This chapter contains these topics:
Journal entries are not created the same way for all batch types. There are different kinds of relationships between debits and credits for a journal entry, depending on the transaction type that is being processed. For instance, when a journal entry is entered by the user, it is the user who defines the debit and credit side of the transaction. For other transactions, one part of the transaction, or the whole transaction, may be defined automatically by the system using the automatic accounting instructions (AAIs) that apply to the transaction type. For example, in voucher entry, the user defines the expense account, but the remaining part of the transaction is automatically created by the system when the entry is posted. For a purchase receipt, the whole accounting transaction is created automatically by the system when the purchase order item is received.
Correspondence methods identify different ways that journal entries balance debit and credit accounts. Depending on the batch type or document type, each document conforms to one of the accounting types listed in the following table.
| Correspondence Method Code | Description | Batch Types |
|---|---|---|
| 01 | Direct correspondence between two following lines: In this case, the first line corresponds with the second line, the third with the fourth, and so on.
This is the case for some fixed asset transactions such as depreciation documents (DP). |
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| 02 | Direct correspondence between the debit line and a credit line: In this case, the debit line has a credit line for the same amount, but it is not necessarily the next one.
This is the case for some inventory management transactions. |
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| 03 | Correspondence between one debit- several credits or several debits-one credit. In this case, the correspondence amount shall be defined by the lowest.
If a document is defined with method 03 and it has several credits and several debits, it shall be processed first by method 02. Then with the remaining G/L entries that were not matched with method 02, it will process by method 04. |
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| 04 | Correspondence between several debits-several credits. In this case, the correspondence amount could be defined as a percentage. | |
| 05 | Vouchers / Invoices - primary account is AAI for Trade account/netting account. Pay item used to build the pairs by Pay Item. | V, I, W voucher side |
| 06 | Payments. If the payment is not voided and there are no gain / loss records, then the bank account becomes the primary account. If there are gain / loss records, then two different pairs are built: one with the bank account as primary account and PC AAI as contra-account and the other one with the PC AAI as the primary account and the gain/loss account as contra -account.
When the payment is voided, the original correspondence pairs are voided. |
K, M, W payment side |
| 10 | First line of transaction is the primary account when sequenced by journal entry line number. The universe to build the pairs is the whole transaction. | G, D, F/A, Inventory |
| 11 | First line of transaction is the primary account when sequenced by journal entry line number. The universe to build the pairs is asset id. So, there will be as many primary account and contra-accounts as asset Ids are in the same transaction. | F/A |
| 12 | First line of transaction is the primary account when sequenced by journal entry line number. The universe to build the pairs is item description (GLEXR). So, there will be as many primary account and contra-accounts as different GLEXR are in the same transaction. | Inventory |
| 20 | Last line of transaction is the primary account when sequenced by journal entry line number. The universe to build the pairs is the whole transaction. | G, D, F/A, Inventory |
| 21 | Last line of transaction is the primary account when sequenced by journal entry line number. The universe to build the pairs is asset id. So, there will be as many primary account and contra-accounts as asset Ids are in the same transaction. | F/A |
| 22 | Last line of transaction is the primary account when sequenced by journal entry line number. The universe to build the pairs is item description (GLEXR). So, there will be as many primary account and contra-accounts as different GLEXR are in the same transaction. | Inventory |
The system uses the correspondence method to find all debit/credit account pairs for each transaction document and check if it is a valid correspondence rule. When editing correspondence, the system looks for the method of the document type being processed. If nothing is defined for that document type, then the method for the corresponding batch type is used. If there is no method defined for either the document type or the batch type, the system generates an error and the batch in error will not be posted.
The system uses the correspondence method to create the correspondence detail transaction file (F74R0911).
If intercompany entries exist in the same transaction, the intercompany account becomes the primary account and the other accounts become the contra-accounts. It overrides any method defined for that batch type.