Setting Up Invoice Encumbrance Accounting

Configure SLA rules to create the invoice encumbrance and its corresponding liquidation entries during payment accounting.

If you have a custom subledger accounting method and journal entry rule set for invoices and payments, you can add the new rules directly. Otherwise you will need to copy the predefined users subledger accounting method and journal entry rule set and then add the new rules.

To create invoice encumbrance accounting, perform these tasks:

Note: Only journal lines required for the normal invoice and payment accounting are shown here. You can create similar journal lines for accounting events for other invoice types such as a credit memo and debit memo, as required.

Create Journal Line Rules for Invoice Encumbrance

Create a new journal line rule that creates encumbrance accounting entries for an invoice.

1. In the setup manager, search for the Manage Journal Line Rule task.

2. Click on the Create icon and enter values for these fields:

   

   Field	Values
   Name	Enter a name for the journal line rule
   Short Name	Enter a short name for the journal line rule
   Description	For example, Invoice-Encumbrance
   Event Class	Invoices
   Side	Debit
   Accounting Class	For example, Accounts Payables
   Conditions	Based on your business requirements. For example, Encumbrance Accounting = Y And Self-Assessed Tax Indicator != Yes And Invoice Distribution Type != Recoverable tax

   Click Validate to validate the condition.

3. Click on the Advanced Options tab and enter values for these fields:

   

   Field	Values
   Balance Type	Encumbrance
   Business Flow Class	Accounts payables invoice encumbrance

4. Click on Accounting Attributes Assignments and enter values for this field:

   

   Field	Values
   Encumbrance Type Identifier	Invoice Encumbrance Type Identifier

5. Save the changes.

Create Custom Journal Line Rules for Liquidation of Invoice Encumbrance

Create a new custom journal line rule that will liquidate the invoice encumbrance accounting entries for an invoice when the payment is accounted. You can make this journal line rule applicable to the payment based on the conditions you configure for the rule.

1. In the setup manager, search for the Manage Journal Line Rule task.

2. Click on the Create icon and enter values for these fields:

   

   Field	Values
   Name	Enter a name for the journal line rule
   Short Name	Enter a short name for the journal line rule.
   Description	For example, Invoice-Encumbrance Liquidation
   Event Class	Payments
   Side	Credit
   Accounting Class	Per your requirement. For example, Accounts Payables
   Conditions	Based on your business requirements. For example, Encumbrance Accounting Option = Y And Invoice Distribution Type!= Recoverable tax

   Click Validate to validate the condition.

3. Click on the Advanced Options tab and enter values for these fields:

   

   Field	Values
   Balance Type	Encumbrance
   Business Flow Class	Accounts payables invoice encumbrance

4. Click on Accounting Attributes Assignments and enter values for this field:

   

   Field	Values
   Encumbrance Type Identifier	Pay Encumbrance Type Identifier

5. Save the changes.

Other Configuration Tasks

After you create the journal lines, complete these tasks:

1. Assign the new custom journal line rules created in previous steps to your Journal Entry Rule Set (JERS).

2. Assign the custom JERS to your custom accounting method.

3. Activate the JERS by submitting this program:

   Activate Subledger Journal Entry Rule Set Assignments

4. Assign the custom accounting method to the ledger.