Understanding Financials

Financials management involves creating and managing entities such as expense codes, distribution codes, cost centers, cost categories, tax rate schedules, accounting calendars, and so on.

Financial Transactions (FTs) are created for a variety of situations, but is most generally associated with the purchase or use of resources, such as the time cost of using labor, the invoicing or receipt of materials, and so on. There is always some system transaction record that drives the creation of the FT, which is referred to as the Creating Sibling record. The system also captures that sibling record on the FT. Each FT belongs to a single accounting period which must be open at the time of creation and is related to a particular currency.

Each FT consists of two or more balanced financial transaction general ledger (FT GL) lines (at least one debit and one credit). This information can be sent to your organization's general ledger. On the FT GL record, the system can capture an associated Project, Cost Center, and Expense Code, as applicable. Each transaction is booked to a particular GL Account code using a distribution code and its associated GL Account Detail. The distribution code specifies how the GL Account string is to be constructed using the GL Construction Algorithm. The Financial Master Configuration specifies which distribution code to use for particular scenarios.

Please refer to the Financials section in the Business User Guide for a conceptual overview of financial functionality.

Master Configuration

Ensure that you create master configuration settings in Financial Master Configuration.