Subledger Accounting Method is applicability

[anjan123]

Hi Folks,


I am reviewing SLA concepts, one thing i couldnot able to understand in this. there are seeded Subledger Accounting methods are there like "Encumbrance Accrual", "Encumbrance Cash", "Standard Accrual", "Standard Cash".

the above methods will applicable only for Payables?

where as in Receivables and Assets module will follow the same method are it might be different, if it is different could some explain bit detail.


Regards
Anjan

[tgs100]

"Encumbrance Accrual", "Encumbrance Cash", "Standard Accrual", "Standard Cash" are subledger accounting method names.

<b>the above methods will applicable only for Payables?
</b>

It depends on the applications attached to the above SLA methods. If you see 'Standard Accrual', not only Payables, but also receivables, assets are attached in this SLA method.

If you are going to use 'Cash' basis accounting and if you are using encumbrance in PO and AP, then you can choose 'Encumbrance Cash'.

If you are going to use 'Cash' basis accounting and if you are NOT using encumbrance in PO and AP, then you can choose 'Standard Cash'.

In the same way, you can use accrual method also.

<b>where as in Receivables and Assets module will follow the same method are it might be different</b>

The important is the 'Application Accounting Definition' which is attached to the SLA method. Find out the AAD attached to the SLA method which will tell you how accounting workflow will be for the corresponding application.

I would suggest you to go through the SLA documents (There are some documents in this forum itself) to undertand the basic concepts.

Cheers,
Saravanan TG

[anjan123]

Hi Saravanan,

<i>It depends on the applications attached to the above SLA methods</i>


Here my doubt is Purchasing and AP will generate Encumbrance journal entries, where as Receivables and Assets may not use encumbrance then how it is applicable for these two modules.

Note:- Except Mass Additions, all other transactions will not follow the encumbrance in Asset , the same way in AR may not use any encumbrance .

could you please clarify this.

regards
Anjan

[tgs100]

You can have different AADs for the same application (One with encumbrance and another without encumrance, etc). Depending on your requirement, you can attach the required AAD with the SLA.

What is the "Application Accounting Definition' for receivables attached to 'Encumbrance Accrual' and 'Standard Accrual'?

If the same AAD (for receivables) is used for both SLA methods, what will be the issue? It all depends on how we configure the SLA.

You may go through the thread
<b>topic.asp?TOPIC_ID=5830</b>
or any other standard documents on SLA.

Cheers,
Saravanan TG