When is a Journal In Balance

A journal can only be posted to Financials when it is in balance.

A journal is in balance when:

  • the debit and credit values on the journal transactions balance in the base currency. See Balancing a Journal in the Base Currency.
  • the debit and credit values on the journal transactions for each accounting period balance.

In a multi-currency environment, a journal may also be forced to balance in all, or some, of the additional currency values that are in use for the business unit. The additional currency values are the transaction currency (value 2), the second base/reporting currency (value 3) and the fourth currency (value 4). This is determined by the balancing rules defined in Business Unit Setup. See Balancing a Multi-Currency Journal.

Optionally, a journal may also be required to balance by any of the following, depending on the Balance By option in Ledger Setup (LES) or Ledger Import (LIM):

  • transaction reference
  • any of the ten transaction analysis dimensions
  • transaction date (Ledger Import only)
Note: There is an exception to these balancing rules for posting journals to memo accounts, which do not need to balance, and slightly different rules apply to posting provisional journals.

The journal balancing rules, established in Business Unit Setup, determine:

  • whether the base currency values can be balanced automatically.
  • the balancing adjustment, or suspense, accounts.
  • the largest allowable balancing amount.
  • which of the currency values must balance and how they must be balanced.

These rules apply to journals entered using either Ledger Entry or Ledger Import. If a journal does not balance, it cannot be posted in Ledger Entry or imported in Ledger Import.

Note:  Ledger Import can optionally force journals to balance by posting errors to a suspense account. See the Dealing with Errors in Ledger Import section in the Financials User Guide / Help.

Forcing Selected Journal Lines to Balance

You can extend the journal balancing rules by ensuring all of the journal lines that reference a selected field balance. This is done by selecting one of the following reference fields in the Balance By option on Ledger Setup (LES) or Ledger Import (LIM):

  • Transaction Reference
  • Ledger Analysis Dimensions 1 to 10
  • Transaction Date (Ledger Import only)

For example, if Transaction Date is chosen for the Balance By option, the system checks that all of the journal lines that reference the same transaction date balance.

You can set the Balance By Override option in Ledger Setup (LES) to allow the user to override this check, if required. For example, you may only want the user to be made aware that the journal does not balance by Transaction Date rather than force the journal to balance in this way.

Note:  This option causes the Ledger Import file to be sorted prior to processing and may therefore have a detrimental effect on the processing time of a ledger import.

Automatically Generating Balancing Lines in Ledger Entry

System generated journal balancing lines can be generated for Value 1, Value 3 and Value 4, by setting their respective Currency Amount Balancing options to Automatic in Business Unit Setup.

Note: Balancing lines cannot be automatically generated for Value 2 (transaction currency), but you can check that it balances by setting its Currency Amount Balancing option to Manual.

If you set the Trans Ref Balancing for Entry option on the Transaction Rules tab of Ledger Setup (LES), then balancing is performed in Ledger Entry (LEN) by transaction reference for those Values (1, 3 or 4) specified as Automatic in Business Unit Setup. In other words, balancing lines are generated if the journal is not balanced by transaction reference. You do not need to create a business rule for this option.

If you want Ledger Entry (LEN) to balance by one of the available fields other than transaction reference (for example, by one of the ledger analysis dimensions), then select the desired field in the Balance By option in Ledger Setup (LES).

You can generate two levels of balancing lines in Ledger Entry (LEN): by transaction reference and by another field (for example, ledger analysis 7). If you want to do this, in Ledger Setup (LES) select the desired field in the Balance By option, and set the Trans Ref Balancing for Entry option. To successfully generate these two levels of balancing lines, you must also create the business rule described above.

Example:

The following table shows a journal entry of four lines, unbalanced in Value 3 both by transaction reference and by ledger analysis 7. Five auto-balancing lines are generated, as described in the Comments column:

Account Code Base Amount Debit / Credit Value 3 Amount Transaction Reference Ledger Analysis 7 Comments
101BOA31 200 D 100 BALTEST1 A10 Ledger Entry line 1
101BOA32 200 C 95 BALTEST1 A10 Ledger Entry line 2
101BOA31 200 D 100 BALTEST2 B12 Ledger Entry line 3
101BOA32 200 C 95 BALTEST2 B12 Ledger Entry line 4
751FX 0 C 5 BALTEST1   Generated line to balance transaction reference BALTEST1
751FX 0 C 5 BALTEST2   Generated line to balance transaction reference BALTEST2
751FX 0 C 5 System Balancing Transaction A10 Generated line to balance Ledger Analysis 7 Code A10
751FX 0 C 5 System Balancing Transaction B12 Generated line to balance Ledger Analysis 7 Code B12
999 0 D 10 System Balancing Transaction   Generated line to balance the journal
Note: For the above example to work, the Currency Amount Balancing must be set to Automatic on the Value 3 tab of Business Unit Setup.

If you want to validate that the journal balances by one of the available fields without automatically generating balancing lines, you can do this for Value 1, 2 or 4 by setting their Currency Amount Balancing options to Manual in Business Unit Setup. Manual Balancing is not possible for Currency Value 3.

Automatically Setting Analysis Codes in Balancing Lines

To ensure that the system generated balancing lines include any necessary analysis codes, you must set up an additional business rule, as shown in the following example. In this example, ledger analysis 1 is set to the value 8605 on the automatically generated balancing lines that otherwise lack a code for ledger analysis 1 when the journal is posted.

Event Profile (EVP):

IF Function Id = Ledger Entry

IF Call Point = 00003 Each Journal Line Posted

Rule Set (RST):

IF Ledger Analysis 1 = SPACE Y

SET Ledger Analysis 1 8605 X

The word 'SPACE' is selected from Keywords, and is used to test for null or blank fields; in this case it tests for the absence of a code in Ledger Analysis 1. For more information, see Understanding Condition Statements in the Business Unit Administrator Guide / Help.

For general information on setting up Event Profiles and Rule Sets, see Using Business Rules Overview in the Business Unit Administrator Guide / Help.