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R12: GL Third Party Control Accounts

It is quite common for manual journals to be created directly within GL against natural accounts that should typically be reserved for specific sub ledger activity. This causes all sorts of issues and tends to impact the reconciliation of subledger control accounts. Previous attempts to control account use include the adoption of security and cross validation rules. R12 offers a more robust option.

R12 includes new functionality to control specific natural account segment values by setting the ‘Third Party Control Account’ segment qualifier. General Ledger (GL) can restrict the posting of manual journals to third party control accounts. This will ensure that journal lines that post to account codes such as the Supplier Liability Account or Customer Receivables Accounts are associated with valid third party information in the respective sub ledger.

The creation of transactions against specific accounts can be restricted to the sub ledgers such as Oracle Payables and Receivables depending on how the qualifier value has been set. Using such account control will require third party information from the relevant sub ledger.

Let’s now consider a working example.

Your organisation has a business policy in place to ensure that customer information is captured when raising transactions within Oracle Applications using account 4150 (Miscellaneous Revenue). In order to ensure that this business process is adhered to, you will need to set the ‘Third Party Control Account’ Segment Qualifier, against account 4150, specifying the value ‘Customer’ (as shown below).

Segment Qualifier

Once the segment qualifier has been set, direct journal entries within GL will not be permitted. Should an entry be attempted, the following message will be displayed since no customer information has been captured against this transaction.

GL Journal Error

Since the business policy was to capture customer information, let’s now consider the impact within Accounts Receivable (AR). As you can see for the screen shot below, an entry can still be made directly within AR. This is possible since the customer information has been entered captured on the transaction which is using the account 4150.

AR Pro Form Transaction

There is still an impact within the subledger that needs to be understood. Within R12, you can create subledger journal entries from within the subledger applications via an html form (Navigation: Inquiry > Subledger Accounting > Journal Entries). Unlike the professional forms, you select the account combination first and then the third party information, i.e. the customer in this case (Note: this is the case for AP as well where the account is selected before the supplier). By selecting the account, you will initially receive an error message, similar to that of which you receive in GL (below).

Sub Ledger Entry Error

You must proceed and select the third party information to continue with the subledger journal transaction entry. To do this, click the ’show’ hyperlink under details and enter the customer information.

Sub Ledger Entry with third party

Receiving this error message can be avoided. After you have created a third party control account, you must run the concurrent program ‘Program – Inherit Segment Value Attributes‘ to ensure your control account qualifier definitions are accurately reflected in all account code combinations. After doing this, you will not be able to select the account within GL, however, you will be able to select the account without the third party information in the respective subledgers. Oracle will treat this third party control account as a means of restricting usage in GL manual journal entries only.

Other available third party control account segment qualifier choices include Yes, No, Supplier and Restrict Manual Journals.

Results of the output from the concurrent request can be seen below:

Concurrent Request

I hope you find this useful.

30 May, 2012 by

E-Business Suite

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