Ledger Interface

A Ledger Interface identifies the values and other details that are taken from Order Fulfilment transactions and posted on journals to accounts in Financials.

Two types of financial information can be interfaced into Financials from Order Fulfillment:

• Transaction values
• Inventory.

A Ledger Interface Setup is used to:

• Identify the journal entries required to record an Order Fulfilment transaction in Financials.
• Determine the destination of the identified journal entries, for example, the Financials ledger and accounts.
• Control the consolidation, summarization and suppression of the journal transactions.

You can set up any number of different Ledger Interfaces for the different types of Order Fulfilment transactions that must be reflected in the Financials ledger. You assign a Ledger Interface to a Sales, Purchase or Movement Type for a particular processing stage. When an Order Fulfilment transaction of the appropriate type reaches this processing stage, the Ledger Interface Setup is used to build the journal transactions required and they are posted to Financials.

You can assign different Ledger Interface rules to the different processing stages for a transaction, for example, order confirmation, receipt entry or invoice matching. You can also request a reversal Ledger Interface, for example, to reverse a budget commitment when an invoice is received and matched.

The use of Ledger Interface setups is best explained with an example:

A purchase order transaction is typically processed through a number of different stages, for example, order entry, order confirmation, receipt entry, invoice entry and invoice matching. The transaction often needs to be reflected in the Financials ledger at different stages.

If you use Commitment control to control committed and actual expenditure against budget, at the order entry or order confirmation stage the order value should be used to increase the commitment for the appropriate Financials budget account. So, you would define a 'PO Commitment' Ledger Interface that generates and posts the commitment budget journal transactions and assign this Ledger Interface to the order entry confirmation stage for the transaction type.

Later, when an invoice is received and matched against the order two additional journals are required:

1. The commitment total for the budget account must be reduced by reversing out the value of the invoice received.
2. The invoice values must be posted as actual expenditure to the Financials creditor/payables and expense accounts.

So, two ledger interfaces must be assigned to the invoice matching stage. The 'PO Commitment' Ledger Interface could be assigned as a reversal, or you could define a separate 'Reduce PO Commitment' Ledger Interface and assign that. In addition, a 'Purchase Invoice' Ledger Interface would be defined and assigned.