Learn using Sub Ledger Accounting (SLA) in R12 Oracle Payables

Thanks to Krishanu Bose for this story7 Dec - 10:03am

Applications

Sub Ledger Accounting (SLA) is a Rule-Based accounting engine that defines how journal entries are generated in sub-ledger transactions in Oracle sub-ledger applications. However, SLA also supports external applications generating accounting information which ultimately needs to be transferred to Oracle General Ledger. Before we get into SLA we need to know few of the basic concepts like event types, event class, etc.

Event Class - classifies transaction types for accounting rule purposes. E.g. in Payables, following are possible event classes: Invoice, Debit Memo, Prepayments, Refunds and Payments.

Event Type - for each transaction type, defines possible actions with accounting significance. E.g. in Payables, following are possible event classes: AP Invoice Events – Validation, Adjustment and Cancellation. Similarly we will have event types for other event classes.

In most of the cases we would not need to customize SLA and accounting features will work same as 11i. Some of the typical business scenarios where we would need to customize SLA in Payables are as follows:

To have a different Liability account based on Operating Unit for which the invoice is entered.

To have different natural account (expense) based on different Invoice Type and Invoice Line type.

To have different natural account (expense) and different liability account based on different criteria like supplier type, entering currency, pay group, etc.

The cost center segment of Invoice distribution Liability account shall be picked from the Invoice distribution Account while the other segment values from the Liability account defined at supplier site.

To cater to some of the above requirements we can use other alternatives like using distribution sets also. But setting up a custom SLA for such scenarios is an easier approach with lower user maintenance. I will try and show a simple scenario of how to derive custom accounting for a business scenario using SLA in Oracle Payables.

Business Scenario: We need to define different liability account (natural account segment) based on Supplier Type so that business can track the liability by supplier type. The other segment values will default from supplier site. I am limiting this example to only one supplier type “Contractor". The objective would be to have a different natural account for Liability account for invoices of supplier type "Contractor" alone, while for other supplier types the normal liability account should default.

Solution:

Step1: First define a mapping set for various supplier types.

Navigation: Setup > Accounting Setups >Sub Ledger Accounting Setups >Accounting Methods Builders > Journal Entry Setups > Mapping Sets

Step2: Define ADR (Account Derivation Rules)

Navigation: Setup > Accounting Setups >Sub Ledger Accounting Setups >Accounting Methods Builders > Journal Entry Setups > Account Derivation Rules

Step3: Define JLD (Journal Line Definition)

Navigation: Setup > Accounting Setups >Sub Ledger Accounting Setups > Accounting Methods Builder > Methods and Definitions > Journal Line Definitions

Always create a copy of the seeded JLD and do not modify a seeded JLD. We will create a copy of ACCRUAL_INVOICES_ALL for our Chart of Accounts ‘Operations Accounting Flex’ only. Add the custom ADR created to ‘Liability, Basic’ (Line Assignment)

Step 4: Setup AAD (Application Accounting Definition)

Navigation: Setup > Accounting Setups >Sub Ledger Accounting Setups > Accounting Methods Builder > Methods and Definitions > Application Accounting Definition

Create a copy of seeded AAD only and do not modify existing AAD. I am creating a custom AAD called ‘TEST_AAD’ for COA ‘Operations Accounting Flex’.

Step 5: Setup SAM (Subledger Accounting Methods)

Navigation: Setup > Accounting Setups >Sub Ledger Accounting Setups > Accounting Methods Builder > Methods and Definitions > Subledger Accounting Methods

Create a copy of a seeded SAM and do not modify seeded SAM. Add the custom AAD to the Event Class ‘Payables’.

Step 6: Assign the custom SAM to Primary Ledger

Navigation: Set ups > Accounting Setups > Ledger Setup > Define > Accounting Setup

Verification of new SLA rule:

Create an invoice for supplier type ‘Contractor’ and create accounting

Liability Account for Supplier Type “Contractor” is 01-000-2990-0000-000

Liability Account for other Supplier Types is 01-000-2210-0000-000

R12 Encumbrance Accrual Accounting for PO and Invoice What is Budgetary Control?

A method of systematically enforcing spending limits by ensuring availability of budgeted funds before approval of transactions,

including pre-expenditures.

What is Encumbrance?A method of tracking and controlling an organization’s spending from the very early stage of initial documented evidence showing intention to buy to the final stage of actual expenditure. It is a management tool used to reflect commitments in the accounting system and attempt to

prevent overspending. Mostly Used by Government and Non-Profit Firms

How it works?Once an encumbrance document(PO, Invoice..etc) is created, funds are set aside for the sole purpose of enabling the organization to pay for it.

If funds are insufficient due to budget or previous commitments and expenditures, no new encumbrances can be entered, ensuring that

budget will not be exceeded.

Calculation of fund availableF.A. = Budget – (Encumbrance + Actual)

F.A. - Amount of money left in the account to spendBudget – Maximum amount that can be spend for the account

Encumbrance – Reserved amount (Requisition, PO, invoice, and others)Actual – Amount liable to another party

Encumbrance Accounting for documents PO and Invoice When accounting method Encumbrance Accrual is set

Example:Budget is $1000

Purchasing an item which costs $200Assume encumbrance is enabled for Purchase Orders and Invoices

Fund available before transaction   F.A. = Budget – (Encumbrance + Actual)

   F.A. = 1000   –  (0+0) = 1000

Create a PO for $200.   Application RESERVES the fund of $200 for PO

   PO  A/C------------------------200-----Dr   RFE A/C------------------------200-----Cr

      F.A. = Budget – (Encumbrance + Actual)

   F.A. = 1000   - (200+0) = 800

Created an Invoice for $200 and matched it to the above said PO and validate Invoice(bc_event and validation event get created).

   Step 1: Application REVERSES PO encumbrance accounting.   PO  A/C------------------------200-----Cr   RFE A/C------------------------200-----Dr

      Step 2: Application RESERVES the fund of $200 for Invoice(bc_event)

   Inv A/C------------------------200-----Dr   RFE A/C------------------------200-----Cr

   F.A. = Budget – (Encumbrance + Actual)   F.A. = 1000   - (200+0) = 800

Run accounting for invoice actuals(Invoice Validation event).   Step 1: Application REVERSES above Invoice encumbrances

accounting(bc_event).   Inv A/C------------------------200-----Cr   RFE A/C-----------------------200-----Dr

   Step 2: Application creates original entries for invoice(Invoice Validation event).

   ItemExpenseA/C----------------200-----Dr   LiabilityA/C---------------------200-----Cr

   F.A. = Budget – (Encumbrance + Actual)   F.A. = 1000   - (0+200) = 800

Note: Payment accounting may happen in two stages based on option selected in Payables->Setup->Options->PayablesOptions-

>AccountingOption tab->PaymentAccounting.Payment Accounting:

   Direct Pay-No Clearance     Payment Time

     LiabilityA/C-------------------200----Dr     CashA/C----------------------200----Cr

   Or

   Pay and Clear     Payment Time

     LiabilityA/C-------------------200----Dr     CashClearingA/C--------------200----Cr

     Clearing Time     CashClearingA/C--------------200----Dr

     CashA/C----------------------200----Cr You might also like:

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Labels: General, Payables, PSA, SLA

R12 Standard Accrual and Cash Accounting in Payables Standard Accrual

In case of Standard Accrual, Invoice and Payment Accounting will be there.

Reason: Transaction happens in two phases.1)Order goods and receive goods(Create PO, Create Receipt, Create

Invoice and account it)2)Pay the amount for received goods within due time set by the

supplier( Pay the invoice and account it)Since you are not paying the amount immediately, you need to keep track of the amount needs to pay to the supplier after phase one. You maintain this amount in LiabilityA/C(Cr). After second phase, you debit your LiabilityA/C and credit your CachA/C which shows your cash flow

from your organization to the supplier.

Here are the details of accounting for an item purchase of cost 100 dollars.

Note: Payment accounting may happen in two stages based on option selected in Payables->Setup->Options->PayablesOptions-

>AccountingOption tab->PaymentAccounting.

Accounting Method: Standard AccrualInvoice Accounting:

ItemExpenseA/C----------------------100----DrLiabilityA/C---------------------------100----Cr

Payment Accounting:  Direct Pay-No Clearance

    Payment Time    LiabilityA/C------------------------100----Dr    CashA/C--------------------------100----Cr

    Or

  Pay and Clear    Payment Time

    LiabilityA/C------------------------100----Dr    CashClearingA/C-------------------100----Cr

    Clearing Time    CashClearingA/C------------------100----Dr

    CashA/C--------------------------100----Cr

Standard CashIn case of Standard Cash, only payment accounting will be there.

Reason: While purchasing an item you pay amount immediately to the supplier. So you don't have any debt to the supplier to record. so there

is nothing to record in LiabiltyA/C.

Here are the details of accounting for an item purchase of cost 100 dollars.

Note: Payment accounting may happen in two stages based on option selected in Payables->Setup->Options->PayablesOptions-

>AccountingOption tab->PaymentAccounting.

Accounting Method: Standard CashNo Invoice Accounting..

No LiabiltiyA/C

Payment Accounting:  Direct Pay - No Clearance

    Payment Time    ItemExpneseA/C------------------100----Dr

    CashA/C-------------------------100----Cr

  Or

  Pay and Clear    Payment Time

    ItemExpneseA/C------------------100----Dr    CashClearingA/C-----------------100----Cr

      Clearing Time

    CashClearingA/C-----------------100----Dr    CashA/C-------------------------100----Cr

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Saturday, November 21, 2009

R12 Subledger Accounting (SLA) What is Subledger Accounting?

#Subledger Accounting is a Service, not an Application.#There are no SLA responsibilities and there is no direct login to SLA.

#SLA forms and programs are embedded within standard Oracle Application responsibilities(e.g. Payables Manager).

o Simply, It is a rule-based accounting engine, toolset & repository supporting Oracle E-Business Suite modules.

o Allows multiple accounting representations for a single business event, resolving conflicts between corporate and local fiscal accounting

requirements.o Retains the most granular level of detail in the subledger accounting

model, with different summarization options in the General Ledger, allowing full auditability and reconciliation.

o Introduces a common data model and UI across subledgers, replaces various disparate 11i setups, providing single source of truth for

financial and management analysis.

Screen shots of sample Invoice Distribution and It's Accounting Journal Entries

Simple Illustration on Journal Line Creation in SLAPlease go thorough the AMB components explained below to

understand more about this picture.

What is Accounting Methods Builder(AMB) in SLA?A set of screens which provides flexibility to create your own subledger

accounting set up or use seeded subledger accounting setup.

You can use the AMB to define the way in which subledger transactions are accounted. This enables you to create and modify subledger journal line setups and application accounting definitions. These

definitions define the journal entries that enable an organization to meet specific fiscal, regulatory, and analytical requirements. These

definitions are grouped into subledger accounting methods and assigned collectively to the ledger.

Following picture shows hierarchy of the components in the AMB.

o Each ledger is assigned with SLAM.o Subledger accounting method(SLAM) which tells what type of

accounting method you are using(Ex: Cash or Accrual) in your ledger.o Under SLAM, you will find set of Application Accounting

Definitions(AAD) for different subledgers(Ex: Payables, Receivables) o Under AAD, you will find set of journal line definitions(JLD) for each

Event Class(Ex: Invoices, Prepayments, Payments) and Event Type(Ex: Invoice Validated, Prepay Application, Payment Created) combination. 

o Each journal line definitions(JLD) holds group of JLT's(Ex: Name it Liability, Item Expense, Gain, Loss, etc), ADR(rules), JED(description)

for each Event Class and Event Type combination.    o Journal Line Types(JLT) contains..

1. Accounting Attributes(Ex: Accounting Date, Entered Amount, Accounted Amount, Party Id, etc )

2. Basic Info which determines journal line properties( Ex: Side(Cr or Dr), Balance Type(Actual or Encum), TransferToGL(Summary

or Detail), etc) 3. Conditions(This condition need to be satisfied to use this JLT)

    o Account Derivation Rules(ADR) (Ex: Accounting segment values. It is nothing but GL account)

    o Journal Entry Descriptions(JED): Which give more information about transaction (Ex: Invoice/Check details)

Navigation Paths to SLA Forms

Explain AMB Components?Event Model(Definition of the subledger transaction types and

lifecycle)

Event EntitiesGroup event classes into technical transaction models called event

entities. For example, group the event classes Invoices and Prepayments into the event entity Invoices because both classes of

transaction are stored in the Payables invoice transaction table (AP_INVOICES_ALL). Event entities enable you to treat events for a

single transaction model in the same way. The event entity often logically corresponds to a single document used as a basis for several

related transactions.

Event ClassGroup accounting event types into user-orientated transaction

categories called event classes. For example, group the event types Invoice Approved, Invoice Adjusted, and Invoice Canceled into the

event class Invoices. Then assign AMB components, such as journal line types, by event class within the application accounting definition.

This assignment simplifies setup when the accounting requirements for all event types in a class are the same. Also, sources assigned to an event class are available for the accounting of all event types in that

event class.

ExamplePayables: Invoice, Debit Memo, Prepayment, Payments, Refunds

Receivables: Invoice, Deposit, Receipt, Bill Receivable

Event TypeEach accounting event should be represented by an accounting event type. These types are registered in the AMB. When subledger journal

entries need to be created, the event type determines which application accounting definitions should be used to process the

accounting event. Application accounting definitions created in the AMB determine the lines, descriptions, accounts, and other elements of

subledger journal entries.

ExampleAP Invoice Events: Validated, Adjusted, Cancelled

AR Receipt Events: Created, Applied, Unapplied, Updated, Reversed

Subledger Accounting Method(SLAM)The subledger accounting method(SLAM) is a collection of accounting

definitions for all the applications that you will be generating accounting for. Each primary and subledger level or adjustment

secondary ledger is associated with a SLAM, which determines the accounting rules and standards that will be applied when generating

entries for that ledger.

Example:Standard Accrual, Standard Cash, etc

http://2.bp.blogspot.com/_-kLJmIbRGGw/SwjtoKPXLZI/AAAAAAAAASs/NXIeb1nUPqQ/s1600/img1.JPG

Application Accounting Definition(AAD)Use Application Accounting Definitions(AADs) to assign journal line

definitions and header descriptions to event classes and event types. AADs must be included in a subledger accounting method and

assigned to a ledger. You can group accounting definitions from multiple products, such as Oracle Payables, receivables Assets into a

single accounting method.

Journal Line Definition(JLD)Journal line type, description, account derivations rules grouped

together as a journal line definition to create the rule for particular event type.

Journal Line Type(JLT)-Identify the natural side:  Debit, Credit, Gain/Loss

-Determine the accounting class-Set under which conditions the rule will create a line

-Define the values needed for entry line generation, such as amount, currency, conversion rate information

-Control behavior for certain features i.e. multi period accounting, business flows, line merging and summarization

Account Derivation Rules(ADR)Account derivation rules are used to determine the account

combinations for subledger journal entries. You can define various rules in te AMB to determine how a journal entry account is derived.

You can derive accounts segment by segment or as a complete account combination. This picture shows an Account Derivation Rule with conditional logic. If the condition holds for priority 1, then this

source (Invoice Liability Account) is used. If not, SLA uses the source for priority 2(If it is available).

Journal Entry DescriptionThis is useful in finding the actual transaction object details(Ex:

Invoice/Payment details from journal line) 

Transaction ObjectExample for transaction objects:ap_invoice_extract_details_v.xdfap_invoice_extract_header_v.xdf

ap_payment_extract_details_v.xdfap_payment_extract_header_v.xdf

ap_prepayapp_extract_details_v.xdfap_system_parameters_extract_v.xdf

Transaction Object is nothing but a view which fetches all transaction information required to create journal line for particular event class. AP_INVOICE_EXTRACT_HEADER_V, AP_INVOICE_EXTRACT_DETAILS_V are transaction objects for event class Invoices. So, accounting for all

invoice type events get transaction information from these transaction objects.

SourcesEach column in the transaction object is defined as Source in the AMB.

AMB uses these sources to get transaction information from Transaction Objects.

Accounting AttributesSources are mapped with Accounting Attributes. Accounting Attributes

are bridge between JLT and Sources. 

ExampleGL Date, Entered Currency Code, Entered Amount, Accounted Amount,

Conversion Rate Date, Conversion Rate Type, Conversion Rate, Distribution Type, Party Type, Party Identifier, Party Site Identifier

What are the important tables in SLA Accounting?The XLA_EVENTS table stores records for accounting events

generated by subledger applications. Each product team populates this table by calling Subledger Accounting API and the respective product

team will decide when this table is to be populated during the transaction life cycle.

The XLA_AE_HEADERS table stores subledger journal entries. There is a one-to-many relationship between accounting events and journal

entry headers.

The XLA_DISTRIBUTION_LINKS table stores detailed distributions for journal entries. This table stores the data at most granular level and

represents data contained in respective subledger product’s distribution tables. The detailed distributions stored in this table are

merged into accounting lines and stored in XLA_AE_LINES table. Subledger Accounting uses this table for processing reversals and

business flows.

The XLA_AE_LINES table stores the subledger journal entry lines. There is a one-to-many relationship between subledger journal entry

headers and subledger journal entry lines. This table will store at least one row for debit and one row for credit for each accounting entry created. If multiple debit or credit journal entry lines exists for any

specific event type and if the journal line type allows merge matching lines then these lines will be merged into single line. The unmerged

granular level of detail for each accounting line will be available in XLA_DISTRIBUTION_LINKS table.

What are the Accounting Methods seeded in SLA?Standard AccrualStandard Cash

Encumbrance Accrual and Encumbrance CashUnited States Federal

China Standard Accrual

What are the reports available in SLA?Journal Entries Report

Account Analysis ReportThird Party Balances Report

Period Close Exceptions ReportOpen Account Balances Listing

Prepayment Invoices A prepayment is a type of invoice you enter to make an advance payment to a supplier or employee. You can enter two types of

prepayments: Temporary and Permanent.

Temporary prepayments can be applied to invoices or expense reports you receive. For example, you use a Temporary prepayment to pay a hotel a catering deposit. When the hotel's invoice arrives, apply the prepayment to the invoice to reduce the invoice amount you pay.

Permanent prepayments cannot be applied to invoices. For example, you use a Permanent prepayment to pay a lease deposit for

which you do not expect to be invoiced.

Include Prepayment in Invoice:You can enter supplier invoices where the invoice amount includes

prepayments. If you receive a supplier invoice, and the invoice amount has been reduced because of prepayments that the supplier has

received, you need to indicate that the invoice amount includes one or more prepayments.

Example:

Prepay Invoice:    200$Standard Invoice: 500$

Case 1: If you apply Prepay on Standard invoice with 'Apply' check box checked in Apply/Unapply window

Result on Standard Invoice after apply PrepayHeader

   Invoice Amount: 500$   Paid Amount :    200$

Distributions   Item                 500$   Prepay             -200$

In this case distribution total is 500 not 300 and amount paid is 200, remaining amount to pay is 300.

Case 2: If you apply Prepay on Standard invoice with both check boxes selected in Apply/Unapply window

Result on Standard Invoice  after apply PrepayHeader

   Invoice Amount:  300$   Paid Amount :        0$

Distributions   Item                  500$

   Prepay              -200$    'Prepayment on Invoice'-CheckedIn this case distribution total is 300 because prepay is part of Std

invoice. Amount to pay is 300.Note: Because the Distribution Total includes prepayments, you need to ensure that you have applied prepayments before you submit the

invoice for Invoice Validation.

Points To Note:1. Settlement date: The date after which the prepayment can be

applied to an invoice. 2. On a prepayment, you can enter any number of distributions,

either manually, or automatically by purchase order matching, distribution sets, or allocating. 

3. You can take discounts on prepayments. 4. You can create Foreign Currency Prepayments.

5. You cannot partially pay a prepayment. you must fully pay it.

6. You can apply prepay on the invoice type is Standard, Mixed, or Expense Report.

7. You can apply only Item distributions from the prepayment. 8. You must fully pay a prepayment before you can apply the

prepayment to an invoice. 9. If you want to apply Permanent type prepay then you can

change the Prepayment Type to Temporary. 10. Supplier, invoice currency and payment currency must be

same on prepay and to invoice. 11. If the prepayment has a value in the Prepayment PO

Number field, then the invoice must be matched to the same purchase order.

12. GL Date on Apply/Unapply window, which is the accounting date for the new Prepayment distributions that Payables creates when you apply a prepayment. This date must be after the latest

accounting date on any distribution for either prepayment or invoice and must be in an open period.

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Labels: Payables

Friday, December 4, 2009

R12 Encumbrance Accrual Accounting for PO and Invoice What is Budgetary Control?

A method of systematically enforcing spending limits by ensuring availability of budgeted funds before approval of transactions,

including pre-expenditures.

What is Encumbrance?A method of tracking and controlling an organization’s spending from the very early stage of initial documented evidence showing intention to buy to the final stage of actual expenditure. It is a management tool used to reflect commitments in the accounting system and attempt to

prevent overspending. Mostly Used by Government and Non-Profit Firms

How it works?Once an encumbrance document(PO, Invoice..etc) is created, funds are

set aside for the sole purpose of enabling the organization to pay for it. If funds are insufficient due to budget or previous commitments and expenditures, no new encumbrances can be entered, ensuring that

budget will not be exceeded.

Calculation of fund availableF.A. = Budget – (Encumbrance + Actual)

F.A. - Amount of money left in the account to spendBudget – Maximum amount that can be spend for the account

Encumbrance – Reserved amount (Requisition, PO, invoice, and others)Actual – Amount liable to another party

Encumbrance Accounting for documents PO and Invoice When accounting method Encumbrance Accrual is set

Example:Budget is $1000

Purchasing an item which costs $200Assume encumbrance is enabled for Purchase Orders and Invoices

Fund available before transaction   F.A. = Budget – (Encumbrance + Actual)

   F.A. = 1000   –  (0+0) = 1000

Create a PO for $200.   Application RESERVES the fund of $200 for PO

   PO  A/C------------------------200-----Dr   RFE A/C------------------------200-----Cr

      F.A. = Budget – (Encumbrance + Actual)

   F.A. = 1000   - (200+0) = 800

Created an Invoice for $200 and matched it to the above said PO and validate Invoice(bc_event and validation event get created).

   Step 1: Application REVERSES PO encumbrance accounting.   PO  A/C------------------------200-----Cr   RFE A/C------------------------200-----Dr

      Step 2: Application RESERVES the fund of $200 for Invoice(bc_event)

   Inv A/C------------------------200-----Dr   RFE A/C------------------------200-----Cr

   F.A. = Budget – (Encumbrance + Actual)   F.A. = 1000   - (200+0) = 800

Run accounting for invoice actuals(Invoice Validation event).   Step 1: Application REVERSES above Invoice encumbrances

accounting(bc_event).   Inv A/C------------------------200-----Cr   RFE A/C-----------------------200-----Dr

   Step 2: Application creates original entries for invoice(Invoice Validation event).

   ItemExpenseA/C----------------200-----Dr   LiabilityA/C---------------------200-----Cr

   F.A. = Budget – (Encumbrance + Actual)   F.A. = 1000   - (0+200) = 800

Note: Payment accounting may happen in two stages based on option selected in Payables->Setup->Options->PayablesOptions-

>AccountingOption tab->PaymentAccounting.Payment Accounting:

   Direct Pay-No Clearance     Payment Time

     LiabilityA/C-------------------200----Dr     CashA/C----------------------200----Cr

   Or

   Pay and Clear     Payment Time

     LiabilityA/C-------------------200----Dr     CashClearingA/C--------------200----Cr

     Clearing Time     CashClearingA/C--------------200----Dr

     CashA/C----------------------200----Cr You might also like:

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Labels: General, Payables, PSA, SLA

R12 Standard Accrual and Cash Accounting in Payables Standard Accrual

In case of Standard Accrual, Invoice and Payment Accounting will be

there. Reason: Transaction happens in two phases.

1)Order goods and receive goods(Create PO, Create Receipt, Create Invoice and account it)

2)Pay the amount for received goods within due time set by the supplier( Pay the invoice and account it)

Since you are not paying the amount immediately, you need to keep track of the amount needs to pay to the supplier after phase one. You maintain this amount in LiabilityA/C(Cr). After second phase, you debit your LiabilityA/C and credit your CachA/C which shows your cash flow

from your organization to the supplier.

Here are the details of accounting for an item purchase of cost 100 dollars.

Note: Payment accounting may happen in two stages based on option selected in Payables->Setup->Options->PayablesOptions-

>AccountingOption tab->PaymentAccounting.

Accounting Method: Standard AccrualInvoice Accounting:

ItemExpenseA/C----------------------100----DrLiabilityA/C---------------------------100----Cr

Payment Accounting:  Direct Pay-No Clearance

    Payment Time    LiabilityA/C------------------------100----Dr    CashA/C--------------------------100----Cr

    Or

  Pay and Clear    Payment Time

    LiabilityA/C------------------------100----Dr    CashClearingA/C-------------------100----Cr

    Clearing Time    CashClearingA/C------------------100----Dr

    CashA/C--------------------------100----Cr

Standard CashIn case of Standard Cash, only payment accounting will be there.

Reason: While purchasing an item you pay amount immediately to the supplier. So you don't have any debt to the supplier to record. so there

is nothing to record in LiabiltyA/C.

Here are the details of accounting for an item purchase of cost 100 dollars.

Note: Payment accounting may happen in two stages based on option selected in Payables->Setup->Options->PayablesOptions-

>AccountingOption tab->PaymentAccounting.

Accounting Method: Standard CashNo Invoice Accounting..

No LiabiltiyA/C

Payment Accounting:  Direct Pay - No Clearance

    Payment Time    ItemExpneseA/C------------------100----Dr

    CashA/C-------------------------100----Cr

  Or

  Pay and Clear    Payment Time

    ItemExpneseA/C------------------100----Dr    CashClearingA/C-----------------100----Cr

      Clearing Time

    CashClearingA/C-----------------100----Dr    CashA/C-------------------------100----Cr

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Wednesday, December 2, 2009

Invoice Price Corrections In Payables Corrections enable you to adjust the invoiced price, quantity, or amount of previously matched purchase order shipments, distributions, or receipts. You can use a correction when a supplier sends an invoice for a change for an invoice you have already matched to a purchase

order. Price corrections adjust the invoiced unit price of previously matched purchase order shipments, distributions, or receipts, without adjusting the quantity billed.

The type of correction that you can make depends on the type of purchase order line you are correcting:

• Goods. You can make price or quantity corrections.• Services. You can make amount corrections on all services, with the

exception of Rate Services.• Rate Services. You can only make Quantity corrections for Rate

Services.If the purchase order line is a Milestone, then you cannot enter

corrections. In this case, you must completely reverse the invoice.

To record a correction enter a Standard invoice to record a price increase, or enter a Credit Memo or Debit Memo to record a price

decrease.

For example, if the original unit price was $100.00 and quantity is 2 and the supplier is decreasing the price by $10.00, enter -10.00 in Unit Price field. If the invoice Type is Credit or Debit Memo, the value in the

Unit Price field must be negative.

Enter PO with quantity 2 and unit price 100

Enter invoice HG-Std, match to PO 5765, validate and pay.

To correct the unit price to 90, enter credit memo for same supplier and click Correction button. Provide standard invoice num HG-Std and click Find.

In Price Corrections window, change Unit Price to -10 and tab out. Click Correct button.

See the results in Invoice Lines and Invoice Distributions.

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Labels: Payables

Tuesday, December 1, 2009

System Created Invoices/Creating Invoices Automatically in Payables

Recurring InvoicesYou can set up your system to automatically create periodic invoices,

for example, rent invoices.

RTS InvoicesIf you use Return to Supplier feature in Oracle Purchasing, the system

creates these debit memos directly in your Payables system.

Retroactive Price Adjustment InvoicesIf Oracle Purchasing users use the Retroactive Pricing of Purchase

Orders feature, the system automatically creates Adjustment and PO Price Adjustment invoices.

PO Price Adjustment Invoice: This invoice is for the difference in price between the original invoice and the new purchase order

price.   PO price adjustment invoices can be matched to both purchase orders and invoices.

Adjustment Invoice: This invoice effectively reverses any outstanding regular Payables price corrections and PO Price

Adjustment invoices. This is so the PO Price Adjustment document can be for only the price difference between the

original invoice and the new PO price.

You might also like: Invoice Price Corrections In Payables Prepayment Invoices What is Tolerance in Payables and How to define Tolerances? R12 Standard Accrual and Cash Accounting in Payables

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Labels: Payables

Monday, November 30, 2009

What is Tolerance in Payables and How to define Tolerances?

In Payables, You can set tolerance for Purchase Order Matching and Tax Override.

Purchase Order Matching/Invoice TolerancesUse the Invoice Tolerances window to define the matching tolerances you want to allow for variances between invoice, purchase order, and

receipt information. You can define both percentage-based and amount-based tolerances.

If you enter a zero for a percentage tolerance and enable the check box for that tolerance, Payables will not allow any variance at all. If you

want a low tolerance, you can enter a very small percentage. If you enter no value, then Payables will allow infinite variance. If you enter

an amount-based tolerance, enter all amounts in your ledger currency. If an invoice exceeds these tolerances, Invoice Validation will apply a

hold to it.

Navigation Path: Payables->Setup->Invoice->Tolerances

Tax TolerancesTax tolerances are used to determine whether E-Business Tax places a

tax hold on an invoice due to theoverride of calculated tax lines.

A tax tolerance is the acceptable variance between the calculated tax amount on an invoice and the override tax amount entered by the

user. If the variance between these two amounts exceeds the tolerances you specify, then E-Business Tax places the invoice on hold.

To define tax tolerances, you must first set the Allow Override for Calculated Tax Lines option.

Navigation Path: Payables->Setup->Options->Payables Options->Invoice->Tax Tolerances

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Labels: Payables

What is Distribution Set and How to define Distribution Sets?

Specify a distribution set for the invoice. A distribution set is a template for invoice distributions. When you specify a distribution set

for an invoice, Payables automatically creates invoice distributions based on the distribution set.

There are two types distribution setsFull Distribution Set

Skeleton Distribution Set

Creating Full and Skeleton Distribution SetsNavigation Path: Payables->Setup->Invoice->Distribution Sets

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What is Tolerance in Payables and How to define Tolerances?

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Labels: Payables

What is Payment Terms and How to define Payment Terms?

Payables uses payment terms to automatically calculate due dates, discount dates, and discount amounts for each invoice you enter. Payment terms will default from the supplier site. If you need to

change the payment terms and the terms you want to use are not on the list of values, you can define additional terms in the Payment

Terms window.

Defining Payment TermsExample: Payement Term - 10/30 Net 45

Your supplier has just notified you that they are going to offer 10% discount if you pay their invoices in 30 days. The entire invoice amount

will be due in 45 days. In this case, you will set up payment terms as follows.

Navigation Path: Payables->Setup->Invoice->Payment Terms

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Monday, November 23, 2009

Accounting and Reconciliation Reports in AP • Accounts Payable Trial Balance Report

• Accounts Payable Negative Supplier Balance Report• Period Close Exceptions Report

• Posted Invoice Register• Posted Payment Register

• Unaccounted Transactions Report

Accounts Payable Trial Balance ReportUse the Accounts Payable Trial Balance Report to verify that total accounts payable liabilities in Payables equal those in the general

ledger. To reconcile these balances you can compare the cumulative total liability provided by this report with the total liability provided by

your general ledger. The Accounts Payable Trial Balance report is a Payables-specific version of the Open Account Balances Listing report.

By running this report from Payables, you can run this report for a specific operating unit.

Accounts Payable Negative Supplier Balance ReportThe Accounts Payable Negative Supplier Balance report allows you to run a Payables-specific version of the Open Account Balances Listing

report. By running this report from Payables, you can view the negative supplier balances for a specific operating unit.

Period Close Exceptions ReportSubmit this report to review a complete list of exceptions that are

preventing you from closing a Payables accounting period. This report lists, for each organization within the ledger, the following exceptions:

• Outstanding Payment Batches• Accounting Entries not Transferred to General Ledger• Bills Payable Requiring Maturity Event and Accounting

• Unaccounted Invoices• Unaccounted Payments

Posted Invoice RegisterUse the Posted Invoice Register to review accounting lines for invoices that have been transferred to your general ledger. Because it presents

amounts that have been charged to liability accounts, this report is valid only for an accrual ledger.

The Posted Invoice Register is primarily a reconciliation tool. Use this report along with the Posted Payment Register and the Accounts

Payable Trial Balance Report to reconcile balances between Payables

and your general ledger. To make their output easier to read, each of these reports can be generated for a single liability account. For

example, if you are using Automatic Offsets and the liability for your invoices is allocated across multiple balancing segments, then you can

use the Liability Account parameter to limit your reports to a single balancing organization.

You can generate the report in summary or in detail. When generated in detail, the report displays invoices charged to liability accounts and the accounting information that has been transferred to the general ledger. Also included is the supplier and amount information for each

invoice listed. Payables displays the total invoice amount in the invoice currency, and the transferred distribution amount in both the invoice currency and accounted currency for easier reconciliation with your

general ledger.

Posted Payment RegisterUse the Posted Payment Register to review accounting lines for

payments that have been transferred to general ledger. Because it presents amounts that have been charged to liability accounts, this report is valid only for an accrual ledger. You can submit the Posted

Payment Register for one payment journal entry batch or all payment journal entry batches.

The Posted Payment Register is primarily a reconciliation tool. Use this report along with the Posted Invoice Register and the Accounts Payable Trial Balance Report to reconcile balances between Payables and your

general ledger. To make the output easier to read, each of these reports can be generated for a single liability account. For example, if you are using Automatic Offsets and the liability for your invoices is allocated across multiple balancing segments, then you can use the

Liability Account parameter to limit your reports to a single balancing organization.

You can generate the report in summary or in detail. When generated in detail, the report displays payments that relieve liability accounts and that have had their accounting information transferred to the

general ledger. Also included is the supplier and amount information for each payment listed. Payables displays the payment amount in the

entered currency and the liability amount relieved in the accounted currency. In detail mode, the report also displays the payment

document and disbursement type for each batch of payments. It provides a report total and subtotals for each payment document and

bank account.

Unaccounted Transactions Report

Use this report to identify and review all unaccounted invoice and payment transactions and see the reason that Payables cannot

account for a transaction. Payables sorts the report by transaction type (invoice or payment), exception, supplier, transaction currency, and

transaction number. Run this report after you create accounting entries. The report will then show only transactions that had problems

that prevented accounting. You can then correct the problems and resubmit the accounting process. Note that this report does not include

invoices that have no distributions. You might also like:

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Labels: Payables

R12 Trial Balance report in AP and Reconciling AP to GL Trial Balance report in AP

In R12, there are 4 Concurrent Programs related to the trial balance.

1.Report Name = "Accounts Payable Trial Balance (Old) "  Short Name = APXTRBAL

 This is the R11i Accounts Payable Trial Balance, it should be disabled in R12.

2.Report Name = "Accounts Payable Trial Balance"  Short Name = APTBRPT

This is the R12 Accounts Payable Trial Balance, this is the correct report name to run if Trial Balance Remodel Phase 4 or higher has

been applied.  This report is a modified version of the Open Account Balance Listing report.

3.Report Name = "Open Account Balance Listing"  Short Name = XLATBRPT

This is a Subledger Accounting report.  This report should NOT be used for Payables.  Instead, use the applicable Payables modified version of

the report.

4.Report Name = "Open Account AP Balance Listing"  Short Name = XLAAPRPT

This is the subledger Open Account Balance Listing report modified for Payables and should be used with Trial Balance Remodel Phases 1 - 3.

Note: Currently, the Trial Balance documentation and notes refer to the Accounts Payable Trial Balance and Open Account AP Balance

Listing report interchangeably.  The name change was due to a change in Phase 1 - 3, going forward all Payables Trial Balance patches should retain the name "Accounts Payable Trial Balance".  Please make sure you run the correct report based on your Trial Balance remodel phase and do NOT run the Open Account Balance Listing report

for Payables.

Reconciling AP to GL1.Run Accounts Payables Trial Balance report for current period with

following details: Start Date = Begin Date for first period you started using Oracle

(This parameter is hidden as of Trial Balance Remodel phase 4, with default date 01-Jan-1950)

As of Date = End Date for Period to be reconciled Show Transaction Detail = Yes

Include Write Offs = No Include SLA Manuals/Other Sources = Yes (This parameter is only

applicable for the "Group by Account, Summary" template.

     Select report template Accounts Payables Trial Balance - Group by Account, Detail

Accounts Payables Trial Balance - Group by Account, Summary

2.Run Invoice and Payment posting reports.Payables Posted Invoice Register

Payables Posted Payment Register

3.The correct method for reconciling AP to GL is as follows:

Last Months Accounts Payable Trial Balance    + This months Payables Posted Invoice Register

        - This months Payables Posted Payment Register                     = This months Accounts Payable Trial Balance

Note: The Accounts Payable Trial Balance report output shows a GL total. That GL total includes manual and non Liability class entries from

the Payables subledger, and non-Payables source entries in GL. Use the given method to reconcile, and the Trial Balance amount remaining total should equal the GL total excluding the manual and non Liability class entries from the Payables subledger, and non-Payables source

entries in GL.

Source=>Refer Note 553484.1 on R12 Steps In Reconciling AP to GL Balance

Refer Note 823043.1 on R12 Steps In Reconciling GL Balance And AP And PO

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Wednesday, November 18, 2009

Types of Invoices in Payables

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Friday, November 6, 2009

3rd Party Payments in Payables Financial settlement is one of the key components of the business

process. This is the final step in completing the business transactions. In procure to pay cycle, the suppliers send the invoices to the

customers after delivering the goods or rendering the services. Once the invoices are received, the accounts payables department of the customer validates the invoices and approves the payments. The

payments made to the suppliers during the settlement process are

generally dependent on the agreement entered into between the customers and suppliers for carrying on the business transactions. Payments are generally made to the original supplier providing the

goods or services, however there can be specific arrangements made wherein the suppliers can specify a different party to be paid on their behalf. The payments made to other parties on behalf of the suppliers

are termed as 3rd party payments.

3rd party payments help parties involved in business to set off their liabilities without directly paying them. This reduces the direct funds

movements and transactions can be settled easily.

Some situations where payments are to be made to a 3rd Party1)When supplier is having cash flow problems. They sell all their

receivables to a 3rd Party to whom all dues are to be paid. 2)When supplier files for bankruptcy. All dues are paid to the Court or a

3rd Party collection agency.

For supporting 3rd party payments, Payables providing functionality to create Invoices with the provided remit to supplier details using Invoice

Workbench, Recurring Invoices, Quick Invoices and Payables Open Interface Import. Also while making payment through Payment

Workbench remit to account should be populated for selected remit to supplier and supplier site.

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Wednesday, October 28, 2009

Check List for Closing Accounting Period You close a Payables period after you have completed accounting for transactions for the period and you have transferred the accounting

entries to general ledger.

You cannot close a period in Payables if any of the following conditions exist:

1. Outstanding payment batches Confirm or cancel all incomplete payment batches.

2. Future dated payments for which the Maturity Date is within the period but that still have a status of Issued. Submit the Update

Matured Future Payment Status Program.3. Unaccounted transactions Submit the Payables Accounting Process to account for transactions, or submit the Unaccounted Transaction Sweep to move any remaining unaccounted transactions from one

period to another.4. Accounted transactions that have not been transferred to general ledger. Submit the Payables Transfer to General Ledger process to

transfer accounting entries.

To complete the close process in Payables:1. Validate all invoices.

2. Confirm or cancel all incomplete payment batches.3. If you use future dated payments, submit the Update Matured

Future Dated Payment Status Program. This will update the status of matured future dated payments to Negotiable so you can account for

them.4. Resolve all unaccounted transactions. Submit the Payables

Accounting Process to account for all unaccounted transactions. Review the Unaccounted Transactions Report. Review any

unaccounted transactions and correct data as necessary. Then resubmit the Payables Accounting Process to account for transactions

you corrected. Or move any unresolved accounting transaction exceptions to another period(optional). Submit the Unaccounted

Transactions Sweep Program.5. Transfer invoices and payments to the General Ledger and resolve

any problems you see on the output report: Payables Transfer to General Ledger Program.

6. In the Control Payables Periods window, close the period in Payables.

7. Reconcile Payables activity for the period. You will need the following reports:

    • Accounts Payable Trial Balance Report    • Posted Invoice Register

    • Posted Payment Register8. If you use Oracle Purchasing, accrue uninvoiced receipts.

9. If you use Oracle Assets, run the Mass Additions Create Program transfer capital invoice line distributions from Oracle Payables to

Oracle Assets.10. Post journal entries to the general ledger and reconcile the trial

balance to the General Ledger.Posted by Contact: highbrow.admin@gmail.com at 7:50 AM 0

comments Labels: Payables

Withhold Tax and Withholding Tax Invoices Withhold Taxes in Payables

You may be required to withhold taxes from your employee expense reports and supplier invoices. Once you set up Payables to

automatically withhold tax, you can withhold tax either during Invoice Validation or during payment processing. You can control all

withholding tax options in the Withholding Tax region of the Payables Options window.

Companies that use withholding taxes calculate these taxes and deposit them to the corresponding fiscal authority. There can be

various regimes applicable to a single transaction. These regimes have different rates that are predefined when the withholding tax is

deducted. The time when the withholding taxes are deducted could be at invoice time, payment time, or both. Companies must apply the

withholding taxes at the specified time and deposit the amount to the corresponding fiscal authority.

Oracle Payables allows you to calculate withholding taxes at invoice validation time, at payment time, or both invoice validation and

payment time. In addition, you can create a withholding tax invoice at the following times:

• At invoice validation time if withholding taxes are calculated at invoice time.

• At payment time if withholding taxes are calculated at payment time.• At withholding application time if withholding taxes are calculated at both invoice validation and payment time. This means that withholding

invoices will be created at both invoice validation and payment time since the withholding taxes would be calculated at both these times.

For example, assume that withholding tax is calculated at Invoice Validation and the withholding tax rate is 20%. If you have a

Prepayment Invoice for $250 with no withholding tax, an Invoice for $1555, and a Payment Amount of $1305. Then the calculated

withholding tax is $311 (1555 * 20%). However, if the withholding tax is calculated at Payment Time, then the calculated withholding tax is

$261 ($1305 * 20%).

To enable the requirement of applying withholding taxes at the time of invoice and payment, an option, At Invoice Validation and Payment

Time, is included in the Apply Withholding Tax region of the Withholding Tax Tab of Payables window which when selected lets you

apply the tax both at the time of Invoice and Payment. Another option, At Withholding Application, is added in the Create Withholding

Invoice region. This option can be selected only when the Apply Withholding Tax option is selected At Invoice and Payment time.

Withholding tax invoicePayables can automatically create withholding tax invoices, or you can

perform this task manually. If you choose to automatically create withholding tax invoices, you must choose whether to do this during

Invoice Validation or during payment processing. Indicate this choice in the Withholding Tax region of the Payables Options window.

Important: Payables does not give invoice detail on the Tax Authority Remittance Advice for manually created withholding

amounts.

If you choose to create withholding tax invoices manually, create an invoice for each Withholding Tax type invoice distribution on an invoice. Create the invoice for the taxauthority supplier and site

assigned to the Withholding Tax type tax code and for the amount of the Withholding Tax type invoice distribution.

If you specify that you want to create withholding tax invoices during Invoice Validation, Payables creates unvalidated withholding tax

invoices for tax authority suppliers assigned to tax codes.If you specify that you want to create withholding tax invoices during

payment processing, Payables creates unvalidated withholding tax invoices (for those invoices where you have applied withholding tax) during the Confirm program of payment batch processing, or

during processing of a Quick payment.

Important: Payables does not automatically withhold taxes if you pay with a manual payment or a refund.

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Labels: EBTax, Payables

Thursday, October 15, 2009

Open/Close AP Period Payables does not allow transaction processing in a period that is

closed.You can enter and account for transaction open accounting periods.

The periods statuses available in Payables are:-Never Opened

-Future-Open

-Closed-Permanently Closed

After you change the status to Future or Open you can not change it back to Never Opened.

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Labels: GL, Payables

Tuesday, October 13, 2009

Budgetary Control in Payables If you use Oracle Public Sector General Ledger's Budgetary Control feature, you can check funds before you save a transaction and you can have Payables Approval automatically create encumbrances to

reserve funds for your transactions. For example, when you enter an

invoice, you can use the Funds Check program to check if you have available budgeted funds to pay for an invoice or invoice distribution.

If you select absolute budgetary control in General Ledger, Payables Approval places an Insufficient Funds hold on any invoice that fails funds checking. If you use advisory budgetary control, Payables will

allow the invoice to pass Approval, even if it fails funds checking. During Approval, Payables creates encumbrances to reserve funds

against the budgets you define in Oracle Public Sector General Ledger. When you create the accounting entries for the transactions, it relieves

the encumbrances.

As the final step of budgetary control in Payables, if you enable Use PO Encumbrance in the Financials Options window, Oracle Public Sector

Purchasing automatically creates encumbrance entries to reserve funds for invoice expenditures against the budgets you define in Oracle

Public Sector General Ledger. Funds checking and budgetary control include nonrecoverable tax as

part of the item cost to fully recognize the commitment because nonrecoverable tax becomes part of the acquisition cost of the item.

Setup=>http://sbllc3.solutionbeacon.net/pls/a159vis2/fndgfm/fnd_help.get/US@PSA_US/gl/@p_bc_setup@PSA_US#p_bc_setup

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Labels: Payables, PSA

Friday, October 9, 2009

Tax Variances in Payables A tax variance occurs when there is a difference between the tax on the invoice and the tax on the PO matched to the invoice. When you match a PO to an invoice, there are three tax-related variances that

can occur:

Tax Exchange Rate Variance (TERV) – when there is a difference between the invoice and PO distributions due to exchange rate

variance.

Tax Invoice Price Tax Rate Variance (TIPV) – when there is a difference between the invoice and PO distributions due to price

variance.

Tax Rate Variance (TRV) – when there is a difference between invoice and PO distributions due to difference in tax applicability.

In addition, Tax Quantity Variance (TQV) is calculated, but is shown as a non-variance distribution.

Variances are calculated for all taxes that are enabled in E-Business Tax.

The following example illustrates how variances are determined.

Note that the exchange rate and tax amounts differ between the PO and the Invoice. The distributions for the invoice show a Tax Exchange

Rate Variance of 0.3 and a Tax Rate Variance of $20.00.

To illustrate an Invoice Price Tax Rate Variance, assume that the invoice is the same as above, but the Unit Price changes from $100.00,

as shown on the Purchase Order, to $200.00. The Tax Amount also changes as a result of the change in Unit Price.

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Tax Variances in Payables A tax variance occurs when there is a difference between the tax on the invoice and the tax on the PO matched to the invoice. When you match a PO to an invoice, there are three tax-related variances that

can occur:

Tax Exchange Rate Variance (TERV) – when there is a difference between the invoice and PO distributions due to exchange rate

variance.

Tax Invoice Price Tax Rate Variance (TIPV) – when there is a difference between the invoice and PO distributions due to price

variance.

Tax Rate Variance (TRV) – when there is a difference between invoice and PO distributions due to difference in tax applicability.

In addition, Tax Quantity Variance (TQV) is calculated, but is shown as a non-variance distribution.

Variances are calculated for all taxes that are enabled in E-Business Tax.

The following example illustrates how variances are determined.

Note that the exchange rate and tax amounts differ between the PO and the Invoice. The distributions for the invoice show a Tax Exchange

Rate Variance of 0.3 and a Tax Rate Variance of $20.00.

To illustrate an Invoice Price Tax Rate Variance, assume that the invoice is the same as above, but the Unit Price changes from $100.00,

as shown on the Purchase Order, to $200.00. The Tax Amount also changes as a result of the change in Unit Price.

+++++++++++++++++++++++++++++++++++++++++++++++++

Learn using Sub Ledger Accounting (SLA) in R12 Oracle Payables Sub Ledger Accounting (SLA) is a Rule-Based accounting engine that defines how journal entries are generated in sub-ledger transactions in Oracle sub-ledger applications. However, SLA also supports external applications generating accounting information which ultimately needs to be transferred to Oracle General Ledger. Before we get into SLA we need to know few of the basic concepts like event types, event class, etc.

Event Class - classifies transaction types for accounting rule purposes. E.g. in Payables, following are possible event classes: Invoice, Debit Memo, Prepayments, Refunds and Payments.

Event Type - for each transaction type, defines possible actions with accounting significance. E.g. in Payables, following are possible event classes: AP Invoice Events – Validation, Adjustment and Cancellation. Similarly we will have event types for other event classes.

In most of the cases we would not need to customize SLA and accounting features will work same as 11i. Some of the typical business scenarios where we would need to customize SLA in Payables are as follows:

To have a different Liability account based on Operating Unit for which the invoice is entered.

To have different natural account (expense) based on different Invoice Type and Invoice Line type.

To have different natural account (expense) and different liability account based on different criteria like supplier type, entering currency, pay group, etc.

The cost center segment of Invoice distribution Liability account shall be picked from the Invoice distribution Account while the other segment values from the Liability account defined at supplier site.

To cater to some of the above requirements we can use other alternatives like using distribution sets also. But setting up a custom SLA for such scenarios is an easier approach with lower user maintenance. I will try and show a simple scenario of how to derive custom accounting for a business scenario using SLA in Oracle Payables.

Business Scenario: We need to define different liability account (natural account segment) based on Supplier Type so that business can track the liability by supplier type. The other segment values will default from supplier site. I am limiting this example to only one supplier type “Contractor". The objective would be to have a different natural account for Liability account for invoices of supplier type "Contractor" alone, while for other supplier types the normal liability account should default.

Solution:

Step1: First define a mapping set for various supplier types.

Navigation: Setup > Accounting Setups >Sub Ledger Accounting Setups >Accounting Methods Builders > Journal Entry Setups > Mapping Sets

Step2: Define ADR (Account Derivation Rules)

Navigation: Setup > Accounting Setups >Sub Ledger Accounting Setups >Accounting Methods Builders > Journal Entry Setups > Account Derivation Rules

Step3: Define JLD (Journal Line Definition)

Navigation: Setup > Accounting Setups >Sub Ledger Accounting Setups > Accounting Methods Builder > Methods and Definitions > Journal Line Definitions

Always create a copy of the seeded JLD and do not modify a seeded JLD. We will create a copy of ACCRUAL_INVOICES_ALL for our Chart of Accounts ‘Operations Accounting Flex’ only. Add the custom ADR created to ‘Liability, Basic’ (Line Assignment)

Step 4: Setup AAD (Application Accounting Definition)

Navigation: Setup > Accounting Setups >Sub Ledger Accounting Setups > Accounting Methods Builder > Methods and Definitions > Application Accounting Definition

Create a copy of seeded AAD only and do not modify existing AAD. I am creating a custom AAD called ‘TEST_AAD’ for COA ‘Operations Accounting Flex’.

Step 5: Setup SAM (Subledger Accounting Methods)

Navigation: Setup > Accounting Setups >Sub Ledger Accounting Setups > Accounting Methods Builder > Methods and Definitions > Subledger Accounting Methods

Create a copy of a seeded SAM and do not modify seeded SAM. Add the custom AAD to the Event Class ‘Payables’.

Step 6: Assign the custom SAM to Primary Ledger

Navigation: Set ups > Accounting Setups > Ledger Setup > Define > Accounting Setup

Verification of new SLA rule:

Create an invoice for supplier type ‘Contractor’ and create accounting

Liability Account for Supplier Type “Contractor” is 01-000-2990-0000-000

Liability Account for other Supplier Types is 01-000-2210-0000-000