It is VERY serious if your company is out of balance. The system is designe=
d to where the sum of all account balances (debits and credits) nets to 0.
The important question is how you are going to split the two companies. The=
re are two primary methods, each with its pros and cons:
Method 1 - journal entries. In this method, you would create a (series of) =
journal entries to move account balances from, say, company 1 to company 2.=
This method would ensure that companies 1 and 2 remain in balance, as your=
entry will be in balance (as long as you do not turn of the system's self =
balancing checks). The downside is that the history of company two (up to t=
he split off point) remains in company one.
Method 2 - Behind the scenes tweaking of accounts - One of the primary base=
s of the JD Edwards system is that there is a relationship between business=
units (cost centers) and companies; that is, a business unit can be associ=
ated with only one company. You can go behind the scenes and change the ass=
ociation of, say business unit 2 from company 1 to company 2. The benefit i=
s that all of the account activity (detail transactions) of business unit t=
wo are now within company two. PLEASE NOTE THIS NEXT SECTION VERY, VERY CAR=
EFULLY... IN THIS METHOD, YOU ARE PLAYING WITH THE "STRUCTURAL INTEGRITY" O=
F JD EDWARDS. FAILURE TO DO ALL THAT IS NECESSARY WITHIN THE SYSTEM PRIOR T=
O THE SPLIT OFF (BALANCE THE BUSINESS UNITS TO BE TRANSFERRED SO THAT THE S=
UM OF THOSE BEING TRANSFERRED NET TO ZERO, CREATE NEW EQUITY ACCOUNTS SO TH=
AT EACH COMPANY NOW HAS A SET, CHANGE ALL OF THE RELATED AAIs TO REFLECT TH=
ESE NEW COMPANIES, ETC) WILL CAUSE FAULTS IN THE SYSTEM THAT CAN TAKE MONTH=
S TO CORRECT.
I have been at companies that have used both approaches, and unless you hav=
e > 5 years of data prior to split off, I would advocate the former method =
(Journal Entries). If however, you have mountains of transactions that user=
s MUST see in the new company, AND you have a technical person who knows th=
e inner workings of JD Edwards AND knows accounting and its structure in JD=
E, go ahead and use the latter method (if you do use this method, get a pre=
scription for a STRONG sedative...I did).
Good luck. =20
Robert Robinson, CPA/CITP, CNE
Senior Business Systems Analyst
D=FCrr Industries, Inc.
734.459.6800 ext. 311
fax # 734.459.5837
e-mail address:
[email protected] <mailto:
[email protected]>=20
RRobinson CPA/CITP,CNE
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Big Ten JD Edwards Users Group
Michigan USA