CBA Example: Payment with Invoice Reference

In this scenario we consider the direct payment with clearing of the known vendor invoice. The graphic below illustrates this:

Cash-Basis Accounting: Payment with Invoice Reference - Overview

This graphic is explained in the accompanying text.

This example assumes that the new general ledger (G/L), document split and Cash-Basis Accounting (CBA) have been configured in full. The scenario described below refers only to one G/L entity - Revenue/Expense Account (RE_ACCOUNT ). However, since all other G/L entities can also be used in CBA, the updating mechanisms considered are valid for them as well.

In the first step, a vendor invoice is posted that results in the following accounting document:

Account	Debit Amount	Credit Amount
Vendor		100
Expense 1	60
Expense 2	40

Since the invoice, by definition, is not cash-relevant, this document is not updated in the Cash Ledger. However, the information about the expenses involved is saved in the split version of the document, as follows:

Account	Debit Amount	Credit Amount	Revenue/Expense Account (RE_ACCOUNT)
Vendor		60	Expense 1
Vendor		40	Expense 2
Expense 1	60		Expense 1
Expense 2	40		Expense 2

Next, the payment clearing the invoice is made from the bank clearing account. According to the CBA concept, bank clearing accounts are not cash-relevant. Therefore this posting is not updated in the Cash Ledger either. The entry view of the document looks as follows:

Account	Debit Amount	Credit Amount
Bank Clearing Account		100
Vendor	100

However, the inheritance mechanism causes the information about the causing expense accounts to be transmitted into the payment document, with the following result:

Account	Debit Amount	Credit Amount	Revenue/Expense Account (RE_ACCOUNT)
Bank Clearing Account		60	Expense 1
Bank Clearing Account		40	Expense 2
Vendor	60		Expense 1
Vendor	40		Expense 2

In the last step, the bank statement is posted (bank to bank clearing account with clearing of the open item). This is updated in the entry view as follows:

Account	Debit Amount	Credit Amount
Bank (Cash-Relevant)		100
Bank Clearing Account	100

Since the bank statement is cash-relevant, this posting generates the following CL document:

Account	Debit Amount	Credit Amount	Revenue/Expense Account (RE_ACCOUNT)
Bank (Cash-Relevant)		60	Expense 1
Expense 1t	60		Expense 1
Bank (Cash-Relevant)		40	Expense 2
Expense 2	40		Expense 2

In this case, the information about the original expense accounts has been transmitted through the process chain by using the document split and finally used in the CL document. To view the CL document, display the FI document and choose the menu option Start of the navigation path Environment Next navigation step Document Environment Accounting Documents. End of the navigation path