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Chart of Accounts Q's

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Vikas Mayur-2

Chart of Accounts Q's

Hello Deepak,

One we to resolve this to set up tax categories. Create two categories
each for 5% and 12.5% tax. Now add all the products with 5% VAT to 5%
category and 12.5% products to 12.5% tax category. Configuring your tax
authorities with the above tax categories.

Thanks,

Raj

On Monday 28 May 2012 09:00 PM, Deepak Agarwal wrote:

> Vikas,
>
> We are facing one problem with VAT and would like to know if you have
> solved it with something.
>
> We want to give 5% and 12.5% as VAT on different categories of products. We
> want to set a selling price as in round figure but we want it to have VAT
> included. We tried with different ways but end results are either ofbiz
> changes the selling price or somehow while checking out the cart, the price
> includes a VAT again.
>
> Could you please tell us how can we set 5%(Laptop like products) and 12.5%
> (Laptop Bag like products) at one place and mention just 2 prices to all
> products (default price and list price) and still be able to get all VAT
> calculations.
>
> On Mon, May 28, 2012 at 8:34 PM, Vikas Mayur<[hidden email]> wrote:
>
>> Yes, I need to keep all the related transactions so that income sheet
>> reflect the correct net income. For all the sales tax (sales taxes could be
>> at country/state/county/city level)& COGS (for different items)
>> transaction entry detail records, I just created one detail record for each.
>>
>> Regards
>> Vikas
>>
>> On May 28, 2012, at 7:46 PM, Nandani Aggarwal wrote:
>>
>>> Nice Approach , Are you also handling tax related transactions so that
>>> actual or final revenue can be generated or determined which may include
>>> COGS,Discount,Tax(Sales Tax , CST , VAT etc).
>>>
>>> Thanks
>>> Nandani
>>>
>>> On Mon, May 28, 2012 at 5:37 PM, Vikas Mayur<[hidden email]>
>> wrote:
>>>> Pierre,
>>>>
>>>> The approach actually worked, moreover I don't need separate accounts
>> as I
>>>> can associate the existing accounts of the parent company to other
>> parties
>>>> like wholesale and retail etc. As a test, I have placed a sales order
>> with
>>>> product GZ-2644 with 3 Qty for a wholesale party and quick ship entire
>>>> order which resulted in 4 accounting transactions namely Sales Invoice,
>>>> Sales Shipment, Incoming Payment& Payment Applied. To setup the income
>>>> sheet for wholesale party, I manually created all the required
>> transactions
>>>> (I believe I just needed Sales Invoice& Sales Shipment transactions)
>> and
>>>> transaction details. That is it. I think I now need to write some code
>> so
>>>> that such transactions could be created automatically. Sorry, I tested
>> this
>>>> on my local copy so you may not be able to see it on demo :)
>>>>
>>>> Your idea of setting up a separate instance for these external parties
>>>> seems good but I believe the other approach which I used is easier. Let
>> me
>>>> know if you have any thoughts.
>>>>
>>>> Regards
>>>> Vikas
>>>>
>>>> On May 28, 2012, at 12:51 PM, Vikas Mayur wrote:
>>>>
>>>>> Hi Pierre,
>>>>>
>>>>> Thanks for your help and your interest in the topic. I am currently
>>>> testing business transaction and their related accounting transactions
>> with
>>>> the OFBiz demo data along with my custom party data of Wholesale, Retail
>>>> channels.
>>>>> For instance when an invoice is captured for a sales order, you would
>>>> have various accounting transactions corresponding to this business
>>>> transaction (Invoice is being captured) like account receivables, COGS,
>>>> discounts, general sales etc. The transactions with OFBiz demo data are
>>>> currently posted to correct account but they are registered to
>> 'Company' -
>>>> the parent organization.
>>>>> After doing some of these tests and how the transactions are posted, I
>>>> think I would need two things to be able to generate income sheet per
>>>> distribution channel.
>>>>> 1. Create separate revenue accounts for each distribution channels,
>> they
>>>> can be setup as subsidiary ledger accounts similar to the existing demo
>>>> data. For example, the hierarchy of accounts for SALES would look like
>> this.
>>>>>
>>>> Revenue
>>>> |
>>>> Sales
>>>> |
>>>> -------------------------------------------------------------
>>>>> |
>>>> | |
>>>>> General Sales General Sales
>>>> Wholesale General Sales Retail
>>>>> where 'General Sales' account transaction would be registered to
>>>> 'Company' - the parent organization.
>>>>> 2. Create duplicate accounting transactions for each revenue account
>> in
>>>> such a manner that these transactions are registered to Wholesale (If
>> the
>>>> sale was made to WholeSalers), Retail (If the sale was made to
>> Retailers)
>>>> etc. This would require additional code so that system can lookup the
>> 'Bill
>>>> To Customer' and automatically create all the required duplicate
>>>> transactions.
>>>>> Once all the transactions are posted, I should be able to generate a
>>>> consolidated income sheet (this already works OOTB) for Company and
>>>> separate income sheet per distribution channel.
>>>>> Let me know if you see any issues with this approach.
>>>>>
>>>>> Regards
>>>>> Vikas
>>>>>
>>>>> On May 25, 2012, at 7:24 PM, Pierre Smits wrote:
>>>>>
>>>>>> Vikas,
>>>>>>
>>>>>> If the distribution channels are truly independent organisation
>> (meaning
>>>>>> legally) you should set up for each one a different instance of OFBiz,
>>>>>> whereby the distribution channels buys from the company and sells to
>>>> their
>>>>>> customers. Otherwise there might appear a conflict of interest.
>>>>>>
>>>>>> If otherwise the distribution channels are like daughter companies or
>>>>>> subsidiaries (and accounting, et all is done by the company) you could
>>>>>> (should?) link them in one instance to the company like departments
>> and
>>>>>> create separate costcenters for each. Subsequently create for each the
>>>> set
>>>>>> of accounts regarding turnover, discount and cogs and connect those to
>>>> the
>>>>>> costcenters.
>>>>>>
>>>>>> In order to capture for each you could then create a sales channel for
>>>> each
>>>>>> (catalog, categories and if nessesary stores) and apply for each
>>>>>> distribution channel the various price, promotion and shipping rules
>> in
>>>>>> their respective sales channel.
>>>>>>
>>>>>> Finally, and this is something I haven't tested yet, you should map
>> the
>>>>>> earlier defined fico accounts to the categories in each sales channel
>> in
>>>>>> ProductCategoryGLAccount in FICO. See example below.
>>>>>>
>>>>>>
>> https://demo-trunk.ofbiz.apache.org:8443/accounting/control/GlAccountAssignment?organizationPartyId=Company
>>>>>> That should do the trick. But like I said, I haven't tested it yet.
>>>>>>
>>>>>> One thing I am also not certain about is how sales transactions will
>> be
>>>>>> handled by OFBiz when generated by a Sales Backoffice for each when
>> the
>>>>>> scenario described above is in place.
>>>>>>
>>>>>> Good luck with your endeavours and keep us posted how you will
>>>> eventually
>>>>>> get to your optimal solution.
>>>>>>
>>>>>> Regards,
>>>>>>
>>>>>> Pierre
>>>>>>
>>>>>>
>>>>>> 2012/5/25 Vikas Mayur<[hidden email]>
>>>>>>
>>>>>>> Hi Pierre,
>>>>>>>
>>>>>>> Thanks for your response. Yes, you are absolutely correct. I should
>> be
>>>>>>> able to see the income sheet of the company (parent organization) as
>>>> well
>>>>>>> as the income sheet per distribution channel.
>>>>>>>
>>>>>>> Regards
>>>>>>> Vikas
>>>>>>>
>>>>>>> On May 25, 2012, at 2:36 PM, Pierre Smits wrote:
>>>>>>>
>>>>>>>> Hi Vikas,
>>>>>>>>
>>>>>>>> Just to get a greater understanding of the challenge you're facing,
>> I
>>>> am
>>>>>>>> understanding that the distribution channels operate as independent
>>>>>>>> organisations and not as internal departments. And that the
>>>> distributors,
>>>>>>>> wholesales and retailers are associated to the distribution
>> channels.
>>>> And
>>>>>>>> that sales is done thru the distribution channels, but that the
>>>>>>>> transactions of the sale need to be registered with the company
>>>> combined
>>>>>>>> with commission calculations per distribution channel.
>>>>>>>>
>>>>>>>> Am I correct in assuming that's what you're saying?
>>>>>>>>
>>>>>>>> Regards,
>>>>>>>>
>>>>>>>> Pierre
>>>>>>>>
>>>>>>>> 2012/5/25 Vikas Mayur<[hidden email]>
>>>>>>>>
>>>>>>>>> Hi,
>>>>>>>>>
>>>>>>>>> I am working for a customer and he is looking to setup a chart of
>>>>>>> accounts
>>>>>>>>> for his organization. I have mentioned below a brief description of
>>>> the
>>>>>>>>> business of this customer, his requirements and a possible solution
>>>>>>> that I
>>>>>>>>> think would meet his needs. Please take a look and also through the
>>>> Q's
>>>>>>>>> below :), if you know anything then let me know. Thanks in advance
>>>> !!!
>>>>>>>>> Business Overview:
>>>>>>>>> A parent organization with several divisions like R&D, Sales&
>>>>>>> Marketing,
>>>>>>>>> Operations, Administration etc. and employees. The company (parent
>>>>>>>>> organization) only sell its products through a number of
>> distribution
>>>>>>>>> channels (they also call them as revenue channels& profit centers)
>>>> like
>>>>>>>>> wholesale, distributor. retail etc. The company will give them a
>>>> certain
>>>>>>>>> commission (as per the agreement) on every sale. The distribution
>>>>>>> channels
>>>>>>>>> are not the divisions of the company and does not have any
>> employees
>>>>>>>>> either. The company will have a number of warehouses (probably
>> shared
>>>>>>> among
>>>>>>>>> the distribution channels) to fulfill the orders.
>>>>>>>>>
>>>>>>>>> Requirement:
>>>>>>>>> The company need to generate a separate income sheet for each
>>>>>>> distribution
>>>>>>>>> channels so that they know the net income by each channel. They
>> also
>>>>>>> need a
>>>>>>>>> consolidated GL totals (generate a consolidated income statement)
>>>> and a
>>>>>>>>> balance sheet report for the company.
>>>>>>>>>
>>>>>>>>> Solution:
>>>>>>>>> Distribution Channel Setup
>>>>>>>>> The distribution channels are organizations (although not internal
>> to
>>>>>>> the
>>>>>>>>> Company) and will be setup as party group in the system. For
>> example
>>>>>>> there
>>>>>>>>> will be party group for wholesale, distributor& retail each. There
>>>>>>> would
>>>>>>>>> be a number of wholesalers, distributors and retailers who will
>> sell
>>>> the
>>>>>>>>> products of the company and they will also be setup as party group
>>>> with
>>>>>>> a
>>>>>>>>> party relationship to wholesale, distributor& retail party group
>>>>>>>>> respectively.
>>>>>>>>> GL Account& Chart of Accounts Setup
>>>>>>>>> I looked through the demo GL setup and Chart of Accounts template
>>>> data
>>>>>>> in
>>>>>>>>> OFBiz, was very helpful. I know that an account can be used by one
>> or
>>>>>>> more
>>>>>>>>> internal organization but have doubts about how to associate the
>>>> account
>>>>>>>>> and how the transaction would be posted to the correct account.
>>>> Sorry,
>>>>>>>>> haven't looked through the code in detail.
>>>>>>>>>
>>>>>>>>> There will be number of accounts but lets say we have three
>> accounts,
>>>>>>> 3000
>>>>>>>>> - Sales, 3010 - Discount on Sale, 3020 - COGS. The net income will
>> be
>>>>>>>>> [Total of Sales - (Total Discount on Sale + Total COGS)].
>>>>>>>>>
>>>>>>>>> Q1. Do I need to associate the above accounts to the parent company
>>>> OR
>>>>>>> to
>>>>>>>>> each distribution channel OR both? Default mappings?
>>>>>>>>> Q2. Do I need separate accounts for the parent company and each
>>>>>>>>> distribution channels? Lets say the 4 different Sales account for
>> the
>>>>>>>>> parent and three distribution channels? Don't think so.
>>>>>>>>> Q3. Any other thing I should be concerned about, like the shared
>>>>>>> warehouse
>>>>>>>>> by all the distribution channels?
>>>>>>>>>
>>>>>>>>> Regards
>>>>>>>>> Vikas
>>>>>>>>>
>>>>>>>>>
>>>>>>>>>
>>>>>>>>>
>>>>>>>
>>>>
>> --
>> Thanks,
>> Deepak Agarwal,
>>
>>
>>

Vikas Mayur-2

Re: Chart of Accounts Q's

In reply to this post by Nandani

Inline

Regards
Vikas

On May 28, 2012, at 8:59 PM, Nandani Aggarwal wrote:

> Thanks a lot for reply.
>
> I am facing some problem in maintaining sales tax transactions.In my case ,
> on my ecommerce site i am displaying products including tax,
> Problem :
> 1. I am displaying product with price including tax.So when order is placed
> and invoice is created then tax transactions display tax amount on price(
> already including tax).
> For example : Product "A" is displayed at price Rs100 (Price :90 + tax :
> 10).
> But on invoice transactions are :
> Sales Transactions - Rs100
> Tax Transactions - RS 10
> Making Invoice Total - Rs110.(which is wrong)Invoice total should be Rs
> 100/-
> I want grand total should be sum of product's subtotal.

I only presented a possible way to execute your scenario in OFBiz, there may be some better/alternate solution though. As I said before you will need an Item adjustment for sales tax to be able to generate a sales tax line item on Invoice. From there you would be able to post accounting transaction to the gl account related to sales tax. I believe you only need to figure out how to create the item adjustment (OrderAdjustment record) for sales tax.

Regards
Vikas

On May 30, 2012, at 5:14 PM, Nandani Aggarwal wrote:

> But with reference to my second post in this thread , my problem was to see
> tax transaction (along with other transactions) in an invoice provided that
> sales tax (VAT or CST etc) is already included in product price.
>
>
> Regards
> Nandani
>
> On Wed, May 30, 2012 at 4:45 PM, Vikas Mayur <[hidden email]> wrote:
>
>> No, it won't because sales tax is not charged on the order.
>>
>> Regards
>> Vikas
>>
>> On May 30, 2012, at 4:11 PM, Nandani Aggarwal wrote:
>>
>>> Vikas,
>>>
>>> Thank a lot ,What ever you explained is absolutely correct but by doing
>>> taxable = 'N' and taxPromotions to 'N' are you able to see tax
>> transaction
>>> in your invoice which shows the amount paid to tax authority.?
>>>
>>> Regards
>>> Nandani
>>>
>>> On Wed, May 30, 2012 at 2:51 PM, Vikas Mayur <[hidden email]>
>> wrote:
>>>
>>>> Nandani,
>>>>
>>>> I have never tested this use case before and was curious to know how
>> this
>>>> works so I did few test by placing a sales order for product WG-1111 and
>>>> DemoCustomer (note: the shipping address of this demo customer is Utah
>> and
>>>> OFBiz demo data have a tax authority setup for this state. I only did
>> one
>>>> change in the TaxAuthorityRateProduct entity by setting the attribute
>>>> taxPromotions to 'N') from demo data once by setting the taxable flag on
>>>> this product to 'Y' (although keeping it null is same) and once by
>> setting
>>>> the flag to 'N' . When taxable flag is 'N' the item was exempted from
>> sales
>>>> tax and when it is 'Y' or Null the sales tax for item is aded to the
>> cart
>>>> or order grand total.
>>>>
>>>> You may need to check your tax authority setup i.e. whether you have
>>>> allowed tax on shipping and/or promotion. I doubt tax amount you are
>> seeing
>>>> in the grand total is either calculated on shipping and/or promotion.
>>>>
>>>> Below is code snip from the service calcTax in TaxAuthorityServices
>> Class
>>>> and conditional check on taxable flag determines whether the item
>> should be
>>>> tax exempted or not.
>>>>
>>>> if (product != null && (product.get("taxable") == null ||
>>>> (product.get("taxable") != null &&
>>>> product.getBoolean("taxable").booleanValue()))) {
>>>> taxable = taxable.add(itemAmount);
>>>> }
>>>>
>>>> HTH
>>>>
>>>> Regards
>>>> Vikas
>>>>
>>>> On May 29, 2012, at 11:05 AM, Nandani Aggarwal wrote:
>>>>
>>>>> Thank a lot for help and such a nice and simple explanation of answers.
>>>>>
>>>>> I tried your solutions with taxable field value as "Y"and "N" both.But
>> in
>>>>> both cases in shoppingcart.java (cart.getTotalSalesTax()) returns tax
>>>> value
>>>>> and (cart.getGrandTotal()) adds this tax in price(already including tax
>>>>> value).
>>>>>
>>>>> I changed (cart.getGrandTotal()) so that it doesn't include tax but
>>>> during
>>>>> order creation it adds tax amount to total amount.It adds Order
>>>>> adjustments (like discounts or tax).So should i change there as well or
>>>>> there is another simple solution to it.
>>>>>
>>>>>
>>>>> - Regards
>>>>> Nandani
>>>>>
>>>>> On Mon, May 28, 2012 at 10:37 PM, Vikas Mayur <[hidden email]>
>>>> wrote:
>>>>>
>>>>>> Inline
>>>>>>
>>>>>> Regards
>>>>>> Vikas
>>>>>>
>>>>>> On May 28, 2012, at 8:59 PM, Nandani Aggarwal wrote:
>>>>>>
>>>>>>> Thanks a lot for reply.
>>>>>>>
>>>>>>> I am facing some problem in maintaining sales tax transactions.In my
>>>>>> case ,
>>>>>>> on my ecommerce site i am displaying products including tax,
>>>>>>> Problem :
>>>>>>> 1. I am displaying product with price including tax.So when order is
>>>>>> placed
>>>>>>> and invoice is created then tax transactions display tax amount on
>>>> price(
>>>>>>> already including tax).
>>>>>>> For example : Product "A" is displayed at price Rs100 (Price :90 +
>> tax
>>>> :
>>>>>>> 10).
>>>>>>> But on invoice transactions are :
>>>>>>> Sales Transactions - Rs100
>>>>>>> Tax Transactions - RS 10
>>>>>>> Making Invoice Total - Rs110.(which is wrong)Invoice total should be
>> Rs
>>>>>>> 100/-
>>>>>>> I want grand total should be sum of product's subtotal.
>>>>>>
>>>>>> Check the 'taxable' field on Product entity, I think setting it to 'N'
>>>> on
>>>>>> individual products should exempt the product from further sales tax.
>>>>>>
>>>>>>>
>>>>>>> 2. If i want to Apply discount on price excluding tax and then
>> display
>>>>>>> final amount (Price - discount) + tax.
>>>>>>> But in ofbiz i am unable to display such price and grandtotal.
>>>>>>>
>>>>>>> Any idea , how above problems can be handled.?
>>>>>>
>>>>>> Discount and Tax should be created as Order Adjustments to display the
>>>>>> prices in the manner you mentioned.
>>>>>>
>>>>>> I haven't done any testing but I think there may be solution OOTB with
>>>>>> some minor modifications where required.
>>>>>>
>>>>>> Lets take your example for instance. Product 'A' displayed price is
>> Rs.
>>>>>> 100 (Actual product price is 90 & tax is 10). Lets say you want to
>> give
>>>> Rs.
>>>>>> 20 discount on the product price which means that your order total
>> will
>>>> be
>>>>>> Rs. 80 with product price after discount as Rs. 70 (since discount is
>>>>>> applied after excluding tax from product price) & a total sales tax of
>>>> Rs.
>>>>>> 10.
>>>>>>
>>>>>> Instead of Rs. 20 discount, you may give a discount including the
>> sales
>>>>>> tax on the price displayed to customer.
>>>>>>
>>>>>> Final Product Price = Price Displayed - (Discount + Tax) = 100 - (20 +
>>>> 10)
>>>>>> = 70
>>>>>>
>>>>>> You may then apply the tax on the product price (note you don't need
>> to
>>>>>> set the 'taxable' flag I mentioned above) in such a manner that tax
>>>> amount
>>>>>> is added back to the order total.
>>>>>>
>>>>>> Item Sub Total = Rs. 100
>>>>>> Discount = Rs. 30
>>>>>> Sales Tax = Rs. 10
>>>>>>
>>>>>> Order Total = Rs. 80
>>>>>>
>>>>>> HTH
>>>>>>
>>>>>>> I want correct transaction details on my invoice.It should include
>>>>>> discount
>>>>>>> , tax and sales information.
>>>>>>> Tax is added in product price itself.Tax is not included in final
>> order
>>>>>>> amount.
>>>>>>>
>>>>>>> Thanks
>>>>>>> Nandani
>>>>>>>
>>>>>>>
>>>>>>>
>>>>>>>
>>>>>>> On Mon, May 28, 2012 at 8:34 PM, Vikas Mayur <[hidden email]>
>>>>>> wrote:
>>>>>>>
>>>>>>>> Yes, I need to keep all the related transactions so that income
>> sheet
>>>>>>>> reflect the correct net income. For all the sales tax (sales taxes
>>>>>> could be
>>>>>>>> at country/state/county/city level) & COGS (for different items)
>>>>>>>> transaction entry detail records, I just created one detail record
>> for
>>>>>> each.
>>>>>>>>
>>>>>>>> Regards
>>>>>>>> Vikas
>>>>>>>>
>>>>>>>> On May 28, 2012, at 7:46 PM, Nandani Aggarwal wrote:
>>>>>>>>
>>>>>>>>> Nice Approach , Are you also handling tax related transactions so
>>>> that
>>>>>>>>> actual or final revenue can be generated or determined which may
>>>>>> include
>>>>>>>>> COGS,Discount,Tax(Sales Tax , CST , VAT etc).
>>>>>>>>>
>>>>>>>>> Thanks
>>>>>>>>> Nandani
>>>>>>>>>
>>>>>>>>> On Mon, May 28, 2012 at 5:37 PM, Vikas Mayur <[hidden email]
>>>
>>>>>>>> wrote:
>>>>>>>>>
>>>>>>>>>> Pierre,
>>>>>>>>>>
>>>>>>>>>> The approach actually worked, moreover I don't need separate
>>>> accounts
>>>>>>>> as I
>>>>>>>>>> can associate the existing accounts of the parent company to other
>>>>>>>> parties
>>>>>>>>>> like wholesale and retail etc. As a test, I have placed a sales
>>>> order
>>>>>>>> with
>>>>>>>>>> product GZ-2644 with 3 Qty for a wholesale party and quick ship
>>>> entire
>>>>>>>>>> order which resulted in 4 accounting transactions namely Sales
>>>>>> Invoice,
>>>>>>>>>> Sales Shipment, Incoming Payment & Payment Applied. To setup the
>>>>>> income
>>>>>>>>>> sheet for wholesale party, I manually created all the required
>>>>>>>> transactions
>>>>>>>>>> (I believe I just needed Sales Invoice & Sales Shipment
>>>> transactions)
>>>>>>>> and
>>>>>>>>>> transaction details. That is it. I think I now need to write some
>>>> code
>>>>>>>> so
>>>>>>>>>> that such transactions could be created automatically. Sorry, I
>>>> tested
>>>>>>>> this
>>>>>>>>>> on my local copy so you may not be able to see it on demo :)
>>>>>>>>>>
>>>>>>>>>> Your idea of setting up a separate instance for these external
>>>> parties
>>>>>>>>>> seems good but I believe the other approach which I used is
>> easier.
>>>>>> Let
>>>>>>>> me
>>>>>>>>>> know if you have any thoughts.
>>>>>>>>>>
>>>>>>>>>> Regards
>>>>>>>>>> Vikas
>>>>>>>>>>
>>>>>>>>>> On May 28, 2012, at 12:51 PM, Vikas Mayur wrote:
>>>>>>>>>>
>>>>>>>>>>> Hi Pierre,
>>>>>>>>>>>
>>>>>>>>>>> Thanks for your help and your interest in the topic. I am
>> currently
>>>>>>>>>> testing business transaction and their related accounting
>>>> transactions
>>>>>>>> with
>>>>>>>>>> the OFBiz demo data along with my custom party data of Wholesale,
>>>>>> Retail
>>>>>>>>>> channels.
>>>>>>>>>>>
>>>>>>>>>>> For instance when an invoice is captured for a sales order, you
>>>> would
>>>>>>>>>> have various accounting transactions corresponding to this
>> business
>>>>>>>>>> transaction (Invoice is being captured) like account receivables,
>>>>>> COGS,
>>>>>>>>>> discounts, general sales etc. The transactions with OFBiz demo
>> data
>>>>>> are
>>>>>>>>>> currently posted to correct account but they are registered to
>>>>>>>> 'Company' -
>>>>>>>>>> the parent organization.
>>>>>>>>>>>
>>>>>>>>>>> After doing some of these tests and how the transactions are
>>>> posted,
>>>>>> I
>>>>>>>>>> think I would need two things to be able to generate income sheet
>>>> per
>>>>>>>>>> distribution channel.
>>>>>>>>>>>
>>>>>>>>>>> 1. Create separate revenue accounts for each distribution
>> channels,
>>>>>>>> they
>>>>>>>>>> can be setup as subsidiary ledger accounts similar to the existing
>>>>>> demo
>>>>>>>>>> data. For example, the hierarchy of accounts for SALES would look
>>>> like
>>>>>>>> this.
>>>>>>>>>>>
>>>>>>>>>>>
>>>>>>>>>> Revenue
>>>>>>>>>>>
>>>>>>>>>> |
>>>>>>>>>>>
>>>>>>>>>> Sales
>>>>>>>>>>>
>>>>>>>>>> |
>>>>>>>>>>>
>>>>>>>>>> -------------------------------------------------------------
>>>>>>>>>>> |
>>>>>>>>>> | |
>>>>>>>>>>> General Sales General Sales
>>>>>>>>>> Wholesale General Sales Retail
>>>>>>>>>>>
>>>>>>>>>>> where 'General Sales' account transaction would be registered to
>>>>>>>>>> 'Company' - the parent organization.
>>>>>>>>>>>
>>>>>>>>>>> 2. Create duplicate accounting transactions for each revenue
>>>> account
>>>>>>>> in
>>>>>>>>>> such a manner that these transactions are registered to Wholesale
>>>> (If
>>>>>>>> the
>>>>>>>>>> sale was made to WholeSalers), Retail (If the sale was made to
>>>>>>>> Retailers)
>>>>>>>>>> etc. This would require additional code so that system can lookup
>>>> the
>>>>>>>> 'Bill
>>>>>>>>>> To Customer' and automatically create all the required duplicate
>>>>>>>>>> transactions.
>>>>>>>>>>>
>>>>>>>>>>> Once all the transactions are posted, I should be able to
>> generate
>>>> a
>>>>>>>>>> consolidated income sheet (this already works OOTB) for Company
>> and
>>>>>>>>>> separate income sheet per distribution channel.
>>>>>>>>>>>
>>>>>>>>>>> Let me know if you see any issues with this approach.
>>>>>>>>>>>
>>>>>>>>>>> Regards
>>>>>>>>>>> Vikas
>>>>>>>>>>>
>>>>>>>>>>> On May 25, 2012, at 7:24 PM, Pierre Smits wrote:
>>>>>>>>>>>
>>>>>>>>>>>> Vikas,
>>>>>>>>>>>>
>>>>>>>>>>>> If the distribution channels are truly independent organisation
>>>>>>>> (meaning
>>>>>>>>>>>> legally) you should set up for each one a different instance of
>>>>>> OFBiz,
>>>>>>>>>>>> whereby the distribution channels buys from the company and
>> sells
>>>> to
>>>>>>>>>> their
>>>>>>>>>>>> customers. Otherwise there might appear a conflict of interest.
>>>>>>>>>>>>
>>>>>>>>>>>> If otherwise the distribution channels are like daughter
>> companies
>>>>>> or
>>>>>>>>>>>> subsidiaries (and accounting, et all is done by the company) you
>>>>>> could
>>>>>>>>>>>> (should?) link them in one instance to the company like
>>>> departments
>>>>>>>> and
>>>>>>>>>>>> create separate costcenters for each. Subsequently create for
>> each
>>>>>> the
>>>>>>>>>> set
>>>>>>>>>>>> of accounts regarding turnover, discount and cogs and connect
>>>> those
>>>>>> to
>>>>>>>>>> the
>>>>>>>>>>>> costcenters.
>>>>>>>>>>>>
>>>>>>>>>>>> In order to capture for each you could then create a sales
>> channel
>>>>>> for
>>>>>>>>>> each
>>>>>>>>>>>> (catalog, categories and if nessesary stores) and apply for
>> each
>>>>>>>>>>>> distribution channel the various price, promotion and shipping
>>>> rules
>>>>>>>> in
>>>>>>>>>>>> their respective sales channel.
>>>>>>>>>>>>
>>>>>>>>>>>> Finally, and this is something I haven't tested yet, you should
>>>> map
>>>>>>>> the
>>>>>>>>>>>> earlier defined fico accounts to the categories in each sales
>>>>>> channel
>>>>>>>> in
>>>>>>>>>>>> ProductCategoryGLAccount in FICO. See example below.
>>>>>>>>>>>>
>>>>>>>>>>>>
>>>>>>>>>>
>>>>>>>>
>>>>>>
>>>>
>> https://demo-trunk.ofbiz.apache.org:8443/accounting/control/GlAccountAssignment?organizationPartyId=Company
>>>>>>>>>>>>
>>>>>>>>>>>> That should do the trick. But like I said, I haven't tested it
>>>> yet.
>>>>>>>>>>>>
>>>>>>>>>>>> One thing I am also not certain about is how sales transactions
>>>> will
>>>>>>>> be
>>>>>>>>>>>> handled by OFBiz when generated by a Sales Backoffice for each
>>>> when
>>>>>>>> the
>>>>>>>>>>>> scenario described above is in place.
>>>>>>>>>>>>
>>>>>>>>>>>> Good luck with your endeavours and keep us posted how you will
>>>>>>>>>> eventually
>>>>>>>>>>>> get to your optimal solution.
>>>>>>>>>>>>
>>>>>>>>>>>> Regards,
>>>>>>>>>>>>
>>>>>>>>>>>> Pierre
>>>>>>>>>>>>
>>>>>>>>>>>>
>>>>>>>>>>>> 2012/5/25 Vikas Mayur <[hidden email]>
>>>>>>>>>>>>
>>>>>>>>>>>>> Hi Pierre,
>>>>>>>>>>>>>
>>>>>>>>>>>>> Thanks for your response. Yes, you are absolutely correct. I
>>>> should
>>>>>>>> be
>>>>>>>>>>>>> able to see the income sheet of the company (parent
>> organization)
>>>>>> as
>>>>>>>>>> well
>>>>>>>>>>>>> as the income sheet per distribution channel.
>>>>>>>>>>>>>
>>>>>>>>>>>>> Regards
>>>>>>>>>>>>> Vikas
>>>>>>>>>>>>>
>>>>>>>>>>>>> On May 25, 2012, at 2:36 PM, Pierre Smits wrote:
>>>>>>>>>>>>>
>>>>>>>>>>>>>> Hi Vikas,
>>>>>>>>>>>>>>
>>>>>>>>>>>>>> Just to get a greater understanding of the challenge you're
>>>>>> facing,
>>>>>>>> I
>>>>>>>>>> am
>>>>>>>>>>>>>> understanding that the distribution channels operate as
>>>>>> independent
>>>>>>>>>>>>>> organisations and not as internal departments. And that the
>>>>>>>>>> distributors,
>>>>>>>>>>>>>> wholesales and retailers are associated to the distribution
>>>>>>>> channels.
>>>>>>>>>> And
>>>>>>>>>>>>>> that sales is done thru the distribution channels, but that
>> the
>>>>>>>>>>>>>> transactions of the sale need to be registered with the
>> company
>>>>>>>>>> combined
>>>>>>>>>>>>>> with commission calculations per distribution channel.
>>>>>>>>>>>>>>
>>>>>>>>>>>>>> Am I correct in assuming that's what you're saying?
>>>>>>>>>>>>>>
>>>>>>>>>>>>>> Regards,
>>>>>>>>>>>>>>
>>>>>>>>>>>>>> Pierre
>>>>>>>>>>>>>>
>>>>>>>>>>>>>> 2012/5/25 Vikas Mayur <[hidden email]>
>>>>>>>>>>>>>>
>>>>>>>>>>>>>>> Hi,
>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>> I am working for a customer and he is looking to setup a
>> chart
>>>> of
>>>>>>>>>>>>> accounts
>>>>>>>>>>>>>>> for his organization. I have mentioned below a brief
>>>> description
>>>>>> of
>>>>>>>>>> the
>>>>>>>>>>>>>>> business of this customer, his requirements and a possible
>>>>>> solution
>>>>>>>>>>>>> that I
>>>>>>>>>>>>>>> think would meet his needs. Please take a look and also
>> through
>>>>>> the
>>>>>>>>>> Q's
>>>>>>>>>>>>>>> below :), if you know anything then let me know. Thanks in
>>>>>> advance
>>>>>>>>>> !!!
>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>> Business Overview:
>>>>>>>>>>>>>>> A parent organization with several divisions like R&D, Sales
>> &
>>>>>>>>>>>>> Marketing,
>>>>>>>>>>>>>>> Operations, Administration etc. and employees. The company
>>>>>> (parent
>>>>>>>>>>>>>>> organization) only sell its products through a number of
>>>>>>>> distribution
>>>>>>>>>>>>>>> channels (they also call them as revenue channels & profit
>>>>>> centers)
>>>>>>>>>> like
>>>>>>>>>>>>>>> wholesale, distributor. retail etc. The company will give
>> them
>>>> a
>>>>>>>>>> certain
>>>>>>>>>>>>>>> commission (as per the agreement) on every sale. The
>>>> distribution
>>>>>>>>>>>>> channels
>>>>>>>>>>>>>>> are not the divisions of the company and does not have any
>>>>>>>> employees
>>>>>>>>>>>>>>> either. The company will have a number of warehouses
>> (probably
>>>>>>>> shared
>>>>>>>>>>>>> among
>>>>>>>>>>>>>>> the distribution channels) to fulfill the orders.
>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>> Requirement:
>>>>>>>>>>>>>>> The company need to generate a separate income sheet for each
>>>>>>>>>>>>> distribution
>>>>>>>>>>>>>>> channels so that they know the net income by each channel.
>> They
>>>>>>>> also
>>>>>>>>>>>>> need a
>>>>>>>>>>>>>>> consolidated GL totals (generate a consolidated income
>>>> statement)
>>>>>>>>>> and a
>>>>>>>>>>>>>>> balance sheet report for the company.
>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>> Solution:
>>>>>>>>>>>>>>> Distribution Channel Setup
>>>>>>>>>>>>>>> The distribution channels are organizations (although not
>>>>>> internal
>>>>>>>> to
>>>>>>>>>>>>> the
>>>>>>>>>>>>>>> Company) and will be setup as party group in the system. For
>>>>>>>> example
>>>>>>>>>>>>> there
>>>>>>>>>>>>>>> will be party group for wholesale, distributor & retail each.
>>>>>> There
>>>>>>>>>>>>> would
>>>>>>>>>>>>>>> be a number of wholesalers, distributors and retailers who
>> will
>>>>>>>> sell
>>>>>>>>>> the
>>>>>>>>>>>>>>> products of the company and they will also be setup as party
>>>>>> group
>>>>>>>>>> with
>>>>>>>>>>>>> a
>>>>>>>>>>>>>>> party relationship to wholesale, distributor & retail party
>>>> group
>>>>>>>>>>>>>>> respectively.
>>>>>>>>>>>>>>> GL Account & Chart of Accounts Setup
>>>>>>>>>>>>>>> I looked through the demo GL setup and Chart of Accounts
>>>> template
>>>>>>>>>> data
>>>>>>>>>>>>> in
>>>>>>>>>>>>>>> OFBiz, was very helpful. I know that an account can be used
>> by
>>>>>> one
>>>>>>>> or
>>>>>>>>>>>>> more
>>>>>>>>>>>>>>> internal organization but have doubts about how to associate
>>>> the
>>>>>>>>>> account
>>>>>>>>>>>>>>> and how the transaction would be posted to the correct
>> account.
>>>>>>>>>> Sorry,
>>>>>>>>>>>>>>> haven't looked through the code in detail.
>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>> There will be number of accounts but lets say we have three
>>>>>>>> accounts,
>>>>>>>>>>>>> 3000
>>>>>>>>>>>>>>> - Sales, 3010 - Discount on Sale, 3020 - COGS. The net income
>>>>>> will
>>>>>>>> be
>>>>>>>>>>>>>>> [Total of Sales - (Total Discount on Sale + Total COGS)].
>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>> Q1. Do I need to associate the above accounts to the parent
>>>>>> company
>>>>>>>>>> OR
>>>>>>>>>>>>> to
>>>>>>>>>>>>>>> each distribution channel OR both? Default mappings?
>>>>>>>>>>>>>>> Q2. Do I need separate accounts for the parent company and
>> each
>>>>>>>>>>>>>>> distribution channels? Lets say the 4 different Sales account
>>>> for
>>>>>>>> the
>>>>>>>>>>>>>>> parent and three distribution channels? Don't think so.
>>>>>>>>>>>>>>> Q3. Any other thing I should be concerned about, like the
>>>> shared
>>>>>>>>>>>>> warehouse
>>>>>>>>>>>>>>> by all the distribution channels?
>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>> Regards
>>>>>>>>>>>>>>> Vikas
>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>
>>>>>>>>>>>>>
>>>>>>>>>>>>>
>>>>>>>>>>>
>>>>>>>>>>
>>>>>>>>>>
>>>>>>>>
>>>>>>>>
>>>>>>
>>>>>>
>>>>
>>>>
>>
>>

Nandani

Re: Chart of Accounts Q's

Thanks a ton Vikas for such a detailed explanation.

On Wed, May 30, 2012 at 6:00 PM, Vikas Mayur <[hidden email]> wrote:

> I only presented a possible way to execute your scenario in OFBiz, there
> may be some better/alternate solution though. As I said before you will
> need an Item adjustment for sales tax to be able to generate a sales tax
> line item on Invoice. From there you would be able to post accounting
> transaction to the gl account related to sales tax. I believe you only need
> to figure out how to create the item adjustment (OrderAdjustment record)
> for sales tax.
>
> Regards
> Vikas
>
> On May 30, 2012, at 5:14 PM, Nandani Aggarwal wrote:
>
> > But with reference to my second post in this thread , my problem was to
> see
> > tax transaction (along with other transactions) in an invoice provided
> that
> > sales tax (VAT or CST etc) is already included in product price.
> >
> >
> > Regards
> > Nandani
> >
> > On Wed, May 30, 2012 at 4:45 PM, Vikas Mayur <[hidden email]>
> wrote:
> >
> >> No, it won't because sales tax is not charged on the order.
> >>
> >> Regards
> >> Vikas
> >>
> >> On May 30, 2012, at 4:11 PM, Nandani Aggarwal wrote:
> >>
> >>> Vikas,
> >>>
> >>> Thank a lot ,What ever you explained is absolutely correct but by doing
> >>> taxable = 'N' and taxPromotions to 'N' are you able to see tax
> >> transaction
> >>> in your invoice which shows the amount paid to tax authority.?
> >>>
> >>> Regards
> >>> Nandani
> >>>
> >>> On Wed, May 30, 2012 at 2:51 PM, Vikas Mayur <[hidden email]>
> >> wrote:
> >>>
> >>>> Nandani,
> >>>>
> >>>> I have never tested this use case before and was curious to know how
> >> this
> >>>> works so I did few test by placing a sales order for product WG-1111
> and
> >>>> DemoCustomer (note: the shipping address of this demo customer is Utah
> >> and
> >>>> OFBiz demo data have a tax authority setup for this state. I only did
> >> one
> >>>> change in the TaxAuthorityRateProduct entity by setting the attribute
> >>>> taxPromotions to 'N') from demo data once by setting the taxable flag
> on
> >>>> this product to 'Y' (although keeping it null is same) and once by
> >> setting
> >>>> the flag to 'N' . When taxable flag is 'N' the item was exempted from
> >> sales
> >>>> tax and when it is 'Y' or Null the sales tax for item is aded to the
> >> cart
> >>>> or order grand total.
> >>>>
> >>>> You may need to check your tax authority setup i.e. whether you have
> >>>> allowed tax on shipping and/or promotion. I doubt tax amount you are
> >> seeing
> >>>> in the grand total is either calculated on shipping and/or promotion.
> >>>>
> >>>> Below is code snip from the service calcTax in TaxAuthorityServices
> >> Class
> >>>> and conditional check on taxable flag determines whether the item
> >> should be
> >>>> tax exempted or not.
> >>>>
> >>>> if (product != null && (product.get("taxable") == null ||
> >>>> (product.get("taxable") != null &&
> >>>> product.getBoolean("taxable").booleanValue()))) {
> >>>> taxable = taxable.add(itemAmount);
> >>>> }
> >>>>
> >>>> HTH
> >>>>
> >>>> Regards
> >>>> Vikas
> >>>>
> >>>> On May 29, 2012, at 11:05 AM, Nandani Aggarwal wrote:
> >>>>
> >>>>> Thank a lot for help and such a nice and simple explanation of
> answers.
> >>>>>
> >>>>> I tried your solutions with taxable field value as "Y"and "N"
> both.But
> >> in
> >>>>> both cases in shoppingcart.java (cart.getTotalSalesTax()) returns tax
> >>>> value
> >>>>> and (cart.getGrandTotal()) adds this tax in price(already including
> tax
> >>>>> value).
> >>>>>
> >>>>> I changed (cart.getGrandTotal()) so that it doesn't include tax but
> >>>> during
> >>>>> order creation it adds tax amount to total amount.It adds Order
> >>>>> adjustments (like discounts or tax).So should i change there as well
> or
> >>>>> there is another simple solution to it.
> >>>>>
> >>>>>
> >>>>> - Regards
> >>>>> Nandani
> >>>>>
> >>>>> On Mon, May 28, 2012 at 10:37 PM, Vikas Mayur <[hidden email]>
> >>>> wrote:
> >>>>>
> >>>>>> Inline
> >>>>>>
> >>>>>> Regards
> >>>>>> Vikas
> >>>>>>
> >>>>>> On May 28, 2012, at 8:59 PM, Nandani Aggarwal wrote:
> >>>>>>
> >>>>>>> Thanks a lot for reply.
> >>>>>>>
> >>>>>>> I am facing some problem in maintaining sales tax transactions.In
> my
> >>>>>> case ,
> >>>>>>> on my ecommerce site i am displaying products including tax,
> >>>>>>> Problem :
> >>>>>>> 1. I am displaying product with price including tax.So when order
> is
> >>>>>> placed
> >>>>>>> and invoice is created then tax transactions display tax amount on
> >>>> price(
> >>>>>>> already including tax).
> >>>>>>> For example : Product "A" is displayed at price Rs100 (Price :90 +
> >> tax
> >>>> :
> >>>>>>> 10).
> >>>>>>> But on invoice transactions are :
> >>>>>>> Sales Transactions - Rs100
> >>>>>>> Tax Transactions - RS 10
> >>>>>>> Making Invoice Total - Rs110.(which is wrong)Invoice total should
> be
> >> Rs
> >>>>>>> 100/-
> >>>>>>> I want grand total should be sum of product's subtotal.
> >>>>>>
> >>>>>> Check the 'taxable' field on Product entity, I think setting it to
> 'N'
> >>>> on
> >>>>>> individual products should exempt the product from further sales
> tax.
> >>>>>>
> >>>>>>>
> >>>>>>> 2. If i want to Apply discount on price excluding tax and then
> >> display
> >>>>>>> final amount (Price - discount) + tax.
> >>>>>>> But in ofbiz i am unable to display such price and grandtotal.
> >>>>>>>
> >>>>>>> Any idea , how above problems can be handled.?
> >>>>>>
> >>>>>> Discount and Tax should be created as Order Adjustments to display
> the
> >>>>>> prices in the manner you mentioned.
> >>>>>>
> >>>>>> I haven't done any testing but I think there may be solution OOTB
> with
> >>>>>> some minor modifications where required.
> >>>>>>
> >>>>>> Lets take your example for instance. Product 'A' displayed price is
> >> Rs.
> >>>>>> 100 (Actual product price is 90 & tax is 10). Lets say you want to
> >> give
> >>>> Rs.
> >>>>>> 20 discount on the product price which means that your order total
> >> will
> >>>> be
> >>>>>> Rs. 80 with product price after discount as Rs. 70 (since discount
> is
> >>>>>> applied after excluding tax from product price) & a total sales tax
> of
> >>>> Rs.
> >>>>>> 10.
> >>>>>>
> >>>>>> Instead of Rs. 20 discount, you may give a discount including the
> >> sales
> >>>>>> tax on the price displayed to customer.
> >>>>>>
> >>>>>> Final Product Price = Price Displayed - (Discount + Tax) = 100 -
> (20 +
> >>>> 10)
> >>>>>> = 70
> >>>>>>
> >>>>>> You may then apply the tax on the product price (note you don't need
> >> to
> >>>>>> set the 'taxable' flag I mentioned above) in such a manner that tax
> >>>> amount
> >>>>>> is added back to the order total.
> >>>>>>
> >>>>>> Item Sub Total = Rs. 100
> >>>>>> Discount = Rs. 30
> >>>>>> Sales Tax = Rs. 10
> >>>>>>
> >>>>>> Order Total = Rs. 80
> >>>>>>
> >>>>>> HTH
> >>>>>>
> >>>>>>> I want correct transaction details on my invoice.It should include
> >>>>>> discount
> >>>>>>> , tax and sales information.
> >>>>>>> Tax is added in product price itself.Tax is not included in final
> >> order
> >>>>>>> amount.
> >>>>>>>
> >>>>>>> Thanks
> >>>>>>> Nandani
> >>>>>>>
> >>>>>>>
> >>>>>>>
> >>>>>>>
> >>>>>>> On Mon, May 28, 2012 at 8:34 PM, Vikas Mayur <[hidden email]
> >
> >>>>>> wrote:
> >>>>>>>
> >>>>>>>> Yes, I need to keep all the related transactions so that income
> >> sheet
> >>>>>>>> reflect the correct net income. For all the sales tax (sales taxes
> >>>>>> could be
> >>>>>>>> at country/state/county/city level) & COGS (for different items)
> >>>>>>>> transaction entry detail records, I just created one detail record
> >> for
> >>>>>> each.
> >>>>>>>>
> >>>>>>>> Regards
> >>>>>>>> Vikas
> >>>>>>>>
> >>>>>>>> On May 28, 2012, at 7:46 PM, Nandani Aggarwal wrote:
> >>>>>>>>
> >>>>>>>>> Nice Approach , Are you also handling tax related transactions so
> >>>> that
> >>>>>>>>> actual or final revenue can be generated or determined which may
> >>>>>> include
> >>>>>>>>> COGS,Discount,Tax(Sales Tax , CST , VAT etc).
> >>>>>>>>>
> >>>>>>>>> Thanks
> >>>>>>>>> Nandani
> >>>>>>>>>
> >>>>>>>>> On Mon, May 28, 2012 at 5:37 PM, Vikas Mayur <
> [hidden email]
> >>>
> >>>>>>>> wrote:
> >>>>>>>>>
> >>>>>>>>>> Pierre,
> >>>>>>>>>>
> >>>>>>>>>> The approach actually worked, moreover I don't need separate
> >>>> accounts
> >>>>>>>> as I
> >>>>>>>>>> can associate the existing accounts of the parent company to
> other
> >>>>>>>> parties
> >>>>>>>>>> like wholesale and retail etc. As a test, I have placed a sales
> >>>> order
> >>>>>>>> with
> >>>>>>>>>> product GZ-2644 with 3 Qty for a wholesale party and quick ship
> >>>> entire
> >>>>>>>>>> order which resulted in 4 accounting transactions namely Sales
> >>>>>> Invoice,
> >>>>>>>>>> Sales Shipment, Incoming Payment & Payment Applied. To setup the
> >>>>>> income
> >>>>>>>>>> sheet for wholesale party, I manually created all the required
> >>>>>>>> transactions
> >>>>>>>>>> (I believe I just needed Sales Invoice & Sales Shipment
> >>>> transactions)
> >>>>>>>> and
> >>>>>>>>>> transaction details. That is it. I think I now need to write
> some
> >>>> code
> >>>>>>>> so
> >>>>>>>>>> that such transactions could be created automatically. Sorry, I
> >>>> tested
> >>>>>>>> this
> >>>>>>>>>> on my local copy so you may not be able to see it on demo :)
> >>>>>>>>>>
> >>>>>>>>>> Your idea of setting up a separate instance for these external
> >>>> parties
> >>>>>>>>>> seems good but I believe the other approach which I used is
> >> easier.
> >>>>>> Let
> >>>>>>>> me
> >>>>>>>>>> know if you have any thoughts.
> >>>>>>>>>>
> >>>>>>>>>> Regards
> >>>>>>>>>> Vikas
> >>>>>>>>>>
> >>>>>>>>>> On May 28, 2012, at 12:51 PM, Vikas Mayur wrote:
> >>>>>>>>>>
> >>>>>>>>>>> Hi Pierre,
> >>>>>>>>>>>
> >>>>>>>>>>> Thanks for your help and your interest in the topic. I am
> >> currently
> >>>>>>>>>> testing business transaction and their related accounting
> >>>> transactions
> >>>>>>>> with
> >>>>>>>>>> the OFBiz demo data along with my custom party data of
> Wholesale,
> >>>>>> Retail
> >>>>>>>>>> channels.
> >>>>>>>>>>>
> >>>>>>>>>>> For instance when an invoice is captured for a sales order, you
> >>>> would
> >>>>>>>>>> have various accounting transactions corresponding to this
> >> business
> >>>>>>>>>> transaction (Invoice is being captured) like account
> receivables,
> >>>>>> COGS,
> >>>>>>>>>> discounts, general sales etc. The transactions with OFBiz demo
> >> data
> >>>>>> are
> >>>>>>>>>> currently posted to correct account but they are registered to
> >>>>>>>> 'Company' -
> >>>>>>>>>> the parent organization.
> >>>>>>>>>>>
> >>>>>>>>>>> After doing some of these tests and how the transactions are
> >>>> posted,
> >>>>>> I
> >>>>>>>>>> think I would need two things to be able to generate income
> sheet
> >>>> per
> >>>>>>>>>> distribution channel.
> >>>>>>>>>>>
> >>>>>>>>>>> 1. Create separate revenue accounts for each distribution
> >> channels,
> >>>>>>>> they
> >>>>>>>>>> can be setup as subsidiary ledger accounts similar to the
> existing
> >>>>>> demo
> >>>>>>>>>> data. For example, the hierarchy of accounts for SALES would
> look
> >>>> like
> >>>>>>>> this.
> >>>>>>>>>>>
> >>>>>>>>>>>
> >>>>>>>>>> Revenue
> >>>>>>>>>>>
> >>>>>>>>>> |
> >>>>>>>>>>>
> >>>>>>>>>> Sales
> >>>>>>>>>>>
> >>>>>>>>>> |
> >>>>>>>>>>>
> >>>>>>>>>> -------------------------------------------------------------
> >>>>>>>>>>> |
> >>>>>>>>>> | |
> >>>>>>>>>>> General Sales General Sales
> >>>>>>>>>> Wholesale General Sales Retail
> >>>>>>>>>>>
> >>>>>>>>>>> where 'General Sales' account transaction would be registered
> to
> >>>>>>>>>> 'Company' - the parent organization.
> >>>>>>>>>>>
> >>>>>>>>>>> 2. Create duplicate accounting transactions for each revenue
> >>>> account
> >>>>>>>> in
> >>>>>>>>>> such a manner that these transactions are registered to
> Wholesale
> >>>> (If
> >>>>>>>> the
> >>>>>>>>>> sale was made to WholeSalers), Retail (If the sale was made to
> >>>>>>>> Retailers)
> >>>>>>>>>> etc. This would require additional code so that system can
> lookup
> >>>> the
> >>>>>>>> 'Bill
> >>>>>>>>>> To Customer' and automatically create all the required duplicate
> >>>>>>>>>> transactions.
> >>>>>>>>>>>
> >>>>>>>>>>> Once all the transactions are posted, I should be able to
> >> generate
> >>>> a
> >>>>>>>>>> consolidated income sheet (this already works OOTB) for Company
> >> and
> >>>>>>>>>> separate income sheet per distribution channel.
> >>>>>>>>>>>
> >>>>>>>>>>> Let me know if you see any issues with this approach.
> >>>>>>>>>>>
> >>>>>>>>>>> Regards
> >>>>>>>>>>> Vikas
> >>>>>>>>>>>
> >>>>>>>>>>> On May 25, 2012, at 7:24 PM, Pierre Smits wrote:
> >>>>>>>>>>>
> >>>>>>>>>>>> Vikas,
> >>>>>>>>>>>>
> >>>>>>>>>>>> If the distribution channels are truly independent
> organisation
> >>>>>>>> (meaning
> >>>>>>>>>>>> legally) you should set up for each one a different instance
> of
> >>>>>> OFBiz,
> >>>>>>>>>>>> whereby the distribution channels buys from the company and
> >> sells
> >>>> to
> >>>>>>>>>> their
> >>>>>>>>>>>> customers. Otherwise there might appear a conflict of
> interest.
> >>>>>>>>>>>>
> >>>>>>>>>>>> If otherwise the distribution channels are like daughter
> >> companies
> >>>>>> or
> >>>>>>>>>>>> subsidiaries (and accounting, et all is done by the company)
> you
> >>>>>> could
> >>>>>>>>>>>> (should?) link them in one instance to the company like
> >>>> departments
> >>>>>>>> and
> >>>>>>>>>>>> create separate costcenters for each. Subsequently create for
> >> each
> >>>>>> the
> >>>>>>>>>> set
> >>>>>>>>>>>> of accounts regarding turnover, discount and cogs and connect
> >>>> those
> >>>>>> to
> >>>>>>>>>> the
> >>>>>>>>>>>> costcenters.
> >>>>>>>>>>>>
> >>>>>>>>>>>> In order to capture for each you could then create a sales
> >> channel
> >>>>>> for
> >>>>>>>>>> each
> >>>>>>>>>>>> (catalog, categories and if nessesary stores) and apply for
> >> each
> >>>>>>>>>>>> distribution channel the various price, promotion and shipping
> >>>> rules
> >>>>>>>> in
> >>>>>>>>>>>> their respective sales channel.
> >>>>>>>>>>>>
> >>>>>>>>>>>> Finally, and this is something I haven't tested yet, you
> should
> >>>> map
> >>>>>>>> the
> >>>>>>>>>>>> earlier defined fico accounts to the categories in each sales
> >>>>>> channel
> >>>>>>>> in
> >>>>>>>>>>>> ProductCategoryGLAccount in FICO. See example below.
> >>>>>>>>>>>>
> >>>>>>>>>>>>
> >>>>>>>>>>
> >>>>>>>>
> >>>>>>
> >>>>
> >>
> https://demo-trunk.ofbiz.apache.org:8443/accounting/control/GlAccountAssignment?organizationPartyId=Company
> >>>>>>>>>>>>
> >>>>>>>>>>>> That should do the trick. But like I said, I haven't tested it
> >>>> yet.
> >>>>>>>>>>>>
> >>>>>>>>>>>> One thing I am also not certain about is how sales
> transactions
> >>>> will
> >>>>>>>> be
> >>>>>>>>>>>> handled by OFBiz when generated by a Sales Backoffice for each
> >>>> when
> >>>>>>>> the
> >>>>>>>>>>>> scenario described above is in place.
> >>>>>>>>>>>>
> >>>>>>>>>>>> Good luck with your endeavours and keep us posted how you will
> >>>>>>>>>> eventually
> >>>>>>>>>>>> get to your optimal solution.
> >>>>>>>>>>>>
> >>>>>>>>>>>> Regards,
> >>>>>>>>>>>>
> >>>>>>>>>>>> Pierre
> >>>>>>>>>>>>
> >>>>>>>>>>>>
> >>>>>>>>>>>> 2012/5/25 Vikas Mayur <[hidden email]>
> >>>>>>>>>>>>
> >>>>>>>>>>>>> Hi Pierre,
> >>>>>>>>>>>>>
> >>>>>>>>>>>>> Thanks for your response. Yes, you are absolutely correct. I
> >>>> should
> >>>>>>>> be
> >>>>>>>>>>>>> able to see the income sheet of the company (parent
> >> organization)
> >>>>>> as
> >>>>>>>>>> well
> >>>>>>>>>>>>> as the income sheet per distribution channel.
> >>>>>>>>>>>>>
> >>>>>>>>>>>>> Regards
> >>>>>>>>>>>>> Vikas
> >>>>>>>>>>>>>
> >>>>>>>>>>>>> On May 25, 2012, at 2:36 PM, Pierre Smits wrote:
> >>>>>>>>>>>>>
> >>>>>>>>>>>>>> Hi Vikas,
> >>>>>>>>>>>>>>
> >>>>>>>>>>>>>> Just to get a greater understanding of the challenge you're
> >>>>>> facing,
> >>>>>>>> I
> >>>>>>>>>> am
> >>>>>>>>>>>>>> understanding that the distribution channels operate as
> >>>>>> independent
> >>>>>>>>>>>>>> organisations and not as internal departments. And that the
> >>>>>>>>>> distributors,
> >>>>>>>>>>>>>> wholesales and retailers are associated to the distribution
> >>>>>>>> channels.
> >>>>>>>>>> And
> >>>>>>>>>>>>>> that sales is done thru the distribution channels, but that
> >> the
> >>>>>>>>>>>>>> transactions of the sale need to be registered with the
> >> company
> >>>>>>>>>> combined
> >>>>>>>>>>>>>> with commission calculations per distribution channel.
> >>>>>>>>>>>>>>
> >>>>>>>>>>>>>> Am I correct in assuming that's what you're saying?
> >>>>>>>>>>>>>>
> >>>>>>>>>>>>>> Regards,
> >>>>>>>>>>>>>>
> >>>>>>>>>>>>>> Pierre
> >>>>>>>>>>>>>>
> >>>>>>>>>>>>>> 2012/5/25 Vikas Mayur <[hidden email]>
> >>>>>>>>>>>>>>
> >>>>>>>>>>>>>>> Hi,
> >>>>>>>>>>>>>>>
> >>>>>>>>>>>>>>> I am working for a customer and he is looking to setup a
> >> chart
> >>>> of
> >>>>>>>>>>>>> accounts
> >>>>>>>>>>>>>>> for his organization. I have mentioned below a brief
> >>>> description
> >>>>>> of
> >>>>>>>>>> the
> >>>>>>>>>>>>>>> business of this customer, his requirements and a possible
> >>>>>> solution
> >>>>>>>>>>>>> that I
> >>>>>>>>>>>>>>> think would meet his needs. Please take a look and also
> >> through
> >>>>>> the
> >>>>>>>>>> Q's
> >>>>>>>>>>>>>>> below :), if you know anything then let me know. Thanks in
> >>>>>> advance
> >>>>>>>>>> !!!
> >>>>>>>>>>>>>>>
> >>>>>>>>>>>>>>> Business Overview:
> >>>>>>>>>>>>>>> A parent organization with several divisions like R&D,
> Sales
> >> &
> >>>>>>>>>>>>> Marketing,
> >>>>>>>>>>>>>>> Operations, Administration etc. and employees. The company
> >>>>>> (parent
> >>>>>>>>>>>>>>> organization) only sell its products through a number of
> >>>>>>>> distribution
> >>>>>>>>>>>>>>> channels (they also call them as revenue channels & profit
> >>>>>> centers)
> >>>>>>>>>> like
> >>>>>>>>>>>>>>> wholesale, distributor. retail etc. The company will give
> >> them
> >>>> a
> >>>>>>>>>> certain
> >>>>>>>>>>>>>>> commission (as per the agreement) on every sale. The
> >>>> distribution
> >>>>>>>>>>>>> channels
> >>>>>>>>>>>>>>> are not the divisions of the company and does not have any
> >>>>>>>> employees
> >>>>>>>>>>>>>>> either. The company will have a number of warehouses
> >> (probably
> >>>>>>>> shared
> >>>>>>>>>>>>> among
> >>>>>>>>>>>>>>> the distribution channels) to fulfill the orders.
> >>>>>>>>>>>>>>>
> >>>>>>>>>>>>>>> Requirement:
> >>>>>>>>>>>>>>> The company need to generate a separate income sheet for
> each
> >>>>>>>>>>>>> distribution
> >>>>>>>>>>>>>>> channels so that they know the net income by each channel.
> >> They
> >>>>>>>> also
> >>>>>>>>>>>>> need a
> >>>>>>>>>>>>>>> consolidated GL totals (generate a consolidated income
> >>>> statement)
> >>>>>>>>>> and a
> >>>>>>>>>>>>>>> balance sheet report for the company.
> >>>>>>>>>>>>>>>
> >>>>>>>>>>>>>>> Solution:
> >>>>>>>>>>>>>>> Distribution Channel Setup
> >>>>>>>>>>>>>>> The distribution channels are organizations (although not
> >>>>>> internal
> >>>>>>>> to
> >>>>>>>>>>>>> the
> >>>>>>>>>>>>>>> Company) and will be setup as party group in the system.
> For
> >>>>>>>> example
> >>>>>>>>>>>>> there
> >>>>>>>>>>>>>>> will be party group for wholesale, distributor & retail
> each.
> >>>>>> There
> >>>>>>>>>>>>> would
> >>>>>>>>>>>>>>> be a number of wholesalers, distributors and retailers who
> >> will
> >>>>>>>> sell
> >>>>>>>>>> the
> >>>>>>>>>>>>>>> products of the company and they will also be setup as
> party
> >>>>>> group
> >>>>>>>>>> with
> >>>>>>>>>>>>> a
> >>>>>>>>>>>>>>> party relationship to wholesale, distributor & retail party
> >>>> group
> >>>>>>>>>>>>>>> respectively.
> >>>>>>>>>>>>>>> GL Account & Chart of Accounts Setup
> >>>>>>>>>>>>>>> I looked through the demo GL setup and Chart of Accounts
> >>>> template
> >>>>>>>>>> data
> >>>>>>>>>>>>> in
> >>>>>>>>>>>>>>> OFBiz, was very helpful. I know that an account can be used
> >> by
> >>>>>> one
> >>>>>>>> or
> >>>>>>>>>>>>> more
> >>>>>>>>>>>>>>> internal organization but have doubts about how to
> associate
> >>>> the
> >>>>>>>>>> account
> >>>>>>>>>>>>>>> and how the transaction would be posted to the correct
> >> account.
> >>>>>>>>>> Sorry,
> >>>>>>>>>>>>>>> haven't looked through the code in detail.
> >>>>>>>>>>>>>>>
> >>>>>>>>>>>>>>> There will be number of accounts but lets say we have three
> >>>>>>>> accounts,
> >>>>>>>>>>>>> 3000
> >>>>>>>>>>>>>>> - Sales, 3010 - Discount on Sale, 3020 - COGS. The net
> income
> >>>>>> will
> >>>>>>>> be
> >>>>>>>>>>>>>>> [Total of Sales - (Total Discount on Sale + Total COGS)].
> >>>>>>>>>>>>>>>
> >>>>>>>>>>>>>>> Q1. Do I need to associate the above accounts to the parent
> >>>>>> company
> >>>>>>>>>> OR
> >>>>>>>>>>>>> to
> >>>>>>>>>>>>>>> each distribution channel OR both? Default mappings?
> >>>>>>>>>>>>>>> Q2. Do I need separate accounts for the parent company and
> >> each
> >>>>>>>>>>>>>>> distribution channels? Lets say the 4 different Sales
> account
> >>>> for
> >>>>>>>> the
> >>>>>>>>>>>>>>> parent and three distribution channels? Don't think so.
> >>>>>>>>>>>>>>> Q3. Any other thing I should be concerned about, like the
> >>>> shared
> >>>>>>>>>>>>> warehouse
> >>>>>>>>>>>>>>> by all the distribution channels?
> >>>>>>>>>>>>>>>
> >>>>>>>>>>>>>>> Regards
> >>>>>>>>>>>>>>> Vikas
> >>>>>>>>>>>>>>>
> >>>>>>>>>>>>>>>
> >>>>>>>>>>>>>>>
> >>>>>>>>>>>>>>>
> >>>>>>>>>>>>>
> >>>>>>>>>>>>>
> >>>>>>>>>>>
> >>>>>>>>>>
> >>>>>>>>>>
> >>>>>>>>
> >>>>>>>>
> >>>>>>
> >>>>>>
> >>>>
> >>>>
> >>
> >>
>
>