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Home > Accounting > Accounting Setup > Setting Up the Accounting Subsystem > Defining Accounts for Products > Defining GL Accounts for Products

Defining GL Accounts for Products

The accounts discussed below can default from the product accounts setup on the organizational unit. These accounts are set up by date and can be changed at any time. However, order lines previously entered (even as un-invoiced – i.e., proforma) will continue to use the receivable and prepayment account in effect at the time the order line was entered.

To define the GL accounts for a product:

1.    From the toolbar, select Products > Product Central and search for a product or create a new product.

2.    Define the general product information.

3.    From the Define the Product/Product Definition task category, click Define GL Accounts.
The General Ledger Accounts screen displays.

4.    Click Define Accounts.

5.    Select the Begin Date from the drop-down.

6.    Enter the Pay Priority.

7.    Click the Receivable Account link to search for a receivable account.
The Prepayment Liability account populates automatically based on the AR-PPL account pairs set up in System Setup.

8.    Click the Writeoff Account link to search for a write-off account.

9.    Click the Cancellation Account link to search for a cancellation account.

10.  Click the Discount Account link to search for a discount account.

11.  Click the Deferred Discount link to search for a deferred discount.

12.  Click the Agency Discount link to search for an agency discount.

13.  Click the Deferred Agency link to search for a deferred agency.

14.  In the Revenue Recognition section, select the Recognition Method from the drop-down.

15.  Click Save.

Screen Element Description

General Ledger Accounts
Define Accounts

Button. When clicked, an Effective Date row is added to the table and another General Ledger account is added to the product.
Effective Date

Table row. Represents a General Ledger account associated with the product. The date listed is correlated with the Begin Date value.

Account Detail
Begin Date

Drop-down. The start date for the General Ledger account.
End Date

Drop-down. The end date for the General Ledger account.
Pay Priority

Text box. Establishes the order by which line items on a multi-product order are paid. Associations that discount prices on items (such as meeting registrants and product purchases) may assign products a preferred priority to ensure the line item is paid prior to line items from other subsystems.
Receivable Account

Link. When clicked, you can search for the appropriate receivable account. The receivable account will be used for sales and receipt transactions. The account must exist for a company referenced in the current Org Unit ID and must be an asset account.
Prepayment Liability

Text box. Enter the appropriate prepayment liability account. Defaults based on the receivable account identified above. This is the account that is used to store payments prior to invoicing. It must be valid for a company referenced in the current Org Unit ID and it must be a liability account. This account auto-populates when the Receivable Account is selected based on the AR/PPL pair defined.
Writeoff Account

Link. When clicked, you can search for the appropriate write-off account. When a write-off of an open balance (including tolerance write-offs) is created, the transaction is DR Write-off Account, CR Accounts Receivable. The account must be either an income or expense account.
Cancellation Account

Link. When clicked, you can search for the appropriate cancellation account. When cancellation fees are charged, this account is used. It is typically an unearned income account, though it may also be defined as an expense account.
Discount Account

Link. When clicked, you can search for the appropriate discount account. When a discount is granted for this product, this account number is used. It reduces the AR number while maintaining the full revenue account amount. It may be either a revenue or expense account. Entry defaults the deferred discount account to the same account.
Deferred Discount

Link. When clicked, you can search for the appropriate deferred discount account. When a deferred revenue transaction is created, this account is used. If no deferred transactions are expected, this account should be the same as the discount account.
Agency Discount

Link. When clicked, you can search for the appropriate agency discount account. When a discount is granted to the agency for this product, this account number is used. It reduces the AR number while maintaining the full revenue account amount. It may be either a revenue or expense account. Entry defaults the deferred discount account to the same account.
Deferred Agency

Link. When clicked, you can search for the appropriate deferred agency account. When a deferred revenue transaction is created for an agency, this account is used. If no deferred transactions are expected, this account should be the same as the agency discount account.

Tax/VAT Control
Taxable

Checkbox. Check if the product is taxable.
Charge VAT to All Customers

Checkbox. Check if you charge the VAT tax to all customers.
VAT Country

Drop-down. Indicates what country’s VAT tax is used.
Tax Category

Drop-down. Further defines how taxes will be calculated. Specifically controls situations where GST is taxable but US taxes are not required. If you set up city and state tax, both are charged if the customer falls under both.
VAT Category

Drop-down. Indicates which type of VAT tax is charged for this product.

Revenue Recognition
Recognition Method Drop-down. Controls how revenue recognition for the order will be handled. Options include:

  • On Invoice – When an order becomes active, the money affects real revenue directly; it does not flow through deferred. Use if you do not want to use the deferred revenue feature. This can be used for MBR, INV, SUB, MTG, FAC, XBT, TRN, CRT, and MISC products. FND products are always assumed to be recognized on invoice.

  • Begin Date – All revenue is recognized on the start date of the order line. This can be used for MBR, SUB, MTG, FAC, and XBT products.

  • End Date – All revenue is recognized on the end date of the order line. Use if a meeting spans a large period of time and you want to recognize the revenue at the end of the meeting. This can be used for MBR, SUB, MTG, FAC, and XBT products.

  • Monthly – Revenue is recognized on a monthly basis by dividing the total amount of the order line by the number of months in the order line. For example, a twelve-month membership will be recognized in one-month intervals over the course of the 12-month membership period. Each month a transaction is created to debit deferred revenue for 1/12 of the membership and credit real revenue for the same. After a year of service to a member is complete for a membership order line, the resulting balance of deferred revenue should be zero. This can be used for MBR and SUB products.

  • On Specific Date – As of a specific date on the setup, all revenue will be recognized. Order lines entered after that date will be immediately recognized. This can be used for MBR, INV, SUB, MTG, FAC, XBT, TRN, CRT, and MISC products. Use for meetings if you want to recognize revenue on the meeting date. If this is not for a meeting, you must change the date every year.

  • At Year End – All revenue will be recognized at the end of the fiscal year entered on the organization setup. This can be used for MBR, INV, SUB, MTG, FAC, XBT, TRN, CRT, and MISC products.

  • By Issue – Recognizes revenue for those issues that have been fulfilled based on the issues served data. The amount to be recognized for each issue is the total amount divided by the number of issues.  Back issue processing needs to be run before revenue recognition so that the proper amount is recognized. This can be used for the subscriptions module only.

Note.pngFor all methods (except “On Invoice”) the revenue recognition process (FAR670) must be run to recognize the revenue.