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Component documentation Journal Entry 

Purpose

Journal Entry is a set of processes that takes files with records representing financial transactions in PRA, edits the data in the files, and posts the files to JE accounts. Journal Entry provides common journalization, posting, inquiry, extraction, and purging functions to all other SAP PRA application areas and PRA line item tables. The ultimate goal of JE is to have financial data saved in tables, representing financial transactions that have taken place in PRA.

 

Whereas Revenue Distribution reads journal entries, Journal Entry as a module only posts the journal entries. Processes within Journal Entry call JE to obtain the relevant account. There are over forty processes in PRA that call Journal Entry.

 

JE provides the following functionality:

 

·  Journal entry collection

·  Journal entry maintenance

·  Journal entry editing

·  Journal entry posting

·  Journal entry queries (ABAP Reports on Journal Entry line item tables)

·  Journal entry extraction

·  Journal entry purging (deletion of data that is no longer required)

 

A journal entry in PRA, in addition to carrying the net financial debit or credit, can include other data such as gross and net volumes, decimals, owners, and purchasers. The specific fields that are included are dictated by the JE line item table field definition in the relevant module.

 

Every journal entry must be linked with a batch (unique batch ID). A batch is simply a collection of individual journal entries, to be treated as one unit for processing. Batch numbers must be assigned sequentially for each accounting period for each company and batch type. For purposes of the Revenue System (RD, JE, etc.), a batch represents a set of journal entries to be processed as a unit.

 

In order to be processed in JE, a batch (collection of journal entries) must be in balance (meaning: debits must equal credits and control totals must equal the corresponding accumulated totals).

 

The Journal Entry application component is used to maintain account information (accounting detail data) for all accounts used in automated or manual processes within PRA, thus completing the upstream business processes incorporated in PRA. It also supports the ability to enter and process manual journal entry batches (see: Manual Journal Entry).

 

Journal Entry represents the accounting and disbursement side (what accounting entries are made) of PRA, whereas Valuation represents the volumes and values side (what volumes are involved, and how are they valued). Revenue Distribution serves as the interface between the volumes and values side, and the accounting and disbursement side.

 

The Journal Entry module supports:

 

·  Master data requirements

·  Manual entry of journal entries (manual processes support the entry of accounting entries by an assigned group (batch)). Controls, edits and validations are used to check the manual entry processes in JE. JE allows for the manual correction or write-off of accounting detail lines that failed posting. You can also copy and reverse manual entries.

·  Automated processing and financial integration

 

There are two main components of the Journal Entry module:

·  The Chart of Accounts

·  Accounting detail posting rules – Features of which include: distribution/ assignment at multiple levels for account category, division of interest, and owner), detail type designation (for example: AR, AP, RD), and reconciliation (purge) rules, which remove offsetting balances

 

 

All journal entries created in PRA, whether entered manually or generated in other systems/application components, are edited and posted into the line item tables by the Journal Entry component. The purpose of the line item tables is to store the journal entry data according to account type (financial transaction involved).

 

The following Journal Entry line item tables exist:

 

·  Miscellaneous Line item table

·  Inter-company Line item table

·  Owner Payable Line item table

·  Legal Suspense Line item table

·  Statistical Line item table

·  Income Line item table

·  Expense Line item table

·  Tax Payable Line item table

·  Accounts Receivable Line item table

·  Accounts Payable Line item table

 

(Note: for a full list of and description of all the line item tables in JE, see: Journal Entry Line item tables)

 

The following represents the process flow for Journal Entry:

 

This graphic is explained in the accompanying text

 

 

 

Journal entry automated processing:

 

·  Gathers all available entries

·  Performs edits and validations

·  Posts accounting detail to line item table detail ledgers

·  Posts summarized accounting detail to SAP financial components (there is an SAP FI integration job that summarizes JE transactions for posting in FI). JE volumes can be sent to the SAP FI Module for all JE accounts.

 

Features

Journal Entry encompasses the following:

 

·  Maintenance of a chart of accounts for all accounts that are used in PRA processing.

 

·  Maintenance of identification of the keys for purging account data on either a routine or periodic basis. Asset and liability accounts are purged based on net account balances. Income and expense accounts are purged based on a defined time period.

 

 

·  Maintenance of default account numbers that are used in PRA processing, when certain types of accounting entries are made (for example, the default account used to book royalty payables). In many cases, default accounts can vary based on other characteristics of the type of entry being made, such as product, interest type, entity type, etc.

 

·  Provides the ability to establish account numbers that override the default accounts. The override accounts are set up to be used at either a DOI or DOI/owner level. The DOIs or DOI/owners to which the overrides apply are maintained in the DOI accounting data application component.

 

 

·  Provides the capability to enter manual batches of journal entries, with appropriate controls such as batch controls and journal entry edits and validations.

 

·  Edits and validates all journal entries, whether they originate in manual journal entry batches, or have been generated automatically by other PRA application components.

 

 

·  Provides the ability to track journal entries that have failed the edit and validation process. Rejected journal entries can be corrected online, and can also be written off.

 

·  Processes journal entries that apply to future accounting periods. Other PRA application components cannot utilize these entries until the future accounting period becomes the current accounting period.

 

·  Provides the ability to flag manual batches so that they will be automatically reversed in the next accounting period.

 

·  Provides the ability to copy manual journal entry batches, with an option to reverse the signs of the entries, if desired.

 

·  Provides a search and display function that queries the various line item tables maintained by the Journal Entry component.

 

The following table provides an overview of some of the main concepts used in Journal Entry, along with a description of each concept:

 

Account number

Represents the account number of a group of journal entries.

Account type

The type of journal entry that the account represents. Examples of account types include owner payable, expense, income, etc.

Company

The processing company, to whose books the account will be posted (journalized).

Accounting Category

A four-character code identifying a group of account numbers.

Accounting Period

Identifies the accounting month in which the batch is to be entered. The accounting period must be open to be accepted. Three accounting periods will be open at any given time (to include the current month plus two).

Batch number

Used to uniquely identify a group of journal entries. The system sequentially assigns batch numbers by batch type.

Batch type

A code used to classify batch information. Examples are: Reversal, write-off, and void checks. Batch types are designated as reversible and non-reversible, for use in the Revenue Distribution automated reversal processing. All batch types, except type 42 are non-reversible, and will not be processed by the automated reversal procedure.

Account number

An account number is a ten-character reference number used to identify a journal entry. It is set up in account maintenance.

Account category

An account category identifies a group of account numbers. For example, taxes payable is an account category. Within this category, several taxes payable account numbers exist that refer to a specific account such as taxes payable – gas and taxes payable – oil.

The account categories are defined in common table TBLRV016. This table is a static list of all account categories used by SAP PRA.

Account category attributes

There are several attributes that are used to uniquely identify the account numbers within an account category. These attributes are defined on the Accounting Category transaction (see:

Creating Account Category Information). For each account category defined on common table TBLRV016, an entry that describes the distinguishing characteristics of the accounts within the category must be made in this transaction.

Account number determination

Several areas of PRA generate journal entries. Account numbers are assigned to these entries using the values of the required account category attributes found on the PRA transaction being processed. The tie between the values of the required attributes and the specific account number is made on the Account Entry Control transaction (see:

Using Account Entry Control).

 

Default account number

If the combination of values found on the PRA transaction does not exist on the Accounting Entry Control transaction, a default account number is used. The default account numbers are listed by category on common table TBLRV066.

A default account number report is generated by each PRA program that attempts to assign an account number to a journal entry but cannot, and therefore, uses a default account number.

 

 

Integration

JE contains system interfaces with the following PRA application areas:

·  Division order in Ownership (used for validation)

·  Revenue Distribution/Disbursement

·  Check input processing

 

 


 

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