General Ledger Determination

Within SAP Business One there are three distinct General Ledger determination methods: 

1. General Ledger determination by warehouse 
2. General Ledger determination by item 
3. General Ledger determination by item group 

When using Eralis Job, it is preferred to use General Ledger determination by warehouse. 

By Item Code 

When using General Ledger determination by item code, adjustments must be made to the General Ledger accounts for the work-in-progress (WIP) warehouse of each item code. Ensure that the following aspects are configured to point to the Eralis Job WIP General Ledger account: 

• Inventory 
• Variance 
• Negative inventory adjustment  
• Sales returns 

Please note that when using General Ledger determination by item, the system will initially set the General Ledger accounts on each of the warehouses.  

By Item Group 

Important Note: It is important to note that Eralis Job does not support General Ledger determination by item group. This determination method is not supported because of the way that SAP Business One obtains the General Ledger accounts for the warehouse, specifically relating to stock transfers. Within a combined solution of SAP Business One and Eralis Job, separate General Ledger accounts are recommended for inventory on-hand and work-in-progress. 

In the setup of SAP Business One, the work-in-progress General Ledger account is set as the inventory account for the work-in-progress warehouse. It is this scenario that creates the issue with General Ledger determination by item group. Since the item belongs to the same item group, SAP Business One will obtain the inventory account from the item group when doing a stock transfer. Then SAP Business One will do a debit and credit to the same account. However, if the item is being transferred into the work-in-progress warehouse related to an Eralis Job transaction, the debit needs to go into the work-in-progress General Ledger account. Within a standard SAP Business One system, even without Eralis Job, you cannot have multiple inventory control accounts that are linked to warehouse and transfer stock.  

If you are required to run General Ledger determination by item group, the system must be configured to use a single General Ledger account for all inventory balances and the work-in-progress. While this eliminates the benefit of a having a separate work-in-progress balance inside the balance sheet, you are still able to obtain work-in-progress balances via reports from Eralis Job.  

For example, imagine the following setup. Two warehouses are attached to different inventory control General Ledger accounts, and one item group is set to a separate inventory control General Ledger account.  

Inside the company, there is an item code widget that is set to General Ledger determination by item group and assigned to the Item Group C. The inventory control account for Item Group C is account 1236. Within SAP Business One, a stock transfer is processed transferring the item from Warehouse A through to Warehouse B. The inventory control account for Warehouse A is 1234, whereas the inventory control account for Warehouse B is 1235. The only journal that SAP Business One will process is a debit and credit journal to General Ledger account 1236, based on the inventory control account assigned to Item Group C. 

However, the stock levels within the warehouse will be adjusted based on the transfer. Since there were no journals processed to accounts 1234 or 1235, the stock levels per warehouse will not match the inventory control account attached to the warehouse. 

As previously mentioned, the work-in-progress General Ledger account is the inventory control account for the work-in-progress designated warehouse for Eralis Job. In its recommended configuration, all other warehouses should be set to other inventory control accounts. This could be the same account for all the other warehouses or different accounts, but not the work-in-progress General Ledger account. 

When any item is moved onto a job via the direct material entry or the stock check picking process, a stock transfer is processed within SAP Business One moving the item from the inventory warehouse to the work-in-progress warehouse. If the General Ledger accounts are different and the item is set to determination by item group, an imbalance will exist within the work-in-progress balances. Therefore, if you use General Ledger determination by item group with Eralis Job, a single General Ledger account is required for all the inventory control accounts and the work-in-progress control account.