Configuring the Account Determination

It is time for Max to take a closer look at some of the settings available in the system to automate the accounting operations.

In addition to the manual journal entries entered by the users or through varied interfaces, numerous Financial Accounting (FI) journal entries can also be generated automatically by specific business operations.

To enable these business transactions to generate the corresponding automatic FI journal entry postings, you can leverage the dedicated configuration activities to set up the system and specify the target accounts for these automatic postings. This activity offers you all the necessary settings for designating the accounts, not only in the area of Financial Accounting, but also across other sectors like Controlling, Sourcing and Procurement, or Sales to name a few.

For example, Max needs to ensure that small rounding decimals, below an acceptable tolerance threshold do not block the clearing process.

For that purpose, an account must be configured to post differences arising during the clearing of open items. In this manner, the system will automatically use this account to post the discrepancy whenever it is required, thus the journal entry will be balanced, and the clearing of the account can successfully go through.

Before you can automatically correct any differences when you clear entries in the general ledger accounts, you first need to set up a tolerance group for the specific General Ledger (G/L) account. The tolerance group will determine the maximum amount that the system can correct automatically. If the discrepancy is above this tolerance, the posting cannot be processed, and clearing the items will not be possible.

To establish the threshold for the tolerance of automatic clearing of differences in open items follow these three steps:

• First: a default tolerance value should be set for each company code. It will be applicable to all the company's general ledger accounts where a more specific tolerance group is not present in their master data, as detailed in the following two steps.

• Second: additional tolerance groups can be defined with different threshold values, to match closer to the specifications of different types of accounts.

• Third: once created, these specific groups must be assigned to the correspondent accounts in the general ledger account master record.

These tolerance groups for G/L accounts are defined at the company code level and can be set as a value or as a percentage.