accruals in ap

7/25/2019 Accruals in AP

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Document ID: 1169884.1 Date Last Revised: 11/12/2010

Title: Accruals in Advanced PricingAbstract: Overview, setup, and example ofaccrual adjustments in Advanced Pricing.

Additional adjustments can be created that provide sales incentives other than the

traditional line item price discount. For example, a company can encourage sales by

including free goods with a purchase or giving a discount based on a total order amountrepricing!. "t is also possible to accrue sales commissions by creating an accrual

adjustment.

#sing accrual adjustments ma$es it possible to reserve monetary amounts through

journal entries for such items as commissions and royalties. %he monetary amount can betrac$ed, but the order price does not change. %his white paper has been written for the

release information &.'( and above.

Overview

Advanced Pricing Definition

Item Price Group and AAI Setup 3

Price Adjustment Details 5

ustomer !illing Instructions "

Item !ranc# Details $

reating t#e Sales Order %P&'()* ()

Sales +pdate ('Post t#e Sale !atc# (&

Simple Accrual ,-ample (5

')

Overview

Accruals are adjustments tat accrue amounts to a s!eci"ic account tat #ill $e !aid at a

later date. It is !ossi$le to ave te s%stem accrue te amount o" an adjustment instead o"a!!l%in& te adjustment to te order line !rice. A com!an% mi&t #ant to do tis "or:

' Advertisin& allo#ances and coo!erative allo#ances.

' (ommissions.

' Ro%alties $ased on !roduct or customer.

Accrual adjustments do not a""ect te $ase !rice or !rint on te invoice. )e adjustment

so#s in te *rice +istor% ,*40-4 and te adjustment name is i&li&ted. )e

accruals are !osted to te /L at te time o" sales u!date.


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In te eam!le so#n $elo# an accrual is set u! to accrue commissions. A com!le item

&rou! "or all customers is used and te sales!erson #ill $e #ritten to te su$led&er o" te

accrual and !rice adjustment accounts. (om!le item &rou! )3 is $ased on ales (at(ode 5. )o%s tat $elon& to (at (ode L ,Le&os !a% out a 57 commission.

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Advanced Pricing Definition

)e Adjustment (ontrol (ode must $e set to Accrued to /L ,control code 4:


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)e u$led&er in /L "ield creates a su$led&er account tat is #ritten at te time o" !ost

,not reuired. )is su$led&er #ill override te su$led&er directed $% te !date ta$

!rocessin& o!tion u$led&er in ales !date ,R42800.

)e /L (lass directs AAI 4280 ,accrual and AAI 42-0 ,!rice adjustments. I" te /L

(lass in te adjustment de"inition is $lan te s%stem uses te /L (lass "rom te order.In tis eam!le te u$led&er in /L "ield is set to ;6< to use te sales!erson num$er as

a su$led&er. )e com!le item !rice &rou! )3 is attaced to te de"inition.

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Item Price Group and AAI Setup

)O%*: )either groups nor complex groups are re+uired for accruals.

(om!le item &rou! )3 is $ased on ales (at (ode 5:

AAI 4280 "or (om!an% 00001 rder )%!e /L (lass =10 is directed to account

4190 (ommissions *a%a$le.


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AAI 42-0 "or (om!an% 00001 rder )%!e /L (lass =10 is directed to account

-020 (ommissions !ense.

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Price Adjustment Details

In te *rice Adjustment Detail te =actor >alue ?umeric must /e negativeso tat te

amounts are #ritten correctl% at !ost:


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)o%s tat $elon& to (at (ode L ,Le&os !a% out a 57 commission:

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ustomer !illing Instructions


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(ustomer 424255 as scedule )@ attaced in te (ustomer illin& Instructions:

ales Re! 965B is attaced to te (ommission (odes:


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Item !ranc# Details


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Attac te Item ranc (ate&or% (odes:


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reating t#e Sales Order %P&'()*

nter a sales order "or 1 item (AR )RAI? ,ales (at (ode 5 C L.


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se te =orm eit to vie# te *rice +istor% ,*40-4 records.

)O%*: %he ase Price is not affected by the accrual adjustment and the accrualadjustment name is highlighted.

)O%*: %he commission accrual is calculated as - of the net unit price. %his was

based on the complex group %O/0 attached to the Adjustment 0chedule 1efinition andthe 0ales 2ategory 2ode 3*4 attached to item 2A54O%5A").


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Sales +pdate

Run ales !date ,R42800 over tis order. n te !date ta$ set !rocessin& o!tion 9

to $lan.

)ote regarding this processing option: "f the user re+uires the subledger only for theadjustment accrual 43 entries, the Processing Option PO! for subledger in 56(&77

should be set to blan$. %his 56(&77 PO is at the order level. 8hen this PO is set, all the

43 entries will have the subledger attached to it. For example, if the subledger definedin the adjustment definition and the 56(&77 PO are the same 0ales person!, the sales

person number will be written to A33 F79'' records. "f the user specifies a different

subledger PO in 56(&77, only the Accrual 43 entries in F79'' will have the subledgermentioned in the adjustment definition. %he remaining 43 entries will have the subledger


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as per the PO of 56(&77.

I" te reuirement is to ave te su$led&er as de"ined "or te adjustment onl% "or teAccrual L entries ten te R42800 * sould $e $lan. I" te user reuires te

su$led&er as de"ined "or te adjustment "or te Accrual L entries and a di""erent

su$led&er "or te remainin& L entries ten R42800 * needs to $e set a!!ro!riatel%.


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?ote tat AAI 42-0 ,!rice adjustment "or /L (lass =10 is directed to account B0.-020

and tat AAI 4280 ,accrual "or /L (lass )(E is directed to account B0.4190:

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Post t#e Sales !atc#

*ost te sales u!date $atc. ?ote tat te u$led&er is "or 0000965B ,sales!ersonnum$er and u$led&er )%!e o" A ,address $oo is "or te !rice adjustment and accrual

entries. )e accrual adjustment created tis due to te "act tat it #as de"ined to use 6

,ales!erson as te u$led&er in /L.


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Simple Accrual ,-ampleLetFs assume te reuest is to create a Ro%alt% !a%ment to a s!eci"ic customer ever% time

a certain item is sold ,$% an% sales!erson. )is can $e accom!lised trou& a sim!le

accrual #itout usin& te su$led&er:

*rice Adjustment De"inition:


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)e u$led&er and /L ""set "ields are $lan so te s%stem #ill use te /L (lass "rom

te sales order line to determine te AAI accounts:


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*rice Adjustment Detail te ro%alt% is set to 107 o" te current !rice o" te item:


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nter a sales order "or customer 424255:

>ie# te *rice +istor% ,*40-4 #ic so#s te accrual #as a!!lied:


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ales !date ,R42800 entries are created "or te accounts de"ined in te AAI 42-0 and

4280 "or te ro%alt% !a%ment:


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