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INTRODUCTION TO PERFORMANCE ANALYSIS

At the end of the day every business wants to know the same thing, "How much money did we make?" This number can differ based on the accounting rules you employ. Compiere allows you to define multiple Accounting Schemas and 'GAAPs'  (Generally Accepted Accounting Principles) for a single Tenant.

ACCOUNTING SCHEMA

An Accounting Schema is a combination of a national accounting standard (e.g. US GAAP), a Costing Method (e.g. Average Invoice or standard), a Accounting Basis (Accrual or Cash)  and a currency. Compiere allows you to define multiple Accounting Schemas so you can maintain books for financial reporting and data for management decision making in parallel. It also eliminates the cumbersome tasks of conversion, transformation, and consolidation of foreign subsidiaries and allows for the easy separation of management and legal reporting.

ELEMENTS

Each Accounting Schema also defines the Elements which make up the Account Combination to be used for GL transactions. Organization and Account are required. Optionally you can also define Business Partner, Product, Campaign, Project and others. Additionally, Compiere allows you to define 2 User Defined elements to accommodate unique business profiles. For example, if an Account Schema defines Product and Business Partner as optional elements a sample account combination would be 01-1200-2000-Brown.

  • '01' is the Organization HQ
  • '1200' is the Accounts Payable account element
  • '2000' is the Product Flower

'Brown' is the Business Partner Joe Brown Inc.

The description displayed for this Account Combination would be: HQ- Payables-Flower-Joe Brown Inc.
 
You do not need to worry about what elements to enter with each transaction as Compiere generates all accounting transactions for you automatically as the element values are derived from the transaction or document.

GENERAL LEDGER PARAMETERS

Each Accounting Schema defines several parameters for General Ledger processing. These include the type of error handling and method of currency balancing to use. Additionally, the accounts used for Retained Earnings, Inter-Company transactions and Balancing are defined.

DEFAULT ACCOUNTS

Lastly, the Accounting Schema defines the default accounts to be used for system generated transactions (e.g. accounting for AR Invoices). These accounts are used as default values for Business Partners, Products, Warehouse, Project, Bank, Taxes and Cash Book. These can all be overwritten at the individual level but having these defaults ensure that every transaction is properly accounted.

The objective is to generate all accounting transaction entries. Consequently, all necessary accounts are predefined. For example, if you sell a product, the revenue account defined for that product is used. This allows you to define the accounts a single time and then you do not have to be concerned with the accounting consequences when entering documents.
 

CALENDAR AND PERIOD

Unlike typical accounting packages, Compiere does not include a Calendar within its Accounting Schema. The Calendar in Compiere is used for control and reporting purposes only.

POSTING

In Compiere, Posting can occur when a document is processed or it can be done in a 'batch' mode when the application server is started. With Compiere's unique architecture you can also 'reset' the accounting for all or part of your organization to accommodate changes made to default accounts or accounting changes made for an organization. You can also resubmit a posting if an error like a closed accounting period caused the post to fail.

For more information on the Application Server, refer to the Compiere Support website: http://www.compiere.com/support/installation.php.

THE WORKFLOW

To get an overview of the Account Setup in Compiere, click on Accounting Setup from the Main Menu.

You can easily review the steps to be carried out during the setup.

To navigate through the different steps and open the appropriate window simply click on the specific workflow icon.

The workflow demonstrates how to define the necessary records to ensure proper Accounting.

Calendar Year and Period

The Calendar Year and Period window allows you to define the Calendars that will be used for Reporting and Period Control. Each Tenant has a one or many Calendars and all Organizations for that Tenant use the same Calendars.

You may click on the Calendar Year and Period icon in the Workflow window or you may simply open the Calendar Year and Period window from the Main Menu.

Use the Calendar tab to enter the Name and Description for this Calendar and select the Active check box.

Click on the Year tab to enter the Years for your Calendar.


 
Enter the Year and Description for this Calendar and select the Active check box.

If you choose, select the Create Periods button to automatically create periods 1 through 12 for the given Year. The periods will be created with a start date of the first day of each month.

Click on the Period tab to enter the Periods for your Year.

Enter the Period and Name for this Period and select the Active check box.

Enter a Start Date or open the Calendar tool to select a date. When you save the record the End Date will be updated and will be the last day of the month selected in the Start Date. This can be overwritten.

Select a Period Type of Standard Calendar Period or Adjustment Period. The Standard Calendar Period is used for determining the period for posting and reporting, while the Adjustment Period can be used only in Manual Journal Entries.

Note: The system will edit to ensure there are no overlaps in the dates for Standard Calendar Periods. The system will allow an Adjustment Period to overlap a Standard Calendar Period.

If you choose, select the Open/Close All button to automatically open or close the given period for all document types. The Open/Close Flag for each period can also be set or overwritten manually. This allows you to prevent posting of Invoices for a given period while still allowing manual journals for example.

Note: Opening and Closing of Periods should be done for the Calendar defined in the Tenant Info window or Organization Info window.

Click on the Period Control tab to update the Period Action for each Period.

When a Period is created a record for each Document Type is created for that period. The Period Status is set to Never Opened and the Period Control is set to a default of No Action. Select one of the following Period Actions: Open Period, Close Period, Permanently Close Period, or <No Action>. Now click the Open/Close Period button. The selected action will occur and the Period Status will be updated based on the action taken.

Click on the Non Business Days tab to update the Non Business Days for this Calendar.

Enter a Name and select a Date to indicate days that are not Business Days. These Non Business Days will be used when determining availability for Resources.

For additional information on Resources, refer to the Services Chapter.

Account Element

The Account Element window allows you to define the Account values and parameters that will be used for Posting. The Account Element is required in each Account Schema and all values to be used must be defined there. When you initially install Compiere and import your accounts, the data in these windows will be populated including Element Values and Trees. Most often you will use this window to add new accounts, make changes to the parameters for specific accounts or add element values for User Defined Elements.

Click on the Account Element icon in the Workflow window or simply open the Account Element window from the Main Menu.

Use the Element tab to enter the Name and Description for this Element and select the Active check box. Select a Type of either Account or User Defined. Optionally you can define a Value Format. This allows you to specify the format that all Element Values must adhere to. It may be variables, fixed values or specify numeric, alpha characters etc. Refer to Online Help for specific information on coding this field.

Click on the Element Value tab to enter the Values for your Element.

Enter the Search Key, Name, and Description for this Element Value and select the Active check box.

Select an Account Type of Asset, Liability, Revenue, Expense, Owners Equity or Memo. The Account Type is used to determine what taxes, if any are applicable and for validating payables and receivables for Business Partners. If a Memo account type is used, then these amounts are not used in determining if a journal is balanced. Select an Account Sign of Debit or Credit to indicate the expected sign for this account. Select the Document Controlled check box if you want to prevent manual posting to this account. Select the Summary check box if this a summary value to be used in a tree.

If the Summary check box is unselected, you need to select the appropriate Balance Type check boxes to control posting to specific balance types.

New Accounts are automatically added to the bottom of the tree (rolling up to the top level). You can modify the roll up and summarization of the accounts by dragging and dropping element values in the tree dialog.

Accounting Schema

The Accounting Schema window allows you to define the Accounting Method and the Elements that will define the accounting structure. While Account and Organization are required, other elements such as Business Partner, Product, Project and Campaign can be included to provide for more detailed tracking and reporting. The Primary Accounting Schema is defined as part of the Initial Tenant Setup, but it can be modified and additional Accounting Schemas added.

For additional information on the Initial Tenant Setup, refer to the Implementation and Basic Settings Chapter.

Note: After making any changes to an Accounting Schema you must log off and log back on to the system and stop and restart the applications server (if it is running), to have the changes effective.

Click on the Accounting Schema icon in the Workflow window or simply open the Accounting Schema window from the Main Menu.


 
Enter the Name and Description for this Accounting Schema and select the Active check box. Select a GAAP (Generally Accepted Accounting Principles).

Select a Commitment Type of None, Commitment and Reservation or Commitment Only. Generally None will be selected unless you perform Encumbrance Accounting. If selected, the posting of certain documents (e.g. Purchase Orders) will generate transactions to the Commitment and/or Reservation Posting Type.

Select the Accrual check box if Accrual based accounting is used. When the check box is left unselected then Cash based accounting is used. When Cash based accounting is selected, Income and Expenses are not accounted until the payments have been made. When Accrual based accounting is selected, Income and Expenses are accounted when invoiced.

For details on the accounting transactions generated by a document, refer to the appropriate chapter which discusses the document in detail.

Select a Costing Method of LIFO, FIFO, Average PO, Average Invoice, Last PO Price, Last Invoice, or Standard Costing.

Select the Cost Type of Default as this is currently the only supported type.

Select a Costing Level of Tenant, Organization, or Batch/Lot.

Select a Currency for this Accounting Schema.

Select the Automatic Period Control check box if you want accounting periods to be automatically opened. When this option is selected, additional fields will display. History days defines the number of days prior to the current date you can post to and Future days defines the number of days following the current date that you can post to. The current date is based on the system date. For example is the system date is May 10 and History days is set to 20 and future days is set to 30, posting can occur for transactions dated between April 20 and June 9. If left unselected, each period must be opened manually for the appropriate document types.

Enter the desired Element Separator to be used when displaying an account combination.

Select the Use Account Alias check box if you want to define aliases for your account combinations. Aliases provide an easy method to search for and select account combinations.

Select the Post Trade Discount check box if you want trade discounts posted to an explicit account. If this is not selected, trade discounts will be deducted from product revenue.

Select the Post Services Separately check box is you want to use a separate account when posting document that contain Service or Resource Product Types. Leave this check box unselected if you want to use the same account as used for posting to Item Product Types.

For more information on Product Types, refer to the Products Chapter.

Select a Tax Correction option of Write off and Discount, Write-off Only, Discount Only, or None to indicate if the tax should be adjusted if a Discount is taken or a Write Off is allowed for an Invoice where tax is imposed.

Select the Explicit Cost Adjustment check box if, when posting Vendor Invoices for Landed Costs you want to see the debit and credit transactions to the Cost Element selected. If this check box is not selected, the transactions will include the Cost Adjustment Account, Tax, and Accounts Payable.

For additional information on Landed Costs, refer to the Costing Chapter.

If this is not the Primary Accounting Schema (as defined in the Tenant window) you may select an Organization for which this Accounting Schema applies in the Only Organization field. Only transactions for this Organization will have GL postings created based on this Accounting Schema. You may also select a Summary Organization to restrict the postings to a group of Organizations.

For example, a given Tenant has 3 Organizations, 2 in the US and one in Canada. For the Canadian Organization they need to generate financial reports in CAD. This reporting is not required for the other 2 Organizations. Their Primary Accounting Schema is in USD; therefore, they define a second Accounting Schema in CAD and select the Canadian Organization in the Only Organization field. When a document posts for either of the two US Organizations, transactions for the Primary Accounting Schema in USD will be created. When a document posts for the Canadian Organization, transactions will be created for both the Primary Accounting Schema in USD and the second Accounting Schema in CAD.

Similarly, you can use the Create GL / Defaults process to copy the GL and Default accounts from one Accounting Schema to another. This would be used if you had set up an alternate Accounting Schema that uses the same Account Elements but a different Currency or Costing Method for example.

Note: Any elements used in a alternate accounting schema must be enabled on the primary accounting schema. For example, if you want to use Project as an element in an alternate accounting schema, it must be enabled in your primary accounting schema.

Defining Multiple Accounting Schemas is discussed in a later section of this chapter.

Click on the Account Schema Element tab to enter the Elements that will be used to comprise your Account Combinations.

Enter the Name and for this Account Schema Element and select the Active check box.

Select a Type for this Element. These include Account, Activity, BPartner, Location From, Location To, Campaign, Org, Trx Org, Project, Product, Sales Region, User List1, UserList2, User Element1, and User Element2.

Activity, Campaign, Project, and Sales Region each have there own reference windows, where you enter the desired values that will populate the drop down list box.

Except for the User Defined, all of these fields are present on documents. This is how Compiere generates the accounting entries from documents.

The Elements allow you to report on the same data in different manners.

Select the Balanced and Mandatory check boxes to indicate that this element should have these attributes. Using the Balanced feature allows you to have a balanced set of books for an organization or project, for example.

Enter a Sequence which will determine the order of the elements in the account combination. Depending upon the Type selected you will be prompted to select a default value. In the example above, because the Type is Organization you must select an Organization.

Continue adding records until you have added all of the values desired for your account combination.

Note: Account and Organization are mandatory elements. Generally, the Account element will never be balanced.

Click on the General Ledger tab to enter the Account Combinations that will be used for posting some Ledger specific entries.

Select the Active check box.

Select the Use Suspense Balancing check box if you want out-of-balance conditions in a journal to force post. The out-of-balance amount will post to the Suspense Balancing Acct entered. Note that the Suspense Balancing Acct appears only if the check box is selected.

Select the Use Suspense Error check box if you want error conditions in a journal to force post. The transaction amount of the line in error will post to the Suspense Error Acct entered. Note that the Suspense Error Acct appears only if the check box is selected.

Select the Use Currency Balancing check box if you want out of balance currency conditions to force post. An out of balance condition can occur due to rounding in when converting currencies. The out of balance amount will post to the Currency Balancing Acct entered. Note that the Currency Balancing Acct appears only if the check box is selected.

The Retained Earnings Acct and Income Summary Acct are used when posting your year end entries.

The Intercompany Due to Acct and Intercompany Due from Acct are used when posting transactions between Organizations. These accounts must be defined even if you do not plan on doing these types of transactions.

The PPV Offset Acct is used for recording the Purchase Price Variance.

The Commitment Offset account is used for recording Commitment or Reservation transactions. These would be generated if a Commitment Type of Commitment or Reservation and Commitment had been selected on the previous tab.

Note: This is one of the screens where you can enter an Alias for an Account Combination if you have that feature enabled.
Important: All of these accounts must be defined even if they will not be used (i.e. intercompany transactions will not be performed).

Click on the Defaults tab to enter the Default Accounts that will be used for transactions if specific accounts are not defined.

To ensure that all required accounts are available, default accounts are defined at the Accounting Schema level. These are the accounts that are imported as part of the Initial Tenant Set Up.

You may update the accounts for Business Partners, Products, Warehouse, Project, Bank, Tax, General, and Cashbook if the ones imported earlier are not the desired accounts.

It is very important that these be set up properly as they will make the definition of the accounting rules for other records in the system much easier. For example, if you sell a Product, the revenue account defined for the Product will be used. This account will default from the revenue account defined for the Product Category defined for this product. The revenue account for the Product Category in turn will default from the revenue account defined for the Accounting Schema.

For example, when defining a new Product Category, the values on the Accounting tab will default from the values entered in the Product section on this window. Then, you only have to make changes for the exceptional cases. Also, if a necessary account combination is missing from a record, the appropriate value entered here will be used so that posting may continue.

Use the Add or Copy Accounts button with caution. It can be useful if you change your accounting structure. As it will overwrite all accounts to the default values, including individual settings, it should be used with caution. It can also be used to add the default accounts for new Accounting Schemas you have defined.

To start the process, click the Add or Copy Accounts button.

If you have updated the default accounts for an existing Account Schema, this should be done with caution. If you have done individual overrides of the default accounts (for example, to a specific product or business partner), these will be over-written by this process and you will need to reapply those updates.

Click the OK button to define the parameters for the process.

Select the Accounting Schema you want to use as the source for this process.

Select the Copy Overwrite check box if you want to copy the new defaults defined to the existing records.

If this is a new Accounting Schema, leave the Copy Overwrite box unselected and it will create the appropriate default accounting records for your Products, Product Categories, Business Partners, Bank, Warehouses, etc. This does not effect any existing records it only adds ones that do not currently exist.

When the process has completed a message dialog is displayed indicated the number of records added or copied.

Default Accounts

The following chart shows the accounts used for generated accounting entries and where their default value is defined.

Element

Account

Default

Business Partner / Customer

Receivables 
  Customer PrePayment

Business Partner Group

Business Partner / Vendor

Liability
  Liability (Services)
  Vendor PrePayment

Business Partner Group

Business Partner / Employee

Expense
  Prepayment

Accounting Schema

Business Partner Group

Receivables
  Customer PrePayment
  Payment Discount Exp
  Receivables Write-Off
  Liability
  Liability (Services)
  Vendor PrePayment
  Payment Discount Rev
  Unrealized Currency Gain
  Unrealized Currency Loss
  Realized Currency Gain
  Realized Currency Loss
  Withholding
  Not Invoiced Receipts
  Unearned Revenue
  Not Invoiced Receivables
  Not Invoiced Revenue

Accounting Schema

Product

Revenue
  Cost Adjustment
  Inventory Clearing
  Product Inventory
  Purchase Price Variance
  Invoice Price Variance
  Trade Discount Received
  Trade Discount Granted
  Expense
  Cost of Goods Sold

Product Category

Product Category

Revenue
  Cost Adjustment
  Inventory Clearing
  Product Inventory
  Purchase Price Variance
  Invoice Price Variance
  Trade Discount Received
  Trade Discount Granted
  Expense
  Cost of Goods Sold

Accounting Schema

Warehouse

Inventory (Asset)
  Inventory Differences
  Inventory Revaluation *

Accounting Schema

Project

Project Asset
  Work in Progress

Accounting Schema

Tax

Tax Due
  Tax Liability
  Tax Credit
  Tax Receivables
  Tax Expense

Accounting Schema

Bank

Cash In Transit
  Bank Asset
  Bank Expense
  Interest Expense
  Interest Revenue
  Unallocated Cash
  Unidentified Cash
  Settlement Currency Gain
  Settlement Currency Loss
  Revaluation Gain
  Revaluation Loss

Accounting Schema

CashBook

Cash Asset
  Cash Transfer
  Cash Difference
  Cash Expense
  Cash Receipt

Accounting Schema

Withholding

Withholding *

Accounting Schema

Charge

Expense Revenue

Accounting Schema


Multiple Accounting Schemas

There may be instances when you require more than one Accounting Schema for a Tenant. This may be because you require accounting transactions to be posted in a more than one currency, or using a different Chart of Accounts or a different GAAP. In this example, we will assume that our Primary Accounting Schema is in US dollars and we do not track Projects. However, for our UK subsidiary we must report in Pounds and we need two different Accounts.

To define additional Accounting Schemas first you must determine if you need to define new Elements (e.g. if you were using a different Chart of Accounts or different project codes). If you determine that this is necessary you must first define a Tree.

To define a Tree open the Tree window from the Main Menu.


 
Enter a Name for this Tree and a Description if desired.

Select the Active check box to indicate this Tree is active.

Select the Type/Area for this Tree. As we are creating Accounts, Element Value is selected.

Select the All Nodes check box as this Tree will contain all nodes for this element. If you were creating an additional tree for an existing element, you may leave this box unselected to indicate the tree represents a sub set of all nodes.

The Verify Tree button is not used at this time.

The next step is to define the values for this Tree. To define Elements open the Account Element window from the Main Menu.

To add a new Account Elements select the New Button on the tool bar.

Enter a Name and a Description if desired.

Select the Active check box to indicate this Project is active.

Enter a Valid Format for this element if you want to ensure that values entered adhere to a specific format. Compiere supports formats which can contain fixed format elements, Variables: "_lLoOaAcCa09"

  • (Space) any character
  • _ Space (fixed character)
  • l any Letter a..Z NO space
  • L any Letter a..Z NO space converted to upper case
  • o any Letter a..Z or space
  • O any Letter a..Z or space converted to upper case
  • a any Letters & Digits NO space
  • A any Letters & Digits NO space converted to upper case
  • c any Letters & Digits or space
  • C any Letters & Digits or space converted to upper case
  • 0 Digits 0..9 NO space
  • 9 Digits 0..9 or space

Example of format for a US Phone Number "(000)_000-0000"

Select a Type of Account or User Defined.

If Account is selected, indicate if this is the Natural Account.

Select the Tree that was defined in the previous step.

To define the Element Values, click on the Element Value tab.

Enter a Search Key or let the System define one for you and enter a Name for this element.

Enter a Description if desired.

Select the Active check box to indicate this account is active.

Select an Account Type of Asset, Liability, Expense, Revenue, Owners Equity, or Memo.

Select an Account Sign of Credit, Debit, or Natural. This controls the signing of amounts in Financial Reports.

Select the Summary Level check box if this Account will not be used for posting, but will be used for summarization in reports.

If Summary Level is unselected, select the types of amounts that can be posted to using this account.

Select the Document Controlled check box if this account can only be updated by transactions generated by documents. Leave this box unselected if the Account will be used in GL Journals.

Add all the necessary accounts using this method.

The next step is to define the Accounting Schema. To define Accounting Schema open the Accounting Schema window from the Main Menu.

Enter values in all tabs as described above being sure to select the appropriate Account Schema Elements for this Account Schema (in this example, you would select UK Accounts for the Element as opposed to Garden World Accounts.

When all of the tabs have been updated, select the Add/Copy Accounts button to create the accounting records for the new Accounting Schema for your Business Partners, Product Categories, Bank, etc.

This time the message displayed after the process has completed indicates that records were added (as they did not exist prior).

Now each of the appropriate records will have two Accounting records, for example Bank.

Note:  If you are using the same elements in both Schemas but have a different currency or costing method, you can use the CopyGL/Defaults button to create all of the default accounts for you alternative accounting schema from your primary accounting schema.

GL Category

The GL Category window allows you to define optional categories to be used in journal entries. These Categories can be used for grouping or to refine reporting. A GL Category can be associated with a Document Type and the value will be used on each journal entry that is generated for that Document Type.

You may use the Workflow buttons to open the GL Category window. Alternatively, you may click on the GL Category icon in the Workflow window or simply open the GL Category window form the Main Menu.


 
Enter the Name and Description for this GL Category and select the Active check box.

Select a Category Type of Document, Manual or Import to indicate the type of journal that this category will be used for.

Select the Default check box if this GL Category is to be used as the default value for manual journal entries.

For information on Document Sequence and Document Types, refer to the Implementation and Basic Settings Chapter.

USER DEFINED ELEMENTS

Should the existing 11 schema elements that are derived from the document not meet your specific needs, Compiere also provides 4 user defined elements, User List1, User List2, User Element1, and User Element2. These can be used in conjunction with existing schema elements to comprise your account combinations and dimensions.

The first step in setting up a User Defined element is to define the Tree. Trees are used in reporting and allow you to define roll-ups of your element values.

To create or change a Tree, open the Tree window by clicking on Tree from the Main Menu. The icon in front of the Tree menu items indicates that it is a window.

Enter the Name and Description for this Tree and select the Active check box.

Select a Table from the drop down listbox. If this Tree will be comprised of values you will define as a list, (e.g. Cost Centers) the selection should be C_ElementValue_AccountElement. If the Tree will be comprised of values from an existing table (e.g. Assets or your own table), the selection should be the appropriate table.

Select the Type/Area for this Tree. In this example it would be User1 or User2.

Select the All Nodes check box. This must be selected for the first tree defined. Any alternate trees may contain only a subset of all nodes.

The next step is to define the User Element and the values.

To define User Elements, open the Account Element window from the Main Menu.

Enter the Name and Description for this Element and select the Active check box.

Note: The Name is the value that will appear in the document windows.

If desired, enter a Value Format. If entered all values must conform to this format. Compiere supports formats which can contain fixed format elements, Variables: "_lLoOaAcCa09"

  • (Space) any character
  • _ Space (fixed character)
  • l any Letter a..Z NO space
  • L any Letter a..Z NO space converted to upper case
  • o any Letter a..Z or space
  • O any Letter a..Z or space converted to upper case
  • a any Letters & Digits NO space
  • A any Letters & Digits NO space converted to upper case
  • c any Letters & Digits or space
  • C any Letters & Digits or space converted to upper case
  • 0 Digits 0..9 NO space
  • 9 Digits 0..9 or space

Example of format for a US Phone Number "(000)_000-0000"

Select the Type of User Defined for this Element.

Select the Balanced check box if you want Compiere to balance transactions for these elements.

Select the Tree defined for this User Element.

Select the Element Value tab to define the list of values for this element.

Enter the Name and Description for this Element and select the Active check box.

Enter the Search Key, Name, and Description for this Element and select the Active check box.

If appropriate, select the Summary Level check box.

Note: Summary Level nodes are used in Reporting and cannot be used in Documents.

The final step is to add the new Element to your Accounting Schema.

To add the element to your Accounting Schema, open the Account Schema window from the Main Menu.

Select the Account Schema Element Tab to add your User Defined Element.

Enter the Name for this Account Schema Element and select the Active check box.

Select the Type and Element (the Element is required for Lists)

Select the Balanced and/or Mandatory check boxes if appropriate.

Enter a Sequence for this Account Schema Element. This will determine where in the Account combination this element will be positioned. By default, Compiere assigns a sequence number at the end. If you want it placed between two existing Account Schema Elements then enter an appropriate Sequence.

If you have selected the Mandatory check box, enter an Account Element to be used if no element has been defined for the document.

Your new element value can now be entered in your documents. As Compiere caches the Accounting Schema definition for performance reasons, it is necessary to close the Tenant and re-open to refresh see the new element in your documents. Also, if the Application Server is running it must also be shut down and restarted.

Once this has been done, your new element is available. For example,you could now select a value for UserList1 in the Sales Order Window.

GL JOURNALS

In most instances there will be no need to enter manual GL Journals. Unlike most system, Compiere automatically generates and posts the accounting consequences or Journals for every document processed. Therefore, there is no need to enter journals to record inventory moves or product sales.

Some instances that will require manual journals include Fixed Asset Depreciation, Year End, Budgets, Payroll, etc. In these situations you will enter your Journals using the GL Journal Window or using Journal Import.

For more information on Import, refer to the Utilities Chapter.

To create or change a GL Journal, open the GL Journal window by clicking on GL Journal from the Main Menu.


 
A Journal Batch define a single or multiple Journals to be processed. If provides Control Totals to ensure the Journals contained in the Batch are accurate.

Enter Document No or allow the system to default one for you. Enter a Description for this Journal Batch.

Select a Posting Type of Actual, Budget or Statistical to indicate where the journal should be posted to.

Select a Document Type to indicate the document controls to be used.

Select a GL Category. This can then be used in reporting on Journals.

Select a Document Date to indicate the date of this Journal Batch and an Account Date to indicate the date to be used for the accounting transactions.

Select a Period for this Journal Batch. In most cases the period will coincide with the Account Date except when posting to an Adjustment Period.

Select a Currency for this Journal Batch.

Enter a Control Total for this Journal Batch if desired. The system will ensure that all Debits and Credits balance and equal this Control Total before the batch can be processed.

The Total Debit and Total Credit fields are reference fields that are system maintained.

Click on the Journal tab to enter the Journals that comprise this batch.

Enter a Document No for this Journal or let the system default a value for you. Enter a Description if desired.

The Posting Type, GL Category, Document Date, Account Date, Period, and Currency will default for the Journal Batch, but you can change them if desired.

Select a Document Type from the list of valid document types with a document base type of GL Journal.

Enter a Control Amount for this Journal if desired to ensure the planned amounts are entered.

Total Debit, Total Credit and Document Status are reference fields that are system maintained.

Click on the Journal Line tab to enter the lines for this Journal.

Enter or accept the default Line No. Enter a Description for this Journal Line if desired.

Select the Combination selection box to display the Account Combination selection window.

Enter an Alias for an Account Combination or select the desired element values. You can save a new combination here or select an existing combination. Once you have the desired combination select the OK button to return to the Journal Line window.

Enter either Source Debit or Source Credit amount. The Accounted Debit and Accounted Credit will display the amount converted to your Accounting Currency for the Accounting Schema for this Journal. Because the Journal Currency is the same as the Accounting Currency the amount is the same.

Finally enter a UOM and Quantity if desired for this Journal Line.

When you have entered your Journal Lines return to the Journal Tab.

You can add more Journals to this batch or you can select the Batch tab to Complete the Journal Batch.

Select the Complete button to Complete the Journal Batch

Once the Journal Batch has a Document Status of Completed, return to the Journal tab and the Posted button is displayed.

Note: The Not Posted/Posted button will only be displayed if your Preferences indicate it.

Once the Journal or Journal Batch has been completed you have the option of Close, Reverse - Correct or Reverse - Accrual.

If you select Close then the Journal or Journal Batch is Closed an no further processing can occur.

If you select Reverse - Correct then a new Journal(s) is created for the same debit and credit account combinations and amounts but the sign of the amount is reversed. The Document Date and Accounting Date are the same as the original Journal.

If you select Reverse - Accrual then a new Journal(s) is created with the same account combinations but the debit account(s) is used as the credit account(s) and the credit account(s) are used as the debit account(s). The signs on the amounts remain the same. The Document Date and Accounting Date are the date used when logging into Compiere.

GL DISTRIBUTION

In Compiere, GL Distribution is used to distribute or allocate the amount for a transaction line to multiple accounts based on pre-defined percentages. This may be used for overhead charges such as Rent, Utilities, Salaries, etc. which you want to allocate to different Organizations, Business Partners or Projects.

To create or change a GL Distribution, open the GL Distribution window by clicking on GL Distribution from the Main Menu.


 
The GL Distribution tab defines the accounts that will be distributed when a transaction is generated. Keep in mind that this includes those transactions generated by documents (Invoices, Material Receipts, Payments, Allocations, etc.)

Enter a Name and optionally a Description and Comment/Help for this GL Distribution.

Select the Active check box to indicate this GL Distribution is Active.

Select and Accounting Schema. The Accounting Schema must contain the element value(s) designated in the Selection section.

Select a Posting Type and Document Type to limit the instances when the GL Distribution will be performed. For example, if you select Budget as the Posting Type only those transactions posted to Budget will be distributed. Similarly, if you select a specific Document Type, for example GL Journal, the distribution will only occur for transactions entered in a GL Journal.

Use the Selection area for indicating the transactions that should be Distributed. You can base your selection on any element defined for the Account Schema. When one of the Any (element name) check boxes is unselected, a list box will appear for selection of the desired element value.

In this example, anytime that a transaction is posted to the account 60130 Salaries, we want this distribution to be done, regardless of any of the other element values for the combination.

The Status area is System Maintained. It is used to ensure that entire amount is distributed.

Click on the Line tab to define how the amounts should be distributed.

Enter a Line No. The Line No will indicate the order the distribution is done.

Enter a Description for this Distribution Line.

Enter the Percent for this Distribution. It may be any number greater than 0 and less than 100. In this example we have entered 50%.

The next series of fields will determine what the resulting account combination will be. In this case we have chosen to overwrite the Organization element value with HQ. You can overwrite any element value, include the value(s) used for the GL Distribution Selection.

Based on this record, any transaction posted to the Salaries Account will be multiplied by 50% and the Organization value in the Account Combination will be overwritten with HQ.

Next, we will review the next line in this GL Distribution.

In this line we are distributing the remainder (whatever amount is left) to the Organization Store. In the Percent field we have entered a 0.0. This is the indicator to Compiere that it is the remainder. This allows for ensuring that the entire amount is distributed, especially when a large number of lines are used.

In this example we could have also entered in 50.0 in the Percent field and arrived at the same result.

Return to the Distribution tab.

When you switch to the Distribution tab, Compiere will add the percentages and if they add up to 100, it will select the Valid check box to indicate that this GL Distribution is valid. Only those GL Distributions that are Active and Valid will be processed.

When this account (60130) is used in a document it will be distributed according to the lines entered.

This Journal Line has debited 1050.25 to the Salaries account, 60130.

Next, the Journal is posted.

Now, select the Posted button to review the posting entries created.

The first two lines represent the original posting. The amount for account 60130 is then reversed and distributed according to the distribution lines. The amount is multiplied by .50 and booked to HQ (525.13) the remainder is booked to Store (252.12). Then, because the distribution has resulted in an multi organization journal, the necessary intercompany postings are created.

For additional information on Multi Organization functionality, refer to The Multi's Chapter.

GENERATED ACCOUNTING ENTRIES

Documents in Compiere automatically generate the appropriate accounting entries. This allows for just a minimum of manual journals entries to be completed and reduces the opportunities for errors. The accounting entries use the default accounts defined throughout the system.

All entries are posted to the Actual balance type. All entries generated from reversing a document are posted on the same side (i.e. Dr/Cr) but with a reversed sign to ensure proper Debit and Credit totals.

For more information on default accounts, refer to the Accounting Schema section previous in this chapter.

BASE ACCOUNTING RULES

There are several Base Accounting Rules in Compiere. These rules cannot be modified or over-ridden as they protect the integrity of the system. They ensure balanced accounting entries.

  • Transactions must be balanced. If a transaction is not balanced and suspense balancing is not enabled, then the transaction is rejected and will not post. If suspense balancing is enabled, an additional entry is created using the suspense account.
  • Accounts used in transactions must be balanced. If all accounts used in a transaction are not valid and suspense error is not enabled, then the transaction is rejected. If suspense error handling is enabled, the account in error is replaced with the suspense error account.
  • Conversion to the accounting currency must be complete. If the document currency cannot be converted to the accounting currency, then the transaction is rejected.
  • The accounting period must be open for posting. If the accounting date is in a closed period for the document type, then the transaction is rejected. If the period is then opened, the transaction can be resubmitted.
  • All currencies used in a transaction must be balanced. If a currency is not balanced (generally due to rounding), the difference it posted to the currency balancing account (if enabled) or to the largest balance sheet account.
  • For Multi-Org transactions, the appropriate due to and due from accounts for each organization are used.

REPORTING ON ACCOUNTING

Compiere provides a number of predefined reports for analyzing your Accounting details and balances. Like all reports in Compiere, you can modify the layout and content to meet your needs.

Accounting Fact Reports

The available reports on Accounting Facts can be found in the Menu under Performance Analysis.

Accounting Fact Details: This report displays the details of transactions that have posted. You may select an Accounting Schema, Organization, Account Date range, Period, Account, Account Key Range, Business Partner, Product, and Tax transactions.

Accounting Fact Daily: This report displays the details of transactions that have posted summarized by Accounting Date. You may select an Accounting Schema, Organization, Account Date range, Period, Account, Account Key Range, Business Partner, Product, and Tax transactions.

Accounting Fact Period: This report displays the summary of transactions that have posted. The amounts are summarized by period based on the Calendar defined for the Tenant. You may select an Accounting Schema, Organization, Account Date range, Period, Account, Account Key Range, Business Partner, Product, and Tax transactions.

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