Defines The GL Account Affected By The Adjustment

Most adjustments affect the general ledger (GL) in some way. The following points describe the source of these GL accounts.

• For normal adjustments (i.e., non-calculated adjustments that affect a single service agreement), there is a single accounting entry generated:
  • One side of the accounting entry is taken from the distribution code on the SA type of the service agreement affected by the adjustment. For example, if you are adjusting the payoff balance on a normal service agreement, the A/R account is constructed from the distribution code on the service agreement's SA type.
  • The other side of the accounting entry is taken from the distribution code on the adjustment's adjustment type. For example, if a late payment charge is created, the "late payment charge" adjustment type references this fee's revenue account.
• For transfer adjustments (i.e., adjustments used to transfer moneys between two service agreements), there are two accounting entries generated - one for the "from" side and one for the "to" side. Each adjustment carries its own set of balanced GL accounting details.
  • For each adjustment, one side of the entry is taken from the distribution code on the SA type of the service agreement affected by the adjustment (just like for normal adjustments).
  • The other sides of both accounting entries have the same GL account. This account should be the intermediate clearing GL account that is to be used for the transfer. The source of this clearing GL account is the distribution code on the adjustment type used to transfer the funds.
• For calculated adjustments (i.e., adjustments where rates may be applied to calculate the adjustment amount), there is a single accounting entry:
  • For each adjustment, one side of the entry is taken from the distribution code on the SA type of the service agreement affected by the adjustment (just like for normal adjustments).
  • The other side of the entry is taken from the distribution codes that resulted from the rate calculation if the adjustment financial transaction algorithm is set up to use the calculation lines as the distribution code source. If the adjustment financial transaction algorithm is set up to use the adjustment type as the distribution code source, the other side of the accounting entry is taken from the distribution code on the adjustment type.