Reclassification of Expenses: Process Activity

This activity will walk you through the process of reclassifying expenses.

Attention: This activity is based on the U100 dataset. If you are using another dataset, or if any system settings have been changed in U100, these changes can affect the workflow of the activity and the results of the processing. To avoid any issues, restore the U100 dataset to its initial state.

Story

Suppose that SweetLife Fruits & Jams has decided to start using the expense reclassification functionality. On January 30, 2025, Pat Farrell (an AP clerk at SweetLife) entered a $135 cash purchase of a bouquet of flowers in the system. On the same day, Anna Johnson (the chief accountant) reviewed this cash purchase and updated the default expense account to accurately reflect this purchase as related to advertising expenses.

Acting as Pat Farrell, you will enable the Expense Reclassification feature in the system, update the vendor's settings, create a cash purchase with the default expense account, and pre-release it. (Normally, a system administrator would enable all needed features, and an AP clerk would not be able to do this. For simplicity, you will do this while signed in as Pat Farrell.) Acting as Anna Johnson, you will reclassify the expense account in the pre-released cash purchase and release the document.

Configuration Overview

In the U100 dataset, the following tasks have been performed to support this activity:

  • On the Enable/Disable Features (CS100000) form, the following features have been enabled:
    • Standard Financials, which provides the standard financial functionality
    • Multibranch Support, which supports multiple branches in your instance of MYOB Acumatica
    • Multicompany Support, which supports multiple companies within one tenant.
  • On the Accounts Payable Preferences (AP101000) form, the Hold Documents on Entry check box has been selected in the Data Entry Settings section.
  • On the Vendors (AP303000) form, the GLORYFRUIT (Glory Fruit Case) vendor has been defined.

Process Overview

In this activity, you will first enable the Expense Reclassification feature on the Enable/Disable Features (CS100000) form. On the Vendors (AP303000) form, you will update the settings of the needed vendor to specify its reclassification account. On the Cash Purchases (AP304000) form, you will create a cash purchase and pre-release it. You will then review the generated GL batch on the Journal Transactions (GL301000) form.

Finally, on the Cash Purchases form, you will update the expense account in the document and release the cash purchase. You will again review the generated GL batch on the Journal Transactions form.

System Preparation

Before you begin performing the steps of this activity, do the following:

  1. Launch the MYOB Acumatica website with the U100 dataset preloaded, and sign in as Pat Farrell by using the farrell username and the 123 password.
  2. In the info area, in the upper-right corner of the top pane of the MYOB Acumatica screen, make sure that the business date in your system is set to 1/30/2025. If a different date is displayed, click the Business Date menu button and select 1/30/2025 on the calendar. For simplicity, in this activity, you will create and process all documents in the system on this business date.
  3. On the Company and Branch Selection menu on the top pane of the MYOB Acumatica screen, select the SweetLife Head Office and Wholesale Center branch.

Step 1: Enabling the Needed Feature

In a production system, an administrator would have enabled the needed feature in advance of its use. To simplify the activity, you will do this while signed in as the AP clerk. To enable the Expense Reclassification feature, do the following:

  1. Open the Enable/Disable Features (CS100000) form.
  2. On the form toolbar, click Modify.
  3. Select the Expense Reclassification check box under the Standard Financials group of features.
  4. On the form toolbar, click Enable to enable the feature.

Step 2: Updating the Vendor's Settings

Typically, an accountant would update the vendor's settings to specify the reclassification account. To streamline the activity, this step, too, is being performed by the AP clerk. To specify the reclassification account for the vendor, do the following:

  1. On the Vendors (AP303000) form, open the GLORYFRUIT vendor record.
  2. Go to the GL Accounts tab.
  3. In the Reclassification Account box, select 81020 - Reclassification Account.
  4. On the form toolbar, click Save to save your changes.

Step 3: Creating a Cash Purchase

To create a cash purchase, do the following:

  1. On the Cash Purchases (AP304000) form, create a new record.
  2. In the Summary area, specify the following settings:
    • Type: Cash Purchase
    • Date: 1/30/2025
    • Vendor: GLORYFRUIT
    • Payment Method: WIRE
    • Cash Account: 10200WH
    • Description: Purchase of flowers
  3. On the Details tab, click Add Row on the table toolbar and specify the following settings for the added row:
    • Branch: HEADOFFICE
    • Transaction Description: Flowers
    • Ext. Cost: 135
    • Account: 81000 - Other Expenses (inserted by default)
  4. On the Financial tab, make sure that 81020 is specified in the Reclassification Account box.
  5. On the form toolbar, click Remove Hold to assign the purchase the Balanced status.
  6. On the form toolbar, click Pre-Release. The cash purchase is assigned the Pre-Released status.
  7. On the Financial tab, click the link in the Pre-releasing Batch Nbr. box.
  8. On the Journal Transactions (GL301000) form, review the generated transaction.

    When you released the cash purchase, the system generated and released this batch in the general ledger. The reclassification account has been debited in the amount of the cash purchase. Notice that the transaction description for this entry is marked as Preliminary AP Expense Booking. The company checking account has been credited in the same amount.

Step 4: Reclassifying Expenses in the Cash Purchase

To reclassify the expenses in the cash purchase, do the following:

  1. Sign in as Anna Johnson by using the johnson username and the 123 password.
  2. On the Cash Purchases (AP304000) form, open the cash purchase that you created in Step 3.
  3. On the Details tab, in the Account column of the document line, select 61000 - Advertising Expense.
  4. On the form toolbar, click Save.
  5. On the form toolbar, click Release to release the cash purchase.
  6. Go to the Financial tab. Notice that the GL Link section now includes two links: in the Batch Nbr. box, a link to the released batch; and in the Pre-releasing Batch Nbr. box, a link to the pre-released batch.
  7. Click the link in the Batch Nbr. box.
  8. Review the GL transaction that is opened on the Journal Transactions (GL301000) form.

    The expense account updated in the cash purchase is now debited in the purchase amount and the reclassification account is credited in the same amount.