Bypassing Accounts Receivable in Sales Update for Transfer Orders

Edward Gutkowski, Chief Architect – RapidReconciler

When transferring items between branch plants, JD Edwards employs the use of transfer orders, more commonly known as the JD Edwards ST/OT process. This involves the creation of an “ST” sales order to relieve inventory and produce the necessary shipping paperwork, and an “OT” purchase order to receive the goods at the destination facility. In this article we will focus on the accounting for “ST” order.

The normal customer sales process consists of several steps, including ship confirm, print bill of lading, print invoice and finally sales update to generate the general ledger entries, which includes a debit to accounts receivable (A/R). Since “ST” orders are internal we don’t want to generate any A/R entries. How is this accomplished?

The sales update batch program has a processing option (as shown below) where the update to A/R can be turned off. Setting option 2 on the update tab to a “1” will stop A/R generation. Of course, this means we need a dedicated version of R42800 just for these order types.

Once that option is set, the sales update program will no longer use the financial AAI for the debit, but will now use DMAAI 4245 instead:

The idea of the transfer order is to move goods from “Branch A to Branch B” within a specific company. We want to relieve inventory and place the value of the items in an “In Transit” clearing account. We do not need to record revenue or cost of goods since this a not really a sale. We can now set up our DMAAI’s to accomplish this:

 

DMAAIDescriptionAccountType
4240InventoryInventoryCredit
4220CogsIn TransitDebit
4230RevenueClearingCredit
4245A/RClearingDebit

This configuration will credit inventory and debit the In-Transit account without generating revenue or A/R entries!

I hope this explanation helps your understanding of the transfer order process, and how bypassing A/R in sales update can help. Happy reconciling!

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Meet the Author

Edward Gutkowski