Impact of zone balancing on fund accounting
Fund accounting is enabled in the finance enterprise group.
See Enabling and disabling fund accounting.
Unbalanced entries can occur when fund accounting is enabled. These examples illustrate how unbalanced entries occur and how to balance them.
Public Sector fund accounting requires all transactions to be in balance by fund. In certain cases, there may be transactions that will not be balanced by fund.
Example 1
| Fund | Account | |
|---|---|---|
| Cash | GENERAL | 1010 |
| Received Not Applied | ENTERPRISE | 2310 |
In this Receivables setup, the fund for the Cash account is different than the fund for the Received Not Applied account.
A receivable cash payment is created for $25.00 and accounted.
These entries will be created in Global Ledger:
| Account description | Fund | Account | Amount |
|---|---|---|---|
| Cash | GENERAL | 1010 | $25.00 |
| Received Not Applied | ENTERPRISE | 2310 | -$25.00 |
The entry is unbalanced because the debit and credit are to different funds. The entries are not kept in balance by the fund accounting feature.
To create balanced entries, we recommend specifying Cash and Received Not Applied accounts using the same fund.
Example 2
| Fund | Account | |
|---|---|---|
| Cash | GENERAL | 1010 |
| Prepay Accrual | ENTERPRISE | 1410 |
In this Payables setup, the fund for the Cash account is different than the fund for the Prepay Accrual account.
A payable prepay cash invoice is created for $50.00, paid, and accounted.
These entries will be created in Global Ledger:
| Account description | Fund | Account | Amount |
|---|---|---|---|
| Cash | GENERAL | 1010 | $50.00 |
| Prepay Accrual | ENTERPRISE | 1410 | -$50.00 |
The entry is unbalanced because the debit and credit are to different funds. The entries are not kept in balance by the fund accounting feature.
To create balanced entries, we recommend specifying Cash and Prepay Accrual accounts using the same fund.
Fund (Dimension 1) zone balancing
If the setup with different funds is required, you can create balanced entries in Global Ledger by using Fund (Dimension 1) zone balancing.
For example, fund zone balancing is enabled for the finance enterprise group and these are the posting funds:
- ZONEBAL is the default zone fund
- GENERAL and ENTERPRISE are separate zone funds
The zone Payables and Receivables account is 7040.
| Fund | Account | |
|---|---|---|
| Cash | GENERAL | 1010 |
| Received Not Applied | ENTERPRISE | 2310 |
In this Receivables setup, the fund for the Cash account is different than the fund for the Received Not Applied account.
A receivable cash payment is created for $25.00 and accounted.
Because zone balancing is enabled, these entries will be created in Global Ledger:
| Account description | Fund | Account | Amount |
|---|---|---|---|
| Cash | GENERAL | 1010 | $25.00 |
| Received Not Applied | ENTERPRISE | 2310 | -$25.00 |
| Balancing entry | ENTERPRISE | 7040 | $25.00 |
| Balancing entry | GENERAL | 7040 | -$25.00 |
| Balancing entry | ZONEBAL | 7040 | $25.00 |
| Balancing entry | ZONEBAL | 7040 | -$25.00 |
The entries are now balanced by fund.