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DIRECTOR GENERAL AUDIT & ACCOUNTS TRAINING INSTITUTE, LAHORE.

SAP ERP FINANCIAL


MANUAL 1
TFIN50_1
Compiled by Mr. Muhammad Akhlaq Khan, F.M.

These notes are prepared from the SAP ERP Financial Manual 1 during SAP
training at SIEMENS Academy, Islamabad, during November-2014.

Summary of TFIN50_1

Compiled by

Muhammad Akhlaq Khan


FM/AO. AATI, Lahore

Short Contents
UNIT-1 BASIC SETTINGS...............................................................................7
LESSON 1.1 ORGANIZATIONAL UNITS.................................................................................7
LESSON: 1.2 BASIC SETTINGS IN GENERAL LEDGER ACCOUNTING.................................13
LESSON 1.3 VARIANT PRINCIPLE.................................................................................15
LESSON 1.4:-FISCAL YEAR.............................................................................................. 15
LESSON: 1.5 CURRENCIES.......................................................................................... 18
UNIT-2 MASTER DATA..................................................................................21
LESSON 2.1: GENERAL LEGER ACCOUNTS:............................................................................21
CHART OF ACCOUNTS:..................................................................................21
COLLECTIVE PROCESSING:.................................................................................................. 31
LESSON 2.2 PROFIT CENTER AND SEGMENT.......................................................................33
LESSON: 2.3 CUSTOMER / VENDOR ACCOUNTS......................................................................35
COMPARE MASTER DATA:................................................................................................... 36
UNIT 3 DOCUMENT CONTROL.....................................................................42
LESSON 3.1DOCUMENT STRUCTURE..................................................................................42
FIELD STATUS VARIANT:..................................................................................................... 47
LESSON:3.2 POSTING PERIODS.......................................................................................49
LESSON-3.3POSTING AUTHORIZATIONS..............................................................................51
LESSON:-3.4 SIMPLE DOCUMENT IN FINANCIAL ACCOUNTING....................................................52
UNIT-4 POSTING CONTROL..........................................................................54
LESSON: 4.1 DOCUMENT SPLITTING:................................................................................54
LESSON: 4.2 DEFAULT VALUES........................................................................................58
LESSON: 4.3 CHANGE CONTROL.....................................................................................60
DOCUMENT CHANGE RULES:............................................................................................... 60
LESSON 4.4 DOCUMENT REVERSAL..................................................................................61
LESSON 4.5 PAYMENT TERM AND CASH DISCOUNT..............................................................63
LESSON 4.6 TAXES....................................................................................................... 68
LESSON 4.7 CROSS-COMPANY CODE TRANSACTIONS...........................................................70
LESSON:- 4.8 REAL-TIME INTEGRATION.............................................................................72
UNIT-5 CLEARING.........................................................................................73
LESSON 5.1 OPEN ITEM CLEARING....................................................................................73
LESSON:-5.2 INCOMING AND OUT GOING PAYMENTS............................................................77
LESSON:-5.2 PAYMENT DIFFERENCES...............................................................................81
LESSON :5.3 EXCHANGE RATE DIFFERENCES......................................................................86
UNIT-6 CASH JOURNAL..................................................................................87
LESSON 6.1 CASH JOURNAL CONFIGURATION:.....................................................................87
LESSON :-6.2 CASH JOURNAL TRANSACTIONS....................................................................89

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Summary of TFIN50_1

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FM/AO. AATI, Lahore

TABLE OF CONTENTS

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FM/AO. AATI, Lahore

UNIT-1 BASIC SETTINGS...............................................................................7


LESSON 1.1 ORGANIZATIONAL UNITS.................................................................................7
Client.......................................................................................................................... 7
Technically............................................................................................................................ 7
Commercially:....................................................................................................................... 7
Logging on........................................................................................................................... 7

Organizational Units in SAP ERP Financial..................................................................7

Company Code..................................................................................................................... 8
Creating a Company Code:................................................................................................ 8
Company code information.................................................................................................. 8
Company Address:............................................................................................................... 8
Currency:.............................................................................................................................. 8
Country Key:......................................................................................................................... 9
Language Key:...................................................................................................................... 9

Enabling Business Area Financial Statements............................................................9


Country Templates:..................................................................................................10

Contents of Country Template:........................................................................................... 10

Information on organization objects:........................................................................11

Company Codes:................................................................................................................ 11
Business Area:.................................................................................................................... 11
Other important organizational units in Financial Accounting:............................................11
Business Area............................................................................................................. 11
Profit center:.............................................................................................................. 11
Segment:................................................................................................................... 11
Company:................................................................................................................... 11
Functional Area:......................................................................................................... 11
International Accounting Requirements:.............................................................................12
Controlling Area (CO):......................................................................................................... 12
Cross Company Codes:....................................................................................................... 12

LESSON: 1.2 BASIC SETTINGS IN GENERAL LEDGER ACCOUNTING.................................13


Ledgers and Ledger Approach in New General Ledger Accounting:....................................13
Accounts Approach............................................................................................................. 13
Assignment of scenarios..................................................................................................... 14

LESSON 1.3 VARIANT PRINCIPLE.................................................................................15


The Variant Principle:.......................................................................................................... 15

LESSON 1.4:-FISCAL YEAR.............................................................................................. 15


Fiscal Year:............................................................................................................... 15
What are Special periods?.................................................................................................. 15
Types of Fiscal Years:-......................................................................................................... 16
Year Independent:.............................................................................................................. 16
Year Specific:...................................................................................................................... 17

LESSON: 1.5 CURRENCIES.......................................................................................... 18


Currency key must be assigned......................................................... (page 58)
18
Exchange Rate Types:......................................................................................................... 18
Currencies and Exchange Rate type:.................................................................................. 18
Maintaining Exchange rates............................................................................................... 18

1- Inversion............................................................................................................. 18

1.
Inversion:................................................................................................................... 18
2.
Exchange rate Spreads.............................................................................................. 18
3.
Base Currency............................................................................................................ 19
Direct and Indirect Quotation of Exchange Rates:...............................................................19

Maintaining Exchange Rates using table TCURR:..................................................19

Design of Exchange Rate in Different Quotations:..............................................................20

UNIT-2 MASTER DATA..................................................................................21


LESSON 2.1: GENERAL LEGER ACCOUNTS:............................................................................21
Chart of Accounts:.............................................................................................................. 21

Variant Principal:...................................................................................................... 21
Defining the Chart of Accounts................................................................................21

Specific Information includes:............................................................................................. 21


General Information includes:............................................................................................. 21
Controlling Integration includes.......................................................................................... 21
Consolidation...................................................................................................................... 22
Status:................................................................................................................................ 22
Assigning Chart of Accounts:.............................................................................................. 22
CHART OF ACCOUNT NUMBER............................................................................................ 22

General Ledger Account:..........................................................................................22


1.

The Chart of Account Segment................................................................................... 22


General Ledger Account Text:......................................................................................... 23
Chart of Account Segment Consists of several group of fields:.......................................23
Type / Description........................................................................................................... 23

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Summary of TFIN50_1

UNIT-1

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Muhammad Akhlaq Khan


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Basic Settings

Lesson 1.1 Organizational Units


Client
ASAP ERP systemhas only one repository (storage area) that reflects the
runtime environment in which customers data is created and maintained.
The repository contains subdivisions called clients.

Technically
Each client is an independent unit with its own master records and a
complete set of tables and data.

Commercially:Commercially the client is a corporate group.


In other words in the SAP environment, a client is the partitions in SAP
System
From release 3.0, SAP delivers three clients that are identical with regard
to contents.
Client000 is the SAP reference client continuously extended
and must not be changed by customers it can be used as a
backup copy.
Client001 Copy of Client 000 with the exception that
customers can make changes in it. (Customizing)
Client066 Reserved for SAP Excess to customers systems to
provide remote diagnosis services such as Early Watch
Client 000 contains the following default settings:
Organization Specific Data It has an example for each organizational
unit. The key for organizational specific data is uniform, 01, 001 and so
on.
Organization Independent Data Client 000 contains extensive default
settings so that you can actually start operating with a lot of these
things.

Logging on To log on client you have to provide 3 digits key. A client


must contain user master record.
This defines the client in which you want to work. All entries are stored
and processed separately by client. The access authorization is assigned
separately by client (there are a few client-independent tables)
HINT: If several participants are using one PC, they should agree on a
common password and remember that password is case sensitive.

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Organizational Units in SAP ERP Financial


In the SAP ERP system hierarchyclient is the highest level.
Specifications or data that is valid for all organization units in SAP ERP
application are entered at client level. This eliminates the need to enter
information more than once. Technically each client is an1independent unit
with 2separate master records and 3a complete set of tables and data. In
business terms, a client level often corresponds to that of a corporate
group or group of affiliated companies. User must enter a client key and
have a user master record in the client in order to log on to the system.
Company: Bellow the client we give second highest level to the Company
the organization to which SAP software is to be provided. Company is
recognized with six characters key.

Company Code The most important unit of financial accounting is the


company code.
A Company code isan independent balancing or legal accounting entity.
Financial statements required by law can be created at company code
level. Thus a company code is the minimum structure necessary in SAP
ERP Financial. It consists of maximum 4 Alpha Numeric Characters.
Explanation: An international business may have operations scattered across
numerous countries, and every country authorities require registration of a legal
entity for tax and other purposes. In such a case a separate company code is
usually created per country. Usually one company is represented by one
company code.

Every organization or Organizational Unit for which financial


statements are to be created must be stored as a company code
in the SAP System.

Creating a Company Code:Easiest way to create a Company Code


is to copy a similar existing company code and then make changes to the
new company Code.
What is Copied:

Definition Name, Address


Global Parameters Currency, Language, Fiscal Year, CoA, etc,
Customizing TablesTables in which data of the organizations business
transactions is saved.
Accounts and the CompanyCode segment if desired.
Account Determination

Note: Controlling area will not be copied.

Hint: SAP recommends this procedure since copying means that lots of
tables are already filled with SAP default data and only have to be
adjusted if necessary.

Hint : The (IMG) suggests the following order:


Copy, Delete, Check Company Code
Edit Company Code Data.
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IMG stands for Implementation Guide and can be accessed by T CodeSPRO.SPRO is a


standard SAP transaction. Its stands for SAP PROJECT REFERENCE OBJECT. This
transaction is used for customization setting in SAP.

Hint: Use of the copy function is optional. You can also define the
company code and carry out the configuration yourself, without using a
reference company code.

Company code information:Company Code Key should be up to 4


alpha numeric characters which identify the company code.

Company Address: Address is required for correspondence.


Currency:Accounting Currency defined in company codes becomes local
currency; all other currencies are treated as foreign currency. Business
transactions in foreign currency are translated to local currency.

Country Key: Country key specifies the country of the company code.
The system interprets all other countries as foreign countries.
This is important for example, in payment transactions since different
regulations have to be considered for foreign payment transactions than
for domestic payment transactions. This setting enables you to prepare a
different address for foreign correspondence.

Language Key:Texts are automatically displayed in the correct


language.

Defining a company code includes:


4 Character company code key
Company name
Address
City
Country
Currency
Language Defining of Language key helps the system to create
texts automatically in the correct language.

Global parameters include(to see list go to T code OBY6)


Chart of Accounts
Fiscal year
Company code defaults includes Discount rate instructions, Tax
rate. These instructions remain unchanged for all transactions in a
company code.

Global Parameters given in TcodeOBY6


1. Company
3. Credit Control Area Variant

2. Chart of Account Variant


4. Company Code is Productive
(Tick)

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Summary of TFIN50_1
5. Document entry screen variant
7. Posting Period Variant
9. Work Flow Variant
11. Cost of Sales Accounting (Tick)
13. Cash Management Activated
15. Fm Area
17. VAT Reg. No.
19. Define Default Value Date

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6. Field Status Variant


8. Max Exchange Rate Deviation
10. Controlling Code = Controlling
Area
12. Negative Posting Permitted
14. Country Chart of Account
16. Fiscal Year Variant
18. Proposed Fiscal Year
20. Enable amount Split.

Enabling Business Area Financial Statements


In order to be able to create financial statements for business areas, the
field for the business is in the line item must be ready for input. In activity
Enable business Area Financial Statements,you can set the indicator for
the business area field for each company code.
Business Area: are defined at client level. They are not assigned to a
company code Using Transaction code SE17 you can call up table TGSB
which contains all the business areas of the client.
When you define a business area. You only have to enter a four digit
alphanumeric key and a short description.
Segments have ten characters. Segment defines area of responsibility
it may contain a little area or more than one business area, segments
have ten characters while, Companies have six characters (either
numeric or alphanumeric). For Segment reporting concept of Profit
Center is to be adopted in place of business area. Business area is old
concept and Profit Centre is the new concept.

Country Templates: SAP serves more than 40 standard countries


which can be used for configuring the business activities of a specific
company.

In SAP standard system, Company Code 0001 is template for a general


company code with the International Chart of Accounts INT and no special
country specifications.
If you need a company code for a country that have a country Template,
you can use the country installation program to copy the country-specific
tables from the country template to company code 0001. Company code
0001 is then configured for the corresponding country. You should then
copy this company code in to new company code. You may then start the
country installation program again to create a template for another
country.

Contents of Country Template:


Cross Application: Calendar setting, factory calendar, public
holidays, and so on
FI: Tax on sales and purchases calculation procedure, withholding tax,
account determination, charts of account (INT is offered for countries
with no specifications), Financial statements versions, Customizing
settings for the payment program, payment methods and sample
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house banks, formats for the electronic account statement, valuation


approaches and so on.
CO: Cost elements, standard hierarchies for cost centers, profit
centers and so on.
Other country specific templates for other areas.
Caution :Never use company Code-0001 as your productive company
code, as some of the templates are not available for it in Release 4.7.In
SAP ERP standard system, Company code 0001 is a template for a general
company code with the international chart of accounts and no special
country specifications.
Hint: The country installation program is defined with reference company
code 0001. It cannot be changed in customizing.
Definitions taken from NET
ERP stands for Enterprise Resource Planning and
ECC stands for Enterprise Central Component.
IMG stands for Implementation Guide.

The below content is taken from wikipedia,


SAP R/3 is the former name of the main enterprise resource planning software produced
by SAP AG. It was renamed SAP ERP. It was later renamed Enterprise Central Component
or ECC. SAP is an Enterprise Resource Planning software.SAP ECC 5.0 ERP is the
successor of SAP R/3 4.70. The newest version of the suite is MySAP 2005 or SAP ECC
6.0.

Information on organization objects:


Company Codes:It is possible to distribute companies over several
company codes (e.g.to map branches or plants in other countries). Usually
one company is represented as a company code.

Business Area:If customers have heard the sentence Business area


are being discontinued this in not correct. The correct formulation is
Business area functions are not being further developed. Business areas
are revaluated with the new general ledger accounting as this can be
completely balanced by document breakdown and, therefore, can be used
for external purposes.

Other important organizational units in Financial


Accounting:
Business Area: Represents a separate area of operation with an
organization and can be used across company codes. They are
balancing entities that can create their own set of financial statements
for internal or external purposes. It is, therefore, possible to save and
evaluate transaction figures for each business area.

Profit center:The profit center invoice evaluates the success of


individual independent areas within a company. These areas are
responsible for costs and revenue. The aim of profit center invoice is to
provide an internal analysis of profits. From an Accounting point of view
it must be determined whether only a profit and loss statement at
profit center levels is to be created (document breakdown not active)
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or whether a financial statement is also to be created(document


breakdown active).

Segment: According to international accounting principles (IFRS-8


and SFAS-131) companies are obliged to provide information in their
reports on the financial results of business segments (Operation
segments) This is conducted using the Management Approach which
requires that segment information from internal reporting is
constructed in the same way that this information is used to make
decision on the allocation of resources to segments and to evaluate
performance.Segment have ten characters.

Company: Companies are used as a basis of consolidation functions


for financial accounting in the SAP System. A company can contain one
or more company codes. The usage of these is part of preparations for
consolidation. Company has six characters. Usually one company is
represented by one company code.

Functional Area: In Cost of Sales accounting, operating costs are


stored according to function (Selling, administrative and so
on).Controlling Area (CO) is used in place of company where
internal accounting (cost accounting) and internal reporting is highly in
use and costs from one controlling area are frequently transferred from
one controlling area to the other.
The use of Business area, profit center, segments, companies and
functional area is intended to suit the requirements of customers internal
and external accounting. Unlike company code, the use of these objects is
optional.
The most important question for selection of organizational objects used
in accounting are:
What is the most important accounting principle in my enterprise?
According to which accounting principles are figures reported internally
/externally in my company?
Does my company structure its Profit & Loss statement according to
total costs or the cost-of-sales accounting?
Is my company obliged to issue segment reporting according to the
law?
Does my company have to issue a consolidated financial statement?
The answer to these questions form the basis for the decision as to which
organizational objects are to be used and defined and are taken as
templates form financial accounting.

International Accounting Requirements:


Customer who wishes to draw up financial statements by business areas,
profit centers or segments have to activate document breakdown.
If profit center accounting is to be used as traditional profit center
accounting, the segments can be derives with a BAdl implementation. If
the profit center is used in the logic of the new general ledger accounting
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(activated with scenario) traditional profit center accounting cannot be


used in parallel.

Controlling Area (CO): The controlling area is the most important


organizational element in controlling. It identifies a self-contained
organizational structure for which costs and revenues can be managed
and allocated. It represents a separate unit of cost accounting.
More than one company code can be assigned to one or more controlling
areas. This enables a cross-company code cost accounting between the
assigned company codes, subject to the condition that they are using
same operating chart of accounts and same fiscal year variant.
Usually controlling areas are set up by controlling employees. However, as
there are important relationships between financial and management
accounting we will also regard this area as a whole.
In controlling area SAP always recommends using cross country code
cost accounting unless there are particular grounds for not doing so.

Cross Company Codes: are used for recording transactions of


transferring costs from one controlling area to the other.

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FM/AO. AATI, Lahore

Lesson: 1.2 BASIC SETTINGS IN GENERAL LEDGER


ACCOUNTING
Ledgers and Ledger Approach in New General Ledger
Accounting:

Each client has one leading ledger while additional non leading ledgers
are used for other requirements. Non leading ledgers may be one or
more than one.

Leading ledger is denoted by 0Land its contents are saved in the


table named as FAGLFLEXT with the standard system, while non
leading ledger may be denoted by 1L, 2L etc.

Different Accounting principles(GAAP, IFRS, etc.) are built in the SAP,


while deciding leading and non leading ledger one should also select
the accounting principles.

Same or different accounting principles can be chosen for leading


ledger and non leading ledger and it is called PARALLEL ACCOUNTING.

This is known as the ledger approach in the new General Ledger. Note
that it is not necessary to define an additional ledger per company
code for each local accounting principle, a non leading ledger is
sufficient for the purpose.

If you use multiple ledgers, you have the option of defining a different
fiscal year in non-leading ledgers.

There is exactly one leading ledger! The values only from the leading
ledger can be posted to CO (CO: Cost elements, standard hierarchies
for cost centers, profit centers and so on).

Accounts Approach

In addition to ledger approach there is also the accounts approach.

In this approach different valuation approaches and valuations are


posted to different accounts.

When financial statements are prepared system decides which


accounts are relevant and need to be evaluated for IAS.

Points to be highlighted for two approaches are given below:

Accounts Approach

Ledger Approach

Specific Account areas for each GAAP


> complex chart of accounts
structure

No specific account areas > no


change to chart of accounts

At least one retained earnings


account for each GAAP

Only one retained earnings account


for all GAAPs

Complex financial statements


definition

Standard financial statement


definition

Relevance of posting for local /


international GAAP specified at
account level.

Relevance of posting for local /


international GAAP specified at
document level

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All evaluation approaches can be


posted to controlling

Muhammad Akhlaq Khan


FM/AO. AATI, Lahore

Only the leading valuation can be


posted to controlling.

Assignment of scenarios
Scenario means state of affairs, picture. A scenario defines which fields
are updated in the new G/L ( in General Ledger view and the new G/L
Tables) during a posting.
A leading ledger can be assigned one or more scenarios (even all six)
Six Scenarios are:
1. Cost Center update (FIN_CCA)
o

Update of sender cost center and receiver cost center fields (when we make a
posting in the General Ledger accounts new G/L shall up-date table on the basis
of Cost centers)

2. Preparation of Consolidation (FIN_CONS)


o

Updation of consolidation transaction type and trading partner fields (when we


make an entry in G/L accounts the system transfer it according to the given
scenario for consolidation)

3. Business Area (FIN_GSBER)


o

Update of sender cost center and receiver business area fields (when we make
an entry in G/L it should split according to given business area in New G/L
tables)

4. Profit center update (FIN_SEGM)


o

Update of profit center and partner profit center fields (entries should split
according to Profit Center thus make them capable to prepare their own Financial
Statements)

5. Segmentation (FIN_SEGM)
o

Update of segment, partner segment and profit center fields.

Update of sender cost center and receiver functional area fields.

6. Cost-of Sales accounting (FIN_UKV)


No one can define his own scenarios except given above.
These scenarios are available in Customizing and can be assigned
to legers.
The fields that are updated by the scenarios can be used to map certain
business situations, such as segment reporting.
You do not have to define non-leading ledgers which means scenarios
have not to be assigned to non leading ledgers either.
IMPORTANT you do not need a ledger for each scenario.
Multiple non leading ledgers are useful for portraying accounting with
different accounting principles

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Lesson 1.3 VARIANT PRINCIPLE


Definition: In SAP ERPa variant is that which appears in several

configuration tables and that simplifies the system for customers.


Variant principle is a three step method, used to assign special
properties to one or more SAP ERPobjects.

Guidan
ce for
Instruct
or

The advantage of variant principle isthelow level of maintenance


required in the system, e.g. fiscal year variant.
Instead of defining the fiscal year for company codes, proceed as follows:

Define variant Fiscal year (K4) K4 is the standard key for

Determine values for the variant (K4) (01/01 - 12/31 or

Assign variant(K4 ) to the SAP ERP object (n company codes)

fiscal year.

07/01 06/30)

means number of company codes.

The Variant Principle:


The variant principle is a three step method used in the SAP system to
assign particular properties to one or more objects. The three steps are
1-

Define the variant

2-

3-

Assign the variant to the objects

Determine values for the variant

The variantprinciple is used for


Field status
Posting period
Fiscal years

Lesson 1.4:-

FISCAL YEAR

Fiscal Year:
A fiscal year is usually a period of 12 months for which a company
regularlycreates an inventory, financial statements and P&L Statements.
Fiscal year variant is created according to the variant principle.i.e. Define,
Determine Values, Assign Variant.

What are Special periods?


In order to ensure that you can compare the closing months with the other
periods of fiscal year you make closing postings in special periods.
Maximum four special periods can be included.
For example Four Special periods could be comprised as follows: Ordinary
functional period 12 months. Period 13= accrual deferral postings, period
14= audit postings, period 15=General meeting of share holders and
period 16=adjustment postings.
Postings in special periods are made subject to four conditions:
Posting date must be in the last posting periods (irrespective of
whether this last posting period is open or closed)
Special period must be open for posting.
Special period must be entered manually when posting.
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The authorization to post in special periods must be given. (optional).


HINT: Fiscal year variant is K4, other variant where the fiscal year is the
same as the calendar year K1,K2,K3.

Types of Fiscal Years:-

Year independent:The number and start and end dates for the
periods are the same for every year. It may be a calendar year or noncalendar year.

Year-specific:Period can vary from year to year also called year


dependent.

To assign business transaction to different periods, you have to


define a fiscal year with posting periods. Fiscal year is defined as
variant that is assigned to company code.

The fiscal year variant contains the definition of posting periods and
special periods. Special periods are used for posting that are not
assigned to time periods, but to the business process of yearend
closing.

In total you can define 16 periods.

System derives the posting period from the posting date. If the
posting date falls within the last normal posting period, you can post
the transaction in one of the special periods.

Standard Fiscal Year variant are already defined in the system and you can
use them as templates.

Standard settings (Net search)


The following fiscal year variants have been created in the standard system:
1.

Variants in which the fiscal year is the same as the calendar and has up to four special periods

2.

Variants for shortened fiscal years. For more information on shortened fiscal years, see "Defining
shortened fiscal years".

3.

Variants for non-calendar fiscal years:


April to March with four special periods
July to June with four special periods
October to September with four special periods
Variants that are set up on a weekly basis. These variants can only be used in the Special
Purpose Ledger application.

HINT: The fiscal year variant does not specify whether a period is open or
closed. The date is managed in another table. The fiscal year variant only
defines the number of periods and their start and finish dates.

Year Independent:
Year Independent Fiscal year means The number and start and end dates for each period are the same for every
year example for this is a calendar year

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If the calendar year is defined as fiscal year, the posting periods are
equal to the months of the year. Therefore, a calendar year must
have 12 posting periods.

If the fiscal year is defined as non calendar year, you have to define
posting periods by assigning end dates to each period. A non
calendar year can have between 1 and 16 posting periods. If the
non calendar year does not start on January 1st the period of the
year that belongs to the former or the coming fiscal year must have
an indicator -1 or +1.

July
August
September
October
November
December
January
February
March
April
May
June

0
0
0
0
0
0
-1
-1
-1
-1
-1
-1

If the fiscal year differs from the calendar year, but the posting
periods correspond to calendar months, the day limit for February
should be 29 to consider leap years.

Fiscal years are normally year independent.

Year Specific:
Year dependent means the start date and end dates of posting period may vary from year to year and some also
number of posting periods may use differently for different years

A fiscal year has to be defined as year specific if one or both of the


following conditions are fulfilled:
The start and end date of the posting periods of some fiscal years will
be different from the dates of other fiscal years.
Some fiscal years use a different number of posting periods.
If all of the fiscal years of a fiscal year variant have the same number of
posting periods, only the different period dates for the different years
have to be defined.
If one fiscal year variant have less posting periods than the other, it is
called a shortened fiscal year. This is required if closinghave to be carried
out before the end of the normal fiscal year (company sold) You have to
define the shortened fiscal year and its number of posting periods before
you can define the period dates. For this year you can only assign a lower
number of posting periods.

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Lesson: 1.5 CURRENCIES


Currency key must be assigned

(page 58)

In SAP ERP system currency is defined at the company code level.

Exchange Rate Types: The system uses exchange rate type M for
currency translation during document posting. This entry must exist in the
system.
Other examples of exchange rate types are:
B for Bank Selling Rate
G for Buying Rate
O for basket currencies.
X for third country currencies.

Currencies and Exchange Rate type:


A currency key must be assigned to every currency used. Most currencies
are already defined in the SAP System with standard international
currency keys. Each currency key can have a validity date (after that date
SAP system will not record any transaction in that currency). (Currency key
should be of three characters e.g. PKR, EUR, USD, GBP, etc.)

For every combination of two currencies, you can maintain different


exchange rates which are distinguished by an exchange rate type. These
different exchange rates can be used for various purposes such as
valuation, conversion, translation and planning.
The relationship between currencies must be maintained per exchange
rate type and currency pair using translation ratios. This usually has to
be performed only once.
Inflation heavily influenced the relationship between currencies.
Therefore, their translation ratios can be maintained on a time period
basis.

Maintaining Exchange rates


Maintaining Exchange rates is an ongoing task. To reduce maintenance,
SAP ERP offers several tools, by using one of them you can reduce the
amount of work involved in the exchange rate maintenance. These tools
are given bellow:
1- Inversion, 2- Exchange rate Spreads and 3- Base currency.
1.

Inversion:
This has the effect that if an entry is missing for an exchange rate, you
can use the inverse exchange rate relationship to translate from one
currency to another. (It is the oldest one and is seldom used now).

2.

Exchange rate Spreads


It is the Constant difference between the average rate and the buying
rate, or between the average rate and the bank selling rate.Exchange rate
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spread is subtracted from buying rate or added to (Bank selling rate) the
average rate.
Between the banks buying / selling rate and average rate usually remain
constant. If exchange rate spread of an exchange rate type is entered in
the system, you only have to maintain the average rate since the buying
and the selling rate can be derived by adding / subtracting the exchange
rate spread to /from the average rate.
3. Base Currency.
Currency key which should be used for all foreign currency translation for
the exchange rate type in question.
A base currency can be assigned to an exchange rate type. In this case
you only have to maintain exchange rates for all other currencies into the
base currency. A translation between two foreign currencies is calculated
via the base currency i.e. by combining the two currency rates.
HINT: You can use one of these tools for each exchange rate type. You can
however use different tools for different exchange rate types.

Direct and Indirect Quotation of Exchange Rates:


All SAP ERP applications process exchange rates using direct as well as
indirect quotations. Defining the exchange rate using direct or indirect
method of quotation depends on market standard or the individual
business transaction. The use of indirect quotation is neither application
nor country specific. It affects all the components in which exchange rate
are use.
In Direct quotation one unit of foreign currency is quoted for the local
currency. Whereas in indirect quotation one unit of local currency is
quoted for the foreign currency
Example: 1 . Local currency EUR, foreign currency =USD then
Direct quotation is =

1 USD = 1.3663 EUR

Indirect Quotation =

1 EUR = 0.7897 USD.

Example: 2 Local Currency PKR foreign currency USD


Direct Quotation =

1 USD = 100 PKR

Indirect quotation=

1 PKR = 0.01 USD

Maintaining Exchange Rates using table TCURR:


In many companies the exchange rate table (TCURR) is shared by several
employees. In such a case following problems may occur:

The table (TCURR) cannot be maintained by more than one users


simultaneously.

The table is very large and maintaining it, is very time-consuming


(scrolling is necessary)

Employeesmay maintain the exchange rates with the incorrect


quotation in place of direct quotation and vice versa.
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Employees maintain incorrect exchange rates (unknowingly or un


intentionally)
As of release R/3 enterprise you can define worklists and then maintain
the exchange rates using the transaction TCURMNT. This has the following
advantages.

Parallel processing of different work lists is possible. You can also


assign authorization for work lists

The work list is smaller and therefore clearer.

Only the relevant quotation can be maintained.

Only relevant exchange rates can be maintained.

Business transaction with directly quoted exchange rates


(local currency):
1st Example:
2

nd

Example:

1 USD=1.2663 EUR
1 USD=100 Pak Rupees.

Business transaction with indirectly quoted exchange rates :


1EUR

0.7897 USD and

1PKR

0.01 USD.

Currency /Rate
2nd Example

USD =

/0.7897

USD =

/0.01

Design of Exchange Rate in Different Quotations:


Exchange Rate can be entered as a direct or indirect quotation. You can
maintain two prefixes that can be used to differentiate between direct and
indirect quotation exchange rates during input and display. If you do not
enter a prefix the standard setting is valid:

(Blank, without a prefix) for direct quotation exchange rates.


/ for indirect quotation exchange rate

1st Scenario: If you work mainly with direct quotation and only rarely use
indirect quotation, you should use the standard settings. In this way you
can enter direct quotation exchange rates without a prefix
2nd Scenario: If you increasingly use indirect quotation as well as direct
quotation, you should define an alternative prefix for both:

* for direct quotation and / for indirect quotation


If you follow this suggestion the configuration will not allow you to
enter the exchange rate without a prefix and will give an error
message. Thus the user will be forced to consider which is the
correct quotation and enter the rate with a valid prefix.

3rd Scenario: If indirect quotation is the most widely used notation at your
company, you can configure the settings in this way:

* for direct quotation, and (blank) for indirect quotation.

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This configuration allows indirect quotation exchange rates to be


entered without a prefix and less used direct quotation exchange
rates have to be entered with a prefix.

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UNIT-2 MASTER DATA


Lesson 2.1:

General Leger Accounts:

Chart of Accounts:
CoA is the list of all general ledger accounts. The CoA directory contains
all the charts of accounts for a client.
(page-85)
Examples of CoA:
INT= International chart of accounts based on the Joint Standard
Accounting System (Germany)
IKR=Industry chart of accounts (Germany)
CAUS=Chart of Accounts US (USA)
GFS= Chart of Accounts of IMF.

Variant Principal:
There are three steps required before you use a CoA.
1. Definition of Chart of Accounts
o Chart of Accounts Key
o Description (e.g. Chart of Accounts of ABC Company)
2. Definition of properties (language, length of G/L account numbers,
group chart of accounts, and so on.)
3. Assignment of Chart of Accounts to a Company code.
Chart of Accounts is a VARIANT that contains the structure and basic
information about General Ledger Accounts.
You define a Chart of Accounts with a four character ID
You define the individual component of the Chart of Account e.g.
language, lengths of G/L account number, group Char to of Account,
Status.
The chart of Accounts must be assigned to every company code for which
accounts are to be set up based upon the structure concerned.

Defining the Chart of Accounts


Specific Information includes:
1. Key, of Chart of Accounts (4 characters),
2. Description.

General Information includes:


1. Maintenance language is the language in which account description
are maintained.
2. Length of the G/L Account number may be from 1 to 10 digits.

Controlling Integration includes:While making integration of the


General Ledger Accounts (relating to Profit & Loss accounts) with cost
types, you can determine, as to what extent cost master record is to be
maintained. You can maintain cost types manually or automatically. When
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you save a New General Ledger Account, the corresponding cost type
is created automatically. The pre-requisite, however, is that a default
value for the cost element category is defined for this cost element. If no
default value exists, the system assumes that not cost element is to be
created. (It is advisable to have a manual creation of cost elements.

Consolidation: If two company codes uses different chart of accounts,


while assigning a chart of account system allows you to, also assign
GROUP CHART OF ACCOUNT. Then this account number is used for cross
company code reporting.
If you enter a group chart of account in the chart of accounts, the system
defines that you have to enter a group account number in the
corresponding field in the General Ledger Account definition (required
entry field) and checks whether the group account number you have
entered exists in the group chart of account.

Status: Blocked indicator. (A CoA that is not yet completed can be


blocked so that no company code can be used until it is ready for use.
You can get a directory of the G/L Accounts in your chart of accounts for
information or for documentation purposes via report RFSKPL00. You use
the G/L account plan to display G/L account master data and to print G/L
account list.

Assigning Chart of Accounts:(Tcode for assigning CoA to company


code=OB62)
Every company code must have a chart of accounts assigned to it. One
Chart of account can be assigned to several company codes using variant
principle.
The Controlling component uses the same Chart of Accounts as the
Financial Accounting Component. If company codes intend to use crosscompany code controlling, they must use the same chart of accounts. You
can use report RFSKV00 to view the G/L account directory with chart of
account and company code-specific data.
CHART OF ACCOUNT NUMBER
System uses this number for cross company code reporting.
Cross Company Code: When same CoA is used by more than one Company
Codes it is called cross Company Code.
A Group CoAis required where different Company Codes are uses different CoA
and we are required to prepare a consolidated report for those company codes

General Ledger Account:


A complete General Ledger Account consists of two components:
1. A chart of Accounts segment
2. At least one company code segment

1.

The Chart of Account Segment

The Chart of Accounts contains basic information about the account. The
information for an account is summarized in the Chart of Accounts
Segment.It contains
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Account number (maximum 10 digit, alphanumeric)


Name of the account (as short and as long text)
Control fields ( for example, account group) e.g. Integration with Co.
Consolidation fields (for example unique company ID in group) e.g.
Group CoA.
You can translate Chart of Account in other languages in order to be able
to display the account name in the appropriate logon language when
displaying master data and when posting. If the chart of account has not
been translated into the appropriate logon language, the account name
appears in the maintenance language.
Texts with different information can be assigned to each CoA segment.
General Ledger Account Text:
You can display G/L Account texts using the Account Assignment Manual
report (RFSKTH00). The G/L Account texts are offered again at company
code level. You can also print them using this report.
You can also change the layout of the individual tab pages.
Chart of Account Segment Consists of several group
of fields:
Type

/ Description
Control in Chart of Accounts
Description
Consolidation data in chart of accounts.

Keyword / Translation
Key words in CoA
Translation
Information
Information in CoA
G/L texts in CoA.
Figure on Fields in the Chart of Accounts Segment

Fields in the Chart of Accounts Segment:


The information entered in the CoA segment for a G/L account applies to
all company codes.
You only enter this information once. Whenever you enter information for
company code for an account number, the information from the chart of
accounts segment is accessed automatically, so you do not have to enter
it again.
Texts entered for the CoA segment are managed by text ID and language.
You can display texts using report Assignment manual (RFSKTH00)
You can search for account number using keywords.
You can define and change the layout of the tab pages for the individual
processing of the G/L account master data. You can define:
The number of tab pages
Title of the tab pages
The field groups that you require and their position on the tab pages.
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You can select the layout for central processing, andprocessing in the
CoA and the company code-specific area. The standard system
contains layout for these editing functions (they start with SAP). You
can copy these layouts, adjust them to meet your requirements, and
then assign them to your CoA or your account groups.

2-

Company Code Segment of a G/L Account

The CoA and Company Code segments make up a General Ledger


Account. If an account is not used in a company code, it does not need a
company code segment.
The account is only complete once you have created the company code
segment. You can then post to it in a company code.
Information in the Company code segment is specific for this company
code.
Company Code Segment:
To use one of the accounts from the assigned CoA in your Company Code,
you must create a Company code segment for account. This Company
Code segment is added to the CoA segment, and together they form the
account.
The company code segment contains information that refers exclusively to
the Company Code concern. This information controls the entry of
accounting documents and the management of accounting data.
HINT: If a GL Account is not used in a company code, it doesnot need
company code segment.
Fields of Company Code Segment:
The company code segment for the same General Ledger account can be
different depending upon the requirement of the company code. For
example you set the Tax Category indicator for a specific company code
to include taxes when expenses accounts are used. For other company
codes, you might not set the indicator
You define the information that is relevant to each company code:
1- Currency
2- Taxes
3- Reconciliation accounts Sub-ledger accounts.
4- Line item display-used to display each & every item recorded under
that head of account
5- Sort Key The basis on which I want to sort the data of that account.
6- Field status Group which maybe
o Hidden
o Display
o Required
o Optional
7- House Bank
8- Interest Calculation information
Taxes are managed by text ID and language. You can display taxes using
the report Account Assignment manual.

One Chart of Account Several Company Codes: (page-99)


A chart of accounts segment can be assigned to several company code
segments, But the entries in the company code segment are company

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code-specific and can differ with different company codes (e.g. different
currencies)
Every Company Code that wants to use an account from the assigned CoA
has to create its own company code segment. Because the number and
name of the account is maintained in the Chart of account, the account
has the same name and number in all assigned company codes.

Retained Earnings Account:


It is a part of financial statements. You use the field P&L statement
account type to define the retained earnings to which the balance is
carried forward. You define the key in Customizing. If you have defined
only one retained earnings account in Customizing the P&L statement
account type field is hidden in the G/L account master record.
You can use different retained earning accounts to map different financial
statement standards, within the SAP ERP system.

Balance Sheet and P&L Statement Accounts:


In the chart of accounts segment, you have to specify whether the
account is a Balance Sheet Account orP&L statement Account.
These two types of accounts are treated differently in the closing
procedure.
For Balance Sheet accounts, the balance is carried forward to the same
account.
For profit & Loss statement accounts, the balances are closed to P&L
Account and the balance of it is forwarded to a retained earnings
account and the P& L Account is set to Zero. A key e.g. X is
assigned to the account to which the balanced is carried forward.
You enter this key on the field P&L Statement Type in the chart of
accounts segment.
In customizing, users define the retained earnings account that is
assigned to expense accounts during G/L account master record creation.
If there is only one retained earnings account, the system automatically
uses the one defined in Customizing. If there is more than one retained
earnings account, when you create a master record you can select the
retained earnings account for each profit and loss statement.

Account Groups:
Before you can create accounts in the CoA, you must have account groups
Group Accounts of the same type (material, reconciliation, P&L
Instruct
Statement etc,)
or Guide Control the number areas
Control the field status (Screen layout of the company code
segment)
o Hidden
o Display
o Required
o Optional

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Account Groups of G/L Accounts:

The number ranges of the accounts


(Page106)
The field status of the fields in the company code segment of the
master record.

Since a chart of account contains many different types of accounts, they


can be grouped into different accounts groups. Usually, one account group
groups (combines) accounts with the same tasks within the general
ledger, e.g. Cash accounts, material accounts, assets account, liabilities
accounts, profit & loss accounts etc.
By assigning a number range to an account group, you can ensure that
accounts of the same type are within the same number range. Number

intervals for General Ledger Account master records can


overlap. But remember that number range intervals in the
G/L account area must not overlap.

You must enter the account group in chart of accounts segment; it


controls the appearance of the company code segment of a G/L Account.
For example for all of your cash accounts, you want to be able to display
all of the line items. In customizing for your cash accounts account
group, change the field status to make line item display a required
entry.
SAP ERP DELIVERS PREDEFINED ACCOUNT GROUPS.

What is the purpose of the field Status?

Superfluous field or field groups are hidden ( an asset account does

Guidanc not require, for example, information about interest calculation,


e for
while a bank may require this information).
Instruct Input errors are avoided (for cash account, the line items display
should always be activated in the master record = line item display
or
is defined as a required entry field in the company code segment.)

Field Status:The field status enables you to control the display and
maintenance of an accounts master data.

You can assign fields that you do not use the status Hide.
Fields whose values must not be changed can have the status of
Display (even in change mode)
For fields where you must enter value, you can define the status
Required Entry
Field that can contain an entry, but are not required, can be set to
Optional Entry.

Certain fields are grouped together and their field status is valid for the
entire group e.g. interest calculation indicator, interest cycle, etc.
The fields Account currency and Field status group are always required
entry fields. This status cannot be changed.
You have two options for controlling field status
Account group-specific.
Transaction-specific.

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FM/AO. AATI, Lahore

HINT: Fields which are hidden (suppressed) may contain values and these
values still take effect.
You have two options to controlling the field status:
Account Group-Specific : Used for controlling
Master data of any G/L Account.
Transaction Specific.
:
Used for
controlling the business transactions on that
specific G/L Account Type.

Transaction Specific Field Status:


Guidanc
e for
Instruct
or

You can also control the field status using the transaction (Display Change -Create). This is useful for transaction Change, for example,
if you do not want to subsequently change a field.
In display mode fields are either displayed only or hidden, since no
entries are possible.
The account group-specific and transaction-specific field statuses
compete with each other. The field status with the highest priority
applies.
The following order applies with decreasing priority:
1234-

Hide
Display
Required Entry.
Optional Entry.

HINT: the field status is generally controlled by the account group. Transactionspecific field status is used only if you want to control individual fields differently
via the transaction Change.
If you do not want to use transaction-specific field status, choose Optional
entry for all fields.
HINT: All fields status definitions of an account group in an overview.

The fields displayed in the general ledger account master record are on
the first hand controlled by the account group field status, and secondly
by the transaction specific field status by using transaction specific
controls i.e. Create, Change, display.
If you do not want certain fields to be modifiable after you have created a
master record, specify that a particular field is not modifiable in the
Change Master Data transaction in Customizing. For example, you want
the currency of your cash account to be GBP and you do not want it to be
modifiable. In the transaction Change Master Data in Customizing, assign
the status Display to the relevant field.
For each field, the field status definitions from the account group and the
transaction are taken into consideration and the one with higher priority is
used (starting with the highest) i.e. Hide, Display, Required Entry,
Optional Entry.
Fields that are accessed with the transaction Display Master Data are
always either displayed or hidden since you cannot make an entry in a
display transaction.

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If you do not want to use the transaction-specific control, set the field
status for all fields to optional. Since this field status has the lowest
priority, the account group-specific control shall always be used.

Reconciliation Account:
The reconciliation accountsconnects sub-ledger to the general ledger
real-time. The following sub ledgers are connected to the general via
reconciliation accounts:
Accounts Receivable
Accounts Payable
Assets
Contract Accounts Receivable and Payable.

Reconciliation of the General Ledger with the Sub-ledgers


Guidanc
e for
Instruct
or

The report carries out an extended reconciliation in Financial Accounting.


As part of the monthly general ledger closing, it carries out the following
consistency checks:
1. Debit and Credit transaction figures of the customer, vender, and G/L
accounts with the debit and credit totals of the posted documents
(previous function of report SPF070)
2. Debit and credit transaction figures of customer, vendor, and GL
accounts with the debit and credit totals of the application indexes
(secondary index). The application indexes are required internally in
the system for accounts with open item management or line item
display.
All results of the reconciliation are connected in a history
management. You can therefore make statements about the time of
the report and the correctness of the reconciliation work.
Page-115

Reconciliation accounts:
are general ledger accounts assigned to the business partner master
records to record all transactions in the sub ledger.
All postings to the sub-ledger accounts are automatically posted to the
assigned reconciliation accounts. The general ledger is, therefore, always
up to date.
You define a General Ledger Account as a reconciliation account by
entering one of the following accounts type in the field Reconciliation
account for Account Type:

D for Accounts Receivable


K for Accounts Payable

The reconciliation account is then only valid for the account type
specified.
Typical reconciliation accounts are the Accounts Receivable and Accounts
Payable.
HINT: In the General Ledger amount cannot be posted directly to
reconciliation accounts. That is why they always reconcile with the
transactions made in the Vendors / customers accounts.

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If you want to look at the business partner account assigned to a specific


reconciliation account, you can select the field for the reconciliation
account in the customer or vendor list (RFDKVZ00 or RFKKZV00) via the
free selections.

Line item display (Entry view):


Line items are items that are posted to a specific account. In contrast to a
document item, a line item only contains information relevant from the
account view.
SAP Help: On the initial screen of the line item display, you can use selection
criteria to restrict the number of items displayed. You can also specify on
this screen exactly how the line items are to be displayed.

You can display the following line items in a G/L Account:


Guidanc Open items Open items are the items that are yet to be cleared. These
are the items which are used to clear other line items in the same account.
e for
Items must be balance out to zero before they can be cleared.
Instruct
Cleared items Like vendor accounts, GL accounts can also be managed on
or
open item basis. For such GL, each entry is tracked as open item. The
clearing entry clears this open item

FBL3N will list open items and cleared items for all those GL which are open
item managed, which means that they have the Tick 'Open item
management' in the control tab of GL master

Noted items Special G/L transactions are also used to manage noted items.
These are postings that are not displayed in your accounts but are only to remind you
of outstanding payments due or to be made. You can process them with the payment
program or dunning program. As a result, it is possible to dun outstanding down
payments or to make down payments with the payment program. To do this, you enter
and store a down payment request. This special document does not update the account
balance: it is merely managed as a line item in the open item account and the special
G/L account. Therefore, you should always mark the Line item display option for these
accounts.
Parked items When an item is punched in the system at the first stage for
further processing it are called a parked item.

You define whether an account is managed with line items in the master
record of the General Ledger Account.
You can activate the line item display for an account later (account has
already been posted to) using report RFSEPA01
Prerequisites:
Line item display is active in the G/L Account.
The account is blocked for posting during the changeover.
It should be noted when carrying out a line item display demonstration
that the logic in the new general ledger has changed.

Line Item Display (Entry View)(


)
Transaction figures are the totals of line item postings on the debit or
credit side.
The balance is the difference between the debit and the credit transaction
figure.

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The field Line item display is a control field in the company code
segment of an account.
For accounts without line item display, only the transaction figures
are updated when a document is posted to this account. When a user
wants to look at this account online, they can only view the balance.

For Accounts with Line item Display, the most important data from
the posted line items is stored in a special index table. Because this
data is also stored in the documents, it is redundant and needs
additional storage and system time. When a user wants to look at this
account online, they can view both the balance and the individual line
items. You can use report (FFSEPA01) to subsequently activate the line
item display read the documentation for this report before you
execute it.

Since the line item display takes up additional system resources, you
should only use it if there is no other way of looking at the line items. You
should not activate the line item display for:

Reconciliation Accounts (line items are managed in the sub-ledgers)


Revenue accounts (line items are managed by the Sales Order
Management application)
Material Stock accounts (line items are managed by the Purchasing
Management application)
Tax accounts (Tax items are only useful in connection with the
document the tax amounts were already checked when the document
was posted)

Guidance
for
Instructor

In practice, revenue and tax accounts are often kept on a line item
basis for reasons of traceability.

The active new General Ledger accounting has an Entry view and a
General ledger view for a document. This is explained in detail in the
Document splitting (posting control) unit.
In the new general ledger accounting, the statement regarding the control
of line item management in the account refers only to the entry view of
documents. In general ledger view, the line items on all accounts are
always visible. This cannot be changed as, in the new general ledger
accounting, a sub-ledger can no longer completely explain the general
ledger ( e.g. profit center and segment in the items during document
splitting).

Open Item Management:


Guidanc
e for
Instruct
or

If the indicator Open Item Management is set in the master record


for a G/L Account, the items belonging to this account are either open
items or cleared items. The balance of an account with open item
management is always the balance of the open items. G/L accounts
are always managed with open item management if you want to be
able to check whether an offsetting posting has already taken place
for a business transaction.

Items in accounts with open item management are specified as open or


cleared.
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Account with open item management must have line item display
activated. Open item management is a prerequisite if you need to check
whether there is an offsetting posting of a given business transaction. You
can display open and cleared items separately, and therefore it is easy to
see which business transactions still need to be cleared.
You should use open line management for the following accounts:
Bank clearing Accounts
Clearing accounts for goods receipt / invoice receipt (GR/IR).
Salary clearing accounts.
You can only activate open item management if the account has a zero
balance.

Account in Local Currency:


As a standard, local currency is the account currency when you create a
G/L Account. However, while defining company code, you can also define
the currency of that account. You can select one of the following:
Local Currency
Foreign Currency
When you create a G/L account, you can choose either the local currency
or a foreign currency as the account currency. The default value is always
the local currency.
If you select the local currency, you can post to this G/L account
Transaction in any currency (Transaction figures are managed for each
currency i.e. other currencies are converted into the local currency for
each line item.) Transaction figures are managed for each currency:
Local currency (total of all posting amounts translated into the local
currency)
Currency 1 (total of all amount posted in currency 1, may be the
local currency)
Currency 2 (total of all amounts posted in currency 2)
Currency 3 (total of all amounts posted in currency 3)
And so on.
This applies whether or not line item display is activated.
If you have posted to an account, you can only change the currency of the
account balance is zero.

Only balance in Local Currency:


If the indicator only Balance in Local Currency is selected in the master
data record, transaction figures are only managed for amount converted
in local currency.
You should select this field for clearing accounts where you want to clear
account by assigning items with the same local currency amount with one
another, without necessitating exchange rate difference postings.
The indicator must be set in cash discount and GR /IR clearing accounts.
It must not be set in reconciliation accounts for customer or vendors.

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The indicator is usually set in balance sheet accounts that are not
managed in foreign currencies and not managed on an open item basis.

Account in foreign currency:


If you select a foreign currency as account currency, you can only post
amounts in this account only in that particular foreign currency.

Methods of creating G/L Accounts:


There are three methods of creating G/L Accounts: 1- Manual, 2- Copying
and 3- Data transfer.

1- Manually
One Step method: Create both segments simultaneously
(centrally). In this method you create G/L Account in a specified
Company code. To create G/L Account in other company codes the
exercise is to be repeated.

Two

Step Method:
Chart of Account Segment.
Company code Segment.
This allows you to create the G/L Account only for one time in
the CoA segmentand in multiple company codes segments.

2- Copying:
Copying an individual G/L account with reference to another G/L
account.
Copy the entire company code segment
Copying the entire chart of accounts segment.
This option is used for creating an account that has the same
properties as an existing account, e.g. another cash account,
create the new account with reference to the existing account and
change the account name accordingly.
If all G/L accounts in an existing company code are required in
another company code, you can copy the entire company code
segment to the new company code.
You can also copy the entire CoA to a new CoA, including the
account determination. You can also copy the financial statement
version.

3- Data Transfer
You can copy / Transfer a new chart of accounts form an external
system.
To reduce data entry, you can use the programs such as
- RFBISA00,
- Batch Input Interfaces for G/L Account master can be modified
by ABAP team to transfer new chart of accounts
In the CoA segment, important is defining the nature of Account i.e. whether it relate to
P&L or B/S.
In Company code three things are important
Currency,
Line Item Management
Open item management. (Show all items whether they are open or cleared)

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Collective Processing:
Guidanc
e for
Instruct
or

You can make changes to G/L account master data simultaneously for
several General Ledger accounts. To change G/L Accounts master data
in collective processing, you have the following options:
Change chart of accounts data
Change company code data
Change account name.

The SAP ERP system provides collective processing functions for G/L account
master records.
You can change the master data in the CoA segment, company code segment or
the names of several G/L Accounts at the same time. The G/L accounts can be
from different charts of accounts.

You can make changes to the displayed G/L accounts:


You can select the fields to be changed.
You can change the values of the fields displayed. Enter the new values
in the column New Values to replace the existing values. For all G/L
accounts selected, the old value is replaced with the new value.
HINT: Changes in existing G/L accounts are effective once saved and
could have extensive consequences. You should therefore check your
changes before saving.

Group Chart of Account:


If you use different operational chart of accounts in different company
codes in a group due to legal requirements, for example external reporting
for the individual country company, then you have a solution i.e. use a
group chart of account.
In the individual operational CoA, a group account in the group chart of
accounts is assigned to each account. First, however, you have to assign a
group chart of accounts to the operative charts of accounts. If this is done,
the field Group Chart of Account Number in the CoA segments of the
accounts in the operational CoA is a required entry field.
There is a 1:n relationship between the group chart of accounts in the
operative chart of accounts.
If for internal purposes, cross-company code reporting may be useful, for
example, financial statements that contain the items of several company
codes.
Where all company codes uses the same chart of accounts this problem
do not occur. However, some company codes may have to use special
charts of accounts because of legal requirements. If this is the case, the
following procedure applies for internal reporting:
Use a Group Chart of Accounts which must contain all of the
group accounts.
The Group Chart of Accounts must be assigned to each operational
chart of accounts. If this is done, the field Group Account Number in
the chart of account segment of the operational charts of accounts is
a required entry filed.
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You must enter the group account number in the CoA segment of the
operational account. Different accounts on one operational chart of
account can refer to the same group account.
You must use a financial statement version for the group chart of
accounts.
Disadvantage: Because the company code use different operation
charts of accounts, no intercompany code controlling can be performed.
(Page-136)

Country Chart of Accounts:


Instructor Using the country chart of accounts, you can fulfill the country-specific
requirements for external reporting and simultaneously carry out uniform
Guide
internal reporting.

All company codes use the same operational chart of accounts.


This procedure enables you to fulfill country-specific requirements and
simultaneously carry out cross-company code controlling.

An alternative to using a group chart of accounts is to use a country chart


of accounts. All the company codes use the same operational chart of
accounts. Company codes that nevertheless require a special chart of
accounts for external reporting have the following options:
A country chart of accounts is assigned.
The country chart of accounts number (alternative account number) is
entered in every company code segment. Every chart of accounts
number can only be used once.
HINT: Since all company codes post into the same operational chart of
accounts, cross-company code controlling is possible.
Disadvantage: Accounting clerks who may be familiar with the country
charts of accounts firs have to get used to using the operational chart of
accounts.

Lesson 2.2 Profit Center and Segment


Definition
A profit center is an organizational unit in accounting that reflects a managementoriented structure of the organization for the purpose of internal control.
You can analyze operating results for profit centers using either the cost-of-sales or the
period accounting approach.
By calculating the fixed capital as well, you can use your profit centers as investment
centers.

The profit center is the only object from which the segment can be
uniformly derived. Of course, when BADI ( Business Add-Ins is a new SAP
enhancement technique based on [[ABAP Objects]] ) or a substitution is used, any
collection can be created. However, notice that a BADI is only a defined
interface, and there is no example coding supplied. A generally critical
point is making subsequent changes to the profit center in master data. In
these cases, an automatic correction document is not created. You must
specify how these changes are posted.
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Segments can be used to meet the requirements of international


accounting principles (IAS/IFRS / US GAAP) regarding segment reporting.

Extract from the IFRS-8: Business Segments


A business segment is a part of a company that:

That carries out business activities that generate revenues and for which expenses
can be incurred (including revenues and expenses in connection with transactions
with other areas of the same company)

Whose operating profits are regularly inspected by the main decision-maker of the
company with regard to decisions about the allocation of resources to this segment
and the evaluation of its profitability, and

For which there is corresponding financial information.

The profit center or business area objects can be used as alternatives.

The segment is provided in addition because the business area and or


profit center were frequently used for other purposes in the past and
thereby to meet other requirements.
Business Area Old concept can be used for preparing Financial statements.
Profit Centre New conceptHelps in segmental reporting containing multiple profit centers.
Dummy profit centers can be created when profit centers are not finalizsed but for it segments can
be prepared.

Derivation of Segment:
An ERP system enables you to save a segment in the master data of a
profit centre. The segment is posted automatically when the profit center
is posted to.
There is no dummy segment posting, as in the profit center logic if the
profit center does not have a segment, there is no segment account
assignment either.
The standard method is to derive the segment from the profit center.

Driving a Segment (2)


The segment is derived from the characteristic Profit Center because this
already exist in various SAP Objects, and the characteristic Segment is
automatically derived from this.
There is a SAP Note 1035140 (correction of standard errors or amendments
given by SAP management) on this topic. Using segments is only officially
approved by SAP if profit centers are being used simultaneously.
Segments can only be derived automatically using profit centers. In many
business cases, particularly in logistics, you cannot enter the segment
manually. Various standard interfaces do not support the segment either.
For these reasons, using segments is officially approved only if you are
also using profit centers.
If it is not possible to derive the characteristic Segment from a profit
center master record, other ways must be found of assigning a segment.
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Document splitting provides the following options:


Manual Entry
BAdI implementation
Defining substitution rules and
Standard account assignment.
Profit center Accounting has its historical origin in Controlling. However,
due to increased significance of external accounting, it is now also a part
of Financial Accounting. Each individual company decides whether Profit
Center Accounting is an instrument of internal or external accounting.

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FM/AO. AATI, Lahore

Customer / Vendor Accounts

Just like general ledger accounts, customer and vendor account also have
two segments:
iClient level that contains general data. This date can be
accessed throughout the whole organization.
ii-

A segment at company code level, which contains company


code-specific data. Any company code that wishes to do business
with a specific customer or vendor has to create a company code
segment for this customer or vendor. This also creates a
customer or vendor account.

Using reports RFBIDE10 / RFBIKR10, you can transfer customer / vendor


master data maintained in a source company code into another company
code.

Sales and Service View of the Customer Account:


If the Sales departments (SD) process business with customers, The SD
Department creates a sales area segment for each customer, in addition
to the segments previously mentioned. It contains data that is important
for the sales area, for example, data for order processing, dispatch data,
billing data, etc.

A sales area is a combination of:

Sales organization
Distribution Channel
Division

The Sales organization


The sales organization is responsible for the sales and distribution of
goods and services. Up to this level the sales figures are managed for
reporting and analysis purposes.
The Distribution Channel
The Distribution channel is the channel through which a customer receives
a product (for example, retail, wholesale, direct sales)
The division represents a product line. In the sales area, you can use the
division to make customer-specific agreements, for example, partial
deliveries, price agreements, and so on. A customer can have several
sales area segments.
Because the sales and distribution department also stays in contract with
a customer and has to know specific data about this customer, a sales
area segment can be created for each customer.
Any sales area that wants to do business with a customer has to create a
sales area segment first. The sales area segment contains sales areaspecific data.

The Material Management (MM) view of Vendor


Account:
If the purchasing department process business with vendors, the
purchasing departments create a purchasing organization segment for
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each vendor, in addition to the segments previously mentioned. It


contains data that is important for the purchasing organization.
Just as there is a sales area segment for customers, there are purchase
area segment for purchasing organization segments for vendors.
Any purchasing organization that wants to do business with a vendor has
to create a purchasing organization segment first. The purchasing
organization segment contains purchasing organization specific data.

A complete customer Account:A

complete customers account consists of the following three segments:


General Data at client level
Company code segment (Contains Company Code Specific Data)
Sales area segment (Contains data relevant to purchase Department)

Usually, the sales area segment must at least be created for the sales
area assigned to the company code.
HINT: there may be other sales areas doing business with the customers
as well.
The account number is assigned to the customer at the client level. This
ensures that the account number for a customer is the same for all
company codes and sales areas.
Central Maintenance of sales or purchase areas is also possible.
A complete Vendor Accountconsists of the following three segments:
General Data at client level
Company code segment
Purchasing organization segment.
Usually, at least the purchasing organizationssegment for the purchasing
organization assigned to the company code must be created.
Note: there may be other purchase organizations doing business with the
vendor as well.
The account number is assigned to the vendor at the client level. This
ensures that the account number for a vendor is the same for all company
codes and purchasing organizations.

Centralized or Decentralized Maintenance (Customers /


Vendors)
The system offers separate functions for maintaining customer master
records depending on the requirements of your organization. These data
records can be maintained centrally for all areas or separately for
Financial Accounting and Sales and Distribution.
As for customer master records, vendor master records can also be
maintained centrally for all areas or separately for Financial Accounting
and Materials Management.
If Master data is maintained separately, there is a danger that customer /
vendor accounts are incomplete or there may be duplication of records.
HINT: When implementing both Accounts Receivable and sales and
distribution, members of both the implementation teams must work
together to decide how to configure customer master records and who will
be responsible for their maintenance.
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Avoiding Duplication of Master Data:


There are two ways of avoiding duplication when you are creating record
of a new customer:
Before you create master record, use the match-code to check
whether the customer / vendor already exist in the system.

The message control should create a message if you try to create a


customer / vendor again
You do not need to show the match code search again.
A match code may be the tracking No. of that customer / vendor e.g.
CNIC, NTN etc.

Compare Master Data:


If you use the component Purchasing Management and / or Sales Order
management, customers and vendors must be maintained for both the
components. It is easiest to create customer /vendor master records
centrally to ensure that they are set up correctly. However, in some cases,
Purchasing Management / Sales Order Management create their own
segments of the master record and Accounting creates its own segments
of the master record. In this case there is the risk of creating incomplete
or duplicate master records. To find and correct these incomplete
accounts, you can run report RFDKAG00, Customer Master Data
Comparison, or RFKKAG00, Vendor Master Data Comparison, and make
the necessary corrections. You can then correct the accounts.
(Page -180)
You can prevent the creation of duplicate accounts as follows:

Use the match-code before you create a new account


Activate the automatic duplication check.

Priority of Data:
iiiiii-

Back End Configurational Data Remains always in the system however


changes
Front End Master Data
Front End Transactional Data.

Pages of Customer / Vendor Accounts:


If you want to change or display an account, you can go directly to every
page by selecting it on the initial screen.
Important fields are:

Search terms: you can enter an abbreviation for the customer /


vendor name in these fields. The format is defined by company
guidelines and practices.
Group: Customers or vendors who belong to the same corporate
group can be bundled together under a user-defined group key. This
group key can be used for running reports, transaction processing,
or for mach codes.
Clerk / accounting: The name of the clerk must be saved under an
ID. You can enter this in the customer / vendor master records for
which the clerk concerned is responsible. The name of the clerk is
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then printed on correspondence automatically. You can also use this


ID for sorting dunning and payment proposal lists.
(In general practice dunning means sending letters to our customers reminding them to
pay invoices which are due and/or well past it.)

Explanatory Textscan be entered in every segment.


Line item display and open item management are configured as standard
for every customer / vendor account.

Copying Customer /Vendor master Record:


You can also create new customer and vendor master records with
reference to an existing master record. Only data which does not refer
directly to the customer /vendor master record is copied from the
reference account to the new account. The copied date must be checked
and changed, if necessary, before the record is saved. We recommend
that you create a reference account for every account group.

IBAN( International Bank Account Number):

IBAN is an internationally recognized, unique identification number for a


certain bank account. It was designed by ISO (International Organization
for Standardization) and ECBS(European Committee for Banking
Standards) to facilitate handling of international payment transactions.
The IBAN contains a maximum of 34 alphanumeric characters and is
structured differently in every country. It usually contains the country
code, bank key and account number.
The SAP System used the IBAN in addition to the standard country-specific
bank details. You can enter an IBAN only in customer / vendor master
record if he provides and requests entry. For this reason, you cannot
automatically generate and save the IBANs for several master records.
You have to enter the IBAN manually in each master record. For certain
countries the system generates a proposal
When You enter IBAN for new bank details, the system can generate the
country-specific bank details for certain countries. If necessary, make sure
that the payment medium programs used can also output the IBAN.

Account Group for Customers and Vendors:


Account Group control:
The account number range so that all accounts in an account
group are in one account number range.
The field status of the account fields so that all accounts in an
account group have the same screen layout.
Use as a one-time account one time customer / one timed vendor.
In contrast to general ledger accounts, where you have to enter the
account group in the chart of account segment of the master record, for
customer and vendor account you have to enter the account group before
you maintain the individual master record segment.
Reasons:

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For customer and vendor accounts, the account group controls their
internal or external number assignment, For G/L accounts, the
number assignment is always external.
In addition to the company code segment sales segment and
purchasing segment the account group also controls the screen
layout at client level.
The account group controls the screen layout for the General Data, the
Company Code Segment and sales area and purchasing organization
segment. Consequently, you always have to specify it on initial screen.
When you create customer /vendor master records, enter the account
group on the initial screen. In Financial Accounting, once the customer
/vendor account has been created, you can no longer change the account
group. However, if you use partner roles in Sales and Distribution, in some
case you can change the account group from an ordering address to a
ship-to address.
You can delete the current number. This is useful if, for example, customer
/ vendor accounts have been archived. In this case the current number is
not updated automatically. You can delete number ranges provided no
number has been assigned from them yet. If number has already been
assigned, the system prevents you deleting a number range with internal
assignment. If the number range has external assignment, the system
issues a warning.

Number Rangers for Customers / Vendors:


There should be separate number ranges for customers and vendors
accounts. The range of possible account number is divided into smaller
number ranges. Number ranges must not overlap.
For each number range you can define whether the number assignment is
internal or external. Internal numbers are assigned by the system,
whereas external numbers are entered by the user who creates the
record. External numbers may be alphanumeric.
With internal number assignment the system always assigns the next
number available in the range to a new account. If you want to know how
many numbers are left in a specific number range, you can display the
Current Number.
With external number assignment, the user chooses the account number.
Numbers do not have to be assigned in sequence; therefore, a current
number cannot be displayed.
Each number range can he assigned to one or more account groups, for
customer or vendor account only.

One time Customer / Vendors:


For all customers or vendors with whom you rarely do business, create a
special customer and a special vendor master record. These master
records contain receivable and payable for one-time customer /vendor
(one time accounts). In contrast to other master records, a one-time
account master record does not contain any information about a specific

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customer / vendor since this account is used for more than one customer /
vendor. Therefore, the customer / vendor-specific fields should be hidden.
You enter the customer / vendor specific data for one time customer /
vendors in the document during posting.

Status of the Fields in the Master Record:


The account group is used to control the field displayed in the master
record. For example, to ensure that all correspondences has complete
address information, you must change the field status so that all address
fields are marked as required entry

Field Status in Customer / Vendor Master Record:


You can make field status definitions via:
Account group-specific fields status
Transaction-specific field status
Company code-specific field status.

Controlling Field Status:


The layout of the customer /vendor master data screen can be affected by
several factors:

Account Group-Specific Control:


Usually the field status is controlled only by the account group. This
means that all accounts of a specific group have the same screen layout.

Transaction-dependent Control
The field status can be dependent on the master data transaction
(Create, Change, Display). The transaction-dependent field status should
be set to display for the change transaction if the field is not to be
changed after it has been created, such as the Reconciliation accounts,
field.

Company code-Dependent Control:


You can control the field status for fields in the company code segment of
customer and vendor master records via the company code-specific
screen layout. You can hide fields that are not used in a specific company
code, but enter values in these fields in other company codes. For
example if a company code does not want to use the dunning program,
hide the relevant fields for this company code.
Account group-specific fields status, the transaction-specific field status
and the company code-specific field status are compared, and the field
status with the highest priority is used.
Fields that are accessed with the display transaction are always either
displayed or suppressed, since you cannot make an entry in a display
transaction.
If you do not want to use the transaction-specific or company codespecific control, set the field status for all fields to optional. Since this field
status has the lowest priority, the account group-specific control is always
used.

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Dual Control Principle:

You now can define that one person makes changes to customer or vendor
master data while another is responsible for confirming the change
usually for critical customer / vendor changes.
First you have to define the fields for dual control in the customer / vendor
master records in the IMG.
If you define a field in the customer / vendor master record as sensitive,
the corresponding customer / vendor is blocked for payment if the entry is
changed. The block is removed when a second person with authorization
checks the change and confirms or rejects it.
The confirmation for the changes can be made for a single customer
/vendor or you can get a list. This list can be restricted by:

Customer / Vendor
Company code
Account not yet confirmed
Account rejected
Accounts to be confirmed by me
You can display the changes to the customer or vendor master
record for all accounts using reportsRFDABL00 or RFKABL00.

Keys:
Vendor (Accounts Payables)
K
Customer Accounts Receivable
D
Asset(For Asset Accounting i.e AA)
A
General Ledger Account
S
Material (For Material Management i.e.MM)

Customer /Vendor Clearing


If a customer is also a vendor, or vice versa, the payment and the dunning
program can clear open items against each other. The open items of the
assigned account can also be displayed in the line item display and the
open item selection screens.
To clear open items, you have to carry out the following steps:

You have to enter the vendor account number in the customer account,
and vie versa.
Each company code can decide separately whether it wants to clear
open item between customer and vendors. If clearing is to be used, you
have to select the Clearing with Vendor field in the customer
account, or the corresponding field in the vendor account.

If you set the Account Control and Status under Additional Selections in
the report for the customer or vendor list (RFDKVZ00 or RFKKVZ00), when
you print the report you can see the partner relationships for the
respective customer or vendor.

Alternative Payer / Payee:


Alternative payer: An invoice is not cleared by the customer from whom a
receivable is due, but by an alternative payer. For example a receivable is

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due from a customer who declares bankruptcy. The administrator makes


the payment (alternative payer).
Alternative payee: A payment is not made to the vendor to whom the
payable is due.
At the client and company code level, you can enter an alternative
payer /payee. The entry in the company code segment has higher priority
than the entry at client level.
There are several options for using this function within the master record.
If you set the Individual Entries indicator when creating an invoice, you
can enter information about an individual payer / payee for a customer
/vendor that has not been created in my SAP ERP.
If the alternative payer/payee is an existing customer or vendor, you can
enter the customer / vendor account number as permitted payer / payee
in the master record. During invoice entry, you can choose one of these
payer(s)/ Payee(s) using match-codes.
If you enter an alternative payer, the amount to clear the due open items
in the account is paid by the alternative payer.
If you enter an alternative payee, the amount that the company has to
pay to clear the open item due is paid to the alternative payee.
If you set the Payment data indicator under Additional Selections in the
report for the customer or vendor list (RFDKVZ00 or RFKKVZ00, when you print
the report you can see the alternative payer for the respective customer or the
alternative payee for the vendor.

Head Office /Branch:


Customers in some industries place orders locally (that is, via their
branches) but pay invoices centrally (from head office). There is a
difference between the goods flow and the cash flow. You can reflect this
in the SAP System via Head Office and Branch office.
All items posted to a branch account are automatically transferred to the
head office account. Usually dunning notices go to the head office and it is
the head office that makes and receives payments. However if the
Decentralize Processing field is selected in the head office master
record, the dunning and payment programs use the branch account
instead.

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Unit 3 DOCUMENT CONTROL


Lesson 3.1Document Structure
Document in SAP ERP Financial:
The SAP system works on the basis of the document principle. A
document is saved for every posting. The document remains as a
complete unit in the system until it is archived.
Every document is uniquely identified by the following fields:
Document Number
Company Code
Fiscal Year.
Documents in SAP ERP Financial contains the following:
A document header (information that applies to the entire
document)
Between 2 and 999 line item (information that is specific to the line
item). When you post documents via the Accounting interface for
example, from Sales Order Management, Purchasing Management,
or other applications), it creates items in the accounting document
that are identical in almost all of the fields.
You can display detailed data for the document head and line items.
Two important control keys:
Document Type for the document header
Posting key for the line items.
The SAP system generates at-least one document for every business
transaction. Each document receives a unique document number.
The system can assign the document number (internal number
assignment) or the user can assign the number when entering the
document (external number assignment).
A business transaction can create one or more documents. For example,
when goods received from a vendor a material document is created to
record data that is important for inventory management. An accounting
document is created to record financially-relevant information such as G/L
accounts and amounts.
In the system documents are generated for the various business
transactions without an accounting document being created at the same
time, because accounting is not affected. An example of this would be a
purchase order in Materials Management.
Related documents are linked in the system so that you have an overview
of every business transaction in the system.
Using report RFBELJ00, you can create a compact document journal in the
system. It contains a table of the most important data from the selected
documents from the document headers and line items.
You can use reports RFBUEB00 and RFBUEB01 to find documents in the
system.
Page 45 of 101

Summary of TFIN50_1

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Muhammad Akhlaq Khan


FM/AO. AATI, Lahore

Document Type:
Guidanc
e for
Instruct
or

Document type is the key that differentiates the business


transactions to be posted.
Document types are defined at client level and therefore valid for all
company codes. For example document type provides information
about whether the document is a vendor invoice or a customer
invoice. Posting documents are classified by document types. There
are different types of business transactions.
The document type controls the document header and defines the
account types to be posted to and the document number assignment.

The Document Type controls the document head and is used to


differentiate the business transactions to be posted for example vendor
invoices, customer payment etc. Document types are defined at client
level and are therefore valid for all company codes. The standard system
is delivered with document types that can be changed or copied.
Document Types define the following:
Number ranges for document numbers.
Account types permitted for postings.
Document types also define the following:
The field status of the Document Header Text and Reference Number
fields in the document header.
Whether invoices are posted with the net procedure or gross
procedure.
In the procedure recommended by SAP for storing original documents, the
document type controls document storage. Always store the original
documents under the number of the system. If the original document has
an external number:
Enter the external number of the original document in the Reference
Number field in the header of the system document.
Note the number of the system document in the original document.

Reversal Document Type:


A document once posted cannot be deleted from the system however its
reversal document can be created to nullify its impact on financial
statements.
The reversal document type is used to reverse documents. If no reversal
document type is specified, the reversal document has the same
document type as the original document.
When a document is reversed, external document number assignment is
not possible. For this reason, reversal document type must be specified for
all document types that work with external document number assignment.
This reversal document type then works with internal number assignment.

Standard Document Types


The document type General Documents (AB) permits postings to all
account types. A Customer Credit Memo (DG), however, only permits
postings to customer and G/L accounts.
Page 46 of 101

Summary of TFIN50_1

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Muhammad Akhlaq Khan


FM/AO. AATI, Lahore

This prevents, for example, a (vendor)credit memo being posted to an


asset. (Reasons: The posting is made by the asset accountant and not by
the accounts payable accountant.
Important Standard Document Types:
Document type AB allows postings to all accounts types.
All other document types limit the types of accounts we can post.
Document type DG, for example, allows you to post to customer (D) and
G/L accounts (S) only.
To transfer billing documents from the SAP ERP billing system, you need
one of the following document types:
RV, the default document type for Sales Order management billing
documents (customer invoices)
RE, the default document type for Materials Management billing
document (vendor invoices)
When internal number assignment is used, the system assigns a new
number to each document in the financial accounting component. In
external number assignment, the system transfers the billing document
number to the accounting document, providing this number has not
already been assigned.
The payment program uses mostly the document type ZP for its automatic
postings.
Guidanc
e for
Instruct
or

In new G/L Accounting and activated document splitting, you


have to make an additional Customizing setting for new
document types.
Every business transaction that is entered is analyzed during the
document splitting process. In this process, the system
determines which splitting rule is applied to the document. To
enable the system to determine the splitting rule, a business
transaction variant must be assigned to each document.
To ensure that splitting rule is used appropriately, the relevant
document must meet certain requirements. These requirements
relate in particular to certain item categories that either must or
must not be available. This information is specified for each
business transaction variant and is checked against the current
document during posting. If document does not meet these
requirements, the system rejects the posting.
For the document types delivered in the standard system, SAP
delivers a classification for the document splitting. This
classification is a proposal that you should check against your
own document type organization as to whether the classification
or assignment to a business transaction variant leads to the
desired results in the document splitting.
SAP delivers business transactions in the standard system. The
item categories permitted for each business transaction are

Page 47 of 101

Summary of TFIN50_1

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Muhammad Akhlaq Khan


FM/AO. AATI, Lahore

already defined. SAP also delivers business transactions variants


that represent a further restriction of a business transaction.
You cannot define additional business transactions. However, you
can define your own business transactions variants for the
standard business transactions.
Document splitting is mainly controlled by document type.
Customers should, therefore, make sure that the document types
used for business processes are those that must be uniquely
assigned to a business transaction variant in document splitting
and thus to splitting rules.
Therefore, it may be necessary to add additional document
types.

Document Number:
Document number is the key that uniquely identifies each document in a
company code within a fiscal year. In order to store the different
documents by document type, they are subdivided in document number
ranges. The document number range defines the number range to which
the document numbers to be assigned belong.
A document number range is assigned to each document type.
The size of the number range intervals should be defined in accordance
with the organization of the document storage and the document volume
(recommendation: +30% safety buffer).
Document number ranges are defined dependent on the company code.
For this reason, they must be copied to every company code in which the
document type in question is used (except if the company code was
created using the function Copy company code)

Document Number Ranges:


The document number range defines the range of numbers that must be
assigned as document numbers. These number ranges must not overlap.

Internal Numbering: The system saves the last document number that
was taken from the number range in the Current Number field and
assigns the number following the current number as the next
document number.
External number assignment: The user enters the number of the
original document, or the number is transferred automatically from
another system. The numbers are usually not assigned in sequence,
which is why the system cannot store a document number. The
numbers can be alphanumeric.

The document number range must be defined for the year in which it is
used. There are two options:

To a fiscal year in the future: At the beginning of a new fiscal year,


the system continues to use the number after the current number as
the next number. It does not restart at the first number of the number
range.
Page 48 of 101

Summary of TFIN50_1

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Muhammad Akhlaq Khan


FM/AO. AATI, Lahore

For Every Fiscal year: At the beginning of a new fiscal year, the
system starts again with the first number of the number range. This
helps to ensure that the number range is sufficient.

Addendum:
If the ledger solution is mapped in new G/L accounting, different ledgers
can use different fiscal year variants. This is a very rare case. It is then
necessary to make special settings for these ledgers in Customizing:

Document number ranges are stored for the general ledger view
The number ranges are assigned to the document types for the general
ledger view.

Addendum:
If the ledger solution is used in new G/L Accounting, document types for
pure posting in a non-leading ledger must be assigned separate number
ranges. This is done to ensure that there are no gaps in the document
assignment in the leading view.
One number range can be assigned to several document types. You can
copy the intervals of document number ranges from one company code to
another, or copy intervals from one fiscal year to another.
We can use report RFBNUM00 to find gaps in the document number
assignment.

Posting Key:
Two digit numeric key that controls the entry of lineitems.
The posting key defines

To which type of account the line item is to be posted Account


type (D,K,S,A,M)
o DCustomersAccounts Receivable
o KVendorAccounts Payable
o S General Ledger Account
o A Assets
o M Material
Debit or Credit Posting
Layout of the entry screens (field status of additional details)

Functions of the Posting Keys:


Like document types, posting keys are also defined at client level
In addition to the control functions, the posting key also specifies:

Whether the line item is connected to a payment transaction. This


information is required for analyzing the payment history and creating
payment notices.
Whether the posting is sales-relevant and the sales figure of the
account is to be updated by the transaction, for example, by the
posting of a customer invoice.

Page 49 of 101

Summary of TFIN50_1

Compiled by

Muhammad Akhlaq Khan


FM/AO. AATI, Lahore

The posting keys have been enhanced for the Enjoy SAP document entry
functions. In the standard transaction posting keys are labeled debit and
credit. The following default values are provided in Customizing for the
SAP ERP system:
For General Ledger account Posting: Debit is posting key 40,
Credit is posting key 50.
For Customer Invoices:
Debit is posting key 01, Credit is
posting key 11.
For Vendor invoices:
Debit is posting key 21, Credit is
posting key 31.

Document Field Status:


Guidanc
e for
Instruct
or

As with the master records, you can specify for each posting item
whether fields are to be hidden, display or function as required or
optional fields. The document field status defines whether fields are to
be hidden or whether they are required or optional fields. However,
this does not apply for the following fields: Amount, Posting Key,
Account.
These fields are required entry fields; you cannot influence their field
status.
The field status for posting an accounting document is determined by
three factors:
Account Type e.g. G/L account, Sub ledger account.
Field status of the posting key
Field status of the account
The system determines the field status dependent on the account
type. It cannot be influenced by Customizing.e.g. The system
automatically hide the terms of payment for a pure G/L account
posting.
The posting key- specific and account specific field statuses both
control the field structure of the additional account assignments in the
line item.
This enables the user to enter line items for specific accounts or
dependent on the posting key. The rule that the field status with the
highest priority is used applies here too.
If the user tries to combine Hide with Required Entry, this fails. The
system issues an error message.
Exception to the rules: If business area financial statements are to
be used, the Business Area field must be ready for input. The field is
ready for input if the user has activated business area financial
statements. The Hide field status no longer affects the Business
Area Field.

When you enter document different fields are displayed depending on the
transaction and the documents used. For example, when you post
expenses, the cost center and tax data normally have to be specified. In
contrast, this information is not required when you post cash. What
information is displayed when a document is processed is controlled by
the field status.

Page 50 of 101

Summary of TFIN50_1

Compiled by

Muhammad Akhlaq Khan


FM/AO. AATI, Lahore

As a general rule you define account dependent field status for general
ledger account in customizing. For customer and vendor data you define
the posting key-dependent field status in Customizing according to your
requirements.
As with the field statuses defined for fields in G/L accounts, the field
status with the higher priority is used. The priority is: Hide, Display,
Required and Optional.
Exceptions to this Rule:
-

If business area is used the business area field must be ready for input.
You can activate it by enabling business area financial statements for
the company code. You can only use field status to define whether the
field is a required or an optional entry field.
Entries in tax fields are only possible if the general ledger account is
relevant for tax.

The hide field status cannot be combined with the required entry field
status. This combination causes error.
Field Status Variant:
The field status variants are assigned to the company codes (variant
principle). This ensures that the field status groups can be used in the
accounts of these company codes. Different company cods can use one
field status variant.
For each group of general ledger accounts you have to define the status of
every document entry field. When documents are entered for these G/L
accounts, should the text field be required, optional or hidden? When
documents are entered for these G/L accounts, should the cost center
field be required, optional or hidden? and so on.
This information is divided into field status groups for each group of G/L
accounts.
We assign field status groups to the respective general ledger accounts in
the G/L account master records.
The field status groups are summarized in one field status Variant.
The field status variant is assigned to your company code(s). No posting
can be made until this is complete. Typically, you assign the same field
status variant to all of your company codes so that the same field status
information applies across company codes.
Various field status groups are available in the standard SAP ERP system.
It is recommend that you copy the standard field status groups and modify
them as necessary.
If a document is posted to a subledger account, the field status group of
the reconciliation account is used.
Page-255

Page 51 of 101

Summary of TFIN50_1
D Accounts R/A
01.
11.

Compiled by
KAccounts P/A
21.
31.

Muhammad Akhlaq Khan


FM/AO. AATI, Lahore

SG/L Accounts
40
50

02.

12.

22.

32.

80

90

03.

13.

23.

33.

81

01

04.

14.

24.

34.

83

93

05.

15.

25.

35.

84

94

06.

16.

26.

36.

85

95

07.

17.

27.

37.

86

96

08.

18.

28.

38.

09.

19.

29.

39.

AAssets
70
75

MMaterials
89
99

Standard Posting Keys:


SAP recommends that you use the standard posting keys delivered. If you
change them or define new posting keys, all tables containing a reference
to these must also be updated.
Posting keys for assets and materials may only be used if the
corresponding SAP components are installed.
By changing fields status definitions of posting keys and the field status
group you can make the field status transaction-dependent or accountdependent.
Since the sub-ledger accounts do not have a field status group, postings,
are differentiated mainly by means of different posting keys. For this
reason there are numerous posting keys for sub-ledger accounts.
Postings to General Ledger accounts are mainly differentiated by means of
different field status groups. Therefore, only two posting keys (40 and 50)
are required for posting.

Addendum: In addition to the accounts and posting key-dependent field


statuses for postings, mandatory fields are also controlled centrally for
document splitting objects (such as the segment or profit center) when
document splitting is used. This is explained in detail in the Document
Splitting posting control unit.

Page 52 of 101

Summary of TFIN50_1

Compiled by

Page 53 of 101

Muhammad Akhlaq Khan


FM/AO. AATI, Lahore

Summary of TFIN50_1

Compiled by

Muhammad Akhlaq Khan


FM/AO. AATI, Lahore

Lesson:3.2 Posting Periods


The posting date in the document header determines the posting period in
which postings are to take place. The system usually proposes the current
date as posting date.
Posting periods are defined via the fiscal year variant. The periods
configured in the fiscal year variant are derived from the month of the
posting date.
The posting period must be open to enable posting. You open the posting
period by entering a time range that is the time range of the posting
period. You open and close posting periods in Customizing or for the
application

Maintaining Posting Periods:


For technical reasons, for each posting period variant you need an entry
+ that is valid for all account types. The columns for the account
number interval must be empty.
The period intervals defined for the + to check whether the period
determined can be posted to in a variant.
When you enter the posting date in the document header, the system
uses the entry for the account type + to check whether the period
determined can be posted to. If all account types are to be open at the
same time, the minimum entry + is sufficient.
You can define whether periods can be posted to differently by account
type (A, D, K, M, S, V) and by account interval. If you do not enter G/L
account number for the account intervals, you must enter ZZZZZZZ as
the account number upper limit. (Number of Z should be equal to number
of digits in CoA)
For each account type within a posting period variant, you specify which
posting periods are open for posting. Two time intervals (Period 1 and 2)
are available. For each interval, specify a period lower limit and period
upper limit, and the fiscal year.
You close periods by selecting period details such that the periods to be
closed are no longer contained.
Special periods have no start and end date. They are assigned to the last
posting period.
For posting in special periods the posting date must be the last posting
period the special period open and entered in the document during
posting.

Posting Periods: are defined in the fiscal year variant.


To prevent document form being posted to an incorrect posting period,
you can close certain posting periods.
Usually the current posting period is open and all other periods are closed.
At the end of the period this period is usually closed and the next period is
opened. You open a posting period by entering a range in the posting
period variant that encompasses this period. You can have as many
posting periods open as desired.
During period closing you open special periods for closing posting.

Page 54 of 101

Summary of TFIN50_1

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Muhammad Akhlaq Khan


FM/AO. AATI, Lahore

During closing two periods intervals must be open at the same time.
Therefore two period intervals can be entered in the posting period table.

Opening and Closing Posting Periods:


When you open and close periods, this affects all company codes to which
the posting period variant is assigned. This means that several company
codes can have the same posting period variant. This enables the groupwide posting closing with less work required.

Posting Period Variant:


Several company codes use the same posting period variant. For all
company codes assigned, the posting periods are opened and closed
simultaneously this simplifies the period maintenance.

Period Checks by Account Type:


In the document header, the periods assigned to the account type +
are checked. This the first check. Therefore, the account type + must
be open for all periods that are supposed to be open for any other account
type. The posting period variant must contain at least the account type
+. If the posting periods for different account types are all to be handled
in the same way, the control by means of the + entry is sufficient.
Posting periods can be handled differently for different account types; i.e.
for a certain posting period, postings to customer account may be
permitted while postings to vendor account may not.
At the line item level, the system checks the account type of the posting
key to ensure that the period is open for the assigned account type.
The account interval always contains G/L accounts. By entering certain
reconciliation account behind sub-ledger account types, these sub-ledger
accounts can be treated differently to account that have a different
reconciliation account.
HINT: From ERP6.0EHP4.0 onward there is a 3rd period interval for real time
integration of controlling in Accounting.
During closing, two period intervals must be open at the same time.
Therefore, two periods intervals can be entered in the posting period
table.
An authorization group may be assigned to the first period interval. Then,
only users belonging to this authorization group have the permission to
post in the first period interval. It makes sense to use the first range for
the special periods and authorize only the accountants involved in closing
to post in the special periods.
The user must have the authorization for authorization object F_BKPF_BUP
(accounting document: Authorization for posting periods) with the same
value in the field authorization group as in the posting period table.
With the new General Ledger Accounting, a third period interval is
displayed. In this interval, open periods are stored for the real-time
integration CO>FI.
The third interval is used to control whether FI postings triggered from CO
really should be able to be posted in the periods. If the third interval is not
filled, the entries in intervals 1 and 2 are also valid for these postings.

Page 55 of 101

Summary of TFIN50_1

Compiled by

Muhammad Akhlaq Khan


FM/AO. AATI, Lahore

With the new G/L accounting, there is also the option to control more
precisely which values for which individual account assignment objects
can be posted, and when.
When entering a document, among other items, you enter the posting
date the system automatically determines the posting period and fiscal
year based on the posting date entered.
In the document overview the posting date, the posting period and the
fiscal year are displayed. The posting period determined is entered in the
document and the transaction figures for this posting period and up dated.
If you display the balance of an account, the transactions figure for the
posting period are displayed.

Lesson-3.3Posting Authorizations
This lesson provides you with an introduction to determining maximum
amounts when posting documents.

Maximum Amount:
In this section we will focus on the upper limits for posting transactions
within tolerance groups.
In tolerance groups you can enter upper limits for the following:
1. Total amount per document
2. Amount per customer / vendor item
3. Cash discount a user with this tolerance group is able to grant
The currency is the local currency of the company code.

Tolerance Groups:
Accounting employees for whom you want to define special tolerance
must be assigned to a separate tolerance group.
Each company code must always have a tolerance group Blank. This
default tolerance group applies for employees that are not explicitly
assigned to another tolerance group.
When you assign a user to a tolerance group, enter the name with which
the user logs on to the system under Name of User.
Each employee must be assigned to only one tolerance group.
A tolerance group can be assigned to one or more company codes.
Maximum amount within the tolerance group:

Amount per document: Maximum posting amount per document


(total of all debit or credit items)
Amount per open item: maximum posting amount per customer
or vendor item. The restriction does not apply to automatically
created line items, for example, for payment clearing.

Assigning Posting Authorizations:


We can create as many tolerance groups as we like. Every user can be
explicitly assigned to a tolerance group.

Page 56 of 101

Summary of TFIN50_1

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Muhammad Akhlaq Khan


FM/AO. AATI, Lahore

If users are not assigned to any special tolerance group, then the entries
in tolerance group are valid for them.
This is the default tolerance group
Tolerance group usually contains values which are meant to apply to
most employees.
For any employee who have especially high or low limits, a special
tolerance group should be created and assigned to their user logon IDs.
(Page-296)

Lesson:-3.4
Accounting

Simple Document in Financial

Enjoy Posting Screens:


The enjoy postings in the general ledger, customers, and vendors area are
single screen transactions. You can enter documents with a minimum
number of entries on one screen.
On the top part of the screen, you enter the general data for the
document that you want to enter or process further, together with the
data for the customer or vendor item. Important fields are on the initial
tab page, less frequently used fields and detailed information are on the
subsequent tab pages.
On the lower part of the screen you enter the invoice or line items in a
table. Once you have made your entries, you can check, hold or post the
document. The system uses the check, proposal and posting logic of the
existing entry transactions such as the invoice / credit memo fast entry or
the standard document entry.
The Enjoy transactions are offered parallel to the standard transactions, in
which you can make more complex postings, for example, asset purchase
from vendor, via the menu by branching directly to the existing complex
posting transactions.
Via user-specific editing options, you can, for example, control the display
and entry for the document type and the posting period individually.

Simple Postings in SAP ERP Financials:


The SAP Financial Accounting component uses one posting transaction for
several different postings for example:

G/L account postings


Customer invoice postings
Customer credit memo postings.
Vendor invoice postings
Vendor Credit memo posting

Enjoy Posting Screen: Header and 1st Line Item:


You enter the general date for posting document on the screen in the
document header, for example invoice and posting date, text, and so on.
For entering invoice and credit memos received, you can define a
document type for each transaction, which then appears as a general
Page 57 of 101

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FM/AO. AATI, Lahore

default value. You can overwrite this proposed document type at any time
as long as the document type field is ready for input during document
entry. If you do not define a document type, the system proposes standard
document types; for example, KR for entering vendor invoices.
The important input fields are in the foreground on a tab page and the
fields used less frequently are on the subsequent tab pages.
With customer or vendor invoices you enter the business partner account
data in this section together with the invoice or credit memo amount.
When you choose Enter, the business partner master data is also
displayed alongside the account name, address and blank details. You can
display an open item list by pressing the Open Items button.
In addition to the header and item data the entry screen also contains an
information area where you can see the display balance.
Via the button Tree, you can access screen variants, account
assignment templates, and held document that you can select as
templates. Users can navigate from a tree structure on the left hand side
of the screen

Enjoy Posting Screen : Additional Line Items:


Enter the additional line items for the document in the table in the bottom
section of the screen. The account name appears once you have made
and confirmed your entries.
You can select different fields or columns and change the size and
sequence of the columns and fields. You can also copy line items.
At the top of the screen, you can select from Park, Post, or Hold, to
complete the document entry transaction once the balance is zero.
You can still use the standard transaction for entering postings.
For complex postings you can access the complex posting transaction via
the menu. You cannot return to the initial screen from this complex
posting transaction.
You can enter any explanatory text for the line item. This item text can be
used internally and externally. If you want to use the text for external
purposes e.g. in correspondence, dunning notices, payment advice notes,
and so on enter a * in front of the text (the * is not become a part of the
printout).
In Customizing, you can define text templates under a four digit key
these text templates are copied into the line item when you enter the
relevant key in the text field during document entry.

Page 58 of 101

Summary of TFIN50_1

Unit-4

Compiled by

Muhammad Akhlaq Khan


FM/AO. AATI, Lahore

POSTING CONTROL

Lesson: 4.1 Document Splitting:


In new General Ledger accounting, every financial accounting transaction always
have two views i.e.The Data entry View and the General Ledger View
Besides the leading ledger, you may also see the document in other, non-leading ledgers in the General ledger
view.

Definition:

The Data Entry View:


View of how a document appears to the document creator and therefore, how
it is shown in the sub-ledgers (Account Receivable, Accounts Payable, Asset
Account). In other words data entry view is (just) entry view.

General Ledger View:

View of how a document appears in the General Ledger


Entry View and General Ledger View:
Displaying a document in the entry view and general ledger view is defined in
the New General Ledger Accounting and cannot be switched on or off using
customizing.
(If a customer uses classic general ledger accounting, the document is displayed
in only one view i.e. entry view. This view corresponds to the entry view of the
New G/L accounting)
New General Ledger Accounting offers the following aspects for a balance sheet
analysis below the company code level for example for profit center or for
segment.
In new G/L, Profit Center, Segment and Business Area are by default parts of its
leading ledger table i.e. FAGLFLEXT.
FI drilldown reports based on the totals of leading ledger table FAGLFLEXT.

Document Splitting:
Displaying the Profit & Loss statement by profit center, business area, or
segment is never problematic, since the positions which have an effect was
always provided with unique corresponding objects by the original controlling
objects, the problem is that the line item (e.g. Payable and Taxes) cannot be split
in the entry view. This only happens in the general ledger view, using document
splitting.
HINT: Note that Document splitting is only for customers who have to or want to
add a further characteristic (such as segment) on the balance sheet, in addition
to company code.

Mapped Business Transaction Example:Vendor invoice with multiple


expenses line items and different account assignment (with 10% Tax)

Entry View:
CCD

BS A/c

Description

AA00

31 1000

Millar Inc

40 4770
00
40 4170
00
40 1540
00

Advert Cost

3
4

Head

Purchase
Serv
Input Tax

Amoun Cur T CCtr


t
r
x
11,000 EU 1I
R
1000 EU 1I 1000
R
9000 EU 1I 4140
R
1000 EU 1I
R

Pc

Segem Explain
nt
Cedit

1000

Seg-A Debit

1402

Seg-B Debit
Debit

General Ledger View:


CCD

BS

A/c

Description

Amoun Cur

Page 59 of 101

CCtr

Pc

Segme Explai

Summary of TFIN50_1
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Muhammad Akhlaq Khan


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Document Splitting Active Split:


The entities defined as splitting characteristics (Balancing Characteristics)
are inherited in Non-account-assigned posting lines.
Document splitting is (also called on line split) ensures that companies
can create complete balance sheet for desired objects.
If document splitting is not activated, there is no difference between the
entry view and the general ledger view.
Document splitting is initially activated in customizing across all
clients
In a further step (in the dialog structure) you can activate /
deactivate splitting in each company code in the same transaction.
Inheritance means that when you create a customer invoice from a
revenue line, the unique characteristics are projected (inherited) to
the customer and tax lines in the general ledger view.
The default account assignment can be used to replace all
assignment and could not be derived from the posting with a
constant value.
Document splitting is activated in Customizing.
Note: Since document splitting can be activated for each client and
deactivated for each company code, the decision of whether to split the
document or not is made at company code level. However, all company
codes of a client can only use one document splitting procedure, i.e.
different procedures cannot be assigned to different company codes.
The inheritance Concept:
If an account assignment object is unique in a document, it is inherited
online in all missing positions. The indicator should always be set when
document setting is activated.
The default account assignment Concept:
It is possible to work with default account assignment, that is, if the
position is not provided with the necessary object for any reason, then a
default value (such as a profit center or segment) can be set
automatically.
To use such a default account assignment, you must first define a
constant in customizing.

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Summary of TFIN50_1

Compiled by

Muhammad Akhlaq Khan


FM/AO. AATI, Lahore

Note that using a default value can reduce the data quality. Incorrect
document splitting rules are then not recognized, since every missing
object is replaced by this constant. If you want to use default account
assignment, carryout a test without default values, in order to find any
possible errors.

Three Simplified steps for Document Splitting:


You can divide the Document Splitting Process into three (simplified) steps
/Types.
1-

Passive Document Splitting


During clearing (for example during a payment) the account
assignments of the items to be cleared are transferred to the
clearing items ( e.g. A/P lines.)
This step cannot be changed by the customer.
During Clearing the entities (segments or profit centers) of the
document being cleared are copied to the clearing document without
being changed

Example: Payment of an incoming invoice that has been assigned to


multiple accounts. The incoming invoice was divided over two segments A
and B in the proportion 60:40. During clearing, the payment is split 60:40
over the segments( only G/L view)
2-

Active (rule-based) Document Splitting:


The system process a specific document split due to (standard or
customer defined) splitting rules.
Splitting rules can be configured.

For document, which do not show clearing, individual distribution rules


can be created in customizing to decide which position of a document are
divided according to which basic position. The document type is the basis
for the rule.
Example:- An incoming invoice that has been assigned to multiple
accounts.
3-

Creating Clearing lines / Zero Balance:


The third step is creating clearing lines / Zero balance for each financial
statement characteristic ( and Document):
The system creates clearing lines to achieve an accurate document
split.
You can control this process with the zero balance indicator (in the
document splitting Customizing).

Creating clearing lines / zero balance formation is always used if, in


addition to the total document, the objects to be balanced within the
document (e.g. profit center, segment) should be balanced to 0.
Example: Without this function a posting from segment A to segment B on
the same account would only create two line items. With zero balance
formation, two further clearing lines are created, and these can be
understood as the relationship between these two segments (receivables
from segment A to B and payable from B to A)
Page 61 of 101

Summary of TFIN50_1

Compiled by

Muhammad Akhlaq Khan


FM/AO. AATI, Lahore

In customizing, you must first specify the (FI-) characteristics for which
you want document splitting to be carried out, because document splitting
characteristics determine which objects document splitting is used for
(where to divide /balance)
Standard Splitting Characteristics are:
- Business Area,
- Profit Center
- Segment
Note User- defined characteristics can also be used for document splitting.
Always set the Zero balance indictor if you want to create a financial
statement for the characteristics. The balance of the defined entities is
then always 0 for every posting, ensuring entry balancing.
The Mandatory Field Indicator has two meanings:
1st
it is in extension of the field status for account in which the
characteristics cannot be entered during document entry, and /or for
account that cannot be controlled using the field status. (Example: Vendor
lines should always include a profit center or a segment)
2nd
it is a check as to whether a business process-equivalent business
transaction variant was selected (which determines whether a splitting
rule can be found).
The mandatory field indicator works in addition to field status control in
the account or in the posting key.
The Splitting Procedure:
A splitting procedure is the total of all splitting rules of all business
transactions. As such the splitting procedure defines how and under which
circumstances document split will be performed. In detail, this means
each splitting procedure defines how each item category will be handled
in the individual business transactions for example whether the account
assignment of a customer item will be copied from the revenue item to a
customer invoice or not.
A Business Transaction: is a general breakdown of the actual
business process that SAP Provides and is assigned a wide variety of
item categories.
A Business Transaction Variant: is the specific version of the
predefined business transaction provided by SAP and the (technical)
modeling of a real business process for document splitting.
An item Category is a technical map of the posted line items. It
describes the items that appears within a document (business
transaction) They are derived from among other things, the general
ledger account categories.
o In other words: the item category is the semantic description for
the document split.
An individual splitting rule defines which item categories can/should be
split (>item categories to be processed) and at the same time
defines which foundation (> Base) can be used (> Base item
categories).
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Summary of TFIN50_1

Compiled by

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Muhammad Akhlaq Khan


FM/AO. AATI, Lahore

Summary of TFIN50_1

Compiled by

Muhammad Akhlaq Khan


FM/AO. AATI, Lahore

Lesson: 4.2 Default Values


To simplify document entry every user can enter values in his master
record. These are values defined for a column type. When you log on to
the SAP ERP system, the memory is filled with default values that were
defined in the user master record. This data is only relevant to the
individual user and not to the whole system.

Demonstration: User-Specific Memory


Setting Password:
Password set up instructions:
Application Menu: System>User Profile> Own Data.
Tab page Address Here you can specify details such as name and address
for the user.
Tab page Defaults Start Menu: You can always start with a specific menu
by entering a transaction name, for example, FDMN for customer menu. This
is not so common now, you generally define a specific role or start
transaction via Menu: Extras> Set Start Transaction or define appropriate
roles. You can also enter preferences for
Logon language
Decimal notation
Data format.
Parameter tab page Here you can define default values that are then
generally unchanged, for example, you always want to propose the same
company code. You can determine the parameter ID by placing the cursor in
the required field, pressing F1 and then clicking on the icon Technical
Information.

Default Values for User Settings:


Parameter IDs allow user to set default values for fields whose value does
not change very often, for example, company code, currency. When you
execute the transaction, these values appear in the corresponding fields
automatically. You, therefore, do not have to enter these values manually
and can prevent input errors.
Using editing options, you can configure your screens for the following
areas:

Receipt Entry: Users can hide fields that may not be relevant for
their jobs, such as foreign currency or cross company code
transactions. You can also use special editing options for the single
screen transactions.

Document Display: Using the List Viewer, the user can select
different display options for displaying documents.

Open Items: Users can choose line layout displays and posting
options for processing open items, in other words, they can enter
the amount of a partial payment or the balance for the new open
item.

When users log on to the SAP ERP system their user ID has specific
properties that apply to it throughout the system e.g.logon language, date
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Summary of TFIN50_1

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Muhammad Akhlaq Khan


FM/AO. AATI, Lahore

format, and decimal notation. Users can also set a default printer for
themselves. You can simplify the work for user maintenance by first
creating a dummy user and maintaining the values in accordance with the
accounting requirements and then copying this user.
Guidanc
e for
Instruct
or

Basic Default values: For document entry, the current date is


proposed as the posting date (you cannot change this)

Document Principle: The balance of a document must be zero before


it can be posted.

Proposals in Identical Fields: These entries are proposed in identical


fields in other functions, for example the number of the customer if you go
from the transaction Display Mater Data to the transaction Display
Items. This is called the set-get parameter.
To simplify the work in the application, you can define different default
values for document entry in Customizing.

System and Accounting Defaults:


The system provides you with basic default values for document entry. For
example, during document entry, the current data is proposed as the
posting data.
If you have already entered a document, for the next document, the
system proposes the company code that you entered in the last
document.
The system works on the basis of Document Principle i.e. all documents
must balance before they can be posted to.
To enter the different business transactions in account, the system offers
you predefined document types and posting keys in the configuration. For
example, a vendor invoice has document type KR, the credit posting is
carried out with posting key 31.
In the system, you can control whether the fiscal year is proposed when
you display or change documents. In company code with (mostly) yearspecific document number assignment, it is helpful if the fiscal year is
proposed the system then proposes the document number of the last
document processed and the relevant fiscal year. You can also have the
CPU date proposed as value date.
At company code level, enter the maximum difference permitted between
the exchange rate in the document header of a business transaction and
the exchange rate in the exchange rate table. If the system determines
that this percentage maximum difference has been exceeded, it issues a
warning message. In this way, incorrect entries can be recognized and
corrected in time.

Page 65 of 101

Summary of TFIN50_1

Compiled by

Muhammad Akhlaq Khan


FM/AO. AATI, Lahore

Lesson: 4.3 Change Control


Guidanc
e for
Instruct
or

You can change document that have already been posted, but only certain
fields! Not certain rules:

Document Header: The reference number and document header


text are modifiable.
Line Items: You cannot change the amount, the posting key, or the
account, therefore, no creative accounting!! Changing the amount
contravenes accounting principles.

All changes are logged, not just the last one. If a field has been changed
several times, the changes are listed one beneath the other. The changed
document does not receive a new document number.
You can use report RFBABL00 (Report of document changes) to get an
overview of all document change.

User can change documents that have already been posted. However,
based on different rules, only certain fields can be changed. These rules
can either be predefined by the system or be user-specific.
Certain fields in both the document header and the line items can be
changed.
Document Header: Only the reference number and document header
text can be changed.
Line Items: The system does not allow changes
to the amount,
posting key,
the account, or
any other fields that would affect the reconciliation of posting.
As users make changes to documents, the following information is logged:
The field that was changed
The new and old values
The user who made the change
The time and date of the change.
You can differentiate according to the following criteria:

Guidanc
e for
Instructo
r

Account Type: Define rules for customers, vendors, or general ledger


accounts. For fields in the document header, do not make any entries here.
There the change rule apply for all account types.
Transaction Class: Only used for the special general ledger transactions bill
of exchange and down payment.
Company code: If the field is blank, the rule applies for all company codes.

In the document header, there can only be one prerequisite for a field being
modifiable, that the posting period has not been closed.
For the line items you can have several prerequisites for a field being modifiable
You can only enter these prerequisites if the field is actually modifiable

Document Change Rules:


You can differentiate between document change rules according to the
following criteria:

Account Type: the account type allows the users to define rules for
customer, vendor, and General Ledger Accounts.
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Summary of TFIN50_1

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Muhammad Akhlaq Khan


FM/AO. AATI, Lahore

Transaction Class: Transaction classes are only used for the special
G/L transactions bill of exchange and down payment.
Company code: If the field is blank, the rule applies to every company
code.

The conditions for changing a field are predefined. You can change them
as follows:

The posting period is still open


The line item is not yet cleared
The line item is either a debit in a customer account or a credit in a
vendor account.
The document is not a credit memo for an invoice
The document is not a credit memo for down payment.

You can display document changes for all documents with report
RFBABL00. In this report you have selection options including the
company code, the document numbers, the fiscal year, the change date,
and the user name of the person making the change.

Lesson 4.4 Document Reversal


A document when entered and posted in a system incorrectly, it cannot be
deleted. It must be reversed and re-entered correctly.
Guidanc There are two ways to reverse documents that have been entered
incorrectly:
e for
Instruct Normal Reversal posting ( separate document is created)
Negative posting (from 4.0 as required by customers.) (Separate
or
Document is not created)

During the normal reversal, a reversal document is created. The


reversal document and the reversed document are then cleared items.
In the document header of the reversed document you can see the
number of the reversal document and the reversal reason.
The document header of the reversal document contains the number of
the reversed document but not the reversal reason.
Mass reversal: With recurring entries or with the payment program,
a large number of documents are created automatically. Using the
mass reversal function, these can be reversed simultaneously.

Users can make errors when they enter documents. As a result the
document created contains incorrect information. In order to log the
adjustments, the incorrect document must first be reversed. The
document can then be re-entered correctly.
The system provides a function to reverse G/L, customer and vendor
documents both individually or in a mass reversal.
A document can be reversed either by
normal reversal posting or
Negative posting.

Page 67 of 101

Summary of TFIN50_1

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Muhammad Akhlaq Khan


FM/AO. AATI, Lahore

When you reverse a document you have to enter a reversal reason that
explains the reversal. The reversal reason also controls whether the
reversal date is allowed to be different to the original posting date.
Documents with cleared items cannot be reversed. The document must
first be reset and then reversed. If a cheque is also issued first you have to
declare the cheque as void and then reset the document and then
reversed.
Guidanc
e for
Instruct
or

The normal reversal posting executes an inverse posting and increases the
transaction figure. If you want to avoid an unnecessary increase in the
transaction figures, you can use the negative posting. This function was
developed as a result of customer requirements and is an option, that is, you
do not have to use it. The negative posing also performs an inverse posting,
but resets the transaction figures.
You can see the negative posting by clicking on a line item in the reversal
document, then clicking on Extras ) More Data, in the menu bar.

Normal Reversal Posting:


It causes the system to post the incorrect debit as a credit and the
incorrect credit as a debit. The normal reversal posting, therefore, causes
an additional increase in the transaction figures.
Negative Posting
The negative posting also post the incorrect debit as a credit and the
incorrect credit as a debit. This time the posted amount is not added to
the transaction figures, but is subtracted from the transaction figures of
the other side of the account. This sets the transaction figures back to as
they were before the incorrect posting took place.
Normally the system uses the normal reversal posting to reverse
documents. The following prerequisites must be fulfilled to enable
negative postings:
The company code permits negative postings.
The reversal reason must be defined for negative reversal.
Negative postings can also be used to perform transfer postings of
incorrect line items. The item is removed from the wrong account by a
negative posting (resetting the transaction figures) and posted to the
correct account by a normal posting. This can only be done with a
document type that explicitly allows negative postings.

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Summary of TFIN50_1

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Muhammad Akhlaq Khan


FM/AO. AATI, Lahore

Lesson 4.5 Payment Term and Cash


Discount
Guidanc
e for
Instruct
or

The company uses different terms of payment. Cash discounts are to


be posted automatically by the system. The company continually
negotiates new terms of payments with a vendor, and these are to be
reflected in the system
These are the payment conditions for clearing invoices:
They are known s terms of payment in SAP ERP. They include the due
date and the cash discount that can be granted if the invoice is paid
within a certain time.
SAP ERP contains some predefined standard terms of payment. If
necessary, you can define new terms of payment.
The terms of payment are used to calculate the cash discount and due
date for paying the invoice.
The terms of payment can be:
Defined in the vendor or customer master record.
Proposed when you post a document.
Entered manually
The dunning and payment programs access these terms of payment.

Terms of Payment:
Terms of payment are conditions agreed between business partners for
the payment of invoices. The conditions define the due date and the cash
discount offered for payment of the invoice within a certain period.
Some terms of payment are predefined in the system; you can add new
ones if necessary.
Terms of payment enable the system to calculate a cash discount and
invoice due date.
In order to do this the system needs the following data

Baseline date: The date from which the due date is derived
Cash discount Terms: The terms by which the cash discount can be
taken.
Cash discount percentage rate: the percentage rate used to
calculate cash discount.

When you process a document, you enter the terms of payment so that
the system can calculate the required conditions of payment.
If you have entered terms of payment in the master record, these are
proposed. You can also enter or change them during processing.
In the customer / vendor master record, you can enter terms of payment
in
1. Company code segment
2. Sales area segment or
3. Purchasing organization segment.

Page 69 of 101

Summary of TFIN50_1

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Muhammad Akhlaq Khan


FM/AO. AATI, Lahore

The payment terms defaulted when you post an invoice depends on where
the invoice is created:

If the invoice is created in Financial Accounting the terms of payment


from the company code segment are defaulted, you can change them.
If the invoice (billing document) is created in Sales and Distribution or
Sales order Management, the terms of payment from the sales area
segment are defaulted. When you post the sales order management
invoice, the terms of payment are automatically transferred to Financial
Accounting invoice (copied to FI invoice).
If a vendor invoice is entered in Purchasing, the terms of payment from
the purchasing organization segment are defaulted. During posting, the
terms of payment are automatically transferred to Financial
Accounting.

HINT: System does not check that the terms of payment in the different
segments agree or not.
When you post to a customer /vendor account, you can enter a cash
discount amount or cash discount percentage rate.
If you enters a cash discount amount and delete the terms of payment
and the related entries (exception: ZB00), the fixed cash discount amount
applies.
You can also fix the cash discount when you post to a vendor account.
Fixed means that the first or second cash discount terms can be claimed
regardless of whether the corresponding date has expired.
The cash discount amount is automatically entered in a customer or
vendor invoice during clearing.

Term of Payment for Credit Memos:


Generally no terms of payment are proposed when you post a credit
memo. However, there are three options for posting credit memos:
1-

Invoice related credit memos:

Here you can create a connection to the original invoice when you post a
credit memo by entering the document number of the invoice in the
Invoice Reference field.As a result the terms of payment from the
invoice are copied to the credit memo. Both are then due on same day
and offset against one another from automatic dunning and payment.
2-

Other Credit Memos terms of payment not valid:


a) If you do not enter an invoice reference when you post a credit
memo. But do enter terms of payment, these terms of payment
have no effect.
b) The additional Net Due Date field in the line item display then
contains the baseline date (document date)

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Summary of TFIN50_1

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Compiled by

Muhammad Akhlaq Khan


FM/AO. AATI, Lahore

Other credit memos Terms of payment valid:

If the terms of payment entered in a credit memo without reference and


to be valid, then you must enter a V(=valued) in the invoice reference
field.
For dunning the invoice and credit memos are offset against each other.
An invoice-related credit memo is only offset when the invoice itself is
due.

Incoming Invoices and Credit Memo:


You can also have terms of payment for incoming invoices and incoming
credit memos:
You use the Day Limitto specify the date (of calendar month) up to which
the terms of payment are valid (baseline date); we will look at this more
closely in connection with the graphic Day Limits.
The Description of terms of payment covers three elements:
Sales order management text for printing on invoices
An explanation if necessary
An explanation generated by the system.The explanation given by you
replaces the system-generated explanation.
The account type defines the sub-ledger in which terms of payment can
be used. We recommend you define different terms of payment keys for
customers and vendors and validate them separately for customers or
vendors. Otherwise problems can arise if Sales order management
changes a terms of payment key.

Payment Control:

Using block keys, which can be entered in line items or accounts, you
can block line items or accounts for payment or collection. These block
keys can also be entered in payment terms.
A payment method (for each country, the system has payment
methods defined that you can use in that county) is entered in line
items or accounts. Like payment blocks, payment methods can be
entered in the terms of payment.

A block key and payment methods defined in terms of payment are


defaulted in the line item when the terms of payment are used.
You can enter the block key and the payment method:

During posting
In the customer /vendor master record (company code segment)
In the terms of payment.

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Summary of TFIN50_1

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Muhammad Akhlaq Khan


FM/AO. AATI, Lahore

The Base Line Date:


The baseline date is the starting date, and the system uses it to calculate
the due date for the invoice and the cash discount terms. It can be
proposed or calculated.
Possible default values:

No default
Posting date
Document date
Entry date.

Specifications for calculating the baseline date:


To calculate the base line date with the day limit to system requires:

A fixed daywith which the calendar day of the baseline date is to be


overwritten.
The number of months to be added to the calendar month of the
baseline month.

Cash Discount:
To calculate the cash discount, you enter a percentage rate in the terms of
payment. You also enter the number of days that the percentage is valid
for in the same line. You can also add fixed days and months.
The days and months specified in the terms of payment are used in
conjunction with the baseline date to calculate the correct cash discount
amount for the payment date.
Up-to three cash discount periods can be entered.
Day Limit:
Day limit is the base line date to which a condition is valid. You can use
the day limit to define different terms of payment under a term of
payment key.
Day limit enable date-specific terms of payment in one term of payment
key.
You can define several versions of terms of payment, with each version
having a different day limit.
The day limit is the baseline date up to which the payment terms version
applies. For terms of payment that are dependent, for example, on
whether the baseline date is before the 15th of the month, you can enter
two-part terms of payment under the same terms of payment key. This
results in two entries where different terms of payments can defined.
The following terms of payment require the specification of a day limit:
Documents with invoice date up to the 15th of the month are payable
on the last day of the following month.
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Summary of TFIN50_1

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Muhammad Akhlaq Khan


FM/AO. AATI, Lahore

Documents with a later invoice date are payable on the 15th of the
month after.

Installment Payments:
Guidanc
e for
Instruct
or

Installment payments are a percentage split of the invoice amount in several


partial amount with different due dates; for example, for purchasing assets
(10% on completion of contract, 50% on deliver, 40% on acceptance).
First define terms of payment in which the field Installment Payment is
selected, but with no cash discount terms and no cash discount percentage.

An invoice can be paid over several months using an installment plan, or a


portion of the invoice amount may be retained for payment at a later
date.
The total amount is divided into partial amounts due on different dates.
The system carryout this split automatically if installment payment is
defined in the terms of payment.
To do this, select installment payment and do not assign cash discount
period or cash discount percentage rates.
Define an installment number, a percentage rate, and terms of payment
for each installment.
The percentage rates specified must be total 100%.
The system creates a line item for each installment specified.
The line item amounts correspond to the percentages of the total amount.
The total of the line item amounts corresponds to the total amount.
The terms of payment for line items are the terms of payment defined for
the individual installments.
The line item display then contains one line item for each installment,
whereby each line item has the same document number but different due
dates.

Cash Discount Base Amount


Depending on the national regulations of the country, the cash discount
base amount to be used by the system for calculating cash discount may
be:
Net value (taxes not included) ; or
Gross value (including taxes)
This setting belongs to the global parameters of a company code.
For all accounts that are posted automatically e.g. cash discount
expenses, revenue, tax accounts, etc. you must set the Post
Automatically Only indicator and the accounts must be defined as such in
the IMG (Implementation Guide)

Posting Cash Discount Gross procedure:


You can enter the amount of cash discount:
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Summary of TFIN50_1
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Muhammad Akhlaq Khan


FM/AO. AATI, Lahore

Manually; or
Automatically (by the system using the rates given in terms of
payment.

You can still change the cash discount after you post the invoice.
When an open item on a customer or vendor account is cleared, the
possible cash discount is posted automatically to an account for cash
discount expenses or cash discount received.
You define the accounts for cash discount expenses or cash discount
revenues in the configuration.

Posting Cash Discount Net procedure:


If you post a vendor invoice with a document type for the net procedure,
the amount posted to the expenses or balance sheet account is reduced
by the cash discount amount. The same amount is also posted to a cash
discount clearing account to clear the posting.
When you use the net procedure, the cash discount amount is
automatically posted when the invoice is posted.
When the invoice is paid, the system caries out a clearing posting to the
cash discount clearing account.
If the invoice is paid after the cash discount deadline, the cash discount
loss is posted to a separate account.
The cash discount clearing account must be managed on an open item
basis.
HINT: SAP ERP supports net procedure for vendors only.

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Summary of TFIN50_1

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Muhammad Akhlaq Khan


FM/AO. AATI, Lahore

Lesson 4.6 Taxes


SAP supports the tax system for different countries:

Tax on sales and purchase


Additional Taxes
Withholding Tax (not covered in this course)

Basically there is two types of Taxation that can be processed in the SAP
ERP system.

Taxes are levied at a national level with uniformly defined rates.


Taxes are levied at a state / jurisdiction level, with rates defined by
the state / jurisdiction. Due to the complications involved with this
type of taxation, third party software is often used to determine the
tax allocation. SAP provides generic interface software to support
this.

In some countries taxes are even levied on both levels.


When dealing with the taxes, the SAP ERP system provides support by:

Checking the tax amount entered (via defined conditions type) or


calculating them automatically.
Posting the tax amounts to tax accounts
Performing tax adjustments for cash discounts or other forms of
deductions.
Creating tax returns

The tax base is configured for every company code under Global
Parameters.

Tax Support:

The system supports the treatment of taxes as follows:


-

Checks the tax amount entered or automatically calculates the tax.


Posts the tax amount to tax accounts defined in the G/L Accounts.
Performs tax adjustments for cash discounts or other forms of
deductions.

The expenses or revenues is the base amount which can include a cash
discount (tax base is gross) or exclude a cash discount (tax base is net).
The tax code is used for the calculation procedure required to perform
taxation functions on the SAP system.
National regulations determine whether the tax base amount must be:
-

Net amount (taxable expenses or revenue items minus cash discount)


Gross amount (taxable expenses or revenue items include cash
discount)
You define which amount is to be used for each company code or for
the highest level of the jurisdiction code.

Tax Postings:
-

The tax calculated by the system are usually posted via a separate line
item to a special tax account. This is the standard scenario.
Taxes with certain transaction/ account keys ( for example, NVV) are
distributed to the relevant expenses /revenue items. This is the case
for sales tax payable or other not-deductible input taxes.

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FM/AO. AATI, Lahore

Tax Account Determination:

To enable the automatic tax account determination you have to assign the
following data to the account / Transaction keys that generate the tax
items during posting:
-

Posting keys (40 and 50 are recommended)


Rules that determine which fields the account determination is based
on (the account determination can be based on the tax code or the
account key)
Tax accounts.

When exchange rates differences occur because of tax adjustment in


foreign currencies, these exchange rate differences are usually posted to
the normal account for exchange rate differences. However, for each
company code, you can specify that the exchange rate for tax items can
also be entered manually or is determined by the posting or the document
date. The resulting differences are posted to a special account.
Tax Accounts:
Guidanc
e for
Instruct
or

In the general ledger account master record, enter the tax code that
can be used to post to this account in the Tax Category field.
The tax accounts for the input and output tax must contain the
following tax categories in the master record:
-

< For input tax


> For output tax
The properties of the tax code define whether or not the tax posted is
an input or an output tax.
In the account for output tax, you can use the Post automatically
only field (on the Create/Bank/Interest tab page) to prevent manual
tax postings.
The Post automatically only indicator should be selected only for
output tax, not for input tax. If you receive an invoice with an incorrect
input tax amount, you still have to post this amount manually.

You define tax accounts, that are account to which tax items are posted, in
the field Tax Category by entering one of the following signs:
-

<For input Tax


> For output Tax
The properties of the tax code define whether or not the tax posted is
an input or an output tax.

Post automatically only must be selected if you do not want to post tax
manually.
Other General Ledger Accounts
All other G/L accounts may have one of the following entries in the Tax
Category field:

,, For non-tax-relevant postings (e.g. bank postings)


- For postings that require an input tax code (for example,
reconciliation accounts for payables form goods and services.
+ for posting s that require an output tax code (for example,
reconciliation accounts for receivable from goods and services)
* For postings that require any tax code.
xx For postings with the predefined tax code xx.
The properties of the tax code define whether or not the tax posted in
an input or an output tax.

If the Postings Without Tax Allowed field is selected, you can post to
this G/L account without specifying a tax code. This is especially
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FM/AO. AATI, Lahore

necessary for tax postings within a jurisdiction code tax calculation


procedure to foreign customers who do not have a jurisdiction code.
HINT: Account for cash discount need an entry in the Tax category field if
the system is supposed to post tax adjustments.

Lesson 4.7 Cross-Company Code


Transactions
Guidanc
e for
Instruct
or

The process flow for cross- company code transactions is as follows:


1- Accounts are posted to in several company codes. Since a
document is always assigned to exactly one company code, one
document is not sufficient. You need one document for each
company code.
2- For clearing debit and credit, the system automatically creates offsetting postings in each company code to clear accounts for
receivables and payables.
3- Both documents receive one common cross-company code
transaction number.
Report RFBVOR00 displays cross-company code transactions.

A cross company code transaction involves two or more company codes in


one business transaction: Examples:

One company code makes purchases for other company codes (Central
Procurement)
One company code pays invoices for other company code (Central
Payment)
One company code sells goods to other company codes

A cross company code transaction posts to accounts in several company


codes. This cannot be done by posting only one document because a
document is always assigned to exactly one company code. Instead, the
system creates and posts a separate document in each company code
involved.
In order to balance debits and credits within these documents, the system
generates automatic line items which are posted to clearing accounts, for
payable or receivables.
HINT: The documents which belong to one cross-company code
transaction are linked by a common cross-company code
transaction number.

Central Procurement
Example: A vendor delivers goods to company codes 1000 and 2000, but
send invoice for all goods to company code 1000. You enter a part of the
expenses and post the invoice to the vendor account in company code
1000. When entering the invoice, you have to post the other part of the
expenses to company code 2000. The clearing posting and tax posting are
created automatically.
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The tax is not distributed between the company codes according to their
expenses. Therefore, this function may only be used if the transactions
itself is not tax-relevant or if the company codes form a taxable entity.
The tax calculated is always posted to the company code of the first item.
Therefore, to ensure that the tax is posted to the same company code as
the invoice, the invoice item must always be entered first.
Certain countries tax regulations require that the tax amount are posted
in the company codes in which the expenses occurred. Therefore, the tax
must be distributed from the first company code to the other company
codes according to their expenses amount. You can do this using report
RFBUST10

Clearing accounts
Clearing accounts must be defined in every company code before a crosscompany code transaction may be carried out. The clearing accounts may
be G/L accounts, customer, or vendor accounts.
In the configuration you must assign clearing account to every possible
combination of two company codes to allow cross company code postings
between these combinations e.g. three company codes need 3x2=6
clearing accounts.
To reduce the number of clearing accounts, you can use just one company
code as the clearing company code. In this case, you only have to assign
clearing accounts to every combination of the clearing company code and
the other company codes i.e. three company codes need 2x2=4 clearing
accounts.
A
A
B

Posting keys must be assigned to the clearing accounts to identify their


account types.
Cross company Code Document Number:
When the Cross company code document is posted, the system generates
a cross-company code document number to link all of the new documents
together.
The document number is a combination of
the document number of the first company code,
the first company code number and
the fiscal year.
It is stored in the document header of all of the documents created for a
complete audit trail.
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FM/AO. AATI, Lahore

Cross-company code documents may be reversed. To do this, use the


reversal function for cross-company code transaction.
Cross Company
Code
Transaction No.

Doc. No. of 1st


CC
1500000012

1st Company Code No


1000

Document No.
of Company
Code 1000

1500000012

1st Company
Code=1000

Document No.
of Company
Code 2000

2000000031

2nd Company
Code=2000

Fiscal
Year
2014

Lesson:- 4.8 Real-Time Integration


In the new G/L Accounting, real-time integration replaces the
reconciliation ledger in classic general ledger accounting. The reason
behind real-time integration is to save time in closing processing.

Real-Time Integration CO / FI
In many controlling posting, financial accounting objects are addressed.
These cases are implemented using real-time integration CO>FI in
financial accounting. Defined variants in Customizing are used to decide
for which objects postings of this kind should or have to be created.
Real Time integration mostly affects the following cases:
1- As a result of a posting between controlling objects, a change results
for an accounting object (profit center, segment business area or
functional area) stored in a controlling object.
2- Costs are posted across company codes in cross-company code cost
accounting In this case such postings must also be mapped
correspondingly in accounting.
Special features of the Financial Accounting Document (2b)

Postings are made real-time (for each CO document)


In this case, the FI follow-on document has no clearing accounts.
Clearing lines are only necessary if the activity in management
Accounting / CO (2) results in a change of a balancing entity.
You can navigate from the real-time follow-on Financial
Accounting document to the Management Accounting document
(2/2a) and vice versa. The key idea here is to ensure the
traceability of accounting documents.

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FM/AO. AATI, Lahore

Variants for COFI Real-Time Integration


To determine which characteristic changes will generate real time FI line
items you can use the checkboxes, define Boolean rules, or implement a
BAdI with your own program logic.
Please note that it does not make any sense to select characteristics that
you have not assigned to at least one ledger in the scenarios.
The key date activation defines when (from which posting date of the CO
document) CO-FI reconciliation is possible with real-time integration.
You can also create Financial Accounting documents for CO documents
entered before the new G/L has activated.

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FM/AO. AATI, Lahore

Unit-5 CLEARING
Lesson 5.1 Open itemClearing
Open items are incomplete transactions, such as a vendor invoice that has
not been paid.
For a transaction to be considered as completed, it must be cleared. A
transaction is cleared when a clearing posting has been carried out from
an item or group of items so that the resulting balance of the items is
zero.
Document with open items cannot be archived and stay in the system
until all open items are cleared. There are two ways to clear open items in
SAP ERP
1- Account clearing (subsequent)
2- Posting with clearing (during posting)
E mail of SAP Expertjay banda
SAP System offers the following methods to clear accounts with open item management:
Posting with clearing
Using the posting with clearing function, you enter document line items and then select the open
items to be cleared. Once you have fulfilled all the prerequisites for clearing, the system clears the
open items. The system generates one or more offsetting postings for the open items to be cleared
Account clearing
In this clearing procedure, you select open items that balance to zero from an account. The system
then marks these items as cleared. It enters a clearing document number and the clearing date in
the document items. The clearing date can be the current date or a date that you enter manually.
The clearing document number is the number of the most recent document involved in the clearing
transaction.
Automatic Clearing
You can use the Automatic clearing program to clear open items from customer, vendor, and G/L
accounts. This program uses predefined criteria to group together open items per account. If the
balance of the group of open items equals zero in local, foreign, and where applicable, the parallel
currency, the items are marked as cleared.

Examples of Postings with Clearing:


An invoice is posted to a customer account. (This record will be
declared as an open item because at this time it is unpaid.
The customer pays the invoice and the payment is assigned to the
open item.
The invoice is cleared with the payment and the resulting balance is
zero.
Example of Account Clearing:
Manually clearing an open invoice with a related credit memo and
payment on account.
A clearing transaction always creates a clearing document.
The process takes place in 4 individual steps:
1- Enter the clearing amount and the account manually.
2- Select the open item.
3- The clearing amount is assigned automatically.
4- As a result of this posting, the open item is cleared.

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FM/AO. AATI, Lahore

In contrast to the account clearing transactions, here clearing is


performed in a single step together with the posting of the incoming
payment. At least two accounts are affected.

Post with clearing:

When you use post with clearing function, enter the clearing document
amount and then select the open items that are to be cleared.
If the total amount of selected open items equals the amount of the
clearing document, the system clears the open items by clearing one
or more clearing items.
If the total amount of selected open items does not equal the amount
of the clearing document, the system allows you to post the difference.
Posting with clearing can be carried out for several accounts, account
types, and for any currency simultaneously.
You can carry out the Post with Clearing transaction manually or
automatically using the automatic payment program.

Account Clearing:

The Account Clearing transaction usually clears clearing accounts, since


Guide for the debit and credit items usually balance to zero. First run the
Instructo Automatic Clearing Report SAPF124. The remaining debit and credit
items are cleared manually without a posting. Payment differences
r
within the tolerance group are cleared. If manual clearing is not
possible, the user can create a residual item or partial payment after
selecting open items.
-

Open items must be cleared so that they can be archived. Otherwise


they take up too much of the memory.
You can use this function to clear one or more items or an entire
account by manually assigning postings and offsetting postings.
You then manually select the open items of an account that must
balance to zero.
Manual clearing takes place, for example, in the following cases:

For bank subaccounts and clearing accounts.


For debit memo procedures
For a vendor makes a repayment.
You can use the Clear Account transactions to clear items from
several accounts. The line items display shows both items as
cleared.

The clearing Document:


Guidanc e for
Instruct
or
-

Normally contains no line items. This is because postings are often


not required to clear items within an account.
Does not appear in the line item display, neither with the cleared nor
with the open items.
The invoice and the credit memo are now cleared items and
therefore, have the same clearing document number.
The clearing document contains items if:
Document splitting is activated in new G/L Accounting.
The items to be cleared belongs to different business areas. The
system then has to carry out offsetting postings to bring the balance
to zero for each business area. This is done using the transaction
Transfer Posting with Clearing

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FM/AO. AATI, Lahore

An invoice is cleared with a credit memo minus cash discount. The


clearing document then contains the cash discount posting.
The clearing date can be current date or a date that you enter
yourself.
Exchange rate differences are to be posted.

Account Clearing:
Using the clear accountfunction, you select those open items from an
account that balance to zero. The system marks them as cleared and
creates a clearing document. The clearing document number and the
clearing date are entered in the cleared items. The clearing date can be
the current date or a date that the user determines.
The Clear Account function works for any accounts managed on an
open item basis in the general ledger and the sub-ledgers.
The Clear Account transaction can be performed manually or
automatically using the clearing program.

Clearing Program (Automatic Clearing)


Guidanc
e for
Instruct
or

Instead of using the clearing Account function you can also carry out
automatic clearing using reports SAPF124 or by choosing the menu
path.
Report SAPF124 summarizes the open items from the selected
accounts in groups and clears them if they have the same following
system criteria:
- Company Code
- Account Type
- Account Number
- Reconciliation Account Number
- Currency Code
- Special G/L Indicator
The program also groups a maximum of five additional user criteria
from the document header / line items to create the groups.
The criteria are selected form the fields of tables BSEG and BKPF and
should also be contained in table BSISBSID and BSIK
- If the balance of the items in a group is zero, these items are
cleared and a clearing document is created (new for 4.0).
Important : clearing only takes place if the balance of the
selected group is zero. If not, the system gives an error message.
The accounts are blocked during clearing.
- For Release 4.0 the program can also create automatic postings
(cash discount, exchange rate differences, taxes)

Item not cleared:


Held items, statistical postings and certain G/L Transactions (e.g.
down payments, bills of exchange, items withholding tax).
Prerequisites:
- The account is managed on an open item basis
- No special G/L transactions should be cleared.

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FM/AO. AATI, Lahore

Steps in the clearing program

o Group items for each account


o If balance is zero, items are marked for clearing

Prerequisites for clearing:

o User criteria must be defined in Customizing


o Account to be cleared must be defined for
automatic clearing

Items that are not cleared:

o Noted items
o Statistical posting, bill of exchange postings.
o Items with withholding tax entries.

Clearing Program:
The user can clear open items for general ledger and sub-ledger accounts
with the automatic clearing program.
The program groups together the items of an account that have the same
entries in the following fields:
Reconciliation account number
Currency
Special G/L indicator
Five freely defined criteria from document header or line item, for
example
o assignment fields,
o reference number, etc.
If the balance (in local currency) of the items within a group is zero, the
system automatically clears them and creates clearing documents.
All account requiring automatic clearing must be defined in Customizing.
The automatic clearing program does not clear:
- Noted items
- Statistical postings and certain special G/L transactions relating to bills
of exchange.
- Down payments can only be cleared if down payment clearing items of
the same amount have already been posted.
- Items with withholding tax entries.

The Assignment Field and Sort Field:


Guidanc
e for
Instruct
or

The system automatically fills the assignment fields for a line item
when you post items according to the Sort Field entry in the master
record.
You can combine upto four fields with a maximum of 18 characters.
For example, to display the document number (10 characters) and
the posting date (6 characters), these two field names are included
in the definition of the assignment field.
You can also use purchase order number as the sort key for
customers and vendors.
In the general ledger, for example, the sort key could be the cost
center.
The line item sorting in the line item display and clearing functions
is based on the value in the assignment field.
Copying control in SD enables to specify (in customizing for SD) what is
copied into the FI document, that is, how the assignment and reference
fields are filled.

The system automatically fills the assignment field for a line item when
you post items according to the Sort Field entry in the master record.

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FM/AO. AATI, Lahore

The assignment field can be a combination of up to 4 fields with a


maximum of 18 characters. For example, to display the document number
(10 characters) and the posting date ( 6 characters), these 2 fields name
are included in the assignment field definition.
For example, if the sort key is set to the purchase order number in the
business partner master record, then the assignment field in the business
partner line item is filled with the purchase order number.
However, if the sort key is set to the cost center in a general ledger
master record, then the assignment field in the general ledger line item is
filled with the number of the cost center when the G/L account is used.
The line item sorting is the line item display and clearing function is based
on the assignment field.

Example:
When an invoice is posted in Sales Order Management, an accounting document
is created in Financial Accounting. The Accounting Document has a document
number that is normally different to the number of the Sales Order Management
Invoice. You can use the reference and the assignment to trace which document
in Sales Order Management the accounting document is based on. The reference
and the assignment in the accounting document are copied from the reference
and the assignment in the sales Order Management billing document. You can
define which numbers (purchase order, order, delivery, or billing document
number) are copied into the Sales Order Management document as reference
and assignment and then transferred to Financial Accounting. You can then use
these fields as selection criteria in Financial Accounting.

Lesson:-5.2 Incoming and out Going


Payments
The Manual Payment Process:
A manual payment is a transaction that clears an open item, typically an
invoice, by manually assigning a clearing document.
An incoming payment, typically used in accounts Receivable, clears an
open debit amount.
An outgoing payment, typically used in Accounts Payable, clears an open
credit amount.
Manual payment is processed in three steps:
Data is entered in the document header (bank data, open items, etc.)
Open items are selected to be cleared.
Simulate the document to check the assignment and posting is correct,
then perform the real posting by saving transaction.
Possible payment differences will be dealt with in the next lesson.

The Document Head


Document Date

06.10.201
4

Type

Posting Date

06.10.201
4

Period

Reference

VP/C
P
10

Company Code

300
0

Currency

PKR

Conversion Date

Doc. Header Text


Clearing Text

Inv. # or Cheque #.

Bank Data
Account

Business Area

Amount

Amount in LC

Bank Charges

CL Bank Charges

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FM/AO. AATI, Lahore

Tax

Assignment

Open Item
Selection
Account

Additional Selections

Account Type

Amount

Advice No.

Document No.

Distribute Account to
age

Auto Search

None

Standard OI

Posting Date

Other
Accounts

Others

Payment Header
The data entered in the document header is similar to the data entered
when posting invoices. The document header consists of three sections:
i)
the payment header
ii)
the Bank data and
iii)
the open item selection.
Enter the following information in the payment header section of the
document header:
Enter the document date this is the date on the physical document.
The system proposed the document type dependent on the transaction
called.
If the company code is not proposed you have to enter it and it is then
proposed as a parameter.
The period specification includes the posting date and the posting
period. The current date is defaulted as the posting date and the
posting period is derived from the posting date.
The currency specifications include the currency code, the exchange
rate and the date for currency translation. If no exchange rate or
translation date is entered, the exchange rate from the exchange rate
table on the posting date is used.
Any references needed to identify the incoming payment may be
entered in the reference document number, document header text, and
clearing text fields.
o If you enter * in the reference field, the document number is
copied into this field. The entry in the Clearing Text: field is copied
into all clearing items and appears on the far right in the open item
display.
o You can only make an entry in the in the document number field if
number assignment is external.

Bank Data:
Enter the following bank data in the next section of the document header:
- The account in a general ledger account used for incoming or outgoing
payments.
- The payment amount is the total payment amount
- The bank may charge service charges for its services and these are
posted automatically to a special expense account. With incoming
payments the system adds the bank charges to the payment amount
to form the clearing amount. With outgoing payment it subtract the
bank charges from the payment amount to determine the clearing
amount.
- The value date is the date used to evaluate the position in Cash
Management. It may be defaulted by the system.
- The tax is an optional description of the item. Start the line with * to
enable the text to be printed on external correspondence too. Youcan

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also work with text templates-the user can select an entry from a list of
standard texts.
The assignment number is either created by the system or you can
enter it manually.

Open Item Selection:


Guidanc
e for
Instruct
or

The last section in the document header determines the selection of


open items:
Enter the account number of the business partner in the Account
field.
For the Account Type you can make your selection using theF4 help,
for example, D and K.
You can select open item with a special G/L indicator and /or normal
open items.
Entering the payment advice note number simplifies the selection of
the items to be cleared.
By specifying additional accounts you can also select and clear
items from other accounts.
If you select the indicator Distribute by Age, the items to be cleared
are selected automatically. The item with most days in arrears are
cleared first (or assigned) automatically and the system creates a
payment on account for the residual amount.
In the automatic search the system tries to find a combination of
open items whose total comes closest to the amount entered. If the
amount is only partially found, you can accept or reject the proposal
in an additional dialog box.
You use the Additional Selection to restrict the open items. Use
Other to access even more selection options.
If you only know the document number to which an incoming payment
refers, but not the customer, you can select the open items without
specifying the customer using Additional Selections to select using
document numbers.
If an incoming payment refers to several invoices, you can enter
additional customers from the menu bar, after you have processed the
open items.

Enter the following open item selection data in the next selection of the
document header:
Account and Account Type: in this area, Account refers to the
account number of the business partner and the account type for this
account. The account and account type are required to determine the
account that contains the open items.
Normal Open items and /or Special G/L Transactions: You can
select normal open items and / or special G/L transactions for
processing.
Payment advice note number: You can use the number of a
payment advice note (either entered manually or created by the
system) to select the open items.
Other accounts: You can select other accounts and process their
open items at the same time.
Additional Selections: You can use additional selection criteria
defined in the configuration to select open items. You can use the
Distribute by age or automatic search functions to speed up the
selection process.

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FM/AO. AATI, Lahore

Process Open Items:


Instructo
rs Guide

During open item processing the amount you enter is assigned to the
appropriate line items and their cash discount. To do this you have to
activate the items so that they can be assigned,
There are several options for activating or deactivating line items:

Editing options for open items: Set the selected items initially
inactive indicator,
Double click on the amount to be deactivated.

You can post the document if the amount entered is the same as the
amount assigned.
Highlighted items are active and can be assigned to the amount as a
total;

The next screen lists all of the unassigned, open items. These could be
payments, debit or credit memos, or invoices. Depending on your settings
all of the items can be active or inactive.
The first step in processing open items is to activate the required line
items before you can assign a payment.
The amount entered is assigned to the appropriate line items and their
cash discount.
There are several options for activating or de-activating line items:

Editing options for open items: Set the Selected items Initially
Inactive indicator.
Double-click the amount to be de-activated.
Selection of action menus and function keys: there are different
menus and keys available.

You can post the document if the amount entered is the same as the
amount assigned.
The cash discount granted is determined by the terms of payment of the
line item.
The cash discount is taken into consideration for calculating the assigned
amount.
You can change the cash discount by overwriting the absolute cash
discount or by changing the cash discount percentage rate. It must not
exceed the limit set in the tolerance.

Posting the Payment:

Instructo
rs Guide

You can recognize documents that belong together because they


have the same clearing document number in the Clearing
Document field in the line item display.
The cleared document also contains the number of the clearing
document. However, the clearing document does not contain the
number of the cleared document.

If you subsequently discover an error in the document that you want


to correct clearing is reset and the document reversed. You then have
to re-enter the original posting correctly.

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FM/AO. AATI, Lahore

After processing the open items you can check the document you have
entered
Via Document >Simulate you can display all of the items including
those created automatically.
If the debits and the credits agree, you can post the complete document.
If you subsequently discover that the document contains an error that has
to be corrected, and then follow the following procedure:
i- Reset the cleared items,
ii- then reverse the document.
iii- Now re-enter the posting correctly.

Automatic posting for Clearing Open Items:


If necessary the system performs automatic postings during Clearing. For
this purpose you have to configure your system. The entries required for
account determination:

Cash discounts expenses or revenue


Cash discount clearing (net procedure)
Tax adjustments
Exchange rate differences
Bank charges
Clearing of cross-company code payments.
Over-or under payments within tolerances.

You can enter bank charges when you enter the bank data; they are
automatically posted to the G/L account.
In order to perform manual cross-company code payments you have to
assign a clearing transaction (either Incoming Payment OR Outgoing
Payment) to the combination of paying company code and the company
code for which the payment is being made. Then, when you select open
items, open items are displayed from each company code.

Resetting Clearing:

You cannot directly reverse a clearing document created by any of the


transactions Clear Account or Post with clearing. As they apply to a
cleared document. First you have to reset clearing.
In the transaction Reset Cleared Items, you can choose between
Reset Only and Reset and Reverse.

The clearing data is removed from the items. All changes are logged
and can be displayed.
- If you select reset only, the clearing document becomes an open
item.
- If you select reset and reverse it becomes a cleared item. The
system also creates a reversal document.
- The cleared document becomes an open item again.
In Accounts Receivable, the payment history and the credit limit are
corrected, if applicable.

Users can reset clearing for individual documents. When you reset
clearing the clearing data is removed from the items.
The changes are logged and can be displayed in change documents. In
Accounts Receivable, the payment history and the credit limit are
corrected, if applicable.
Page 89 of 101

Summary of TFIN50_1

Compiled by

Muhammad Akhlaq Khan


FM/AO. AATI, Lahore

Lesson:-5.2 Payment Differences


If payment differences occur they may be handled either automatically or
manually.
Automatic clearing:
If the payment difference is small, it can be dealt with automatically:
- By adjusting the cash discount
- By writing off the difference to special account.
The limit up to which a difference is considered to be immaterial are
defined in the tolerance groups.
1-

Manual Clearing:
If the payment difference is too high to be considered inconsequential, it
must be processed manually by using one of the following methods:
- By adjusting the cash discount
- By posting the payment as a partial payment
- By posting the payment difference as a residual item
- By posting the payment difference as a difference posting.
2-

Tolerance Groups:
In accounting tolerances can be divided into three types: 1- Employee
tolerance groups, 2- G/L account tolerance groups and 3- customer
/vendor tolerance groups.
1- Employee Tolerance group is used to control:
Upper limit for transactions posted
Permitted payment differences
2- Tolerance group for G/L Accounts is used to control permitted payment
differences.(for example, for automatic clearing procedures).
3- Customer / vendor Tolerance group provide specifications for:
Default values for clearing transactions.
Permitted payment differences
Specifications for posting residual items from payment differences
Tolerances for payment advice notes.
Guidanc
e for
Instruct
or

For automatic clearing transactions with tolerances you first have to


define tolerance groups in Customizing.
First define tolerance groups for customers / vendors; this is
important for the treatment of payment of differences and residual
items that can occur during payment clearing.
Tolerances can be specified in one or more tolerance groups. A
tolerance group is assigned to each customer /vendor via the
master record.
For each tolerance group, define the following:
Tolerances up to which payment differences can automatically be
posted to expenses or revenue accounts during clearing of open
items.
The treatment of terms of payment for the creation of residual
items.
Each tolerance group is defined for a company code in local currency. If
a tolerance group is to apply in several company codes, it must be
defined for several company codes. The tolerance group BLANK is
required as the minimum tolerance group for employees and
customers / vendors.
If an employee is not assigned to a tolerance group, tolerance group
BLANK applies.

Page 90 of 101

Summary of TFIN50_1

Compiled by

Muhammad Akhlaq Khan


FM/AO. AATI, Lahore

Each employee must be assigned to only one tolerance group.


A tolerance group can be assigned to one or more company codes.

Configuration of Tolerance groups:


Tolerance group of employees for Example:
- Accountant I
- Accounts II
Defining the
Tolerance
- Accounting Manager.
Groups and
Configuring
Tolerance groups for customers /vendors, for example Them.
- Good customers / vendors.
- Not so good customers / vendors
- Cash only Customers / vendors.
Tolerance group for G/L accounts for example
- Clearing accounts (external procurement).
- Clearing accounts (in-house production).
Use tolerances to define permitted payment differences
Assign the tolerance groups to:
User master data.
G/L account master records.
Assigning the
Tolerance
Customer / vendor master records.
Groups.
You have to carry out two steps to use tolerance groups:
Group definition:
- The tolerance group is defined by a group key, company code, and a
currency code
- The group key is a four character alphanumeric key.
- The key (blank) is the standard tolerance group and is required as
the minimum tolerance group.
Group assignment:
Employee tolerance group may be assigned to employees.
G/L account tolerance group may be assigned to G/L account master
records.
Customer/vendor tolerance groups may be assigned to a customer or
vendor master record.
If no tolerances are assigned, the default tolerance group (blank)
applies.
Permitted Payment Differences:
The specifications for permitted payment differences can be found in both
types of tolerance groups. They control the automatic posting of cash
discount adjustments and unauthorized customer deductions.
The system takes the entries in both groups into account during clearing.
The payment difference has to be within both tolerances to be handled
automatically. Therefore, the lower tolerance always applies.
The entries in the tolerance groups are always in local currency.
The unit for Cash Discount Adjustment should be in local currency and
not in percentage.

Example:

A payment difference has to be lower than 3.00 and 2.00 of currency


units to be written off as a cash discount adjustment automatically
A payment difference has to be a lower than 200 and 100 currency
units as well as lower than 2.5% and 2% of the open amount to be
Page 91 of 101

Guidanc
e Summary
for
of TFIN50_1
Instruct
or

Compiled by

Muhammad Akhlaq Khan


FM/AO. AATI, Lahore

written off automatically as an unauthorized deduction. The lower of


the two tolerance values always apply. For an open amount of 1000
currency units unauthorized amount will be 20 currency units and for
an open amount of 100,000 currency units this would be an
unauthorized customer deduction of 100 currency units.
The system always checks if it can post the difference as a cash
discount adjustment first and then checks whether it can be considered
as an unauthorized deduction.

Payment Differences:

A payment difference normally occurs during open item clearing. The


difference is then compared to tolerance limits of the employee and the
customer /vendor and is handled accordingly.
The system handles payment differences as follows:
When the payment difference is within the tolerance for cash discount
adjustment the system check it
o If it is within cash discount adjustment limit, then adjust it as a
cash discount adjustment automatically.
o If the payment difference is within the tolerance for unauthorized
deductions, it is automatically posted as an unauthorized
customer deduction (account for over or under payment)
Otherwise manual processing is permitted using the employee
tolerance group for Cash discount for Line item.
Payment Difference Outside Tolerance:
You want to use automatic posting within tolerances to reduce the
Guidanc manual work required.
e for
If the payment difference is outside tolerances it has to be
Instruct processed manually. The employee can:
or
1- Adjust a cash discount manually if necessary.
2- Post the payment as partial payment
3- Post the payment difference as residual item
4- Write off the difference (manual account assignment)
o As sales deduction
o As posting on account.
You can enter a reason code for each.
In case of a partial payment the system creates an invoice reference
between the partial payment and the invoice.
When residual items are created, the term of payment can be transferred
from the invoice.
A posting to an expense account is a difference posting. Here, the
complete cash discount is granted. This is only useful if you specify a
reason code that can then be used for the valuation. A specific text is
defined for this reason code in the correspondence type. The reason code
may also control the account to which the difference is written off.
An employee can only carry out a manual cash discount adjustment with
his tolerances.
Processing Payment Differences:
If the payment difference is immaterial, it may be processed automatically
by allowing the system to adjust the cash discount up to certain amount
or to write it off to a special account. The limits to which a payment
difference is considered to be immaterial are defined in tolerance groups.
Within the tolerance group for an employee, you can allow an adjustment
of the cash discount (within defined limits), so that the employees has the
authorization to make the adjustment.

Page 92 of 101

Summary of TFIN50_1

Compiled by

Muhammad Akhlaq Khan


FM/AO. AATI, Lahore

If the payment difference is too high to be immaterial, it must be


processed manually. The payment can be posted as follows:
Partial payment
The payment difference may be posted as a residual item.
The Payment difference can be posted to an account assigned to a
reason code or written off by manually entering a new posting item
Payment on account.
For partial payment, the invoice and the partial payment are managed as
open items and both have the same assignment. Double clicking on the
partial payment shows that it is a payment for the invoice. The invoice
and the partial payment are not cleared until the payment is cleared.
No cash discount is posted for a partial payment. The cash discount is
calculated on the complete invoice amount during clearing. If the invoice
clearing exceeds the cash discount terms agreed in the terms of payment
for the invoice, the cash discount is reduced.
After clearing the invoice, partial payment and clearing payment are
cleared items and have the same clearing document number.
The (second) clearing payment has a difference assignment to the first
items.
When you create a residual item the payment difference is posted as
residual item and remains in the account; the original document and the
payment are cleared. The system creates a new document number with
reference to the original document
The posting changes the original receivable into a cleared item. A new
receivable (residual item) is created for the remaining amount. Double
clicking on the partial payment shows that it is a residual item for the
invoice.
The partial granting of cash discount makes cash discount lower and
residual item higher.
Example: Sales: 1000 units, Discount Rate=3%, Cash received=900
Remaining outstanding 70
For clearing however, only 70 units are required since cash discount is
also granted on the residual item. If payment takes place after the cash
discount deadline, the cash discount in the open item processing is
reduced automatically.
For both partial payments and the creation of residual items you can
specify a reason code that is in the next field in the document and on the
right in the open item display. Both the partial payment difference and the
residual item can be posted to a separate expense account dependent on
the reason code.
The customer and vendor tolerance groups contain entries that control the
treatment of residual items:
Whether the terms of payment from the invoice will apply or always the
same fixed terms of payment are valid.
Whether the cash discount is granted partially (only for the payment
amount) and not for the whole amount.
By specifying a dunning key, whether the residual item is to have a
maximum dunning level or is to be printed separately.
During dunning run a partial payment is cleared with the invoice, so that
only the difference amount is dunned.
The invoice and payment on account are still open items in partial
payment.

Page 93 of 101

Summary of TFIN50_1

Compiled by

Muhammad Akhlaq Khan


FM/AO. AATI, Lahore

For incoming payment where you do not know which items are to be
cleared, you post the incoming amount to the credit side of the customer
account without clearing specific open items. You can use Clear Account
to assign the incoming payment to open item at a later point in time.

Partial and Residual Payments:


Customer /
Vendor
8000
5000
items

Invoice
Reference

Partial
Payment
Open Item
Both are Open items

Residual
Payment
Customer /
Vendor
8000
5000
3000
Invoice

Page 94 of 101

Both are Cleared

Summary of TFIN50_1

Compiled by

Muhammad Akhlaq Khan


FM/AO. AATI, Lahore

If the payment difference is outside of the tolerances it has to be


processed manually. The user can:
Post the payment as partial payment, where all the documents
remain in the account as open items.
Post the payment difference as residual item, whereby only the
residual item remains in the account and the original document and
the payment are cleared. A new document number is created with
reference to the original documents.
Post the payment difference to a different account as a difference
posting using reason codes and automatic determination.
Write off the difference (manual account assignment)
The customer /vendor tolerance groups contain entries that control the
residual items. These specify
Whether the terms of payment of a residual item are the same as
those of the cleared item or whether the terms of payment are
fixed.
Whether cash discount is granted only partially and not for the
whole amount.
By specifying a dunning key, whether the residual item has a
maximum dunning level or is printed separately
If you know the reason for a payment difference, you can enter a
reason code.
Reason Codes:
Reason codes are used to describe the reason for the payment difference.
To assign more than one reason code to a payment difference, click on
distribute difference.
Reason code can be assigned to these accounts to clear them:
- Difference postings.
- Partial payments.
- Residual items.
The reason code can be used to analyze the post process payment
differences. Additional optional functions are:
Control of the type of payment notice which is sent to the customer.
Control of the account where a residual item is posted.
Automatic posting of a residual item to a specified G/L Account.
Exclusion of residual items from credit limit checks because they are
disputed.
Explanations for the individual column:
CorrT: Correspondence Type
W: Write off to separate account.
D: Disputed item, does not increase the total receivable from a
customer in Credit Management.
T: The reason code text is not transferred to the segment text of the
residual item or the partial payment.
D: Indicates that payment difference with this reason code create
outstanding receivables / residual items, even though the tolerance
limit for differences to the payment advice not item is not exceeded.
You can define one joint G/L account for all reason codes. A special G/L
account can also be defined for each reason code.
The correspondence Type determines the payment notification sent to the
customer. With SAP50 (cash discount difference) for example, the
Page 95 of 101

Summary of TFIN50_1

Compiled by

Muhammad Akhlaq Khan


FM/AO. AATI, Lahore

customer receives a payment notification. The print request is not


automatically placed in the spool. It is requested automatically, but
executed with a special report.

Lesson :5.3 Exchange Rate Differences


Guidanc
e for
Instruct
or

When you clear open items in foreign currency, exchange rate differences
arise as a result of exchange rate fluctuations. This happens when the
exchange rate of the outgoing invoice is different to the exchange rate for the
incoming payment. The system automatically posts these exchange rate
differences as realized profits or losses.
Exchange rate differences are also posted if open items are evaluated for the
financial statements (e.g. according to the lowest value principle). These
differences from the valuation however are posted to a different exchange rate
difference account and as offsetting posting to a financial statement
adjustment account.
When clearing an open item that has already been valuated, the system
reverses the financial statement adjustment account and posts the remaining
exchange rate difference to the account for realized exchange rate
differences.

Realized Exchange Rate Differences:

When clearing open items in foreign currency, exchange rate differences


may occur due to fluctuations in exchange rates.
The system posts the differences automatically to the revenue / expense
account for exchange rate differences that you defined during
configuration. This prevents incorrect postings.
The realized difference is stored in the cleared line item.
Guidanc
e for
Instruct
or

Exchange rate differences are also posted when open items are
valuated for financial statements. These exchange rate differences
from valuation are posted to another exchange rate difference account
and to a financial statement adjustment account. When clearing an
open item that has already been valuated, the system refers the
balance sheet correction account and posts the remaining exchange
rate difference to the account for realized exchange rate differences.
The exchange rate difference key is in the master record of the G/L
account (Company code segment, tab page Control) and is used for
the foreign currency valuation on closing.
You can make the assignment of the exchange rate difference accounts
to the general ledger account dependent on the currency and the
currency type (company code currency, group currency, company
currency):

You can define the same expense and revenue account for each
balance sheet account for all currencies and currency types (this is
the setting in the IMG).
For each currency and currency type, you can define one expense
and one revenue account for each balance sheet account.
For each currency type, you can define one expense and one
revenue account for each balance sheet.

Page 96 of 101

Summary of TFIN50_1

Compiled by

Muhammad Akhlaq Khan


FM/AO. AATI, Lahore

Account Determination:
All reconciliation accounts and all G/L accounts with open item
transactions in foreign currency must be assigned revenue /expense
accounts for realized losses and gains.
One gain / loss account can be assigned:

All currencies and currency types.


Per currencies and currency type.
Per currency
Per currency type.

Page 97 of 101

Summary of TFIN50_1

Compiled by

Muhammad Akhlaq Khan


FM/AO. AATI, Lahore

Unit-6 Cash Journal


Lesson 6.1 Cash Journal configuration:
The accounting department requires special general ledger accounts to
handle the cash journal. You want to be able to post to this account
automatically.
What can the cash journal do?
Guidanc Tool for managing cash from Release 4.6.
Supports posting cash receipts and expenses.
e for
Instruct Create a separate cash journal for each currency
or
You can make postings to G/L, customer, and vendor accounts.
A company code can have several cash journals
A cash journal has a four digit alphanumeric key.
The balance is displayed dependent on the entries you make in
the data selection. There are three tab pages for payments,
receipts, and checks.

Cash Journal Assignment:


The cash journal is a tool for managing cash that was offered with R/3
release 4.6. It supports posting cash receipts and payments.
With this tool you can:
Create a separate cash journal for each currency.
Post to customer, vendor, and general ledger accounts.
Run several cash journals in each company code.
Choose a random number for cash journal identification ( a four-digit
alphanumeric key)

Setting up the Cash Journal:


To set up new cash journal for a company code, you have to enter the
appropriate values for the following fields:

The company code in which you want to use the cash journal.
The four digit cash journal identification name (Alphanumeric).
The G/L account to which you want to post the cash journal business
transactions.
The currency in which you want to run the cash journal
The document types for:
- G/L Account postings
- Outgoing payments vendors
- Incoming payment from vendors
- Outgoing payment to customers
- Incoming payments from customers.

Page 98 of 101

Summary of TFIN50_1

Compiled by

Muhammad Akhlaq Khan


FM/AO. AATI, Lahore

Within the cash journal you process different transactions that you have to
set up beforehand using business transaction categories. Below are
standard business transactions categories and their postings:

Expenses (E) for Expenses /Cash desk


Revenues (R) for Cash desk/Revenue
Cash transfer
o From cash journal to bank(B)
o From bank to cash journal (C)
Accounts Receivable (D)
Customers payment receipt Cash office/customer
Customer outgoing payment Customer / cash office
Accounts Payable (K)
Vendor payment issue Vendor / Cash office
Vendor incoming payment Cash journal/vendor

Creating Business Transactions:


There are two places where you can define new cash journal business
transactions:
-

In cash journal itself or


In Customizing (IMG).

When you give the business transaction a name, you can base it on the
type of business transaction. For example, for the business transaction for
creating postings to cash sales, you could assign the name Cash Sale.
To create a business transaction, make the following setting:

The company code in which the business transaction should be


created.
The type of business transaction (Note: you cannot make an entry in
the field G/L account for accounting transaction types D& K)
Specify tax codes for the business transaction E (Exp) and R (Revenue)
For business transaction categories E, R, C, and B, you can set an
indicator to enable the general ledger account for the business
transaction to be changed when document is entered. In this case, the
general ledger account is only a default value.
For business transaction categories E and R, you can set an indicator to
enable the tax code for the business transaction to be changed when
the document is entered. If no tax code has been defined, you have to
specify one (if required for the account) when you create the
document.
Once saved, the business transaction is assigned a number
automatically. During document entry, the business transaction can be
called up by its name or its number.
You can set an indicator that blocks the business transaction for further
postings.
Page 99 of 101

Summary of TFIN50_1

Compiled by

Page 100 of 101

Muhammad Akhlaq Khan


FM/AO. AATI, Lahore

Summary of TFIN50_1

Compiled by

Muhammad Akhlaq Khan


FM/AO. AATI, Lahore

Lesson :-6.2 Cash Journal Transactions


If a department handles various kinds of cash transactions, these
transactions have to be saved locally and posted /transferred to the
general ledger every day.
Characteristics of Cash Journal Transactions:
The cash journal transaction is also a single screen transaction.
Entries saved in the cash journal are posted to the general ledger, for
example, at the end of the working day.
You can print the cash journal entries via Print Journal.
You can display documents via the button Follow-On Document.
From Release 4.6C, you can reflect check receipts in the cash journal.

Posting Business Transactions in the Cash Journal


The cash journal is one of the Enjoy business transactions that you can
process on a single screen. On this screen, you can enter, display, and
change journal entries.
You can save cash journal entries locally in the cash journal sub-ledger,
and copy or delete them. The cash journal entries saved are posted to the
general ledger, for example, at the end of the working day.
You can also print the cash journal entries you have saved (receipts) as
well as the cash journal entries posted in the time period displayed. The
print forms are selected in Customizing.
The follow-on documents that are posted as a result of cash journal
entries are displayed.
You can also copy and delete cash journal entries saved and display the
deleted cash journal entries.
From Release 4.6C, you can also enter checks in the cash journal.

Cash Journal Document with Document Split:


In the SAP system you can enter a cash journal document with a
document split. In other words, a cash journal document can contain
several items with different tax codes and /or account assignments
relevant to cost accounting. When the cash journal document is forwarded
to Financial Accounting, only one accounting document is therefore
created.

Cash Journal Document with One-Time Account:


In the cash journal you can create a business transaction linked to a onetime account. If you use a one-time account in the cash journal, the dialog
box for entering the one-time data is called automatically and the entries
saved in the cash journal.
Page 101 of 101

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