Understanding How to Review and Correct Draft Accounting Entries

Draft Accounting Entry Creation

For drafts, all the accounting entries are created when you run the Receivables Update process. You cannot create them online. The draft type determines how the accounting entries are created.

The system creates accounting entries for each event in the draft life cycle even though it may not be an event that you initiate online. For example, it creates accounting entries at the draft due date. The next time that you run the Receivables Update process after the due date, the system creates accounting entries.

The draft process uses the PeopleSoft Receivables core architecture for pending groups. For example, after you indicate that a draft was accepted by the customer, the Receivables Update process creates a group of pending items with the group type D and creates the accounting entries that are associated with the DM-01 (pay item) system function.

When you accept a draft, the Receivables Update process reduces the balance of open items and creates an accounting entry that debits the receivable account and credits drafts receivable. For subsequent draft events, it does not change the balance of the item; it simply creates the appropriate accounting entries for the draft event and changes the draft status.

Interunit Accounting Entries

The system also creates interunit accounting entries when the PeopleSoft Receivables business units of the draft payment and the item are associated with different general ledger business units. The entries are the same as payments on the payment worksheet, except that the process debits the Draft Receivables account instead of the Cash account.

Error Correction

The Receivables Update process edits for ChartField combination errors if you enabled ChartField combination editing on the Receivables Options - General 2 page for the business unit. You cannot post the accounting entries until you fix the error if you selected Recycle in the ChartField Editing group box. You can edit the receivables (AR) lines for these types of new items that do not reference existing items:

• Prepay an Item (DM-02)

• Place an Amount on Account (DM-03)

• Adjust Remaining Overpayment (DM-04)

• Adjust Remaining Underpayment (DM-05)

• Create a Deduction (DM-06)

• Write-off an Overpayment (DM-08)

• Write-off an Underpayment (DM-09)

You can also edit entries in the user-defined line for these transactions:

• Write-off an Item (DM-07)

• Write-off an Overpayment (DM-08)

• Write-off an Underpayment (DM-09)

For all other draft transactions perform these steps:

1. Delete the entries using the Draft Error Correction component (MAINT_DST_CORR2).

2. Modify the combination edit rules so the combination is valid or perform one of these steps as appropriate

   • Modify the ChartField combination on the External Account page for the bank account if the error is on the Cash or Cash Control line.

   • Modify the ChartField combination on the Distribution Code page if the error is on a line generated from one of the distribution codes.

3. Rerun the Receivables Update process.

Use the Draft Error Correction component to correct any other errors that were discovered by the Receivables Update process. When you save the Draft Error Correction page, the system runs the combination edit again, and the error detail appears on the ChartField Comb Error tab in the Distribution Lines grid. The draft error correction pages are accessible only if the system detects any pending items that are in error.

Use the Accounting Entries page to review accounting entries created for drafts during the Receivables Update process.