O2C Cycle With Accounting Entries

O2C Cycle with Accounting Entries ORDER TO CASH PARTICULARS

DR

CR

SPL NOTES

ACCOUNT IS PULLED FROM

100

At Standard Cost

Sub-inventory Material A/c Setup Sub-inventory Material A/c Setup

Sales order entry No Accounting Sales Order Pick From Sub Inventory A/c

To Sub Inventory A/c

100

At Standard Cost(Staging)

100

It can be fetched from five places

Sales Order Issue COGS

To Sub Inventory A/c

100

At Standard Cost

Master Item/Org/Order Type/Line Type/Shipping Params Sub-inventory Material A/c Setup

Transaction level Receivable A/c Tax A/c Freight A/c Revenue A/c

120

Auto Accounting Auto Accounting Auto Accounting Auto Accounting

10 10 100

Receipts Receipts with no remittance method Cash

100

Before application of  the receipt

Receipt class

Unapplied A/c Unapplied A/c

100 100

Receivables A/c Cash A/c Unidentified A/c

100

Unidentifed A/c

100

Unapplied A/c

Receipt class After application of the receipt to the transaction

Receipt class

100

Receipt class

100

Receipt class Receipt class

In case of receipt without customer or transaction when customer indentified

100

Receipt class Receipt class

Receipts with remittance method. Confirmed receipts A/c

100

Unapplied A/c

At the time receipt entry 100

Remitted receipts A/c Confirmed receipts A/c

100

Cash Remitted receipts A/c

100

Receipt class Receipt class

On remittance to bank

Receipt class Receipt class

On clearance of cheque

Receipt class Receipt class

At the time earned discounts

Bank

100

100

Receipts with discount/unearned discounts Cash

90

Discount earned A/c

10

Receivable A/c

Receivable activity Transaction Type

100

Cash

90

Discount unearned A/c

10

At the time of  unearned discount

Bank Receivable activity

Receivables A/c

100

Transaction type

Following Accounting entries will be generated for O2C 

Sales order creation – No entries



Pick release: Inventory Stage A/c…………………Debit Inventory Finished goods a/c……..Credit



Ship confirm: Cogs A/c ……………………………Debit Inventory Organization a/c………Credit

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Receviable: Receviable A/c………………………Debit Revenue A/c………………………Credit Tax ………………..…………………Credit Freight…………..….……………….Credit

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Cash: Cash A/c Dr…………………………Debit Receivable A/c……………………….Credit

Accounting Entries for AR Once the Order is shipped then Material account will be credit and COGS Account will be debit. At the time of Invoice creation Revenue account will be credit and receivable account will be debit. At the time of receipt creation. Receivable account will be credit and Bank payment account will be debit