Reason code Definition – An overview

Introduction

In a business organization, every business operation will have a specific reason assigned to it. Based on this logic the Reason Code Definition component evolved. The basic functionality of this component is to assign standard reasons for the operations in the business organization.

 For example: In a normal Sales cycle the seller may have the policy of issuing Invoice only when the actual payment is received. So when he receives a check with regard to payment he may advice his sales personnel to issue Invoice only when the check is realized. For this purpose he may use standard reason definition like “Hold”. So under reason definition component where ever “Hold “ is used he may assign the description “Hold the Invoice until the check is realized “. So by this way the seller can reduce the number of Instructions he would normally give to his sales personnel.

To take another example in case of Debtors ledger, as a normal business practice the customer’s account will be credited as soon as the check is received from him. If the check bounces when it is presented, a reversal entry will be passed. For this purpose the finance personnel has to give a long narration. Instead if these narrations are standardized, he has to just give the reason code like “Bounce”, corresponding to which the relevant reason description would have been already assigned, which in turn makes the work simpler.

How does the component function:

• Creation of a reason code:

To assign a reason definition the user has to select a component and a transaction type and event applicable for that component name. Then he has to define a reason code and a description in the relevant controls as the case may be and save the reason, so as to standardize it.

• Usage of Reason code:

To use the reason code, the relevant component and activity in the picture has to contain the reason code feature. If the component and activity has the reason code feature then by going to the relevant activity the user has to just select the required reason for the specific business function from the reason combo.

Feature Highlights

• Define Reason code and description for Every Component –Transaction-Event combination.

• Make the Reason definition in Active –Inactive status.

• Defaulting a particular Reason code.

List of Activities