The General Ledger (also called the nominal ledger) is a summary of all of the transactions that occur in the company. Most of these transactions originate in the various sub-ledgers such as Accounts Payable, Accounts Receivable, Inventory, Assets, etc.
SYSPRO enables you to integrate these sub-ledgers with the General Ledger to automate the transfer of transaction information from the sub-ledgers to the General Ledger.
You can define which modules (sub-ledgers) to link to the General Ledger and the level of detail recorded for the transactions in the General Ledger.
You can also select to post journals created from transactions in the sub-ledgers automatically into the General Ledger, without operator intervention. This reduces the administrative burden of managing the flow of information into the General Ledger and provides a real-time General Ledger (i.e. it eliminates the time lag between transacting and reporting). Alternatively, you can select to manually post journals from the sub-ledgers into the General Ledger.
General Ledger integration requires thought and planning as to how information from sub-ledgers must be recorded in the General Ledger.
You can opt for no integration initially, and then gradually implement sub-ledger integration.
Once set up, the system applies the correct General Ledger accounts for each transaction processed within the system, without the need for operator intervention (although this is not possible in some instances, such as processing deposits or withdrawals in the Cash Book, or posting invoices in Accounts Payable, where you need to indicate the accounts to use).
Following is a guideline to defining General Ledger integration within SYSPRO:
General Ledger accounts
Before implementing General Ledger integration, you should ideally have already defined your chart of accounts. |
Define the following General Ledger accounts using the General Ledger Codes program:
Forced balance account
This account is used to correct an out-of-balance situation in the General Ledger. It does so by posting an entry to this account to correct the imbalance. The value posted can then be journalized out to the correct ledger code manually.
Retained earnings account
This account is updated with the net income/loss for the year when you run the Year end function in General Ledger (see GL Period End). This account is also used when you select to set your revenue and expense accounts to zero when you run the Year end function.
Additionally, when you make prior period adjustments to previous year's revenue or expense accounts, the net amount of the adjustment updates this account.
By default, the retained earnings account defined against the ledger code is used (General Ledger Codes). If this is not defined or is invalid, then the retained earnings account defined in the General Ledger Integration program is used.
Integration level
Using the General Ledger Integration program, define the level of integration you require for each module (sub-ledger) and the General Ledger Control accounts defined in Step 1. Note that your settings do not have to be the same for all sub-modules.
Optionally, you can make the system generate a printed distribution report containing entries that may be entered into a third-party General Ledger system (i.e. a non-SYSPRO General Ledger system).
You can decide that all transactions derived from each sub-ledger must be recorded in detail within the General Ledger system, but there may be a number of ledger accounts for which only summary information is required. In this case, you can set the summary transaction option against the specific ledger code itself (see General Ledger Codes).
Alternatively, you can set all entries for all General Ledger accounts to post in summary for each module. Summarized transactions generate only the subtotals on change of each ledger account and these are posted through to the General Ledger System.
You use the General Ledger Integration program to define the level of integration you require according to the following table:
Level of Integration Required | Option to Select |
---|---|
No link to GL required and no distribution report required | Not linked to GL - no distribution report |
No link to GL required, but you do require a distribution report | Not linked to GL - Distribution report |
Link to General Ledger required, with every transaction from the sub-ledger recorded in detail within the GL | Linked to GL in detail |
Link to General Ledger required, with only summarized subtotals from the sub-ledgers recorded within the GL | Linked to GL in summary |
Automation level
Once you have indicated the level of integration required for the sub-modules, you need to indicate the level of automation you require for posting journals from the sub-ledgers into the General Ledger.
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Navigate to the General Ledger Integration program.
Against each sub-module you are using, indicate the level of automation required. Refer to Effect of automation level selected for additional details on the available levels of automation.
Irrespective of the level of automation selected, if any errors are encountered in the journal creation or in the posting process for a sub-module (for example a ledger interface record is missing or a GL code is on hold), you will need to:
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Refer to Accounts Payable Journals with 'Force check no' Option for additional information on the effect of automation on the Accounts Payable option: Force check no.
GL Analysis
If you are using General Ledger analysis (General Ledger Setup) then you can indicate (against each sub-module) the point at which GL Analysis information must be entered for the sub-module's transactions.
Ledger codes
If your chart of accounts is not fully defined, then use the General Ledger Codes or GL Structure Definition program to define the various ledger codes associated with each sub-ledger.
GL control accounts
Using the General Ledger Integration setup programs, define the GL control accounts for the sub-modules you are using.
Additional ledger codes and options
For each sub-module, define the additional ledger codes and options required for integration.
These include:
Accounts Payable
Banks
Use the Banks program to indicate the Cash account, Exchange variance and Bank charges ledger codes for each bank.
Tax codes
Use the Tax Code Setup program to indicate the Sales tax ledgercode and AP tax ledger code.
If you are using the USA tax system, then you use the Browse on Extended Tax Codes program to indicate the Sales tax ledger code.
Branches
Use the AP Branches program to indicate AP control ledger code and the AP discount taken ledger code for each Accounts Payable branch.
Currency variance interfaces (if you have foreign currency suppliers)
Use the AP Currency Variance GL Interface program to indicate the Currency variance account by AP branch and optionally by currency and/or bank.
Indicate the options that affect integration.
These include:
Accounts Receivable
Sales interfaces
Use the AR Sales Ledger Interface program to define the interface ledger accounts for sales and costs of sales entries.
These determine the ledger accounts that are credited when you sell an item from a specific branch, product class and warehouse combination.
Payments interfaces
Use the AR Payments Ledger Interface program to define the interface ledger accounts required for payments, adjustments, discount and deposit entries.
These determine the ledger accounts that are debited when you process entries for a specific branch using the AR Payments and Adjustments program.
Branches
Use the AR Branches program to define the interface ledger accounts required for the Sales value accounts and the Cost of sales accounts for each Accounts Receivable branch.
Tax codes
Use the Tax Code Setup program to indicate the Sales tax ledgercode.
If you are using the USA tax system, then you use the Browse on Extended Tax Codes program to indicate the Sales tax ledger code.
Currency variance interfaces (if you have foreign currency customers)
Use the AR Currency Variance GL Interface program to indicate the Currency variance account to use for your Accounts Receivable Branches and Currencies.
Indicate the options that affect integration for Accounts Receivable.
These include:
Accounts Receivable link to Cash Book (Accounts Receivable Setup)
This determines how Accounts Receivable payments processed using the AR Payments and Adjustments program are posted to the Cash Book.
Counter Sales and Point of Sales
Both Counter Sales and Point of Sales use the existing ledger interface entries defined for Accounts Receivable payments and sales. There are some additional interface entries you need to define for unique transactions that are created from within the Counter Sales module.
Use the Counter Sales Payments Interface function to define the interface ledger accounts required to be associated to each counter sale payment code.
You must also define a number of ledger codes for the transactions unique to Counter Sales or Point of Sales. These are as follows:
The Counter Sales Payments Interface program can be accessed by selecting the Counter Sales Interface option from the Functions menu of the AR Payments Ledger Interface program.
Cash Book
Banks
Use the Banks program to indicate the Cash account, Exchange variance and Bank charges ledger codes for each bank.
Tax codes
Use the Tax Code Setup program to indicate the Sales tax ledgercode.
If you are using the USA tax system, then you use the Browse on Extended Tax Codes program to indicate the Sales tax ledger code.
Indicate the options that affect Cash Book integration.
These include:
Inventory
Inventory interfaces
Use the Inventory Ledger Interface program to define the interface ledger accounts required when processing non sales-related inventory transactions.
In addition you can define the Purchase price variance account to which postings must be made when processing a purchase order receipt (where standard costing is in use) and the receipt cost differs from the standard cost.
Warehouses
Use the Warehouses program to indicate the GL accounts required for each warehouse. The Warehouse control and Warehouse variance accounts are specified per warehouse. If the other GL accounts are not specified against the warehouse, then the accounts specified in the General Ledger Integration are used.
Indicate the options that affect Inventory integration.
These include:
Specify the accounts to use for Inventory integration in the General Ledger Integration. This is only required if you have not specified these accounts against each warehouse.
Assets
Assets interfaces
Use the Assets Ledger Interface program to define the interface ledger accounts required at asset branch/cost center/group level for the Assets Register module.
Branches
Use the Asset Branches program to define the branches in which your assets are located.
The Assets Register can be integrated to the General Ledger at branch level.
Cost centers
Use the Asset Cost Centers program to define the cost centers to which your assets are allocated.
Cost centers are defined within Asset Branches (Asset Branches) and may be used to integrate asset transactions to the General Ledger (General Ledger Integration).
Groups
Use the Asset Groups program to define the asset groups which you can use to categorize your assets.
Asset groups can be used for ledger integration purposes to establish the correct ledger codes for the various depreciation codes (Assets Ledger Interface).
Indicate the options that affect Assets integration.
These include:
Specify the accounts to use for Assets integration in the Assets Setup. This is only required if you have not specified these accounts at asset branch level.
Asset maintenance
Within the Assets program, you can indicate a ledger account, per asset, to which the expense side of depreciation entries must be distributed for General Ledger integration purposes.
Work in Progress
Cost centers
Use the Cost Centers program to define the Cost Center GL Integration accounts.
Work centers
Although work centers derive their default costing rates and units from the cost center to which they are assigned (e.g. costing rates, time and capacity units of measure, run time calculation method and General Ledger productive and non-productive codes) these can be overridden at work center level.
Use the Work Centers program to define the Work Center GL Integration accounts.
Indicate the options that affect integration.
These include:
Automatically cleared variance (Work in Progress Setup)
You need to indicate the value (or percentage) below which Work in Progress variances are automatically posted to the Automatically cleared variances account in the General Ledger.
Work in Progress control account
The Work in progress control account is the account to which the value of work in progress is posted when a job is created to manufacture a finished stock item.
This control account can be defined in various places. When adding a job (Job Entry) the WIP ledger code to use is determined as follows:
the code defined against the job preferences is used as the default (see Preferences). Note that this code can be changed by the operator when creating the job.
If this is not defined, then
the code defined against the stock code (Stock Codes) is used.
If this is not defined, then
the code defined against the warehouse (Warehouses) is used.
If this is not defined, then
You therefore need to indicate the WIP Control account to use against the job preferences, the stock code or the warehouse if you do not want to use the WIP control account defined in the General Ledger Integration program.
Trade Promotions
You can optionally define default ledger accounts per Deduction code (see Deduction Code).
If these are not defined against the deduction code then the default deduction, resolution and write-off control accounts configured for Trade Promotions are used (General Ledger Integration).
General Ledger
Although the level of integration is defined at module level, you can also defined the level of integration against specific ledger account codes.
This is particularly useful when the sub-ledger is linked to the General Ledger in Detail, but for specific ledger accounts against which postings are made, you only want summary information passed through to the General Ledger (and vice versa).
Indicate the options and settings that affect General Ledger integration.
These include:
Security
Once you have defined your General Ledger integration settings you should prevent unauthorized changes to these settings.
Security can be defined:
by restricting operators from performing activities which affect integration (Operators)
These include activities such as posting to previous periods or authorizing journals.
Disaster Recovery
Once you have defined your General Ledger integration interface settings you should generate reports of these settings and retain them for disaster recovery purposes.
These reports can be found in the SYSPRO Main Menu > SYSPRO Reporting Services > General Ledger > General Ledger Integration folder.
The following tables list the accounts required by the system to integrate sub-modules effectively to the General Ledger.
The table includes the account description, the module(s) that require the account, and the transaction (within the module) which posts an amount to the account.
The accounts are listed by account type. The expense accounts are divided into multiple types of accounts as follows:
Cost of goods manufactured accounts.
These accounts are updated when you issue material or post labor to Work in Progress.
Cost of sales accounts.
These accounts are updated when you record the sale of an item. They also include costing variances not included in the inventory value of the item.
Inventory handling accounts.
These accounts are updated by non sale inventory transactions. There are some clearing accounts, but most accounts are updated by transactions that adjust either the cost or quantity of inventory on hand.
Other expense accounts.
These are accounts that you would include in the Profit and Loss section of your Income Statement with your other general expense accounts.
Account Description | Module(s) Requiring the Account | Originating Transactions |
---|---|---|
Bank and Cash | Cash Book | All Cash Book transactions |
Payables | All check processing | |
Receivables | Cash posting | |
AR Control | Receivables | All Accounts Receivable transactions except miscellaneous receipts |
Warehouse Control | Inventory | All transactions relating to stocked items |
Inventory in Transit | Inventory | SYSPRO posts to this account when you transfer an item from one warehouse to another. The outstanding balance in this account represents the cost of the inventory items currently in transit between warehouses. |
Non-stocked Clearing | Receivables | The cost side of a miscellaneous charge, freight charge or sale of a non-stocked item. |
Work in Progress | Manual distributions in the Part Billings program when dealing with a non-stocked item that you will subsequently sell. | |
Fixed Asset Clearing | Assets Register | Asset purchase and disposal. |
Payables | Manual distribution using the AP Invoice Posting program of invoices relating to Fixed Assets that are maintained in the Assets Register. | |
Fixed Assets Control | Assets Register | Purchase, disposal and revaluation of assets |
Payables | Manual distribution using the AP Invoice Posting program of invoices relating to Fixed Assets that are maintained in the Assets Register. | |
Accumulated Depreciation | Assets Register | Month end depreciation calculation and depreciation adjustments. |
WIP Control | Work in Progress | All transactions that update the value of a job. |
Inter-company Clearing | Cash Book | Inter-company postings |
Account Description | Module(s) Requiring the Account | Originating Transactions |
---|---|---|
AP Control | Payables | All Accounts Payable transactions |
GRN Suspense | Payables / Inventory | Inventory receipts and AP Invoice Postings for
inventory items - or - Using the GL Journal Entry program to record the month end accrual for inventory items received but not yet invoiced by the supplier |
Tax Control | Receivables | SYSPRO automatically posts an entry to this account whenever you charge a customer sales tax. |
Payables | Invoice postings that include recoverable sales tax amounts. | |
Goods and Services Tax (GST) (Canada only) | Receivables | SYSPRO automatically posts an entry to this account whenever you charge a customer GST. |
Account Description | Module(s) Requiring the Account | Originating Transactions |
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Forced Balance | General Ledger | Used by the GL Period End program to handle out-of -balance situations in the General Ledger. |
Retained Earnings | General Ledger | Posted to by the Year End function of the GL Period End program and period end adjustments to previous years. |
Account Description | Module(s) Requiring the Account | Originating Transactions |
---|---|---|
Merchandise Sales Revenue | Receivables | Updated by transactions in the AR Invoice Posting and Sales Order Entry programs. |
Inter-branch Sales Revenue | Receivables | Updated when you invoice an inter-branch sales order. |
Freight Charges Revenue | Receivables | Posted to when you process a freight charge using the Sales Order Entry or AR Invoice Posting programs. |
Miscellaneous Charges Revenue | Receivables | Posted to when you process an other charge using the Sales Order Entry or AR Invoice Posting programs. |
Inter-branch Miscellaneous Charges | Receivables | Posted to when you process an inter-branch transfer sales order |
Finance Charge Revenue | Receivables | Updated by transactions created by the AR Finance Charge Calculation program. |
Discount Received | Receivables | SYSPRO posts to this account when you take advantage of terms discounts when processing check in Accounts payable. |
Account Description | Module(s) Requiring the Account | Originating Transactions |
---|---|---|
WIP Variance | Work in Progress | Updated by the backflushing function when the value of the labor and material components does not match the value of the manufactured item. |
Production Wages Control | Work in Progress | Run time labor transactions posted into Work in Progress |
Fixed Production Overhead | Work in Progress | Posted to when you post labor to a job using a rate code that has a non-zero fixed overhead rate. The fixed overhead rate portion is posted to this account. |
Variable Production Overhead | Work in Progress | Posted to when you post labor to a job using a rate code that has a non-zero variable overhead rate. The variable overhead rate portion is posted to this account. |
Account Description | Module(s) Requiring the Account | Originating Transactions |
---|---|---|
Merchandise Cost of Sales | Receivables | Sale of an item in Accounts Receivable or Sales Order processing |
Inter-branch Cost of Sales | Receivables | Sale of an item using inter-branch sales orders |
Merchandise Cost of Sales Adjustments | Inventory | The system posts to this account when you record the receipt of an item and the quantity on hand is negative. |
Freight-in Expense | Payables/Inventory | You post freight in invoices to this account using the AP Invoice Posting program to offset Freight-in allowance amounts. |
Duty & Brokerage Clearing | Inventory | SYSPRO posts the brokerage portion of the landed cost of an item to this account when you record the receipt of inventory items. SYSPRO can only post to this account if you are using the landed cost multiplier. |
Payables/Inventory | You post to this account when recording duty and brokerage invoices using the AP Invoice Posting program. | |
Warehouse Variance | Inventory | Amounts from rounding function in the Inventory Movements program. |
Account Description | Module(s) Requiring the Account | Originating Transactions |
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Consumables (Inventory Issues) | Inventory | SYSPRO posts to this account when you record the issue of an inventory item using the Inventory Movements program. |
Stock Clearing (Inventory Receipts) | Inventory | SYSPRO posts to this account when you record the receipt of an item into inventory using the Inventory Movements program. |
Stock Clearing (Multiple) | Payables | You post to this account when recording invoices for inventory items using the AP Invoice Posting program. |
Inventory Quantity Adjustments | Inventory | SYSPRO posts to this account when you record inventory quantity adjustments using the Inventory Movements program and when you generate stock take quantity adjustments using the Stock Take Confirmation program. |
Stock Count Adjustments | Inventory | SYSPRO posts to this account when you use the Physical Count function of the Inventory Movements program |
Inventory Cost Changes | Inventory | SYSPRO posts to this account when you use the Cost Changes function of the Inventory Movements program |
Inventory Modifications | Inventory | SYSPRO posts to this account when you use the Cost Modifications function of the Inventory Movements program |
Account Description | Module(s) Requiring the Account | Originating Transactions |
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Discount Allowed | Receivables | Cash postings when the customer takes advantage of the terms discount offered. |
Bad Debts | Receivables | Posted to by the Adjustment function in Accounts Receivables. |
Exchange Variance | Receivables | Posted to when you change the exchange rate when processing cash receipts. |
Cash Book | Posted to when you print the Cash Book Currency Variance report and select the Update function. | |
Payables | Posted to when you change the exchange rate during manual check processing. | |
Depreciation | Assets Register | Posted to when depreciation on assets is calculated. |
When you process transactions within the SYSPRO sub-modules, the journal for the transaction (sub-ledger transaction journal) is automatically created within the sub-module. The subsequent creation and posting of the corresponding General Ledger journal takes place according to the level of automation defined for the individual sub-module (see General Ledger Integration).
See also Creating and Posting Sub Module Journals.
In all cases, the system attempts to create as few General Ledger journals as possible for the sub-module transaction journals. Separate General Ledger journals are, however, created for transactions to different banks and warehouses and for different currencies, etc.
The following table indicates how the journals for the General Ledger are created from the sub-ledger transaction journals depending on the level of automation selected (General Ledger Integration):
Create GL Journal | Comment |
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Selected | The journals for the General Ledger for transactions
processed in the sub-modules are automatically created by
the system. A message box is displayed in the sub-module transaction posting program indicating the General Ledger journal number created. You can suppress the display of this message by deselecting the activity: GL Show journal number created (Operators). The General Ledger journals created can be viewed in the GL Journal Entry program. Refer to General Ledger Integration Error Handling for situations in which the General Ledger journal is not created automatically. |
Not selected | The General Ledger journals for transactions
processed in the sub-modules are only created when you run
the GL Integration program(s) in each sub-module:
Once created, the journals can be viewed in the GL Journal Entry program. |
GenJournalRef table reflects whether a journal is in a status of 0 - In process or C - Closed. When a transaction is started and the journal number is allocated, an entry is added to the table, with a status of 0 - In process. Once all transactions are successfully posted, the journal entry is updated with the closed date and time, and the status is changed to C -Closed. The GenJournalRef table is a SQL table with no C-ISAM equivalent, so it only applies when running SYSPRO in a SQL environment.
The following table indicates how the General Ledger journals created from the sub-module transaction journals are posted from the sub-ledgers depending on the level of automation selected (General Ledger Integration):
Post GL Journal | Comment | ||||
---|---|---|---|---|---|
Not selected | You need to use the GL Journal Entry or GL Post Multiple Normal Journals program to manually post the journals into the General Ledger. | ||||
Selected | The journals are automatically posted into the
General Ledger.
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The GL Integration programs create the General Ledger journals corresponding to the transactions journals created in the sub-modules.
This section describes what happens when errors are detected during the creation of the General Ledger journals from the sub-module transaction journals.
Depending on the type of error encountered, the journal may be created and placed on hold or it may not be created and the transaction rolled back.
Errors in one sub-module do not affect the journal creation in other sub-modules. For example, if an error is encountered in the creation of a journal in Accounts Payable, this will not stop journals from being created in the other sub-modules. If an error occurs in a sub-module, then you need to check that the other journals in the sub-module are posted. Once you have corrected the error, you need to manually post that journal and any other unposted journals for that sub-module using the GL Journal Entry program. |
Irrespective of whether you selected to create the General Ledger journals automatically (General Ledger Integration) or whether you are running the GL Integration programs automatically or manually, for the following error messages, the journal is created, but immediately placed on hold:
For these errors, no message is displayed on the screen, however an entry is created in the job logging file (Job Logging Query) against the GENTJL program, which is the business object responsible for creating the ledger journals from the sub-module transaction journals.
You need to use the GL Journal Entry program to rectify the error by releasing the journal from hold and correcting the error(s) before you can post it.
In addition, you should correct the reason for the error (e.g. define the missing interface entry or ledger code to prevent the error occurring the next time a ledger journal is created for the same type of transaction.
For errors not listed above, the ledger journal is not created. A message detailing the reason is displayed on the screen.
In addition, an entry is created in the job logging file (Job Logging Query) against the GENTJL program, which is the business object responsible for creating the ledger journals from the sub-module transaction journals.
Until the problem is fixed, the error message is redisplayed each time you run the GL Integration program to create the ledger journal.
Once the error is fixed and the ledger journal is created, you need to use the GL Journal Entry or GL Post Multiple Normal Journals program to manually post the journal into the General Ledger. This is irrespective of whether you selected to post journals automatically (General Ledger Integration).
If the journals are not created and no error messages are displayed, then use the GL Integration Utility program to restore the integrity of the journal numbers and flags for ledger journals created from the sub-module journals.
If not all (or no) journals are created, but no error messages are displayed, then you need to:
use the GL Integration Utility program and select the Reset lowest unprocessed journal option, together with the GL Integration program(s) in which the journals are not being posted.
Note that this option is not available in the WIP Period End program. The WIP module creates both labor and Inventory journals. Although labor journals do not become 'in process' journals, the Reset lowest unprocessed journal option is not exclusively linked to in-process journals. It also enables the GL Integration program to start from the lowest journal and run through all the entries. The option to reset labor, part billing and Inventory journals can therefore be accessed from the GL Integration Utility program.
use the GL Integration Utility program and select the Reset GL integration flag option, together with the GL Integration program(s) in which the journals are not being posted.
Thereafter, you need to re-run the GL Integration program(s) to create the journals.
When you successfully process a transaction in a sub-module:
you can use the relevant GL integration program within the sub-module to view the sub-module journals not yet posted to the ledger.
From the Journal options in the relevant GL integration program, select Single at the Function option.
Use the Browse icon at the Journal field to display the list of journals not yet posted for the sub-module. These are the journals against which the GL period, GL year and GL journal columns are zero.
You can also display the GL journals which were posted by selecting the Posted journals option from the Include menu.
When the corresponding General Ledger journal is created either automatically or manually using the relevant GL integration program,
you can use the distribution report in the sub-module to print the details of the GL journal. The sub-module transaction journal number is printed on the distribution report enabling you to cross reference the two journals.
The General Ledger journal must be created for it to appear on the Distribution report. If an error occurred in the GL journal creation process and the GL journal was not created, it will not appear on the distribution report. GL journals that were created but immediately placed on hold will appear on the distribution report. |
you can generate the GL Journal Report from the SYSPRO Reporting Services > General Ledger sub-menu. This report enables you to print journals not yet posted to the General Ledger per sub-module.
Journals originating from the sub-modules are Normal journals. |
you can use the relevant GL integration program within the sub-module to view the sub-module journals not yet posted to the ledger.
From the Journal options in the relevant GL integration program, select Single at the Function option. Use the Browse icon at the Journal field to display the list of journals not yet posted for the sub-module. These are the journals against which the GL period, GL year and GL journal columns are zero.
You can select the Posted journals option from the Include menu to display the GL journals which were posted.
When the GL journal is posted, either automatically or using the GL Journal Entry or GL Post Multiple Normal Journals program, you can:
generate the GL Journal Report from the SYSPRO Reporting Services > General Ledger sub-menu. This report enables you to print journals posted to the General Ledge per sub-module.
Journals originating from the sub-modules are Normal journals. |
view GL journal details from within the GL Query program.
If the sub-module is linked to the General Ledger in Detail (General Ledger Integration) or the integration method against the individual General Ledger code is set to Detail transactions (GL Structure Definition) then you can view the sub-module transaction journal and the GL journal from the GL Query program.
If the sub-module is linked to the General Ledger in Summary, (General Ledger Integration) and the integration method against the individual General Ledger code is not set to Detail transactions (GL Structure Definition) then you can view the GL journal only.
From the GL Query program, enter a ledger account used in the transaction. Within the Details pane, locate the GL journal number required and right click on the line to select the journal you want to view.
All General Ledger journals created from the sub-ledger journals can be printed using the GL Journal Report program.
The Journal reports, Registers and Distribution reports from the sub-modules need not be generated in order to update the General Ledger. They are provided for audit trail purposes and to assist in reconciling and balancing the control accounts to the sub-ledgers.
All Registers, Journal reports and Distribution reports can be accessed from within the SYSPRO Main Menu > General Ledger > GL Integration folder. Alternatively, these reports can be accessed from within the GL Integration sub-folder of each sub-module.
The distribution reports reflect details of the sub-module transactions posted to the GL Journal and are grouped by the GL journal number. The term *Multiple* in place of a GL code indicates that, in the sub ledger, a single journal was referenced to more than one control record. For example payments made to customers in two branches in the same session or an invoice with lines shipped from multiple warehouses (if you are integrated by warehouse).
The table below indicates the reports that can be generated and the module setup options which determine the length of time for which they can be reprinted.
Report | Setup Option | Location |
---|---|---|
Accounts Payable | ||
AP Invoice Journal | Number of months to retain > Expense Journals | Accounts Payable Setup |
AP Payment Register Reprint | Number of months to retain > Payment cycle details | Accounts Payable Setup |
AP Expense Distribution | Number of months to retain > Expense Journals | Accounts Payable Setup |
AP Disbursement Distribution | Number of GL periods to retain > Disbursement distribution entries | Accounts Payable Setup |
Accounts Receivable | ||
AR Invoice Register | Number of months to retain > Sales transaction summary and detail records | Accounts Receivable Setup |
AR Cash Journal | Number of months to retain > Cash journals | Accounts Receivable Setup |
AR Sales Distribution | Number of months to retain > Sales transaction summary and detail records | Accounts Receivable Setup |
AR Payments Distribution | Number of months to retain > Cash journals | Accounts Receivable Setup |
Cash Book | ||
Cash Book Journal | Number of months to retain > Cash book journals | Cash Book Setup |
Cash Book Distribution Report | Number of months to retain > Cash book journals | Cash Book Setup |
Assets | ||
Asset Distribution | Retain asset details (periods) > Distribution entries | Assets Setup |
Inventory | ||
Inventory Journal Report | Number of months to retain > Inventory journals | Inventory Setup |
Inventory Distribution Report | Number of months to retain > Inventory journals | Inventory Setup |
WIP Labor Journal | Number of months to retain > Labor posting journals | Work In Progress Setup |
WIP Labor Distribution | Number of months to retain > Labor posting journals | Work In Progress Setup |
Purchase Orders | ||
Inventory Journal Report | Number of months to retain > Inventory journals | Inventory Setup |
Inventory Distribution Report | Number of months to retain > Inventory journals | Inventory Setup |
GRN Journal | Number of days to retain > GRN journals | Purchase Orders Setup |
GRN Distribution | Number of days to retain > GRN journals | Purchase Orders Setup |
Sales Orders - Trade Promotions | ||
Trade Promotions Journal | None | Trade Promotions journals are currently not purged, therefore no option exists to retain them. |
Work in Progress | ||
WIP Part Billings Journal | Number of months to retain > Part billing journals | Work In Progress Setup |
WIP Part Billings Distribution | Number of months to retain > Part billing journals | Work In Progress Setup |
WIP Labor Journal | Number of months to retain > Labor posting journals | Work In Progress Setup |
WIP Labor Distribution | Number of months to retain > Labor posting journals | Work In Progress Setup |
Inventory Journal Report | Number of months to retain > Inventory journals | Inventory Setup |
Inventory Distribution Report | Number of months to retain > Inventory journals | Inventory Setup |
In prior versions of SYSPRO, the integration information was contained in two tables/files in each sub-module - a Journal and a Distribution table/file. In SYSPRO 6.1 these tables/files were combined into a single Journal table/file for each sub-module and the Distribution entries tables/files were removed. Therefore, all journal and distribution reports (including reprints) are generated from the Journal tables/files.
The conversion program to SYSPRO 6.1 attempted to match each entries group in the Distribution entries table/file back to the Journal table/file. Where a match was found, the distribution entries information was written to the Journal table. The distribution reports for these old entries groups can be reprinted using the various Distribution reports.
Where no corresponding entry for a distribution entries group was found in the Journal table/file, the distribution entries group was deleted. This may affect your ability to reprint distribution Reports in Accounts Payable, Accounts Receivable and Work in Progress.
If you were retaining distribution entries for longer than you were retaining journals then, after conversion to SYSPRO 6.1, you will only be able to reprint distribution entries for the number of months you were retaining journals when last you ran the Purge function in these modules. This is because the conversion only retained distribution entries that could be matched to a corresponding journal; all other distribution entries were discarded.
For example, if in Accounts Payable, the Number of GL periods to retain expense distribution entries is 24 (i.e. 2 years) and the Number of months to retain expense journals is 12 (i.e. 1 year) then, after the conversion to SYSPRO 6.1, you will only be able to reprint the distribution entries for 12 months.
For all transactions processed from SYSPRO 6.1 onwards, the distribution reports can be reprinted for as long as you are retaining journal information as indicated in the table above.
There are two sets of ledger integration within the Accounts Payable module. The first caters for invoices posted and maintained within the AP Invoice Posting program (expenses) and the second caters for payments made to suppliers by the Payment Cycle Maintenance program (disbursements).
Following is a summary of the journal entries generated by transactions processed in the Accounts Payable module:
Invoice Payment | Debit Code | Credit Code |
---|---|---|
Amount paid | AP Control | Bank control |
Discount taken | AP Control | AP terms discount |
Exchange variance profit (foreign payments) | AP Control | Exchange variance |
Exchange variance loss (foreign payments) | AP Control | |
Tax (tax on discount) | AP Control | Input tax code (General Ledger Integration) |
The value debited to AP Control is processed as a single entry. |
Invoice Posting | Debit Code | Credit Code |
---|---|---|
Goods | Merchandise | AP Control |
Goods with GRN Matching | GRN Suspense (Warehouses) or (General Ledger Integration) | AP Control |
Goods to Work in Progress | Work in Progress Control | AP Control |
Tax Payable - single account | Input tax code (General Ledger Integration) | AP Control |
Tax Payable - multiple accounts | AP tax code (Tax Code Setup) | AP Control |
Freight | Freight in | AP Control |
Price variance, price increase (GRN matching) | Purchase Price Variance | AP Control |
Price variance, price decrease (GRN matching) | AP Control | Purchase Price Variance |
Other | Other expenses | AP Control |
The value debited to AP Control is processed as a single entry. |
The following sections list individually, with examples, the journal entries generated by each of the transaction processing functions in the Accounts Payable module.
The tables list the journal entries by SYSPRO function.
Invoice Posting | Debit Code | Credit Code |
---|---|---|
Goods | Merchandise (Suppliers or General Ledger Integration). The account defined against the supplier takes precedence. |
AP Control (AP Branches) |
Freight in | Freight (Suppliers or General Ledger Integration). The account defined against the supplier takes precedence. |
AP Control (AP Branches) |
Other | Other expenses (AP Invoice Posting) | AP Control (AP Branches) |
The value debited to AP Control is processed as a single entry. The Merchandise, Freight, and Other expense accounts can be amended during Invoice Posting. |
Example: Assume you are posting a supplier's invoice for Inventory that you have received (500.00), Staff refreshments (100.00) and freight-in charges (80.00).
The journal entry generated is:
Stock clearing | DR 500.00 |
Freight-in | DR 80.00 |
Staff refreshments | DR 100.00 |
Accounts Payable control | CR 680.00 |
Invoice Payment (with discount) | Debit Code | Credit Code |
---|---|---|
Amount paid | AP Control | Bank Control (Banks) |
Discount | AP Control | Discount Take ledger code (AP Branches) |
The value debited to AP Control is processed as a single entry. |
Example: Assume you generate a system check for the invoice entered in the previous example and that you take advantage of a 2% terms discount.
The journal entry generated by the payment is:
Accounts payable control | DR 680.00 |
Discount received | CR 13.60 |
Bank & cash | CR 666.40 |
Invoice Payment (foreign check) | Debit Code | Credit Code |
---|---|---|
Amount paid | AP Control | Bank Control |
Discount taken | AP Control | Discount Taken ledger code (AP Branches) |
Exchange variance (profit) | AP Control | Exchange variance |
The value debited to AP Control is processed as a single entry. This exchange rate variance represents a profit. If the exchange rate variance results in a loss, then posting to the Exchange variance account is a debit, and posting to the Accounts Payable control is a credit. |
Example: Assume you record a manual check that you wrote to pay a foreign supplier the amount payable of F600.00 and you took advantage of a 2% terms discount.
Also assume that you changed the Local:Foreign (L:F) exchange rate held against the invoice from 2:1 to 2.5:1
The journal entry generated is:
Exchange variance | DR 300.00 |
Accounts Payable control | CR 300.00 |
Accounts Payable control | DR 1500.00 |
Discount received | CR 30.00 |
Bank & cash | CR 1470.00 |
This exchange rate variance represents a loss. If the exchange rate variance results in a profit, then posting to the Exchange variance account is a Credit, and posting to the Accounts payable control is a Debit. |
Invoice Posting (GRN matching) | Debit Code | Credit Code |
---|---|---|
Goods | GRN Suspense (Warehouses) or (General Ledger Integration) | AP Control |
Price Variance | Purchase Price Variance (General Ledger Integration or
Warehouses). The account held against the warehouse takes precedence. |
AP Control |
The value credited to AP Control is processed as a single entry. This purchase price variance represents a loss. If the purchase price variance results in a profit, then posting to the Purchase price variance account is a Credit, and posting to the Accounts payable control is a Debit. |
Example: Assume you enter an invoice for inventory items you previously received and that you use the GRN system to match the invoice with the items received.
Also assume that the invoice amount was 620.00 while the items were received into inventory at the order price of 600.00.
The journal entry generated is:
GRN suspense | DR 600.00 |
Purchase price variance | DR 20.00 |
Accounts Payable control | CR 620.00 |
Invoice Posting (tax - single) | Debit Code | Credit Code |
---|---|---|
Goods | Merchandise (Suppliers or General Ledger Integration). The account defined against the supplier takes precedence. |
AP Control |
Freight in | Freight (Suppliers or General Ledger Integration). The account defined against the supplier takes precedence. |
AP Control |
Other | Other expenses (AP Invoice Posting) | AP Control |
Tax | Input tax (General Ledger Integration) | AP Control |
The value credited to AP Control is processed as a single entry. |
Example: Assume you are posting a supplier's invoice for 680.00.
500.00 is for inventory you received, 100.00 for Staff refreshments and 80.00 for freight-in charges.
The sales tax rate is 10% and taxes are in addition to the 680.00 invoice amount.
The journal entry generated is:
Tax control | DR 68.00 |
Stock clearing | DR 500.00 |
Freight-in | DR 80.00 |
Staff refreshments | DR 100.00 |
Accounts payable control | CR 748.00 |
Invoice Posting (tax - multiple) | Debit Code | Credit Code |
---|---|---|
Goods | Merchandise (Suppliers or General Ledger Integration). The account defined against the supplier takes precedence. |
AP Control |
Freight in | Freight (Suppliers or General Ledger Integration). The account defined against the supplier takes precedence. |
AP Control |
Other | Other expenses (AP Invoice Posting) | AP Control |
Tax | AP Tax ledger code (Tax Code Setup) | AP Control |
The value credited to AP Control is processed as a single entry. |
Example: Assume you entered the same 680.00 invoice that you entered above, only now the invoice includes items with different tax rates.
The tax rate for merchandise is 10% (tax code A) and the rate for freight-in and refreshments is 5% (tax code B).
The taxes are in addition to the 680.00 invoice amount.
The journal entry generated is:
Tax control (Tax code A) | DR 50.00 |
Tax control (Tax code B) | DR 9.00 |
Stock clearing | DR 500.00 |
Freight-in | DR 80.00 |
Staff refreshments | DR 100.00 |
Accounts payable control | CR 739.00 |
Invoice Posting (Tax and GRN matching) | Debit Code | Credit Code |
---|---|---|
Tax - multiple | AP Tax ledger code (Accounts Payable Setup) | AP Control |
Tax payable - single | Input tax (General Ledger Integration) | AP Control |
Goods | GRN Suspense | AP Control |
Price variance (loss) | Purchase Price Variance (General Ledger Integration or
Warehouses). The account held against the warehouse takes precedence. |
AP Control |
The value credited to AP Control is processed as a single entry. This purchase price variance represents a loss. If the purchase price variance results in a profit, then posting to the Purchase price variance account is a credit, and posting to the Accounts payable control is a debit. |
Example: Assume you have received the same items as in the GRN matching example above, except now there are 10% recoverable sales taxes included in the invoice amount.
The journal entry generated is:
Tax control | DR 62.00 |
GRN suspense | DR 600.00 |
Purchase price variance | DR 20.00 |
Accounts payable control | CR 682.00 |
Invoice Payment (tax on discount) | Debit Code | Credit Code |
---|---|---|
Amount paid | AP Control | Bank Control |
Discount taken | AP Control | Discount taken ledger code (AP Branches) |
Tax on settlement discount | AP Control | Input tax (General Ledger Integration) |
The value debited to AP Control is processed as a single entry. |
Example: Assume you paid an invoice where you took advantage of a terms discount of 2% and you want to decrease the amount of the sales taxes recoverable by the terms discount.
The invoice amount including taxes at 10% is 550.00
The journal entry generated is:
Accounts payable control | DR 550.00 |
Discount received | CR 10.00 |
Bank & cash | CR 539.00 |
Tax control | CR 1.00 |
Invoice Posting (to Work In Progress) | Debit Code | Credit Code |
---|---|---|
Goods | WIP ledger code held against the job | AP Control (AP Branches) |
Example: Assume you receive an invoice for 300.00 for subcontract services for a job you have opened in Work in Progress.
The journal entry generated is:
WIP control | DR 300.00 |
Accounts payable control | CR 300.00 |
When you use the AP Invoice Contra program to contra debit and credit invoices on a supplier's account:
The AP control ledger code defined against the AP branch (AP Branches) for the transaction is debited or credited.
Any exchange variance is posted to the Exchange variance account defined against the Bank (Banks) which defined against the supplier (Suppliers). An exchange variance occurs when the invoices you contra have different exchange rates.
Refer to General Ledger Entries for examples.
You record the purchase of an inventory item in the Inventory Control module when the item is received, and in the Accounts Payable module when you receive the invoice from the supplier.
When you record the receipt of an inventory item in the Inventory Control module you increase the value of your inventory account and increase the value of an accrual account representing the amount you owe to the supplier.
An example of the journal entry created by the Inventory Control Receipt function is:
Function | Account Description | Debit/Credit | Amount |
---|---|---|---|
Inventory Receipt | Warehouse Control | Dr | 999 |
Stock Clearing | Cr | 999 |
When you receive the supplier's invoice you record it using the Accounts Payable Invoice Posting program. This will increase the value of your Accounts Payable account and decrease the value of the accrual. The entry looks as follows:
Function | Account Description | Debit/Credit | Amount |
---|---|---|---|
Inventory Posting | Stock Clearing | Dr | 999 |
Accounts Payable Control | Cr | 999 |
You enter the Accrued liability account in the expense distribution portion of the Invoice Posting program. The amount entered should match the amount entered when recording the receipt of the inventory item using the Movements program. Any variances should be journalized out of this account and charged to an expense account such as your Purchase price variance account.
If you want to keep track in the General Ledger of the value of inventory received and the value of received inventory invoiced, you can split the Accrued liability account into two accounts such as Inventory received and Inventory purchased.
The above example would look as follows if the Accrued liability account were split.
Recording the receipt of the inventory item would generate the following journal entry:
Function | Account Description | Debit/Credit | Amount |
---|---|---|---|
Inventory Receipt | Warehouse Control | Dr | 999 |
Inventory Received | Cr | 999 |
Recording the receipt of the supplier's invoice would generate the following journal entry:
Function | Account Description | Debit/Credit | Amount |
---|---|---|---|
Invoice Posting | Inventory Purchased | Dr | 999 |
Accounts Payable Control | Cr | 999 |
The amount of inventory received for which no invoice was received, should be raised as an accrual amount for each reporting period.
You set Accounts Payable integration to Cash Book in the Accounts Payable Setup program.
If your require Accounts Payable payments to be linked to Cash Book (Accounts Payable Setup) then at the end of the Payment Register run, all checks (excluding Void checks) are posted into the Cash Book as withdrawals.
A net local currency value is printed in the section headed 'Register totals' for foreign payments - the net local currency value at the payment rate.
When a payment is made against a foreign currency invoice, the exchange rate applied to the payment is the rate held against the invoice.
When you post a supplier's invoice in Accounts Payable (AP Invoice Posting), you must distribute the value of the invoice to the applicable General Ledger accounts. These distribution amounts can include tax or exclude tax.
If you selected the Exclusive option, then you are prompted to enter a tax value for the invoice. The system deducts this amount from the Undistributed amount displayed on the screen. When posting the remaining undistributed amount you are prompted to enter a tax code for each ledger code you enter. The system uses this tax code to calculate the applicable tax amount.
Once you have finished distributing the invoice value, the system compares the tax value it calculated to the amount you entered. If the amounts do not match, then you are required to adjust the amounts that the system calculated to the amount you entered. The tax amounts are posted to the General Ledger accounts assigned to the tax codes defined using the Tax Codes program (Tax Options setup).
If you want tax to be posted to the accounts specified, then you must select the option Disburse tax amount over multiple GL tax accounts (Accounts Payable Setup - Tax tab). If you select the option Disburse tax amount over single GL tax account, then tax is posted to the AP tax ledger code defined against each of the tax codes Tax Codes (Tax Options setup). |
For the following examples, assume that no Merchandise or Freight-in codes are defined in either the General Ledger Integration or the AP Supplier Maintenance program.
Example 1:
Assume you entered an invoice with a Total invoice amount of 1000.00 and a Tax amount of 67.00
You selected the Exclusive tax option, as you want to distribute amounts exclusive of tax.
You perform the General Ledger distribution as follows:
Stock clearing (account 2010-00) Debit 800.00
You defined Tax code B against account code 2010-00 (General Ledger Codes). The system displays this code as the default.
You defined account 2402-00 against Tax code B at the AP tax ledger code option in the Tax Codes program (Tax Options setup).
The rate assigned to Tax code B is 7%
The system calculates the tax amount applicable to the 800.00 distribution amount as (7% x 800) or 56.00
Freight-in (account 5500-00) Debit 133.00
You defined account 2401-00 against Tax code A at the AP tax ledger code option in the Tax Codes program (Tax Options setup).
The rate assigned to Tax code A is 7%
The system calculates the tax amount applicable to the 133.00 distribution amount as (7% x 133) or 9.31
The total tax calculated by the system is therefore (56 + 9.31) or 65.31. This amount does not equal the 67.00 you entered as the tax amount.
Before you can post the invoice you have to adjust the 65.31 amount to 67.00. That means you have to adjust either the 56.00 or the 9.31 amount. Assume you adjust the 56.00 amount up to 57.69.
The calculated tax amount now equals the tax amount you entered and the distribution of the invoice is now complete.
The journal entry generated by this invoice is:
Function | Account Description | GL Code | Dr/Cr | Amount |
---|---|---|---|---|
Invoice Posting | Tax Control (Tax code A) | 2401-00 | Dr | 57.69 |
Tax Control (Tax code B) | 2402-00 | Dr | 9.31 | |
Stock Clearing | 2010-00 | Dr | 800.00 | |
Freight in | 5500-00 | Dr | 133.00 | |
Accounts Payable Control | 2000-00 | Cr | 1000.00 |
If you had selected the Inclusive option, you would NOT be prompted to enter a tax value for the invoice. When you are distributing the invoice amount you will be required to enter a tax code. The system uses this tax code to calculate the applicable tax amount based on the tax percentage you assigned to the code. This amount is posted to the general ledger accounts assigned to the tax code defined using the Tax Codes program accessible from the Tax Options program.
Example 2:
Assume you enter an invoice for 1000.00
The tax applicable to this invoice is calculated by the system based on the tax codes you enter.
You perform the General Ledger distribution as follows:
Stock clearing (account 2010-00) Debit 850.00
After entering the posting amount you must enter a tax code.
If you entered a tax code against account code 2010-00 in the GL Accounts Setup program (General Ledger), the system displays this code as the default. You defined Tax code B against this account.
You defined account 2402-00 against Tax code B at the AP tax ledger code option in the Tax Codes program (Tax Options setup).
The rate assigned to tax code B is 7%.
The system calculates the tax amount applicable to the 850.00 distribution amount as (850 x (7/107)) or 55.61 and deducts it from the 850.00. Remember that the 7% tax value is included in the amount of 850.00.
The net posting to 2010-00 is (850.00 - 55.61) or 794.39.
The tax amount of 55.61 is posted to account 2402-00.
Freight-in (account 5500-00) Debit 150.00
You defined account 2401-00 against Tax code A at the AP tax ledger code option in the Tax Codes program (Tax Options setup).
The rate assigned to Tax code A is 7%
The system calculates the tax amount applicable to the 150.00 distribution amount as (150 x (7/107)) or 9.81. Remember that the 7% tax value is included in the amount of 150.00.
The net posting to account 5500-00 is (150.00 - 9.81) or 140.19.
The tax amount of 9.81 is posted to account 2401-00.
The total tax calculated by the system is (55.61 + 9.81) or 65.42.
This amount is posted to the two accounts assigned to the tax codes in the Tax Codes program. The distribution of the invoice is now complete.
The journal entry generated by this invoice is:
Function | Account Description | GL Code | Dr/Cr | Amount |
---|---|---|---|---|
Invoice Posting | Tax Control (Tax code A) | 2401-00 | Dr | 9.81 |
Tax Control (Tax code B) | 2402-00 | Dr | 55.61 | |
Stock Clearing | 2010-00 | Dr | 794.39 | |
Freight in | 5500-00 | Dr | 140.19 | |
Accounts Payable Control | 2000-00 | Cr | 1000.00 |
There are two sets of ledger integration within the Accounts Receivable module. The first caters for invoices created within the Accounts Receivable and Sales Order modules, and the second caters for cash receipts created within the Accounts Receivable and Sales Order modules.
Setting up integration in the Accounts Receivable module involves selecting options and entering ledger accounts to which postings are required to be made when transactions are entered into either the Accounts Receivable or Sales Order modules.
For sales integration you must define branch control accounts using the AR Branches program, and the sales and cost of sales accounts using the Sales interfaces option of the General Ledger Integration program (see AR Sales Ledger Interface).
The following tables outline how each transaction type is processed and distributed to the General Ledger system:
Sales | Debit Code | Credit Code |
---|---|---|
Stocked | Branch Debtors Control | Interface Entry |
Stocked (Inter -branch Transfers) | Branch Debtors Control | Interface Entry |
Non-stocked | Branch Debtors Control | Interface Entry |
Freight | Branch Debtors Control | Branch Freight |
Other charges | Branch Debtors Control | Interface Entry |
Sales tax | Branch Debtors Control | Branch Sales tax |
Finance charges | Branch Debtors Control | Branch Finance Charge |
Rounding errors | Branch Debtors Control | Branch Rounding Error |
Cost of Sales | Debit Code | Credit Code |
---|---|---|
Stocked | Interface Entry | Warehouse Control |
Stocked (Inter -branch Transfers) | Interface Entry | Warehouse Control |
Non-stocked | Interface Entry | Branch Cost of Sales Control |
Freight | Branch Cost of Sales Freight | Branch Cost of Sales Control |
Other charges | Interface Entry | Branch Cost of Sales Control |
All merchandise, freight and miscellaneous charge lines that have been invoiced (both from Sales Order Entry and AR Invoice Posting) are retained in the sales transaction file. When the General Ledger journal is created, the ledger codes for sales and cost of sales are determined as follows:
Stocked merchandise lines
The merchandise amount (excluding any tax) is posted to a ledger code determined from the sales ledger interface, with the balancing entry being made to the branch sales control code (normally the debtors control account).
The cost of sales is posted to the warehouse control code with the balancing entry being made to the cost of sales interface entry.
Non-stocked merchandise lines
The merchandise amount (excluding any tax) is posted to a ledger code determined from the sales ledger interface with the balancing entry being made to the branch sales control code (normally the debtors control account).
The cost of sales is posted to the branch cost of sales control code, with the balancing entry being made to the cost of sales interface entry.
Freight lines
The freight amount (excluding any tax) is posted to the branch sales freight code, with the balancing entry being made to the branch sales control code (normally the debtors control account).
The cost of sales is posted to the branch cost of sales freight code, with the balancing entry being made to the branch cost of sales control account.
Other charge lines
The miscellaneous charge amount (excluding any tax) is posted to a ledger code determined from the sales ledger interface, with the balancing entry being made to the branch sales control code (normally the debtors control account).
The cost of sales is posted to the branch cost of sales control code with the balancing entry being made to the cost of sales interface entry.
The following table outlines how each transaction type is processed and distributed to the General Ledger system:
Transaction Type | Debit Code | Credit Code |
---|---|---|
Payments | Interface Entry | Branch AR Control |
Discounts | Interface Entry | Branch AR Control |
Adjustments | Interface Entry | Branch AR Control |
Interface entries for payments are defined using the AR Payments Ledger Interface program, accessible from the General Ledger Integration program. |
All payments, discounts, and adjustments made within the AR Payments and Adjustments program are retained within the cash journal file. When the General Ledger journal is created, the ledger codes are determined as follows:
Payments, discounts and adjustments
The amount is posted to a ledger code determined from the payment ledger interface, with the balancing entry being made to the branch sales control code (normally the debtors control account).
Exchange rate variances
An exchange rate variance occurs when a payment or a miscellaneous receipt is processed against a foreign customer and the exchange rate at which the invoice was captured differs from the exchange rate at which the payment or receipt was captured.
Typically, the exchange rate for the payment or miscellaneous receipt is taken from the currency table (Currencies). You can, however, override the exchange rate at the time of capturing the payment or receipt. Where the exchange rate from the currency table is overridden, the exchange rate variance is calculated using this new rate.
At the time of posting a payment, you can change the ledger code to which the exchange rate variance must be posted. This code is displayed on the AR Cash Journal. |
The following sections list the journal entries generated by each of the transaction processing functions in the Sales Orders and Accounts Receivable modules.
The tables list the journal entries by SYSPRO function. Examples are included.
Description | Debit Code | Credit Code |
---|---|---|
Stocked/Non-stocked item | AR Control | Sales |
Miscellaneous charge | AR Control | Sales |
Freight | AR Control | Freight charges |
Tax | AR Control | Sales tax (If Sales tax integration to GL is at Tax Code level - Tax codes setup) or Sales tax (Branch setup) |
Goods & Services tax (Canada only) | AR Control | GST - Branch setup |
Rounding error (see Note below) | AR Control | Rounding error (Branch setup) |
Merchandise Cost of Sales (stocked item) | Cost of sales (Sales interface) | Warehouse Control (Warehouse setup) |
Merchandise Cost of Sales (non-stocked item) | Cost of sales (Sales interface) | Cost of sales Non-stocked (Branch setup) |
Miscellaneous charges Cost of Sales | Cost of sales (Sales interface) | Cost of sales Non-stocked (Branch setup) |
Freight revenue Cost of sales | Freight cost of sales (Branch setup) | Cost of sales Freight (Branch setup) |
Where the rounding error causes a loss, a debit entry is made to the Rounding error ledger code, and a credit entry to the AR Control ledger code. |
Example: Assume you sold the following to a customer (exclusive of tax):
Description | Revenue | Cost of Sales |
---|---|---|
Stocked merchandise | 900.00 | 450.00 |
Non-stocked merchandise | 700.00 | 350.00 |
Freight charge | 200.00 | 100.00 |
Misc. charge - (e.g. Packaging) | 100.00 | 25.00 |
Applicable taxes | 10% on merchandise only. |
The journal entry generated would be:
Account | Debit | Credit |
---|---|---|
Accounts receivable control | 2060.00 | |
Merchandise sales revenue (stocked) | 900.00 | |
Merchandise sales revenue (n/stocked) | 700.00 | |
Freight charges revenue | 200.00 | |
Miscellaneous charges revenue | 100.00 | |
TAX control | 160.00 | |
Merchandise COS (stocked) | 450.00 | |
Merchandise COS (non-stocked) | 350.00 | |
Freight revenue COS | 100.00 | |
Misc. charges COS | 25.00 | |
Warehouse control | 450.00 | |
Non stocked clearing (350+100+25) | 475.00 |
Description | Debit Code | Credit Code |
---|---|---|
Inter-branch sales (stocked/non-stocked) | AR Control | IBT Sales (Sales interface) |
Inter-branch miscellaneous charges | AR Control | IBT Sales (Sales interface) |
Freight charges | AR Control | Freight charges |
Tax | AR Control | Sales tax (If Sales tax integration to GL is at Tax Code level - Tax codes setup) or Sales tax (Branch setup) |
Goods & Services tax (Canada only) | AR Control | GST - Branch setup |
Rounding error (see Note below) | AR Control | Rounding error Revenue (Branch setup) |
Inter-branch COS (stocked item) | IBT Cost of Sales (Sales interface) | Warehouse Control (Warehouse setup) |
Inter-branch COS (non-stocked item) | IBT Cost of Sales (Sales interface) | Cost of sales Non-stocked (Branch setup) |
Inter-branch miscellaneous charge COS | IBT Cost of Sales (Sales interface) | Cost of sales Non-stocked (Branch setup) |
Freight revenue COS | Freight Cost of Sales (Branch setup) | Cost of sales Freight (Branch setup) |
Where the rounding error causes a loss, a debit entry is made to the Rounding error ledger code, and a credit entry to the AR Control ledger code. |
Example: Assume that all your branches are considered tax paying entities.
You sold the following to one of your branches:
Description | Revenue (excluding tax) | Cost of Sales |
---|---|---|
Stocked merchandise | 800.00 | 400.00 |
Non-stocked merchandise | 600.00 | 300.00 |
Freight charge | 100.00 | 50.00 |
Misc. charge - (e.g. Packaging) | 50.00 | 25.00 |
Applicable taxes | 10% on merchandise only. |
Inter-branch transfer stocked and non-stocked merchandise transactions are always accounted for at cost, regardless of any sales price entered. |
The journal entry generated would be:
Accounts receivable control | DR 920.00 |
Inter-branch sales revenue | CR 400.00 |
Inter-branch sales revenue | CR 300.00 |
Freight charges revenue | CR 100.00 |
Inter-branch misc. charges | CR 50.00 |
Tax control | CR 70.00 (i.e. 10% on 300 + 400) |
Inter-branch COS | DR 400.00 |
Inter-branch COS | DR 300.00 |
Freight revenue COS | DR 50.00 |
Inter-branch misc. charges COS | DR 25.00 |
Warehouse control | CR 400.00 |
Non stocked clearing | CR 375.00 (i.e. 300+50+25) |
Debit Code | Credit Code | |
---|---|---|
Amount charged | AR Control | Finance Charges (Branch setup) |
Example: Assume you have 10 000.00 of outstanding sales invoices that are past due and that you charge 24% per annum in finance charges.
The journal entry generated would be:
Accounts receivable control | DR 200.00 |
Finance charges revenue | CR 200.00 |
Debit Code | Credit Code | |
---|---|---|
Amount received | Cash Account (if AR linked to Cash book - Banks
setup) or Payments (Payments interface) |
AR Control |
Discount allowed | Discount (Payments interface) | AR Control |
Example: Assume you received a payment from a customer to settle a 5000.00 invoice. They have taken the 2% terms discount you have offered them.
The journal entry generated would be:
Bank & cash | DR 4900.00 |
Discount allowed | DR 100.00 |
Accounts receivable control | CR 5000.00 |
Debit Code | Credit Code | |
---|---|---|
Amount received | Payments (Payments interface) | AR Control |
Exchange variance (see Note below) | AR Control | Exchange rate variance (General Ledger Integration) |
Discount allowed | Discounts | AR Control |
|
Example: Assume you invoiced a customer for an amount of F4000.00 and the exchange rate at the time was 2.0. The local currency equivalent is therefore 8000.00
Assume the customer pays you F2000.00 off this F4000.00 foreign currency invoice (i.e. the customer is paying half the invoice).
The exchange rate has changed from 2.0 at the time the invoice was issued to 2.5 at the time of the receipt.
They have taken the 2% terms discount you offered them. The actual check amount is therefore F1960.00 (F2000.00 less 2%).
The journal entry generated would be:
Bank & cash | DR 4900.00 (F1960.00 converted at exchange rate of 2.5) |
Discount allowed | DR 100.00 (2% of F2000.00 = F40.00 converted at exchange rate of 2.5) |
Exchange variance | CR 1000.00 (difference between F2000.00 at a rate
of 2 and F2000.00 at a rate of 2.5) The system also converts the invoice value being paid to the new exchange rate, not just the amount paid. |
Accounts receivable control | CR 4000.00 (F2000.00 converted at exchange rate of 2) |
Debit Code | Credit Code | |
---|---|---|
Amount received | Cash Account (if AR linked to Cash book - Banks
setup) or Payments (Payments interface) |
Credit ledger code (AR Payments and Adjustments - miscellaneous receipt) |
Example: Assume that your parent company advanced you 10000.00.
The journal entry generated would be:
Bank & cash | DR 10000.00 |
Inter-company clearing | CR 10000.00 |
Debit Code | Credit Code | |
---|---|---|
Adjustment amount (profit) | AR Control | Adjustments |
|
Example: Assume that you have a 1000.00 outstanding sales invoice that a customer is not going to pay.
As this adjustment is intended to reduce the value of Accounts Receivable, it has to be entered as a negative value, as the normal entry is a debit to Accounts Receivable control (see above).
The account to which you debit the bad debt is either the Adjustments ledger code (AR Payments Ledger Interface) or an override account specified at the time of entering the adjustment.
The journal entry generated would be:
Bad debts or Bad Debt Provision | DR 1000.00 |
Accounts receivable control | CR 1000.00 |
Foreign currency payments
If you are entering foreign currency customer payments and Accounts Receivable is integrated to the Cash Book, then you should run the Report and update option of the Cash Book Currency Variance report on a regular basis. Running this report ensures that the local equivalent of foreign payments are correct.
The Accounts Receivable module shares information with each of the following modules:
General Ledger
Accounts Receivable information transferred:
Sales Analysis
Accounts Receivable information available on reports:
Inventory Control
Accounts Receivable processes that update stock quantities:
Sales Orders
Sales Order information transferred to Accounts Receivable:
Sales Order processes that update stock quantities:
Document print capability:
Cash Book
Information transferred to Cash Book:
Setting up integration in the Cash Book module involves selecting options and entering accounts to which postings are required to be made when transactions are entered into the module.
Apart from the accounts set up in the General Ledger Integration program, the following options also affect how Cash Book integration operates:
The following sections indicate some of the transactions that can be processed in the Cash Book module, with the relevant debit and credit ledger codes for each transaction.
Examples are also provided.
Deposit - No Tax | Debit Code | Credit Code |
---|---|---|
Deposit amount | Cash account ledger code (Banks) | Credit ledger code (any type) entered at the time of entering the deposit |
Example: Assume you receive a 10000.00 advance of funds from a bank loan.
The journal entry generated would be:
Bank & cash | DR 10000.00 |
Bank Loan | CR 10000.00 |
Withdrawal - No tax | Debit Code | Credit Code |
---|---|---|
Withdrawal amount | Debit ledger code (any type) entered at the time of entering the withdrawal | Cash account ledger code (Banks) |
Example: Assume you made a 1000.00 payment on a bank loan.
The journal entry generated would be:
Bank loan | DR 1000.00 |
Bank & cash | CR 1000.00 |
Deposit - With tax | Debit Code | Credit Code |
---|---|---|
Deposit amount | Cash account ledger code (Banks) | Credit ledger code (any type) entered at the time of entering the deposit |
Tax portion | Tax for deposits ledger code (General Ledger Integration) |
Example: Assume you made a cash sale of 500.00 plus 10% sales tax.
You only want to record the sales side of the transactions in the Cash Book and do not want to update any customer or sales analysis statistics.
The journal entry generated would be:
Bank & cash | DR 550.00 |
Merchandise sales revenue | CR 500.00 |
TAX control | CR 50.00 |
Withdrawal - With tax | Debit Code | Credit Code |
---|---|---|
Withdrawal amount | Debit ledger code (any type) entered at the time of entering the withdrawal | Cash account ledger code (Banks) |
Tax portion | Tax for deposits ledger code (General Ledger Integration) |
Example: Assume you purchased staff refreshments for 400.00 plus 10% sales tax that is recoverable from the tax authorities.
The journal entry generated be:
Staff refreshments | DR 400.00 |
Tax control | DR 40.00 |
Bank & cash | CR 440.00 |
Reconcile Foreign Transaction | Debit Code | Credit Code |
---|---|---|
Profit amount | Cash account ledger code (Banks) (for foreign currency bank) | Exchange variance ledger code (Banks) |
If the exchange rate variance leads to a loss, then the transaction is processed as a Credit to the Cash account ledger code and a Debit to the Exchange variance ledger code. |
Example: Assume you enabled the Foreign currency cash book required option (Cash Book Setup).
You are reconciling a F300.00 foreign deposit with your bank statement and the exchange rate has changed from 2.0 at the time of recording the deposit to 2.5 at the time the bank recorded the transaction in their records.
The journal entry generated would be:
Bank & cash | DR 150.00 |
Exchange variance | CR 150.00 |
When you recorded the deposit of F300 at a rate of 2 - the local equivalent was L600.00
When you receive your bank statement, the rate has changed to 2.5, therefore the value of your deposit is now F300 at a rate of 2.5 = L750. You therefore gained L150 due to the exchange rate having changed in your favour.
Currency Variance Report - Update function | Debit Code | Credit Code |
---|---|---|
Profit amount | Cash account ledger code (Banks) (for foreign currency bank) | Exchange variance ledger code (Banks) |
If the exchange rate variance leads to a loss, the transaction is processed as a Credit to the Cash account ledger code and a Debit to the Exchange variance ledger code. |
Example: Assume you are updating the outstanding foreign transactions and the statement balance of a foreign currency bank to the current exchange rate of 2.5.
The outstanding transactions (withdrawals) amount to 1500.00 and were recorded at an exchange rate of 2.0.
The bank statement balance of 2000.00 (not taking the outstanding transactions into account) was last converted at 1.5.
The change in the local currency equivalent is calculated as {[-1500.00 x (2.5 - 2.0)] + [2000.00 x (2.5 - 1.5)]} or +1250.00.
The journal entry generated would be:
Bank & cash (foreign currency bank) | DR 1250.00 |
Exchange variance | CR 1250.00 |
Inter-company deposit | Debit Code | Credit Code |
---|---|---|
Deposit amount | Cash account ledger code (Banks) (in source company) | Inter-company ledger code (in source company) |
Deposit amount | Inter-company ledger code (in target company) | Credit ledger code (any type) entered at the time of entering the deposit. This code must exist in the target company. |
Example: Assume company A has recorded the receipt of 5000.00 that a related company (company B) borrowed from the bank and deposited into your account.
The journal entry generated in the company in which you record the transaction would be as follows:
Company A | |
Bank & cash | DR 5000.00 |
Inter-company clearing | CR 5000.00 |
Company B | |
Inter-company clearing | DR 5000.00 |
Bank loan | CR 5000.00 |
Interbank transfers are processed by performing a withdrawal from the transferring bank and a deposit into the receiving bank.
You must define the Interbank transfer suspense ledger account (General Ledger Integration) before you can process interbank transfers.
When the option Foreign cash book required is selected (Cash Book Setup) then the following types of interbank transfers can be processed:
In all of the above-mentioned cases, two journals are created - one journal for the withdrawal and another journal for the deposit as follows:
Withdrawal transaction | Debit Code | Credit Code |
---|---|---|
Interbank transfer suspense account | Cash account of the withdrawal bank |
Deposit transaction | Debit Code | Credit Code |
---|---|---|
Cash account of the deposit bank | Interbank transfer suspense account |
When a foreign currency is involved in the transaction and a currency variance is created by changing the deposit exchange rate, then this variance is posted to the exchange rate variance account of the withdrawal bank (Banks).
For example:
You transfer an amount of L100.00 from your local currency bank to a foreign currency bank with a currency of 'F'.
Assume that the exchange rate defined in the exchange rate table is L1 = F3.5 (i.e. one unit in the local currency equals 3.5 units in the foreign currency).
When you use the Cash Book Deposits & Withdrawals program to process the transaction, you enter L100.00 in the Withdrawal amount field. The program converts this to F28.57 (i.e. 100 / 3.5 = 28.57) and enters this in the Deposit amount field.
However, you now change the deposit exchange rate to 3.0 (i.e. one local unit equals three foreign units).
The deposit value is now equivalent to L85.71 in the local currency. This creates an exchange variance of L14.29 (i.e. L100.00 - L85.71 = L14.29).
The journal entries generated for the General Ledger are:
Withdrawal transaction | |
---|---|
Cash account of the withdrawal bank | CR L100.00 |
Exchange rate variance account | DR L14.29 |
Interbank transfer suspense account | DR L85.71 |
The above values are displayed in the Values in local currency section of the Interbank Transfers pane of the Cash Book Deposits & Withdrawals program when you process the transaction.
Deposit transaction | |
---|---|
Cash account of the deposit bank | DR L85.71 |
Interbank transfer suspense account | CR L85.71 |
The integration of asset information to the general ledger can be defined at branch, group and cost center level, or a combination of these (see Assets Ledger Interface). Where integration is not defined at these levels, the ledger codes in the General Ledger Integration program are used.
In addition, you can define a ledger code against each asset to which the expense side of the book value depreciation amount must be distributed. You do this by selecting the Assets Register option Post book value depreciation to by Individual asset (Assets Register Setup) and then using the Assets program to define the ledger code required.
No General Ledger entries or journals are created when you use the Asset Transactions, Asset Expense Posting and Asset Labor Time Sheet Posting programs. |
The following tables list the journal entries created by the various assets transaction programs.
When you use the Assets program to add a new asset, the following journal is created:
Dr | Asset Control | Cost amount of asset |
Cr | Asset Clearing | Cost amount of asset |
In addition, the following depreciation entries are created if applicable:
Dr | Depreciation expense account | Accumulated depreciation value |
Cr | Accumulated depreciation account | Accumulated depreciation value |
When you pay for an asset, the Asset Clearing account must be debited. |
When you use the Assets program to add an asset purchased in a prior financial year the system generates the following General Ledger journal:
Dr | Asset Control | Cost amount of asset |
Cr | Asset Clearing | Cost amount of asset |
Dr | Depreciation Expense in the Current period (either against the asset, branch, cost center or group, depending on integration level defined). | Accumulated Depreciation applicable to the Current year only. |
Cr | Accumulated Depreciation | Accumulated Depreciation to date. The system adds all the depreciation from the depreciation start date to the current period and posts it. |
Dr | Asset Clearing | Difference between the total accumulated depreciation and the accumulated depreciation for the current year. |
If an asset is added in a prior year, the system posts all previous months' depreciation into the current period in the General Ledger. The query screen displays the depreciation spread out over the months since the start calculation date, showing how the depreciation should be spread out. IAS16 requires that an asset be depreciated over its useful life, matching the cost against the full period in which it earns profit for the business. In short, depreciation must start when the asset is brought into use. This matching concept in accounting is fundamental and is also incorporated in a number of the other standards. The asset clearing account will therefore have a balance of the prior year's depreciation in it. As the system cannot assume if the Financial Accounts and Tax calculations have been finalised, it posts this depreciation entry to the Clearing account so that it can be resolved. Although the Assets Register carries out default entries based on IAS16 when an asset is added, these can be changed. The system is used in a number of different countries and therefore has to cater for different eventualities. The system does allow for instances where an asset is purchased on a certain date but the depreciation and tax wear and tear allowance starts on a different date. This may occur where an asset is purchased but is not used in the production of income immediately. When an asset is added in SYSPRO there are options to enter a purchase date, a start depreciation date and tax start date (see Assets). |
If you change the Cost/value of an asset using the Assets program, then the following entries are created:
Dr or Cr (depending on whether the value was increased or decreased) | Asset Clearing account | Change in asset value |
Dr or Cr (depending on whether the value was increased or decreased) | Asset Control account | Change in asset value |
No General Ledger entries are created for depreciation. To adjust the depreciation, you use the Asset Depreciation Adjustment program. |
When you use the Asset Disposal program to dispose of an asset, the following journal is created:
Dr | Asset Clearing | Sold Amount Less Cost of disposal |
Cr | Asset Control | Asset cost |
Dr | Accumulated Depreciation | Depreciation to date |
Cr or Dr | Profit/Loss on Disposal of Assets | Sold Amount Less Cost of disposal Less (Asset Cost
less Depreciation to date). If a profit was made on the disposal, then this account is credited, else it is debited. |
If the asset was revalued during its lifetime (using the Asset Revaluation program) then the following entry is also created:
Dr | Revaluation Reserve | Total of revaluation reserve amount on the asset |
Cr | Profit/Loss on Disposal of Assets | Total of revaluation reserve amount on the asset |
When you use the Asset Revaluation program to revalue an asset, the following journal is created:
If you increased the cost of the asset, then the following entries are created:
Dr | Accumulated Depreciation | Accumulated depreciation to date |
Dr | Asset Control | Difference between old and new cost |
Cr | Revaluation Reserve | Accumulated depreciation to date value plus difference between old and new cost |
If you decreased the cost of the asset, then the following entries are created:
Dr | Accumulated Depreciation | Accumulated depreciation to date |
Cr | Asset Control | Difference between old and new cost |
Cr or Dr | Revaluation Reserve | Accumulated depreciation to date value plus
difference between old and new cost. i.e. The difference between the book value of the asset at the time it is revalued and the new cost value of the asset is journalized to the Revaluation Reserve account. |
When you use the Asset Transfer program to transfer an asset, the following journal is created, (irrespective of whether the ledger account numbers for the assets differs or not):
Cr | Asset Control for the OLD Branch/Cost Center/Group combination | Asset cost/value |
Dr | Asset Control for the NEW Branch/Cost Center/Group combination | Asset cost/value |
Dr | Accumulated depreciation for the OLD Branch/Cost Center/Group combination | Accumulated depreciation to date |
Cr | Asset Control for the NEW Branch/Cost Center/Group combination | Accumulated depreciation to date |
When you use the Asset Depreciation Adjustment program to adjust the depreciation for an asset, the following journal is created:
If the adjustment amount is positive, then the following entries are created in the General Ledger distribution file for the selected period:
Dr | Depreciation Expense | Amount of adjustment |
Cr | Accumulated Depreciation | Amount of adjustment |
If the adjustment amount is negative, the General Ledger distribution file for the selected period is updated as follows:
Cr | Depreciation Expense | Amount of adjustment |
Dr | Accumulated Depreciation | Amount of adjustment |
When you use the Asset Depreciation Adjustment Recalc program to adjust the depreciation for an asset, the following journal is created:
If the adjustment amount is positive, then the following entries are created in the General Ledger distribution file for the current Assets period:
Dr | Depreciation Expense | Amount of adjustment |
Cr | Accumulated Depreciation | Amount of adjustment |
If the adjustment amount is negative, the General Ledger distribution file for the selected period is updated as follows:
Cr | Depreciation Expense | Amount of adjustment |
Dr | Accumulated Depreciation | Amount of adjustment |
When you run the Asset Depreciation Calculation program in update mode, the following journal is created:
Dr | Depreciation Expense (either against the asset, branch, cost center or group, depending on the level defined). | Amount of depreciation for the asset for the period. |
Cr | Accumulated Depreciation | Amount of depreciation for the asset for the period |
You use the Asset Capex Items program to create asset capex items and their related capex requisition lines. For each requisition line you can create a Purchase Order Requisition, Purchase Order or Job. When a Purchase Order for a capex requisition line is receipted or a Job for a capex requisition line is part billed, an asset is created in suspense for the receipt quantity and value. You then use the Assets in Suspense program to transfer the item from suspense into your Assets Register.
The ledger accounts used in the journal entries depend on the integration level defined. The ledger codes against the Branch/Cost center/Group combination (Assets Ledger Interface) are used if defined. If these are not defined, then the ledger codes defined in the General Ledger Integration program are used.
The following table lists the journal entries created when you use the Purchase Order Receipts program to receipt a Purchase Order for a capex requisition item.
Dr | Asset clearing account | Total value of receipt (quantity x unit cost). |
Cr | Non-stocked account (General Ledger Integration) if the GRN suspense
system is not required
(Purchase Orders Setup). OR GRN Suspense account (General Ledger Integration) if GRN suspense system is required. |
The following table lists the journal entries created when you use the Part Billings program to receipt a Job for a capex requisition item.
Dr | Asset clearing account | |
Cr | Capex in progress account |
The following table lists the journal entries created when you use the Assets in Suspense program to transfer a capex item from suspense into your Assets Register.
Dr | Asset control account | |
Cr | Asset clearing account |
Setting up integration in the Inventory Control module involves selecting options and entering accounts to which postings are required to be made when transactions are entered into the module.
You must define a default integration account for every type of inventory transaction before you can enter any transactions into the module. Inventory interfaces are defined using the Inventory Ledger Interface program which is accessible from the General Ledger Integration program. Integration in Inventory Control can be completely automatic, however you can change some default integration accounts at the time of posting the transaction. |
A summary of transactions that can be processed and the relevant debit and credit ledger codes for each transaction appears in the sections below. Examples are also included.
Receipt | Debit Code | Credit Code |
---|---|---|
Item received | Warehouse Control ledger code | Ledger code for receipts (Inventory Ledger Interface) |
Inventory costing variance (see note 2) | Warehouse variance (rounding up) (Warehouses) | |
Merchandise COS adjustments | Cost of goods sold (decrease in unit cost) |
|
Example: Assume you received 100 items at a total cost of 99.99.
You currently have a negative balance of 10 items on hand at a cost of 1.10 each.
The system updates inventory based on the unit costs of the items received. In this case the total value of the receipt does not divide evenly into a 3 decimal unit cost. The system rounds the unit cost amount (0.9999) to three decimal places (1.000) to leave a remainder of 0.01 which it posts to the Warehouse variance account (Warehouses).
In addition, there was a negative quantity on hand with a different unit cost at he time of recording the receipt.
The system assumes that the quantity of items previously issued (that caused the quantity on hand to go negative) were costed at the incorrect amount. They should have been costed at the unit cost of the current receipt.
The system posts an adjustment to reflect this costing error.
10 items were sold at 1.10 each when they should have been sold at 1.00 each. The net adjustment amount is 1.00 (i.e. 10 x (1.10 - 1.00)). The system posts this amount to the Cost of goods sold account (General Ledger Integration Setup, Inventory function).
The journal entry generated would be:
Warehouse control | DR 101.00 |
Merchandise COS adjustments | CR 1.00 |
Warehouse variance | CR 0.01 |
Stock clearing | CR 99.99 |
Receipt/Issue to WIP | Debit Code | Credit Code |
---|---|---|
Item received | Warehouse Control ledger code | Ledger code for receipts (Inventory Ledger Interface) |
Merchandise COS adjustments | Cost of goods sold (General Ledger Integration) | |
Inventory costing variance | Warehouse variance (Warehouses) | |
Item to WIP | WIP ledger code (Job maintenance) | Warehouse Control ledger code |
|
Example: Assume you have 10 items on hand at a cost of R1.10 each as in the receipt of bought-out stocked item example above.
You receive the same 100 items as in that example, but now you want to record the immediate issue of the 100 items from inventory to a Work in Progress job.
The system summarizes the entry to the inventory account so that the net amount posted to the account is 1.00 (i.e. (101.00 - 100.00)).
The journal entry generated would be:
Warehouse control | DR 1.00 |
Merchandise COS adjustments | CR 1.00 |
Warehouse variance | CR 0.01 |
Stock clearing | CR 99.99 |
WIP control | DR 100.00 |
Receipt | Debit Code | Credit Code |
---|---|---|
Item received | Warehouse Control ledger code | WIP ledger code (Job maintenance) |
Example: Assume you received 100 items with a value of 1000.00 from a Work in Progress job.
The generated journal entry would be:
Warehouse control | DR 1000.00 |
WIP control | CR 1000.00 |
Receipt - Purchase Order | Debit Code | Credit Code |
---|---|---|
Item received | Ledger code entered at purchase order line level
(Purchase Order Entry) OR Warehouse control |
GRN suspense account - if GRN suspense is installed
(General Ledger Integration) OR Ledger code for Receipts (Inventory Ledger Interface) |
Example: Assume you received 100 non-stocked items for 100.00 from a purchase order.
The journal entry generated would be:
Non-stocked control | DR 100.00 |
Stock clearing / GRN suspense | CR 100.00 |
Receipt/Issue | Debit Code | Credit Code |
---|---|---|
Item received |
Warehouse control (hidden entry) |
GRN suspense account - if GRN suspense is installed
(General Ledger Integration) OR |
WIP ledger code (Job maintenance) | Warehouse control (hidden entry) |
Example: Assume you received 100 non-stocked items for 100.00 from a purchase order into inventory and then immediately issued them to a Work in Progress job.
The journal entry generated would be:
WIP control | DR 100.00 |
Stock clearing / GRN suspense | CR 100.00 |
Receipt into WIP | Debit Code | Credit Code |
---|---|---|
Item received | WIP ledger code (Job maintenance) | GRN suspense account - if GRN suspense is installed
(General Ledger Integration) OR Subcontract operations |
Example: Assume you received an item back from a supplier who performed a subcontract service for you. The cost is 500.00 and you want to add these subcontracted costs to the job.
The journal entry generated would be:
WIP control | DR 500.00 |
Subcontract clearing/GRN suspense | CR 500.00 |
Issue | Debit Code | Credit Code |
---|---|---|
Item issued | Ledger code for Issues (Inventory Ledger Interface) | Warehouse control |
Example: Assume you issued items from inventory worth 100.00 for use in the office.
The journal entry generated would be:
Consumables | DR 100.00 |
Warehouse control | CR 100.00 |
Issue to WIP | Debit Code | Credit Code |
---|---|---|
Item issued | WIP ledger code (Job maintenance) WIP ledger control account (Stock Codes - Production) |
Warehouse control |
The Work in Progress ledger control account is assigned to the job at the time of adding it using the Jobs program of the WIP module. The system displays one of two accounts as the default: If you assigned a WIP ledger control account to the stock item (Stock Codes - Production) then it is displayed as the default when you are adding a new job. If this field is blank, then the Work in progress control account code (General Ledger Integration) is displayed as the default. |
Example: Assume you issued items from inventory worth 100.00 for use in a Work in Progress job.
The journal entry generated would be:
WIP control | DR 100.00 |
Warehouse control | CR 100.00 |
Issue to WIP | Debit Code | Credit Code |
---|---|---|
Item issued | WIP ledger code (Job maintenance) WIP ledger control account (Stock Codes - Production) |
Non-stocked ledger code (General Ledger Integration) |
Example: Assume you issued non-stocked items worth 200.00 to a Work in Progress job.
The journal entry generated would be:
WIP control | DR 200.00 |
Non-stocked control | CR 200.00 |
Cost Change | Debit Code | Credit Code |
---|---|---|
Change amount (increase in unit cost) | Warehouse control | Ledger code for Cost changes (Inventory Ledger Interface) |
Change amount (reduction in unit cost) | Ledger code for Cost changes (Inventory Ledger Interface) | Warehouse control |
Example: Assume you changed the cost of an inventory item from 2.00 each to 2.50 each and that there are 100 items on hand.
The journal entry generated would be:
Warehouse control | DR 50.00 |
Inventory cost changes | CR 50.00 |
Cost Modifications | Debit Code | Credit Code |
---|---|---|
Modification amount (increase in unit cost) | Warehouse control | Ledger code for Cost modifications (Inventory Ledger Interface) |
Modification amount (reduction in unit cost) | Ledger code for Cost modifications (Inventory Ledger Interface) | Warehouse control |
Example: Assume you previously recorded the receipt of 10 inventory items at 10.00.
You should have received them in at 12.00.
The 50 items on hand at the time you recorded the cost modification had an average cost of 15.00 each.
The journal entry generated would be:
Warehouse control | DR 20.00 |
Inventory modifications | CR 20.00 |
Inventory Quantity Adjustments | Debit Code | Credit Code |
---|---|---|
Adjustment amount (increase in quantity) | Warehouse control | Ledger code for Adjustments (Inventory Ledger Interface) |
Adjustment amount (reduction in quantity) | Ledger code for Adjustments (Inventory Ledger Interface) | Warehouse control |
Example: Assume you have just destroyed 10 items in inventory worth 12.00 each.
The journal entry generated would be:
Inventory quantity adjustments | DR 120.00 |
Warehouse control | CR 120.00 |
Physical | Debit Code | Credit Code |
---|---|---|
Adjustment amount (increase in quantity) | Warehouse control | Ledger code for Physical counts (Inventory Ledger Interface) |
Adjustment amount (reduction in quantity) | Ledger code for Physical counts (Inventory Ledger Interface) | Warehouse control |
Example: You counted a quantity of 45 of an inventory item but the system has 50 on hand at a cost of 15.00 each.
The journal entry generated by entering 45 as the new quantity on hand would be:
Stock count adjustments | DR 75.00 (50 - 45 = 5 at a cost of 15.00 each) |
Warehouse control | CR 75.00 |
Transfers | Debit Code | Credit Code |
---|---|---|
Item in transit (Issuing warehouse) | Ledger code for Warehouse transfers (Inventory Ledger Interface) | Warehouse control |
Item in transit (Receiving warehouse) | Warehouse control | Ledger code for Warehouse transfers (Inventory Ledger Interface) |
Example: In this example on transfers, only one Inventory in transit account is used. Separate ledger accounts for goods in transit for each warehouse in use can be defined using the Warehouses program.
Assume you processed an immediate transfer of 10 items worth 15.40 each from one warehouse to another.
The journal entry generated would be:
Warehouse control Receiving warehouse | DR 154.00 |
Inventory in transit | CR 154.00 |
Inventory in transit | DR 154.00 |
Warehouse control Issuing warehouse | CR 154.00 |
Transfer out | Debit Code | Credit Code |
---|---|---|
Item in transit | Ledger code for Warehouse transfers (Inventory Ledger Interface) | Warehouse control (Issuing warehouse) |
Example: Assume you transferred 10 items worth 15.40 each from one warehouse to another, and they are still in transit.
The journal entry generated would be:
Inventory in transit | DR 154.00 |
Warehouse control Issuing warehouse | CR 154.00 |
.
Transfer in | Debit Code | Credit Code |
---|---|---|
Item in transit | Warehouse control (Receiving warehouse) | Ledger code for Warehouse transfers (Inventory Ledger Interface) |
Example: Assume you received the 10 items transferred in from another warehouse.
The journal entry generated would be:
Warehouse control Receiving warehouse | DR 154.00 |
Inventory in transit | CR 154.00 |
Backflushing | Debit Code | Credit Code |
---|---|---|
Parent item | Warehouse control Receipt of parent item |
WIP control (General Ledger Integration) |
Component items | WIP control (General Ledger Integration) | Warehouse control Issue of component items |
Labor costs | Run time ledger code (Productive time ledger codes, Work Centers) | |
Setup time ledger code (Productive time ledger codes, Work Centers) | ||
Production overheads | Fixed overhead ledger code Productive time ledger codes, Work Centers) |
|
Variable overhead ledger code Productive time ledger codes, Work Centers) |
||
Variance | Variance ledger code (General Ledger Integration) (If variance unfavorable) | Variance ledger code (General Ledger Integration) (If variance favorable) |
You define a default set of labor posting accounts against each cost center that you add. When you assign a new work center to a cost center, the system displays the cost center accounts as the defaults. |
Example: Assume you manufactured 10 items at a cost of 100.00 each.
The total material cost of the components is 500.00, the total labor cost is 250.00 (50.00 setup and 200.00 runtime), and overhead costs are 200.00 (50.00 fixed and 150.00 variable).
There is a 50.00 variance between the total cost of the items manufactured and the total cost of the items issued and labor applied.
The system posts this variance to the WIP Variance account (General Ledger Integration - WIP Function).
The journal entry generated would be:
Warehouse control (Receipt of parent item) | DR 1000.00 |
WIP control | CR 1000.00 |
WIP control | DR 1000.00 |
Warehouse control (Component materials issued) | CR 500.00 |
Production wages control | CR 250.00 |
Fixed production overhead inventoried | CR 50.00 |
Variable production overhead inventoried | CR 150.00 |
WIP variance | CR 50.003 |
Correcting inventory transactions
If you want to correct an entry that should not have been made, enter a negative of the original entry.
For example:
When sending items back to suppliers, a negative receipt should be performed, rather than an issue. This is to avoid artificially inflating the inventory movement statistics.
Warehouse setup
To enable you to set up a Cost of goods manufactured schedule or a Cost of goods sold schedule in the General Ledger, raw materials and finished goods should be split into two different warehouses.
Inventory goods used internally
A special control account should be set up in the General Ledger to identify the value of inventory goods used internally. This again allows you to produce a Cost of goods sold or Cost of goods manufactured schedule in the General Ledger. This account should be distributed out to the proper general ledger account for each reporting period.
Alternatively, if you enable the Request ledger code at transactions option (Inventory Setup) then you can specify the proper account during issue.
Accrual for items received but not invoiced
For the financial statements to accurately reflect the inventory and liability position of the company, the inventory purchases recorded in Accounts Payable must be reconciled to the inventory receipts recorded in the Inventory Control module.
If you defined your Receipts Ledger account in the Inventory Ledger Interface program as a liability account type, and you post the Accounts Payable Invoice Posting offset entry to this account, then there is no need to accrue for outstanding supplier invoices - the balance on the account will then represent the outstanding invoices.
If, however, you have defined the interface account as an expense, you will have to raise an accrual for the outstanding supplier invoices. Failure to do so will cause SYSPRO's year end routine to treat the outstanding invoices as a loss, rather than as an accrued liability. The following example explains the procedure where the interface account is defined as an expense:
Example Net result of Accounts Payable invoice posting for the month:
Function | Account Description | Debit/Credit | Amount |
---|---|---|---|
Invoice Posting | Stock clearing (expense) | Dr | 600.00 |
Accounts payable control | Cr | 600.00 |
Net result of inventory receipts for the month:
Function | Account Description | Debit/Credit | Amount |
---|---|---|---|
Invoice Receipt | Warehouse control | Dr | 900.00 |
Stock clearing (expense) | Cr | 900.00 |
The value of receiving reports not matched against a vendor's invoice is 300.00.
Month end provision entry to reconcile Accounts Payable with Inventory:
Function | Account Description | Debit/Credit | Amount |
---|---|---|---|
Journal Entry | Stock clearing (expense) | Dr | 300.00 |
Accrual for Inventory Received | Cr | 300.00 |
The GRN system can help provide you with the information required to perform the accrual entry.
Recording inventory at landed cost
In many cases, the cost of an item recorded on a purchase order differs from the landed cost of the inventory item. In these cases the landed cost must be calculated and entered at the time of recording the receipt of the inventory item.
There are three ways you can calculate a landed cost amount:
Using a manual calculation does not allow the inventory cost components, such as purchase order cost, freight and duty and brokerage, to be divided into separate accounts in the General Ledger. In addition, the GRN system cannot be used, and the reconciliation between Accounts Payable and Inventory Control will be more difficult.
Use the following sample data to examine the effect of using the two methods:
Purchase order cost: 600.00 Freight-in cost: 200.00 Duty & brokerage: 100.00
Landed cost of item 900.00
Example 1: Manual calculation
Journal entry generated by receipt of item:
Function | Account Description | Debit/Credit | Amount |
---|---|---|---|
Inventory receipt | Warehouse control | Dr | 900.00 |
Inventory received | Cr | 900.00 |
Journal entry generated by Accounts Payable invoice posting when posting invoice for merchandise:
Function | Account Description | Debit/Credit | Amount |
---|---|---|---|
Invoice posting | Inventory purchased | Dr | 600.00 |
Accounts Payable control | Cr | 600.00 |
Journal entry generated by Accounts Payable invoice posting when posting freight invoice:
Function | Account Description | Debit/Credit | Amount |
---|---|---|---|
Invoice posting | Freight in | Dr | 200.00 |
Accounts Payable control | Cr | 200.00 |
Journal entry generated by Accounts Payable invoice posting when posting invoice for duty and brokerage:
Function | Account Description | Debit/Credit | Amount |
---|---|---|---|
Invoice posting | Duty & Brokerage expense | Dr | 100.00 |
Accounts Payable control | Cr | 100.00 |
In the above example the Inventory received account is offset by Inventory purchased, Freight-in expense and duty and brokerage expense accounts - the sum of the accounts should be zero.
If a month end reporting period occurs before all the invoices relating to an inventory receipt are recorded, then an accrued liability should be recorded in the General Ledger. (See Inventory Related Supplier Invoices).
Using the manual method causes the landed cost of the inventory item to be lumped into one amount at the time of recording the Inventory receipt.
This does not allow for freight, duty and brokerage amounts included in the cost of the inventory item to be matched to the expense amounts recorded from the invoices. Only the total of the Inventory purchases, Freight-in expense and duty and brokerage expense accounts (900.00) can be reconciled with the Inventory received amount (900.00).
To facilitate matching of Inventory receipts with Inventory purchases, freight-in and duty and brokerage expenses (and provided you do not need a separate record of the cost components) you can use a common account, preferably a liability account, to which you can post these transactions. In the example above, if you post all the accruals for inventory received entries, as well as the freight-in entry to a common account, such as stock clearing, you would be left with the following net transaction:
Manual calculation using clearing account
Function | Account Description | Debit/Credit | Amount |
---|---|---|---|
Inventory receipt | Warehouse control | Dr | 900.00 |
Stock clearing | Cr | 900.00 | |
Stock clearing (p/order cost) | Dr | 600.00 | |
Stock clearing (Freight in) | Dr | 200.00 | |
Stock clearing (Brokerage) | Dr | 100.00 | |
Accounts Payable control | Cr | 900.00 |
Example 2: Using Landed cost multiplier
There are two ways that additional costs can be recorded using the Landed cost multiplier. One way is a lump sum amount (in our example 300.00), and the other way is a factor (multiplier) based on the purchase order cost (in our example 1.50).
Journal entry generated by receipt of item:
Function | Account Description | Debit/Credit | Amount |
---|---|---|---|
Inventory receipt | Warehouse control | Dr | 900.00 |
Stock clearing | Cr | 600.00 | |
Freight in clearing | Cr | 200.00 | |
Duty & Brokerage clearing | Cr | 100.00 |
In this example the freight-in account is used as a clearing account. Note that the use of the landed cost multiplier allows the freight, duty and brokerage amounts to be broken out from the purchase order cost of the item. The Freight-in clearing and Duty & brokerage clearing accounts are manually entered at the time of processing the receipt.
Journal entry generated by Accounts Payable Invoice Posting when posting an invoice for merchandise:
Function | Account Description | Debit/Credit | Amount |
---|---|---|---|
Invoice posting | Stock clearing | Dr | 600.00 |
Accounts Payable control | Cr | 600.00 |
Journal entry generated by Accounts Payable Invoice Posting when posting freight invoice:
Function | Account Description | Debit/Credit | Amount |
---|---|---|---|
Invoice posting | Freight in clearing | Dr | 200.00 |
Accounts Payable control | Cr | 200.00 |
Journal entry generated by Accounts Payable Invoice Posting when posting invoice for duty and brokerage:
Function | Account Description | Debit/Credit | Amount |
---|---|---|---|
Invoice posting | Duty & Brokerage clearing | Dr | 100.00 |
Accounts Payable control | Cr | 100.00 |
Note that if a month end reporting period occurs before all the invoices relating to an inventory receipt are recorded, then an accrued liability should be recorded in the General Ledger. (See Accrual for items received but not invoiced above.)
Using the landed cost multiplier method allows the components of the landed cost of the item to be broken down. This method allows for freight, duty and brokerage amounts (included in the cost of the inventory item) to be matched against the expense amounts recorded from the invoices.
Inventory transactions rounding
When using the Total quantity rather than the Unit quantity in the Inventory Movements program, the unit cost of the inventory item may have to be rounded. This is because unit costs are calculated to three decimal places.
Consider the following example:
A receipt of a quantity of 10000 units of an item had a total cost of 50.51. The per unit cost of these items would be 0.005 (rounded). This leaves a remainder of 0.51 which needs to be accounted for. The journal entry generated by the system to record this transaction would be the following:
Function | Account Description | Debit/Credit | Amount |
---|---|---|---|
Inventory receipt | Warehouse control | Dr | 50.00 |
Stock clearing | Cr | 50.51 | |
Warehouse variance | Dr | 0.51 |
The warehouse variance amount would be expensed in the month in which it occurred.
If you indicate that the Work in Progress module is not linked to General Ledger and no distribution report is required, then you cannot produce any labor distribution reports using the WIP Labor Distribution program.
You use the General Ledger Integration program to define the general ledger integration accounts required for Work in Progress.
The following sections list the journal entries generated by each of the transaction processing functions in the Work in Progress module.
The tables list the journal entries by SYSPRO function. Examples are included.
Receipt/Issue | Debit Code | Credit Code |
---|---|---|
Item received | Warehouse control (Warehouses) | GRN suspense - if GRN system installed and the
receipt is against a purchase order (Warehouses or
General Ledger Integration) or Ledger code for Receipts (Inventory Ledger Interface) |
Warehouse variance | Warehouse variance ledger code (rounding up) | |
Merchandise COS adjustments | Cost of goods sold ledger code | |
Item issued | WIP ledger code (Job maintenance) | Warehouse control (Warehouses) |
|
Example: Assume the current quantity on hand of a stocked item is 44 and the current warehouse cost is 20.111.
You receive in a quantity of 1 at a cost of R40.00 of the item, but issue it directly to a job.
You are using Average costing.
The journal entry generated would be:
Warehouse control (receipt) | DR 40.00 |
Warehouse control (rounding) | DR 0.01 |
Warehouse control (issue) | CR 20.55 |
Warehouse variance (rounding) | CR 0.01 |
Stock clearing | CR 40.00 |
WIP control | DR 20.55 |
Receipt/Issue (P/O only) | Debit Code | Credit Code |
---|---|---|
Item received / issued | WIP ledger code (Job maintenance) | GRN suspense - if GRN system installed)
(General Ledger Integration) or Ledger code for Receipts (Inventory Ledger Interface) |
The Work in Progress ledger control account is assigned to the job at the time of adding it using the Jobs program of the WIP module. The system displays one of two accounts as the default: If you assigned a WIP ledger control account to the stock item (Stock Codes) then it is displayed as the default when you are adding a new job. If this field is blank, the Work in progress control account code (General Ledger Integration) is displayed as the default. |
Example: Assume you received a non-stocked item for 100.00 from a purchase order into inventory and then immediately issued it to a Work in Progress job.
The journal entry generated would be:
WIP control | DR 100.00 |
Stock clearing | CR 100.00 |
Receipt | Debit Code | Credit Code |
---|---|---|
Item received | WIP ledger code (Job maintenance) | Labor ledger code if defined
(Work Centers) or GRN suspense - if GRN suspense system is installed and subcontract charge is being received against a purchase order. |
The Work in Progress ledger control account is assigned to the job at the time of adding it using the Jobs program of the WIP module. The system displays one of two accounts as the default: If you assigned a WIP ledger control account to the stock item (Stock Codes) then it is displayed as the default when you are adding a new job. If this field is blank, the Work in progress control account code (General Ledger Integration) is displayed as the default. |
Example: Assume you received an item back from a supplier who performed a subcontract service for you at a cost of 500.00, and you add the subcontract costs to the job.
The journal entry generated would be:
WIP control | DR 500.00 |
Stock clearing | CR 500.00 |
Stocked to WIP | Debit Code | Credit Code |
---|---|---|
Item issued | WIP ledger code (Job maintenance) | Warehouse control (Warehouses) |
The Work in Progress ledger control account is assigned to the job at the time of adding it using the Jobs program of the WIP module. The system displays one of two accounts as the default: If you have assigned a WIP ledger control account to the stock item (Stock Codes) then it is displayed as the default when you are adding a new job. If this field is blank, the Work in progress control account code (General Ledger Integration) is displayed as the default. |
Example: Assume you issued items from inventory worth 100.00 for use in a work in progress job.
The journal entry generated would be:
WIP control | DR 100.00 |
Warehouse control | CR 100.00 |
Non-stocked to WIP | Debit Code | Credit Code |
---|---|---|
Item issued | WIP ledger code (Job maintenance) | Non-stocked ledger code (General Ledger Integration) |
Example: Assume you issued non-stocked items worth 200.00 to a work in progress job.
The journal entry generated would be:
WIP control | DR 200.00 |
Non-stocked control | CR 200.00 |
Kit Issue (Material) | Debit Code | Credit Code |
---|---|---|
Item issued (stocked) | WIP ledger code (Job maintenance) | Warehouse control The warehouse from which to issue the components is determined from the material allocations records for each job. |
Item issued (non-stocked) | WIP ledger code (Job maintenance) | Non-stocked ledger code (General Ledger Integration) |
The Work in Progress ledger control account is assigned to the job at the time of adding it using the Jobs program of the WIP module. The system displays one of two accounts as the default: If you have assigned a WIP ledger control account to the stock item (Stock Codes) then it is displayed as the default when you are adding a new job. If this field is blank, the Work in progress control account code (General Ledger Integration) is displayed as the default. |
Example: Assume you kit issued items from inventory worth 350.00 and non-stocked items worth 210.00 to a work in progress job.
The journal entry generated would be:
WIP control | DR 350.00 |
Warehouse control | CR 350.00 |
WIP control | DR 210.00 |
Non stocked control | CR 210.00 |
Kit Issue (Labor) | Debit Code | Credit Code |
---|---|---|
Labor posted | WIP ledger code (Job maintenance) | |
Production wages control (Setup) | Setup time ledger code (Work Centers) | |
Production wages control (Startup) | Startup time ledger code (Work Centers) | |
Production wages control (Run time) | Run time ledger code (Work Centers) | |
Production wages control (Teardown) | Teardown time ledger code (Work Centers) | |
Fixed production overhead | Fixed overhead ledger code (Work Centers) | |
Variable production overhead | Variable overhead ledger code (Work Centers) | |
Subcontract clearing | Labor ledger code (Work Centers) |
|
Example: Assume you issued the following kit of labor costs:
Cost Setup time 125.00, Run time 425.00, Fixed overhead 150.00, Variable overhead 375.00, Startup time 125.00, Teardown time 75.00, Subcontracted services 400.00.
The journal entry generated would be:
WIP control | DR 675.00 |
Production wages control | CR 750.00 |
Fixed production overhead | CR 150.00 |
Variable production overhead | CR 375.00 |
Subcontract clearing | CR 400.00 |
All Production wages control entries are accumulated and printed as one entry on the Distribution report |
Post Setup Time | Debit Code | Credit Code |
---|---|---|
Time posted | WIP ledger code (Job maintenance) | |
Production wages control (Setup) | Setup time ledger code (Work Centers) | |
Fixed production overhead | Fixed overhead ledger code (Work Centers) | |
Variable production overhead | Variable overhead ledger code (Work Centers) |
The Work in Progress ledger control account is assigned to the job at the time of adding it using the Jobs program of the WIP module. The system displays one of two accounts as the default:
|
Example: Assume you posted 3.0 hours of setup time to a Work in Progress job.
The rate code used to value the hours posted has the following rates:
Rate Setup time 25.00, Run time 15.00, Fixed overhead 20.00, Variable overhead 30.00, Startup time 35.00, Teardown time 15.00
The journal entry generated would be:
WIP control | DR 225.00 |
Production wages control | CR 75.00 |
Fixed production overhead | CR 60.00 |
Variable production overhead | CR 90.00 |
Post Run Time | Debit Code | Credit Code |
---|---|---|
Time posted | WIP ledger code (Job maintenance) | |
Production wages control (Run time) | Run time ledger code (Work Centers) | |
Fixed production overhead | Fixed overhead ledger code (Work Centers) | |
Variable production overhead | Variable overhead ledger code (Work Centers) |
The Work in Progress ledger control account is assigned to the job at the time of adding it using the Jobs program of the WIP module. The system displays one of two accounts as the default:
|
Example: Assume you posted 6.0 hours of run time to a Work in Progress job.
The rate code used to value the hours posted has the following rates:
Rate Setup time 25.00, Run time 15.00, Fixed overhead 20.00, Variable overhead 30.00, Startup time 35.00, Teardown time 15.00
The journal entry generated would be:
WIP control | DR 390.00 |
Production wages control | CR 90.00 |
Fixed production overhead | CR 120.00 |
Variable production overhead | CR 180.00 |
Post Startup Time | Debit Code | Credit Code |
---|---|---|
Time posted | WIP ledger code (Job maintenance) | |
Production wages control (Startup) | Startup time ledger code (Work Centers) | |
Fixed production overhead | Fixed overhead ledger code (Work Centers) | |
Variable production overhead | Variable overhead ledger code (Work Centers) |
The Work in Progress ledger control account is assigned to the job at the time of adding it using the Jobs program of the WIP module. The system displays one of two accounts as the default:
|
Example: Assume you have posted 0.5 hours of startup time to a Work in Progress job.
The rate code used to value the hours posted has the following rates:
Rate Setup time 25.00, Run time 15.00, Fixed overhead 20.00, Variable overhead 30.00, Startup time 35.00, Teardown time 15.00
The journal entry generated would be:
WIP control | DR 42.50 |
Production wages control | CR 17.50 |
Fixed production overhead | CR 10.00 |
Variable production overhead | CR 15.00 |
Post Teardown Time | Debit Code | Credit Code |
---|---|---|
Time posted | WIP ledger code (Job maintenance) | |
Production wages control (Teardown) | Teardown time ledger code (Work Centers) | |
Fixed production overhead | Fixed overhead ledger code (Work Centers) | |
Variable production overhead | Variable overhead ledger code (Work Centers) |
The Work in Progress ledger control account is assigned to the job at the time of adding it using the Jobs program of the WIP module. The system displays one of two accounts as the default:
|
Example: Assume you posted 0.5 hours of teardown time to a Work in Progress job.
The rate code used to value the hours posted has the following rates:
Rate Setup time 25.00, Run time 15.00, Fixed overhead 20.00, Variable overhead 30.00, Startup time 35.00, Teardown time 15.00
The journal entry generated would be:
WIP control | DR 32.50 |
Production wages control | CR 7.50 |
Fixed production overhead | CR 10.00 |
Variable production overhead | CR 15.00 |
Non-productive labor postings generate the same journal entries as productive time postings.
The only exception to this is if you indicated that non-productive time must not update a job (Work in Progress Setup). In this case, the system debits the Non-productive ledger code assigned to the non-productive code (Non-productive Codes) entered against the job during Labor Posting instead of the job's work in progress control account.
The remainder of each journal entry stays the same.
Post Subcontract Costs | Debit Code | Credit Code |
---|---|---|
Item posted | WIP ledger code (Job maintenance) | |
Subcontract clearing | Labor ledger code (Work Centers) (see Note below) |
|
Example: Assume you posted a 350.00 charge from a subcontractor.
The journal entry generated would be:
WIP control | DR 350.00 |
Subcontract clearing | CR 350.00 |
Receipt | Debit Code | Credit Code |
---|---|---|
Item received | Warehouse control (Warehouses) | |
WIP control | WIP ledger code (Job maintenance) | |
Warehouse variance | Warehouse variance ledger code (rounding up) | |
Merchandise COS adjustments | Cost of goods sold ledger code |
|
Example: Assume the current quantity on hand of a stocked item is 44 and the current warehouse cost is 20.111.
You receive in a quantity of 1 at a manufactured cost of 20.11 from a Work in Progress job.
The journal entry generated would be:
Warehouse control | DR 20.11 |
Warehouse control | DR 0.01 |
Warehouse variance | CR 0.01 |
WIP control | CR 20.11 |
Part Billings | Debit Code | Credit Code |
---|---|---|
Item | Ledger code (any type) in the ledger distribution portion of the Part Billings program. | WIP ledger code (Job maintenance) |
You enter the debit ledger code at the time of entering the part billing. You can assign a default ledger code using the Preferences toolbar function within the Part Billings program. |
Example: You completed the manufacture of a non-stocked item, costing 3400.00, that you are now ready to ship to the customer and invoice.
The journal entry generated would be:
Non-stocked control | DR 3400.00 |
WIP control | CR 3400.00 |
Using Standard Costing:
When an item is receipted into WIP Inspection, it is received in at its current standard cost.
If there are no changes to the standard cost of the item, it is receipted into stock from inspection at this standard cost.
If the item is receipted into an alternate warehouse which has a different standard cost, then:
If the cost of the item is changed and the item is receipted into a separate warehouse with a different standard cost then:
Example: An item is receipted into WIP inspection for at a standard cost of 400 in warehouse A.
The initial entry is:
In the interim, a cost change is performed in Warehouse A and the cost of the item is increased to 500.
The following entries are created for the cost change:
The item is now receipted into Warehouse B (not Warehouse A) in which its standard cost is 700. The following entries are created:
This leaves a balance of 100 credit in the WIP inspection account which must be journalized out manually. This represents the cost change value done for the item in Warehouse A.
Setting up integration in the Trade Promotions sub-module involves defining and entering the accounts to which postings are required to be made when transactions are processed in the sub-module.
Setting up integration in the Trade Promotions sub-module involves selecting options and entering ledger accounts to which postings are required to be made when transactions are entered into in the Trade Promotions, Accounts Receivable and Sales Order modules.
Default control accounts for Trade Promotions are defined in the General Ledger Integration program.
Trade promotions transactions are created for the following processes:
When a sales order is processed and an accrual promotion applied, the value of the accrual is not shown on the sales order.
The following journal entry is created when the order is invoiced:
Transaction | Debit | Credit |
---|---|---|
Accrual promotion value earned on order | Expense GL Account defined against the accrual promotion code (Promotion Code) | Accrual GL Account defined against the accrual promotion code (Promotion Code) |
The Promotion Review program is used to adjust accrual promotion transactions, to issue Accounts Payable checks and Accounts Receivable credit notes for the values accrued to customers.
Adjustments
The accrual value for a customer can be increased (positive adjustment) or decreased (negative adjustment).
When an adjustment is applied to an accrual, the following journal entry is created:
Transaction | Debit | Credit |
---|---|---|
Positive adjustment value (accrual value is increased) | Expense GL Account defined against the accrual promotion code (Promotion Code) | Accrual GL Account defined against the accrual promotion code (Promotion Code) |
Negative adjustment value (accrual value is decreased) | Accrual GL Account defined against the accrual promotion code (Promotion Code) | Expense GL Account defined against the accrual promotion code (Promotion Code) |
When processing an accrual adjustment, the Promotion Review program allows you to change default Accrual GL account and default Expense GL account. The journal entry above is created when the default accounts are used. |
Credit Notes
When an Accounts Receivable credit note is issued, the following journal entry is created:
Transaction | Debit | Credit |
---|---|---|
Total Credit note value | Accrual GL Account defined against the accrual promotion code (Promotion Code) | Expense GL Account defined against the accrual promotion code (Promotion Code) |
Credit note value excluding tax | Sales returns GL code defined against customer/sales order branch and promotion product class in the Sales Ledger interface (AR Sales Ledger Interface) for the product class used in Promotion Review when creating the credit note. | AR Control |
AP Check
The process of issuing a check to the customer in respect of an accrued promotion value involves creating an AP invoice for the accrued amount to be paid out and then issuing a check to pay the invoice.
Transaction | Debit | Credit |
---|---|---|
Invoice creation value | Accrual GL Account defined against the accrual promotion code (Promotion Code) | AP Control |
Invoice payment - check issued | AP control | Bank Control |
The Deduction Review program is used to resolve, write off or reinstate customer deductions recorded at the time of processing customer payments and receipts using the AR Payments and Adjustments program.
When you process a customer's payment that includes a deduction amount, the following journal is created:
Transaction | Debit | Credit |
---|---|---|
Check amount | Bank Control | |
Invoice amount | AR Control | |
Deduction amount | Deduction GL code defined against the deduction code used in AR Payments and Adjustments. |
Resolution
A deduction can be resolved by resolving the amount, writing off the amount or offsetting the amount against a promotion accrual.
When a deduction is resolved by resolution, the following journal is created:
Transaction | Debit | Credit |
---|---|---|
Deduction resolution amount | Resolution GL code against the deduction code used in the Deduction Review program | Deduction GL code defined against the deduction code used in AR Payments and Adjustments. |
When a deduction is resolved by writing it off, the following journal is created:
Transaction | Debit | Credit |
---|---|---|
Deduction write off amount | Write-Off GL code against the deduction code used in the Deduction Review program | Deduction GL code defined against the deduction code used in AR Payments and Adjustments. |
When a deduction is resolved by offsetting it against an accrual promotion, the following journal is created:
Transaction | Debit | Credit |
---|---|---|
Deduction offset amount | Accrual GL Account defined against the accrual promotion code (Promotion Code) | Deduction GL code defined against the deduction code used in AR Payments and Adjustments. |
Auto Write off
When you write off all deductions below a specific deduction amount, the following journal is created:
Transaction | Debit | Credit |
---|---|---|
Write-Off GL code against the deduction code used in the Deduction Review program | Deduction GL code defined against the deduction code used in AR Payments and Adjustments. |
Reinstate
When you reinstate a deduction, the following journal is created:
Transaction | Debit | Credit |
---|---|---|
Deduction reinstatement amount | AR Control | Deduction GL code defined against the deduction code used in AR Payments and Adjustments. |
Reclassify
When you reclassify a deduction, the following journal is created:
Transaction | Debit | Credit |
---|---|---|
Deduction reclassification amount | Deduction GL code defined against the original deduction code displayed in Deduction Review. | |
Deduction reclassification amount | Deduction GL code defined against the deduction code entered in Deduction Review. |
Off Invoice promotions can be defined as:
Line promotions
The value of the promotion is shown as a separate miscellaneous charge line. A product class must be defined to which to apply the discount (Promotion Code).
Transaction | Debit | Credit |
---|---|---|
Miscellaneous charge sales value | Sales GL code defined against customer/sales order branch and promotion product class in the Sales Ledger interface (AR Sales Ledger Interface) | AR Control |
Miscellaneous charge cost of sales | Cost of sales Non-stocked against customer branch (AR Branches) | Trade discount GL code defined against customer/sales order branch and promotion product class in the Sales Ledger interface (AR Sales Ledger Interface) |
Line discount
The value of the promotion, which is a discount shown on the order line, is posted to the Trade discount General Ledger code defined against the customer/sales order branch and the product class of the stock item being sold in the Sales Ledger interface (AR Sales Ledger Interface).
Transaction | Debit | Credit |
---|---|---|
Line discount value | Trade discount GL code defined against customer/sales order branch and promotion product class in the Sales Ledger interface (AR Sales Ledger Interface) | AR Control |
Price change
A price change has no additional Trade Promotions General Ledger integration implications, as the sale is merely processed to the General Ledger at the new price.
You use the Counter Sales Payments Interface function (within the AR Payments Ledger Interface program) to define the interface ledger accounts required to be associated to each counter sale payment code. This function uses the existing ledger interface integration level defined for payments and sales.
If Accounts Receivable is linked to Cash Book (Accounts Receivable Setup) and against the payment code you select the Deposit in bank option, then the entries defined here are not used, as all payments are then debited to the bank. |
You can integrate Counter Sales to General Ledger according to varying levels of detail.
You control the amount of detail posting you want reflected in the General Ledger using the Integration Level function in the AR Payments Ledger Interface program).
If you selected Counter sales payments as an integration level, then you can use the Counter Sales Payments Interface function within the AR Payments Ledger Interface program to define a specific ledger code for each payment type. This option has no effect if Accounts Receivable is linked to Cash Book (Accounts Receivable Setup) as all payments are then debited to the bank. |
Setting up integration
Counter Sales and Point of Sales use the existing ledger interface you have already defined for Accounts Receivable payments and sales.
There are some additional interface entries you need to define for unique transactions that are created from within the Counter Sales module. You must also define a number of ledger codes for the transactions unique to Counter Sales or Point of Sales. The accounts are as follows:
As part of the AR Payments Ledger Interface function (AR Payments Ledger Interface) you can indicate that you want integration to General Ledger by Counter sales payments (see Counter Sales Payments Interface). This means that for each payment code you define for Counter Sales, you can define a specific ledger code to record the payments accepted for that payment code. This option has no effect if you have integrated Accounts Receivable payments with Cash Book (and against the payment code you select the Deposit in bank option) as all payments are then debited to the bank.
The following sections list the journal entries generated by each of the transaction processing functions in the Counter Sales module.
The tables list the journal entries by SYSPRO function. Examples are included.
Deposit Receipt/Adjustment | Debit Code | Credit Code |
---|---|---|
Amount paid | Payments GL Account - if AR payments are integrated to GL at Counter sales payments level (Counter Sales Payments Interface) | Deposits liability (AR Payments Ledger Interface) |
Cash account ledger code - if AR payments are not integrated to GL at Counter sales payments level, but AR is integrated to Cash Book (Banks). | ||
Payments ledger code - if AR payments are not integrated to GL at Counter sales payments level and AR is integrated to Cash Book (AR Payments Ledger Interface) |
Example: Assume that a customer has given you a 500.00 deposit on an order to hold an item for them until it comes in from your supplier.
The item normally sells for 2000.00. (As the item is not yet available, it has to be placed on backorder during order entry).
The journal entry generated would be:
Bank & cash | DR 500.00 |
Deposit liability | CR 500.00 |
Deposit Refund | Debit Code | Credit Code |
---|---|---|
Amount refunded (see Note 1 below) | Deposits liability (AR Payments Ledger Interface) | Payments GL Account - if AR payments are integrated to GL at Counter sales payments level (Counter Sales Payments Interface) |
Cash account ledger code - if AR payments are not integrated to GL at Counter sales payments level, but AR is integrated to Cash Book (Banks). | ||
Payments ledger code - if AR payments are not integrated to GL at Counter sales payments level and AR is not integrated to Cash Book (AR Payments Ledger Interface) | ||
Amount not refunded | Deposits liability | Deposits revenue (AR Branches) |
See Note 1 below | Sales tax ledger code (Accounts Receivable Setup) | |
Amount not refunded (see Note 2 below) | AR control (AR Branches) | AR control (AR Branches) |
|
Example: Assume you refund a 500.00 deposit.
You company is not at fault, and in such cases, your policy is to charge 10% when refunding deposits.
You refund 450.00 and keep the remaining 50.00.
The charge attracts sales tax at 10% inclusive.
The journal entry generated would be:
Deposit liability | DR 500.00 |
Bank & cash | CR 450.00 |
Accounts receivable control | CR 50.00 |
Accounts receivable control | DR 50.00 |
Deposit revenue | CR 45.45 |
Tax control | CR 4.45 |
Debit Code | Credit Code | |
---|---|---|
Deposit amount | Deposits liability (AR Payments Ledger Interface) | AR control (AR Branches) |
Example: Assume that a customer has given you a 500.00 deposit on an order. The item has now come in, and the deposit is used as part of the payment to the invoice.
The journal entry generated would be:
Deposit liability | DR 500.00 |
Accounts receivable control | CR 500.00 |
Payment | Debit Code | Credit Code |
---|---|---|
Amount paid | Payments GL Account - if AR payments are integrated to GL at Counter sales payments level (Counter Sales Payments Interface) | AR control (AR Branches) |
Cash account ledger code - if AR payments are not integrated to GL at Counter sales payments level, but AR is integrated to Cash Book (Banks). | ||
Payments ledger code - if AR payments are not integrated to GL at Counter sales payments level and AR is not integrated to Cash Book (AR Payments Ledger Interface) | ||
Discount allowed | Discount ledger code (Expense -Other) (AR Payments Ledger Interface) | AR control (AR Branches) |
Example: Assume that you have received a payment from a customer to pay a 500.00 invoice. They pay in cash so you allow a 2% discount.
The journal entry generated would be:
Bank & cash | DR 490.00 |
Discount allowed | DR 10.00 |
Accounts receivable control | CR 500.00 |
Cash paid out | Debit Code | Credit Code |
---|---|---|
Amount paid out | Debit ledger code (any type) - entered at the time of payment | Payments GL Account - if AR payments are integrated to GL at Counter sales payments level (Counter Sales Payments Interface) |
Cash account ledger code - if AR payments are not integrated to GL at Counter sales payments level, but AR is integrated to Cash Book (Banks). | ||
Payments ledger code - if AR payments are not integrated to GL at Counter sales payments level and AR is not integrated to Cash Book (AR Payments Ledger Interface) |
Example: The company air conditioning system breaks down. Due to the extreme heat you purchase 3 cold drinks (at 1.00 each) for yourself and your co-workers.
The journal entry generated would be:
Staff refreshments | DR 3.00 |
Bank & cash | CR 3.00 |
Cash taken in | Debit Code | Credit Code |
---|---|---|
Amount received | Payments GL Account - if AR payments are integrated to GL at Counter sales payments level (Counter Sales Payments Interface) | Credit ledger code (any type) - entered at the time of receipt |
Cash account ledger code - if AR payments are not integrated to GL at Counter sales payments level, but AR is integrated to Cash Book (Banks). | ||
Payments ledger code - if AR payments are not integrated to GL at Counter sales payments level and AR is not integrated to Cash Book (AR Payments Ledger Interface) |
Example: Your boss finds out that you purchased 3 cold drinks without asking first. You have to pay back the 3.00.
The journal entry generated would be:
Bank & cash | DR 3.00 |
Staff refreshments | CR 3.00 |
Although the Purchase Order module does not directly integrate to the General Ledger, you can specify a ledger code at the time of entering a purchase order line for a non-stocked item that is not allocated to a job.
If you are using the GRN system, you can also enter an accrual account and purchases variance account. These accounts are used when receiving an item and when matching the suppliers' invoice to the items received. These options are the ledger control accounts for GRN suspense and Purchase price variance (General Ledger Integration).
You can enter a ledger code for non-stocked items for which you have not entered a job number. The ledger code entered on the purchase order overrides the Non-stocked control account (General Ledger Integration).
If you are purchasing an inventory item, the non-stocked control account should be entered on the purchase order. If you are purchasing some other kind of asset, or incurring an expense, you can enter the applicable account on the purchase order.
You can enter adjustments to outstanding GRN values using the GRN Adjustment. You use this program when you cannot adjust the inventory receipt that created the GRN, or you cannot match the GRN using the GRN matching routine of the AP Invoice Posting program.
GRN Posting | Debit Code | Credit Code |
---|---|---|
Adjustment amount (increase value of GRN) | Debit ledger code - at time of entry | GRN Suspense (Warehouses) or General Ledger Integration) |
Adjustment amount (reduce value of GRN) | GRN Suspense (Warehouses) or General Ledger Integration) | Credit ledger code - at time of entry |
Example: Assume you created a GRN for 3000.00 from recording the receipt of an item into your Inventory warehouse.
The supplier's invoice was entered without being matched to the GRN and the purchases account incorrectly debited.
You want to zero out the GRN as the invoice has now been recorded.
The following journal entry would have been generated at the time:
Inventory receipt:
Warehouse control | DR 3000.00 |
GRN suspense | CR 3000.00 |
Invoice posting:
GRN suspense | DR 3000.00 |
Accounts payable control | CR 3000.00 |
The GRN journal entry generated for the adjustment of -3000 is:
GRN suspense | DR 3000.00 |
GRN suspense | CR 3000.00 |
The only effect that the Landed Cost Tracking module has on integration to General Ledger is when you record the receipt of a shipment. The Landed Cost Tracking module itself does not integrate to General Ledger, but it does affect the way the Inventory module integrates to General Ledger.
You have the option of integrating non-merchandise shipment transactions with the General Ledger using the Non-stocked control account; by cost element code; or the GRN suspense account.
The Credit ledger code field in the Browse on Elements is enabled if the Inventory Control system is integrated to General Ledger, and if the GRN suspense system is not installed.
This ledger code is used as the credit ledger code for each cost element when receipting a shipment into stock. If you leave this code blank the system posts the credit amount to the Non-stocked control account (General Ledger Integration). If the GRN suspense system is installed, then the credit ledger code will always be the GRN suspense control account (General Ledger Integration).
The journal entries generated depend on the inventory costing method you are using, and whether you are using the GRN system. The possible scenarios are as follows:
Receipts | Debit Code | Credit Code |
---|---|---|
Item received | Warehouse control (with standard cost) | Ledger code for Receipts (Inventory Ledger Interface) |
Cost element accounts (e.g. Freight-in, Duty and
Brokerage) Amount apportioned from Invoice posting - or (if not entered) - with the expected cost |
Credit ledger code
(Browse on Elements) or Non-stocked ledger code - if credit ledger code is undefined |
|
Purchase price variance (see Note below) | Purchase price variance (General Ledger Integration) |
The purchase price variance is posted as a credit if the actual cost is less than the standard cost. |
Example: Assume you imported an item with a purchase cost 1000.00 that was subject to the following expected and actual additional costs:
Item | Expected Costs | Actual Costs |
---|---|---|
Purchase cost | 950.00 | 1000.00 |
Freight | 100.00 | 110.00 |
Duties | 200.00 | 195.00 |
Brokerage | 50.00 | 47.00 |
Total costs: | 1300.00 | 1352.00 |
The item's Standard cost was fixed at 1300.00.
The journal entry generated by the receipt of the item, after the invoices have been recorded, would be:
Warehouse control | DR 1300.00 |
Purchase price variance | DR 52.00 |
Stock clearing (Purchase cost) | CR 1000.00 |
Stock clearing (Freight) | CR 110.00 |
Stock clearing (Duties) | CR 195.00 |
Stock clearing (Brokerage) | CR 47.00 |
Shipment Receipt | Debit Code | Credit Code |
---|---|---|
Item received | Warehouse control (with standard cost) | |
Actual landed cost | GRN suspense ledger code (Warehouses or General Ledger Integration) | |
Cost element accounts (e.g. Freight-in, Duty and
Brokerage) Amount apportioned from Invoice posting - or (if not entered) - the expected cost |
Credit ledger code
(Browse on Elements) or Non-stocked ledger code - if credit ledger code is undefined |
|
Purchase price variance (see Note below) | Purchase price variance (General Ledger Integration) |
The purchase price variance is posted as a credit if the actual cost is less than the expected cost. |
Example: Assume you imported an item with a purchase cost 1000.00 that was subject to the following expected and actual additional costs:
Item | Expected Costs | Actual Costs |
---|---|---|
Purchase cost | 950.00 | 1000.00 |
Freight | 100.00 | 110.00 |
Duties | 200.00 | 195.00 |
Brokerage | 50.00 | 47.00 |
Total costs: | 1300.00 | 1352.00 |
The item's Standard cost was fixed at 1300.00.
The journal entry generated would extract the applicable ledger codes from different sources as follows:
Warehouse control | DR 1300.00 |
Purchase price variance | DR 52.00 |
GRN suspense (Purchase cost) | CR 1000.00 |
GRN suspense (Freight) | CR 110.00 |
GRN Suspense (Duties) | CR 195.00 |
GRN Suspense (Brokerage) | CR 47.00 |
Receipts | Debit Code | Credit Code |
---|---|---|
Item received | Warehouse control (with actual landed cost) | Ledger code for Receipts (Inventory Ledger Interface) |
Cost element accounts (e.g. Freight-in, Duty and
Brokerage) Amount apportioned from Invoice posting - or (if not entered) - the expected cost |
Credit ledger code
(Browse on Elements) or Non-stocked ledger code - if credit ledger code is undefined |
Example: Assume you received the same item as in the Shipment Receipts - Standard costing; no GRN system. That is:
Item | Expected Costs | Actual Costs |
---|---|---|
Purchase cost | 950.00 | 1000.00 |
Freight | 100.00 | 110.00 |
Duties | 200.00 | 195.00 |
Brokerage | 50.00 | 47.00 |
Total costs: | 1300.00 | 1352.00 |
The example is as above, except that now you are using an actual Inventory costing method rather than Standard costing.
The journal entry generated would be:
Warehouse control | DR 1352.00 |
Stock clearing (Purchase cost) | CR 1000.00 |
Stock clearing (Freight) | CR 110.00 |
Stock clearing (Duties) | CR 195.00 |
Stock clearing (Brokerage) | CR 47.00 |
Shipment Receipt | Debit Code | Credit Code |
---|---|---|
Item received | Warehouse control (with actual landed cost) | |
Actual landed cost | GRN suspense ledger code (General Ledger Integration) | |
Cost element accounts (e.g. Freight-in, Duty and
Brokerage) Amount apportioned from Invoice posting - or (if not entered) - the expected cost |
Credit ledger code
(LCT Elements) or Non-stocked ledger code - if credit ledger code is undefined (General Ledger Integration ) |
Example: Using the same information as in the previous example which was:
Item | Expected Costs | Actual Costs |
---|---|---|
Purchase cost | 950.00 | 1000.00 |
Freight | 100.00 | 110.00 |
Duties | 200.00 | 195.00 |
Brokerage | 50.00 | 47.00 |
Total costs: | 1300.00 | 1352.00 |
You are using an actual Inventory costing method rather than Standard costing.
The journal entry generated would obtain the applicable ledger codes from different sources, as follows:
Warehouse control | DR 1352.00 |
GRN suspense (Purchase cost) | CR 1000.00 |
GRN suspense (Freight) | CR 110.00 |
GRN Suspense (Duties) | CR 195.00 |
GRN Suspense (Brokerage) | CR 47.00 |
Setting up integration in the Activity Based Costing module involves selecting options and entering accounts to which postings must be made when transactions are entered.
You must set up an integration account for each of the cost elements in the Activity Based Costing module before you can enter any transactions.
Activity Based Costing is basically an add-on to the Inventory Control, Sales Orders and Accounts Receivable modules. As such, it relies on the integration of these modules to determine the accounts to which postings must be made.
The programs and functions involved in setting up integration in the Activity Based Costing module are as follows:
Refer to Activity Based Costing Introduction for additional information on the apportionment of ABC Costs and the implication of AB costing on various transactions.
The following sections list the journal entries generated by each of the transaction processing functions that are affected by the Activity Based Costing system.
The sections list the journal entries by SYSPRO function. Examples are included.
Invoice Print/Post | Debit Code | Credit Code |
---|---|---|
Invoice amount | AR Control | |
Stock items sales values | Sales ledger code (AR Sales Ledger Interface) | |
Tax amount | Sales tax (AR Branches) | |
GST amount (Canada only) | GST (AR Branches) | |
Sales rounding error (see Note below) | Rounding error (rounding up) (AR Branches) | |
Stocked items cost of sales value | Cost of sales (AR Sales Ledger Interface) | |
Stocked items cost | Warehouse control (Warehouses) | |
Cost recovery amount | Ledger code (Element Descriptors) |
If the transaction results in a rounding down of the inventory unit cost, then a debit is posted to the Rounding error ledger code. |
Example: Assume you sold an inventory item costing 5000.00 to a customer for 8000.00.
In addition, you added 1500.00 worth of selling costs to the cost of the sale.
Applicable taxes are 10% on the selling price of the item.
The journal entry generated would be:
Accounts receivable control | DR 8800.00 |
Merchandise sales revenue | CR 8000.00 |
TAX control | CR 800.00 |
Merchandise COS | DR 6500.00 |
Warehouse control | CR 5000.00 |
Selling costs | CR 1500.00 |
Receipt | Debit Code | Credit Code |
---|---|---|
Item received | Warehouse control (Warehouses) | GRN suspense - if GRN system is installed (Warehouses
or General Ledger Integration) or Ledger code for Receipts (AR Sales Ledger Interface) |
Variance amount (see Note 1 below) | ABC costing variance (General Ledger Integration) | |
Variance amount (see Note 2 below) | Warehouse variance (Warehouses) | |
Merchandise COS adjustments (see Note 3 below) | Cost of goods sold adjustment (General Ledger Integration) | |
Cost recovery amount | Ledger code (Element Descriptors) |
|
Example: Assume you received 100 items at a total cost of 99.99 and that you currently have 10 items on hand at a cost of 1.10 each. In addition, you add purchasing costs of 50.00 per order to the per unit inventory cost of the items received.
In this case, the total value of the receipt does not divide evenly into a 3 decimal unit cost. The system, therefore, rounds the unit cost amount (1.4999) to three decimal places (1.500) which leaves a remainder of 0.01, that it posts to the ABC costing variance account.
There was a negative quantity on hand with a different unit cost at a time of recording the receipt.
The system assumes that the quantity of items previously issued that caused the quantity on hand to go negative were costed at the incorrect amount. They should have been costed at the unit cost of the current receipt.
The system, therefore, posts an adjustment to reflect this costing error. 10 items were sold at 1.10 each when they should have been sold at 1.50 each. The net adjustment amount is -4.00 or 10 x (1.10 - 1.50). The system posts this amount to the Cost of goods sold adjustment account.
The journal entry generated would be:
Warehouse control | DR 146.00 |
Merchandise COS adjustments | DR 4.00 |
Warehouse variance | CR 0.01 |
Stock clearing | CR 99.99 |
Purchasing costs | CR 50.00 |
Receipt | Debit Code | Credit Code |
---|---|---|
Item received | Warehouse control (Warehouses) | WIP ledger code (Job maintenance) |
Variance amount (see Note 1 below) | ABC costing variance (General Ledger Integration) | |
Variance amount (see Note 2 below) | Warehouse variance (Warehouses) | |
Merchandise COS adjustments (see Note 3 below) | Cost of goods sold adjustment (General Ledger Integration) | |
Cost recovery amount | Ledger code (Element Descriptors) |
|
Example: Assume you received the same 100 items as in the receipt of bought out items example above, except this time you received them from a Work in Progress job rather than a supplier; and the ABC allocation relates to manufacturing costs rather than purchasing costs.
The journal entry generated would be:
Warehouse control | DR 96.00 |
Merchandise COS adjustments | DR 4.00 |
Warehouse variance | CR 0.01 |
WIP control | CR 99.99 |
Purchasing costs | CR 50.00 |