> General Ledger Integration Introduction

General Ledger Integration Introduction

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.

Implementation

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:

  1. General Ledger accounts

    [Note]

    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.

  2. Integration level

    From the General Ledger tab of 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 G/L required and no distribution report required Not linked to G/L - no distribution report
    No link to G/L required, but you do require a distribution report Not linked to G/L - Distribution report
    Link to General Ledger required, with every transaction from the sub-ledger recorded in detail within the G/L Linked to G/L in detail
    Link to General Ledger required, with only summarized subtotals from the sub-ledgers recorded within the G/L Linked to G/L in summary

  3. 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.

    [Note]
    • The level of automation can only be defined if the sub-module is linked to the General Ledger either in summary or in detail.
    • You will be unable to automate the posting of journals into the General Ledger if you selected the option: Authorization of journals before posting required (General Ledger Setup - Journals tab).
    • Your settings do not have to be the same for all the sub-ledgers.

    Navigate to the General Ledger tab of 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.

    [Note]

    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:

    • rectify the cause of the error. You can use the Job Logging Query program to view details of the error.

    • use the GL Integration program(s) in the GL Integration section of the sub-module to manually create the journals for the sub-module.

    • use the GL Journal Entry program to post these journals manually into the General Ledger.

    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.

  4. 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 that sub-module's transactions.

  5. 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.

  6. G/L control accounts

    Using the General Ledger Integration program, define the G/L control accounts for the sub-modules you are using.

  7. 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 Codes 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 Branch Maintenance program to indicate A/P control ledger code and the A/P 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.

      • If you are using the USA tax system, you can use the General Ledger Integration program to indicate the Ledger Descriptions you require for merchandise, freight and input tax.

      • Use the Accounts Payable Setup program to indicate the options that affect integration.

        These include:

        • Ask notation per detail distribution entry (General tab)
        • the options on the Tax tab
        • Accounts Payable linked to Cash Book (Integration tab)
      • You can optionally define default merchandise and freight ledger codes per supplier (see Supplier Maintenance - General Details). If these are not defined against a supplier, then the default merchandise and freight control accounts configured for the Accounts Payable module are used (General Ledger Integration).

    • 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 Payments and Adjustments program.

      • Branches

        Use the AR Branch Maintenance 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 Codes 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.

      • Use the Accounts Receivable Setup program to indicate the options that affect integration.

        These include:

        • the options on the Tax tab

        • Link Accounts Receivable to Cash Book (Integration tab)

          This determines how Accounts Receivable payments processed using the 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 Codes 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.

      • If you are using the USA tax system, you can use the General Ledger Integration program to indicate the Ledger Descriptions you require for deposits and withdrawals.

      • Use the Cash Book Setup program to indicate the options that affect integration.

        These include:

        • Ask notation per detail distribution entry (General tab)
        • the options on the Tax tab

    • 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 Warehouse Maintenance 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.

      • Use the Inventory Setup program to indicate the options that affect integration.

        These include:

        • Request ledger codes for inventory transactions (Options tab)

    • 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 (Browse on Asset Branches) and may be used to integrate asset transactions to the General Ledger (General Ledger Integration).

      • Groups

        Use the Asset Group Maintenance 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 (General Ledger Integration).

      • Use the Asset Register Setup program to indicate the options that affect integration.

        These include:

        • Book value depreciation posted to G/L code (General tab)

      • Asset maintenance

        Within the Browse on 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.

      • Use the WIP Setup program to indicate the options that affect integration.

        These include:

        • Automatically cleared variances (General1 tab)

          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 Code Maintenance) is used.

            If this is not defined, then

          • the code defined against the warehouse (Warehouse Maintenance) is used.

            If this is not defined, then

          • the code specified within the General Ledger Integration program (W.I.P tab) is used.

          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 Maintenance).

        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).

  8. 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).

      • Select the Integration from sub-ledger at ledger code level option (General Ledger Setup - General tab).
      • Use the Ledger Code Details > Sub-ledger integration method option in the General Ledger Codes program to set the method of integration required for specific ledger codes.

    • Use the General Ledger Setup program to indicate the options and settings that affect integration.

      These include:

      • Authorization of sub module journals before posting required (Journals tab)
      • Integration from sub-ledger at ledger code level (General tab)
      • Passwords required for individual ledger accounts (General tab)
      • the End date and Status for each period on the Periods tab

  9. 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 (Operator Maintenance)

      These include activities such as posting to previous periods or authorizing journals.

  10. 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.

Integration Accounts

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.

Asset Account Types Required for General Ledger Integration

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
A/R 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

Liability Account Types Required for General Ledger Integration

Account Description Module(s) Requiring the Account Originating Transactions
A/P Control Payables All Accounts Payable transactions
GRN Suspense Payables / Inventory Inventory receipts and A/P 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.

Capital Account Types Required for General Ledger Integration

Account Description Module(s) Requiring the Account Originating Transactions
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.

Revenue Account Types Required for General Ledger Integration

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.

Cost of Goods Manufactured Accounts Required for General Ledger Integration

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.

Cost of Sales Accounts Required for General Ledger Integration

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.

Inventory Handling Accounts Required for General Ledger Integration

Account Description Module(s) Requiring the Account Originating Transactions
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

Other Expense Accounts Required for General Ledger Integration

Account Description Module(s) Requiring the Account Originating Transactions
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 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.

Extraordinary Items and Other Accounts Required for General Ledger Integration

Account Description Module(s) Requiring the Account Originating Transactions
Gain/Loss on Asset Disposal Assets Register SYSPRO posts to this account when you record the disposal of an asset in the Assets Register.

Updating the General Ledger

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 (seeGeneral Ledger Integration - General Ledger tab).

See also Creating and Posting Sub Module Journals.

Creation of General Ledger 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
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 (Operator Maintenance - Security tab - Activities).

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:

  • Accounts Payable

    • AP Invoice GL Integration
    • AP Payments GL Integration

  • Accounts Receivable

    • AR Invoice GL Integration
    • AR Payments GL Integration

  • Cash Book

    • Cash Book GL Integration

  • Assets

    • Assets GL Integration

  • Inventory

    • Inventory GL Integration

  • Purchase Orders

    • Inventory GL Integration
    • Inventory GRN GL Integration

  • Work in Progress

    • Part Billings GL Integration
    • WIP Labor GL Integration
    • Inventory GL Integration

Once created, the journals can be viewed in the GL Journal Entry program.

Posting of General Ledger Journals

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 program to manually post the journals into the General Ledger.
Selected The journals are automatically posted into the General Ledger.
[Note]

  • Journals for a future period are only posted into the ledger by the GL Period End program when the General Ledger reaches that period.

    For example, if you ran a month end on your Accounts Payable module and then processed invoices in the new AP period, then the journals for these transactions are only posted to the General Ledger when you have also run a month end on the GL.

  • Journals are only posted for the Current, Previous 1 and Previous 2 periods.

  • Journals requiring GL analysis are not posted automatically if the operator selected the Ask Me Later option in the GL Analysis program.

    The journal cannot be posted to the ledger without the GL analysis information. This applies if you selected the option Force GL Analysis - GL journal posting (General Ledger Integration - General Ledger tab).

  • If you selected Authorisation of journals before posting required (General Ledger Setup - Journals tab), then journals cannot be posted automatically.

General Ledger Integration Error Handling

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.

[Note]

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.
Journals Created

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:

  • Account on hold
  • Credit ledger code not on file - Intercompany
  • Credit ledger code on hold - Intercompany
  • Debit ledger code not on file - Intercompany
  • Debit ledger code on hold - Intercompany
  • Intercompany ID may not be the local company ID
  • Intercompany debit ledger code missing
  • Intercompany debit ledger code missing
  • Intercompany debit and credit ledger code cannot be the same
  • Journal out of balance
  • Ledger code must not be spaces
  • Ledger amount cannot be zero
  • Ledger code XXX not found
  • Ledger code password XXX invalid
  • Ledger code XXX cannot be a statistical account type
  • Ledger code XXX must be a statistical account type
  • Current years history missing
  • Posting failed for journal number XXX
  • Previous year history missing

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 (see General Ledger Integration)) to prevent the error occurring the next time a ledger journal is created for the same type of transaction.

Journals Not Created

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 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.

Journals Not Created - No Errors

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.

Viewing and Printing Journals

When you successfully process a transaction in a sub-module,

  • the sub-module journal is automatically created. This cannot be controlled by any setup option.
  • you can use the relevant journal report, or register, in the sub-module to print the journal details.

  • 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 autom0atically 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.

    [Note]

    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 use the GL Journal Entry program to display and optionally print the GL journal.

  • 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.

    [Note]

    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 program,

  • you can use the GL Journal Entry program to display and optionally print the GL journal.
  • you can view the GL journal details on the relevant sub-module 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 posted to the General Ledge per sub-module.

    [Note]

    Journals originating from the sub-modules are Normal journals.

  • you can 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.

Reports

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 Report Number of months to retain > Expense Journals Accounts Payable Setup - History tab
AP Payment Register Reprint Number of months to retain > Payment cycle details Accounts Payable Setup - History tab
AP Invoice Expense Distribution Number of months to retain > Expense Journals Accounts Payable Setup - History tab
AP Invoice Disbursement Distribution Number of G/L periods to retain > Disbursement distribution entries Accounts Payable Setup - History tab
Accounts Receivable    
AR Invoice Register Number of months to retain > Sales transaction summary and detail records Accounts Receivable Setup - History tab
AR Cash Journal Report Number of months to retain > Cash journals Accounts Receivable Setup - History tab
AR Sales Distribution Number of months to retain > Sales transaction summary and detail records Accounts Receivable Setup - History tab
AR Payments Distribution Number of months to retain > Cash journals Accounts Receivable Setup - History tab
Cash Book    
Cash Book Journal Report Number of months to retain > Cash book journals Cash Book Setup - History tab
Cash Book GL Distribution Number of months to retain > Cash book journals Cash Book Setup - History tab
Assets    
Asset GL Distribution Retain asset details (periods) > Distribution entries Asset Register Setup - History tab
Inventory    
Inventory Journal Report Number of months to retain > Inventory journals Inventory Setup - History tab
Inventory GL Distribution Number of months to retain > Inventory journals Inventory Setup - History tab
WIP Labor Journal Report Number of months to retain > Labor posting journals WIP Setup - History tab
WIP Labor GL Distribution Number of months to retain > Labor posting journals WIP Setup - History tab
Purchase Orders    
Inventory Journal Report Number of months to retain > Inventory journals Inventory Setup - History tab
Inventory GL Distribution Number of months to retain > Inventory journals Inventory Setup - History tab
GRN Journal Report Number of days to retain > GRN journals Purchase Orders Setup - History tab
GRN GL Distribution Number of days to retain > GRN journals Purchase Orders Setup - History tab
Sales Orders - Trade Promotions    
TPM Journal Report None Trade Promotions journals are currently not purged, therefore no option exists to retain them.
Work in Progress    
Part Billings Journal Report Number of months to retain > Part billing journals WIP Setup - History tab
WIP Part Billings Distribution Number of months to retain > Part billing journals WIP Setup - History tab
WIP Labor Journal Report Number of months to retain > Labor posting journals WIP Setup - History tab
WIP Labor GL Distribution Number of months to retain > Labor posting journals WIP Setup - History tab
Inventory Journal Report Number of months to retain > Inventory journals Inventory Setup - History tab
Inventory GL Distribution Number of months to retain > Inventory journals Inventory Setup - History tab

Reprinting Distribution Reports

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 G/L 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.

Accounts Payable Integration

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:

Journal Entries Generated by Accounts Payable Disbursement Transactions

Invoice Payment Debit Code Credit Code
Amount paid A/P Control Bank control
Discount taken A/P Control A/P terms discount
Exchange variance profit (foreign payments) A/P Control Exchange variance
Exchange variance loss (foreign payments)   A/P Control
Tax (tax on discount) A/P Control Input tax code (General Ledger Integration)
[Note]

The value debited to A/P Control is processed as a single entry.

Journal Entries Generated by Accounts Payable Expense Transactions

Invoice Posting Debit Code Credit Code
Goods Merchandise A/P Control
Goods with GRN Matching GRN Suspense (Warehouse Maintenance) or (General Ledger Integration) A/P Control
Goods to Work in Progress Work in Progress Control A/P Control
Tax Payable - single account Input tax code (General Ledger Integration) A/P Control
Tax Payable - multiple accounts A/P tax code (Browse on Tax Codes) A/P Control
Freight Freight in A/P Control
Price variance, price increase (GRN matching) Purchase Price Variance A/P Control
Price variance, price decrease (GRN matching) A/P Control Purchase Price Variance
Other Other expenses A/P Control
[Note]

The value debited to A/P Control is processed as a single entry.

A/P Journal Entries

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.

A/P Invoice Posting
Invoice Posting Debit Code Credit Code
Goods Merchandise (Supplier Maintenance or General Ledger Integration).

The account defined against the supplier takes precedence.

 A/P Control (AP Branch Maintenance)
Freight in Freight (Supplier Maintenance or General Ledger Integration).

The account defined against the supplier takes precedence.

 A/P Control (AP Branch Maintenance)
Other Other expenses (AP Invoice Posting) A/P Control (AP Branch Maintenance)
[Note]

The value debited to A/P 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
A/P Invoice Payment with Discount
Invoice Payment (with discount) Debit Code Credit Code
Amount paid A/P Control Bank Control (Banks)
Discount A/P Control Discount Take ledger code (AP Branch Maintenance)
[Note]

The value debited to A/P 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
A/P Invoice Payment (Foreign Manual Check)
Invoice Payment (foreign check) Debit Code Credit Code
Amount paid A/P Control Bank Control
Discount taken A/P Control Discount Taken ledger code (AP Branch Maintenance)
Exchange variance (profit) A/P Control Exchange variance
[Note]

The value debited to A/P 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
[Note]

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.
A/P Invoice Posting (GRN Matching)
Invoice Posting (GRN matching) Debit Code Credit Code
Goods GRN Suspense (Warehouse Maintenance) or (General Ledger Integration) A/P Control
Price Variance Purchase Price Variance (General Ledger Integration - Inventory tab or Warehouse Maintenance).

The account held against the warehouse takes precedence.

 A/P Control
[Note]

The value credited to A/P 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
A/P Invoice Posting (Tax - Single)
Invoice Posting (tax - single) Debit Code Credit Code
Goods Merchandise (Supplier Maintenance or General Ledger Integration - Payables tab).

The account defined against the supplier takes precedence.

 A/P Control
Freight in Freight (Supplier Maintenance or General Ledger Integration - Payables tab).

The account defined against the supplier takes precedence.

 A/P Control
Other Other expenses (AP Invoice Posting) A/P Control
Tax Input tax (General Ledger Integration - Payables tab) A/P Control
[Note]

The value credited to A/P 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
A/P Invoice Posting (Tax - Multiple)
Invoice Posting (tax - multiple) Debit Code Credit Code
Goods Merchandise (Supplier Maintenance or General Ledger Integration - Payables tab).

The account defined against the supplier takes precedence.

 A/P Control
Freight in Freight (Supplier Maintenance or General Ledger Integration - Payables tab).

The account defined against the supplier takes precedence.

 A/P Control
Other Other expenses (AP Invoice Posting) A/P Control
Tax A/P Tax ledger code (Browse on Tax Codes) A/P Control
[Note]

The value credited to A/P 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
A/P Invoice Posting (Tax and GRN Matching)
Invoice Posting (Tax and GRN matching) Debit Code Credit Code
Tax - multiple A/P Tax ledger code (Tax Options - Options tab) A/P Control
Tax payable - single Input tax (General Ledger Integration - Payables tab) A/P Control
Goods GRN Suspense A/P Control
Price variance (loss) Purchase Price Variance (General Ledger Integration - Inventory tab or Warehouse Maintenance).

The account held against the warehouse takes precedence.

 A/P Control
[Note]

The value credited to A/P 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
A/P Invoice Payment (Tax on Settlement Discount)
Invoice Payment (tax on discount) Debit Code Credit Code
Amount paid A/P Control Bank Control
Discount taken A/P Control Discount taken ledger code (AP Branch Maintenance)
Tax on settlement discount A/P Control Input tax (General Ledger Integration - Payables tab)
[Note]

The value debited to A/P 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
A/P Invoice Posting to Work In Progress
Invoice Posting (to Work In Progress) Debit Code Credit Code
Goods WIP ledger code held against the job A/P Control (AP Branch Maintenance)

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
AP Contra Foreign Currency Invoices

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 Branch Maintenance) 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 (Supplier Maintenance). An exchange variance occurs when the invoices you contra have different exchange rates.

Refer to General Ledger Entries for examples.

Inventory Related Supplier Invoices

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.

Integration to Cash Book

You define Accounts Payable integration to Cash Book on the Integration tab of 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.

  • Only one journal entry per check number is made into the Cash book module.
  • Because the Payment Cycle Maintenance program does not post payments into Cash Book if the check number is blank, you must run the AP Check and Remittance Print before printing the AP Payment Register.
  • Once checks have been printed on the AP Payment Register and posted to Cash Book, you will be unable to reprint them.
  • The AP Payment Register prints the Cash Book journal number at the end of the report.

  • 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.

Tax Distribution to Multiple Accounts

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).

[Note]

If you want tax to be posted to the accounts specified, then you must select the option Disburse tax amount over multiple G/L tax accounts (Accounts Payable Setup - Tax tab). If you select the option Disburse tax amount over single G/L tax account, then tax is posted to the A/P 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 A/P 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 A/P 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 G/L 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 G/L 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 A/P 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 A/P 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 G/L 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

Accounts Receivable Integration

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.

A/R Sales Ledger Interface

For sales integration you must define branch control accounts using the Browse on AR Branches program, and the sales and cost of sales accounts using the Sales Interface function 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:

Processing and Distribution of Sales Transaction Types
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
Processing and Distribution of Cost of Sales
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.

A/R Payments Ledger Interface

The following table outlines how each transaction type is processed and distributed to the General Ledger system:

Processing and Distribution of A/R Payment Transaction Types
Transaction Type Debit Code Credit Code
Payments Interface Entry Branch A/R Control
Discounts Interface Entry Branch A/R Control
Adjustments Interface Entry Branch A/R Control
[Note]

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 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.

    [Note]

    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 Report.

A/R Journal Entries

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.

Invoice Print or Invoice Posting - Sales to customers
Description Debit Code Credit Code
Stocked/Non-stocked item A/R Control Sales
Miscellaneous charge A/R Control Sales
Freight A/R Control Freight charges
Tax A/R Control Sales tax

(If Sales tax integration to G/L is at Tax Code level - Tax codes setup)

or

Sales tax (Branch setup)
Goods & Services tax (Canada only) A/R Control GST - Branch setup
Rounding error (see Note below) A/R 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)
[Note]

Where the rounding error causes a loss, a debit entry is made to the Rounding error ledger code, and a credit entry to the A/R 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
Inter-branch sales invoicing in Sales Order module
Description Debit Code Credit Code
Inter-branch sales (stocked/non-stocked) A/R Control IBT Sales (Sales interface)
Inter-branch miscellaneous charges A/R Control IBT Sales (Sales interface)
Freight charges A/R Control Freight charges
Tax A/R Control Sales tax

(If Sales tax integration to G/L is at Tax Code level - Tax codes setup)

or

Sales tax (Branch setup)
Goods & Services tax (Canada only) A/R Control GST - Branch setup
Rounding error (see Note below) A/R 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)
[Note]

Where the rounding error causes a loss, a debit entry is made to the Rounding error ledger code, and a credit entry to the A/R 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.  
[Note]

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)
Finance charge calculation
  Debit Code Credit Code
Amount charged A/R 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
Customer payments
  Debit Code Credit Code
Amount received Cash Account (if A/R linked to Cash book - Banks setup)

or

Payments (Payments interface)

 A/R Control
Discount allowed Discount (Payments interface) A/R 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
Foreign customer payments - Not integrated to Cash Book
  Debit Code Credit Code
Amount received Payments (Payments interface) A/R Control
Exchange variance (see Note below) A/R Control Exchange rate variance (General Ledger Integration - Receivables tab)
Discount allowed Discounts A/R Control
[Note]
  • If the exchange rate variance leads to a loss, the transaction is processed as a Credit to the A/R Control account ledger code and a Debit to the Exchange variance ledger code.
  • The default account to which you debit the exchange rate variance can be overridden at the time of entering the Payment Details in the Payments and Adjustments program.

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)
Miscellaneous cash receipts
  Debit Code Credit Code
Amount received Cash Account (if A/R linked to Cash book - Banks setup)

or

Payments (Payments interface)

 Credit ledger code (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
Accounts Receivable balance adjustments
  Debit Code Credit Code
Adjustment amount (profit) A/R Control Adjustments
[Note]
  • The account to which you credit the adjustment can be overridden at the time of entering the adjustment in the Payments and Adjustments program.
  • If the adjustment represents a loss, the Accounts Receivable control is credited and the adjustments ledger code is debited.

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 (General Ledger Integration Payments 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

A/R Specific Journal Entries

  • 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 Currency Variance report on a regular basis. Running this report ensures that the local equivalent of foreign payments are correct.

A/R and other modules

The Accounts Receivable module shares information with each of the following modules:

  • General Ledger

    Accounts Receivable information transferred:

    • Sales and cost of sales-related distributions
    • Payment (cash receipts) distributions

  • Sales Analysis

    Accounts Receivable information available on reports:

    • Sales by salesperson, product class, and customer
    • Sales commissions
    • Sales tax schedules
    • Turnover reports

  • Inventory Control

    Accounts Receivable processes that update stock quantities:

    • Invoice posting
    • Credit note posting
    • Debit note posting

  • Sales Orders

    Sales Order information transferred to Accounts Receivable:

    • Sales and cost of sales related distributions

    Sales Order processes that update stock quantities:

    • Order Entry (allocations)
    • Invoice printing
    • Credit invoice printing (returns to inventory)
    • Debit invoice printing (issues)

    Document print capability:

    • Invoices/debit notes/credit notes
    • Delivery notes and order acknowledgements

  • Cash Book

    Information transferred to Cash Book:

    • Invoice payment receipts
    • Miscellaneous cash receipts

Cash Book Integration

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 on the Cash Book tab of the General Ledger Integration program, the following options also affect how Cash Book integration operates:

  • The Ask notation per detail distribution entry option (Cash Book Setup - General tab) enables you to indicate whether you want an additional notation to be available for entry against each detail distribution entry processed in the Deposits and Withdrawals program. This notation is passed through to the General Ledger module and is printed on the Cash Book Journal Report.
  • The Cash account ledger code defined for each bank (Browse on Banks) serves as a link between the banks maintained in the Cash Book module to cash accounts in the General Ledger module. This is the automatic side of a deposit, withdrawal or adjustment entry.
  • The Exchange variance account ledger code defined for each bank (Browse on Banks) serves as the link between foreign currency exchange gains and losses and the General Ledger module.

Cash Book Journal Entries

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
Deposit - No Tax Debit Code Credit Code
Deposit amount Cash account ledger code (Browse on 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
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 (Browse on 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
Deposit - With tax Debit Code Credit Code
Deposit amount Cash account ledger code (Browse on Banks) Credit ledger code (any type) entered at the time of entering the deposit
Tax portion   Tax for deposits ledger code (General Ledger Integration - Cash Book tab)

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
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 (Browse on Banks)
Tax portion Tax for deposits ledger code (General Ledger Integration - Cash Book tab)  

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
Reconciliation of a Foreign Currency Transaction
Reconcile Foreign Transaction Debit Code Credit Code
Profit amount Cash account ledger code (Browse on Banks) (for foreign currency bank) Exchange variance ledger code (Browse on Banks)
[Note]

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 selected 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
Currency Variance Report - Update function Debit Code Credit Code
Profit amount Cash account ledger code (Browse on Banks) (for foreign currency bank) Exchange variance ledger code (Browse on Banks)
[Note]

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
Inter-company deposit Debit Code Credit Code
Deposit amount Cash account ledger code (Browse on 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
Inter-Bank Transfers

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 - Cash Book tab), before you can process interbank transfers.

When the option Foreign cash book required is selected (Cash Book Setup - General tab), then the following types of interbank transfers can be processed:

  • Transfers between two local currency banks.
  • Transfers between two same foreign currency banks.
  • Transfers between two different foreign currency banks.
  • Transfers from any local currency bank to any foreign currency bank.
  • Transfers any foreign currency bank to any local currency bank.

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 Deposits and 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 Deposits and 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

Inventory Integration

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.

[Note]

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 Inventory tab of 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.

Inventory Journal Entries

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 of bought-out stocked item
Receipt Debit Code Credit Code
Item received Warehouse Control ledger code Ledger code for receipts (General Ledger Integration - Inventory tab)
Inventory costing variance (see note 2)   Warehouse variance (rounding up) (Browse on Warehouses)
Merchandise COS adjustments   Cost of goods sold (decrease in unit cost)
[Note]
  • The W/h variance account is only accessed if it is necessary to round the inventory unit cost up or down.
  • If the transaction results in a rounding down of the inventory unit cost, then the posting to the W/h variance account is a debit.
  • The Cost of goods sold ledger code is only accessed if the current quantity on hand is negative and average costing is applied. If the transaction results in an increase in the inventory unit cost, then a debit is posted to the Cost of goods sold ledger code.

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 (Browse on 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 of Bought-out Stocked item & Immediate Issue to WIP
Receipt/Issue to WIP Debit Code Credit Code
Item received Warehouse Control ledger code Ledger code for receipts (General Ledger Integration - Inventory tab)
Merchandise COS adjustments   Cost of goods sold (General Ledger Integration - Inventory tab)
Inventory costing variance   Warehouse variance (Browse on Warehouses)
Item to WIP WIP ledger code (Job maintenance) Warehouse Control ledger code
[Note]
  • The code for the Cost of goods sold adjustment is used when a receipt is entered where the current quantity on hand is negative and the costing method is based on average costing. The negative value of the stock on hand is not used in the re-averaging of the cost and must, therefore, be posted into the General Ledger system in order to reduce the inventory warehouse value.
  • The Inventory costing variance account is used if you enter a total receipt value that does not calculate down to an exact unit cost. The remainder is posted to this account.

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 of Manufactured Stocked item
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 of Bought-out Non-stocked item (from Purchase Orders only)
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 - Inventory tab)

OR

Ledger code for Receipts

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 of Bought out Non-stocked item & Immediate Issue to WIP (from Purchase Orders only)
Receipt/Issue Debit Code Credit Code
Item received Warehouse control (hidden entry) GRN suspense account - if GRN suspense is installed (General Ledger Integration - Inventory tab)

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 of Subcontract Services into WIP (from Purchase Orders only)
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 - Inventory tab)

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 of a Stocked item to an Account Other than WIP
Issue Debit Code Credit Code
Item issued Ledger code for Issues (General Ledger Integration - Inventory tab) 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 of a Stocked item to WIP
Issue to WIP Debit Code Credit Code
Item issued WIP ledger code (Job maintenance)

WIP ledger control account (Stock Code Maintenance - Production)

 Warehouse control
[Note]

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 Code Maintenance - 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 - WIP tab) 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 of a Non-stocked item to WIP
Issue to WIP Debit Code Credit Code
Item issued WIP ledger code (Job maintenance)

WIP ledger control account (Stock Code Maintenance - Production)

 Non-stocked ledger code (General Ledger Integration - Inventory tab)

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
Cost Change Debit Code Credit Code
Change amount (increase in unit cost) Warehouse control Ledger code for Cost changes (General Ledger Integration - Inventory tab)
Change amount (reduction in unit cost) Ledger code for Cost changes (General Ledger Integration - Inventory tab) 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
Cost Modifications Debit Code Credit Code
Modification amount (increase in unit cost) Warehouse control Ledger code for Cost modifications (General Ledger Integration - Inventory tab)
Modification amount (reduction in unit cost) Ledger code for Cost modifications (General Ledger Integration - Inventory tab) 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
Inventory Quantity Adjustments Debit Code Credit Code
Adjustment amount (increase in quantity) Warehouse control Ledger code for Adjustments (General Ledger Integration - Inventory tab)
Adjustment amount (reduction in quantity) Ledger code for Adjustments (General Ledger Integration - Inventory tab) 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 Adjustments
Physical Debit Code Credit Code
Adjustment amount (increase in quantity) Warehouse control Ledger code for Physical counts (General Ledger Integration - Inventory tab)
Adjustment amount (reduction in quantity) Ledger code for Physical counts (General Ledger Integration - Inventory tab) 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
Inventory Transfers - Immediate
Transfers Debit Code Credit Code
Item in transit (Issuing warehouse) Ledger code for Warehouse transfers (General Ledger Integration - Inventory tab) Warehouse control
Item in transit (Receiving warehouse) Warehouse control Ledger code for Warehouse transfers (General Ledger Integration - Inventory tab)

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 Browse on 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
Inventory Transfers - Part One: Transfer Out
Transfer out Debit Code Credit Code
Item in transit Ledger code for Warehouse transfers (General Ledger Integration - Inventory tab) 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
Inventory Transfers - Part Two: Transfer In

.

Transfer in Debit Code Credit Code
Item in transit Warehouse control (Receiving warehouse) Ledger code for Warehouse transfers (General Ledger Integration - Inventory tab)

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
Backflushing Debit Code Credit Code
Parent item Warehouse control

Receipt of parent item

 WIP control (General Ledger Integration - WIP tab)
Component items WIP control (General Ledger Integration - WIP tab) Warehouse control

Issue of component items
Labor costs   Run time ledger code (Productive time ledger codes, General Ledger Integration - Work centers setup)
    Setup time ledger code (Productive time ledger codes, General Ledger Integration - Work centers setup)
Production overheads   Fixed overhead ledger code

Productive time ledger codes, General Ledger Integration - Work centers setup)
    Variable overhead ledger code

Productive time ledger codes, General Ledger Integration - Work centers setup)
Variance Variance ledger code (General Ledger Integration - WIP tab) (If variance unfavorable) Variance ledger code (General Ledger Integration - WIP tab) (If variance favorable)
[Note]

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

Inventory - Specific Journal Entries

  • 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 select the Request ledger codes for inventory transactions option (Inventory Setup - Options tab), 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 have defined your Receipts Ledger account in Inventory Ledger Interface Maintenance (General Ledger Integration - Inventory tab) as a liability, and you post the Accounts Payable Invoice Posting offset entry to this account, there will be 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:

    • perform the calculation manually (or use a program other than SYSPRO)
    • use the landed cost multiplier attached to each stock code
    • use the Landed Cost Tracking module

    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.

Assets Register Integration

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 defined on the Assets tab of 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 setup option Book value depreciation posted to G/L code by Individual asset (Asset Register Setup) and then using the Browse on Assets program to define the ledger code required.

[Note]

No General Ledger entries or journals are created when you use the Asset Transactions, Asset Expense Posting and Asset Labor Time Sheet Posting programs.

Assets Register Journals

The following tables list the journal entries created by the various assets transaction programs.

When you use the Browse on 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
[Note]

When you pay for an asset, the Asset Clearing account must be debited.

When you use the Browse on 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.
[Note]

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 Browse on Assets).

If you change the Cost/value of an asset using the Browse on 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
[Note]

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

Asset Capex Integration

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 on the Assets tab of 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 - Inventory tab) if GRN suspense system is not required (Purchase Orders Setup - GRN tab).

OR

GRN Suspense account (General Ledger Integration - Inventory tab) 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  

Work in Progress Integration

If you indicate that the Work in Progress module is not linked to General Ledger and no distribution report is required, then you will be unable to produce any labor distribution reports using the WIP Labor GL Distribution program.

You use the W.I.P. tab of the General Ledger Integration program to define the general ledger integration accounts required for Work in Progress.

Work in Progress Journal Entries

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 of Bought-out Stocked item & Immediate issue to WIP
Receipt/Issue Debit Code Credit Code
Item received Warehouse control (Browse on Warehouses) GRN suspense - if GRN system installed and the receipt is against a purchase order (Browse on Warehouses or General Ledger Integration - Inventory tab)

or

Ledger code for Receipts (General Ledger Integration -Inventory tab)
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 (Browse on Warehouses)
[Note]

  • The W/h variance account is only accessed if it is necessary to round the inventory unit cost up or down.

    If the transaction results in a rounding down of the inventory unit cost, then the posting to the W/h variance account is a debit.

  • The Cost of goods sold ledger code is accessed only if the current quantity on hand is negative. If the transaction results in an increase in the inventory unit cost, then a debit is posted to the Cost of goods sold ledger code.

  • 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 Code Maintenance) 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 - WIP tab) is displayed as the default.

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 of Bought-out Non-stocked item & Immediate Issue to WIP (from Purchase Orders only)
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 - Inventory tab)

or

Ledger code for Receipts (General Ledger Integration -Inventory tab)
[Note]

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 Code Maintenance) 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 - WIP tab) 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 of subcontract services into WIP (from Purchase Orders only)
Receipt Debit Code Credit Code
Item received WIP ledger code (Job maintenance) Labor ledger code if defined (Browse on Work Centers)

or

GRN suspense - if GRN suspense system is installed and subcontract charge is being received against a purchase order.
[Note]

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 Code Maintenance) 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 - WIP tab) 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
Issue of a Stocked item to WIP
Stocked to WIP Debit Code Credit Code
Item issued WIP ledger code (Job maintenance) Warehouse control (Browse on Warehouses)
[Note]

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 Code Maintenance) 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 - Inventory tab) 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 of a Non-stocked item to WIP
Non-stocked to WIP Debit Code Credit Code
Item issued WIP ledger code (Job maintenance) Non-stocked ledger code (General Ledger Integration - Inventory tab)

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 of Stocked & Non-stocked Material
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 - Inventory tab)
[Note]

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 Code Maintenance) 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 - WIP tab) 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 of Labor
Kit Issue (Labor) Debit Code Credit Code
Labor posted WIP ledger code (Job maintenance)  
Production wages control (Setup)   Setup time ledger code (Browse on Work Centers)
Production wages control (Startup)   Startup time ledger code (Browse on Work Centers)
Production wages control (Run time)   Run time ledger code (Browse on Work Centers)
Production wages control (Teardown)   Teardown time ledger code (Browse on Work Centers)
Fixed production overhead   Fixed overhead ledger code (Browse on Work Centers)
Variable production overhead   Variable overhead ledger code (Browse on Work Centers)
Subcontract clearing   Labor ledger code (Browse on Work Centers)
[Note]

  • 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 Code Maintenance) 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 - WIP tab) is displayed as the default.

  • You define a default set of productive and non-productive time ledger codes against each cost center that you add.

    When you assign a work center to a cost center, the system displays the cost center accounts as the defaults.

    The system obtains the applicable work center from the operations attached to the job to which you are posting.

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
[Note]

All Production wages control entries are accumulated and printed as one entry on the Distribution report
Post Setup Time in Labor Postings
Post Setup Time Debit Code Credit Code
Time posted WIP ledger code (Job maintenance)  
Production wages control (Setup)   Setup time ledger code (Browse on Work Centers)
Fixed production overhead   Fixed overhead ledger code (Browse on Work Centers)
Variable production overhead   Variable overhead ledger code (Browse on Work Centers)
[Note]

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 Code Maintenance) 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 - WIP tab) is displayed 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 in Labor Postings
Post Run Time Debit Code Credit Code
Time posted WIP ledger code (Job maintenance)  
Production wages control (Run time)   Run time ledger code (Browse on Work Centers)
Fixed production overhead   Fixed overhead ledger code (Browse on Work Centers)
Variable production overhead   Variable overhead ledger code (Browse on Work Centers)
[Note]

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 Code Maintenance) 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 - WIP tab) is displayed 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 in Labor Postings
Post Startup Time Debit Code Credit Code
Time posted WIP ledger code (Job maintenance)  
Production wages control (Startup)   Startup time ledger code (Browse on Work Centers)
Fixed production overhead   Fixed overhead ledger code (Browse on Work Centers)
Variable production overhead   Variable overhead ledger code (Browse on Work Centers)
[Note]

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 Code Maintenance) 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 - WIP tab) is displayed 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 in Labor Postings
Post Teardown Time Debit Code Credit Code
Time posted WIP ledger code (Job maintenance)  
Production wages control (Teardown)   Teardown time ledger code (Browse on Work Centers)
Fixed production overhead   Fixed overhead ledger code (Browse on Work Centers)
Variable production overhead   Variable overhead ledger code (Browse on Work Centers)
[Note]

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 Code Maintenance) 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 - WIP tab) is displayed 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
Post non-productive time in Labor Postings

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 (WIP Setup - Labor Posting tab). In this case, the system debits the Non-productive ledger code assigned to the non-productive code (Browse on 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 in Labor Postings
Post Subcontract Costs Debit Code Credit Code
Item posted WIP ledger code (Job maintenance)  
Subcontract clearing   Labor ledger code (Browse on Work Centers)

(see Note below)
[Note]

  • 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 Code Maintenance) 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 - WIP tab) is displayed as the default.
  • The system extracts the applicable subcontract work center code from the operations attached to the job.

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 of manufactured stocked item
Receipt Debit Code Credit Code
Item received Warehouse control (Browse on 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
[Note]

  • The W/h variance account is only accessed if it is necessary to round the inventory unit cost up or down.

    If the transaction results in a rounding down of the inventory unit cost, then the posting to the W/h variance account is a debit.

  • The Cost of goods sold ledger code is accessed only if the current quantity on hand is negative. If the transaction results in an increase in the inventory unit cost, then a debit is posted to the 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
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)
[Note]

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

WIP Inspection

Using Standard Costing:

When an item is receipted into WIP Inspection, it is received in at its current standard cost.

  • Debit WIP Inspection
  • Credit Work In Progress

If there are no changes to the standard cost of the item, it is receipted into stock from inspection at this standard cost.

  • Credit WIP Inspection account with the standard cost value
  • Debit Inventory with the standard cost value

If the item is receipted into an alternate warehouse which has a different standard cost, then:

  • Credit WIP Inspection with the current standard cost value for the current warehouse
  • Debit Inventory with the new warehouse value
  • Debit/Credit the cost difference to the Warehouse variance account.

If the cost of the item is changed and the item is receipted into a separate warehouse with a different standard cost then:

  • the Warehouse variance account is credited with the full value of the quantity multiplied by the new warehouse cost.
  • the Warehouse variance account is debited with the difference between the cost in the new warehouse and the cost of the item at the new cost.
  • Inventory is receipted at the full quantity multiplied by the standard cost in the new warehouse.
  • The difference is posted to the warehouse variance account.

Example: An item is receipted into WIP inspection for at a standard cost of 400 in warehouse A.

The initial entry is:

  • Debit WIP inspection 400
  • Credit Work in Progress 400

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:

  • Debit Inventory for Warehouse A with 100
  • Credit Cost modifications account with 100

The item is now receipted into Warehouse B (not Warehouse A) in which its standard cost is 700. The following entries are created:

  • Credit WIP inspection account with 700
  • Debit Inventory for Warehouse B with 700
  • Debit WIP inspection with 200 (i.e. 700 - 500)
  • Credit Warehouse variance with 200

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.

Trade Promotions Integration

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.

Trade promotions transactions are created for the following processes:

  • Sales order invoicing - line and global accrual promotions
  • Deduction review - resolve deductions
  • Deduction review - write off of individual deductions
  • Deduction review - automatic write off of deductions
  • Promotion review - adjust accrual balance

Accrual Promotions

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 Maintenance) Accrual GL Account defined against the accrual promotion code (Promotion Code Maintenance)

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 Maintenance) Accrual GL Account defined against the accrual promotion code (Promotion Code Maintenance)
    Negative adjustment value (accrual value is decreased) Accrual GL Account defined against the accrual promotion code (Promotion Code Maintenance) Expense GL Account defined against the accrual promotion code (Promotion Code Maintenance)
    [Note]

    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 Maintenance) Expense GL Account defined against the accrual promotion code (Promotion Code Maintenance)
    Credit note value excluding tax Sales returns G/L 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. A/R Control

  • A/P Check

    The process of issuing a check to the customer in respect of an accrued promotion value involves creating an A/P 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 Maintenance) A/P Control
    Invoice payment - check issued A/P control Bank Control

Deductions

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 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   A/R Control
Deduction amount Deduction G/L code defined against the deduction code used in 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 G/L code against the deduction code used in the Deduction Review program Deduction G/L code defined against the deduction code used in 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 G/L code against the deduction code used in the Deduction Review program Deduction G/L code defined against the deduction code used in 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 G/L Account defined against the accrual promotion code (Promotion Code Maintenance) Deduction G/L code defined against the deduction code used in 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 G/L code against the deduction code used in the Deduction Review program Deduction G/L code defined against the deduction code used in Payments and Adjustments.

  • Reinstate

    When you reinstate a deduction, the following journal is created:

    Transaction Debit Credit
    Deduction reinstatement amount A/R Control Deduction G/L code defined against the deduction code used in Payments and Adjustments.

  • Reclassify

    When you reclassify a deduction, the following journal is created:

    Transaction Debit Credit
    Deduction reclassification amount   Deduction G/L code defined against the original deduction code displayed in Deduction Review.
    Deduction reclassification amount Deduction G/L code defined against the deduction code entered in Deduction Review.  

Off Invoice Promotions

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 (Browse on Promotion Code).

    Transaction Debit Credit
    Miscellaneous charge sales value Sales G/L code defined against customer/sales order branch and promotion product class in the Sales Ledger interface (AR Sales Ledger Interface) A/R Control
    Miscellaneous charge cost of sales Cost of sales Non-stocked against customer branch (Browse on AR Branches) Trade discount G/L 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 G/L code defined against customer/sales order branch and promotion product class in the Sales Ledger interface (AR Sales Ledger Interface) A/R 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.

Counter Sales Integration

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.

[Note]

If Accounts Receivable payments are linked to Cash Book (Accounts Receivable Setup - Integration tab) and against the payment code you select the Deposit in bank option, then the entries defined here are not used, as all payments are debited to the bank.

Counter Sales and Point of Sales

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 Define Integration Level option of the Accounts Receivable Maintain Payments Interfaces function (General Ledger Integration).

[Note]

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 you have integrated Accounts Receivable payments with Cash Book (Accounts Receivable Setup - Integration tab), as all payments are 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 A/R 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.

Counter Sales Journal Entries

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.

Receipt of Deposit or Deposit Adjustment
Deposit Receipt/Adjustment Debit Code Credit Code
Amount paid Payments G/L Account - if A/R payments are integrated to G/L at Counter sales payments level (Counter Sales Payments Interface) Deposits liability (AR Payments Ledger Interface)
  Cash account ledger code - if A/R payments are not integrated to G/L at Counter sales payments level, but A/R is integrated to Cash Book (Browse on Banks).  
  Payments ledger code - if A/R payments are not integrated to G/L at Counter sales payments level and A/R 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
Deposit Refund Debit Code Credit Code
Amount refunded (see Note 1 below) Deposits liability (AR Payments Ledger Interface) Payments G/L Account - if A/R payments are integrated to G/L at Counter sales payments level (Counter Sales Payments Interface)
    Cash account ledger code - if A/R payments are not integrated to G/L at Counter sales payments level, but A/R is integrated to Cash Book (Browse on Banks).
    Payments ledger code - if A/R payments are not integrated to G/L at Counter sales payments level and A/R is not integrated to Cash Book (AR Payments Ledger Interface)
Amount not refunded Deposits liability Deposits revenue (Browse on AR Branches)
See Note 1 below   Sales tax ledger code (Tax Options)
Amount not refunded (see Note 2 below) A/R control (Browse on AR Branches) A/R control (Browse on AR Branches)
[Note]

  1. The Amount refunded and the Amount not refunded that are debited to the Deposits liability account are posted as a single entry.

    The portion of the journal entry that recognizes the revenue from the non-refunded portion of the deposit is passed through the invoice register as a non-merchandise amount.

    The non-merchandise amount is created on the invoice as a miscellaneous charge line with a product class of _DEP.

    If the revenue for the non-refunded portion of the deposit is taxable, then sales tax is subtracted from this revenue amount.

  2. When a customer's deposit is refunded, and you retain a portion of the deposit, a debit is posted to the customer's account to the value of the retained portion.

    Since you are retaining a portion of the deposit as payment, a credit is simultaneously posted to the customer's account.

    Only the Cash Book entries are shown here. The sales and cost of sales entries have not been provided for.

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
Deposit applied as payment
  Debit Code Credit Code
Deposit amount Deposits liability (AR Payments Ledger Interface) A/R control (Browse on 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
Payment Debit Code Credit Code
Amount paid Payments G/L Account - if A/R payments are integrated to G/L at Counter sales payments level (Counter Sales Payments Interface) A/R control (Browse on AR Branches)
  Cash account ledger code - if A/R payments are not integrated to G/L at Counter sales payments level, but A/R is integrated to Cash Book (Browse on Banks).  
  Payments ledger code - if A/R payments are not integrated to G/L at Counter sales payments level and A/R is not integrated to Cash Book (AR Payments Ledger Interface)  
Discount allowed Discount ledger code (Expense -Other) (AR Payments Ledger Interface) A/R control (Browse on 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
Cash paid out Debit Code Credit Code
Amount paid out Debit ledger code (any type) - entered at the time of payment Payments G/L Account - if A/R payments are integrated to G/L at Counter sales payments level (Counter Sales Payments Interface)
    Cash account ledger code - if A/R payments are not integrated to G/L at Counter sales payments level, but A/R is integrated to Cash Book (Browse on Banks).
    Payments ledger code - if A/R payments are not integrated to G/L at Counter sales payments level and A/R 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
Cash taken in Debit Code Credit Code
Amount received Payments G/L Account - if A/R payments are integrated to G/L 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 A/R payments are not integrated to G/L at Counter sales payments level, but A/R is integrated to Cash Book (Browse on Banks).  
  Payments ledger code - if A/R payments are not integrated to G/L at Counter sales payments level and A/R 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

Purchase Orders Integration

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 - Inventory tab).

Non-stocked items

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 - Inventory tab).

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.

GRN posting

You can enter adjustments to outstanding GRN values using the Browse on GRNs. 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 (Browse on Warehouses or - General Ledger Integration Inventory tab)
Adjustment amount (reduce value of GRN) GRN Suspense (Browse on Warehouses or - General Ledger Integration Inventory tab) 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

Landed Cost Tracking Integration

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 - Inventory tab). If the GRN suspense system is installed, then the credit ledger code will always be the GRN suspense control account (General Ledger Integration - Inventory tab).

Landed Cost Tracking Journal Entries

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:

  • Standard costing, without GRN system.
  • Standard costing, with GRN system.
  • Average, Last, FIFO or LIFO costing, without GRN system.
  • Average, Last, FIFO or LIFO costing, with GRN system.
Shipment Receipts - Standard Costing, No GRN System
Receipts Debit Code Credit Code
Item received Warehouse control (with standard cost) Ledger code for Receipts (General Ledger Integration - Inventory tab)
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 - Inventory tab)  
[Note]

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 Receipts - Standard Costing with GRN System
Shipment Receipt Debit Code Credit Code
Item received Warehouse control (with standard cost)  
Actual landed cost   GRN suspense ledger code (Browse on Warehouses or General Ledger Integration - Inventory tab)
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 - Inventory tab)  
[Note]

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
Shipment Receipts - Average, Last, FIFO or LIFO Costing, without GRN System
Receipts Debit Code Credit Code
Item received Warehouse control (with actual landed cost) Ledger code for Receipts (General Ledger Integration - Inventory tab)
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 Receipts - Average, Last, FIFO or LIFO Costing, with GRN System
Shipment Receipt Debit Code Credit Code
Item received Warehouse control (with actual landed cost)  
Actual landed cost   GRN suspense ledger code (General Ledger Integration - Inventory tab)
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: 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

Activity Based Costing Integration

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.

Activity Based Costing Journal Entries

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 or Invoice Posting
Invoice Print/Post Debit Code Credit Code
Invoice amount A/R Control  
Stock items sales values   Sales ledger code (General Ledger Integration - Receivables tab - Sales Interface)
Tax amount   Sales tax (Browse on AR Branches)
GST amount (Canada only)   GST (Browse on AR Branches)
Sales rounding error (see Note below)   Rounding error (rounding up) (Browse on AR Branches)
Stocked items cost of sales value Cost of sales (General Ledger Integration - Receivables tab - Sales Interface)  
Stocked items cost   Warehouse control (Browse on Warehouses)
Cost recovery amount   Ledger code (Browse on Element Descriptors)
[Note]

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 of Bought-out Stocked item
Receipt Debit Code Credit Code
Item received Warehouse control (Browse on Warehouses) GRN suspense - if GRN system is installed (Browse on Warehouses or General Ledger Integration - Inventory tab)

or

Ledger code for Receipts (General Ledger Integration - Inventory tab)
Variance amount (see Note 1 below)   ABC costing variance (General Ledger Integration - Inventory tab)
Variance amount (see Note 2 below)   Warehouse variance (Browse on Warehouses)
Merchandise COS adjustments (see Note 3 below)   Cost of goods sold (General Ledger Integration - Inventory tab)
Cost recovery amount   Ledger code (Browse on Element Descriptors)
[Note]
  1. Postings are made to the ABC costing variance ledger code before any postings are made to the W/h variance account (Browse on Warehouses).
  2. This account is used if you enter a total receipt value that does not calculate down to an exact unit cost. The remainder is posted to this account.
  3. The code for the cost of goods sold adjustment is used when a receipt is entered where the current quantity on hand is negative and the costing method is based on average costing. The negative value of the stock on hand is not used in the re-averaging of the cost and must, therefore, be posted to the General Ledger system in order to reduce the inventory warehouse value.

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 of Manufactured Stocked item
Receipt Debit Code Credit Code
Item received Warehouse control (Browse on Warehouses) WIP ledger code (Job maintenance)
Variance amount (see Note 1 below)   ABC costing variance (General Ledger Integration - Inventory tab)
Variance amount (see Note 2 below)   Warehouse variance (Browse on Warehouses)
Merchandise COS adjustments (see Note 3 below)   Cost of goods sold (General Ledger Integration - Inventory tab)
Cost recovery amount   Ledger code (Browse on Element Descriptors)
[Note]
  1. Postings are made to the ABC costing variance ledger code before any postings are made to the W/h variance account (Browse on Warehouses).
  2. This account is used if you enter a total receipt value that does not calculate down to an exact unit cost. The remainder is posted to this account.
  3. The code for the cost of goods sold adjustment is used when a receipt is entered where the current quantity on hand is negative and the costing method is based on average costing. The negative value of the stock on hand is not used in the re-averaging of the cost and must, therefore, be posted to the General Ledger system in order to reduce the inventory warehouse value.

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