This chapter lists eight basic guidelines that should be followed for the financial transfer process to work properly and provide good results.
1. Do not skip using the financial transfer
Do not skip using the financial transfer because it is a mandatory process without which your company will have no accounting integrity. Even though you will be operating with two self-contained accounting systems, each system depends on the other for vital information. The WIP accounting in DBA, for example, relies on labor and overhead costing information from the financial accounting system to calculate shop rates. The financial accounting system will not have validity or useful value without AR and AP voucher invoices and manufacturing account totals.
2. Do not use outside sales orders
Do not use outside sales orders because doing so compromises the integrity of the closed loop inventory system, the process workflow, and the two accounting system design. Sales orders are fully integrated with bills of manufacturing, inventory, MRP, and shop control and therefore cannot be excised from the system. Furthermore, using outside sales orders compromises the self-contained nature of each accounting system by introducing a host of duplicate functions and data synchronization issues and problems.
3. Do not attempt to replicate line item detail in AR invoices
Do not attempt to replicate line item detail in AR invoices in your financial accounting system. By design, line item detail is not included in the AR voucher transfer because line detail has no relevance to AR processing and would needlessly introduce duplicate tables to synchronize, duplicate inventory transactions, double posting, invoice reversal issues, complicate sales tax tracking, and other problems. Be especially wary of any consultant who proposes to re-create detailed invoices in your financial accounting system, which indicates a fundamental misunderstanding of the financial transfer process or a lack of scruples in charging for a completely unnecessary feature that is inherently problematic and not in your best interest.
4. Do not attempt to enter sales tax or purchase tax in your financial accounting system
Your sales order invoices and purchase order invoices will include item transactions with detailed tax information. The AR and AP voucher value will be a single value that includes tax. Tax liability totals are transferred to your main general ledger during GL Summary Transfer. You do not enter tax codes or tax detail in your financial accounting system.
5. Do not manage multiple operating entities within a single DBA system
Do not manage multiple operating entities, meaning other factories or remote warehouse operations, within a single DBA system. Each operating entity must be furnished with its own DBA system and product license and will use the financial transfer to update your financial accounting system to reflect its activities. MRP and shop control are inventory-driven processes that only work properly when used with a single factory where all inventory is locally available for immediate issuing, receiving, and picking. WIP accounting and shop rate calculations also only work properly when used with a single operating entity.
6. Transfer AR and AP vouchers in real time
Transfer AR and AP vouchers in real time immediately after each set of invoices is generated or entered so that AR and AP account balances and aging profiles are always current in your financial accounting system for financial planning purposes.
7. Never reverse customer invoices in your financial accounting system
If a customer invoice needs to be reversed and corrected, never reverse the invoice in your financial accounting system because the reversal will not flow back to the DBA accounting system. Instead, always reverse an invoice in DBA, which creates a credit memo that offsets the original invoice. You can then make any corrections and generate a new invoice. The credit memo and the corrected invoice will get transferred as AR vouchers to properly update accounts receivable in your financial accounting system.
8. Never skip PO invoice entry and AP voucher transfer
Never skip the entry and matching of supplier POs in the PO Invoices screen and the AP Voucher Transfer process. Skipping these functions ruins the PO processing workflow because PO matching is required for closing PO lines, supplier invoice entry is required to offset the Received Not Invoiced balance, and the voucher transfer properly updates accounts payable.
9. Always transfer all GL account totals in a timely manner
Our recommendation is to post GL summary batches daily for fully completed days. This insures that your company financial reports are complete and reflect the financial profile of the entire business. The daily posting will improve the visibility of the balancing entries in DBA and provide improved feedback to your system.
