Accounts for automatic transactions

The modules in Finance are highly integrated, so many postings are handled automatically. There are times when a transaction is posted but there is no ledger account defined for that transaction.

For example, when an invoice is posted and a discount is given, this amount is posted automatically to an account for discounts. The appropriate account for that kind of posting must be set up, through system accounts. It could be a penny difference, an error account, or a cash discount.

You can specify accounts for automatic transactions such as rounding differences, retained earnings, and discounts.

General ledger > Posting setup > Accounts for automatic transactions

Accounts for automatic transactions

For a newly created legal entity, when you first open the Accounts for automatic transactions page, it will be blank. You can select Create default types at the top of the page, to have entries automatically created in the Posting type and Name fields. Then, you must select the corresponding main accounts that you want to assign to the list of default types.

You can also manually set up other accounts for automatic transactions. There is a drop-down list of posting types, plus you can add more if needed.

General ledger > Posting setup > Accounts for automatic transactions

Posting type field

When you post a transaction in Finance, you might receive an error message if a specific posting type is not set up and the journal needs it. For example, if you are using a journal entry for the first time for a specific transaction type that has not been configured on the Accounts for automatic transactions page.

On the Accounts for automatic transactions page, consider the following criteria:

  • Specify the main accounts for automatic transactions that cannot be set up elsewhere in Finance.
  • There are other automatic accounts set up in each module, for example, posting profiles in the Accounts receivable and Accounts payable modules.

The Error account, Penny difference, and Year-end result accounts for automatic transactions are required. The other accounts for automatic transaction are set up depending on whether that functionality is used.

If an update is applied to your instance of Finance, new accounts for automatic transactions can be added. Always select Create default types after an update has been applied to make sure that you have all the latest default account types.

To interrupt updates with an error message when the error account is used in the posting process, select the Interrupt in case of error account check box on the General ledger parameters page.

To register or manually change a cash discount in the settlement process, a cash discount system account must be set up. To offer a discount on the total invoice amount, a customer invoice discount, vendor invoice discount, or both must be set up accounts for automatic transactions for customer and vendor cash discount posting types.