ALFOX

SOLUTION

ACCOUNTING SCHEMA

The "Account"

We refer to Account as the fully qualified valid combination of information structure segments:

In the Information Structure of your Accounting Schema you selected segments you want to report on. The mandatory elements are: Company and Natural Account, optional elements are for example, Business Partner, Product, Project, etc.
If an element is mandatory, it must be specified for the combination to be fully qualified.

Elements with Account Information

The objective is to generate all accounting transaction entries. Consequently, all accounts are predefined. For example, if you sell a product, the revenue account defined with the product is used. This allows you to define just once what accounts should be used and not worry about accounting while entering transactions. To ease the data entry for accounts, all accounts have defaults defined at the Accounting Schema. The defaults for Products come from their Product Category - the defaults for Business Partners come from their Group.

Then the accounting rules determine based on the transaction context and rule set, what accounts (and amounts) to use:

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 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
Business Partner - Employee	Expense Prepayment	Accounting Schema
Product	Revenue Product Inventory Product Cost Difference Expense Cost of Goods Sold	Product Category
Product Category	Revenue Product Inventory Product Cost Difference 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 Payment Selection	Accounting Schema
Cash Book	Cash Asset Cash Transfer Cash Difference Cash Expense Cash Receipt	Accounting Schema
Withholding	Withholding	Accounting Schema
Charge	Expense Revenue	Accounting Schema
Company .. Company	Due To Due From	GL Defaults

You can reset or overwrite the account settings from the default screen, Example: from the Account Schema Default screen, you can overwrite the accounts used in the Product Categories, from there you can overwrite the Product Account settings. This is useful, if you change your accounting structure, but overwrites individual settings.

Accounting Schema Accounts

In addition to default accounts, the following General Ledger accounts are defined for every accounting Schema:

Account	Description	Comment
Suspense Balancing	Source Currency differences in documents	used only when enabled - if not, the document is not posted
Suspense Error	Accounts are not valid	used only when enables - if not, the document is not posted
Currency Balancing	Accounting Currency (rounding) differences in documents after conversion	used only when enabled - if not, the biggest line amount is corrected
Retained Earning Income Summary	Year End Processing

Accounting Rules

Accounting rules allow creation of "natural" accounting entries - in the way you see them in accounting text books. Compared with most applications, this reduces the number of accounting lines and makes the accounting easier to understand, check and audit.

ALFOX ERP II can have different accounting rules. Advanced users can change the rules to reflect country or company specific procedures.

Account Masking

The actual account used in the transaction depends often on the context. There are several situations, that the Company segment is overwritten:

Product Inventory - Company segment from warehouse, remainder from product
Liability/Receivables - Company segment from transacting organization, remainder from business partner

As ALFOX ERP II maintains the information on detail level, the available context information is filled in (e.g.. business partner, project, etc.).

Base Rules

Base Rules cannot be modified or overwritten and protect the integrity of the system. They basically ensure balanced accounting entries.

Rule Description

Rules	Description
rejectUnbalanced createSuspenseBalancing	Reject, if the entry is not balanced and suspense balancing is not enabled. If suspense balancing is enabled, an additional source line is created
rejectError createSuspenseError	Reject, if the account is invalid and suspense error is not enabled. If suspense error is enabled, the account in error is replaced
rejectUnconvertible	Reject, if the document currency cannot be converted to the accounting currency
rejectPeriodClosed	Reject, if the accounting date is in a closed period.
balanceCurrency	The accounting entry is balanced either via posting the difference to the Currency Balancing account or correcting the largest balance sheet account amount.
multiOrg	Transaction entries for multiple organizations: due to - due from

Tax Rules

Most tax entries are created by the transaction. ALFOX ERP II supports multiple taxes (e.g. GST/PST) as well as local tax. Tax rules create correcting tax entries for Sales Tax and VAT systems. The main areas are prorating tax entries for payment discounts and write-offs as well as tax treatment of prepayments.

Costing Rules

Different Costing Methods post to different accounts using different amounts. For details see ALFOX ERP II Costing.

Accounting Rules

Details - see also User Documentation.