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Posting Rules by Transaction Type

This topic provides an explanation of the posting rules used by the system, organized by transaction type.

Note

For some transaction types, suggested choices are noted below based on whether your organization uses Accrual or Cash accounting.

TRANSACTION TYPE – INVOICES (Accrual or Cash)

When a user adds or edits an invoice, "transactions" are created and the information from each transaction is posted to the general ledger. The system uses the posting rule options to determine which account to use.

For Invoices, if a discount is taken at the time of invoice, a "Credit Invoice" is created. This option is a global policy on the Invoice tab.

Debit

User selects Special.

Debit the INVOICE account, i.e., the expense code from the invoice line item.

Credit

User Selects Default.

When posting an Invoice derived from a Purchase Order using the Default option, the system uses the first account found in this hierarchy:

1. The PO Payable override that exists on the Batch.
2. The PO Payable account on the CompanyEntity.
3. The AP Override on the Invoice.
4. The AP Override on the Batch.
5. The AP Account on the CompanyEntity.
6. Otherwise, show an error message to indicate a missing account.   .

When posting an Invoice not derived from a Purchase Order using the Default option, the system uses the first account found in this hierarchy:

1. The AP Override that exists on the Invoice.
2. The AP Override on the Batch.
3. The AP Account on the CompanyEntity.
4. Otherwise, show an error message to indicate a missing account.   .

User Selects GL Account

˗ Credit the selected GL Account.

Discounts

Discounts are handled differently for Invoices and Checks. When discounts are taken at the time of invoice, the system creates a separate credit invoice record.  

When you make a payment with a discount taken at payment, the discount portion is calculated on the fly by the system, and any applicable discount is added to the existing Payment record.

Taxes

When accruing taxes, a Sales Tax Code can be assigned to an Invoice line item. This means a Use Tax liability is being incurred on that item. The system posts to the general ledger for every Jurisdiction in that Sales Tax Code.

As there can be multiple Jurisdictions in a Sales Tax Code, and the calculated tax amounts for each Jurisdiction may not equal the total taxes, the system solves this by posting the remaining tax amount to the last Jurisdiction, i.e., that Jurisdiction may get the extra penny.

A validation on the Jurisdiction ensures that a Sales Tax or a Use Tax is not used in more than one Jurisdiction.

TRANSACTION TYPE - CHECKS

Debit

User selects Default.

Note that this is the suggested or Sample choice when using Accrual accounting. The system uses the first account found in this hierarchy:

1. The AP Payable Account override on the Invoice.
2. The AP Payable or PO Payble GL Account override on the Batch.
3. The AP or GL Account of the CompanyEntity.
4.  Otherwise, show an error message to indicate a missing account.   

User selects GL Account.

˗ Debit the selected GL Account.

User selects Special.  

Note that this is the suggested or Sample choice when using Cash accounting.

˗ Debit the selected general ledger account that matches the posting rule’s CompanyEntity and invoice line item’s expense code.

Credit

User selects Expense Code.

˗ Credit the general ledger account matching the posting rule’s CompanyEntity and given expense code.

User Selects GL Account.

˗ Credit the general ledger account that the user selects.

User Selects Special. CASH is automatically selected by the system.

˗ Credit the GL Account for the bank.

Discounts

Credit If a discount was taken, the system uses the first account found in this hierarchy:

1. Credit the Discount Earned expense code on the Batch.
2. Credit the Discount Earned expense code on the PropertyCompany.
3. Otherwise, show an error message to indicate a missing account.

TRANSACTION TYPE – INTERCOMPANY CHECK (ICA)

ICA Checks need two posting rules.

• The first rule is to debit the accounts payable account and credit the due to other CompanyEntity (destination) account of the CompanyEntity associated with the source PropertyCompany.
• The second rule is for the CompanyEntity where the bank account resides. The rule debits the due from the source CompanyEntity account and credits the cash account of the destination CompanyEntity (i.e., Special with CASH selected). Use the general ledger account to define the specific account.

Debit

User selects Default.

Note that this is the suggested or Sample choice when using Accrual accounting. The system uses the first account found in this hierarchy:

1. The AP Payable Account override on the Invoice.
2. The AP Payable or PO Payble GL Account override on the Batch.
3. The AP or GL Account of the CompanyEntity.
4.  Otherwise, show an error message to indicate a missing account.   

User Selects GL Account.

˗ Debit the selected GL Account.

User Selects Special. Note that this is the suggested or Sample choice when using Cash accounting.

˗ Debit the general ledger account matching the posting rule’s CompanyEntity and given expense code.

Credit

User Selects GL Account.

˗ Credit the GL Account.

User Selects Special.

˗ Credit the GL Account for the bank.

TRANSACTION TYPE – BILLINGS (Accrual or Cash)

Debit

User Selects Default.

When posting a billing using the Default option, the system uses the first account found in this hierarchy:

1. The AR Override that exists on the Invoice.
2. The AR Override on the Batch.
3. The AR Account on the CompanyEntity.
4. Otherwise, show an error message to indicate a missing account.  

User Selects GL Account

˗ Debit the selected GL Account.

Credit

User Selects Special.

The system will credit the GL Account matching the posting rule's CompanyEntity and billing item's income code.

˗ Credit the income code from the billing line item.

TRANSACTION TYPE – RECEIPTS

Debit

User Selects Expense Code.

˗ Debit the selected Expense Code.

User Selects GL Account.

˗ Debit the selected GL Account.

User Selects Special.

˗ Debit the GL account for the bank.

Credit

User Selects Default

The system uses the first account found in this hierarchy:

1. The AR Account override on the Billing.
2. The AR GL Account override on the Batch.
3. The AR or GL Account of the CompanyEntity.
4.  Otherwise, show an error message to indicate a missing account.   

User Selects GL Account.

˗ Credit the selected GL Account.

User Selects Special.

Note that this is the suggested or Sample choice when using Cash accounting.

˗ Credit the general ledger account matching the posting rule’s CompanyEntity and billing item's expense code.

See Also

Posting Rules Overview

Posting Rules Setup