Reducing Account Coding Error Rates in QAD’s Enterprise Applications

Posted on: September 14, 2008 | By: SuperUser Account | QAD Financials

An examination on this functionality will shed some light. Account coding on inventory items are based on an assignment to a product line. These product lines are accounting tables that default general ledger account numbers into a variety of transactions associated with the item. Purchase order receipt accounts, work order variance accounts and accounts payable variance accounts are examples of transaction that leverage these product line accounting tables. Whereas the account coding for non-inventory purchase orders and accounts payable vouchers defaults from the supplier. Each supplier has a default purchases account. This account must be defined in the account master tables to pass validation when entered in the supplier. The default purchase account string includes general ledger account, sub account and cost center. The problem is the default account can be correct for one department/cost center and incorrect for the others.

Typically, these purchases are made with the use of requisitions. The user that enters the purchase order or the accounts payable voucher should refer to the manual requisition for the appropriate account string. If the user fails to review and enter the account string from the requisition, the software does nothing. Alternatively stated, the account that defaulted from the supplier into these transactions is a valid account number defined in the account master tables. The software views the transaction as passing account code validation.

Without any additional intervention, a proper review of transactions by the department managers and the accounting staff should reveal the account coding errors from the above. Manual adjusting journal entries will be created and entered to correct the miscoding. The result of this process is a slower general ledger accounting close. Adjusting journal entries also will get higher attention from your external auditors which can negatively impact administrative costs.

I have deployed a number of different approaches to enhance transaction accuracy for these type of QAD transactions. I will explain a couple of approaches below:

  • Approach 1: Enter a Non Valid Account in the Supplier Master
    • This approach requires customization. As stated, standard functionality requires account validation on this field. The customization should essentially by-pass this validation. The result of this condition is that a non-valid account defaults into the purchase order line or the accounts payable voucher. Account Validation will prevent the user from moving forward until a valid account string is entered. This customization is relatively inexpensive to deploy. This will help to raise the level of transaction accuracy, however, this still has room for data entry errors using this approach.
  • Approach 2: Create Custom Accounting Tables Utilizing Supplier type and Requisitioner ID.
    • Using this approach, a custom account table will be required to intersect the supplier type from the supplier master and the requisitoner ID to determine appropriate general ledger account string to include cost center. The combination will provide an accurate account string to the transaction through a custom progress program greatly reducing the number of accounting transaction errors in the general ledger. This low cost approach will require some effort from the finance and accounting leadership to build the appropriate accounting tables.

The two practical approaches can be deployed quickly and have dramatic impact on efficiency and accuracy. For more information regarding this blog, you can reach me via email at avitullo@logan-consulting.com

Andy Vitullo, CPA
Principal, Logan Consulting



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