Receipt Accrual Clearing Rules
Define accrual clearing rules to clear accrual balances automatically. Accrual balances are often of unknown origin and unpredictable. With accrual clearing rules you can specify when accrual balances should be cleared and written off.
The Clear Receipt Accrual Balances process scans for applicable rules on the transactions, and clears the balances when rule criteria are met. The following discusses the creation of accrual clearing rules using predefined attributes, and illustrates the results with an example.
Predefined Attributes
The following table describes the attributes that are available in the Accrual Line tree in the Conditions browser:
Attribute Name |
Description |
---|---|
Purchase Order Distribution Identifier |
Purchase order structure is based on the hierarchy of purchase order header > purchase order line > purchase order schedule > purchase order distribution. The accounting for purchase order transaction is at the lowest level of purchase order distribution. The accrual and charge account codes are defined at this level. Invoices are matched and accrual is offset at the PO distribution level. This attribute represents the PO distribution ID on the PO document. |
Percentage Over-Invoiced |
At each purchase order distribution level, receipt accounting tracks the original ordered quantity, total received quantity, and total invoiced quantity. Percentage Over-Invoiced Quantity represents the
condition: |
Percentage Uninvoiced |
At each purchase order distribution level, receipt accounting tracks the original ordered quantity, total received quantity, and total invoiced quantity. Percentage Uninvoiced Quantity represents the condition: |
PO Status |
Status of the purchase order document. If the PO status is Finally closed, then it's treated as Closed. You can define the accrual clearing rules based on the PO Status. |
PO Match Option |
Invoice match option defined on the purchase order schedule. It can be PO or Receipt. |
Invoice Age |
Days or time since the latest invoice was recorded for a purchase order distribution. |
Receipt Age |
Days or time since the latest receipt was recorded for a purchase order distribution. |
Over-Invoiced Quantity |
When the invoiced quantity is greater than the ordered
quantity, it represents the difference between the two: |
Under-Invoiced Quantity |
When the invoiced quantity is less than the ordered
quantity, it represents the difference between the two: |
Percentage PO Accrual Amount |
The balance in the accrual account for a PO distribution
divided by the accrual value for the ordered quantity:
|
Accrual Clear Amount |
Value of balance in an accrual account for a PO distribution. Net of accrual amount credited in Receipt Accounting and that debited in Accounts Payable. To clear debit balance enter a positive number and for credit balance enter a negative number. |
Total Invoice Accrual Amount |
Absolute value of balance (net of invoices and debit memos) in an accrual account in Payables Subledger for a PO distribution. |
Total Receipt Accrual Amount |
Absolute value of balance (net of receipts, corrections and returns) in an accrual account in Receipt Accounting Subledger for a PO distribution. |
PO Distribution Number |
This attribute represents the PO distribution number on the PO document, such as 1, 2, and so on, and is different from the Purchase Order Distribution Identifier. |
Supplier |
Supplier name on the purchase order document. |
Supplier Site |
Supplier site code on the purchase order document. |
Item |
Item on the purchase order line. |
Item Category |
Item category on the purchase order line. |
Accrual Amount Difference |
Difference in accrual amount credited in Receipt Accounting and that debited in Accounts Payable. |
Purchase Order Schedule Identifier |
The identifier of the PO Schedule that uniquely identifies a PO Schedule number of PO. |
Invoice Accrual Amount |
Accrual amount debited on invoice in Accounts Payable for the item price. |
Invoice Nonrecoverable Tax Amount |
Accrual amount debited on invoice in Accounts Payable for the nonrecoverable tax. |
PO Line Number |
Line number on the Purchase Order Line. |
Nonrecoverable Tax Amount Difference |
Difference in the nonrecoverable tax amounts booked in Receipt Accounting and Accounts Payable for a PO Distribution. |
Inventory Organization Code |
Code that uniquely identifies a Inventory Organization. |
PO Total Amount |
Total amount on the Purchase Order. |
PO Number |
Unique identifier for the Purchase Order. |
PO Quantity |
Quantity ordered from the Purchase Order. |
Purchase Basis |
The basis on which the purchase is done. |
Received Accrual Amount |
Amount received for PO distribution. |
Received Nonrecoverable Tax Amount |
Nonrecoverable tax in the amount received for PO distribution. |
PO Shipment Number |
Schedule in purchase order indicating place of delivery. |
Invoice Quantity |
Quantity invoiced for PO Distribution. |
Invoice Recoverable Tax Amount |
Recoverable tax amount on the invoice for a PO distribution. |
Received Quantity |
Quantity received for a PO distribution. |
Received Recoverable Tax Amount |
Recoverable tax amount on the receipt for a PO distribution. |
Procurement Business Unit |
Business unit performing procurement business function. |
Purchase Order - Deliver to Location |
Delivery location on the purchase order schedule indicating place of delivery. |
Profit Center Business Unit |
Indicates the business unit which serves as the profit center. |
PO Destination Type |
Destination type on the PO which can be inventory, expense, manufacturing or drop ship. |
Item Description |
Description of the item on the purchase order line. |
Example
This example illustrates the distributions for a purchase order with associated receipts and invoices.
The following table describes the purchase order details:
PO Header |
Supplier |
Supplier Site |
Status |
---|---|---|---|
PO#1234 |
Advanced Network Devices |
New York |
Open/Close/Final Close |
The following table describes the purchase order lines:
Item |
Item Category |
PO Price |
Ordered Quantity |
---|---|---|---|
AS54888 |
Raw Materials |
100 USD |
100 EA |
The following table describes the purchase order schedules:
Schedule |
Order Quantity |
Match Option |
Status |
---|---|---|---|
1 |
100 EA |
Order or Receipt |
Open |
The following table describes the receipts and invoices:
Receipts |
Ordered Quantity |
Received Quantity |
Invoiced Quantity |
Accrual Account |
Status |
---|---|---|---|---|---|
Receipt 1 |
60 |
58 |
55 |
01-2210 |
Open |
Receipt 2 |
40 |
40 |
45 |
01-2220 |
Open |
The following table describes the purchase order distributions and accrual balances:
PO Distribution |
CMR Accrual Amount (A) |
AP Accrual Account (B) |
Accrual Clear Amount (C) = (A-B) |
Under-Invoiced Quantity |
Over-Invoiced Quantity |
Percentage Under-Invoiced |
Percentage Over-Invoiced |
Percentage PO Accrual Amount (C)/Ordered Quantity*PO Price |
---|---|---|---|---|---|---|---|---|
Distribution 1 |
58*100 USD = 5800 USD |
55*100 USD = 5500 USD |
300 USD |
60 - 55 = 5 |
Not Applicable |
5/58*100 = 8.62% |
Not Applicable |
300 USD/60*100 = 5% |
Distribution 2 |
40*100 USD = 4000 USD |
45*100 USD = 4500 USD |
(500) USD |
Not Applicable |
45-40 = 5 |
Not Applicable |
5/40*100 = 12.50 % |
500 USD/40*100 = 12.50 % |
The following table describes the Rule 1:
Attribute |
Operator |
Value |
Conditions |
---|---|---|---|
PO Status |
= |
OPEN |
And |
Percentage Under-Invoiced |
Less Than |
10% |
Not Applicable |
Results: The PO Status and the Percentage Under-Invoiced values meet the criteria of Rule 1; therefore the accrual balance of 300 USD is automatically cleared.
The following table describes the Accrual Amounts Cleared Based on Rule 1:
PO Distribution |
CMR Accrual Amount (A) |
AP Accrual Account (B) |
Accrual Clear Amount (C) = (A-B) |
Under-Invoiced Quantity |
Over-Invoiced Quantity |
Percentage Under-Invoiced |
Percentage Over-Invoiced |
Percentage PO Accrual Amount (C)/Ordered Quantity*PO Price |
---|---|---|---|---|---|---|---|---|
Distribution 1 |
58*100 USD = 5800 USD |
55*100 USD = 5500 USD |
300 USD |
60 - 55 = 5 |
Not Applicable |
5/58*100 = 8.62% |
Not Applicable |
300 USD/60*100 = 5% |
The following table describes the Rule 2:
Attribute |
Operator |
Value |
Conditions |
---|---|---|---|
PO Status |
= |
OPEN |
And |
Accrual Clear Amount |
Less Than |
Absolute (1000) USD |
Or |
Percentage Under-Invoiced |
Less Than |
10% |
Or |
Percentage Over-Invoiced |
Less Than |
10% |
Not Applicable |
Results: The PO Status, Percentage Under-Invoiced, and Accrual Clear Amount Absolute values meet the criteria of Rule 2; therefore the accrual balances of 300 USD and (500) USD are automatically cleared.
The following table describes the Accrual Amounts Cleared Based on Rule 2:
PO Distribution |
CMR Accrual Amount (A) |
AP Accrual Account (B) |
Accrual Clear Amount (C) = (A-B) |
Under-Invoiced Quantity |
Over-Invoiced Quantity |
Percentage Under-Invoiced |
Percentage Over-Invoiced |
Percentage PO Accrual Amount (C)/Ordered Quantity*PO Price |
---|---|---|---|---|---|---|---|---|
Distribution 1 |
58*100 USD = 5800 USD |
55*100 USD = 5500 USD |
300 USD |
60 - 55 = 5 |
Not Applicable |
5/58*100 = 8.62% |
Not Applicable |
300 USD/60*100 = 5% |
Distribution 2 |
40*100 USD = 4000 USD |
45*100 USD = 4500 USD |
(500) USD |
Not Applicable |
45-40 = 5 |
Not Applicable |
5/40*100 = 12.50 % |
500 USD/40*100 = 12.50 % |