Without proper account assignment, orderly financial accounting would be impossible. But what does it actually involve? And how does this process work in practice?
What Is Account Assignment?
Account assignment means assigning a document or business transaction to a specific account in the chart of accounts. It determines how an invoice, a cash transaction, or a posting is recorded in the system.
In short: This assignment is the preparation for the actual posting.
Why Is Account Assignment Important in Accounting?
Because it is critical for:
- Order and traceability: Every transaction is clearly linked to an account.
- Compliance and audits: Accurate assignment is essential for correct financial statements and audits.
- Automation: ERP systems or document management systems (DMS) rely on assignment to process postings automatically.
Without proper assignment of accounts, errors in the balance sheet and compliance risks can occur.
How Does this Assignment Work?
The principle is simple: every document is linked to an account.
Example: An incoming invoice for office supplies is assigned to the “Office Supplies” account.
The steps:
- Review the document (type of transaction, amount, tax).
- Select the appropriate account from the chart of accounts.
- Add additional details such as cost center or tax code.
Central to Assignment: The Chart of Accounts
The chart of accounts is the foundation of account assignment. It contains all accounts relevant for bookkeeping – structured according to account frameworks (e.g., SKR03 or SKR04).
It ensures that assignments are standardized and transparent.
How Are Documents Assigned?
- Manual: The clerk selects the account and adds the details.
- Automated: Modern systems use rules or AI to suggest assignments.
- Hybrid: Pre-assignment by the system, final review by the employee.
Pre-Assignment
Pre-assignment is a preliminary step in assignment. It often happens automatically, for example through OCR (Optical Character Recognition) in a document management system.
The system suggests accounts that are later reviewed and confirmed. This saves time and reduces errors.
What Is the Difference Between Posting and Account Assignment?
Account assignment is the preparation for posting. In double-entry bookkeeping, this means: every transaction is assigned so that it can later be correctly posted to debit and credit. Without proper assignment, accurate double-entry bookkeeping is impossible.
- Assignment of accounts: Preparation – linking the document to an account.
- Posting: Execution – the transaction is finally recorded in the general ledger.
Example:
An invoice is assigned (account “Office Supplies”). Only after posting does it appear in the balance sheet.
Conclusion
Account assignment is more than a technical step – it is the foundation for accurate bookkeeping, automation, and compliance. Proper assignment lays the groundwork for efficient processes and reliable financial data.