Financial dimensions on a purchase requisition Use this blog to understand how the financial dimensions are defaulted on the purchase requisition, and how they influence the accounting distributions


Concepts

Financial dimensions are available on each requisition line in the lines details. The purpose is to let you update the accounting distribution ledger account on the requisition line. The accounting distribution ledger account consists of a main account and financial dimension values. Accounting distributions are used to define how an amount will be accounted for, such as how the expense, tax, or charges will be accounted for and posted in the ledger.

Updates on the financial dimension values on the requisition line will update the accounting distributions ledger account, not the other way around.

Create a requisition line and set up initial financial dimensions values

When a purchase requisition line is created, the values of financial dimensions are assigned from various sources that are specific to the purchase requisition line.

This works such that the logic will apply values from what is considered the most important or specific source toward the least important source. The sources are ranked in the following order:

  1. Project
  2. Requester
  3. Vendor
  4. Item

If one of the sources is not on the requisition, e.g. not related to a project or does not include a reference to a specific item from the master data, then the source is ignored.

The financial dimensions are only assigned a value once. This is done by first taking all dimension values available from the project, and then taking the dimension values from Requestor that are used but not already assigned a value. Next, the values from the Vendor for dimensions that were not already assigned a value are used, and so on. In the following example, the default financial dimension values are set up for Vendor 1 and Requester.

Financial dimensions on different Sources Business unit (BU) Department (Dep)
Vendor 1 001 025
Requester (Worker) 033

 

Create a requisition line for an item that has the default Vendor1.

Business unit (BU) Department (Dep)
1. Create the line and select the item. Vendor 1 is defaulted to the line. 001 033

 

As you can see from the table above, the Requestor’s default value for financial dimension is Department (033). This value takes priority over the Vendor’s default value Department (025).

If the requisition is not for a project, then that source will not contribute to the financial dimension values.

The accounting distribution ledger account dimension values will be set according to the final result of the values on the requisition line.

Manually update the financial dimension on a requisition line

When you update a financial dimension value on the requisition line to a non-blank value, that will update the dimension values on the accounting distributions. If the accounting distribution lines are split, then all lines will be updated with the new value.

  • For non-stocked items and lines not referring to a catalog item - Setting a financial dimension value to blank on the requisition line will not update the accounting distribution.
  • For stocked items and fixed assets - Setting a financial dimension value to blank on the requisition line will update the accounting distribution by removing the dimension.

For stocked items and fixed assets, the financial dimensions need to be in sync between the financial dimension on the line and the accounting distributions. Note that the accounting distributions cannot be split or edited manually for such cases.

Update a vendor or project

Two of the original sources for setting financial dimension can be changed on the requisition line: project and vendor. Changing one of these on the requisition line will reinitialize the financial dimensions on the requisition line according to the ranking of the sources described above. The new initialization of the financial dimension values will only update the financial dimensions that do not have any value, i.e. are blank. The existing financial dimension values on the purchase requisition line will take priority, and thereby keep their value.

Changing the project or vendor will also mean that the accounting distributions ledger account is reset and updated based on the new project or vendor and the updated set of financial dimensions. If the accounting distributions are spilt, then the split will be removed during the reset.

Note that if you want to ensure that the financial dimensions are reset to how the requisition line was initially created when changing the project or vendor, clear all the financial dimensions on the requisition line that you want to re-default.

Example

Set up the following default values.

Financial dimensions on different Sources Business unit (BU) Cost center (CC) Department (Dep)
Vendor 1 001 025
Vendor 2 002 008
Vendor 3 003 009 026
Requester (Worker) 033

 

Create a requisition line for a non-catalog item.

Business unit (BU) Cost center (CC) Department (Dep)
1. Create a line without a Vendor, the Requester’s default Dep is added. 033
2. Select Vendor 1. Because BU is blank and Dep is not blank only BU is updated from Vendor. 001 033
3. Change to Vendor 2. Only CC is blank and can be updated from Vendor 2. 001 008 033
4. Delete BU on line details and Dep. Manually update the cost center to 010. 010
5. Select Vendor 3,

  • BU is blank and will therefore be updated with dimension from the Vendor 3's default dimension 003.
  • CC has a value 010 so it will keep that value and ignore Vendor 3’s CC 009.
  • Dep is also blank but since the Requester has a default dimension 033 this will overrule the Dep dimension 026 from the vendor.
003 010 033

 

Use a template to update the accounting distribution

You can only use a template for non-stocked items and lines not referring to a catalog item. The lines should also not be categorized as a fixed asset item.

When you apply a template on your requisition line it will update the accounting distribution directly with a split distribution on different dimensions. Applying a template will not change the financial dimension values on the requisition line.

However, if you manually change a financial dimension value to a non-blank value on the requisition line, then that dimension will be updated on all split accounting distribution lines. Clearing a financial dimension value on the requisition line will not change the accounting distributions.

If you change a vendor or project the financial distributions from the vendor or project will update the financial dimension on the requisition line as described above; however, using a template will prevent the accounting distribution split from being cleared. Any updated dimension value will update all the split lines in accounting distributions.

If you remove the template from the requisition line, then the accounting distributions will be reset based on the financial dimension values on the requisition line. Any split lines in the accounting distributions will be removed.


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