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:
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.
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In the setup manager, search for the Manage Journal Line Rule task.
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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.
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Click on the Advanced Options tab and enter values for these fields:
Field
Values
Balance Type
Encumbrance
Business Flow Class
Accounts payables invoice encumbrance
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Click on Accounting Attributes Assignments and enter values for this field:
Field
Values
Encumbrance Type Identifier
Invoice Encumbrance Type Identifier
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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.
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In the setup manager, search for the Manage Journal Line Rule task.
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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.
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Click on the Advanced Options tab and enter values for these fields:
Field
Values
Balance Type
Encumbrance
Business Flow Class
Accounts payables invoice encumbrance
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Click on Accounting Attributes Assignments and enter values for this field:
Field
Values
Encumbrance Type Identifier
Pay Encumbrance Type Identifier
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Save the changes.
Other Configuration Tasks
After you create the journal lines, complete these tasks:
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Assign the new custom journal line rules created in previous steps to your Journal Entry Rule Set (JERS).
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Assign the custom JERS to your custom accounting method.
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Activate the JERS by submitting this program:
Activate Subledger Journal Entry Rule Set Assignments
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Assign the custom accounting method to the ledger.