ST/OT Transfer Order Accounting in JD Edwards. Part 1

ST/OT Transfer Order Accounting in JD Edwards. Part 1.

ST/OT transfer orders in JD Edwards are used to move materials between branch plants (A to B) within the same company and employs the use of a clearing account to hold the value of the goods while they are in transit. This balance sheet account in JDE differs from a perpetual account because while the goods are in transit the quantities on hand “disappear” from the perpetual counts and only remain as a balance in the clearing account. A summary of the process would look like this:

1. An ST sales order and OT purchase order pair are entered in the system.
2. Goods are picked and ship confirmed in branch A. This decrements their quantity on hand.
3. A special version of sales update credits inventory and debits the clearing account.
4. Goods are received in branch B, increasing their quantity on hand. A credit is issued to the clearing account.

In a perfect world, the initial debit amount will precisely match the credit and the clearing account balance will zero out. But as you know we don’t live in a perfect world.

When goods are transferred there are 2 scenarios which can be used:

1. Transfer at cost
2. Transfer with markup

In this month’s article, we will explore transferring at cost, which is the most common method. There are 2 data elements for each ST sales order line that must be considered, the unit cost and unit price. When transferring at cost, both values would be the same.

Setting up the DMAAI’s (Distribution/Manufacturing Automatic Accounting instructions) will depend on which data element you want to manage. Let’s choose the easiest set up to start. There are 4 DMAAI tables to configure:

1. 4230 – Revenue (Credit at price. Set up with wash account.)
2. 4245 – Account receivable (Debit for price. Set up with wash account.)
3. 4220 – Cost of Goods Sold (Debit for cost. Set up with in transit clearing account.)
4. 4240 – Inventory (Credit at cost. Set up with perpetual account.)

Since there is no revenue to be recorded for transfers, we wash it to accounts receivable for a net zero GL impact. In this set up it wouldn’t matter what the price on the sales order is, whether it’s $0 or $1,000,000 it will not affect the GL. This would be the safest set up to make.

In my next article I will talk about transferring with markup and the difference in the DMAAI’s under that scenario. Stay tuned …

To find about RapidReconciler or any of GSI’s other products or services including JDE project consulting services, managed services, upgrade services, cloud services, and more, call us at 855-GSI-4ERP or click on CONTACT US to send us a request for more information.

CONTACT US TODAY

FOR MORE INFORMATION ON GSI'S SOLUTIONS & SERVICES