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"> How Does The Account Generator Default The Accounts In Oracle Purchasing? [ID 1067139.1] Modified 30-AUG-2011 In this Document Goal Solution Account Build Timing and Logistics Type HOWTO Status PUBLISHED

Applies to:
Oracle Purchasing - Version: 11.5.10 to 12.0.6 - Release: 11.5 to 12 Information in this document applies to any platform. ***Checked for relevance on 30-AUG-2011***

Goal
How does the Account Generator default the accounts in the Purchase Order Distribution?

Solution
The default Account Generator processes in Oracle Purchasing build a charge, budget, accrual, and variance account for each purchase order, release, and requisition distribution based on the distribution's Expense, Inventory, or Shop Floor destination type. Oracle Purchasing always builds these accounts using the Account Generator; you cannot disable this feature. If you utilize the centralized procurement functionality, the Account Generator will also create two new accounts to record accounting transactions between the procuring organization and the destination organization: the destination charge account and the destination variance account. These accounts will be created and used only when the destination organization is in a different operating unit than the Procuring organization, and there is a transaction flow defined between the two organizations. (Note that if the two operating units are in different sets of books, there must be a transaction flow defined.) For example: In the centralized procurement scenario a user may create a purchase order in one operating unit, but require shipment to a different operating unit. In this case, there will be an accounting transaction (created at the time of receipt of goods) to record the transfer of ownership between the two organizations (operating units). If these accounts are not required they will be not be built. For Inventory charge account construction, the Account Generator further distinguishes between asset and expense purchases based on the item and subinventory that you provide for the distribution. If you select an expense item, the Account Generator disregards the subinventory and builds an expense charge account. If you select an asset item, the Account Generator evaluates the subinventory to decide whether to build an expense or asset charge account. Additional Information: You classify a subinventory as expense or asset by selecting the Asset Subinventory check box in the Oracle Inventory Subinventories window. You classify an item as expense or asset by selecting the Inventory Asset Value check box in the Costing section of the Master Item window. (This window is accessible through Inventory or Purchasing.) When the Account Generator locates a source account based on the distribution destination type, it copies complete code combinations (full Accounting Flexfields) from designated fields to destination Accounting Flexfields. The default Oracle Purchasing processes do not build individual flexfield segments. For example, to populate the Accrual account for distributions with an Expense destination type, the Account Generator locates the Expense AP Accrual Account that you specify in the Purchasing Options window as part of your application setup, and copies it into the Accrual Account Flexfield in your document. An exception is when the account generator is unable to derive a charge account in the first two steps. Then an account is retrieved from the HR employee record and individual segments are replaced based on the item category. This is a typical scenario when using one-time items in Oracle Purchasing. The following matrix describes the source fields that the Account Generator references to build the charge, budget, accrual, and variance account based on the distribution destination type. The horizontal axis lists the windows you use to specify the source accounts that the Account Generator references in Oracle Purchasing. The vertical axis lists the possible destination types for each account type the Account Generator constructs. In addition, the Additional Conditions are applied as part of the vertical access. The body of the matrix lists the fields you use to enter the reference accounts. When more than one option is indicated for a particular account/destination type combination, the Account Generator attempts to locate the primary source account identified in the matrix (Seq) with a 1 as long as any Additional Conditions listed are met. This means that there may be several source accounts with a 1, since there may be multiple Additional Conditions. The first additional condition met will be the source attempted. If this reference account is unavailable or not appropriate for the distribution information you provide, the Account Generator tries the source indicated as 2 and so on until it either successfully locates a reference account, or fails. When an account has been located, or the Account Generator has failed to find an account, the matrix may indicate that an Override condition may apply. These entries are indicated by an O instead of a numeric value. In the case of an Override, a built account may be superceeded. Default Charge Account Sources

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Destination Types All Destination Types

Additional Considerations

WIP OrganizatSubSeq Accounting ion inventories Classes Parameters Cost of Sales Account for Transaction Flow default org

Items (INV or PO)

Purchasing Options

Other

Cross OU 1 case and One-Time Item or a Shop Floor enabled Item Cross OU case and Expense item Cross OU case and Expense item Cross OU case and Asset item 1

All Destination Types All Destination Types All Destination Types All Destination Types Expense

Expense

Expense

Material

PO auto1 created from requisition Not a PO 1 autocreated from req and not prevented by PA override profile Project related 2

Copied from requisition Preferences

Expense Expense

Customized Project rules User entered

Project O Related and not prevented by PA override profile Not a PO autocreated from a req. Not Project. Non-Project Non-Project 1

Expense

Preferences

Expense Expense

2 3

Expense Employee Profile for Assignment in Purchasing OU's SOB Item Category Segment substitutions

Expense

Non-Project Account not built before HR Employee Profile step Non-Project Expense item Expense item Expense item Asset item Asset item

3O

Expense Inventory Inventory Inventory Inventory Inventory Shop Floor

O 1 2 3 1 2 1 Material Material Expense Expense Expense

User entered

Enterprise Asset Mgmt (EAM) rules Material Mat. Overhead Resource Outside Processing Overhead

Shop Floor Shop Floor Shop Floor Shop Floor Shop Floor

2a 2b 2c 2d 2e

Default Accrual Account Sources

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Destination Types All Destination Types

Additional Considerations Cross OU case (No additional sources are used)

WIP SubSeq Accounting inventories Classes 1

Organization Parameters

Items (INV or PO)

Purchasing Options Expense AP Accrual Account for PO OU

Other

All Destination Types Expense Expense

OPM is 1 installed. Not Project related. Project related 1 Expense AP Accrual Account Expense AP Accrual Account for PO OU Inventory AP Accrual for Ship-to org

OPM API

Customized Project rules

OPM is not 1 installed. Not Project related. OPM is not installed. One-time item. 1

Inventory, Shop Floor

Inventory, Shop Floor

OPM is not 1 installed. Not one-time item.

Default Budget Account Sources Additional Considerations WIP Seq Accounting Classes 1 OrganizItems (INV or Purchasing ation PO) Options Parameters

Destination Types

Subinventories

Other Copied from requisition Charge Account User entered

Expense or PO autoInventory created from requisition Expense Expense Inventory Inventory Inventory Shop Floor

1 O 1 2 3 No 1 encumbrance is done for Shop Floor n/a n/a Encumbrance for ship-to org n/a n/a n/a Encumbrance Encumbrance

n/a

Default Variance Account Sources Items (INV Purchasing or Options PO)

Destination Types All Destination Types

Additional Considerations Cross OU case (No additional sources are used)

WIP SubSeq Accounting inventories Classes 1

Organization Parameters

Other Charge Account

All Destination Types Expense Expense Expense Inventory

PO auto1 created from requisition Projectrelated Projectrelated Non-Project 1 2 1 1 Inventory Price Variance for Ship-to org

Copied from requisition Customized Project rules Customized Project rules Charge Account

Shop Floor Shop Floor

One-time Item

1 1 Inventory Price Variance for

Charge Account

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Ship-to org Default Destination Charge Account Sources Additional Considerations WIP OrganizatSubSeq Accounting ion inventories Classes Parameters Items (INV or PO)

Destination Types All Destination Types Expense Expense

Purchasing Options

Other Copied from requisition charge account Customized Project rules User entered

PO auto1 created from requisition Project related 2

Project O Related and not prevented by PA override profile Not a PO autocreated from a req. Not Project. Non-Project Non-Project 1

Expense

Preferences

Expense Expense

2 3

Expense Employee profile for deliver-toperson's HR assignment in destination OU SOB Item Category Segment substitutions

Expense

Non-Project Account not built before HR Employee Profile step Non-Project Expense item Expense item Expense item Asset item Asset item

3O

Expense Inventory Inventory Inventory Inventory Inventory Shop Floor

O 2 3 4 2 3 2 Material Material Expense Expense Expense

User entered

Enterprise Asset Mgmt (EAM) rules Material Mat. Overhead Resource Outside Processing Overhead

Shop Floor Shop Floor Shop Floor Shop Floor Shop Floor

3a 3b 3c 3d 3e

Default Destination Variance Account Sources Items (INV Purchasing or Options PO)

Destination Types Expense

Additional WIP SubConsider- Seq Accounting inventories ations Classes PO autocreated from requisition Project related Project related 1

Organization Parameters

Other Copied from requisition Variance Account Customized Project rules Destination Charge Account Destination Charge Account

Expense Expense

1 2

Expense

Non-Project 1

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Inventory

Inventory Price Variance for Ship-to org Destination Charge Account Inventory Price Variance for Ship-to org

Shop Floor

One-time Item

Shop Floor

Suggestion: Minimize your setup by specifying source accounts at the appropriate level of detail for your business. For example, you can specify the charge account source for Inventory (expense) destination types at the subinventory, item, or organization level. If an organization level account is sufficient for your business needs, it is not necessary to specify item or subinventory accounts. For Shop Floor destination types, the Account Generator first applies the Oracle Enterprise Asset Management (EAM) rules. If no account is found, it then constructs the charge account based on the resource cost element associated with the Outside Processing job or schedule. In this case, the Account Generator selects one of the five possible source accounts; it does not step through a hierarchy of choices as it does for other destination types. Finally, the Account Generator does not construct a budget account for Shop Floor distributions, even if you are using encumbrance. Oracle Purchasing never encumbers outside processing purchases. Attention: If the Account Generator is unable to build a charge account you can either manually specify a charge account in your document or you can design a custom Account Generator function to build Expense destination charge accounts based on your own business rules. While you cannot edit the accrual, budget, or variance accounts that the Account Generator constructs, you can override or specify the charge account for uncommitted Expense distributions. In this case, you can either edit the charge account that the Account Generator constructs for you, or you can specify a default charge account in the Defaults region of your document. When you specify a default charge account, it always overrides any expense charge account that the Account Generator tries to provide.

Account Build Timing and Logistics

For Expense and Inventory destinations in the Requisitions, Purchase Orders, and Releases windows, the Account Generator constructs the account when you navigate into the distribution Charge Account field, or when an explicit or implicit commit anywhere in the window provides enough information for Oracle Purchasing to create a distribution. For Shop Floor destinations, the code is constructed when you enter all required data in the Outside Processing region and either return to the document distributions region or commit.

Related Products

Oracle E-Business Suite > Procurement > Procurement > Oracle Purchasing Keywords ACCOUNT GENERATOR; ACCOUNT TYPES; ASSET ITEM; CODE COMBINATIONS; DESTINATION; ENCUMBRANCE; ITEM; PURCHASE ORDER

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