Understanding the

logic of accounting
hierarchies in Kinetic
Alexa Szajlai

Principal Application Support Engineer

2023-07-11
Why is it good for you to participate in this
Webinar?

You can receive answers to the following

question:

What can you do if you notice that a transaction is not taking the
proper account?
Where can you check what causes this?
How can you solve this yourself?
Agenda

- Where is it coming from?

- What elements are used in the solution?
- What is the hierarchy and how does it work?
- Where can you find it?

Demo in Training environment

Where is it coming from?
The hierarchies incorporate the standard accounting
rules into the Kinetic system.

There are accounting principles that should be followed

in order the meet legal requirements. The basic rules
are the same in each country, but there can be specific
rules depending on the local legislation.

I will use the example of a miscellaneous AR invoice in

the presentation.
What elements are used in the solution?

The hierarchy is the result of the combination of

- GL transaction types,
- Posting rules,
- GL control types,
- GL control codes.
GL Transaction Types
Kinetic contains a unique set of GL transaction types
which post financial results to reports, trackers, and
the general ledger.

GL transaction types control the posting processes

used by each book, and a posting process uses one
or more GL transaction types to generate its financial
results.
Posting Rules

Kinetic uses a standard set of rules to tally with the

international accounting principals.

These can be customized to meet local

requirements.
GL Control Types
GL control types and GL controls work together to
define the accounts used for all business
transactions entered in the application.
GL Control Codes
General ledger control codes define the
accounts and journal codes available
during the posting process for a specific
transaction.
What is the hierarchy and how does it
work?
The reason why the solution is called Hierarchy, is because
it is built up of several levels. Each level represents a
variation of the booking.

The most important rule to remember is, unlike in most

places, the smallest unit is the strongest.
Where can you find the accounting
hierarchies?

Open Help from the main menu

Type „Transaction Hierarchy”

Select the option you are interested in.

In our example we go with the AR Invoice Entry – Add

Invoice option.
If you expand the section that best describes your transaction,
you can see the actual hierarchy structure.
In the first column you will see the Function or Action, in the
others the Debit and Credit options.

The results show the basic accounting rule that applies for misc
AR invoices:
Debit AR (receivables)
Credit Sales
DEMO

Miscellaneous AR Invoice booking in a Training

Environment

Try to find the reason why the Sales account is not

correct on the invoice line
Enter the misc AR invoice
The Sales Account is empty.

Press the Get Default button to populate the

account calculated by the hierarchy.

The account shows: 4065-00-00.

Check the hierarchy

The smallest unit is the product group.

Go back to the invoice. The product group is empty.
Select the product group and press the Get Default button
again.
Another scenario:
Account should come from the customer.
Thank you

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