18 Creating and Invoicing Cash Calls for Joint Venture Partners (Release 9.2 Update)

This chapter discusses:

18.1 Understanding Cash Calls

Cash calls are requests for funds from the managing partner of a joint venture to the partners of the joint venture. The funds ensure that the managing partner can manage the joint venture's cash flow for the expenses associated with the joint venture. When the expenses are distributed to the partners, the amounts are drawn from their specific cash call until it is depleted. The managing partner will request new cash calls from the partners as often as needed or as stipulated in the Joint Operating Agreement. Information about each cash call is available to the partners in their Joint Venture Billing report, which can be provided by the managing partner whenever needed.

The managing partner will handle the management of the cash calls including invoicing the partner for the amount requested, drawing on the cash call, transferring cash call balances to other cash calls as requested by the partner, and closing cash calls and refunding amounts agreed upon by the partners.

18.2 Defining Cash Calls

You use the Cash Call Definition program (P09J40) to define the terms of the cash calls. At a minimum, you must include the partner to collect the cash from, the amount to be collected, the joint venture associated with the cash call, and the effective date of the cash call. To define a cash call for a specific purpose within the joint venture, you can add additional terms, such as the project and business unit that the cash will be used for, the accounts associated with the type of expenses for which the cash will be used, and so on.

Later in the process, when you draw on the cash calls, the system uses the joint venture business unit hierarchy to determine which cash calls to draw from. As in the case of DOI and overhead rules assignments, the system assigns the cash calls to the distributed expenses starting with the most specific (business unit) to the least specific (joint venture and partner).

Exclusive Cash Call

You can use a cash call exclusively for a project or business unit within a joint venture. For example, when you define a cash call specific to a project and you make the cash call exclusive, the system will use only this cash call to draw cash for the project and all its business units defined in the joint venture hierarchy. The system will not use other cash calls defined in the hierarchy even when cash is depleted from this cash call. Also, the system will not draw on this cash call for other projects even after the project is complete and there is cash remaining in the cash call.

The system saves the cash call definition records in the Cash Call Definition table (F09J40).

System Flexibility when Defining Multiple Cash Calls

The P09J40 program provides you the flexibility to add multiple cash call records in succession without leaving the form. Also, you can set up the program to populate common information when you define cash calls in succession. You can apply the same setup to ease data entry when you add new cash calls and when you transfer amounts from an existing cash call to a new cash call.

Figure 18-1 Creation of Cash Call Definition Records

Description of Figure 18-1 follows
Description of ''Figure 18-1 Creation of Cash Call Definition Records''

18.2.1 Prerequisites

Before you complete the tasks in this section:

  • Set up the processing options for the P09J40 program.

    On the Display tab, set up the following processing options:

    • Joint Venture Name: Specify whether to retain the joint venture name entered in the previous cash call definition record when you add a new cash call or transfer to a new cash call. If you leave this processing option blank, the system does not retain the joint venture name.

    • Partner: Specify whether to retain the partner entered in the previous cash call definition record when you add a new cash call or transfer to a new cash call. If you leave this processing option blank, the system does not retain the partner.

    • Effective Date: Specify whether to retain the partner entered in the previous cash call definition record when you add a new cash call. If you leave this processing option blank, the system does not retain the effective date.

    • Project Number: Specify whether to retain the project number entered in the previous cash call definition record when you add a new cash call or transfer to a new cash call. If you leave this processing option blank, the system does not retain the project number.

    • Business Unit: Specify whether to retain the business unit entered in the previous cash call definition record when you add a new cash call or transfer to a new cash call. If you leave this processing option blank, the system does not retain the business unit.

    • Account Group Name: Specify whether to retain the account group entered in the previous cash call definition record when you add a new cash call or transfer to a new cash call. If you leave this processing option blank, the system does not retain the account group.

    On the Defaults tab, set up the following processing options:

    • Canceled Transfer Request Cash Call Status: Specify a cash call status to use on the From Cash Call when you cancel a transfer request. The valid statuses for this process are: 40 (Available to Draw), 80 (On Hold), or any user-defined status.

    • Canceled Closure Request Cash Call Status: Specify a cash call status to use on the cash call when you cancel a closure request. The valid statuses for this process are: 40 (Available to Draw), 80 (On Hold), or any user-defined status.

    On the Versions tab, specify the versions that you want to use for these programs: Review Cash Call Ledger (P09J41), Create JV Cash Call Invoices (R09J610), Create JV Cash Call JEs for Transfer and Close (R09J630), and Create JV Cash Call Vouchers (R09J640).

    The system will launch the specified versions when you access the programs from the Row menu on the Work with Cash Call Definition form.

    If you do not specify a version for the P09J41 program, the system uses the ZJDE0001 version.

    If you do not specify the versions for the R09J610, R09J630, and R09J640 programs, the system uses the XJDE0001 version.

  • Set up account groups in the Account Groups program (P09J53) if you are using account groups in your cash call definition. The P09J53 program enables you to create groups of accounts that are to be included or excluded.

    See Chapter 11, "Setting Up Account Groups (Release 9.2 Update)".

18.2.2 Creating a Cash Call Definition Record

To create a cash call definition record:

  1. From the Joint Venture Management module (G09J), select Periodic Processing, Manage Cash Calls, and then select Cash Call Definition.

  2. On the Work with Cash Call Definition form, click Add.

  3. On the Add Cash Call Definition form, enter values in these fields:

    • Joint Venture Name

    • Outside Partner or Insider Business Unit

      This is the partner to whom the cash call will be issued.

  4. Optionally, enter values in the following fields:

    • Effective Date

      This is the date the system will use to select the expense distribution details to be drawn from the cash call based on the service/tax date of the expense transactions. Effective Date is required to set the cash call to the status Available to Invoice.

    • Project Number

      This is the project that this call cash will be used for. The project business unit that you enter must be associated to the joint venture. If you have not entered a value in the Joint Venture Name field, the system populates the joint venture that is associated with this project.

    • Business Unit

      This is the business unit that this call cash will be used for. The business unit that you enter must be associated to the joint venture. If you have not entered a value in the Joint Venture Name field, the system populates the joint venture that is associated with this business unit.

    • Account Group Name

      This is the account group that includes the accounts associated with the type of expenses that can be drawn from the cash call.

    • Description

      This is the alphanumeric value that describes the cash call definition.

    • Amount

      This is the cash call amount that will be issued to the partner. The amount is in the currency of the managing company for the joint venture. An amount is required to set the cash call to the status Available to Invoice.

    • Status

      The status of the cash call is In Progress when you add a new cash call. You can change this status to Available to Invoice after you complete defining the cash call and are ready to create the invoice. Also, you can change this status to On Hold if you want to hold off performing any activities for the cash call.

  5. To make the cash call exclusive to the partner, project, business unit, and accounts that you have entered, select the Exclusive check box. This check box is enabled only when the cash call is defined by Project or Business Unit.

    The system displays a confirmation window stating that the cash call will be exclusively used for the project, business unit, and account group within the joint venture and other cash calls in the joint venture hierarchy will not be used.

  6. To save this cash call definition record and to add another record, click Save and Add New. The system saves the record and retains the values of the previous record in the fields of the Add Cash Call Definition form based on your processing options setup.

    To save the cash call definition record and to continue entering values to the rest of the fields, click Save and Continue. The system saves the record without closing the form, and you can complete the fields.

    To save the cash call definition record and to close the form, click Save and Close.

    Note:

    When you save a cash call definition record, the system generates a cash call ID to uniquely identify the cash call, and also populates the amount that you have entered as the open amount available to draw.

18.3 Invoicing the Partners for Their Cash Calls

After you have defined the cash calls, you request the cash from the partners by creating invoices of the cash call amount using the Create JV Cash Call Invoices program (R09J610). You can access and run this batch process for a specific cash call using the Submit Invoice option on the Row menu of the Work with Cash Call Definition form. You can also run this process for multiple cash calls through the standard Batch Versions form by using the data selection for the program to select the records to process.

The system processes only those selected records that are at the status Available to Invoice, and creates an invoice for each cash call record included in the R09J610 process. In order to set a cash call to the status Available to Invoice, the cash call amount and effective date are required.

After the invoices are created, the system updates the status of the cash calls in the F09J40 table to the default value of 30 (Invoiced) or to the status that is set up in the Cash Call Status processing option. The system also creates records in the Cash Call Ledger table (F09J41) with the transaction type 10 (Cash Call Invoice). You can access the ledger record for the cash call invoice by clicking Review Ledger on the Row menu of the Work with Cash Call Definition form.

After the invoices are created, the system updates the status of the cash calls to 30 (Invoiced) in the F09J40 table, and creates records in the Cash Call Ledger table (F09J41) with the transaction type 10 (Cash Call Invoice). You can access the ledger record for the cash call invoice by clicking Review Ledger on the Row menu of the Work with Cash Call Definition form.

Figure 18-2 Creation of A/R Invoices for Cash Calls

Description of Figure 18-2 follows
Description of ''Figure 18-2 Creation of A/R Invoices for Cash Calls''

Debit and Credit Entries for Cash Call Invoices in the F0911 Table

The cash call amount is credited to the partner contribution account and debited to the accounts receivable (A/R) trade account.

The system determines the partner contribution account for the invoice transaction using the managing company and AAI JVCxxx (Partner Contributions) where xxx is the G/L offset code assigned to the joint venture. If you have specified a G/L offset code in the Joint Venture Master program (P09J30), the system concatenates the G/L offset code to the AAI Item JVC to locate the account. If the account is not found using the managing company, the system uses the company 00000. Also, if you have set up the Joint Venture Master program (P09J30) to create cash calls by subledger, the system uses the subledger type A (Address Book) to add the subledger detail to the partner contribution account. The outsider partner address book number is used as the subledger value, and if the partner is an insider business unit, the address book number associated with the business unit is used as the subledger value.

The systems creates an invoice document for each cash call and an a batch for each managing company. The invoice documents are created with the batch type JI (Joint Venture Invoices).

Example: G/L Accounting Entries when a Joint Venture Cash Call Invoice Transaction is Created for a New Cash Call

A cash call for a partner and joint venture is created and is set to the cash call status Available to Invoice.

Joint venture: A-GREENACREHOLDINGS

Partner: 7500010 (Thomson Company)

Cash call amount: 150,000.00 USD

An invoice is created for the cash call in order to collect the cash. The invoice uses the Partner Contributions account and the A/R Trade account.

This diagram illustrates the G/L entries for the cash call invoice.

Figure 18-3 Joint Venture Cash Call Invoice Transactions

Description of Figure 18-3 follows
Description of ''Figure 18-3 Joint Venture Cash Call Invoice Transactions''

The system prints a report listing the number of invoice documents created and issues a message if there are cash calls in error. You can review the error in the work center, correct the issue, and rerun the process.

The system prints a report listing the number of invoice documents created and the batch numbers generated during the process. The report also includes a message if there are cash calls in error. You can review the error in the work center, correct the issue, and rerun the process.

Invoice Currency

When the currency of the partner and the managing company are different, the invoice is created in the currency of the managing company for the domestic side of the transaction and in the partner's currency for the foreign side of the transaction.

Override Tax Information in Customer Master Record

The R09J610 program does not calculate tax on the invoice amount even if the customer master record for the partner is set up with tax information in the Customer Master by Line of Business (F03012).

Payment Terms for Cash Call Invoices

The payment terms, if specified on the legal entity record for the partner, will be used on the cash call invoice instead of the payment terms on the partner's Customer Master record.

18.3.1 Prerequisites

Before you complete the tasks in this section:

  • Set the cash call status for the selected cash call records to Available to Invoice in the Cash Call Definition program (P09J40).

  • Set up the processing options for the Create JV Cash Call Invoices program (R09J610).

    • On the Process tab, enter values for the following processing options:

      • Cash Call Status: Specify the cash call status to be used after the cash call invoice is created. If you leave this processing option blank, the system uses the cash call status 30 (Invoiced).

      • G/L Date: Specify the G/L date to assign to the journal entries created for the invoice. If you do not enter a date, the system date is used.

      • Invoice Date: Specify the date to assign to the invoice during invoice creation. If you do not enter a date, the system date is used.

      • Batch Approval: Specify whether to set the batch as approved or apply the status specified in the accounts receivable constants. If you leave this processing option blank, the system applies the status specified in the accounts receivable constants.

    • On the Versions tab, specify the versions that you want to use for these programs: Invoice Entry MBF (P03B0011), Journal Entry MBF (P0900049), and General Ledger Post (R09801). If you do not specify a version for the P03B0011 and P0900049 programs, the system uses ZJDE0001 as the default versions.

      Note:

      You can define a specific invoice document type in the processing option of the Invoice Entry MBF program (P03B0011) to identify the invoices for cash calls.

      When you specify a version of the R09801 program in the processing option, the system automatically runs the R09801 program after creating the invoice batch and posts the invoice batch. The system submits the R09801 program for each batch that is created. A batch is created for each managing company that is included in the selected cash call records.

  • Set up data selection for the R09J610 program if you are running the program from the Batch Versions form. In the data selection, you can include the joint ventures for which you want to create cash call invoices.

  • Enter a value to the G/L Offset Code field and select the Cash Call by Subledger check box in the P09J30 program as required.

    See Section 4.2.2, "Entering Joint Venture Master Records".

18.3.2 Running the Create JV Cash Call Invoices Program (R09J610)

To run the program interactively for a specific cash call:

  • Access the Cash Call Definition program (P09J40). On the Work with Cash Call Definition form, select the cash call for which you want to create the invoice and select Submit Invoice from the Row menu.

  • On the confirmation window that displays, revise the following fields as required:

    • G/L Date

    • Cash Call Status

    • Invoice Date

      The system populates these fields with the values from the processing options, but you can override the values.

  • Click Submit to proceed.

To run the program for multiple cash calls:

  • From the Joint Venture Management module (G09J), select Periodic Processing, Manage Cash Calls, and then select Create JV Cash Call Invoices.

18.4 Voiding Cash Calls and Cash Call Invoices

You might need to void a cash call and the invoice for the cash call when you no longer need the cash call and you will not invoice the cash call again. For example, you have created a cash call definition for a partner, created the cash call invoice, and sent the invoice to the partner, but the partner is unable to pay. When you void a cash call, the system closes the cash call and deletes the cash call invoice if the invoice is not posted. If the invoice is posted, the system closes the cash call and voids the cash call invoice leaving an audit trail in the Cash Call Ledger table (F09J41) and the Customer Ledger table (F03B11).

You cannot void a cash call in these situations:

  • You have already requested the cash call to be transferred to another cash call.

  • Another cash call is getting transferred to this cash call.

  • You have already requested the cash call to be closed and the amount refunded to the partner.

  • Expenses have been drawn against the cash call.

    To void a cash call that has been drawn against, you will need to reverse or void the transactions that have drawn on the cash call.

You have the option to simultaneously void the cash call and invoice, or void just the invoice without affecting the cash call.

You will void only the invoice when the cash call needs to be invoiced again. For example, you have created an invoice, sent the invoice to the partner, and then you realized that the amount in the invoice is incorrect. You void the invoice, correct the amount, and invoice the cash call using the revised amount.

18.4.1 Voiding a Cash Call and the Invoice for the Cash Call

To void a cash call and the invoice associated with the cash call:

  1. On the Work with Cash Call Definition form, select the cash call definition record that you want to void, and click Void Cash Call from the Row menu.

    The system displays an error if the cash call cannot be voided. For example, cash calls that are at Pending Transfer or Pending Closure status cannot be voided.

  2. On the Void Cash Call window, enter values in the following fields as required:

    • Void G/L Date

    • Invoice Revision Code

      The value that you enter in this field will identify the reason for voiding the cash call invoice. This value must exist in the Reason Code UDC table (03B/RC).

    • Void Reason Code

      The value that you enter in this field will identify a user-defined reason for voiding the cash call. This value must exist in the Cash Call Closed Reason Code UDC table (09J/RC).

  3. Click Void.

  4. On the Work with Cash Call Definition form, review the updates to the cash call definition record that you have voided.

    The system updates these values for the cash call: Cash Call Status = 99 (Closed), Open Amount = 0, and the Cash Call Close Date field is populated with the date you voided the cash call.

  5. To view the updates to the cash call invoice, select Review Ledger from the Row menu. The system displays the Review Cash Call ledger form.

    If the invoice is not posted, the system deletes the invoice. The invoice information is no longer available in the grid.

    If the invoice is posted, the system voids the invoice and updates these values for the invoice in the cash call ledger: Cash Call Void Code = 1 (Ledger Voided) and the Void Date field is populated with the date you voided the cash call.

18.4.2 Voiding a Cash Call Invoice

Note:

You can specify the cash call status to be used on the cash call when you void or delete an invoice from the Cash Call Ledger by setting a processing option for the P09J41 program. If you do not specify the cash call status in the processing option, the system uses the default value of Available to Invoice (20).

To void a cash call invoice without affecting the cash call:

  1. On the Work with Cash Call Definition form, select the cash call definition record for which you want to void the invoice, and click Review Ledger from the Row menu.

  2. On the Review Cash Call Ledger form, review the invoice that you want to void and select Void/Delete Invoice from the Row menu.

    The system displays an error if the cash call cannot be voided. For example, cash calls that are at Pending Transfer or Pending Closure status cannot be voided.

  3. On the Void/Delete Invoice window, enter or update the values in the following fields as required:

    • Void G/L Date

    • Invoice Revision Code

      The value that you enter in this field will identify the reason for voiding the cash call invoice. This value must exist in the Reason Code UDC table (03B/RC).

    • Cash Call Status

      The system populates the cash call status that you have set in the processing option for the P09J41 program, but you can override this default value.

  4. Click Void/Delete.

    If the invoice is not posted, the system deletes the invoice. The invoice information is no longer available in the grid of the Review Cash Call ledger form.

    If the invoice is posted, the system voids the invoice and updates these values for the invoice in the cash call ledger: Cash Call Transaction Type = 05 (Cash Call Invoice - Voided), Cash Call Void Code = 1 (Ledger Voided), and the Void Date field is populated with the date you voided the invoice.

    The system updates the status of the cash call (associated with the invoice) to the status that you have specified in the processing option for the P09J41 program or on the Void/Delete Invoice window.

    Note:

    When you void only the invoice, the information related to the cash call does not change because the cash call is not affected.