11 Correct Company Imbalances

This chapter contains these topics:

11.1 Correcting Company Imbalances

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From General Accounting (G09), choose Integrity Reports and Updates

From Integrity Reports and Updates (G0922), choose Companies in Balance

All transactions within each company should be in balance, (that is, they should net to zero). You should run the Companies in Balance report to review each company's balance.

JD Edwards World recommends you run this report as often as possible. If you use automatic intercompany settlements, run the Companies in Balance report and then run the Intercompany Accounts in Balance report immediately thereafter to be sure intercompany accounts are in balance.

After you run the report and correct any discrepancies, you can prevent future out-of-balance conditions by:

  • Placing security on the Batch Header Revisions form and general accounting constants to prevent improper changes

  • Assigning responsibility for correcting out-of-balance conditions to one user

  • Submitting posts to only one, single-threaded job queue

  • Running this report and then the Intercompany Accounts in Balance report

11.2 Running the Report

The Companies in Balance report uses information from the Account Balances table (F0902) to summarize each company's balance condition.

This is a DREAM Writer report.

The following graphic illustrates a company's balance condition.

Figure 11-1 Example of a Company's Balance Condition

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Description of "Figure 11-1 Example of a Company's Balance Condition"

The report provides the following amounts:

Amount Explanation
Prior Year The balance forward amount for the current year (updated during annual close).
YTD (Year to Date) The amount at the beginning of the fiscal year through the current period.
PACO (Post After Cut Off) The amount beyond the current period into the next fiscal year.

If any companies are out-of-balance, the summarized amounts are in the columns. The system accumulates a total difference amount for all companies for each of the three columns. When companies are in balance, the columns are blank.

The Intercompany Settlements field in the general accounting constants controls the automatic generation of intercompany entries. You can set this field to create an offsetting entry that brings your companies back into balance.

Figure 11-2 Companies in Balance report

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Description of "Figure 11-2 Companies in Balance report"

11.2.1 What You Should Know About

The report contains the following abbreviated column heading:

  • PACO - Post After Cut Off

11.3 Locating Out-of-Balance Conditions

After reviewing the Companies in Balance report, choose any of the following methods to locate out-of-balance conditions:

  • Run any of the following reports:

    • Intercompany Accounts in Balance

    • Batch to Detail and Post Out of Balance

    • Company by Batch Out of Balance

    • Account Balance to Transactions

    • Repost Account Ledger

  • Select batches or batch types to review on General Journal Review.

  • Run one of the reports listed above to determine which periods are out-of-balance in each company. Select the fifth level of detail for a summarized report.

  • Run the Repost Account Ledger program in proof mode.

11.4 Correcting Discrepancies

After running the Companies in Balance integrity report, you should correct any discrepancies that the system detects. Some typical discrepancies, causes, and possible resolutions follow, along with an example from the report.

Example 1: YTD and PACO total are out of balance by opposite amounts for the same company

Discrepancy Reason / Resolution
YTD and PACO totals Reasons:

  • Company contains an incorrect date pattern for a leap year or 4-4-5 accounting.

  • Posting by batch method. This creates the AE entry on the last day of the period. All other methods create the AE with the same date as the original entry.

  • Changes were made to period ending dates after posting to that period and the Repost Account Ledger was run. This moves half the entry to a different period.

Resolutions:

  • Void the document and post. Change the date pattern for the new period ending dates and re-enter the document. Run the Repost Account Ledger program. A balanced entry is moved between periods and the periods remain in balance.

  • Create one-sided journal entries to balance each period and then post.

Figure 11-3 Discrepancy Example 1

Description of Figure 11-3 follows
Description of "Figure 11-3 Discrepancy Example 1 "

This error is usually caused by a leap year. 2016 is used here because it is a leap year. The company's date pattern begins 1 - 01 - 16 and each period ends the last day of the month, as follows:

Period 01 ends 1/31/16

Period 02 ends 2/28/16

Period 03 ends 3/31/16

.....

Period 12 ends 12/31/16

When you enter a voucher for 146,700, the system creates the following journal entries:

G/L Date Doc Type Amount Period

2/29/16 PV 146,700 03

3/31/16 AE -146,700 03

The 146,700 PV document is in period 03 because of the date pattern. The -146,700 AE document is posted with a G/L date of 3/31/16, the last day of the period when posting by the batch method.

Example 2: Company is out of balance in YTD

Discrepancy Reason / Resolution
YTD is out of balance Reasons:

  • The batch was posted out of balance.

  • The Account Balances table contains erroneous data and does not equal the transactions in the Account Ledger table.

Resolutions:

  • If an out-of-balance condition exists, run the Batch to Detail and Out of Balance report to locate out-of-balance postings.

  • If the Account Balances table contains erroneous data and does not equal the transactions in the Account Ledger table, run the Repost Account Ledger program in proof mode. Enter a balancing journal entry. Run the Repost Account Ledger program with the processing options set to update the Account Balances table. The Account Balance table will match the total of posted Account Ledger records.

Figure 11-4 Discrepancy Example 2

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Description of "Figure 11-4 Discrepancy Example 2"

Example 3: Two companies are out of balance by the same amount in the YTD column

Discrepancy Reason / Resolution
Two companies are out of balance Reason:

  • The intercompany settlements were not set up properly and, therefore, were not created for some batches during posting.

Resolutions:

  • Run the Intercompany Accounts in Balance report to locate any imbalances.

  • Use the Trial Balance by Object form or report to determine the period in which the out-of-balance condition occurs.

  • Create a balancing intercompany journal entry and set the batch header to post out of balance so that intercompany settlements are not created.

Figure 11-5 Discrepancy Example 3

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Description of "Figure 11-5 Discrepancy Example 3"

11.4.1 What You Should Know About

Topic Description
Research tools To locate the cause of this error, do any the following:

  • Research and correct the automatic accounting instructions that control intercompany settlements.

  • Restrict the intercompany accounts to automatic journal entries (posting edit code of M).

  • Verify that the intercompany settlements option in the general accounting constants is activated.

Example 4: Prior year total for a company is out-of-balance

Discrepancy Reason / Resolution
Prior year out-of-balance Reasons:

  • The prior year entries were made without closing the year to update the retained earnings account.

  • An abnormal entry with a document type ## might have been posted to a prior year without reclosing the year.

Resolutions:

  • You can close the year for the out-of-balance company and the correct fiscal year. Rerun this integrity report.

  • You can post a prior period journal entry which updates the balance forward, but does not recalculate retained earnings. If the prior year entry is a reclassification between a balance sheet and an income statement, close the year to recalculate retained earnings.

  • You can check the AAI item GLG4 (retained earnings) for accuracy.

Figure 11-6 Discrepancy Example 4

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Description of "Figure 11-6 Discrepancy Example 4"

See Also: