57 Set Up Order Line Types

This chapter contains these topics:

• Section 57.1, "Setting Up Order Line Types,"

• Section 57.2, "Working with Variance Flags."

Each purchase order you enter must contain details about the items or services you want to order. For each item or service, you must enter a line of detail information that describes the order, including the quantity and cost of the item or service. The system processes the detail line based on a line type.

57.1 Setting Up Order Line Types

Navigation

From Stock Based Procurement (G43A), enter 29

From Procurement System Setup (G43A41), choose Order Line Types

A line type is a one or two character code that you set up in Order Line Types (P40205) The values you associate with a line type on P40205 control how the system manages information on an order detail line. Each purchase order detail line you enter must have an assigned line type.

The line type you enter for a detail line also determines how the transaction affects other systems, such as:

• General Accounting

• Inventory Management

• Accounts Payable

For example, you might create a line type for stock items, which is often assigned the value 'S'. When you set up the S line type, you usually specify that it affects item availability in the Inventory Management system. You also specify that it affects the General Accounting and Accounts Payable systems. When you assign the S line type to a purchase order detail line, the system knows to:

• Increase the quantity of the item in the Inventory Management system (upon receipt)

• Create ledger entries in the General Accounting system

• Create ledger entries in the Accounts Payable system

The line type for a detail line also determines the cycle through which the system processes the line (based on order activity rules). Other information you can specify for a line type includes whether the detail line is subject to taxes, whether the system applies freight charges and payment terms to the detail line, and so on.

You can also designate the account numbers to which the system writes variance amounts at Voucher Match (P4314).

To set up order line types

On Order Line Types (P40205)

Figure 57-1 Order Line Types screen

Description of "Figure 57-1 Order Line Types screen"

1. Complete the following fields:

   • Ln Ty (Line Type)

   • Description

   • Interface G/L (General Ledger Interface)

   • Interface Inv (Inventory Interface)

   • Interface A/R (Accounts Receivable Interface)

   • Interface A/P (Accounts Payable Interface)

   • Rev Sgn (Reverse Sign)

   • Txt Y/N (Text)

   • Include G/P (Include Sales/COGS for Gross Profit)

   • Include C/D (Include in Cash Discount Calculation)

   • Include T1 (Include in Tax 1)

   • AR (Apply Retainage)

   • AF (Apply Freight)

   • WO (Generate Work Order)

2. Press F4 to access the detail (fold) area.

   Figure 57-2 Order Line Types (Detail) screen

   
   Description of "Figure 57-2 Order Line Types (Detail) screen"
   
   

3. Complete the following fields:

   • G/L Class (General Ledger Class)

   • Jrnl Col (Journal Column)

   • Variance

Field	Explanation
Ln Ty	A code that controls how the system processes lines on a transaction. It controls the systems with which the transaction interfaces (General Ledger, Job Cost, Accounts Payable, Accounts Receivable, and Inventory Management). It also specifies the conditions under which a line prints on reports and is included in calculations. Codes include: S – Stock item J – Job cost N – Non-stock item F – Freight T – Text information M – Miscellaneous charges and credits W – Work order
G/L Interface (Y/N)	A code that indicates whether the system reflects the dollar or unit value of any activity containing this order line type in the general ledger. Valid codes are Y (yes), which is the default, and N (no).
Inventory Interface (Y/N)	A code that identifies the type of interface to the Inventory Management system. Valid codes are: Y – The dollar or unit value of any activity containing this line type will be reflected in inventory. The system also edits the item you enter to ensure that it is a valid item. Y is the default. A – The number entered will be recognized as a G/L account number. This code is used in purchasing only. B – The system edits when using format 4 in purchase order entry. The system retrieves price data from the inventory tables, but does not update to the quantity on the purchase order. This code is valid only when the G/L Interface field is Y (yes). Budget checking is fully functional with this interface type. D – The item in this line is an inventory item that will not affect availability or quantities. N – This item is not an inventory item.
A/R Interface (Y/N)	Code that indicates whether the system will reflect the dollar or unit value of any activity containing this order line type in Accounts Receivable. Valid codes are Y (yes), which is the default, and N (no). This field is for future use only.
A/P Interface (Y/N)	A code that indicates whether the system reflects the dollar or unit value of any activity containing this order line type in accounts payable. Valid codes are Y (yes), which is the default, and N (no). When this value is set to No, the Procurement system will not create a voucher for the line type. At Voucher Match (P4314 or P470412) the system assigns a voucher number of zero and refrains from creating G/L entries, regardless of the G/L Interface setting. This allows you to receive items to inventory without the need for creating a voucher. If you set this flag to N, you can use the Evaluated Receipts process (P43800) to complete the voucher process for these order line types.
Rev Sgn	A code that indicates whether the system reverses the sign of the quantity in the line. This code is used to allow easy entry of credit memos. Valid codes are: Y – Yes N – No. This is the default
Txt	A code that indicates whether this line contains only memo information. Valid codes are: Y – Yes N – No, which is the default
Include Sales/COGS for Gross Profit	A code indicating that the system includes sales and cost of goods sold in gross profit calculations. Valid codes are Y (yes) and N (no, which is the default).
Include in Cash Discount Calculation	A code indicating whether the system includes the extended dollar amount of the transaction in the cash discount or payment terms discount calculation. Valid codes are Y (yes) and N (no). N is the default.
Include in Tax 1	A code that indicates whether the monetary value of this order line is subject to applicable taxes and which taxes to apply. Valid values are: Y – Yes, the line is subject to applicable taxes. N – No, the line is not subject to applicable taxes. 3-8 – Yes, the line is subject to applicable taxes at the rate indicated by the group number (3-8). The system uses group numbers for VAT (value added tax).
Apply Retainage - Y/N	A code that indicates whether the system includes the item's values in the calculation of an accounts payable retainage. Use this field only if the interface between the Purchasing system and Accounts Payable system is active. Valid codes are: Y – Include the item's values in the accounts payable retainage calculation. N – Do not include the item's values in the accounts payable retainage calculation. If you leave this field blank, the system automatically enters N.
Apply Freight - Y/N	A code indicating whether the system should perform freight calculations during processing. Valid codes are: Y – yes, perform calculations N – no, do not perform calculations If you leave this field blank, the system automatically enters Y.
Generate Work order	A code indicating whether the system automatically generates an internal work order for this line. Valid codes are Y (yes) and N (no, which is the default).
G/L Class	A user defined code that identifies the G/L offset to use when the system is searching for the account to which it will post the transaction. If you do not want to specify a class code, you can enter **** (four asterisks) in this field. The table of Automatic Accounting Instructions (AAIs) allows you to predefine classes of automatic offset accounts for the Inventory, Purchase, and Sales Order Management systems. G/L categories might be assigned as follows: IN20 Direct Ship Orders IN60 Transfer Orders IN80 Stock Sales The system can generate accounting entries based upon a single transaction. As an example, a single sale of a stock item can trigger the generation of accounting entries similar to these: Sales-Stock (Debit) xxxxx.xx A/R Stock Sales (Credit) xxxxx.xx Posting Category: IN80 Stock Inventory (Debit) xxxxx.xx Stock COGS (Credit) xxxxx.xx Although this field is four characters, the system uses only the last two characters of the Category and the last character of the Document Type to find the AAI.
Jrnl Col	The Sales Journal report has four columns. The value in this field controls which of the four columns receives the sales value, if any, of this line. Allowed codes are 1, 2, 3, and 4.
Variance	Code that tells the system to which account it should book a variance. Valid codes are: Y – Tells the system that a variance generated during voucher match should be booked to the variance account. N – Indicates to the system that it should book any variance back to the expense account for the order line. Note: This field is used in conjunction with an inventory interface of A or B in the Purchasing system only.

See Also:

• Section 58.1, "Setting Up Order Activity Rules."

57.2 Working with Variance Flags

You can use variance flags for non-stock purchase orders. In Order Line Types (P40205), the Record Variance field (PDC4) determines which account the system records a variance to at the time of Voucher Match (P4314). This field is located in the detail area, and is used in conjunction with an inventory interface of A or B only. This variance will take place when doing a 3-way match. Valid values for the field are:

• Y - A variance generated during voucher match will be booked to the variance account

• N - A variance generated during voucher match will be booked to the expense account on the detail line of the order.

Note:

There will always be an account number on a purchase order detail line that has an inventory interface of A or B. If an account is not entered on the detail line, the account number field is automatically populated by the account in the 4315 AAI.

57.2.1 Example 1

The variance field in the fold of the line type is set to N.

• Enter a non-stock purchase order for $1000.

• Receive the entire amount in Enter Receipts (P4312).

• Match the order in Voucher Match (P4314) for $990 and close the remaining balance by putting a 7 in the option field.

This creates a $10 variance.

Transaction	AAI or Account	Debit	Credit
Receipt	Account number on the purchase order	$1,000
	AAI 4320		$1,000
Voucher Match	AAI 4320	$1,000
	Account number on the purchase order		$10
	PC AAI		$990

The $990 credited to Accounts Payable Trade (PC AAI) is not created at Voucher Match; instead, it's created when you run the Post program (P09800) over the batch created at Voucher Match.

57.2.2 Example 2

The variance field in the fold of the line type is set to Y.

• Enter a non-stock purchase order for $1000.

• Receive the entire amount in Enter Receipts (P4312).

• Match the order in Voucher Match (P4314) for $990 and close the remaining balance by putting a 7 in the option field.

This creates a $10 variance.

Transaction	AAI or Account	Debit	Credit
Receipt	Account number on the purchase order	$1,000
	AAI 4320		$1,000
Voucher Match	AAI 4320	$1,000
	AAI 4330		$10
	PC AAI		$990

The Exchange Rate Variance (EXVR) flag, which is valid when currency is activated in your system, works the same way as the standard variance flag, that is, when you set the flag to No, exchange rate variances that occur between Enter Receipts (P4312) and Voucher Match (P4314) are booked to the expense account on the order detail line. When you set the flag to Yes, these variances are booked to the appropriate account number in AAI 4340 (Exchange Rate Variance account).

Note:

If there is a variance when doing a 2-way match, the Record Variance field is not used since journal entries are only written at time of voucher.