Understanding Manufacturing AAIs

Each transaction for which the system creates journal entries requires AAIs that instruct the program to post amounts to specific accounts in the general ledger. User-defined AAIs connect manufacturing accounting, the chart of accounts, and financial reporting. You should create AAIs for each unique combination of company, transaction, document type, general ledger class, and cost component.

AAIs use these five keys to retrieve the object account number to use to create general ledger entries for work order transactions:

• Company number.

• Document type of the transaction (except for AAIs 3120 and 3401)

  If no transaction is associated with the activity, for example, in AAI 3120 (Work in Process), the AAI does not specify a document type for the transaction

• General ledger class code.

• Document type.

• Cost component.

To retrieve an AAI, the system searches first for an exact match between company and the general ledger class code. If the system does not find a match, it searches for the default company and the general ledger class code for the item. If it does not find a match, it searches for the company and uses **** (four asterisks) for the general ledger class code.

Each AAI or record type points to a specific object account in the general ledger. Business unit and a subsidiary can also be supplied in the AAI table or supplied by default from other sources.

Manufacturing AAIs are defined at the 3000 level, as illustrated in this table:

AAI	Description
3110 Inventory/Raw Materials	This AAI specifies which balance sheet accounts in the general ledger the system uses when it issues raw materials or parts from inventory to work in process (transaction document type IM). You also use this AAI to issue completed subassemblies from inventory back into work in process. The system uses this AAI when you run the Manufacturing Accounting Journal Entries program (R31802A).
3120 Work in Process	For debit transactions, this AAI increases the value of work in process by issuing raw materials and parts to work orders or rate schedules (document type IM) and recording labor, machine, and overhead costs from the routing (document type IH). For credit transactions, during completion (document type IC), this AAI records the transfer of costs for a work order or a rate schedule from work in process to subassemblies and finished goods inventory. The system uses this AAI when you run the Manufacturing Accounting Journal Entries program.
3130 Sub-Assembly/Finished Goods	This AAI specifies which balance sheet accounts in the general ledger the system uses when it receives subassemblies or finished goods from work in process into inventory (document type IC) or scrap (document type IS). The system uses this AAI when you run the Manufacturing Accounting Journal Entries program (R31802A).
3210 Clear Work in Process	For actual costing, this AAI posts any additional cost of goods sold that were not included when completions were entered. The system uses this AAI when you run the Variance Journal Entries program (R31804).
3220 Labor	Use this AAI when the actual hours are different from the planned hours that are associated with shop floor activities on document type IV. This is applicable to all cost components except A1 and A2. Variances are posted as positive or negative, depending on whether they are favorable or unfavorable. The system uses this AAI when you run the Variance Journal Entries program.
3240 Material	Use this AAI when the actual costs are different from the planned costs for cost components A1 and A2. The variance results from either over-issues or under-issues. Variances are posted as debits or credits, depending on whether they are favorable or unfavorable. The system uses this AAI when you run the Variance Journal Entries program.
3260 Planned	Use this AAI when the planned costs are different from the current costs that are associated with shop floor activities on document type IV. This variance results from either of the items listed: A change to the parts list or the routing. A shrink factor. Variances are posted as positive or negative, depending on whether they are favorable or unfavorable. The system uses this AAI when you run the Variance Journal Entries program.
3270 Engineered	Use this AAI when the current costs are different from the standard (frozen) costs that are associated with shop floor activities on document type IV. This variance results from a change to the standard bill of material or the standard routing. Variances are posted as positive or negative, depending on whether they are favorable or unfavorable. The system uses this AAI when you run the Variance Journal Entries program.
3280 Other	Use this AAI when the completed cost is different from the standard cost that is associated with shop floor activities on document type IV. This variance results when a cost rollup is performed in the middle of the cycle, or it is generated when the quantity completed plus the quantity scrapped does not equal the work or rate schedule quantity. The variance might also be rounding. Variances are posted as positive or negative, depending on whether they are favorable or unfavorable. The system uses this AAI when you run the Variance Journal Entries program.
3401 Accruals	This AAI specifies the profit-and-loss accounts that offset work-in-process labor, machine, and overhead transactions to work orders or rate schedules (document type IH). The system uses this AAI when you run the Manufacturing Accounting Journal Entries program.