Using ‘IT’ Transactions Between Branch Plants

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Using ‘IT’ Transactions Between Branch Plants

Edward Gutkowski, Chief Architect - Rapid Reconciler

When moving goods from ‘Branch A’ to ‘Branch B’ in JD Edwards, it is normally recommended to use the ‘ST/OT’ transfer process. This is to account for distance between the branches, where transportation is necessary (bills of lading etc.). But what if the branches are in the same building? Do you need to generate documentation and perform all those steps?

Well, the answer is an emphatic NO! You can use the standard ‘IT’ process to accomplish the task, but it does come with a caution, especially when using the branch plant number as the business unit in the general ledger account.

Consider the following scenarios:

Scenario 1

  • Item/qty to transfer: 12345, 10 units
  • Cost level in item master: 2 or 3
  • Cost in branch A: $1.00
  • Cost in branch B: $1.00

This is the typical scenario, where the costs in the branches are the same:

A.Inventory   B.Inventory
Dr Cr   Dr Cr
  $10   $10  

Nice and simple. DMAAI 4122 controls the credit form branch A, while DMAAI 4124 controls the debit to branch B. If the business unit field in the DMAAI set up is left blank, then the system will use the branch plant as the business unit. Your cardex will show the From and To transactions at $10 and the GL will move the value from A.Inventory to B.Inventory. Perfect!

But what if the costs in the 2 branches are different? What happens then?

Scenario 2

  • Item/qty to transfer: 12345, 10 units
  • Cost level in item master: 2 or 3
  • Cost in branch A: $2.00
  • Cost in branch B: $1.00
            DMAAI 4141
A.Inventory   B.Inventory   Comp.COGS
Dr Cr   Dr Cr   Dr Cr
  $20   $10     $10  

As in scenario 1, DMAAI’s 4122 and 4124 control the initial debit and credit, but what about the variance? That’s where DMAAI 4141 comes to the rescue. If 4141 is set to an expense account, like COGS for example, you will get the proper GL entries as pictured above.

Time and time again when I review DMAAI’s for this situation, DMAAI is set to the INVENTORY account, which pushes the cost variance to the wrong account and causes reconciliation issues.

Lesson to be learned: When using ‘IT’ transactions to move goods from ‘Branch A’ to ‘Branch B’, set DMAAI 4141 to be an expense account. It will save you reconciling items!

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Meet the Author

Edward Gutkowski