topic).Uncheck the Event Class Default box for the attribute Party Identifier. . . Used together with the above when Prior Entry is selected. Determines if lines with matching criteria should be merged into a single line. . . copy the BSV from the corresponding expense line in the same entry. on a payment. Note that you can change the event class default only if there have been multiple source assignments to an accounting attribute on the event -
. . or. . For example. This will result in the journal entry line showing the party site identifier as both the party and the party site. .Used in interpreting or converting an accounting flexfield source carrying a value from the transaction for the primary ledger (advanced topic). .Review the sources assigned to the accounting attributes to be used in deriving values for this journal entry line. .None.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.Summary.
Will allow defining constant values by validating against the COA. defined for accounting chart of accounts Operations Accounting Flex.Null . 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. Field Rule Code Rule Name Enabled Description Chart of AccountsTransaction Value Enter a code. can leave null.Null . can leave null. . <FIN_XX>_LIABILITY Enter a name. <FIN_XX>_EXPENSE Enter a name. . Invoices All). Note: This may not work in our current training environment 3. ADR for account segment: a constant based ADR deriving value 7740 for account segment.class level. . 5. Segment – Account 1 Constant 7740
Chart of AccountsAccounting Output Type Priority Value Type Value
.Operations Accounting Flex . <FIN_XX> Liability Account Yes Enter a description for the component you are defining. Liability ADR: a constant based ADR deriving accounting flexfield 01-000-2220-0000-000. .Used in interpreting or converting an accounting flexfield source carrying a value from the transaction for the primary ledger (advanced topic). Flexfield 1 Constant 01-000-2220-0000-000
Chart of AccountsAccounting Output Type Priority Value Type Value
4. Field Rule Code Rule Name Enabled Description Chart of AccountsTransaction Value Enter a code.Operations Accounting Flex .Will allow defining constant values by validating against the COA. <FIN_XX> Expense Account Yes Enter a description for the component you are defining. defined for accounting chart of accounts Operations Accounting Flex.Used in interpreting or converting an accounting flexfield source carrying a value from the transaction for the primary ledger (advanced topic).
Remember to Validate your AAD. Optionally. The value of this source from the transaction will determine what the GL date will be on the accounting entry. to generate an entry only for invoice validation events. for the purposes of this exercise. 9.6. Assign the JLD from step #7. Use the Definition Code <FIN_XX> OPERATIONS_COA_AAD. Note that the former will determine the value for all the segments of the accounting flexfield.
. SLAM: defined for accounting chart of accounts Operations Accounting Flex. 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. Hit the Header Assignments button. However. Note that you can also assign your COAspecific AAD on a COA-generic SLAM. 7. Note that this ADR will determine the value for all the segments of the accounting flexfield. assign a description for the header of the entry. called <FIN_XX>_OPERATIONS_SLAM. 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. JED (optional): you can use the JED already defined in the previous exercise. and the latter will overwrite the account segment value. Payables AAD: defined for accounting chart of accounts Operations Accounting Flex. and check the source assigned to the GL Date accounting attribute.
8. to generate accounting only for Payables application. define a new one.
New Liability JLT
. Your new liability JLT should be similar to below:
Figure 8 .Solution Navigation: Setup -> Accounting Setup -> Subledger Accounting Setup -> Accounting Methods Builder -> Journal Entry Setup -> Journal Line Types 1.
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 .2.New Expense JLT
Figure 10 .Expense JLT Condition
Expense JLT Accounting Attributes 3.Figure 11 .Liability ADR
. 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 .
4. Seeded ADR Invoice Distribution Account will read the value of the source Invoice Distribution Account from the transaction.
Figure 13 . and will use the same account on the journal line.Seeded ADR for Invoice Distribution Account
Expense ADR for Account Segment 6. The JED is defined in the previous exercise.
. Expense account ADR should be similar to below:
Figure 14 .5.
7.JLD for Invoice Validation Event
. Your JLD should be similar to below: Setup -> Accounting Setups -> Subledger Accounting Setup -> Accounting Methods Builder -> Methods and Definitions -> Journal Lines Definitions
Figure 15 .
AAD for Operations Accounting Flex
.8. Your AAD should look like below: Setup -> Accounting Setups -> Subledger Accounting Setup -> Accounting Methods Builder -> Methods & Definitions -> Application Accounting Definition
Figure 16 .
Your SLAM should be similar to below: Setup -> Accounting Setups -> Subledger Accounting Setup -> Accounting Methods Builder -> Methods and Definitions -> Subledger Accounting Method
Figure 18 .Figure 17 .SLAM for Services Accounting Flex
.AAD Header Assignments 9.
3. When you create accounting for any ledger that has this SLAM assignment. View the accounting lines generated. 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. 5. you created your own AMB components by copying and modifying the seeded definitions. This exercise involves entering a transaction and generating accounting for it per your definition in Exercise 1. You assigned your AAD to the seeded SLAM Standard Accrual. Detailed Steps 1. View the entry in t-account format. 4. the invoices will be accounted per your rules. 2. otherwise this will generate confusing results.Exercise 3 . View the details of one liability line. (Warning: this might take a long time to appear – go for a coffee!)
. Create a standard Payables invoice for operating unit Vision Operations (USA). View the journal entry. with 2 item lines.Create Accounting Using Seeded SLAM with Custom AAD
Task In the Copy and Create flow above in Exercise 1.
Use the Actions button to submit online accounting for the invoice. Use the toolbar to access accounting entry for the invoice.Create Online Accounting for a Payables Invoice 2.Accessing Accounting Entry from Invoice Workbench
Figure 21 .e. but all lines belonging to all entries will be displayed on this page. displaying all lines generated.
Figure 20 .Solution 1.
Figure 19 .View Journal Entry Lines
. a separate entry will be generated for each. reporting currencies and secondary ledgers. Note that if there are multiple representations i.
Journal Line Details and Description
Figure 23 . Notice that the liability lines have not been summarized per the liability JLT definition you had created. Use the button View Journal Entry to access more details of the entry with the header information. Select the link Show for one of the liability lines to view the details. Notice the description is created per your JED.
Figure 22 – View Journal Entry 4.3.
Figure 24 .5.View Journal Entry in T-Account Format
Select the button View T-Account.
Detailed Steps 1. validate the invoice. Drill down to the SLA entry. you need to assign it to the ledger you are using. When you create accounting for any ledger that has this SLAM assignment.
. search for the two invoices you have entered in this exercise and the previous one. Switch to GL responsibility and view the new journal. Select the two entries and hit Compare button.Create Accounting Using Custom SLAM with Custom AAD
Task In the Copy and Create flow above in Exercise 2. 5. Drill down to the transaction. This exercise involves entering a transaction and generating accounting for it per your definition in Exercise 2.Exercise 4 . and create online accounting in final mode to post to GL. 3. 2. you created your own AMB components including the SLAM. Create a standard Payables invoice for operating unit Vision Operations (USA). 4. the invoices will be accounted per your rules. In order to use your SLAM. 6. On Subledger Accounting Journal Entries page. with 2 item lines.
Search Journal Entries 3. and distribution accounts as in the previous exercise.
Figure 25 . and notice the difference in the accounts and liability line summarization. multiple entries may be returned. Compare the details of the two entries.Compare Journal Entries 4. whereas the entry was created in SLA with 2 expense lines to the same account.
Figure 26 . Notice that the entry in GL has two lines with the expense lines summarized. This is because
.Solution 1. Create an invoice with the same date. Depending on your search criteria. 2. amount.
Hence.Entry Viewed in GL 5. Using the Line Drilldown button for the debit line. lines hitting the same account are summarized into a single one. which was set to Summary. you can drill back to the transaction on Payables invoice workbench.
Figure 27 . with the details being preserved in SLA. during transfer to GL. From the lines view.of the Transfer to GL setting on the expense JLT.Detail Lines in SLA 6.
Figure 28 .Drilldown to Transaction
Figure 29 . SLA entries are more detailed than the GL entries. you navigate to the SLA page to view the detail lines that were summarized together to create the line as seen in GL.
Troubleshoot Accounting Errors Create Accounting Using Custom SLAM with Custom AAD
Task In this exercise. 4. run the Create Accounting program through SRS in batch mode so you can see the errors.Exercise 5 . and JLD for invoice validation. you will be running diagnostics to troubleshoot an error in accounting. Identify and fix the error. When the process errors. Use your own SLAM. Of course. Enable diagnostics for your user if not already done. but copying it and creating your own exact copy with no modifications.
. 3. and create accounting in final mode to post to GL. validate the invoice. 2. AAD. Detailed Steps 1. but replace the Item Expense JLT with the following one already defined as a template for you: “LP Item Expense (error)”. and run the diagnostics report. Create a standard Payables invoice for operating unit Vision Operations (USA). you should not be using this JLT.
Set the profile option SLA: Enable Diagnostics to Yes for your user.Solution 1.Online Accounting Error
2. and submit the Transaction Objects Diagnostics program. Following error will be displayed:
Figure 30 .Enable Diagnostics
Figure 31 .
Figure 32 .Create Accounting Offline
Figure 33 .3. Submit Create Accounting program for your ledger. and when completed.Error on Accounting Report
. view the output for errors.
For a list of validations on a journal entry. When you generate accounting after these changes (offline or online).e. A valid journal entry line must always have a value for accounted amount. To fix the error.Submit Transaction Object Diagnostics 4. you will see an entry successfully created. i. i. your copy of the LP Item Expense (error) JLT. locate the accounting attribute that the error was reported for. you will need to change the source mapped to this accounting attribute on the JLT that was in error. “Quantity Variance Amount in Ledger Currency” with no value. and was unable to create a successful entry as the there was no value. Note that after modifying any component used in it. Accounted Amount. This shows that the accounting program was trying to create the entry line using the value of this source. your AAD will need to be revalidated to compile the code with the new settings.Figure 34 .e. On the output. Notice the source and its value mapped to this attribute for the JLT that was expected to create the entry line.
. please see the appendix of the SLA Implementation Guide.
Figure 35 .Diagnostics Report
Figure 36 .Accounting Attribute Assignments on the JLT
Figure 37 .Revalidating the AAD