Journal Entries

With every timesheet entry that is posted, a journal entry will be created. The journal entry will debit the WIP (work-in-progress) General Ledger Account and credit the Recovery Account based on the cost of the timesheet entry. 

When determining the WIP General Ledger Account, the system will look to the warehouse defined as the Eralis Job WIP warehouse. It will then check the Inventory Control Accounts for that warehouse, which will then be defined as the Eralis Job WIP General Ledger Account.  

The Recovery Account is determined either by the Item Code or from a default setting in the Eralis Job system initialization. In the SAP Business One Item Master, there is a Clearing Account field on the right side of the screen. This is a lookup for all the General Ledger Accounts inside SAP Business One, and the user can define the Recovery Account from this field. Once it has been defined, the system will post the recovery to the General Ledger code specified whenever this Item Code is used. If no General Ledger code has been specified, the system will go back to the general settings in Eralis Job system initialization to find the default account. The Default Clearing Account field is mandatory, so there should always be a value in that field. 

It is important to note that the Recovery Account does not get cleared. This account is a recovery against the actual expenses that are incurred inside standard company processing. For example, when we are looking at staff members, the company will be incurring actual wages during a period. These wages are posted to the income statement as an expense. Throughout the job, staff members will record timesheets for work carried out which results in a credit to the Recovery Account. This means that the cost is being moved to the balance sheet WIP and a recovery is made against the actual wage cost. When the work is completed, the timesheets are either invoiced or written off. If an invoice is raised, the cost will be moved from the WIP balance sheet to the COGS income statement. The recovery entry ensures that income and expenses are being recognized in the income statement at the same time. It is important to note that different Recovery Accounts can be used to reflect different types of transactions. For example, labor costs can be separated from costs that are not time related.