43 Accounting in Procurement Doc ID 625497.1

2/20/2015 Document 625497.1

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E1: 43: Accounting in Procurement (Doc ID 625497.1)

In this Document

PurposeDetails Overview DMAAI Setup Stock Purchase Order 3Way Match NonStock Purchase Order 2Way Match NonStock Purchase Order 3Way Match Variances DMAAI 4330 DMAAI 4332 DMAAI 4340 DMAAI 4335 DMAAI 4312 PC Accounts Payable Financial AAI Frequently Asked Questions

Question 1: How can a variance recorded at the time of voucher match time be directed to the account onthe purchase order line rather than to the variance account set up in Distribution AAIs?

Question 2: Why does the general ledger post, R09801, end in error with the work center error referencingAAI 4340 when a voucher batch is submitted to post?

Question 3: How is the cost variance for line type J handled?References

APPLIES TO:

JD Edwards EnterpriseOne Procurement and Subcontract Management Version XE and laterInformation in this document applies to any platform.

PURPOSE

Information Center: Overview of JD Edwards EnterpriseOne Procurement and Subcontract Product >Information Center: Using JD Edwards EnterpriseOne Procurement and Subcontract Product > Doc id625497.1

An overview of the primary table created/updated and the journal entries created during the purchasing processes,and the DMAAIs that control the journal entries.

DETAILS

Overview

Distribution and Manufacturing Automatic Accounting Instructions (DMAAIs) determine which accounts are used whentransactions are created by EnterpriseOne programs. This document outlines the tables that are created and updated.

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The DMAAIs used to write journal entries during the purchasing process are outlined.

DMAAI Setup

DMAAIs for Distribution are stored in Distribution/Manufacturing AAI Values (F4095), and are set up on anydistribution setup menu. The fast path is DMAAI.

A DMAAI is a unique combination of:

• Company Number • Document Type • G/L Class code

If the DMAAI for a specific combination is not found, the system will use Company 00000 and G/L Class Code **** asdefaults. The document type must match. For example, for a particular document type, the system performs theDMAAI searches as follows:

Company 00100, G/L Class Code of IN30

1. Searches for Company 00100, G/L Class code IN30.2. If not found, then searches for Company 00100, G/L Class code ****.3. If not found, then searches for Company 00000, G/L Class code IN30.4. If not found, then searches for Company 00000, G/L Class code ****.5. If not found, then gives error message.

The steps for determining the GL Offset in the Purchase Order detail is as follows:

User enters the GL Offset.

1. For any Inventory Interface OTHER than N, A, or B, the Item Location GL Category Code is selected (F41021).If this is blank, the next check will be the F4101.If the F4101 is blank, the F40205 will be used.

2. For an A Inventory Interface, the Line Type will be used. This is because J Line Types do not interface withitem information.

3. For a B Inventory Interface, the Stocking Type will determine where the GL Offset will come from. If StockingType is a N, the GL Offset will come from the Line Type (F40205). For any other stocking type, the GL Offsetwill come from the Item Location file (F41021).

4. For an N Inventory Interface, the system will first look at the "Edit Item Master for NonStock Item" option inthe Line Type constants setup. If the option is set, the system will go to the Item Master (F4101) to fetch theGL Offset. If the option is not set, the system will use the Line Type (F40205) to fetch the GL Offset.

Note: Inventory Interface drives which GL Offset is pulled into the purchase order detail. Stockingtype will not control the default.

Stock Purchase Order 3Way Match

Enter Purchase Order (P4310) off menu G43A11

At Purchase Order Entry (P4310), records in the following files are created / updated:

• F4301 P.O. Header record is created. • F4311 P.O. Detail record is created. • F43199 – Purchasing Ledger record is created, only if Order Activity Rules have “Y” in Ledger field forspecific order type and line type.• F41021 – Item Location File is created / updated.

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No Journal Entries are crated at the time of Purchase Order Entry.

Ex: Enter a purchase order for a stock Item for quantity 10 and cost 50.

Enter Receipt by Purchase Order (P4312) off menu G43A11

At Purchase Order Receipt, the following tables are created / updated:

• F4311 P.O. Detail record is updated.

The Next Status codes are set to the Outgoing Status for Closing in Processing Option 5 on the Defaults tab.

The received and open quantity and amount fields updated. • F43121 P.O. Receiver File is created.

Match Type 1 record created to show that the transaction has been received. • F4111 Item Ledger File (Cardex) is created.

An OV (receipt record) document type is created in the Cardex(F4111). • F0911 Account Ledger (OV document type) is created. • F41021 Item Location File has two fields that are updated: On Hand Quantity and On P.O. Field • F4105 – Item Cost File – Lastin, Average, Purchase • F41051 Item Cost Work File if Update Average Cost OnLine is not checked in the System Constants.

The following journal entries are created:Driven by Debit CreditDMAAI 4310 Inventory

DMAAI 4320 Received NotVouchered

If full receipt is done the records should debit the Inventory and credit the received Not Vouchered.

The journal entriesDriven by Debit Credit

Inventory 500

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DMAAI 4310

DMAAI4320Received NotVouchered

500

These are journal entries in a PDF file after “O” batch type has been posted.

Match Voucher to Open Receipt (P0411/ P4314) off menu G43A15

At Match Voucher to Open Receipt, records in the following tables are updated / created: • F0411 Accounts Payable Ledger (PV document type) is created. • F0911 Account Ledger (PV document type) is created. • F4105 if Variance• F4111 if Variance• F43121 Purchase Order Receiver File • Match Type 2 record is created indicates that the transaction has been vouchered through the purchasing system. • Match Type 1 record is updated from open to paid (for amount vouchered). • F4311 P.O. Detail record is created for any new line added at Voucher Match.

The system debits Received Not Vouchered and credits A/P Trade.

The following journal entries are created:Driven by Debit Credit

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DMAAI 4320 RNV PCAAI A/P Trade Account

Ex. Match voucher to open receipt (P0411/P4314)

At this point, system assigns a PV document number and a “V” batch number.

The PC AAI is the Accounts Payable Trade Account. PC AAI is a financials AAI in table F0012. The G/L Class code isassigned at the Supplier Master Information (P04012), if at all, since PC____ is valid.

NonStock Purchase Order 2Way Match

1. Enter Purchase Order (P4310) off menu G43B11

At Purchase Order Entry (P4310), records in the following tables are created / updated:

• F4301 P.O. Header record is created. • F4311 P.O. Detail record is created. • F43199 – Purchasing Ledger record is created, only if Order Activity Rules have “Y” in Ledger field.

Note: Same tables as for stock orders with the exception of the F41021 table. No Journal Entries are made at time ofPurchase Order Entry.

2. Receive and Voucher P.O. (P0411/ P4314) off menu G43B11

At Receipt and Voucher P.O., the following tables are created/ updated:

• F0411 Accounts Payable Ledger (PV document type) is created. • F0911 Account Ledger (PV document type) is created. • F4311 P.O. Detail record is updated. • The Next Status codes are set to 999 to close the line. • The received and open quantity and amount fields updated. • F43121 P.O. Receiver File is created. • Match Type 2 record is created to show that the transaction has been vouchered through the purchasingsystem. • F4311 P.O. Detail record is created for any lines added at Voucher Match.

DMAAI 4315 or the account number from detail line will be used for creating journal entries when receiving a nonstock item.

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DMAAI 4315 or account number

on line

NonStock AAI orAccount Number

PC AAI A/P Trade Account

If an account number is not entered on the purchase order in a detail line, which has inventory interface A or B, thisfield should automatically be populated by the account in the AAI 4315

Ex: No account number is entered on the detail line 4315 DMAAI setup to take the 30.1469 account number.

Receive and Voucher PO

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Journal Entries

NonStock Purchase Order 3Way Match

1. Enter Purchase Order (P4310) off menu G43B11

At Purchase Order Entry (P4310), records in the following tables are created / updated:

• F4301 P.O. Header record is created. • F4311 P.O. Detail record is created. • F43199 – Purchasing Ledger record is created, only if Order Activity Rules have “Y” in Ledger field.

No Journal Entries are made at time of Purchase Order Entry.

2. Enter Receipt by Purchase Order (P4312) off menu G43B11

At Purchase Order Receipt, the following tables are created/ updated:

• F4311 P.O. Detail record is updated. • The Next Status codes are set to the Outgoing Status for Closing in Processing Option 5 on the Defaultstab. • The received and open quantity and amount fields updated. • F43121 P.O. Receiver File is created. • Match Type 1 record created to show that the transaction has been received.

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• F0911 Account Ledger (OV document type) is created.

Note: The same tables are updated for nonstock orders as for stock orders with the exception of the F4111, F41021and F4105.


DMAAI 4315 NonStock

Inventory AccountNumber

DMAAI 4320 RNV

Ex: 4320 DMAAI setup to take the 30.4112 account number

4315 DMAAI setup to take the 30.1469 account number

Journal Entries

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3. Match Voucher to Open Receipt (P0411/ P4314) off menu G43B11

At Match Voucher to Open Receipt, the following files are created / updated:

• F0411 Accounts Payable Ledger (PV document type) is created. • F0911 Account Ledger (PV document type) is created. • F43121 P.O. Receiver File • Match Type 2 record is created indicates that the transaction has been vouchered through the purchasingsystem. • Match Type 1 record is changes from open to paid (for amount vouchered). • F4311 P.O. Detail record is created for any lines added at Voucher Match.

The following journal entries are created:

Driven by Debit Credit

DMAAI 4320 RNV

PC AAI A/P Trade Account

Journal entries created after voucher match

Variances

Variances can appear when a supplier will send an invoice that reflects a different dollar amount per item than the

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dollar amount received. This difference is written to a Purchase Price Variance account, driven by different AAI’s,depending on the circumstance. Under line type setupP40205, the Voucher Match Variance Account option affects which variance account generatedfrom voucher match to hit.

• If this option is checked, it indicates that a variance that is generated during voucher match will be bookedto the variance account.• If this option is not checked, any variance will be booked back to the expense account for the order detailline.

DMAAI 4330

DMAAI 4330 is invoked by the Voucher Match program. This is invoked if vouchering a different amount than whatwas received.

For line type "S" (Inventory Interface = Y), and for line type "N" (Inventory Interface = N), the 4330 AAI account willbe hit every time there is a variance in the amount regardless if the "Voucher match variance" is check or unchecked.

The Voucher Match Variance Account flag is only considered when using a line type with Inventory Interface = A or B.

For Inventory Interface = A or B, if the flag is on, the variance will be recorded in the 4330 AAI account, while if it isunchecked it will be recorded in the expense account specified in the purchase order.

Example 1: If changing amount to Voucher from 1200 to 1300 with all quantity on hand, the difference of 100should be written to the 4330 DMAAI account.

In this case, the journal entries will be as follows

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Driven by Debit CreditDMAAI 4320 RNV 1200

DMAAI 4330 Purchase PriceVariance 100

PC AAI A/P TradeAccount 1300

Variance amount of 100 is written to the account number invoked by DMAAI 4330

DMAAI 4332

DMAAI 4332 is invoked by the Voucher Match program. This is invoked if goods are sold prior to being vouchermatched and there is a cost variance.

Example 2: A purchase order is received for quantity =10 for unit cost as 10. On hand quantity=18.

The items are being sold /issued before doing voucher match and On hand quantity=8. A voucher match is created forQ=10 and Amount changed from 1000(amount receipt) into 1100(amount VM): Q=2 has been sold and Q=8 still onhand.

In this case, the journal entries will be asfollows

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Driven by Debit CreditDMAAI 4320 RNV 1000

DMAAI4330 InventoryVariance 80

DMAAI 4332 Cost of Goods 20

PCxx A/P TradeAccount 1100

DMAAI 4320 RNV – 30.4111 received amount of 1000DMAAI 4332 Cost of Sales – 30.6315 only 2 items has been sold – variance amount is 20 for Q=2 that was sold priorto matchDMAAI 4330 – 30.6310 – variance amount is 80 for the Q=8 that was still on handPC AAI – 1.4110 – total matched amount

Following is how the AAIs will be used in case of exchange rate variance:

Exchange rate variance is booked to AAI 4340 (for items in stock) and AAI 4332 (for items sold) if onhand quantity isless than transaction (voucher) quantity.

If onhand quantity (not zero) is less than voucher quantity , exchange rate variance is booked to AAI 4340 & AAI4332 and the exchange rate variance for onhand quantity ( booked to AAI 4340) is written to item ledger whenperforming voucher match and voucher reversal.

If onhand quantity is zero, exchange rate variance is booked to only AAI 4332 and no variance record is written toitem ledger (for costing method weighted average) when performing voucher match and voucher reversal.

DMAAI 4340

When matching a voucher to a foreign open receipt, if the exchange rate has changed since the receipt and if thequantity on hand for the product on the purchase order is less than the quantity vouchered, the variance is recordedusing DMAAI 4332 (Cost of Sales) instead of 4340 (Currency Gain and Loss).

DMAAI 4332 is invoked if the quantity vouchered is greater than the quantity onhand and the exchange rate is at thetime of voucher match is different than the exchange rate at the time of purchase order receipt.

Sample Transaction

Beginning quantity onhand = 5Enter a purchase order for a quantity of 3 with an exchange rate is 1.5.

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Domestic cost is 10.00 each for a total domestic cost of 30.00. Foreign cost is 45.00

Receive purchase order at exchange rate of 1.5 and post the batch. Journal entries are as follows:Domestic30.00 Inventory (30.00) Received not Vouchered

Foreign45.00 Inventory (45.00) Received not Vouchered

Total onhand quantity after receipt = 8 (Beginning quantity onhand of 5 plus 3 quantity on receipt)

Before voucher match, a sales order is entered for a quantity of 7. Ship confirmation then relieves inventory.

Total onhand quantity after ship confirm = 1

After ship confirm, voucher match the purchase order quantity of 3 (quantity vouchered is greater than quantity onhand) with an exchange rate of 2.14. The exchange rate variance in this example is 9.00. Post the batch. Journalentries are as follows:Domestic30.00 Received not Vouchered (6.00) DMAAI 4332 (3.00) DMAAI 4340 (21.00) AP Trade (PC AAI)

Foreign45.00 Received not Vouchered (45.00) AP Trade (PC AAI)

The variance of 9.00 is prorated and split between the 4332 and 4340 DMAAIs as follows:

Amount of variance divided by transaction quantity in voucher match (9.00 / 3 = 3) Multiply the above amount by the onhand quantity (3 * 1 = 3)

The result of step 2 is written to the 4340 DMAAI. Therefore 3.00 is written to the 4340 DMAAI account. The varianceis for the quantity transacted.The difference between the variance and step 2 is written to the 4332 AAI. Therefore 6.00 (9.00 3 = 6.00) is writtento the 4332 DMAAI account.

DMAAI 4335

DMAAI 4335 is invoked by the Receipts program. This is invoked if receiving goods at a different cost than what is inthe Standard Cost (07) method in the Item Cost (F4105) file. The Standard Cost method must be the Inventory/SalesCost method.

When a receipt is done with the cost that is different from the item's standard cost, there is one record written to thecardex (F4111) with the quantity, price and total amount. Then there is a second record written that has zero quantity and zero cost but a total amount of the differencebetween the actual cost and the standard cost.

If a variance exists between the standard cost and the cost at which you purchase an item, the system creates journalentries to account for the variance. You specify variance accounts in the automatic accounting instructions in DMAAI4335. A record is written to the Cardex (F4111) for the standard cost variance.

Example 3: When using Standard Cost, dollar amount variances occurring at Receipt are written to the Cardex as an

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additional entry with no quantity, just an extended cost. This variance has to be recorded to a variance account,directed by the DMAAI 4335.

If receiving a purchase order at a different cost (51.00) than the standard cost 07(50.00), the standard cost varianceamount is created in journal entry by DMAAI 4335.

In this case, the journal entries will be as followsDriven by Debit CreditDMAAI 4310 Inventory 500

DMAAI 4335StandardCost

Variance10

DMAAI 4320 RNV 510

Further variances at voucher match for standard cost items will be booked to DMAAIs 4330/4332.

DMAAI 4312

Example 4: A Purchase Order for a Standard Cost Bulk item with temperature conversion and Standard CostVariance.

AmbientQuantity

StandardQuantity

StandardCost

PurchasePrice

10,000 10,090 20.543 11.63

The AAIs will be hit as follows:

DMAAI Calculation Result4310

(Inventory)Standard Cost * Standard

Quantity 207278.87

4320 (RNV) Ambient Quantity *Purchase Price 116300.00

4312(Gain/Loss)

(Standard Quantity Ambient Quantity) *Standard Cost

1848.87

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4335 (StandardCost Variance)

(Standard Cost PurchasePrice) * Standard Quantity

89932.17

4335 (StandardCost for theGain/Lossportion)

(Standard Cost PurchasePrice) * (Ambient Quantity

Standard Quantity)802.17

PC Accounts Payable Financial AAI

The PC AAI will determine the A/P Trade Account. This is the Financial AAI used for payables. The G/L Class codeused can be assigned in the Supplier Master Information (P04012), if at all, since PC____ is valid.

The business unit used by the PC AAI and written to the F0411 by P4314 Voucher Match is determined based on aprocessing option on the Process tab.

9. Company Retrieval From Branch/Plant

Blank = Each detail line

1 = Purchase Order header

2 = Address book

3 = Voucher Match header

4 = Each detail line Branch/Plant's Project

5 = Purchase Order header Branch/Plant's Project

6 = Address book Branch/Plant's Project

7 = Voucher Match header Branch/Plant's Project

When the processing option is set for a Project, the Project Number comes from P0006 Business Unit Revisions for thebusiness unit. Select the business unit for revision and review the Revise Business Unit form, More tab, ProjectNumber field.

For more information on Accounts Payable, see E1: 04: Overview and Set Up of Accounts Payable (P0004A, P0000,P0002, X00500, P0012, P00022) (Doc ID 1409284.1)

Frequently Asked Questions

Question 1: How can a variance recorded at the time of voucher match time be directed to the account on thepurchase order line rather than to the variance account set up in Distribution AAIs?

Answer 1: The Voucher Match Variance Account setting in the line type setup controls where the variance is written. If this box is checked, any variance recorded at voucher match time will be written to the account set up in theDistribution AAIs. If the box is not checked, the variance will write back to the account on the purchase order line.


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Note: This functionality is valid only for line types with an Inventory Interface value of A or B when usingprocurement.

Question 2: Why does the general ledger post, R09801, end in error with the work center error referencingAAI 4340 when a voucher batch is submitted to post?

Answer 2: The AAI 4340 error was caused because the Detailed Currency Restatement was run on the newcompany and there were no entries in the AAI 4340 table.

AAI 4340 is used to select the general ledger account used to post an exchange rate variance. If there is no entrysetup that can be used for the Company, Document Type and G/L Class Code for the PO being matched, there will bean AAI 4340 error.

AAI 4340 is edited whether the transaction is in the base currency or in any other currency (for companies withdetailed currency restatement). Even the USD transactions in the USD based currency companies needed the AAI setup for editing purposes. The AAI 4340 cannot be left blank with no entries or the edit will fail. The account setup in AAI 4340 is used to write entries to the XA (detailed currency restatement) ledger when there isan exchange rate difference. The financial AAI takes care of the account for the entry to be written to the AA ledgeras Distribution AAI 4340 writes the difference to the XA ledger.

To implement the solution, please execute the following steps:

1. Setup AAI 4340 for the Company, Doc Type and G/L Class Code on the PO so that currency restatement entriescan be posted to the correct account in the XA ledger on any transactions for companies where detail currencyrestatement was run.

2. Rerun the post program.

Question 3: How is the cost variance for line type J handled?

Answer 3: When the amount is changed at the time of voucher match, the difference is written to the Cost Variancefield, VARC, in the F43121. For stock lines, the cost variance is written to the Cardex (F4111). Nonstock lines do notupdate the cardex. In the line type constants, if the box is checked for voucher match variance, journal entries arewritten to the accounting indicated in the 4330 AAI. If the box is not checked, journal entries are written to theexpense account indicated on the J line. When summarizing journal entries, as indicated in the processing optionbehind P4314, one summarized journal entry is written to the expense account. If not summarizing, two journalentries will be written to the expense account, one for the expense and one for the variance amount.

To discuss information further with Oracle experts and industry peers, we encourage you to review, join or start adiscussion in the JDE1 Distribution Community.

To look at upcoming or archived Advisor Webcasts please see Advisor Webcast Details (Doc ID 548764.1) if yourtopic is not currently scheduled please suggest it.

REFERENCES

NOTE:625475.1 E1: 40: Automatic Accounting Instructions for Distribution (AAI / DMAAI) [Video]NOTE:548764.1 Advisor Webcast DetailsNOTE:625534.1 E1: 43: Purchase Order Entry Through Accounts Payable



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BUG:10924259 EXCHANGE VARIANCE SAR: 8080746NOTE:1342228.2 Information Center: JD Edwards EnterpriseOne Procurement, Subcontract and Self Service Product


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43 Accounting in Procurement Doc ID 625497.1