Secondary ledger

[tariq]

my customer needs to use cash basis and accrual basis at the same time so we are suggesting to build Primary ledger (cash basis) and secondary ledger (accrual) ...is it healthy to apply that?

[abhyankarnarayan]

Hi Tariq,

You can not have a primary ledger as cash and secondary ledger as Accrual.
As per the standard functionality, a secondary ledger can not have subledger accounting method as accrual, if the primary ledger is cash.

Though you can have primary ledger as accrual and secondary ledger as cash.

For detailed setups of cash ledger you can refer to metalink note: 793005.1

Narayan

[tariq]

the main work for our customer base on accounting method which is cash basis, so is there any risk or disadvantages in future if we consider the Primary as(encumbrance acrrual)and the secondary as(encumbrence cash).

[abhyankarnarayan]

Hi,

There is no disadvantage as such.
All the reports etc need to be designed for your secondary ledger (Encumbrance Cash).
You said your client needs cash basis of accounting. Still they need encumbrance??

Narayan

[tariq]

yes my customer is using cash basis and as u said we will build a primary ledger (accrual encumbrence) and secondary(encumbrence cash)

but why did u ask me about encumbrence
with cash because they have encumbrence ???

[abhyankarnarayan]

Yes. Generally I have seen encumbrance being used by companies with accrual system of accounting. When you are using cash, anyways the accruals will be ignored, and encumbrance involves accruals. So I got confused. But its okay, you can do that. Be careful with the setup of the cash ledger. You can refer metalink note # which I mentioned in my last update.

Thanks,
Narayan

[SIVAKUMAR_G]

Hi

I need whether is there a solution for the following case

One of our client wants Accrual Accounting and Cash Based Budgeting

(i.e) When I create an Invoice the system must generate Accrual entries, but the Fund against expense should not be reduced against budget. The budget should be reduced only if I make the Payment

I thought can we have Standard Accrual as Primary Ledger and Encumbrance Cash as Secondary Ledger?

Will this work?.

If anyone has any solution or similar cases, please provide your feedback

Regards
Sivakumar