SLA Customization to Override Accounting created by Auto Accounting

SLA Customization to Override Accounting created by Auto Accounting

Review the setup for replacing the accounting generated by Auto Accounting using Sub ledger Accounting (SLA) in R12.

In Release 11i Auto Accounting controlled all the derivation of code combinations.  Based on what you setup in Auto Accounting, the accounting code combinations were derived from limited sources like transaction type, customer site or a fixed value.  There was no flexibility to source accounting combinations from any other source.  For example if you had an invoice with two lines, Auto Accounting would always give the same account for both the transaction lines, unless they were for different items.

In Release 12, for the same case we can replace the accounting derived by Auto Accounting for one of the revenue lines with a different value.

We will use the following examples to understand the flexibility provided by SLA:

1. Replace the accounting code combination for negative revenue lines with a fixed code combination.
2. Replace the accounting code combination for freight lines based on the value entered in Transaction Information Descriptive Flexfield (DFF).
3. Replace the Cost Center on the Accounting Code Combination for Exchange Gain / Loss Account based on the Receivable Account on Transaction Type or Cash Account on Remittance Bank.

Solution:

Pre Work
Before customizing the subledger definition, ensure that new Subledger Accounting Method, Application Accounting Definition and Journal Line Definitions are created.  It is best to copy the seeded definitions given by Oracle.   Ensure that the Accounting Chart of Accounts is given in each of the three definitions.

Steps:

1. Create a new Sub-ledger Accounting Method.
2. Create a new Application Accounting Definition by copying the existing one for Receivables.
3. Create a new Journal Line Definitions by copying the seeded one.  Provide the chart of accounts name in the Accounting Field.
4. Attach the new Journal Line Definitions to the Application Accounting Definition and remove the seeded value.
5. End date the existing Application Accounting Definition assigned to the Subledger Accounting Method and attach the new Application Accounting Definition.
6. Assign the new Subledger Accounting Method to the Ledger.

 

 

Example 1:  Replace the Accounting Segments for Negative Revenue Lines

• Assumption: All negative revenue lines on an invoice represent discounts.

Business Case:

• When booking sales orders, discounts may be provided to customers.
• Discounts can be accounted by setting Order Management (OM) System Options.
• When the sales order is interfaced, there will be a positive revenue line for the item and a negative revenue line for the discount.
• Since both lines refer to the same item, Auto Accounting will derive the same account for both lines.
• To book the discount line to a different account, we must use SLA to modify the Account Derivation Rule.

Steps:

1. Create two new Journal Line Types by copying the seeded Journal Line Type INV_REV:
   1. One for invoice REV lines with amount < 0 (we are assuming that this is a discount line).
   2. One for all other types of invoice REV lines with amount >= 0.
2. Add the Journal Line Types to the Journal Line Definition created in the Pre-work.
3. Create a new Account Derivation Rule.
4. Associate the new Account Derivation rule the Journal Line type for negative revenue lines.
5. Attach the new Journal Line Types to the Journal Line Definition
6. Validate the Application Accounting Definition.
7. Test the new setup
   1. Create a transaction with a negative revenue line and a positive revenue line.
   2. Run Create Accounting for this transaction (Tools -> Create Accounting).
   3. View Accounting (Tools -> View Accounting -> View Journal).

Result:

We have successfully replaced the Accounting Segment 01-000-4110-0000-000 with 01-000-7825-0000-000 using a modified Accounting Derivation Rule in Subledger Accounting.

Invoice Revenue Account on Transaction Distributions: 01-000-4110-0000-000
Invoice Revenue Account on the Accounting in SLA: 01-000-7825-0000-000 (for the line where the amount < 0 or Debit Account)