Case Study – Sub-Ledger Accounting

Introduction
This section is aimed to guide you through the definition of rules to
account for a Payables invoice. The environment to be used does
not have the adequate ledger setup to accommodate each user to
be able to create accounting using her/his own rules. Remember
that a primary or secondary ledger can have a single accounting
method effective at any given date for a given application.
Therefore, with a single primary ledger definition (Vision
Operations, USA), it will not be possible for all users to create
accounting concurrently for the same ledger. We will be
concentrating on the definition of the rules in this class.

Define Rules to Account for Payables Invoices

Exercise 1 - Copy and Modify Flow

Task
Using the seeded Payables definitions, copy and create your own
rule to account for an invoice. Your rule should:
- Have your own description on the liability line,
- Have a separate liability line for each invoice line, i.e. not
summarized.

Detailed Steps
Copy the seeded journal line definition Accrual, Invoices All and
perform the following changes for your copy:
1. Define a journal entry description to be used on the liability
line. The description should contain your name as a
constant and the supplier name. It should appear only on
invoices having invoice date of February 21, 2007.
Responsibility: Payables, Vision Operations
Navigation: Setup -> Accounting Setup -> Accounting Methods
Builder -> Methods and Definitions -> Journal Line Definitions
Field Value
Journal Description Code Enter a code.
Journal Description Name Enter a name.
Enabled Yes
Transaction Chart of Null
Accounts
Description Enter a description for this
component you are defining; can
leave null.
Priority 1
Details This is what will show on the liability
line as the description. Define such
that your name as well as your
supplier’s name is displayed.
Conditions Define a condition such that this
 description is used only when invoice
date is February 21, 2007.

2. Liability lines of the entry should not be summarized i.e.

there should be a liability entry for each invoice line. To
accomplish this, copy the seeded journal line type “Liability,
Basic”, and modify it such that journal entry lines with
matching criteria are not merged.
3. Modify your copied JLD to use above components.
4. Copy and modify the seeded Payables application definition
Accrual Basis to use your JLD.
5. Modify the Subledger Accounting Method Standard Accrual
to de-activate the seeded Payables AAD and activate yours
as of February 1st, 2007.
Solution
Navigation: Setup -> Accounting Setups -> Subledger
Accounting Setup -> Accounting Methods Builder -> Journal
Entry Setups -> Journal Entry Descriptions
1. Your description should look like below:

Figure 1 –JED for Liability Line

Figure 2 - JED Detail

 Figure 3 - JED Condition

2. To ensure that liability lines with matching criteria (GL

account, accounting class being a few of many. For the full
list, please refer to the SLA Implementation guide) are not
merged into a single line and that the granularity of the
invoice lines are preserved, set the Merge Matching Lines
option to “No” on your JLT. In order to make the definition
easier, instead of creating the JLT from scratch, use the
copy functionality on the seeded JLT Liability, Basic and
change the desired option. Your JLT should be similar to
below:

Figure 4 – New Liability JLT

3. Remove or de-activate the seeded Liability, Basic JLT from
your copied JLD, and assign your JLT, instead. Do not forget
to assign your description to this JLT, as well as the same
account derivation rule as was on the seeded JLT that you
removed/de-activated. Your JLD should look like below:

Figure 5 – New Invoice JLD

4. Copy the seeded AP AAD; replace the JLD for the event
class Invoice with your own. Remember to validate your
AAD; the validation will check for inaccuracies in the setup
and compile the code to create accounting per these rules.
Your AAD should look like below:

Figure 6 – New AP AAD

5. Copy the seeded Standard Accrual SLAM, put an end-date
of January 31st, 2007 on the seeded Payables AAD. Add a
new row and activate your AAD as of February 1st, 2007.
The SLAM should look like below:

Figure 7 - Modified SLAM

Exercise 2 Create Flow

Task
Define an AAD for the accounting chart of accounts Operations
Accounting Flex, such that it will generate a journal entry:
- Only for the validation of AP invoices,
- with only item expense and liability lines i.e. no tax,
freight etc,
- booking the liability line to the account: 01-000-2220-
0000-000,
- booking the expense line to the distribution account on
the invoice line, but with the account segment value
overwritten with 7740.

Detailed Steps
Define the following components and build your SLAM:
1. Liability JLT: Copy your liability JLT defined in the previous
exercise and modify it such that lines with matching criteria
are merged. Call your Liability JLT
<FIN_XX>_LIABILITY_MERGED
2. Expense JLT: to create a line for invoice lines of type Item,
Field Value
Event Class Invoices
Line Type Code Enter <FIN_XX>_INVOICE_EXPENSE
Accounting Class - Item Expense.
- This value will be on the entry line
and is used to categorize lines,
primarily for reporting purposes.
Name Enter a name.
Rounding Class - Enter the same value as in
Accounting Class.
- Along with the Rounding Reference,
this value is used to determine at
what level transaction rounding
should be performed (advanced
topic).
Description Enter a description for the component
you are defining; can leave null.
Enabled Yes
Balance Type Actual, as we are not looking to create
budget or encumbrance entries.
Side Debit. Expense amount should be
debited to the expense account.
Switch Debit/Credit - No.
- Determines if the side on a line with
a negative amount should be
switched and the negative made
positive, or both the negative and
the side preserved. For example, an
amount of -100 may generate an
 entry line with DR -100 or CR 100.
Merge Matching Lines - No.
- Determines if lines with matching
criteria should be merged into a
single line.
Subledger Gain/Loss - No.
- Will this JLT be used to create an
exchange gain/loss line calculated
by the transacting application for
the primary ledger (advanced
topic)?
Transaction Chart of - Null.
Accounts - Used in interpreting or converting an
accounting flexfield source carrying
a value from the transaction for the
primary ledger (advanced topic).
Business Flow Method - None.
- Determines if certain attributes of
the journal line should be inherited
from another line. For example, for
a liability line, copy the BSV from
the corresponding expense line in
the same entry; or, on a payment,
back out from the same liability
account that was used on the
invoice of this payment (advanced
topic).
Business Flow Class - Null.
- Used together with the above when
Prior Entry is selected.
Multiperiod - None.
- Determines if/how a payment should
be recognized as expense over
multiple accounting periods
(advanced topic).
Transfer to GL - Summary.
- Determines whether the lines should
be transferred to GL in the same
level of granularity as in SLA or
summarized by accounting flexfield
and other criteria.
Conditions Define a condition such that this JLT is
used only for invoice lines with
distribution type = Item.
Accounting Attribute - Review the sources assigned to the
Assignments accounting attributes to be used in
deriving values for this journal entry
line.
- Uncheck the Event Class Default box
for the attribute Party Identifier, and
select Invoice Supplier Site Identifier
from the list of values. This will
result in the journal entry line
showing the party site identifier as
both the party and the party site.
Note that you can change the event
class default only if there have been
multiple source assignments to an
accounting attribute on the event
 class level.
Note: This may not work in our current
training environment

3. Liability ADR: a constant based ADR deriving accounting

flexfield 01-000-2220-0000-000, defined for accounting
chart of accounts Operations Accounting Flex,
Field Value
Rule Code Enter a code. <FIN_XX>_LIABILITY
Rule Name Enter a name. <FIN_XX> Liability
Account
Enabled Yes
Description Enter a description for the component
you are defining; can leave null.
Chart of Accounts- - Null
Transaction - Used in interpreting or converting
an accounting flexfield source
carrying a value from the
transaction for the primary ledger
(advanced topic).
Chart of Accounts- - Operations Accounting Flex
Accounting - Will allow defining constant values
by validating against the COA.
Output Type Flexfield
Priority 1
Value Type Constant
Value 01-000-2220-0000-000

4. ADR for invoice distribution account: already exists as

seeded rule (see the ADR Invoice Distribution Account
attached on the JLT Item Expense JLT on seeded JLD
Accrual, Invoices All),

5. ADR for account segment: a constant based ADR deriving

value 7740 for account segment, defined for accounting
chart of accounts Operations Accounting Flex,
Field Value
Rule Code Enter a code. <FIN_XX>_EXPENSE
Rule Name Enter a name. <FIN_XX> Expense
Account
Enabled Yes
Description Enter a description for the component
you are defining; can leave null.
Chart of Accounts- - Null
Transaction - Used in interpreting or converting
an accounting flexfield source
carrying a value from the
transaction for the primary ledger
(advanced topic).
Chart of Accounts- - Operations Accounting Flex
Accounting - Will allow defining constant values
by validating against the COA.
Output Type Segment – Account
Priority 1
Value Type Constant
Value 7740
6. JED (optional): you can use the JED already defined in the
previous exercise,
7. JLD for invoice validation event type: defined for accounting
chart of accounts Operations Accounting Flex:
- Assign the liability JLT from step #1 and the
liability ADR from step #3. Note that this ADR
will determine the value for all the segments of
the accounting flexfield.
- Assign the expense JLT from step #2 and the
ADR for invoice distribution account from step
#4 and ADR for account segment from step #5.
Note that the former will determine the value
for all the segments of the accounting flexfield,
and the latter will overwrite the account
segment value.
-
8. Payables AAD: defined for accounting chart of accounts
Operations Accounting Flex, to generate an entry only for
invoice validation events. Assign the JLD from step #7. Use
the Definition Code <FIN_XX> OPERATIONS_COA_AAD.
Hit the Header Assignments button, and check the source
assigned to the GL Date accounting attribute. The value of
this source from the transaction will determine what the GL
date will be on the accounting entry. Optionally, assign a
description for the header of the entry.
Remember to Validate your AAD.
9. SLAM: defined for accounting chart of accounts Operations
Accounting Flex, to generate accounting only for Payables
application. Note that you can also assign your COA-
specific AAD on a COA-generic SLAM. However, for the
purposes of this exercise, define a new one, called
<FIN_XX>_OPERATIONS_SLAM.
Solution
Navigation: Setup -> Accounting Setup -> Subledger
Accounting Setup -> Accounting Methods Builder -> Journal
Entry Setup -> Journal Line Types
1. Your new liability JLT should be similar to below:

Figure 8 - New Liability JLT

2. Your JLT for the expense line should be similar to below:
(Note: You may have to set the Subledger Gain/Loss field to
NO)

Figure 9 - New Expense JLT

Figure 10 - Expense JLT Condition

 Figure 11 - Expense JLT Accounting Attributes

3. Your liability ADR should be similar to below:

Setup -> Accounting Setup -> Subledger Accounting Setup
-> Accounting Methods Builder -> Journal Entry Setups ->
Account Derivation Rules

Figure 12 - Liability ADR

4. Seeded ADR Invoice Distribution Account will read the value
of the source Invoice Distribution Account from the
transaction, and will use the same account on the journal
line.

Figure 13 - Seeded ADR for Invoice Distribution Account

5. Expense account ADR should be similar to below:

Figure 14 - Expense ADR for Account Segment

6. The JED is defined in the previous exercise.
7. Your JLD should be similar to below:
Setup -> Accounting Setups -> Subledger Accounting Setup
-> Accounting Methods Builder -> Methods and Definitions
-> Journal Lines Definitions

Figure 15 - JLD for Invoice Validation Event

8. Your AAD should look like below:
Setup -> Accounting Setups -> Subledger Accounting Setup
-> Accounting Methods Builder -> Methods & Definitions ->
Application Accounting Definition

Figure 16 - AAD for Operations Accounting Flex

 Figure 17 - AAD Header Assignments
9. Your SLAM should be similar to below:
Setup -> Accounting Setups -> Subledger Accounting Setup
-> Accounting Methods Builder -> Methods and Definitions
-> Subledger Accounting Method

Figure 18 - SLAM for Services Accounting Flex

Exercise 3 - Create Accounting Using Seeded SLAM with
Custom AAD

Task
In the Copy and Create flow above in Exercise 1, you created your
own AMB components by copying and modifying the seeded
definitions. You assigned your AAD to the seeded SLAM Standard
Accrual. When you create accounting for any ledger that has this
SLAM assignment, the invoices will be accounted per your rules.
This exercise involves entering a transaction and generating
accounting for it per your definition in Exercise 1.

Detailed Steps
1. Create a standard Payables invoice for operating unit
Vision Operations (USA), with 2 item lines, validate
the invoice, and create online accounting in final
mode to post to GL.
Note: If you use Supplier number 1005, you should
remove the Distribution Set name that will default
into the invoice header, otherwise this will generate
confusing results.
2. View the accounting lines generated.
3. View the journal entry.
4. View the details of one liability line.
5. View the entry in t-account format. (Warning: this
might take a long time to appear – go for a coffee!)
Solution
1. Use the Actions button to submit online accounting
for the invoice.

Figure 19 - Create Online Accounting for a Payables Invoice

2. Use the toolbar to access accounting entry for the
invoice, displaying all lines generated. Note that if there
are multiple representations i.e. reporting currencies and
secondary ledgers, a separate entry will be generated for
each; but all lines belonging to all entries will be displayed
on this page.

Figure 20 - Accessing Accounting Entry from Invoice Workbench

Figure 21 - View Journal Entry Lines

3. Use the button View Journal Entry to access more
details of the entry with the header information. Notice
that the liability lines have not been summarized per the
liability JLT definition you had created.

Figure 22 – View Journal Entry

4. Select the link Show for one of the liability lines to
view the details. Notice the description is created per your
JED.

Figure 23 - Journal Line Details and Description

5. Select the button View T-Account.

Figure 24 - View Journal Entry in T-Account Format

Exercise 4 - Create Accounting Using Custom SLAM with
Custom AAD

Task
In the Copy and Create flow above in Exercise 2, you created your
own AMB components including the SLAM. In order to use your
SLAM, you need to assign it to the ledger you are using. When you
create accounting for any ledger that has this SLAM assignment,
the invoices will be accounted per your rules. This exercise
involves entering a transaction and generating accounting for it
per your definition in Exercise 2.

Detailed Steps
1. Create a standard Payables invoice for operating unit
Vision Operations (USA), with 2 item lines, validate the
invoice, and create online accounting in final mode to post
to GL.
2. On Subledger Accounting Journal Entries page, search
for the two invoices you have entered in this exercise and
the previous one.
3. Select the two entries and hit Compare button.
4. Switch to GL responsibility and view the new journal.
5. Drill down to the SLA entry.
6. Drill down to the transaction.
Solution
1. Create an invoice with the same date, amount, and
distribution accounts as in the previous exercise.
2. Depending on your search criteria, multiple entries may be
returned.

Figure 25 - Search Journal Entries

3. Compare the details of the two entries, and notice the
difference in the accounts and liability line summarization.

Figure 26 - Compare Journal Entries

4. Notice that the entry in GL has two lines with the expense
lines summarized, whereas the entry was created in SLA
with 2 expense lines to the same account. This is because
 of the Transfer to GL setting on the expense JLT, which was
set to Summary. Hence, during transfer to GL, lines hitting
the same account are summarized into a single one, with
the details being preserved in SLA. SLA entries are more
detailed than the GL entries.

Figure 27 - Entry Viewed in GL

5. Using the Line Drilldown button for the debit line, you
navigate to the SLA page to view the detail lines that were
summarized together to create the line as seen in GL.

Figure 28 - Detail Lines in SLA

6. From the lines view, you can drill back to the transaction on
Payables invoice workbench.

Figure 29 - Drilldown to Transaction

Exercise 5 - Troubleshoot Accounting Errors
Create Accounting Using Custom SLAM with Custom AAD

Task
In this exercise, you will be running diagnostics to troubleshoot an
error in accounting. Use your own SLAM, AAD, and JLD for invoice
validation, but replace the Item Expense JLT with the following one
already defined as a template for you: “LP Item Expense (error)”.
Of course, you should not be using this JLT, but copying it and
creating your own exact copy with no modifications.

Detailed Steps
1. Create a standard Payables invoice for operating unit Vision
Operations (USA), validate the invoice, and create
accounting in final mode to post to GL.
2. When the process errors, run the Create Accounting
program through SRS in batch mode so you can see the
errors.
3. Enable diagnostics for your user if not already done; and
run the diagnostics report.
4. Identify and fix the error.
Solution
1. Following error will be displayed:

Figure 30 - Online Accounting Error

2. Set the profile option SLA: Enable Diagnostics to Yes for

your user, and submit the Transaction Objects Diagnostics
program.

Figure 31 - Enable Diagnostics

3. Submit Create Accounting program for your ledger, and
when completed, view the output for errors.

Figure 32 - Create Accounting Offline

Figure 33 - Error on Accounting Report

 Figure 34 - Submit Transaction Object Diagnostics
4. On the output, locate the accounting attribute that the error
was reported for, i.e. Accounted Amount. Notice the source
and its value mapped to this attribute for the JLT that was
expected to create the entry line, “Quantity Variance
Amount in Ledger Currency” with no value. This shows that
the accounting program was trying to create the entry line
using the value of this source, and was unable to create a
successful entry as the there was no value. A valid journal
entry line must always have a value for accounted amount.
For a list of validations on a journal entry, please see the
appendix of the SLA Implementation Guide.
To fix the error, you will need to change the source
mapped to this accounting attribute on the JLT that was
in error, i.e. your copy of the LP Item Expense (error)
JLT. Note that after modifying any component used in
it, your AAD will need to be revalidated to compile the
code with the new settings.
When you generate accounting after these changes
(offline or online), you will see an entry successfully
created.
Figure 35 - Diagnostics Report

Figure 36 - Accounting Attribute Assignments on the JLT

Figure 37 - Revalidating the AAD