Understanding OpenItem Accounting

OpenItem accounting enables you to efficiently define, control, and maintain open accounts until all transactions for an OpenItem cause it to reach a zero balance. You can set up many types of OpenItem accounts on the Account page in the ChartField Values component (GL_ACCOUNT). Common examples of OpenItem accounts are employee advances, suspense accounts, and interunit accounts. Once an OpenItem account is established, you can keep track of the PeopleSoft Payables transactions that are posted to this account using the Open Item Update page.

OpenItem Accounting Terms

The following terms are used with OpenItem accounting:

Term	Definition
OpenItem Account	Specifies the account that requires OpenItem accounting, such as Employee Advances, CFO Suspense, and Due From/Due To Subsidiary. You set up OpenItem accounts on the Account page in the ChartField Values component.
OpenItem Key	Determines the identifying or search key for open items in an OpenItem account. For an Employee Advances account, the OpenItem key field would typically be the Employee ID or Social Security Number. This means that any voucher distribution that posts to the Employee Advances account would also carry an employee ID or social security number. This search key is required by the system and enables the association of multiple vouchers with the open item.
OpenItem	Each transaction that affects an OpenItem account remains an open item until all transactions for a given OpenItem key add up to 0. For example, the first open item in the Employee Advances account is normally the issuance of an advance. Vouchers entered against the initial advance become open items also, until a final voucher brings the balance for a particular employee ID to 0, at which point all open items for the employee ID are closed.
Closed Item	Transactions for an OpenItem key become closed items when the total for the OpenItem key is 0. Note: The PeopleSoft Payables system does not automatically mark the OpenItem as closed in the distribution line table once the OpenItem balance reaches zero. However, you can manually change the status on the OpenItem transaction from Open to Closed on the Open Item Update page.

OpenItem Accounting Setup and Processing

To use OpenItem accounting:

1. Set up an OpenItem account on the Account page in the ChartField Values component.

   For example, you could set up an employee advance account as an OpenItem account, using the Employee ID field (EMPLID) from the PERSONAL_DATA table as the open item key.

   See Account Page.

2. Create an advance voucher.

   On the distribution line, enter the employee ID (the open item key value) in the OpenItem field. In our example, we'll enter a voucher for an advance in the amount of 1000 EUR.

   See Entering OpenItem Transactions on Vouchers.

3. Post the advance voucher and journal-generate it.

   Here are the accounting entries for an advance in the amount of 1000 EUR.

   Account	Debit	Credit
   Emp Adv	1000.00
   APA		1000.00

4. (Optional) View the OpenItem account using the Open Item Update page.

   In our example, one line for the advance voucher, in the amount of 1000 EUR, appears.

   You can also view the OpenItem account in PeopleSoft General Ledger using the Open Items - Review Status Online page.

   See Open Item Update Page.

   See PeopleSoft General Ledger: Review Open Item Status Page.

5. Run the Pay Cycle process or create a manual payment to pay the advance:

   Account	Debit	Credit
   APA	1000.00
   CASH		1000.00

6. Enter a voucher for an expense against the advance.

   Again, enter the employee ID in the OpenItem field on the distribution line for the open item account.

   In this example, an expense of 1100 EUR is entered and schedules a payment of 100 EUR.

   See Entering OpenItem Transactions on Vouchers.

7. Post the voucher and journal-generate it.

   Here are the accounting entries for the expense voucher:

   Account	Debit	Credit
   Emp Adv		1000.00
   EXP	1100.00
   APA		100.00

8. Create a payment for any remaining expense amount.

   In this case, a payment of 100 EUR is created.

   Account	Debit	Credit
   APA	100.00
   CASH		100.00

9. View the OpenItem account balance using the Open Item Update page.

   In our example, the OpenItem balance is zero, as the expense entry has balanced out the advance entry, and the OpenItem is closed in PeopleSoft Payables.

10. Run the PS/GL Open Item Reconciliation process (GLPPOITM) or perform open item reconciliation manually in PeopleSoft General Ledger to reconcile and close open items in the general ledger.

    The PeopleSoft Payables system does not automatically mark the OpenItem as closed in the distribution line table once the OpenItem balance reaches zero. Since OpenItem accounting is ultimately a general ledger function, no automatic processing is done in PeopleSoft Payables. However, you can manually change the status on the OpenItem transaction from Open to Closed on the Open Item Update page.

    Note:

    OpenItem transactions are passed to PeopleSoft General Ledger when they are journal-generated, and can be viewed on the OpenItems - Review Status Online page. However, PeopleSoft General Ledger updates the status of OpenItems independently of PeopleSoft Payables. PeopleSoft Payables reconciles open items by open item key reference and account, while the PS/GL Reconciliation process in PeopleSoft General Ledger reconciles by account. An OpenItem that is balanced and closed in PeopleSoft Payables can, therefore, remain open in PeopleSoft General Ledger if OpenItem transactions for another open item key reference on the account remain open. Likewise, an OpenItem that is closed in PeopleSoft General Ledger does not automatically update the OpenItem as closed in PeopleSoft Payables.