Control accounts

Business practices in Japan, Spain, Italy, and other countries require that different types of receivables and payables are posted to different control accounts. You can use multiple control accounts for financial business partner groups to post real trade transactions and other purchase or sales-related transactions to different control accounts.

You can use the sales types and the purchase types to post the financial transactions generated during processing of the invoices to various control accounts. For each business partner group, you can define the control account to be used for each sales type and purchase type.

You can create as many sales types and purchase types as you need for your financial administration. You can define sales type exceptions and purchase type exceptions to post transactions with specific origins and with specific details, for example, specific items or projects, to specific control accounts.

The default control account

For each business partner group, you must define one default sales type or purchase type and its related control account. In other words, you must define at least one sales type and one purchase type because this is required to link at least one control account to a business partner group.

It is recommended that for regular sales/purchase activities, you use the default sales type and purchase type and control accounts. You can use the additional sales types and purchase types with their control accounts to post invoices that are not related to real trade transactions to separate control accounts. For example, non-trade sales invoices can concern the sale of fixed assets, intercompany transfers, and so on.

Dimensions

You can use the dimensions to split the transactions on the customer and supplier control accounts by departments, persons responsible for the revenues, costs, properties, debts, and so on. All the additional control accounts of the business partner groups must use the same dimensions as the control account linked to the default sale type or purchase type.

For details, refer to Dimension accounting.

The control account search path

To determine the control account for an invoice transaction, LN searches for the most specific sales type or purchase type in this order:

  1. The manually entered sales type or purchase type of the sales invoice header or purchase invoice header.
  2. The sales type or purchase type of the sales order line or purchase order line. This can be an 'exception' defined for specific order details such as the item code, the item group, or the project.
  3. The default sales type or purchase type defined for the business partner group of the invoice-to or invoice -from business partner.

For manual purchase orders and purchase schedules, if no purchase type is found in the purchase type exceptions, LN retrieves the default purchase type from the business partner group of the invoice-to business partner.

For internal invoices with bilateral invoicing or triangular invoicing, LN uses the default sales type or purchase type of the business partner group linked to the internal invoice-to or invoice-from business partner. For example, internal invoices can be generated for transfers, manual transfers, WIP transfers, and internal freight orders.

Note

For purchase orders for which intercompany settlement transactions are generated, no sales type and purchase type are used and the corresponding field is disabled.

Transactions

Multiple control accounts are used for the following types of purchase and sales transactions:

  • Purchase orders
  • Freight orders
  • Manual purchase invoices
  • Invoices generated for procurement card statements
  • Sales orders
  • Warehouse orders for transfers that result in inter-company transactions
  • Service orders
  • Service contracts
  • Calls
  • Project orders
  • Debit notes
  • Credit notes
  • Interest invoices
  • Manual sales invoices
  • Commission and Rebate invoices
  • Purchase schedules
  • Advance receipt requests
  • Sales schedules

Payments and receipts processed in Cash Management are posted to the control accounts determined by the sales types and purchase types of the related orders or invoices.

This applies to the following types of cash management transactions:

  • Manual and automatic payments/receipts for normal and anticipated payments/receipts
  • Assignment of invoices to advances/unallocated
  • Reconciliation of bank documents and electronic bank statements

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