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O2C Cycle with Accounting Entries

PARTICULARS Sales order entry No Accounting Sales Order Pick From Sub Inventory A/c 100 At Standard Cost Sub-inventory Material A/c Setup Sub-inventory Material A/c Setup ORDER TO CASH DR CR SPL NOTES ACCOUNT IS PULLED FROM

To Sub Inventory A/c

100

At Standard Cost(Staging)

Sales Order Issue COGS 100 It can be fetched from five places Master Item/Org/Order Type/Line Type/Shipping Params Sub-inventory Material A/c Setup

To Sub Inventory A/c

100

At Standard Cost

Transaction level Receivable A/c Tax A/c Freight A/c Revenue A/c Receipts Receipts with no remittance method Cash 100 Before application of the receipt Receipt class 120 10 10 100 Auto Accounting Auto Accounting Auto Accounting Auto Accounting

Unapplied A/c Unapplied A/c 100

100 After application of the receipt to the transaction 100 100 100 In case of receipt without customer or transaction when customer indentified 100

Receipt class Receipt class

Receivables A/c Cash A/c Unidentified A/c

Receipt class Receipt class Receipt class

Unidentifed A/c Unapplied A/c Receipts with remittance method. Confirmed receipts A/c Unapplied A/c Remitted receipts A/c Confirmed receipts A/c Cash Remitted receipts A/c Receipts with discount/unearned discounts Cash Discount earned A/c Receivable A/c Cash Discount unearned A/c

100

Receipt class Receipt class

100 100 100 100 100 100

At the time receipt entry

Receipt class Receipt class

On remittance to bank

Receipt class Receipt class

On clearance of cheque Receipt class Receipt class

90 10 100 90 10

At the time earned discounts

Bank Receivable activity Transaction Type

At the time of unearned discount

Bank Receivable activity

Receivables A/c

100

Transaction type

Following Accounting entries will be generated for O2C


Sales order creation No entries Pick release: Inventory Stage A/cDebit Inventory Finished goods a/c..Credit Ship confirm: Cogs A/c Debit Inventory Organization a/cCredit Receviable: Receviable A/cDebit Revenue A/cCredit Tax ..Credit Freight....Credit Cash: Cash A/c DrDebit Receivable A/c.Credit

Accounting Entries for AR Once the Order is shipped then Material account will be credit and COGS Account will be debit. At the time of Invoice creation Revenue account will be credit and receivable account will be debit. At the time of receipt creation. Receivable account will be credit and Bank payment account will be debit