FINANCIAL OVERVIEW - Qmuzik Technologiesapps.qmuzik.com/Training/qm8pdf/General Ledger.pdf · 2018. 2. 7. · The Year-End Roll posts a journal against the retained earnings account(s)

FINANCIAL OVERVIEW Course Assignment

VERSION 15

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All rights reserved. The contents, nor any part thereof, nor the format, the

configuration or any other aspect thereof may be copied, transformed, reworked,

reverse engineered, stored or transmitted, irrespective of the mode or method

thereof, or in any other way be dealt with other than only with the express prior

written permission of QMuzik.

ADD

ACCOUNT

CODES

PERFORM A

CHEQUE

RECONCILIATION

LOAD

EXTERNAL

JOURNALS

ADDING

NON-POSTING

ENTITIES

PERFORM A YEAR

END ROLL

LINK ACCOUNT

CODES TO A

DIVISION

LINK ACCOUNT

CODES TO A

COST CENTRE

ADD and RUN A

NON-POSTING

ENTITY REPORT

ADD A

JOURNAL

SOURCE CODE

PROCESS A

HAND

JOURNAL

PERFORM A DRILL

DOWN ON ACTUAL

COSTS

FINANCIAL OVERVIEW

Revision 15 : 15 July 2005 Page 1

Financial Overview : Course Assignment

INTRODUCTION

The Financial Overview course assignment addresses the setting up of the company’s accounting structure. The processing of hand journals and check reconciliation is illustrated. The running of general ledger reports and the drill down on actual costs is included. Defining Non Posting Entities and Non Posting Entities Structures is included. Non Posting Entities group accounts for easier financial report generation. Importing journals created outside the System concludes the course.

OBJECTIVES : You will learn how to:

EXERCISE 1 : Adding Account Codes

EXERCISE 2 : Adding accounts for a Division and a Cost Centre

EXERCISE 3 : Process a Hand Journal

EXERCISE 4 : Cheque Reconciliation

EXERCISE 5 : Account Actual Cost Drill Down

EXERCISE 6 : Add a Journal Source Code

EXERCISE 7 : Load External Journals

EXERCISE 8 : Adding Non-posting Entities and Structures

EXERCISE 9 : Do a Year-End Roll

EXERCISE 10 : Add and Run a Non-Posting Entity Report

EXERCISE 11 : General Ledger Reports

APPENDIX A : Presenter’s Notes

APPENDIX B : Account Codes for a Division

APPENDIX C : Divisional Account Descriptions

APPENDIX D : Year End Plan


Financial Overview: Course Assignment

IMPORTANT TO KNOW

The following security profile functions are needed to use the general ledger

course functions.

ACCOUNT BUDGETS ACTUALS ACCOUNT CODE RULES ACCOUNT CODES ACCOUNT REPORTS ACCOUNTS CHEQUE INFORMATION UPDATE EXTERNAL JOURNALS GENERAL LEDGER REPORTS HAND JOURNAL JOURNAL SOURCE NON POSTING ENTITY NON POSTING ENTITY REPORTS NON POSTING ENTITY STRUCTURE SYSTEM CONFIGURATION YEAR END ROLL



EXERCISE 1

ADDING ACCOUNT CODES

Account Codes represent the generic charter of accounts for a company. For each division or cost centre, which needs to do accounting against a certain account code, a unique account linked to that account code will be created. (See exercise 2)

1.1 Use the Account Code function to add some of the account codes for a division in your company. Please use the information in Appendix B.

1.2 Use the Account Code function to add account codes for a cost centre in your company.

FIGURE 1.1

ADDING AN ACCOUNT CODE

NOTES:

NB! Ask your presenter which division’s account codes you have to add.

Follow the steps in Figure 1.1 to add Account Codes.

FIGURE 1.2

APPLICATION MAINTENANCE

NOTES:

Follow the steps in Figure 1.2 to link the applications to the account codes.

See Function Help before linking the applications.



FIGURE 1.3

APPLICATION MAINTENANCE

NOTES:

Follow the steps in Figure 1.3 to link budget checking rules to the account codes.

Read the Online Help to understand the fields.

In this example the expenditure must not push the actual costs past the year to date figure of the budget and it must only be checked on bank transactions.

FIGURE 1.4

Non Posting Entity Linking

NOTES:

Follow the steps in Figure 1.4 to link the account codes to a non posting entity.

The non posting entity is used to group account codes for reporting on financial statement level.



EXERCISE 2

ADD ACCOUNTS FOR A DIVISION AND A COST CENTRE

2.1 Use the Accounts function (Account Maintenance tab) to add accounts for a division and a cost centre.

2.2 Use the Accounts function (Account Copy tab) to add “Same-As” accounts for a second cost centre.

FIGURE 2.1

ADDING ACCOUNTS

NOTES:

Use the same division and cost centre as in Exercise 1.

Use the Account Codes that you added in Exercise 1.

Follow the steps in Figure 2.1 to add accounts.

Step 2 is not necessary if automatic numbering is on.

FIGURE 2.2

COPY “SAME-AS” ACCOUNTS

NOTE:

Follow the steps in Figure 2.2 to copy “same as” accounts. This functionality speeds up the process of creating accounts for similar divisions and cost centres considerably. The double arrow allows the copying of all accounts.



EXERCISE 3

PROCESS A HAND JOURNAL

Use the Hand Journal function to process a journal. Journals are created automatically in the System. Hand Journals will therefor be used by exception only. Hand Journals can be done from one account to another account, from a project (node) to another project(node) and from a Project(node) to an account.

FIGURE 3.1

HAND JOURNAL

NOTES:

Ask your presenter for account numbers.

Follow the steps in Figure 3.1 to process a hand journal.

Go to Figure 3.2 To Process a Hand Journal against a Node.

Ensure that the credits and debits balance.

FIGURE 3.2

HAND JOURNAL AGAINST A NODE

NOTES:

Ask your presenter for to change the system setting which allows Hand Journals against Nodes.

Follow the steps in Figures 3.2 .



EXERCISE 4

CHEQUE RECONCILIATION

Use the Cheque Information update function to reconcile cashed cheques on the commercial bank’s statement and the System’s bank transactions.

4.1 First create an Excel file containing the bank statement number, cash date, amount and cheque

number (i.e. file received from the commercial bank). See Figure 4.1. Save this file in a folder named Bank on your C drive.

FIGURE 4.1

INFO FILE FROM BANK

NOTE:

Ask your presenter for data for the Excel file to be created. See Figure 4.1.

4.2 Perform the actual reconciliation using the Cheque Information Update function.

FIGURE 4.2

SPECIFY FILE NAMES

NOTE:

Perform the steps in Figure 4.2.



FIGURE 4.3

FIND INFO AND “RESULT” FILES

NOTE:


FIGURE 4.4

PROCESS RECONCILIATION

NOTE:


FIGURE 4.5

VIEW INFO FILE

NOTE:

Perform the steps in Figure 4.5 to view Notepad file.



EXERCISE 5

ACCOUNT ACTUALS DRILL DOWN

This function enables the user to drill down to General Ledger level on actual costs.

Use the Account Budgets Actuals function to drill down to the source of the actual costs for the following account codes:

Project management WIP

Material WIP

Stock

Creditors provision

FIGURE 5.1

VIEW OPTIONS

NOTE:

Perform the steps in Figure 5.1

FIGURE 5.2

VIEW ACCOUNT ACTUAL

NOTE:




FIGURE 5.3

VIEW JOURNAL ENTRIES

NOTE:

Perform the steps in Figure 5.3

FIGURE 5.4

VIEW JOURNAL SOURCE

NOTE:

View the actual transaction in Figure 5.4.



FIGURE 5.5

VIEW JOURNAL VISIBILITY

NOTE:

View the actual journals produced in Figure 5.5.



EXERCISE 6

ADD A JOURNAL SOURCE CODE

Journal source codes indicate the origin of the journal i.e. M = Stock Movements, N = Node Timesheet, etc. Each Journal Entry will have a Journal Source Code.

Use the Journal Source function to add a journal source code.

FIGURE 6.1

ADDING JOURNAL SOURCE CODES

NOTE:

Follow the steps in figure 6.1 to add a journal source code.

The following source types cannot be entered as they are fixed types used in the system:

Debtors (D), Creditors (C), Hand Journal (H), Debtor Settlement Journal (L), Movement (M), Node

Timesheet (N), Correction (O), Reverse Hand Journal (R), Cash Management (S), Part Revaluation (U),

Node Provision (V), Year-End Journal (Y), Order Operation Labour (B), Creditor Settlement (K), Cost

Centre Divisional Transfer (T), Transport (W).

FIGURE 6.2

ADDING JOURNAL SETTINGS

NOTE:

Follow the steps in figure 6.2 to add journal settings.

This setting specifies that journals are allowed against this journal source against the selected financial period. Note that the default closing days need to be set on the first tab since they work together.



EXERCISE 7

LOAD EXTERNAL JOURNALS

Journals created in applications other than the System can be loaded into The system. If for instance, a telephone system is running in isolation in a company but the telephone costs must be accounted for by cost centres and divisions in the System, a external journal batch file with telephone costs journals can be created and imported into the System. A External Journal Source code must be added before external journals can be processed (See exercise 6).

Use the External Journals function to load external journals in the System.

See example of a comma delimited file with two entries below:

1100083 B, , , , , , 1999-03, 1888, E 1100089 B, , , , , , 1999-03, -1888, E

FIGURE 7.1

LOAD EXTERNAL JOURNALS

NOTES:

Ask your presenter for valid account numbers.

Create a .txt or .csv file with the journals you want to load. The debits must equal the credits.

Step 1: Use the Find button to select the external journal file.

View results if unsuccessful.

After adding successfully, use the Accounts Budgets Actuals function to verify.

The view button shows the file content.

Errors are shown on the errors tab.



EXERCISE 8

ADDING NON-POSTING ENTITIES AND STRUCTURES

Non Posting Entities are used to group account codes according to the income statement and balance sheet entries. On financial reports, the report writer can refer to a non-posting entity in stead of having to refer to all the account codes linked to it. A Non Posting Entity may represent an entry on the company’s income statement or balance sheet.

8.1 Use the Non-posting Entity function to add non-posting entities.

FIGURE 8.1

ADDING A NON-POSTING ENTITY

8.2 Use the Non-posting Entity Structure Maintenance tab to build a non-posting entity structure.

If a report writer wants all account codes linked to Non Posting Entities A, B and C to be summed, he/she can simply add a non posting entity (let say D) as the parent to A, B and C. In his financial report he/she specifies that Non Posting Entity D must be printed. No formulas need to be specified.



FIGURE 8.2

ADDING A NON-POSTING ENTITY

STRUCTURE



EXERCISE 9

DO A YEAR-END ROLL

The Year-End Roll posts a journal against the retained earnings account(s) equal to the balance of all income statement accounts for the financial year specified. It posts journals against each income statement account to make the balance zero.

Use the Year End Roll function.

FIGURE 9.1

YEAR END ROLL

NOTE:

A Year End Roll can only be done for a previous financial year.

FIGURE 9.2

YEAR END ROLL

NOTE:

By clicking on Simulated Roll, a simulation is done first. It shown the retained earnings total and other journals that will be created when the run is done in non-simulation mode.

If satified with results click simulated roll off ans then apply to clear accounts and update retained earnings account.

At any financial year end, the following must be performed. 1. Year end roll must be performed (need not be done on the last day, but anytime in the new year when

the last year's journals are completed.) Refer to the help on this function. 2. The stock prices and values must be adjusted :

Stock resides in four places : Locations (stock), WIP, creditor suspense, debtor suspense.



All stock must be revalued if the new financial year standard cost differs from the previous financial year. This must be performed on the last evening of the fin year. To assist you in remembering what the closing balance of the stock (in locations) (in terms of quantities) was at the end of the financial year, you must run the 'Year_End_Set_Stock_Balances' Stored Procedure on the database from SQL Enterprise Manager - it requires only the new finanaical year as a parameter. This procedure will take the location quantites at the time of runnning the report and inserts it into the 'Opening_Stock_Balance' field in Part_Financial_Year_Data. This report must therefor be run on the last evening of the Financial Year. It is therefor a snapshot of the stock – but only in locations, not the WIP, creditor suspense and debtors suspense quantities -it is therefor of limited use, since you must anyway manually (i.e. via Access or your own queries) take a snapshot of the quantities in the other three places where stock can reside. Actually, the best way to take a snapshot in all four places is to run a complete Access report on the last evening and/or take a backup that night. (Its anyway a good idea to take a backup - for reference and comparisons etc. and other year-end reports) If you don't do any of the above, then all is not lost – the report which calculates the new value of the stock must then retrace the movements to arrive at the stock quantity as on the last evening. Stock must be thus "counted" in four places : stock, debtors suspense, creditor suspense, WIP. Using the snapshot you must multiply the year-end quantities by the difference between the old and new prices (as on Part Fin Data) and handjournals must be suggested by the MS Access report. The handjournals must then be performed (debit/credit stock (or cred. susp, WIP, debt susp) and credit/debit the applicable revaluation account).



EXERCISE 10

ADD AND RUN A NON-POSTING ENTITY REPORT

The Non-Posting Entity Reports function is used to create financial summary reports.

Study the on-line help for a detail explanation of the function and each field before doing this exercise. The formulas used in Figure 10.1 is used to illustrate the possibilities and do not necessary make sense from

a financial perspective. Exercise 1 shows how account codes are linked to a non-posting entity. Exercise 8 shows how non-posting entities can be build in a non-posting entity structure. (Note: Financial summary reports can also be created using the Quick Query function and other tools like Microsoft Access).

10.1 Use the Non Posting Entity Reports function to add and run a report.

FIGURE 10.1

ADDING AND RUNNING A NON-

POSTING ENTITY REPORT

NOTES:

Ask your presenter for which division or cost centre the report must be run.

Step 2: Add Rows as suggested by your presenter.

Row 100 Place the value of 10 in each financial period.

Row 200 Add the result in row 100 twice and place the result in row 200

Row 300 Place the sum of all journals for accounts linked to the non-posting entity number 10020 in their respective financial periods provided the amounts are credits.

Row 400 Place the sum of all journals for accounts linked to the non-posting entity number 10020 in their respective financial periods provided the amounts are debits.

Row 500 Add all journals for accounts linked to the non-posting entity numbers 10020 and 10040 in there respective financial periods.

Row 600 Divide the result of row 200 with the result of row 300 minus by 1 and multiply this by 100.

Row 700 Place the sum of all journals for accounts linked to the account code 9010 in their respective financial periods.



10.2 VIEW THE NON-POSTING ENTITY REPORT

RESULTS.

FIGURE 10.2

VIEWING A NON POSTING ENTITY

REPORT RESULTS

NOTE:

Use the sliding scale to view the results.

To export the data click on any cell in the result box and then click on F1 to start the export function. The export may be used to do what if analysis on a spreadsheet or to print the results.

To drill down on the detail of a cell, double click on the cell.



EXERCISE 11

GENERAL LEDGER REPORTS

The following General Ledger reports exists as standard reports within the system. Also see the ACCOUNTS REPORTS function.

Use the General Ledger Reports function.

FIGURE 11.1

REPORTS

NOTE:

FIGURE 11.2

REPORTS

NOTE:

Select the Division and

accounts you want included in

the report.

FIGURE 11.3

REPORTS

NOTE:

Report output will be displayed

in Microsoft Excel



APPENDIX A

PRESENTER’S NOTES

EXERCISE 1

Add a new division.

Add 2 cost centres for each student.

EXERCISE 3

Supply the students with accounts for the hand journal.

Use accounts of existing cost centres or division.

EXERCISE 4

Prepare cheque data through the cheque print function.

Prepare cheque data for the Excel file or create the file beforehand.

EXERCISE 6

Use Journal Source A.

Use Accounts 1100***.

EXERCISE 10

Select Non-Posting Entities, Account Codes and a Division or Cost Centre for which journals exists.

Revision 15 : 15 July 2005 Page 22 of 45 Financial Overview : Course Assignment

APPENDIX B

ACCOUNT CODES FOR A DIVISION

Code Acc Description LV CL C S NS OI UI SP T M Post H

9310 COS LABOUR D I N N N N N N N N 12140 Y

9300 COS MATERIAL D I N N N N N N N N 12120 Y

9330 COS OVERHEADS D I N N N N N N N N 12160 Y

2450 CREDITOR PRICE VARIANCE D B Y Y N N N N N N 10300 Y

4490 CREDITOR PROVISIONING D B N N N N N N N N 10600 Y

4050 CREDITORS SUSPENSE D B N N N N N N N N 10600 Y

1800 DEBTOR SUSPENSE D B N N N N N N N N 10260 Y

2050 INCOMING INSPECTION D B N N N N N N N N 10260 N

9205 INTERDIVISIONAL COS LABOUR D I N N N N N N N N 12080 Y

9200 INTERDIVISIONAL COS MATERIAL D I N N N N N N N N 12080 Y

9210 INTERDIVISIONAL COS OVERHEAD D I N N N N N N N N 12080 Y

9220 INTERDIVISIONAL SALES D I N N N N N N N N 12080 Y

6131 LABOUR BUDGET VARIANCE ORDERS D I N N N N N N N N 12260 Y

9509 MATERIAL BUDGET VARIANCE D I N N N N N N N N 12220 Y

8513 OVERHEAD BUDGET VARIANCE D I N N N N N N N N 12330 Y

9423 PRODUCTION SCRAP LABOUR COST D I N N N N N N N N 12420 Y

9422 PRODUCTION SCRAP MATERIAL COST D I N N N N N N N N 12420 Y

9424 PRODUCTION SCRAP OVERHEAD COST

D I N N N N N N N N 12420 Y

2331 REVALUATION CREDITOR SUSPENSE D B N N N N N N N N 10300 Y

2330 REVALUATION STOCK D B N N N N N N N N 10300 Y

1720 REVALUATION WIP D B N N N N N N N N 10340 Y

9513 REWORK LABOUR COST D I N N N N N N N N 12400 N

9512 REWORK NETT MATERIAL COST D I N N N N Y N N N 12400 Y

9514 REWORK OVERHEAD COST D I N N N N N N N N 12400 N

9515 REWORK PURCHASE COST D I N Y Y N Y N N N 12400 Y

9550 STOCK ADJUSTMENT DEFAULT D I N N N N N N N N 12440 Y

9425 STOCK SCRAP D I N N N N N N N N 12420 Y

4190 VAT PURCHASES D B Y N N N N N N N 10600 Y

4195 VAT SALES D B N N N N N N N N 10600 Y

1611 WIP LABOUR INTERNAL ORDERS D B N N N N N N N N 10330 Y

1670 WIP MATERIAL CUSTOMER ORDERS D B N N N N N N N N 10260 Y

1600 WIP MATERIAL INTERNAL ORDERS D B N N N N N N N N 10330 Y

2313 WIP MATERIAL PURCHASE ORDERS D B N N N N N N N N 10280 Y

1613 WIP OVERHEAD INTERNAL ORDERS D B N N N N N N N N 10330 Y

1540 WIP PROJECT MANAGEMENT D B N N N N N N N N 10370 Y

8112 TRANSPORT RECOVERY C I Y Y Y N Y Y Y Y 12310/ 12910

Y


APPENDIX C

DIVISIONAL ACCOUNT DESCRIPTIONS

Divisional Journals

The following paragraph regarding divisional journals is of extreme importance to ensure integrity on the

company financial statements.

The following accounts are divisional accounts, which are journalized outomatically. These accounts

should never be entered on requisitions, bank transactions or hand journals. If you do it, it is possible

that your books will not balance and it will be difficult to trace and correct the problem. If they are to be

used the person doing so, should really know and understand the consequences. If a need exists to make

provisions for transactions out of the ordinary, it should be done against extraordinary provisional

accounts created by ourselves and not against these divisional accounts.

All reconciliation reports should have a heading for provisions made against the division accounts from

sources different to the ones the system creates automatically. This heading total can be added to the

figures created for the normal sources to give a grand total. This will highlight if these accounts are used

irresponsible and can be used to force the person(s) to declare what they are doing.

COS LABOUR (Cost of Sales Labour) This account accumulates the Cost of Sales of labour incurred on Customer Orders and Over the Counter sales, per division. If an invoice, for a shipped Customer Order line, is set to “PRINT APPROVED” via the Debtors function, this account is debited subject to the rules described below. If it is a CUSTOMER NON-STOCK line with a milestone node (project) specified, this account of the division to which the order/node belongs is debited, and the DEBTOR SUSPENSE account is credited with the labour cost of the customer order. If a non-milestone node (project) is specified on the NON-STOCK line, no journalising will occur. If it is a CUSTOMER SPECIAL, CUSTOMER REPAIR, CUSTOMER PRODUCT SALES or CUSTOMER SPARE line, with a node (project) specified, no journalising will occur. If it is a CUSTOMER SPECIAL or CUSTOMER NON-STOCK line, with no node (project) specified, this account of the customer orders division is debited, and the relevant COST CENTRE PRODUCTION LABOUR account will be credited if Order Operations are specified for the customer order. The system will determine the Cost Centre Production Overhead recovery account through the work centres specified for the Order Operations.

If it is a CUSTOMER PRODUCT SALES or CUSTOMER SPARES line, and the EXPLODE REQUIREMENTS option is used, this account of the division to which the order belongs is debited. The relevant COST CENTRE PRODUCTION OVERHEAD recovery accounts are credited if Order Operations are specified for the customer order. The system will determine the Cost Centre Production Overhead recovery account through the Work Centres specified for the Order Operations. If the EXPLODE REQUIREMENTS option is not used the Part Master’s standard labour cost of the Customer Order Line item will be journalised. If a part is sold in an over the counter sale transaction, this account is debited with the part’s standard labour cost and the division’s DEBTOR SUSPENSE account credited with the total cost of sales.


COS MATERIAL (Cost of Sales Material) This account accumulates the Cost of Sales of material(not labour) incurred on Customer Orders and Over the Counter sales, per division. When the invoice, for a shipped Customer Order line, is set to “PRINT APPROVED” via the Debtors function, this account is debited subject to the rules described below. If it is a CUSTOMER NON-STOCK line with a milestone node specified, this account of the division to which the order belongs is debited, and the division’s DEBTOR SUSPENSE account is credited with the material cost of the customer order. If it is a CUSTOMER SPECIAL, CUSTOMER REPAIR, CUSTOMER PRODUCT SALES or CUSTOMER SPARE line with a node (project) specified, the system will not journalise any material cost. If it is a CUSTOMER PRODUCT SALES, CUSTOMER SPARE or CUSTOMER SPECIAL with no node (project) specified, this account of the division to which the customer order belongs is debited, and the order’s divisions DEBTOR SUSPENSE account will be credited. If a part is sold in an over the counter sale transaction, this account is debited with the part’s standard material, transfer and subcontract cost and the division’s DEBTOR SUSPENSE account credited with the total cost of sales.

COS FIXED OVERHEADS (Cost of Sales Overheads) This account accumulates the Cost of Sales of fixed overheads incurred on Customer Orders and Over the Counter sales, per division. When the invoice for a shipped Customer Order line is set to “PRINT APPROVED” via the Debtors function, this account is debited with the fixed overhead cost of the customer order subject to the rules described below. If it is a CUSTOMER NON-STOCK line with a milestone node (project) specified, this account of the division to which the order/node belongs is debited, and the DEBTOR SUSPENSE account is credited with the fixed overhead cost of the customer order. If a non-milestone node (project) is specified on the customer order line, no journalising will occur. If it is a CUSTOMER SPECIAL, CUSTOMER REPAIR, CUSTOMER PRODUCT SALES or CUSTOMER SPARES line, with a node (project) specified, no journalising will occur. If it is a CUSTOMER SPECIAL or CUSTOMER NON-STOCK, with no node (project) specified, this account of the customer orders division is debited, and the relevant COST CENTRE PRODUCTION FIXED OVERHEAD recovery account will be credited if Order Operations are specified for the customer order. The system will determine the Cost Centre Production Fixed Overhead recovery account through the work centres specified for the Order Operations.

If it is a CUSTOMER PRODUCT SALES or CUSTOMER SPARES line, and the EXPLODE REQUIREMENTS option is used, this account of the division to which the order belongs is debited. The relevant COST CENTRE PRODUCTION FIXED OVERHEAD recovery accounts are credited if Order Operations are specified for the customer order. The system will determine the Cost Centre Production Fixed Overhead recovery account through the Work Centres specified for the Order Operations. If the EXPLODE REQUIREMENTS option is not used the Part Master standard fixed overhead cost of the Customer Order Line item will be journalised. If a part is sold in an over the counter sale transaction, this account is debited with the part’s standard fixed overhead cost and the division’s DEBTOR SUSPENSE account credited with the total cost of sales.


COS VARIABLE OVERHEADS (Cost of Sales Overheads) This account accumulates the Cost of Sales of variable overheads incurred on Customer Orders and Over the Counter sales, per division. When the invoice for a shipped Customer Order line is set to “PRINT APPROVED” via the Debtors function, this account is debited with the variable overhead cost of the customer order subject to the rules described below. If it is a CUSTOMER NON-STOCK line with a milestone node (project) specified, this account of the division to which the order/node belongs is debited, and the DEBTOR SUSPENSE account is credited with the variable overhead cost of the customer order. If a non-milestone node (project) is specified on the customer order line, no journalising will occur. If it is a CUSTOMER SPECIAL, CUSTOMER REPAIR, CUSTOMER PRODUCT SALES or CUSTOMER SPARES line, with a node (project) specified, no journalising will occur. If it is a CUSTOMER SPECIAL or CUSTOMER NON-STOCK, with no node (project) specified, this account of the customer orders division is debited, and the relevant COST CENTRE PRODUCTION VARIABLE OVERHEAD recovery account will be credited if Order Operations are specified for the customer order. The system will determine the Cost Centre Production Variable Overhead recovery account through the work centres specified for the Order Operations.

If it is a CUSTOMER PRODUCT SALES or CUSTOMER SPARES line, and the EXPLODE REQUIREMENTS option is used, this account of the division to which the order belongs is debited. The relevant COST CENTRE PRODUCTION VARIABLE OVERHEAD recovery accounts are credited if Order Operations are specified for the customer order. The system will determine the Cost Centre Production Variable Overhead recovery account through the Work Centres specified for the Order Operations. If the EXPLODE REQUIREMENTS option is not used the Part Master standard variable overhead cost of the Customer Order Line item will be journalised. If a part is sold in an over the counter sale transaction, this account is debited with the part’s standard variable overhead cost and the division’s DEBTOR SUSPENSE account credited with the total cost of sales.

CREDITOR PRICE VARIANCE This account accumulates the variances between the creditors invoice price and the part’s standard unit cost per division. This account gives an indication on the accuracy of the standard part unit costs. If a “Invoice Line Link” is created between the supplier invoice and the Purchase Order via the Creditors function, the difference between the invoice value (Qty invoiced * Invoice Unit Price) and the value at standard cost (Part Master Unit cost for the item purchased * Qty Invoiced) is CREDITED if Part Master unit cost > Invoice unit cost/ and DEBITED if Part Master unit cost < Invoice unit cost, to this account. Note: This journal only runs if the purchased item/part is a FIXED ACCOUNT stock item. In the event of a purchase orders not having an account or node and in the event of Subcontract purchase order lines, this account is journalised on receipt of the parts.

CREDITOR PROVISIONING This account accumulates the costs of non-stocked items, non-fixed account stocked items and reworked items received from suppliers, per division. If a “non-stocked” item, a “non-fixed account” stocked item or “reworked” (external Rework Orders) item, is received from a supplier (Supplier-to-Store and Supplier-to-Inspection movement), this account will be credited with the movement value (Purchase Order Line Unit Price * Qty Received). If a Division or Cost Centre account is specified on the Non-Stock Purchase Order Requisition leading to the Purchase Order, that account is debited with the movement value). If a Node (project) is specified on the Non-Stock Purchase Order Requisition leading to the Purchase Order, the account specified for the Material Resource specified on the requisition, is debited with the movement value. If a


Material account is specified for the Node (project) (see Node Accounts tab on Node function), the Node (project) account is debited with the movement value. For an external Rework Order, the division’s REWORK PURCHASE COST account is debited with the movement value.

CREDITOR SUSPENSE This account temporarily keeps the movement values of stock received per division. As soon as the invoices are settled, the movement value is cleared from this account and transferred to the TRADE CREDITORS account for the specific supplier. When “Fixed account” stock items are received from suppliers (supplier-to-store or supplier-to-inspection movement) this account is credited with the movement value (Part Master unit cost * Qty Received). If the movement is “supplier-to-store” the STOCK ACCOUNT specified for the store into which the items are received is debited with the movement value. If the movement is “supplier to inspection” the INCOMING INSPECTION account will be debited. If a part’s standard cost is changed and invoices exist which are not settled yet, this account will also be credited or debited to reflect the difference.

CREDITOR SETTLEMENT DISCOUNT This account reflects the discount received for supplier invoices to be paid on time per division. If a service requisition or purchase order is linked to the supplier invoice, the system will automatically insert a credit if discount applies. On apply this account will be debited and the TRADE CREDITORS account for the specific supplier credited with the discount amount. If the credit is manually deleted or a return of purchase order items occur, this account will be credited and the TRADE CREDITORS account for the specific supplier debited with the relative discount amount.

DEBTOR SUSPENSE This account temporarily keeps the cost of sales values of shipments to customers per division (Customer Orders and Counter Sales). When a shipment occurs, the work in progress value of the customer order line is transferred to this account. The balance in this account represents the value of customer orders shipped but not yet invoiced. On a shipping transaction (production-to-customer or crating-to-customer), this account of the division to which the customer order belongs is debited with the cost from either the WIP MATERIAL CUSTOMER ORDERS account or WIP PROJECT MANAGEMENT account. If it is a CUSTOMER NON-STOCK line with a milestone node (project) specified, the WIP PROJECT MANAGEMENT account of the division to which the order/node belongs is credited. If it is a CUSTOMER PRODUCT SALES, CUSTOMER SPARES or CUSTOMER SPECIAL line, with no node (project) specified, the WIP MATERIAL CUSTOMER ORDERS account is credited with the material cost. When the invoice for the shipped Customer Order line is set to “PRINT APPROVED” via the Debtors function, this account is credited and the various costs of sales accounts debited. Refer to COS LABOUR, COS MATERIAL, COS FIXED OVERHEAD and COS VARIABLE OVERHEAD accounts.

INCOMING INSPECTION This account represents the value of stock in the inspection area not yet moved into stock per division. If a “fixed account” stock item is received from a supplier into inspection (not directly into stock), this account of the division to which the purchase order belongs is debited with the movement value (Qty received * Part Master unit price).


The CREDITOR SUSPENSE account will be credited with the movement value (Qty received * Part Master unit price).

INTERDIVISIONAL COS LABOUR This account represents the accumulated standard cost of labour of stock transferred to other divisions. If an interplant item is issued (store-to-order requirements movement) against a Transfer Order of the acquiring division, this account of the selling division is debited with the issue value (Part Master labour unit cost * Issue Qty). The stock account of the store, from which the item is issued, is credited with the issue value.

INTERDIVISIONAL COS MATERIAL This account represents the accumulated standard cost of material (not labour) of stock transferred to other divisions. If an interplant item is issued (store-to-order requirements) against a Transfer Order of the “buying” Division, this account of the selling division is debited with the issue value (material unit cost of the item as specified on the Part Master * issue qty). The stock account of the store from which the item is issued is credited

INTERDIVISIONAL COS FIXED OVERHEAD This account represents the accumulated standard cost of fixed overheads of stock transferred to other divisions. If an interplant item is issued (store-to-order requirements) against a Transfer Order of the “buying” Division, this account of the selling division is debited with the issue value (fixed overhead unit cost of the item as specified on the Part Master * issue qty). The STOCK account of the store from which the item is issued is credited

INTERDIVISIONAL COS VARIABLE OVERHEAD This account represents the accumulated standard cost of variable overheads of stock transferred to other divisions. If an interplant item is issued (store-to-order requirements) against a Transfer Order of the “buying” Division, this account of the selling division is debited with the issue value (variable overhead unit cost of the item as specified on the Part Master * issue qty). The STOCK account of the store from which the item is issued is credited

INTERDIVISIONAL SALES This account represents the accumulated standard transfer/interplant cost of stock transferred to other divisions. If an interplant item is issued (store-to-order requirements) against the Transfer Order of the acquiring division, this account of the selling division is credited with Part Master Transfer/Interplant Unit cost * Receive qty. The STOCK account of the store into which the interplant item is received will be debited with the receiving value (Sum of Part Master Cost (Material + Labour + Overhead + Transfer) * receive qty)).

INTERDIVISIONAL CLEARANCE This account represents the value of transfers from your division to another division. If a fixed account part is transferred from a store in your division to a store in another division this account will be debited and the sending STORE account credited with the part’s standard costs * quantity transferred. The


receiving division will have their STORE account debited and their INTERDIVISIONAL CLEARANCE account credited. If an asset is transferred from your cost centre/division to a cost center/division in another division, the ASSET CONTROL account will be credited with the asset take on value and the ASSET ACCUMULATIVE DEPRECIATION account will be debited with the asset’s accumulative depreciation value. The clearance account will be debited with the balance of the values written to the ASSET CONTROL account and the ASSET ACCUMULATIVE DEPRECIATION account. The receiving cost centre/division will be journalised with the mirror image of the sending cost/centre division’s journals.

LABOUR BUDGET VARIANCE This account represents the variance between standard production labour costs versus actual production labour costs, per division. This applies to “fixed account parts only. If a production order (works order) line is completed (production-to-store movement), the difference between the Part Master labour cost of a manufactured item and the calculated labour cost based on the Part Operations is CREDITED if Part Master labour cost * Qty Completed > Part Operation Cost *Qty Completed/ DEBITED if Part Master labour Cost* Qty < Part Operation Cost * Qty to this account. Refer to: WIP LABOUR INTERNAL ORDERS account

MATERIAL BUDGET VARIANCE This account represents the variance between standard production material costs versus actual production material costs, per division. This applies to “fixed account parts only. If a production order (works order) line is completed (production-to-store movement), the difference between the Part Master material cost of the manufactured item and the calculated material cost based on the Order Requirements issued (SUM of (Qty Complete * Qty Per of required item * Total Part Master material cost of required item)), is CREDITED if Part Master Unit Cost * Qty > Requirements Issued cost/DEBITED (if Part Master Unit Cost * Qty < Requirements Issued cost) to the this account.

Refer to: WIP MATERIAL INTERNAL ORDERS account Note: This account is also journalised on receipt of a subcontract purchase order line where the (Requirements value – (Movement value – subcontract cost)) differs.

FIXED OVERHEAD BUDGET VARIANCE This account represents the variance between standard production fixed overhead costs versus actual production fixed overhead costs, per division. This applies to “fixed account parts only. When a production order (works order) line is completed (production-to-store movement), the difference between the Part Master fixed overhead cost of a manufactured item, and the calculated fixed overhead cost based on the Part Operations, is CREDITED if Part Master fixed overhead cost * Qty Completed > Part Operation Cost *Qty Completed/ DEBITED (if Part Master fixed overhead Cost* Qty < Part Operation Cost *Qty) to the this account.

Refer to: WIP OVERHEAD INTERNAL ORDERS account

VARIABLE OVERHEAD BUDGET VARIANCE This account represents the variance between standard production variable overhead costs versus actual production variable overhead costs, per division. This applies to “fixed account parts only. When a production order (works order) line is completed (production-to-store movement), the difference between the Part Master variable overhead cost of a manufactured item, and the calculated variable overhead cost based on the Part Operations, is CREDITED if Part Master variable overhead cost * Qty Completed > Part Operation Cost *Qty Completed/ DEBITED (if Part Master variable overhead Cost* Qty < Part Operation Cost *Qty) to the this account. Refer to: WIP OVERHEAD INTERNAL ORDERS account


PRODUCTION SCRAP LABOUR COST This account represents the labour cost of manufactured items that were scrapped from production (or reworks), per division. When a partially completed “FIXED ACCOUNT” manufactured item, is scrapped from production (production-to-scrap movement), this account of the division to which the production order (works order) belongs, is debited with the labour cost (Sum of (Part Operation Time * Cost Centre Labour Rate * Scrap Qty)). The COST CENTRE LABOUR RECOVERY accounts of the Cost Centres used in the Part Operations, are credited.

PRODUCTION SCRAP MATERIAL COST This account represents the material (not labour) cost of manufactured items that were scrapped from production (or reworks), per division. When a partially completed FIXED ACCOUNT manufactured item is scrapped from production (production-to-scrap movement and rework to scrap), this account of the division to which the production order (works order) belongs, is debited with the material cost (Part Master Material unit Cost * Scrap Qty). The WIP MATERIAL INTERNAL ORDERS is credited with the material cost.

PRODUCTION SCRAP FIXED OVERHEAD COST This account represents the fixed overhead cost of manufactured items that were scrapped from production (or reworks), per division. When a partially completed FIXED ACCOUNT manufactured item is scrapped from production (production-to-scrap movement), this account of the division to which the production order (works order) belongs, is debited with the fixed overhead cost (Sum of (Part Operation Time * Cost Centre fixed overhead Rate * Scrap Qty)). The COST CENTRE FIXED OVERHEAD RECOVERY accounts for the Cost Centres used in the Part Operations, are credited.

PRODUCTION SCRAP VARIABLE OVERHEAD COST This account represents the variable overhead cost of manufactured items that were scrapped from production (or reworks), per division. When a partially completed FIXED ACCOUNT manufactured item is scrapped from production (production-to-scrap movement), this account of the division to which the production order (works order) belongs, is debited with the variable overhead cost (Sum of (Part Operation Time * Cost Centre variable overhead Rate * Scrap Qty)). The COST CENTRE VARIABLE OVERHEAD RECOVERY accounts for the Cost Centres used in the Part Operations, are credited.

REVALUATION CREDITOR SUSPENSE This account represents the value difference, when the cost of material changes between the time of receipt and the time the invoice is linked to the purchase order. This applies only to “fixed account” parts. If the material cost is changed for an item that was received from the supplier but the Invoice Line Link has not yet been done between the Creditor Invoice and the Purchase order, this account will be credited (if the new price < old price) /debited (if the new price > old price). The division’s CREDITORS SUSPENSE account will be credited (if the new price > old price)/debited (If the new price < old price)


REVALUATION STOCK This account accumulates the value difference when the cost of material changes for items where there is stock on hand. This applies only to “fixed account” parts. When the material cost is changed, this account is credited (If the new cost > the old cost) / debited (If the new cost < the old cost) The STOCK ACCOUNT is debited (If the new cost > the old cost) / credited (If the new cost < the old cost)

REVALUATION WIP This account accumulates the value difference when the cost of material changes for items where there is stock in work in progress. This applies only to “fixed account” parts. When the material cost is changed of work in progress items (i.e. issued stock for Production or Customer Order lines which are not yet completed), this account is credited (If the new cost > the old cost) / debited (If the new cost < the old cost). The WIP MATERIAL INTERNAL ORDERS (for production Orders) or WIP MATERIAL CUSTOMER ORDERS (for production Orders) is debited (If the new cost > the old cost) / credited (If the new cost < the old cost).

REWORK LABOUR COST In this account, the labour costs due to reworks are accumulated per division. This applies only to Internal Rework Order lines without a Node (project) specified. On completion of an internal Rework Order line (production-to-store movement), this account of the division to which the order belongs, is debited with the labour cost (Sum of (Order Operation STD Time * Cost Centre Labour Rate * Movement Qty)). The COST CENTRE LABOUR RECOVERY accounts for the Cost Centres used in the Part Operations, are credited.

REWORK NETT MATERIAL COST In this account, the material costs due to reworks are accumulated per division. This applies only to Internal Rework Order lines without a Node (project) specified. On completion of an internal Rework Order line (production-to-store movement), this account will be debited with the material cost of the order (Qty Issued * Total Part Master cost of items issued as requirements). The division’s WIP MATERIAL INTERNAL ORDERS account will be credited with the material cost of the order.

REWORK FIXED OVERHEAD COST In this account, the fixed overhead costs due to reworks are accumulated per division. This applies only to Internal Rework Order lines without a Node (project) specified. On completion of an internal Rework Order line (production-to-store movement), this account of the division to which the order belongs, is debited with the fixed overhead cost (Sum of (Order Operation STD Time * Cost Centre Fixed Overhead Rate * Movement Qty)). The COST CENTRE FIXED OVERHEAD RECOVERY accounts for the Cost Centres used in the Part Operations, are credited.

REWORK VARIABLE OVERHEAD COST In this account, the variable overhead costs due to reworks are accumulated per division. This applies only to Internal Rework Order lines without a Node (project) specified.


On completion of an internal Rework Order line (production-to-store movement), this account of the division to which the order belongs, is debited with the variable overhead cost (Sum of (Order Operation STD Time * Cost Centre Variable Overhead Rate * Movement Qty)). The COST CENTRE VARIABLE OVERHEAD RECOVERY accounts for the Cost Centres used in the Part Operations, are credited.

REWORK PURCHASE COST In this account, the purchasing costs due to reworks are accumulated per division. This applies only to Internal Rework Order lines without a Node (project) specified. On completion of an external Rework Order Line (supplier-to-store movement), this account will be debited with the movement value (Purchase Unit Cost as specified for the Purchase Order line * Qty Received). The division’s CREDITOR PROVISIONING account will be credited with movement value (Purchase Unit Cost as specified for the Purchase Order line * Qty Received).

STOCK ADJUSTMENT DEFAULT This account reflects the value of stock adjustments done per division. It could also give an indication of the amount of stock theft in the division. When a stock adjustment (adjustment to stores or adjustment from stores movement transaction) is done, this account is credited (if qty is adjusted downwards)/debited (if qty is adjusted upwards) with the value of the movement (Total Part Master Cost * Adjustment Qty) The STOCK account for the store used will be debited (if qty is adjusted upwards)/credited (if qty is adjusted upwards) with the value of the movement.

STOCK SCRAP This account reflects the value of stock scrapped from the stores in a specific division. When an item is scrapped from stock (stores-to-scrap movement), this account will be debited with the value of the movement (Total Part Master Cost * Adjustment Qty). The STOCK account for the store used will be credited with the value of the movement.

VAT PURCHASES This account accumulates the value added tax payable on purchases made. When the Invoice Line received is linked to a Purchase Order line or Service Requisition via the Creditors function, this account is debited and the TRADE CREDITORS account credited with the VAT value specified on the Invoice Line.

VAT SALES This account accumulates the value-added tax on sales made. When the Invoice is set to “PRINT APPROVED”, this account is credited and the TRADE DEBTORS account debited with the VAT plus the SALES amount of the Invoice Line.

WIP LABOUR INTERNAL ORDERS This account reflects the labour value spend on production orders (works orders) per division. This value is derived from the part master’s standard labour cost value. This applies to fixed account parts only.


If a production order line is completed (production-to-store movement), this account is debited with the Part Master labour cost of the manufactured item specified for the order line. The PRODUCTION LABOUR RECOVERY accounts of the cost centres specified for the Part Operations through the Work Centres, are credited with the labour cost calculated through the Part Operations of the manufactured part specified for the Production Order Line (Order Operation Std Time * Cost Centre Labour Rate * Movement Qty). The difference between the Part Master labour cost and the labour cost calculated through the Part Operations is debited (if Part Master Unit Cost * Qty > Part Operation Cost *Qty) / credited (if Part Master Unit Cost * Qty < Part Operation Cost *Qty) to the LABOUR BUDGET VARIANCE account.

WIP MATERIAL CUSTOMER ORDERS This account reflects the Material (not Labour) value issued to CUSTOMER PRODUCT SALE, CUSTOMER SALE and CUSTOMER SPECIAL customer order lines which are not shipped yet. This value is derived from the part master’s standard material cost and the quantity issued. When an item is issued (store-to-order requirements movement) to one of these customer order lines, this account is debited with the movement value (Total Part Master cost of issued item * Qty Issued). The STOCK account for the store from which the item is issued is credited with the movement value. When the Customer Order Line is shipped, this account is credited with the material Work in Process value and the DEBTOR SUSPENSE account debited.

WIP MATERIAL INTERNAL ORDERS This account reflects the material (not labour) value spend on open production orders (works orders), per division. This value is derived from the part master’s standard material cost value. This applies to fixed account parts only. If material is issued (store-to-order requirements movement) to a production order line, this account is debited with the movement value (Total Part Master cost of issued item * Qty Issued). On completion of the line (production-to-store movement) this account is credited with the movement value (Part Master material cost of the manufactured item * Qty Completed). The difference between the Part Master material cost of the manufactured item and the calculated material cost based on the order requirements issued (SUM of (Qty Complete * Qty Per of required item * Total Part Master material cost of required item)), will be debited to the MATERIAL BUDGET VARIANCE account (if Part Master material cost * Qty > Requirements Issued cost)/credited (if Part Master material cost * Qty < Requirements Issued cost). Note: This account is also journalised during part cost changes. (Part reevaluation)

WIP MATERIAL PURCHASE ORDERS This account reflects the material issued to currently open subcontract purchase orders. This applies to fixed account parts only. When stock is issued to a SUB CONTRACT Purchase order, this account is debited with the movement value (Part Master material cost of the issued item * Qty Issued). On completion of the SUB CONTRACT Purchase order (supplier-to-store or supplier-to-inspection movement), this account is credited with the movement value (Part Master material cost of the sub contract item * Qty Completed). If there is a difference between the Part Master material cost of the sub contract item and the calculated material cost based on the Order Requirements issued (SUM of (Qty Complete * Qty Per of required item * Total Part Master material cost of required item)), the MATERIAL BUDGET VARIANCE account will be debited (if Part Master material cost * Qty > Requirements Issued cost)/credited (if Part Master material cost * Qty < Requirements Issued cost), with the difference. Note: This account is also journalised during part cost changes (part reevaluations).

WIP FIXED OVERHEAD INTERNAL ORDERS This account reflects the fixed overhead value spend on production orders (works orders) per division. This value is derived from the part master’s standard fixed overhead cost value. This applies to fixed account parts only.


If a production order line is completed (production-to-store movement), this account is debited with the Part Master Fixed Overhead cost of the manufactured item specified for the order line. The PRODUCTION FIXED OVERHEAD RECOVERY accounts of the cost centres specified for the Part Operations through the Work Centres, are debited with the fixed overhead cost calculated through the Part Operations of the manufactured part specified for the Production Order Line (Order Operation Std Time * Cost Centre Fixed Overhead Rate * Movement Qty). The difference between the Part Master fixed overhead cost and the fixed overhead cost calculated through the Part Operations (Order Operation Std Time * Cost Centre Fixed Overhead Rate * Movement Qty), is debited (if Part Master fixed overhead Cost * Qty > Part Operation Cost *Qty) / credited (if Part Master fixed overhead Cost * Qty < Part Operation Cost *Qty) to the FIXED OVERHEAD BUDGET VARIANCE account.

WIP VARIABLE OVERHEAD INTERNAL ORDERS This account reflects the variable overhead value spend on production orders (works orders) per division. This value is derived from the part master’s standard variable overhead cost value. This applies to fixed account parts only. If a production order line is completed (production-to-store movement), this account is debited with the Part Master VariableOverhead cost of the manufactured item specified for the order line. The PRODUCTION VARIABLE OVERHEAD RECOVERY accounts of the cost centres specified for the Part Operations through the Work Centres, are debited with the variable overhead cost calculated through the Part Operations of the manufactured part specified for the Production Order Line (Order Operation Std Time * Cost Centre Variable Overhead Rate * Movement Qty). The difference between the Part Master variable overhead cost and the variable overhead cost calculated through the Part Operations (Order Operation Std Time * Cost Centre Variable Overhead Rate * Movement Qty), is debited (if Part Master variable overhead Cost * Qty > Part Operation Cost *Qty) / credited (if Part Master variable overhead Cost * Qty < Part Operation Cost *Qty) to the VARIABLE OVERHEAD BUDGET VARIANCE account.

WIP PROJECT MANAGEMENT This account reflects the work in progress values for projects (nodes) which are not completely shipped yet, per division. This value includes labour and material (not labour) costs. This account is debited when:

A receipt is done against a Purchase Order Line for a project (Node) with the Movement function (supplier-to-store or supplier-to-inspection movement).

The Project (Node) manager or his/her “acting-for” person via the Node Timesheet Approval function approves a Time Sheet.

An item is issued against an Unplanned Issue Requisition for a project (Node) via the Movement function (stores-to-requisition movement).

A supplier invoice is linked to a Service Requisition against a project (node) via the Creditors function.

The actual kilometers are entered for a transport requisition against a project (node) via the Transport Administration function.

The actual expense amount is specified for a Cash Requisition against a project (node) via the Bank Transaction function.

Stock is issued against an Order Issue Requisition for an Order Line for a project (node) via the Movement function (stores-to-order requirement movement).

This account is credited when the NON STOCK CUSTOMER ORDER Line for a MILESTONE Node, is shipped. The DEBTOR SUSPENSE account is then debited.

TRANSPORT RECOVERY This account reflects the transport costs per division. If the actual kilometers traveled is entered against a Transport Requisition, this account is credited with the cost (Actual Kilometers * Vehicle Rate). The Cost Centre account or project (Node) specified on the transport Requisition is debited with the cost.

OVER COUNTER SALES This account reflects the value of over the counter sales. (I.E. Sales not made through customer orders or the sales order wizard) per division.


If an over the counter sale is made this account is credited with the sales value and the VAT SALES ACCOUNT credited with the sales vat amount. The TRADE DEBTORS account is debited with the sum of the sales amount and vat amount. Note: This account is always defaulted as the sales account when doing over the counter sales but may be changed. If changed this account will obviously not accurately reflect the divisions over the counter sales value.


APPENDIX D

Year End Plan

1. The purpose of this document is to specify the actions to be taken before, during

and after the financial year-end. These actions are can be classified as follows;

Standard Costs/ Base line for the new financial Year (Parts / Costs Centres / Resources)

Synchronising Data in The system with actual situation (Stock / WIP / Timesheets)

Balancing financial information (Accounts Payable / Accounts Receivable)

Financial requirements (Accruals / Provisions)

House Cleaning (Cleaning out purchasing / sales and other data)

System Requirements (Company Calendar / Backup) The actions and implications are briefly described and then listed in an action list with responsibilities and dates.

Glossary

Term Definition

BOM Bill of Material

CT Credit

DT Debit

WIP Work In Process

Table 1.2 – Glossary of Terms Used

2. Standard Prices and Rates (Standard Costing and Average Costing models apply)

2.1 Requirement

All standard costs for the new financial year must be updated before year end. The effect of not updating these costs before year end will result in users not being able to perform transactions were costs do not exist. The updating of standard costs in future years has no effect on current costing information in The system. Please note that if changes to organization structures are required – splitting / merging of division and costs centers that year-end is the best time to perform these actions.

2.2 Update Purchase Prices

The following actions must be taken;

Confirm/update prices for all “fixed account” purchased / subcontracted items for the new financial year.

Use the Function: Part Price Scenario to simulate specific scenarios. Also use this function for bulk updates of purchase/subcontract prices.

The ABC classification and Commodity Codes can be utilized to do batch updates of prices, for example increase the purchase price with 10% for all Class “C” parts with a Commodity Code of “consumable”

The “Last Purchase” price from The system can also be used to update the purchase price

A deviation report can be extracted to show purchase values with a variance of more than x % from the standard


2.3 Update Cost Centre Rates

The following actions must be taken to update the direct manufacturing labour costs

Revise cost centre rates (Labour, Variable Overhead & Fixed Overhead) for all DIRECT cost centers for the new financial year.

The new rates should be based on the new financial year’s budget and the “allocation of cost from INDIRECT cost centers to DIRECT cost centers” model.

2.4 Update BOM Roll-ups

Once the purchase prices and cost centre rates have been updated for the new financial year, run

UPDATE Cost Generations for all internally manufactured parts. NB – any movements of items where cost generations have not been run for the new financial year will result in variance journals for either material or labour, or even both.

2.5 Update Item Sales Prices

Update sales prices for the new financial year.

This is necessary to generate sales forecast reports showing the correct sales values and also for the value that defaults to Customer Orders to be correct and meaningful

2.6 Store issue Requisitions

Update open store issue requisitions to reflect new standard cost as the required amount.

3 Project Structure, Resource and Costing Data

3.1 Node Structures

Make sure node structures are in place for the new financial year.

Also make sure that the relevant general ledger accounts have been opened and specified for the node structure.

3.2 Project Labour Resource Rates

Revise and update labour resources defined in The system. The following actions need to be performed;

Suspend all labour resources not to be used in new financial year

Add new labour resources if required

Revise and update the labour, variable overhead and fixed overhead rates for all active Labour Resources in The system for the new financial year.

Revise and update the labour, variable overhead and fixed overhead rates for all sub contractors who would work on projects/programs in the new financial year.

3.3 Project Material Resources

Revise and update material resources defined in The system. The following actions need to be performed;

Suspend all material resources not to be used in new financial year


Add new material resources if required

3.4 Timesheets

The following actions needs to be performed for time management

Raise and approve all project timesheets before the “year end”.

NB – time approved after “Month-End” will only be costed in the new Financial Year.

3.5 Requisitions

To ensure clean data for year-end, the following needs to be performed in term of project requisitions

Review all requisitions against projects that is still in the current financial year.

Update the requisitions required date to a date in the new Financial Year to indicate that that it is still required.

If not required close or reject the requisition.

4 Stock

The activities described below must be performed prior to “Year End”.

4.1 Confirm Stock Balance

Confirm physical stock by means of a stock count and correct the “On Hand” quantities in The system by means of “stock adjustment “ and “scrap” transactions.

Warning! Correction of stock quantities should only happen if the system has been closed for all types of movement transactions. Only users responsible for correcting stock quantities should have access to movement transactions.

Once the physical stock quantities have been verified and corrected, take a snapshot of the “On Hand” balance of the stock by running the “Year_End_Set_Stock_Balances” stored procedure on the Production database with SQL Enterprise manager. The stored procedure requires only the new financial year as a parameter.

This procedure will take the stock quantities at the time of running and inserts it into the Opening_Stock_Balance field in the Part_Financial_Year_Data table. It is recommended that this procedure be run once the system has been closed for all movement transactions or from a restored backup of the Production database taken before start of business in the new financial year.

4.2 Confirm Work in Progress (WIP) Quantities

Run the WIP Reports and confirm the quantities by means of a physical count. Correct the discrepancies by means of stock adjustments. These corrective movements have to be done prior to year-end.

Warning! Correction of WIP quantities should only happen if the system has been closed for stores issue and receiving movement transactions. Only users responsible for correcting stock quantities should have access to the movement transactions.


5 Control Accounts

5.1 Requirement

It is a requirement to balance Control accounts to the detail report for various financial functions at year-end to ensure data integrity.

5.2 Confirm the Accounts Payable Suspense and Provision Quantities

Run the Accounts Payable Suspense and Provision Reports and confirm the actual items and quantities by comparing the report to Delivery Notes and Invoices from suppliers. Fixes can be:

Capture invoices received but not captured.

Link Invoices captured but not linked to the receiving transaction

Items received without being invoiced. Reverse receiving transactions if no proof of delivery exists or if the supplier has been paid through the creditor’s function. Note: Validate stock OH to make sure that the stock is still correct after the reversal

Warning! Correction and confirmation of Creditor Suspense quantities should only happen if the system has been closed for Accounts Payable invoicing and receiving transactions.

5.3 Confirm Accounts Receivable Suspense Quantities

Run the Debtor Suspense Reports and confirm the actual items and quantities by comparing the report to Delivery Notes for which the Invoices have not been “Print Approved” in The system. Fixes can be;

Invoices created but not print approved or printed.

Credit Notes created but not linked to a credit line on a debtor invoice

Warning! Correction and confirmation of Debtor Suspense quantities should only happen if the system has been closed for Accounts Receivable invoicing and shipping transactions.

5.4 Confirm Accounts Payable

Run the Accounts Payable Open Payable Reports and confirm the actual items against the Accounts Payable Control accounts.

Investigate and fix any discrepancies.

Make provisions to clear in the new financial year for known outstanding invoices.

5.5 Confirm Outstanding Accounts Receivable

Run the Debtor Age Analysis Reports and confirm the actual items against the Accounts Receivable Control accounts.

Investigate and fix any discrepancies.

Compare Accounts Receivable Outstanding with Customers and Correct if required.

Make provisions for bad debt if required invoices.


6 Ad Hoc Activities

6.1 Year End Revaluation Journals – Only standard costing

It is possible to run reports to see the effect of year end revaluation and correct if required. Once the physical quantities and items have been confirmed run valuation reports for:

Stock on Hand

Work in Progress

Accounts Payable Suspense

Debtor Suspense These reports must multiply the year-end quantities with the difference between the current and new financial year prices to determine the value of hand journals to be processed to correct the relevant accounts. The hand journals must debit/credit the stock and suspense accounts and debit/credit the relevant revaluation accounts.

6.2 Year End Roll

Use the “Year End Roll” function in The system to clear the income statement accounts. Balance of Income Statement Accounts written to Retained Earnings Account. This action should only be done once all provisions have been made and management is satisfied with year-end reports and balances. There is no time limit on when to do this year-end roll; it might even be 2-3 months after year-end closure. But after the year-end roll is performed no more transaction and journals can be processed to the previous financial year.

6.3 Cleaning Out Data

Financial Year End is a good time to do “House Cleaning” on The system. The following items should be investigated and closed / rejected / made obsolete where possible.

Overdue Purchase Orders

Any Requisitions with required date prior to year End

Overdue Accounts Receivable Invoices

Overdue Requests and Failures

Open Nodes with End Dates prior to year End

Bills of Materials not Used Warning! Always ensure that the correct business processes are followed when cleaning data.

6.4 Company Calendar

Revise and update the Company Calendar with public holidays and company closing dates for at least the next two financial years.


Year End Count Down Plan

No Action Remarks Responsible Deadline

1 Finalize company’s yearly budget

Report per Division and Cost Centre

Cost Centre Managers Before Year end

2 Update prices for all purchased / subcontracted parts for the new financial year.

Report per Buyer / Supplier; Part Price Scenario Function

Buyers Before Year end

3 Update Project Labour Resource rates for the new financial year Report by Labour Resource Report by Employee (Sub Contractor)

Node Managers Before Year end

4 Raise and approve final timesheets System Timesheet System Node Timesheet Approval

Node Managers Before Year end

5 Create new node structures Node Node Managers Before Year end

6 Update part sales prices for new financial year Report per Customer by Part Marketing Before Year end

7 Update routings and standard times for new year. Reports per Production Planner by Part

Production Before Year end

8 Update cost centre, labour resource and employee recovery rates for new year.

Report per Cost Centre, Resource and Employee

Cost Centre Managers Before Year end

9 Run UPDATE cost generation for new financial year to update cost on all levels for manufactured parts

Cost Generation Costing Before Year end

10 Receive / close overdue purchase orders and purchase requisitions

Transactions and Procurement Reports

Procurement Before Year end

11 Ship or postpone overdue sales orders and print debtor invoices not printed

Transactions, Sales and Debtor Reports

Sales Before Year end

12 Process overdue debtor settlements (allocate all unallocated cash)

Transactions, Sales and Debtor Reports

Debtors Before Year end

13 Complete overdue cash advances and claims Transactions and Cashbook Reports

Elena Before Year end

14 Process overdue invoices for services Transactions and Year End action reports

Accounts Payable Before Year end


15

Create provisions (DT Expense Account / CT Provision Account) by means of hand journals for overdue commitments / expenses not possible to complete in current year Outstanding purchases (NSTK Requistions) Outstanding cash advances and claims (employee exp Requistions) Outstanding service invoices (Service Requisitions)

Reports per Account or Project showing value of Outstanding Commitments

Finance Before Year end

16 Confirm stock “qty on hand” by means of physical counting. (Adjust where necessary by means of stock adjustment movement transaction) Note: Close system for operational users

Report per Store by Part and Location

Inventory Before Year end

17 Confirm WIP quantity by means of physical counting (Adjust where necessary with movement transactions)

WIP Report Inventory Before Year end

18 Confirm creditor suspense quantities and Open Payable Creditor Suspense Report Accounts Payable Open Payable Report

Accounts Payable Before Year end

19 Confirm debtor suspense quantities and Age Analysis Debtor Suspense Report Accounts Receivable Age Analysis

Accounts Receivable Before Year end

20 Run the “Year End” revaluation reports for Stock, WIP, Accounts Payable Suspense, Debtor Suspense to determine difference in stock value

Report Finance Before Year end

21 Process hand journals for the revaluation values (Stock, WIP, Accounts Payable, Accounts Receivable)

Hand Journal function Finance Before Year end

22 Create stock opening balance for new financial year “Year_End_Set_Stock_Balances” stored procedure

Costing Before Year end

23 Take backup of Production Database System Configuration

function Dewald Stander Year end

24 Process other year end hand journals (e.g. Auditors) Hand Journal function Finance After Year end

25 Run preliminary year end financial reports Statement Reports All After Year end

26

Prepare and approve final statements Balance Sheet General Ledger Income Statement Trial Balance

Statement Reports Finance After Year end

27 Clear the Income Statement Accounts – Year end Roll Year End Roll Finance After Year end


LESSON SUMMARY

On completion of the Financial Overview course assignment, students will understand and be able to set up the company’s accounting structure in the System. The students will be able to process hand journals, do cheque reconciliation, run ledger reports, do drill down on actual costs, load external journals, create non-posting entities, do a year-end roll and create a non posting entity report.

TO DO THIS

Add Account Codes. Use ACCOUNT CODE function.

Add Accounts. Use ACCOUNTS function.

Use ACCOUNT MAINTENANCE tab.

Copy “Same As” Accounts. Use ACCOUNTS function.

Use ACCOUNT COPY FUNCTION tab.

Process a Hand Journal. Use HAND JOURNAL function.

Do Cheque Reconciliation. Use CHEQUE INFORMATION UPDATE function.

Do Actual Cost Drill Down. Use ACCOUNT BUDGETS / ACTUALS function.

Use VIEWING OPTIONS tab.

Use BUDGET / LATEST / ACTUAL tab.

Use DETAIL JOURNAL ENTRIES tab.

Use JOURNAL SOURCE tab.

Add a Journal Source Code. Use the JOURNAL SOURCE function.

Load External Journal. Use the EXTERNAL JOURNALS function.

Add Non-posting Entities and Structure Use the NON-POSTING ENTITY function.

Use the NON-POSTING ENTITY MAINTENANCE tab. Use the NON-POSTING ENTITY STRUCTURE MAINTENANCE tab.

Do a Year End Roll Use the YEAR END ROLL function.

Add and Run a Non-posting Entity Report Use the NON POSTING ENTITY REPORTS

function.

Run General Ledger Reports Use the GENERAL LEDGER REPORTS and

ACCOUNT REPORTS functions

Documents

FINANCIAL OVERVIEW - Qmuzik Technologiesapps.qmuzik.com/Training/qm8pdf/General Ledger.pdf · 2018. 2. 7. · The Year-End Roll posts a journal against the retained earnings account(s)