Set up a Chart of Accounts

Security Note: You need the Allow the maintenance of chart of accounts and account groups security right in the Accounting user group security rights group for this activity.

Activity Steps

  1. Open the Chart Of Accounts screen.
  2. Select the Chart Of Accounts tab.
  3. Select the relevant Document Type.
  4. If the Document Type is Custom Document Type, select the Custom Document Type from the Custom Document Types list items defined in the List Editor.
  5. Right-click in the Chart Of Accounts table and select New from the menu.
  6. Complete the following fields.
    • Name
    • Transaction Type—Select from Standard, Accrual and Both. If the Document Type is Profit And Loss, set to Standard.
    • Store Original Currency—Whether to store the original currency of the item (for example, invoice or payment) in the journal. If checked, journal entries are stored in the original currency as well as the Primary Currency and Secondary Currency specified in the chart of accounts. If unchecked, journal entries are only stored in the Primary Currency and Secondary Currency specified in the chart of accounts. For both options, the exchange rate used for each currency in the journal entries displays and is stored.
    • Districts—List of districts associated with the chart of accounts. The district of an item must be in this list for journal entries to be created. Select from the districts defined on the Organisations panel of the Solution Explorer.
    • Material Type—List of material types associated with the chart of accounts. The material type of an item must be in this list for journal entries to be created. Select from the material types defined on the Material panel of the Solution Explorer.
    • Primary Currency—Primary currency used for the chart of accounts. Select from (None) and from the currencies defined in the Currency/Exchange Editor. If (None) is selected, the currency specified in the item is used.
    • Decimal Places—Number of decimal places to which to round journal entries in the primary currency. Specifying the number of decimal places for the chart of accounts can ensure that journal entries are rounded as required for exporting to another financial system. If the number of decimal places is not specified for the chart of accounts, the number of decimal places specified in the Currency/Exchange Editor is used for rounding journal entries.
    • Exchange Rate Method—Date on which the exchange between the invoice currency and the primary currency occurs for the chart of accounts. For most document types, select from:
      • Journal Transaction Date
      • Document Type Date
      • Bill Of Lading Date
      • Method Of Document—For example, for invoice journals, uses the exchange rate method from the contract term related to the invoice.

      For charts of accounts with the Profit And Loss document type, select from:

      • Journal Transaction Date
      • Document Type Date
      • Bill Of Lading Date
    • Secondary Currency Base Document—Source values of the secondary currency values of the journals. Select from:
      • Journal Primary Values
      • Document Primary Values
      • Document Second Values—Not applicable to the Profit And Loss document type.
    • Secondary Currency—Secondary currency used for the chart of accounts. Select from (None) and from the currencies defined in the Currency/Exchange Editor. If (None) is selected, the currency specified in the item is used.
    • Secondary Decimal Places—Number of decimal places to which to round journal entries in the secondary currency. Specifying the number of decimal places for the chart of accounts can ensure that journal entries are rounded as required for exporting to another financial system. If the number of decimal places is not specified for the chart of accounts, the number of decimal places specified in the Currency/Exchange Editor is used for rounding journal entries.
    • Secondary Currency Exchange Rate Method—Date on which the exchange between the invoice currency and the secondary currency occurs for the chart of accounts. Select from the same options as Exchange Rate Method.
    • Balanced Tolerance—Maximum amount permitted in the tolerance account of the chart of accounts. Currency conversions and other rounding issues can make journals unbalanced. If the journal is unbalanced, and the difference is greater than balanced tolerance, the journal is declared as unbalanced. If the difference is less than the balanced tolerance, the difference is assigned to the tolerance account so that the journals balance. This balancing method is recommended if Use Rounding Adjustment is unchecked.
    • Accounting Groups—Accounting groups associated with the chart of accounts. Select from the accounting groups defined on the Accounting Groups tab.
    • Use District Balancing—Whether district balancing is applied. This setting allows those customers who have multiple districts to have unbalanced accounts in a journal for some of the districts, as long as the overall result for all the customer's districts is balanced. That is, some districts would have unbalanced credits, and others have unbalanced debits; however, the sum of the accounts for all their districts would be balanced. Note that if Use District Balancing is enabled, it is desirable (but not mandatory) to have a tolerance account per district.
    • Use Rounding Adjustment—If checked, any journal imbalance caused by currency conversion or rounding errors is assigned to the largest account entry, resulting in the journal being balanced. If unchecked, a tolerance account is used to restore the balance.
    • Maximum Adjustment Value—Maximum amount that may be added to a journal entry that has already been created for a journal, when Use Rounding Adjustment is enabled, and the journal is not balanced. This maximum adjustment value avoids the creation of a tolerance account journal entry for such a small value. If the difference is greater than this tolerance, the tolerance account for the district is used to store the difference.
    • Use Prepayment—Whether the prepayment amount is used for journal creation. If checked, when journals are generated for an actual invoice that is created after a prepayment invoice, an incremental journal item is generated for each line item in the prepayment invoice. Example:

      • The Sales Invoice chart of accounts has Use Prepayment checked and Account Type Prepayment set to Credit. The following accounts are set up:

      • Account Type: Credit; Account Number: WXYZ-01; Concept: Prepayment Amount
      • Account Type: Credit; Account Number: ABCD-1000; Concept: Invoice Value
      • Account Type: Debit; Account Number: ABCD-11000; Concept: Invoice Value

      A prepayment invoice with a single line item of $7000 is created. The journal items for the prepayment invoice are:

      • ABCD-1000 $7000 (Credit)
      • ABCD-11000 $7000 (Debit)

      A final invoice is then created with a single line item of $8000. The journal items for the prepayment invoice are:

      • WXYZ01 $7000 (Credit)
      • ABCD-1000 $1000 (Credit)
      • ABCD-11000 $8000 (Debit)
    • Account Type Prepayment—Account type associated with the prepayment. The Account Type for the account with the Concept of Prepayment Amount must match the selected Account Type Prepayment for the chart of accounts. There must also be an account with the Concept of Invoice Value set to the same Account Type. Select from Credit and Debit.
    • Use Numbering Script—Whether to use the defined numbering script to generate dynamic account numbers when journal entries are created. See Set up the Numbering Script for a Chart of Accounts.
    • Use Journal Entry Properties Script—Journal entry properties for which to use script-generated values. If selected, set to Description. See Set up the Properties Script for Journal Entries.
    • Contract Type—Optionally limit the chart of accounts to a contract type:
      • If Document Type is Credit Note or Debit Note, select from Sales Contract and Purchase Contract.
      • If Document Type is Sales Invoice, select from Sales Contract and Repurchase Contract.
      • If Document Type is Purchase Invoice, select from Purchase Contract and Repurchase Contract.
  7. Click Save.