Welcome to the advanced G/L account determination course.

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This is the agenda for the course on the G/L Account Determination solution in version 9.0. In this course we are going to discuss the following topics: First, we present the G/L Account Determination – Advanced Solution. The introduction including advantages of the new solution. Then, we discuss the solution definitions How to initialize the system? Including System Initialization, Item Master Data, G/L Account Determination and 2 new windows: Determination Criteria and Advanced G/L Account Determination Rules. In the Solution Overview topic we will present: How the solution work. How to prioritize the rules. What are the account picking rules. And finally, we will configure an upgraded company We will see the changes in fields/ tabs/ forms. How to convert data in an existing database. Including the simulation tool. And the created rules.

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At the end of this course, you will be able to: • Outline the principles of the G/L Account Determination – Advanced Solution. • Define the initial settings required to start working according to the new solution. • Explain how to convert an existing upgraded company to start using the new solution.

• OEC Computers is located in the US and previously sold mostly to domestic customers. Now they are expanding sales in Canada and Brazil. • In the Profit and Loss report James, the CEO, wants to see what are the profits for each item group (for example, Printers) per country (for example, Canada). • For this purpose, they should define a separate revenue account for each item group per Country (for example, revenues from printers in Canada). • You tell them about the G/L Account Determination – Advanced Solution.

Let us first introduce the G/L Account Determination Advanced Solution

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Let us briefly review the traditional solution for G/L Account Determination (prior to version 9.0). In the Item Master Data you define the G/L Accounts to be involved in the monetary transactions. In every item master record you can specify that the accounts are retrieved from a higher level: Warehouse level: In this case the system automatically retrieves the accounts from the warehouse definition. To maintain the accounts in the warehouse definition, choose Administration Setup Inventory Warehouses and choose the Accounting tab. Item group level: In this case the system automatically retrieves the accounts from the item group definition. To maintain the accounts in the item group definition, choose Administration Setup Inventory Item Groups and choose the Accounting tab. Item Level – any G/L accounts that you define at the item level Choose the default G/L method for new items: Administration System Initialization General Settings Inventory tab Items Set G/L Accounts By field. You can define default accounts under Administration Setup Financials G/L Account Determination. These values are defaulted for all levels (warehouse level, item group level, and item level).

The new solution provides a centralized matrix to determine rules for assigning G/L accounts in journal entries, including: Defining the company level accounts in one place: the G/L Account Determination window (the traditional window for defining default accounts). For tailored business scenarios you have the option to define rules for G/L account determination. Those rules support: –

G/L Account determination for Item Code, Item Group, Warehouse Code, Ship-to Country, Ship-to State, Federal Tax ID and Business Partner Group.

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As well as multi determination criteria. That is, a combination of the criteria.

Any rule you define in the advanced form will have a higher priority in determining which account is assigned in journal entries. The solution enables tracking the change log of G/L account determination definitions easily. So, in our example, OEC Computers can define a separate revenue account for each item group per country (for example, revenues from printers in Canada, Brazil and US). Note! in the first phase (version 9.0), the advanced solution applies only to item related accounts. These are the same accounts that you define in the Item Master Data in the traditional solution (the regular G/L Account Determination, prior to version 9.0).

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Next, we will go over the necessary definitions for start working with the new solution.

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In a new database you should follow these steps to start working with the G/L Account Determination – Advanced Solution: 1.

Activate the new solution.

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All items will be set to Advanced Rule Type: General (automatically).

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Define determination criteria to set the priorities in the Advanced G/L Account Determination Rules window.

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Set the Advanced G/L Account Determination Rules Form.

In the following slides we will go over the four steps and demo how to initialize the G/L Account Determination – Advanced Solution.

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To activate the new solution go to: Administration Company Details Basic Initialization.

System Initialization

Check the Enable Advanced G/L Account Determination box. For a new company and for an upgraded company – the box is un-checked as default and editable. Once the user checks the box, the new G/L account advanced functionality will be activated and new windows and fields will be available under Administration Setup Financials G/L Account Determination: In the G/L Account Determination window: –

New column Advanced Rules is available for advanced rules defined for a specific account including a link to the advanced form

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New button Advanced was added. When choosing this button the new window: Advanced G/L Account Determination Rules opens.

The Determination Criteria window provides a predefined (closed) list of criteria. •

In an existing company, fields will be changed or removed after checking the Enable Advanced G/L Account Determination box.

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More details on the changes in an upgraded company and on how to configure it will be discussed later.

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Note! you need to make decisions about G/L Account Determination together with the client accountant.

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All items will be set automatically to Advanced Rule Type: General. The Advanced Rule Type in the item is a new field that determines which rule will be used to choose the inventory G/L accounts in the journal entry created by the document for this item. The Advanced Rule Type is the first criterion for automatically picking of the Advanced G/L Account Determination Rule. The other criterions defined in the rule will be discussed in the following slides. We recommend to keep the General advanced rule type in all items and rules. A different advanced rule type will be set automatically by the system in special scenarios of migration from the traditional solution to the advanced solution. Use the Warehouse Code and the Item Group criterions in the Advanced G/L Account Determination Rule definition instead of using the Warehouse and Item Group advanced rule types.

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• The Determination Criteria window provides a predefined (closed) list of criteria: • The user will be able to: Activate all or some of the criterions depends on the business need. If an active determination criterion is not in use by any of the advanced rules, you can un-check it to make it inactive. You cannot un-check determination criteria which are in use by one or more advanced rules (the Active box is disabled). • You can define or change the criteria priority using the Up and Down buttons. • Change log is supported in the Determination Criteria form. • Also, authorization definition was added for this form. Note! • Once you activate the new solution the system checks the criteria in this window according to the values (Warehouse, Item Group, Item Level) defined in the Set G/L Account By field in the Item Master Data under the Inventory Data tab. • When you choose the Item Code criterion, the Item Group criterion will be automatically selected too. This is due to the fact that in the item master data, item group is a mandatory field.

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The priority (that is the rows order) in the Determination Criteria window sets the priorities in the Advanced G/L Account Determination Rules window. This is reflected in: The columns names and order - the first row in the Determination Criteria window sets the highest priority for each rule. And so on for the rest of the rows. The rows order – the first row in the Determination Criteria window sets the rule with the highest priority in the Advanced G/L Account Determination Rules table. And so on for the rest of the rows. Inactive determination criteria are not displayed in the Advanced G/L Account Determination Rules window. Note! Entering a specific value has a higher priority than the value All. Let us look at the presented example: the 3 rules in the Advanced G/L Account Determination Rules window, have specific values. In the first 2 rules an item group is specified and in the third rule a warehouse is specified. The first 2 rules have higher priority since Item Group is ranked higher than Warehouse Code in the Determination criteria window.

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The current G/L Account Determination form will be used to define G/L accounts in the company level (under: Administration Setup Financials G/L Account Determination G/L Account Determination). Using the Advanced button you open the Advanced G/L Account Determination Rules window. Any rule you define in the advanced form will have a higher priority (than the G/L Account Determination window) in determining which account is assigned in journal entries. Advanced Rules column: Once the user defines an advanced rule for a specific account, the Advanced Rules column of this account will be updated in the G/L Account Determination window with a number of rules defined for the account and a link to the advanced form. While choosing the link arrow, the advanced form opens (in editable mode), filtered, and displays only the advanced rules related to this account. The form will be opened in Edit mode and the user can update it.

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In this form you define rules for assigning G/L accounts in journal entries: The advanced form deals with item related accounts only. The accounts that can be defined in the rules are the same accounts that you define in the Item Master Data in the traditional solution (that is, the regular G/L Account Determination, prior to 9.0). The form will be limited to 2000 records. Change log and print layout of the form are supported. Authorization for the new form will be included in the existing authorization of the G/L Account Determination form. When creating a new posting period, rules from the last period will be copied to the new period. Only rules that are valid for the selected period will be listed in the form. For each rule you should define at least one criterion and one account. In each period the rules priority starts at 1 (Lower numerical value = higher priority). As explained in the previous slides, the rules priority will be determined based on the priority in the Determination Criteria window. Once you define a new advanced rule (or changes the rule criteria) and update the form, the system will automatically prioritize the rules according to the determination criteria. The priority of all rules will be updated accordingly (that is, the system will place the rule according to its priority). Once you change the determination criteria priorities, the advanced rules priorities will be automatically updated accordingly the next time you open the form.

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Let us see how the G/L Account Determination – Advanced Solution behaves in everyday work.

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• In marketing and inventory documents the item related accounts are automatically picked according to the rules defined in the company. • When you choose an item in a marketing document for example, an A/R Invoice, the system checks the accounts required for the transaction. In our example, the inventory and the revenue accounts. • The system checks if there are any rules defined for these accounts in the G/L Account Determination window. • If not, the accounts are taken from the company level - G/L Account Determination window. • If there are rules defined for the necessary accounts, the system goes to the Advanced G/L Account Determination Rules window and looks for the appropriate rule. • The system checks if the document criteria match any of the advanced rules criteria. • If so, it picks the advanced rule with the highest priority. • Note! • The Set G/L Account By field in the Item Master Data under the Inventory Data tab is changed to: Set Inventory Method By. The field values (Warehouse, Item Group

and Item Level) will remain the same but they will no longer affect the accounts determination.

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Now we will loot at the account picking rules in the Advanced G/L Account Determination Rules window: You can control the columns presented in this window by choosing the Form Setting option and then checking the Visible and Active boxes under the Table Format tab. Period – the system picks the rules from the period that matches the document posing date. Only active rules in the transaction posting period are taken into consideration. When a date range is defined (in the From Date and To Date fields), the rule will be active only during the defined posting date range. Note that the dates must be included in the posting period date range. From these rules, the system filters the Advanced Rule Type that matches the type in the item master data. This is the first criterion that determines which rule will be used to define the G/L accounts in the journal entry created by the document. In our example, the Advanced Rule Type in the item is General. The system will pick from the rules defined as General type. Note! For items defined as Warehouse and Item Group rule type, rules with the same type as well as the General type will be considered as relevant. When defining new rules, we recommend to keep the General Advanced Rule Type unless a special scenario was migrated from the traditional solution.

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Next, the system checks the business partner and the item master data chosen in the document, and filters the rules list by the criteria defined for them. In our example, the system picks the rule according to the following criteria: If the Ship-to Country of the business partner master data is Canada and the item belongs to the Printers item group, then choose the revenue and inventory accounts defined in the first rule. The rule overrides the G/L accounts defined in the G/L Account Determination window. The inventory and revenue accounts defined for this rule will be included in the journal entry created by the A/R Invoice. If only one account is defined in the rule, the other accounts relevant for the journal entry creation will be taken from the company level definition, that is from the G/L Account Determination window. So for example, if a rule matches the two relevant criteria (that is, ship-to country Canada and the item group Printers) and has only the revenue account defined, the inventory account will be taken from the G/L Account Determination window.

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As described in the previous slides, the priority (that is the rows order) in the Determination Criteria window sets the priorities in the Advanced G/L Account Determination Rules window. Specific value has higher priority than the value All. In our business example: The first two rules have specific item groups defined for them. Item group has the highest priority in the Determination Criteria window in our example, therefore the Item Group column is the first column in the table. This is also the reason for having these 2 rules in a higher priority than the third rule that also has a specific value (warehouse) but in a lower priority than the Item Group criteria. Item Group is ranked higher than Warehouse Code in the Determination Criterion window. Next, let us look at the first two rules. Both of them have the item group specified with another value: For the first rule it is the Ship-to Country and for the second rule it is a specific item code. Since Ship-to Country is ranked higher than Item Code in the Determination Criteria window, the first rule is in higher priority. A rule will be picked by the system if all criteria are met. If more than one rule answers the document line criteria the highest priority rule will be picked. So in our example, if the item chosen in the A/R Invoice window is A00004 (which belongs to the Printers group) and the ship-to country of the customer is Canada, the first rule will be automatically picked by the system and the accounts defined for this rule will be used in the journal entry created by this A/R Invoice. If the same item will be sold to a local customer (ship to country is US) the second rule will be automatically picked by the system and the accounts defined for this rule will be taken to the journal entry created by the A/R Invoice.

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If the user changes an account in the document manually, the updated account will be used in the journal entry. Note! To ensure you defined the advanced G/L account determination rules according to the customer expectations, we recommend to use the Journal Entry Preview option before adding the document. This option presents a simulation of the journal entry that will be created after adding this document (“Right Click” on the document header or footer to open the context menu and choose the Journal Entry Preview option).

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And finally, let us see how to configure the system in an upgraded company.

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• For an upgraded company you should check the Enable Advanced G/L Account Determination box in Administration System Initialization Company Details Basic Initialization to activate the new solution. • As mentioned in previous slides, once the user checks the box, the new G/L account advanced functionality will be activated and new windows and fields will be available for the user. • In an existing company, fields will be changed or removed after checking the Enable Advanced G/L Account Determination box: Set G/L Account By field is changed to: Set Inventory Method By in: –

Administration System Initialization Inventory tab Items tab.

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Inventory

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The field values (Warehouse, Item Group and Item Level) will remain the same.

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All implementations of the field (for example, the Multi Branch Company solution) will remain as they are, except the G/L Account assignment in documents.

Items Master Data

General Settings

Inventory Data tab.

The Accounting tab including all accounts will be removed from: –

Administration

Setup

Inventory

Warehouses

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Administration

Setup

Inventory

Items Groups

Inventory Items Master Data matrix will be removed.

Inventory Data tab

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all account columns in the

• After the user checks the Enable Advanced G/L Account Determination box the system suggests three options: Migrate Account Assignments and Inventory G/L Account Determination Settings – in this option, all existing accounts assignment in warehouse level, item group level and item level will be migrated into the advanced G/L account determination rules. Preview Advanced G/L Account Determination Rules - in this option the system will simulate the expected accounts assignment and the user can view the advanced rules matrix and adopt or reject the rules. Migrate Inventory G/L Account Determination Settings Only - in this option no accounts assignment is expected and only system forms and settings will be adjusted to the G/L Account Determination new matrix. Note! We recommend to choose this option in case the company wants to reset the accounts determination and work according to the advanced rules structure.

Note! • Once the box is checked and transactions exist, it can be un-checked again, however in this case no accounts will be assigned and the G/L Account Determination form will be used to define G/L accounts in all levels: warehouse, item group and item level. • The accounts assignment will be migrated into all existing periods (Unlocked, Unlocked Except Sales, Closing Period, Locked).

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• After activating the G/L account determination advanced system and according to the user decision, all existing G/L account definitions from the: warehouse, item group and the item master data will be migrated into the G/L account determination advanced rules. • Future documents will pick the accounts from the new system. • Let us review few examples of migrating data from the traditional solution to the G/L account determination advanced rules system. • In the presented examples, we can see 2 cases: In the first case all the items in the company are defined as Set G/L Account By Warehouse. For the accounts that are different from the G/L Account Determination settings, the migration process will create an advanced rule for each warehouse. This rule will include a single determination criteria. In the second case all the items in the company are defined as Set G/L Account By Item Group. For the accounts that are different from the G/L Account Determination settings, the migration process will create an advanced rule for each item group. This rule will include a single determination criteria.

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• In this third example, the items in the company are defined as Set G/L Account By Warehouse or By Item Level. • For the accounts that are different from the G/L Account Determination settings, the migration process will create an advanced rule for each warehouse including a single determination criteria. • For each item level G/L account with accounts that are different from the accounts in the advanced rule of the same warehouse (created in the previous step), the migration process will create higher priority advanced rules (according to the number of warehouses) including 3 determination criteria: Item Code. Item Group – due to the fact that in the item master data, item group is a mandatory field. And Warehouse Code. • For the 3 examples presented in this course, the created rules will have the following definition: The type of the advanced rules will be General. The Advanced Rule Type of all items will be set to General. If all accounts settings are equal to the company level settings, then no advanced rule will be created. Note! Advanced rule type different than General will be set in items and rules in case items in the company were set to both G/L Account By Warehouse and By Item Group. Therefore, when you define new items and rules we recommend to keep the General Advanced Rule Type. Use the Warehouse Code and Item Group criterions in the Advanced G/L Account Determination Rule definition instead of using the Warehouse and Item Group advanced rule types.

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You should now be able to Outline the principles of the G/L Account Determination – Advanced Solution. Define the initial settings required to start working according to the new solution. Explain how to convert an existing upgraded company to start using the new solution.

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