Financial Accounting covers the costing and accounting dimension of the application. In traditional systems, this functionality usually appears in modules called Financial & Controlling, Reporting and General Ledger as well as those modules which generate accounting entries. A diagrammatic representation of Performance Analysis is shown in the schematic below.
Receipts
When entering a Sales Order or Invoice, the payment rules allow flexibility in the automatic generation of receipts:
– For cash transactions a Cashbook entry is automatically generated
– For credit card, cheque and direct debit transactions a payment is created against the appropriate bank account.
– Open Items are settled by entering Payments (e.g. receiving a cheque or creating a direct debit), creating a Cash Book entry (e.g. open invoice paid by petty cash later) or during the process of reconciling Bank Statements (e.g. bank transfers).
Payments
Payments are generated, in batches or individually, based on payment terms which allow for payment discounts to be automatically taken. Payments can be made by direct debit transactions or FORCA’s cheque printing facilities. Payments can also be made by credit card and details can be recorded when entering the Purchase Order or Invoice. Credit Card numbers for completed transactions have the middle 8 characters removed when stored in the system.
Payment Rules (Receivables and Payables)
Depending on the payment rule associated with the vendor invoice, payments are automatically created. Payment rules can be changed at any time to reflect changes in the actual method of payment and in the event that it is decided to pay an invoice using an alternative method. The following payment rules are supported by FORCA:
– Cash
– On Account (Payment Term)
– Credit Card
– Cheque
– Direct Debit transfer
– Cash
When cash is selected as payment method, an entry is automatically made in the default Cash Book for that day.
– On Account (Payment Term)
For “on account” customers (ie those with a credit limit) the payment term defaults to the payment term in the Business Partner definition unless another payment term is specified by the user.
– Credit Card
Credit card transactions can be entered and processed online. The invoice is marked as paid and the charge maintained in the system as an unreconciled payment. Note that use of this facility may require modifications to meet the needs of the credit card organisation that you deal with.
– Cheque
After selection of the appropriate bank account, cheques can be entered into the system. The associated invoice is marked as paid and the cheque maintained in the system as an unreconciled payment.
– Payments
Payments records (via Credit Card, Check, Transfer) can created when an invoice being paid or can be entered into the system later. If a manual Payment pays a single invoice the invoice is selected in a dropdown list and automatically matched to the payment. If a manual Payment pays multiple invoices then the payment and the matching invoices are selected in the Payment Allocation window. System generated payments automatically match and clear their respective invoices.
– Allocation
The Allocation process links (multiple) payments to (multiple) invoices or credit memos and records payment discounts and receivable write-offs. The user selects the relevant documents and then enters/confirms the difference as a short payment, discount or write-off. The Allocation process also records realised gains and losses on foreign currency denominated AP and AR transactions.
Bank Statement
Bank Statements items can be selected from a system-generated list of unreconciled payments or automatically loaded from electronic details supplied by the financial institution. FORCA provides functions to allow for the reconciliation of in-transit payments and bank charges or the creation of payments for direct debit transfers. Modifications may be required to support the requirements of your financial institution.
Cash Book
Petty cash transactions are recorded in the relevant cashbook. Invoices paid by cash are automatically entered in the cash journal. A cash journal is created for each organisation for each day.
The Cash Journal may also be used to record:
– General expenses (for accounts defined in the cashbook)
– General revenue (for accounts defined in the cashbook)
– Petty Cash differences (for account defined in the cashbook)
– Charges
– Cash payments of Invoices to a customer or from a supplier
– Transfers to or from a bank account.
The Cash Journal is processed after balancing adjustments are made by creating a new cash journal with the correcting entries.
Charges
In many systems miscellaneous expenses and revenues are allocated directly to GL account codes. In FORCA these items are entered by selecting a “Charge” which acts as an alias for a GL account code. This allows FORCA to support multiple charts of accounts as the Charge can be linked to Account 123 in the first IDR Chart of Accounts and to (say) Account 789 in the second USD Chart. Where a single Chart of Accounts is used then the Charges are simply named/numbered the same as the GL account codes they link to.
The user can define the tax type of the Charge. If Customer or Vendor Invoice lines are allocated to a Charge, the tax rate defaults to the defined tax type of the Charge. The amount of a charge can be predefined to speed data entry. The currency of the document determines the currency of the charge.
Expense Allocations
Default allocation of expenses (or revenues) can be defined so that an expense of a particular type and/or from a particular vendor is split up and allocated over multiple Organisations and/or account codes.
Accounting Rules
Accounting entries are automatically generated based on rules which apply to Document transaction types defined by the system which are able to be extended by the user. The rules define the natural account codes for each group of transactions generated by an accounting document. As a result transactions are entered into the system without the user’s staff needing to know anything about account numbers. The system also allows for manual entries to generate additional postings (actual, budget and statistical).
Manual Journals
The majority of accounting transactions are generated as a consequence of the processing of Documents. This allows the recording of individual transactions in multiple accounting schemas. Manual journals allow for the creation of accounting entries for a specific accounting schema. Auto reversing Journal entries are supported and FORCA’s standard recurring document functionality can be used to process standing journals (and any other document based transaction).
General Ledger Distributions
The system provides for the creation of user-defined rules to cause amounts debited or credited to the system by any document to be spread over multiple General Ledger accounts.
