Hi Pierre,
Thanks for your help and your interest in the topic. I am currently testing
business transaction and their related accounting transactions with the OFBiz
demo data along with my custom party data of Wholesale, Retail channels.
For instance when an invoice is captured for a sales order, you would have
various accounting transactions corresponding to this business transaction
(Invoice is being captured) like account receivables, COGS, discounts, general
sales etc. The transactions with OFBiz demo data are currently posted to
correct account but they are registered to 'Company' - the parent organization.
After doing some of these tests and how the transactions are posted, I think I
would need two things to be able to generate income sheet per distribution
channel.
1. Create separate revenue accounts for each distribution channels, they can be
setup as subsidiary ledger accounts similar to the existing demo data. For
example, the hierarchy of accounts for SALES would look like this.
Revenue
|
Sales
|
-------------------------------------------------------------
|
| |
General Sales General Sales Wholesale
General Sales Retail
where 'General Sales' account transaction would be registered to 'Company' -
the parent organization.
2. Create duplicate accounting transactions for each revenue account in such a
manner that these transactions are registered to Wholesale (If the sale was
made to WholeSalers), Retail (If the sale was made to Retailers) etc. This
would require additional code so that system can lookup the 'Bill To Customer'
and automatically create all the required duplicate transactions.
Once all the transactions are posted, I should be able to generate a
consolidated income sheet (this already works OOTB) for Company and separate
income sheet per distribution channel.
Let me know if you see any issues with this approach.
Regards
Vikas
On May 25, 2012, at 7:24 PM, Pierre Smits wrote:
> Vikas,
>
> If the distribution channels are truly independent organisation (meaning
> legally) you should set up for each one a different instance of OFBiz,
> whereby the distribution channels buys from the company and sells to their
> customers. Otherwise there might appear a conflict of interest.
>
> If otherwise the distribution channels are like daughter companies or
> subsidiaries (and accounting, et all is done by the company) you could
> (should?) link them in one instance to the company like departments and
> create separate costcenters for each. Subsequently create for each the set
> of accounts regarding turnover, discount and cogs and connect those to the
> costcenters.
>
> In order to capture for each you could then create a sales channel for each
> (catalog, categories and if nessesary stores) and apply for each
> distribution channel the various price, promotion and shipping rules in
> their respective sales channel.
>
> Finally, and this is something I haven't tested yet, you should map the
> earlier defined fico accounts to the categories in each sales channel in
> ProductCategoryGLAccount in FICO. See example below.
>
> https://demo-trunk.ofbiz.apache.org:8443/accounting/control/GlAccountAssignment?organizationPartyId=Company
>
> That should do the trick. But like I said, I haven't tested it yet.
>
> One thing I am also not certain about is how sales transactions will be
> handled by OFBiz when generated by a Sales Backoffice for each when the
> scenario described above is in place.
>
> Good luck with your endeavours and keep us posted how you will eventually
> get to your optimal solution.
>
> Regards,
>
> Pierre
>
>
> 2012/5/25 Vikas Mayur <vikasma...@gmail.com>
>
>> Hi Pierre,
>>
>> Thanks for your response. Yes, you are absolutely correct. I should be
>> able to see the income sheet of the company (parent organization) as well
>> as the income sheet per distribution channel.
>>
>> Regards
>> Vikas
>>
>> On May 25, 2012, at 2:36 PM, Pierre Smits wrote:
>>
>>> Hi Vikas,
>>>
>>> Just to get a greater understanding of the challenge you're facing, I am
>>> understanding that the distribution channels operate as independent
>>> organisations and not as internal departments. And that the distributors,
>>> wholesales and retailers are associated to the distribution channels. And
>>> that sales is done thru the distribution channels, but that the
>>> transactions of the sale need to be registered with the company combined
>>> with commission calculations per distribution channel.
>>>
>>> Am I correct in assuming that's what you're saying?
>>>
>>> Regards,
>>>
>>> Pierre
>>>
>>> 2012/5/25 Vikas Mayur <vikasma...@gmail.com>
>>>
>>>> Hi,
>>>>
>>>> I am working for a customer and he is looking to setup a chart of
>> accounts
>>>> for his organization. I have mentioned below a brief description of the
>>>> business of this customer, his requirements and a possible solution
>> that I
>>>> think would meet his needs. Please take a look and also through the Q's
>>>> below :), if you know anything then let me know. Thanks in advance !!!
>>>>
>>>> Business Overview:
>>>> A parent organization with several divisions like R&D, Sales &
>> Marketing,
>>>> Operations, Administration etc. and employees. The company (parent
>>>> organization) only sell its products through a number of distribution
>>>> channels (they also call them as revenue channels & profit centers) like
>>>> wholesale, distributor. retail etc. The company will give them a certain
>>>> commission (as per the agreement) on every sale. The distribution
>> channels
>>>> are not the divisions of the company and does not have any employees
>>>> either. The company will have a number of warehouses (probably shared
>> among
>>>> the distribution channels) to fulfill the orders.
>>>>
>>>> Requirement:
>>>> The company need to generate a separate income sheet for each
>> distribution
>>>> channels so that they know the net income by each channel. They also
>> need a
>>>> consolidated GL totals (generate a consolidated income statement) and a
>>>> balance sheet report for the company.
>>>>
>>>> Solution:
>>>> Distribution Channel Setup
>>>> The distribution channels are organizations (although not internal to
>> the
>>>> Company) and will be setup as party group in the system. For example
>> there
>>>> will be party group for wholesale, distributor & retail each. There
>> would
>>>> be a number of wholesalers, distributors and retailers who will sell the
>>>> products of the company and they will also be setup as party group with
>> a
>>>> party relationship to wholesale, distributor & retail party group
>>>> respectively.
>>>> GL Account & Chart of Accounts Setup
>>>> I looked through the demo GL setup and Chart of Accounts template data
>> in
>>>> OFBiz, was very helpful. I know that an account can be used by one or
>> more
>>>> internal organization but have doubts about how to associate the account
>>>> and how the transaction would be posted to the correct account. Sorry,
>>>> haven't looked through the code in detail.
>>>>
>>>> There will be number of accounts but lets say we have three accounts,
>> 3000
>>>> - Sales, 3010 - Discount on Sale, 3020 - COGS. The net income will be
>>>> [Total of Sales - (Total Discount on Sale + Total COGS)].
>>>>
>>>> Q1. Do I need to associate the above accounts to the parent company OR
>> to
>>>> each distribution channel OR both? Default mappings?
>>>> Q2. Do I need separate accounts for the parent company and each
>>>> distribution channels? Lets say the 4 different Sales account for the
>>>> parent and three distribution channels? Don't think so.
>>>> Q3. Any other thing I should be concerned about, like the shared
>> warehouse
>>>> by all the distribution channels?
>>>>
>>>> Regards
>>>> Vikas
>>>>
>>>>
>>>>
>>>>
>>
>>
