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Tuesday, June 7, 2011

What is a special G/L transaction?

Special G/L transactions are transactions that are not normal business transactions with your business partners. These are generally shown in different control ledgers and are not grouped with the normal transactions. They include bills of exchange, down payments, bank guarantees, and provisions for doubtful debts.

  • Special General Ledger Transactions are transactions that logically belong to accounts in the sub-ledger (Customer / Vendor) but are not to be posted to the corresponding G/L ReconciliationAccount defined in the master record.  Instead alternate G/L Reconciliation Accounts allow these transactions to be reported separately on the Balance Sheet.
  • Special General Ledger Transactions can be grouped into 3 basic categories. 
    • Bill of Exchange Related:  Bill of Exchange processing is used to handle country specific requirements. R/3 provides special reconfigured programs and screens that use the Special G/L Transaction Functionality to meet these requirements.
    • Down Payment Related:  R/3 provides special reconfigured programs and screens that handle the requests, receipt and application of down payments.  They can be used in the A/R or A/P modules and are contained on the standard R/3 A/R and A/P menus.  Down payment processing has also been integrated into the R/3 Dunning and Payment Processing Programs.
    • Other:  Miscellaneous types of business transactions use Special G/L Transactions Functionality. 
  • There are three ways that Special General Ledger entries can be recorded in the system.  The processing of these entries is controlled by the G/L indicator on the line item being entered.
    • Real Postings are part of the balance sheet.  They are postings with a
      freely definable offsetting entry (e.g. a down payments receipt posting).
    • Statistical Postings are transactions that always post to the same offsetting account.  They are typically part of the balance sheet appendix (e.g., a guarantee).
    • Noted Items (e.g., a down payment request) are postings that are intended to serve as reminders of outstanding payments due or to be made.  They are not displayed in the financial statements
  • The Special G/L Indicator must be entered when the transaction is created.  This enables the system to recognize the transaction as a Special G/L Transaction.
  • Posting keys and Special G/L Indicators are predefined in the system and do not need to be defined in advance.  However, they can be changed or added to satisfy the requirements of the organization.
  • The posting keys 09, 19, 29 and 39 are allocated to Special General Ledger Transactions in the standard system.
  • Special G/L Accounts should be specified as Reconciliation G/L Accounts for the following Account Types:
    • D (Customer)
    • K (Vendor)
  • The Line Item Display option should be used in the alternate Reconciliation G/L Accounts but not in the regular Reconciliation G/L Accounts (Accounts Receivable/ Accounts Payable Accounts).
  • The Down Payment Request belongs to the Special G/L Class Down Payments, but is merely a noted item (i.e., a memo entry). 
  • When a Down Payment Request is posted, the system creates a document containing a one-sided memo entry recorded in the Customer or Vendor Account.  A document is created, but no financial accounting entry is posted to the general ledger.
  • Note that although the Special G/L Indicator for a Down Payment Request is F, the Target Special G/L Indicator is A (Down Payment), which must be entered on the Down Payment Request entry screen
  • All Down Payment Requests can be displayed in the Customer account display screen.
  • If an uncleared Down Payment exists for a customer, the system will issue a warning message, which alerts the user that the customer has made a prepayment, when a new open item is posted to that customer's account.
  • As is the case with Down Payment Requests, Down Payments may also be displayed in the customer account line item display.
  • The above slide depicts the G/L Accounts to which there are postings when creating a customer down payment.  The Customer (sub-ledger) Account is also posted with the same entries as shown above in the G/L A/R Account.
  • The procedure for posting down payments to vendors is similar to the one presented above.
  • If the system is configured to do so, a Down Payment Request will trigger either the Dunning Program (to remind the customer to pay) or the Payment Program (to make the payment to the vendor).  In this case, the down payments are created and posted automatically.
  • The down payment is managed as a payment on account (i.e., a liability) until the open items are cleared from the invoice.
  • The down payment is cleared with the final invoice.  This clearing can be done automatically via the Payment Program.
  • Special General Ledger Transactions - Multi-step transactions, which for reporting purposes, the system will post to a G/L Reconciliation Account other than that defined in the Customer or Vendor master record for which the transaction is being processed.
  • Special G/L Indicator - An indictor that identifies the transaction being created as a Special G/L Transaction.  It is configured to include the alternate G/L Reconciliation Account to which the transaction should be posted.
  • Alternate G/L Reconciliation Account - The G/L Reconciliation Account to which a Special General Ledger Transaction is posted.  This account is not the same as the one defined in the Customer / Vendor master record. 
  • Real Postings are part of the balance sheet.  They are postings with a
    freely definable offsetting entry (e.g. a down payments receipt posting).
  • Statistical Postings are transactions that always post to the same offsetting account.  They are typically part of the balance sheet appendix (e.g., a guarantee).
Noted Items (e.g., a down payment request) are postings that are intended to serve as reminders of outstanding payments due or to be made.  They are not displayed in the financial statements

2 comments:

  1. Thanks for the information, I've been looking into this system as I'm trying to start my own business.

    ReplyDelete

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