Hi

Please see the attachment .. for the issue i am facing

I appreciate all your support and help

Thanks so much
Manav

Your problem in a nutshell is: the liability account is wrong for your invoice. Invoice is validated and approved and the payment has been made.

Invoice Accounting:

DEBIT: EXPENSE
CREDIT: WRONG LIABILITY ACCOUNT

Payment Accounting:

The wrong liability account has been propagated to your payment accounting as well.

DEBIT: WRONG LIABILITY ACCOUNT
CREDIT: CASH

One option is:
1) Void the payment
2) Cancel the invoice
3) Re-enter another invoice
4) Repay this invoice (Use dummy wire payment if the check has already mailed out).

Option 2:

Pass an adjusting entry in GL for invoice accounting correction:

DEBIT: WRONG LIABILITY $x
CREDIT: CORRECT LIABILITY ACCOUNT $x

Pass an adjusting entry in GL for payment accounting correction:

DEBIT: CORRECT LIABILITY ACCOUNT $x
CREDIT: WRONG LIABILITY ACCOUNT $x

If the payment is made in the same period as the invoice GL date then your wrong liability account is will not have any balance for that period. The adjustment entries may not be necessary. Accountants should make a call on how to fix this.

Thanks Hasan, for your time to read and understand the problem, and then provide detailed solutions. Cheeres!
Gavrobere

Hi

Thanks very much for your support. Such a good explanation.

Payment date for this invoice is - 13-Jan-2010 and GL date on the invoice is 12-Jan-2010.. so as per your suggestion .. should i go with option 2 -- making adjusting entries in GL

Please advice
Thanks
Manav

Hi Manav,
I think:
A/ You should go for Option 1, if the invoice and its related payment accounting information have not yet been posted to update the concerned GL balances. This means you resolve the problem at the Oracle Payables level.

B/ Go for Option 2, if the invoice and its related payment accounting information have already been posted to update the concerned GL balances.

Manav,
As I said this is a call for the accountants, not for consultants. Auditors will go after the accountants if something goes wrong with numbers.
I would put the two options in front of the accounting group and would let them decide.
Personally, if I am the budget control I would choose option 1. No other system should hit trade liability account than AP. This keeps the reconciliation clean between AP and GL.
On the side note, whether accounting has reached GL or not, would not really affect the choice between A and B.
Hasan