How Sale Codes Affect the GL

1. Direct GL Mapping

Each Sale Code is directly linked to specific GL accounts. When a transaction is entered in the system, the Sale Code assigned to the entry determines which GL accounts will be impacted. This mapping ensures that revenue from different types of sales (e.g., equipment sales, parts, labor, misc, rental) is correctly allocated to the appropriate income, cost and inventory accounts.

2. Selecting a Sale Code on an Open Document 

On an open work/sales order, users select a Sale Code that represents the type of transaction they are adding to the document. This selection triggers the system to automatically assign the GL accounts for revenue, cost of goods sold (COGS), and, where applicable, inventory adjustments. This setup simplifies the process for end users, as they do not need to manually select GL accounts; the Sale Code handles it behind the scenes.

3. Impact on Revenue Recognition

Revenue recognition is dependent on the selected Sale Code, which determines the sale account the transaction will post to.

4. COGS Allocation

Sale Codes also define which COGS accounts are affected. When a Sale Code is applied to an order, the related COGS accounts are adjusted automatically.

This ensures that costs are accurately matched with the corresponding revenue.

5. Inventory Adjustments

If inventory is involved in the transaction, the Sale Code dictates how the inventory movement will be posted to the GL. This includes adjustments to inventory valuation accounts and any reclassification needed.

6. Customization and Flexibility

Administrators can create, modify, or remove Sale Codes to reflect changes in business operations or accounting practices.

Sale Codes can be customized to align with evolving GL account structures, ensuring the system remains flexible and adaptable over time. Note: When a change is made to a sale code, any entries on open documents assigned to that sale code will need to be updated (select line item and click Update) to reflect the change made to the sale code. 

Overall, the interaction between Sale Codes and the GL in Softbase Evolution is designed to streamline financial transactions, reduce manual entry, and provide accurate financial reporting.