I have a query regarding splitting that what is the main difference between Passive spilting, Active splitting and Zero balance method? On which base we do splitting?
Kindly share your valuable views here so I can proceed further, thanks in advance.
What is Document Splitting in New General Ledger
The document spilting will be done based on spiliting rules of reference document ex; The vendor payment document will be spilited based on splitting characterstic of main invoice ex; expense a/c ba 1 expense a/c ba1 (ba means business area ) to vendor payable account (ba2) to vendor payable a/c (ba2) the doc posted based on document spiliting rules business transacation and variant assigned to the document types
Document Splitting means to split the documents automatically for selected dimensions to receivable line items by profit center. Document splitting enables you to allow draw financial statements for dimensions like a profit center, business area, segments any time. Document splitting are of three types
- Active document splitting
- Passive document splitting.
- ZERO balancing splitting
ACTIVE DOCUMENT SPLITTING: Active document splitting based on the business transaction/ variant assigned to document type and the item category assigned to the GL account. systems determine does the splitting of each line item in the document based on the configuration you have done. you have control over this document splitting.
PASSIVE DOCUMENT SPLITTING: Means you do not have control over, systems takes the characteristics from original document. that is a reference or preceding document. reversal document always refers to the original document being reversed.
ZERO BALANCE METHOD: Means in this method define document splitting characteristics in GL accounting as relevant for the balance sheet. if the balancing dimensions in a document not producing balance of zero. the system creates additional clearing items. that ensures the balancing of dimensions produce balance of zero. you can create B/S or partial B/S from doc splitting characteristics. Mostly we do splitting assign doc type and account determination.
Advantages of Document Splitting
- Classify G/L Accounts for Document Splitting.
- Classify Document types for document splitting .
- Define Zero balance clearing account.
- Define Document splitting Characteristics for G/L
Active Document Splitting vs Passive Document Splitting
In Active Splitting While posting transaction we have to give bus area, profit centre in debit line or credit line then the system will update the other line, this is called active splitting while In Passive splitting means the values will be captured from invoice levels to the rest of process. ex: purchase order. The system picks a business area from division and profit centre from material master. so the same will be updated to migo, miro and vendor payment. Therefore we don't need to specify everytime while doing these transactions.
Passive Document splitting is where the account assignments of the line items to be cleared are transferred to the clearing items, in simple terms if i say you have an customer invoice of INR1000 in which there are two products divided on segments A and B, so when you will receive the payment the payment will automatically be divided into the ratio of the segments of the invoice when you post the clearing document. While for Active Document splitting you have to define specific rules for the split whereby gl accounts have to be assigned in the configuration for the spit, apart from you have zero balance clearing where in the line items balance to zero.