Distribution Code Controls Cash Accounting For A GL Account

Whether or not cash accounting is used for a specific GL account is defined on HOLDING GL account's distribution code (i.e., the holding GL account references the true payable account).

It is very important that unique payable and holding distribution codes be used for each type of amount subject to cash accounting rules. For example, for sales tax distribution, a pair of payable and holding accounts is required for each separate distribution amount.

Without unique distribution codes for each payable and holding account, the system cannot keep track of how much of a given amount is being held, awaiting payment.