Charts of Accounts

A chart of accounts defines the conditions upon which journal entries are created, including the relevant accounts, depending on the account configuration.

Example: A chart of accounts of document type Sales Invoice can be set up specific to District A, containing two accounts that debit revenue to Account A0001 and credit revenue to Account A0002. When a sales invoice is created for a sales contract with seller of District A, and subsequently all the despatch orders in the invoice are locked, a journal group for District A is created. This includes the two journal entries, one for each of the two accounts.

Journal entries can be created for invoices, payments, refunds, invoice revaluation adjustments, trade profit or loss amounts and hedging profit or loss amounts.

Document Types

Charts of accounts can be set up for the following document types:

Sales Invoice
Purchase Invoice
Funds Receipt
Freight Invoice
Freight Commission Invoice
Service Invoice
Demurrage Invoice
Freight Demurrage Invoice
Freight Demurrage Commission Invoice
Service Demurrage Invoice
Despatch Invoice
Credit Note
Debit Note
Transfer
Sales Revaluation
Purchase Revaluation
FX Revaluation
Freight Revaluation
Service Revaluation
Hedging
FX Hedging
Profit And Loss
Custom Document Type

One chart of accounts can be set up for each material type, district and accounting group combination, and for each document type.

Account Concepts

Each account set up in a chart of accounts is associated with a given concept; for example, invoice value, treatment charge or price sharing. The concepts available depend on the document type:

If the Document Type is Sales Invoice, Purchase Invoice, Credit Note, Debit Note or Transfer, the available concepts are:

Bonus and Penalty
Bonus and Penalty With Tax
Contract Charge Concept
Contract Charge Concept With Tax
Deduction On Payables
Deduction On Payables With Tax
Demurrage
Demurrage With Tax
Despatch
Despatch With Tax
Dynamic Invoice Items
Dynamic Items With Tax
Fixed Charges
Fixed Charges With Tax
FOB Value
Freight Parity
Freight Parity With Tax
Freight Value
Freight Value and Tax
Invoice Value
Payment Conditions
Payment Conditions With Tax
Payment Due
Premium
Premium With Tax
Prepayment Amount—(Only applicable if Document Type is Sales Invoice or Purchase Invoice.) Uses the payable amount of the prepayment invoice. Should only be used if Use Prepayment is checked for the chart of accounts. Must be of the same Account Type as specified for the Account Type Prepayment.
Price Participation
Price Participation With Tax
Price Sharing
Price Sharing With Tax
Product Parity
Product Parity With Tax
Refining Charge
Refining Charge With Tax
Revenue
Revenue With Tax
Service Value
Service Value And Tax
Taxes
Template Charges
Template Charges With Tax
Tolerance
Treatment Charge
Treatment Charge With Tax
Umpiring Charge
Umpiring Charge With Tax

If the Document Type is Funds Receipt or Refund, the available concepts are:

Invoices Forex Adjustment—If the invoice primary currency is different from the chart of accounts primary currency.
Invoices Total Value
Payment Charges
Payment/Receipt Amount
Write Off
And all concepts applicable to sales and purchase invoices

If the Document Type is Freight Invoice, Freight Commission Invoice, Freight Demurrage Invoice or Freight Demurrage Commission Invoice, the available concepts are:

Demurrage
Demurrage With Tax
Despatch
Despatch With Tax
Dynamic Invoice Items
Dynamic Items With Tax
Freight Value
Freight Value and Tax
Invoice Value
Payment Due
Taxes
Tolerance

If the Document Type is Service Invoice or Service Demurrage Invoice, the available concepts are:

Demurrage
Demurrage With Tax
Despatch
Despatch With Tax
Dynamic Invoice Items
Dynamic Items With Tax
Invoice Value
Payment Due
Service Value
Service Value And Tax
Taxes
Tolerance

If the Document Type is Demurrage Invoice or Despatch Invoice, the available concepts are:

Demurrage
Demurrage With Tax
Despatch
Despatch With Tax
Dynamic Invoice Items
Dynamic Items With Tax
Invoice Value
Taxes
Tolerance

If the Document Type is Sales Revaluation, Purchase Revaluation or FX Revaluation, the available concepts are:

Actual Revenue
Bonus and Penalty
Contract Charge Concept
Deduction On Payables
Demurrage
Despatch
Dynamic Invoice Items
Estimated Revenue
Fixed Charges
Freight Parity
Invoice Value
Premium
Price Participation
Price Sharing
Product Parity
Refining Charge
Revenue
Template Charges
Tolerance
Treatment Charge

If the Document Type is Freight Revaluation or Service Revaluation, the available concepts are:

Demurrage
Despatch
Dynamic Invoice Items
Freight Value—Only applicable to Freight Revaluation.
Invoice Value
Service Value—Only applicable to Service Revaluation.
Tolerance

If the Document Type is Hedging or FX Hedging, the available concepts are:

Valuation Net Loss
Valuation Net Profit
Valuation Total Broker Fee
Valuation Total Loss
Valuation Total Premium
Valuation Total Profit

If the Document Type is Profit And Loss, the available concepts are:

Bonus and Penalty
Contract Charge Concept
Fixed Charges
Freight Parity
Freight Value
FX Hedging Value
Hedging Value
Invoice Value
Premium
Price Participation
Price Sharing
Refining Charge
Revenue
Service Value
Tolerance
Treatment Charge
Umpiring Charge

Account Sub-concepts

Some account concepts can be further refined by sub-concepts.

If the Concept is Dynamic Invoice Items or Dynamic Items With Tax, the available sub-concepts are the Dynamic Invoice Item Types list items defined in the List Editor.

If the Concept is Freight Value or Freight Value and Tax, the available sub-concepts are the Freight Activity list items defined in the List Editor.

If the Concept is Invoice Value, the available sub-concepts are:

Total Amount—This is the only option if the Document Type is Profit And Loss.
Net Amount
Tax Component
Due Amount
Held Amount—Not applicable if the Document Type is Funds Receipt.
Due Amount Before Tax
Held Amount Before Tax—Not applicable if the Document Type is Funds Receipt.
Due Amount Before Tax + Taxes
Held Amount Before Tax + Taxes—Not applicable if the Document Type is Funds Receipt.

If the Concept is Invoices Total Value, the available sub-concepts are:

Total Amount
Payable Amount
Due Amount
Forex Adjustment

If the Concept is Payment Charges, the available sub-concepts are the Payment Charges list items defined in the List Editor.

If the Concept is Payment Due or Payment/Receipt Amount, the available sub-concepts are:

Total Amount
Net Amount

If the Concept is Contract Charge Concept, the available sub-concepts are the Contract Charge Concept list items defined in the List Editor.

If the Concept is Premium or Premium With Tax or Refining Charge or Refining Charges With Tax or Treatment Charge or Treatment Charge With Tax, the available sub-concepts are:

All Values
Base Value
Linked Values
Total Amount

If the Concept is Service Value or Service Value And Tax, the available sub-concepts are the Service Activity list items defined in the List Editor.

If the Concept is Taxes, the available sub-concepts are the taxes defined in the Tax Editor.

If the Concept is Template Charges, the available sub-concepts are the contract charge templates in the Contract Charge Templates.

If the Concept is Custom Account Concept, the available sub-concepts are the Custom Account Concept list items defined in the List Editor.

Accounting Groups

The accounting group links the contract to the chart of accounts in the relevant document type.

Accounting groups relate directly to the company's enterprise resource planning (ERP) system. They allow the accounting journals to be created in such a way so that when the journals are passed across to the ERP system, they are compatible with the setup of the chart of accounts in the general ledger.

The material contract can be defined against a specific accounting group when entering general details for material contracts. Accounting groups are also used when generating invoices and when interacting with the company's accounting system.

Balancing the Journals

The chart of accounts is like an accounting ledger, in that it has to be of a double-entry nature, with both a credit and debit portion.

Balancing a journal can be done either by district, or by the sum of all districts. Whether the journal creation requires district balancing or overall balancing can be defined in the chart of accounts.

Rounding Error Management

Sometimes, especially if contributors are used, small rounding errors are introduced when journal entries are created, thereby leaving the journal unbalanced.

Example: Invoice for $15,555.55 with two Contributors: A: 90%, B: 10%. Two journal entries are created: A: 90% = $14,000.00, B: 10% = $1555.56. The sum of these values is $15,555.56, which is not balanced if we create another account for 100%.

A chart of accounts has a maximum adjustment value associated with it. If Use Rounding Adjustment is specified, and the rounding error is less than or equal to this tolerance, the difference is distributed into the already created accounts for a journal, thereby avoiding the creation of a tolerance account for such a small value. Otherwise, the difference is put into the tolerance account, which is a special account in the chart of accounts.

Forex Gain/Loss Example

If the Document Type is Funds Receipt or Refund, accounts can be set up for foreign exchange gain or loss incurred for the selected concept (and sub-concept if applicable).

Example: An invoice has a primary currency of USD and secondary currency of AUD. At the date of the invoice, the instalment of USD 10.87 was equivalent to AUD 15.99. However, when the payment of USD 10.87 was made, it was only equivalent to AUD 12.08. The following table summarises the accounts and payment journals.

Account Type	Concept	Forex Gain/Loss	Debits (USD)	Credits (USD)	Debits (AUD)	Credits (AUD)
Credit	Invoices Total Value	Unchecked		10.87		12.08
Debit	Invoices Total Value	Unchecked	10.87		12.08
Credit	Invoices Total Value	Checked			3.91
Debit	Invoices Total Value	Checked				3.91