Processing Configuration

Reclassification

A comprehensive guide to Reclassification in Fynapse.

Overview

Reclassification is an accounting process where, due to regulatory compliance requirements and financial reporting accuracy, certain accounts require balance transfers, e.g. due to initial missclassification. It adjusts where an amount is reported, i.e. how it is classified in the system, not the amount itself or the underlying transaction.

In Fynapse, the Reclassification functionality supports regulatory compliance and financial reporting accuracy by enabling systematic movement of balances between account classifications without manual intervention based on a set of specified filter criteria.

The Reclassification capability provides:

  • Reclassification Configurations that specify the Journal Type for the Journal that will be posted as a result and a set of rules specifying source accounts, adjustment filters on balances, offset accounts.

  • Assignment of one or more reclassification configurations to Accounting Base and Subledger Node combinations

  • On-demand execution of the balance movement process, using the current balances in the ledger, including earlier runs of reclass

How Does the Reclassification Process Work?

Reclassification operates on the principle that certain accounts require balance transfers, when specified filter criteria are met, to maintain proper financial statement classification. When the process is run, the cumulative balances from specified accounts, net of any amounts already moved in a prior run, shall be transferred to their corresponding offset accounts.

The process can be run at any time, on demand. Journals produced by the process receive the Effective Date of that same business day.

Each run reads current ledger balances, including its own postings from earlier runs. Amounts already moved therefore net off, so a repeat run on the same posting date moves only what has changed since. The check after a run is not the size of any individual posting but the resulting position: the target account holds the full reclassifiable balance as at the run date.

The way this works in Fynapse, you have to create a reclassification configuration which will include:

  • the Accounts for which balances, that will later be moved, will be calculated
  • the filter criteria used to verify whether the amounts/balances need to be reclassified
  • the Offset Accounts to which the Journal with the reclassified balance will be posted to
  • the Journal Type the reclassified Journals will be posted as

Then you assign the Reclassification configurations to Accounting Base/Subledger Node combinations. This provides you with a level of granularity that allows you to efficiently manage the fiscal complexity of your organization.

Finally, once the setup is complete, the process is run, i.e. the balances are reclassified.

Configuration and Execution

Configuring the Reclassification Process

Reclassification Configuration Screen

On the Reclassification configurations screen you can create new Reclassification configurations and browse the already created ones.

You can also refresh the screen using the Refresh button to see if any new changes or configurations are available.

For information on how to configure a new Reclassification configuration refer to the tutorial below.

To view the details of an existing configuration, click the three dots in the Actions column and choose View configuration. You will be redirected to the details screen where you can:

  • View the details of the configuration
  • Edit the configuration
  • Clone the configuration
  • Delete the configuration

Reclassification Assignment Screen

On the Reclassification assignment screen you can:

  • Assign configurations you created on the Reclassification configurations screen to Accounting Base/Subledger Node combinations
  • Browse existing configuration assignments in the grid
  • Edit an existing assignment
  • Use the Refresh button to see if any new changes or configuration assignments are available.

For information on how to assign a configuration, refer to the tutorial below.

Tutorials

  1. Go to Accounting Configurations > Reclassification > Reclassification configuration.
  2. Click Create new configuration.
  3. Type a unique Configuration name for the Reclassification configuration.
  4. From the drop-down list, select the Journal Type of the Journal that will be created and posted as the result of running the Reclassification process.
  5. Select the Dimension set that will procide filtering attributes for reclassification rules.
  6. You can optionally add a Configuration description.
  7. In the next section you will create rules for your configuration:
    1. Type a unique Name for your rule.
    2. Select the Account Codes of the Accounts for which you want to run the Reclassification process from the drop-down list. You can select multiple Accounts.
    3. Select the filtering attributes from the drop-down list. This list consists of attributes from the selected Dimension Set, excluding Systemic Fields, and a “Balance” attribute that allows you to setup matching criteria for Balances.
    4. Select the Offset account from the Chart of Accounts in the drop-down list. This is the account which will be used to balance any amounts from the Account(s) you defined in the previous step.

      You cannot use the account that you configured as a source Account.

    5. If you want to configure multiple rules for your configuration, click + Add new rule to add another one.
  8. Click Save configuration to save your configuration, or Cancel to discard.

Once you have defined Reclassification configurations, you need to assign them to an Accounting Base/Subledger Node combination to be able to run the Reclassification process.

  1. Go to Accounting Configurations > Reclassification > Reclassification assignment.
  2. Click Edit assignments.
  3. Select the Accounting Bases/Subledger Node combination for which you want to assign a Reclassification configuration, then select the configuration from the drop-down list. You can select multiple configurations.

    You cannot assign two configurations which operate on the same accounts to one Accounting Bases/Subledger Node combination. This will cause an error to be thrown.

  4. Multiple selection
    1. You can also select multiple Accounting Base/Subledger Node combinations using the check list in the first column on the left.
    2. From the drop-down list at the top of the screen, select the reclassification configuration. You can select multiple configurations.
    3. Click the Assign for selected button.
  5. Click Save changes to save your changes, or Cancel to discard your changes.

Running the Reclassification Process

Reclassification Screen

On the Reclassification screen you can run the Reclassification process.

The screen includes:

  • The Run button - click it to start the Reclassification process
  • A grid which comprises:
    • Information about Accounting Base and Node combinations and Reclassification Configurations assigned to the given combination
    • Last run status - status of the last run
    • Last run for - the date for which the given Reclassification was run
    • Last run at - the timestamp for when the Reclassification run was started
    • Actions - the Actions column allows you to perform the following:
      • Rerun - rerun the cleardown for the date in the Last run for column
      • Open journals - redirects you to the Journals screen in the Subledger, where the system automatically runs a query based on the Ingestion ID of the Journals which were created by the reclassification process
      • View errors - if a run is unsuccessful, you can view the errors in a pane that will open on the right-hand side of the screen.

Tutorials

  1. Go to Subledger > Reclassification.
  2. Select the Accounting Base/Subledger Node combination for which you want to run the reclassification.

You can run reclassification for multiple selections.

If you have multiple configurations assigned to one Accounting Bases/Subledger Node combination each configuration will have a separate row in the grid and will have to be run separately.

  1. Click the Run button to perform Reclassification.

Watch a Video about Reclassification