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Journal Entry Troubleshooting: Income

Distributor troubleshooting for invoice sales posting to the wrong income account in Encompass: trace Distribution Area, Income Area and Income Account Maps, then re-close AR or reverse. v25.04+.

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Written by Bailey Naas-Thornton

Minimum Version Required: 25.04

Pre-Conditions

  • You have identified an Invoice where the resulting journal entries posted to an incorrect income account.
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  • You have access to the system's Income Account Maps table, Customer records, Distribution Areas, and Income Areas.
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  • You have the necessary permissions to view and potentially edit these tables and records.

  • You know the specific invoice and potentially the customer, product, or other relevant details of the transaction.

Steps

1. Navigate from the Invoice to the Customer Record:
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  • Open the specific Invoice in question.
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  • From Invoice View, you can click the Journal Entry button to see the exact related entry.
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  • Navigate to and open the associated Customer record.
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2. Identify the Distribution Area:
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  • Within the Customer record, note the assigned Distribution Area.
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3. Identify the Income Area:
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  • Navigate to and view the Income Area that is linked to the Distribution Area found in Step 2. The system's setup will define this relationship.
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4. Navigate to the Income Account Maps Table:
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  • Use the universal search functionality within the system.
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  • Search for "Income Account Maps" and select the corresponding table.
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5. Filter Income Account Maps by Company and Income Area:
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  • In the Income Account Maps table, filter the records by the Company of the invoice and the Income Area identified in Step 3.
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6. Check for Second-Tier Filters (Product Type, Supplier, Product):
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  • Within the filtered Income Account Maps, examine if there are any active filters for:
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    • Product Type
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    • Supplier
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    • Product
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  • Determine if any of these second-tier filters match the specifics of the product(s) sold on the problematic invoice. More specific filters will take precedence over "catchall" maps.
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7. Identify the Applicable Income Account Map:
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  • The correct Income Account Map is the one that matches the Company, Income Area, and any relevant Product Type, Supplier, or Product filters of the invoice transaction. If no specific filters match, the "catchall" map for that Company and Income Area will be used.
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8. Verify the Income Account:
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  • Once the applicable Income Account Map is identified, examine the Income Account field (or similar GL Account field).
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  • Ensure that the GL account listed is the correct income account that should be used for this type of sale based on the Company, Income Area, and any specific product criteria.
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  • If the Income Account is incorrect, note the incorrect account and the correct account.
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9. Correct the Income Account Map (If Necessary and if you have permissions):
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  • If the Income Account in the Income Account Map is incorrect, update it to the correct GL account.
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10. Recalculate Journal Entries for Affected Invoices:
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  • Journal entries from invoices are typically calculated during the AR Close process. To recalculate for the incorrect invoice(s):
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    • Option 1 (Recommended if within the allowed rollback period): Roll back the AR Close date (if applicable and permitted), un-verify the affected invoice(s), and then re-run the AR Close process.
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    • Option 2 (If rollback is not feasible):
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      • Reverse the incorrect invoice(s).
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      • Correct the Income Account Maps (if necessary) or reassign the Income Area/Distribution Area on the Customer record (if the map was correct but misapplied).
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      • Recreate the invoice(s) with the correct mapping.
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      • Process the new invoice(s) through the AR Close.
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    • Option 3 (For historical balance correction):
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      • Make the necessary corrections to the Income Account Maps or Customer/Distribution/Income Area assignments.
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      • Create a simple journal entry to transfer the balance from the incorrect income account to the correct income account to adjust historical financials. This will not change the original invoice journal entry details.

Best Practices

  • Establish a clear understanding of how Income Areas, Distribution Areas, and Customer assignments interact with Income Account Maps.
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  • Utilize specific Product Type, Supplier, or Product filters in Income Account Maps for targeted GL assignment.
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  • Create "catchall" Income Account Maps at the Company and Income Area level to handle sales that don't meet specific filter criteria.
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  • Regularly review and audit Income Account Maps to ensure they accurately reflect your desired revenue recognition.
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  • Train users on the importance of accurate Customer assignments to the correct Distribution and Income Areas.

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