Accounting Rules

You set up accounting rules to automatically generate accounting entries for source documents. For example, the following Procure-to-Pay source documents can use accounting rules to automatically generate accounting entries:

Purchase order receipts
Supplier invoices
Supplier payments

In an accounting rule, you specify the object for the source document (for example, Receiving Document), the transaction (for example, Purchase Order Receipt), the subtransaction (for example, Goods), and the line type in the source document. You also use some fields in accounting rules to specify the GL accounts for the accounting entries. Each transaction must have an accounting rule for its debit and an accounting rule for its credit.

When a source document is processed, for example, when goods are received into inventory, the data associated with the lines in the source document is automatically reviewed to determine the verified accounting rule that applies to each line. Then an accounting entry is automatically generated for the lines of the source document. The field values in the accounting entry are automatically populated with amounts from the source document and with values from the accounting rule.

Origin of Amounts for Accounting Entry Lines

For each source document, the following table shows how the absence or presence of accounting rules and how the Amount Reference field for accounting rules determine the amounts for the generated accounting entry lines. You manually enter the amounts for source documents that are journal entries, so the journal entry source document is omitted from the table.

Origin of Amounts for Accounting Entry Lines
Source Document	If an accounting rule is absent, then the amount comes from:	If an accounting rule is present, and if the accounting rule has a value in the Amount Reference field, then the amount comes from:	If an accounting rule is present, and if the accounting rule has no value in the Amount Reference field, then the amount comes from:
Bank Transaction	The Amount field for the bank transaction.	The Amount Reference field for the accounting rule.	The Amount field for the bank transaction.
Customer Invoice (Not an allowance line)	The Extended Price field for the customer invoice line.	The Amount Reference field for the accounting rule.	The Extended Price field for the customer invoice line.
Customer Invoice (An allowance line)	The Allowance Amount field for the Allowance Applied object associated with the customer invoice line.	The Amount Reference field for the accounting rule.	The Allowance Amount field for the Allowance Applied object associated with the customer invoice line.
Customer Receipt	The Amount field for the customer receipt line.	The Amount Reference field for the accounting rule.	The Amount field for the customer receipt line.
Fixed Asset Adjustment	The Amount field for the fixed asset adjustment.	The Amount Reference field for the accounting rule.	The Amount field for the fixed asset adjustment.
Fixed Asset Depreciation	The Depreciation Amount field for the fixed asset depreciation.	The Amount Reference field for the accounting rule.	The Depreciation Amount field for the fixed asset depreciation.
Inventory Change (Line type has a value)	The following calculation: the active standard cost, which originates from code, times the Quantity field for the inventory transaction.	The Amount Reference field for the accounting rule.	If the Type field for the inventory transaction is Activate Proposed Costs, then the amount comes from the following calculation: the Standard Cost field for the inventory transaction times the Quantity field for the inventory transaction. If a composite cost applies, then the amount comes from the following calculation: CostRecord.get (costComponentFieldName), which originates from code, times the Quantity field for the inventory transaction. If a composite cost does not apply, then the amount comes from the following calculation: the active standard cost, which originates from code, times the Quantity field for the inventory transaction.
Inventory Change (Line type has no value)	The following calculation: itemcostrecord.get (cost component), which originates from code, times the Quantity field for the inventory transaction.	The Amount Reference field for the accounting rule.	The following calculation: itemcostrecord.get (cost component), which originates from code, times the Quantity field for the inventory transaction
Intercompany Invoice	The Extended Amount field for the invoice line.	The Amount Reference field for the accounting rule.	The Extended Amount field for the invoice line.
Intercompany Payment	The Amount field for the payment line.	The Amount Reference field for the accounting rule.	The Amount field for the payment line.
Receiving Document	The Purchase Price field for the receipt line.	The Amount Reference field for the accounting rule.	The Purchase Price field for the receipt line.
Supplier Invoice	The following calculation: the Invoice Unit Price field for the supplier invoice line times the Invoice Quantity field for the supplier invoice line.	The Amount Reference field for the accounting rule.	If the transaction for the supplier invoice is a supplier credit memo, then the amount comes from the following calculation: the Invoice Unit Price field for the supplier invoice line times the Invoice Quantity field for the supplier invoice line. If the item for the supplier invoice line is a miscellaneous item or expense item, and if the purchase order line for the supplier invoice line has a value, then the amount comes from the following calculation: the Unit Price field for the purchase order line associated with the supplier invoice line times the Invoice Quantity field for the supplier invoice line. If the item for the supplier invoice line is a miscellaneous item or expense item, and if the purchase order line for the supplier invoice line has no value, then the amount comes from the following calculation: the Invoice Unit Price field for the supplier invoice line times the Invoice Quantity field for the supplier invoice line.
Supplier Payment	The Amount field for the supplier payment line.	The Amount Reference field for the accounting rule.	The Amount field for the supplier payment line.

Accounting Rule Field Descriptions

The following table lists the fields that Kenandy provides. Your system administrator selects the fields that are displayed on your user interface.

Accounting Rule Page
Field	Description
Accounting Standard	The accounting standard for the accounting rule.
Accounting Rule	The auto-generated ID for the accounting rule.
Allocation	The allocation field on the accounting rule maps to the Allowance Class field on the allowance. You use this field only in accounting rules with an Object field value of Customer Invoice because the allowance applied record is a sub-line for the customer invoice line. Allocations are discounts or charges on customer invoices. Out-of-the-box options for this field are Freight and Discount, but you can create more values as needed. In the generated accounting entry, the GL account for the accounting rule is associated with the amount of the allocation.
Allocation Type	An indication of whether the allocation is applied at the invoice level or invoice line level. You use this field only in accounting rules with an Object field value of Customer Invoice because the allowance applied record is a sub-line for the customer invoice line. Select Header if the amount of the allocation applies to the entire customer invoice, and select Line if the amount of the allocation applies to each line of the customer invoice.
Amount Reference	The field name of a custom field applicable to the accounting rule. If you enter a custom field in this field, then in the generated accounting entry, the GL account for the accounting rule is associated with the amount in this custom field. For example, if you have a custom field for the labor costs (Labor), the material costs (Material), and the overhead costs (Overhead)applicable to manufactured inventory, then you can set up an accounting rule with Labor in the Amount Reference field, an accounting rule with Material in the Amount Reference field, and an accounting rule with Overhead in the Amount Reference field. In the generated accounting entry, the GL account for each accounting rule is associated with the amount for each custom field.
Autonumber	An auto-generated ID that identifies the accounting rule.
Company	The company for the accounting rule.
Company Identifier	A unique identifier that specifies the company during the data loading process.
Company Ledger	An indication of whether the accounting rule applies to the company ledger. The company ledger is a ledger for the legal entity accounts in the functional currency of the company.
Consolidation Ledger	An indication of whether the accounting rule applies to consolidated ledger. The consolidation ledger is included in the consolidated financials of the top-level parent company, and is used only for consolidation purposes.
Default GL Account	An indication of whether the general ledger account in the GL Account field applies to the accounting rule. If this general ledger account does not apply to the accounting rule, then the general ledger account specified in the GL Account Reference Value field applies to the accounting rule.
Default Intercompany	An indication of whether the company in the Intercompany field applies to the accounting rule. If this company does not apply to the accounting rule, then the company specified in the Intercompany Reference Value field applies to the accounting rule.
Effective End Date	The date and time that the accounting rule is last in effect.
Effective Start Date	The date and time that the accounting rule is first in effect.
Expected Sign	No processing is associated with this field. This read-only field always has a value of Positive. The processing for accounting rules changes a debit amount to a credit amount and changes a credit amount to a debit amount when the sign for the amount on the source document is negative.
FX Date Path	The schema path to the source document for the accounting rule. The transaction date of the source document is used to perform a foreign currency exchange. This field is not currently used.
FX Flow	The flow of money for foreign exchange consideration. Options include In and Out. If this field value is Out, monetary, non-cash accounts might be exposed to foreign exchange fluctuations. This field is not currently used.
GL Account	The general ledger account for the accounting rule.
GL Account Identifier	A unique identifier that specifies the general ledger account during the data loading process.
GL Account Reference Value	A reference for a dynamic general ledger account. This field value consists of a data combination for the object of the accounting rule and a corresponding general ledger account. The data combination determines the specific general ledger account for the accounting rule. If this field value is blank, the value in Default GL Account field determines the GL account for the accounting rule. For example, the following field value indicates that the product, item, and class (or data combination) associated with the source document determine the specific inventory GL account for the accounting rule: Product_r.Item_r.class_r.Inventory_GL_Account_c If you select a value in the Allocation field, then you must include the customer invoice line in this field value. For example, the following field value indicates that the customer invoice line, product, item, and class (or data combination) associated with a customer invoice determine the specific inventory GL account for the accounting rule: Customer_Invoice_Line_r.Product_r.Item_r.class_r.Inventory_GL_Account_c If you select a value in the Allocation field, and if you set up a custom segment, such as item, department, or facility, with a reference value field, then you must include the customer invoice line in the reference value field for the custom segment. For example, if you set up an item custom segment, then the following field value in the reference value field for the custom segment indicates that the customer invoice line and product (or data combination) associated with a customer invoice determine the value in the item custom segment for the accounting rule: Customer_Invoice_Line_r.Product_r.Item_c
Intercompany	The company for the accounting rule. This field applies to intercompany transactions.
Intercompany Reference Value	A reference for a dynamic company. This field applier to intercompany transactions. This field value consists of a data combination for the object of the accounting rule and a corresponding company. The data combination determines the specific company for the accounting rule. If this field value is blank, the value in Default Intercompany field determines the company for the accounting rule. For example, the following field value indicates that the invoice (or data combination) associated with the source document determines the specific to-company for the accounting rule: Invoice__r.To_Company__c
Line Type	The line type for the accounting rule.
Object	The object for the source document associated with the accounting rule.
Object Name	The name of the object for the source document associated with the accounting rule.
Raise Exceptions for Blank Amounts	An indication of whether to generate exceptions for accounting entry lines with no amounts. If you clear this checkbox, blank amounts are assumed to be 0.
Role	The role for the accounting rule. This field applies to intercompany transactions. Options include: Investor, Investee, Payor, and Payee.
Rule Type	The type of accounting rule. Options include CR (Credit), DR (Debit) and NA (Not Applicable).
Statutory Ledger	An indication of whether the accounting rule applies to the statutory ledger. The statutory ledger is a ledger for local financial and government reporting.
Subsidiary Ledger	An indication of whether the accounting rule applies to the subsidiary ledger. The subsidiary ledger is included in the consolidated financials of the direct parent company in its local country, and is not used for top-level consolidation purposes.
SubTransaction Type	The subtransaction type for the accounting rule. The values that are available for selection depend on the value that you select in the Transaction field of the accounting rule. The accounting rule creates an accounting entry when the subtransaction type in the lines of the source document matches this subtransaction type and when other data in the source document, such as the transaction type, matches the corresponding field value in the accounting rule.
Suppress Zero-Amount Lines	An indication of whether to not create accounting entry lines when the line amounts are 0.
Transaction	The transaction type for the accounting rule. The values that are available for selection depend on the value you select in the Object field of the accounting rule. The accounting rule creates an accounting entry when the transaction type in the header of the source document matches this transaction type and when other data in the source document, such as the subtransaction type, matches the corresponding field value in the accounting rule.
Unique Key	A key that identifies the accounting rule. This field value consists of some field values in the account rule, and uses the following format: Company Reference\|Object Name\|Transaction\|SubTransaction Type\|Line Type\|Rule Type\|Amount Reference\|Effective Start Date

Accounting Rules

See Also