SAP Manual-2-2014

COMPILED BY MUHAMMAD AKHLAQ KHAN
SAP TRAINING
MANUAL-2
TFIN50_2
These notes are prepared from the SAP ERP Financial Manual 2 during SAP
training at SIEMENS Academy, Islamabad, during November-2014.
TFIN50_2
Compiled by Muhammad Akhlaq Khan

AO / FM, AATI, Lahore.
SHORT TABLE OF CONTENTS

Unit-1: Fundamentals.............................................................................................................. 7
Lesson:1.1 Customer / Vendor Account -The Financial Accounting View of the Customer
/Vendor Account................................................................................................................ 7
Lesson 1.2 Bank Accounts.............................................................................................10
Lesson 1.3 Simple Documents in SAP Financial Accounting..........................................11
Unit-2: Automatic Payments...............................................................................................13
Lesson-2.1 Payment Run Overview:..............................................................................13
Lesson-2.2 Payment Program Configuration:..............................................................15
Lesson-2.3 Running the Payment Program Individual Steps......................................18
Lesson-2.4 Payment Medium Workbench (PMW)..........................................................23
Lesson-2.5 Debit Balance Check..................................................................................26
Lesson-2.6 Automating the Payment Process...............................................................26
Unit-3:-Automatic Dunning.................................................................................................... 27
Lesson: 3.1 Dunning Overview:....................................................................................27
Lesson: 3.2 Dunning Program Configuration................................................................28
Lesson: 3.3 Parameters for the Dunning Run...............................................................31
Lesson: 3.4 The Dunning Run......................................................................................31
Lesson: 3.5 Editing the Dunning Proposal....................................................................35
Lesson: 3.6 Printing Dunning Notices..........................................................................36
Unit-4: Correspondence......................................................................................................... 39
Lesson: 4.1 Correspondence Overview.....................................................................39
Lesson: 4.2 Correspondence Types..............................................................................40
Unit-5: Closing Process overview........................................................................................42
Lesson:-5.1 Month End & Year End Closing Processes.................................................42
Unit-6: Financial Statements.................................................................................................44
Lesson:-6.1 Financial Statements Versions......................................................................44
Lesson:-6.2 Drilldown Reporting......................................................................................47
Unit-7: Receivables and Payables..........................................................................................48
Lesson:-7.1 Balance Confirmation...............................................................................48
Lesson:-7.2 Foreign Currency Valuation.......................................................................49
Lesson:-7.3 Value adjustments....................................................................................52
Lesson:-7.4 Regrouping............................................................................................... 53
Unit-8: Accruals and Deferrals............................................................................................... 54
Lesson:-8.1 Accrual /Deferral Postings.........................................................................54
Lesson:-8.2 The Accrual Engine...................................................................................55
Usually, two main processes are triggered from the application component:..................55
Lesson:-8.3 Manual Accruals.......................................................................................58
Lesson:8.4 Posting Controls and Account Determination.............................................59
Unit-9: Technical, Organizational and Documentary Steps....................................................61
Lesson:-9.1 Technical Steps......................................................................................... 61
Lesson:9.2 Documentary Steps...................................................................................63
Lesson:-9.3 Ledger Group Posting...............................................................................63
Unit-10: Financial Closing Cockpit.........................................................................................65
Lesson:-10.1 Financial Closing Cockpit........................................................................65
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TABLE OF CONTENTS
Unit-1: Fundamentals.............................................................................................................. 7
Lesson:1.1 Customer / Vendor Account -The Financial Accounting View of the Customer
/Vendor Account................................................................................................................ 7
Important fields:........................................................................................................... 7
AR /AP Groups............................................................................................................... 7
Controlling the Field Status:.......................................................................................... 8
1- Account group-dependent Controls.......................................................................8
2- Transaction-dependent Controls............................................................................8
3- Company code-dependent Controls......................................................................8
International Bank Account Number (IBAN)......................................................................8
Clearing Customer /Vendor........................................................................................... 9
Alternative Payer / Payee.............................................................................................. 9
Head Office /Branch:................................................................................................. 9
Lesson 1.2 Bank Accounts.............................................................................................10
Bank Directory:........................................................................................................... 10
Bank Master Data:...................................................................................................... 10
House Bank................................................................................................................. 10
House Bank ID and Account ID................................................................................11
Lesson 1.3 Simple Documents in SAP Financial Accounting..........................................11
The SAP Document Principle:.....................................................................................11
Financial Accounting Documents in the SAP System:.............................................11
Contents of Document:............................................................................................11
Simple Posting in SAP Financial Accounting:............................................................11
Unit-2: Automatic Payments...............................................................................................13
Lesson-2.1 Payment Run Overview:..............................................................................13
Preparation:.................................................................................................................... 13
The program can be used for:.................................................................................13
Payment Process:........................................................................................................ 13
Settings for Payment Program:...................................................................................14
SAP System Program Over view:.................................................................................14
1- Setting parameters........................................................................................... 14
2- Generating a Proposal:.....................................................................................14
3- Scheduling the Payment Run............................................................................14
4- Printing the Payment Media:.............................................................................14
Lesson-2.2 Payment Program Configuration:..............................................................15
1All Company Codes..............................................................................................15
2- Paying Company Code:...........................................................................................16
3- Payment Method per Country:................................................................................16
4- Payment Method per Company Code:.....................................................................16
5-Bank Selection:........................................................................................................ 17
1- Ranking Order..................................................................................................17
2- Amounts Available:........................................................................................... 17
3- Accounts........................................................................................................... 17
4- Expenses / Charges..........................................................................................17
5- Value Date........................................................................................................ 17
Lesson-2.3 Running the Payment Program Individual Steps......................................18
Open Item Selection:...................................................................................................... 18
What happens in the proposal run?.........................................................................18
How the Due Date of Payables is Determined:........................................................19
Proposal Run:................................................................................................................. 19
The Proposal List:........................................................................................................ 19
Exception List:............................................................................................................ 19
Payment Block (Stop payment of specific Transaction):.................................................19
Editing the Payment Proposal:........................................................................................20
Editing the Payment:...................................................................................................... 20
During Payment Run:...................................................................................................... 20
Bank Subaccounts:......................................................................................................... 20
Payment Document:....................................................................................................... 21
Printing Payment Media:................................................................................................. 21
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Forms for Payment Media:..............................................................................................21

EDI (Electronic Data Interchange) and Payment Advice Notes:......................................22
DME Data Media Exchange:......................................................................................22
The Print Program:...................................................................................................... 22
Lesson-2.4 Payment Medium Workbench (PMW)..........................................................23
What is PMW:.............................................................................................................. 23
Advantages of PMW.................................................................................................... 23
How to activate PMW:.................................................................................................23
Additional Information on PMW...................................................................................23
Adjust the Payment Medium Format:..........................................................................24
Create Payment Medium Format:................................................................................24
The Payment Medium Workbench (Features):..........................................................24
Conversion of Payment Methods to PMW:................................................................25
Conversion Steps for the Payment Method:.............................................................25
Payment Medium Formats:......................................................................................25
Granularity and Payment Groups:............................................................................25
Lesson-2.5 Debit Balance Check..................................................................................26
Payment Despite Debit Balance:.................................................................................26
Lesson-2.6 Automating the Payment Process...............................................................26
Schedule Manager:..................................................................................................... 26
Unit-3:-Automatic Dunning.................................................................................................... 27
Lesson: 3.1 Dunning Overview:....................................................................................27
Lesson: 3.2 Dunning Program Configuration................................................................28
The Dunning Procedure:.................................................................................................28
1- Dunning Procedure Overview:..............................................................................28
2- Dunning levels..................................................................................................... 29
3- Expenses /charges............................................................................................... 29
4- Minimum amount................................................................................................. 29
5- Dunning Text........................................................................................................ 30
6- Environment........................................................................................................ 30
Lesson: 3.3 Parameters for the Dunning Run...............................................................31
Open Items Selection:................................................................................................. 31
Lesson: 3.4 The Dunning Run......................................................................................31
Steps in Dunning Run..................................................................................................... 31
1- Account Selection................................................................................................31
Due Dates for Receivables and Credit Memos.........................................................31
Clearing with Credit Memos or Vendor Items:..........................................................32
Dunning Date.......................................................................................................... 32
Dunning Block in Items or Accounts........................................................................32
Payment Method in the Item or Account..................................................................32
2- Dunning Levels for Line Item:..............................................................................33
Dunning Keys.......................................................................................................... 33
Minimum Amounts per Dunning Level:....................................................................33
Minimum Days in Arrears (Account)........................................................................33
3- Dunning Level in Account.....................................................................................34
Dunning Requirements............................................................................................ 34
Lesson: 3.5 Editing the Dunning Proposal....................................................................35
Editing Dunning Data..................................................................................................... 35
Lesson: 3.6 Printing Dunning Notices..........................................................................36
Scheduling Printing:....................................................................................................... 36
Grouping Items in Dunning Notices................................................................................36
Special Grouping (I).................................................................................................... 36
Dunning by Dunning Level:.....................................................................................37
Grouping Key........................................................................................................... 37
Decentralized Processing.........................................................................................37
Special Grouping (II)................................................................................................... 37
Dunning Text Control (Based on SAPscript)....................................................................37
Unit-4: Correspondence......................................................................................................... 39
Lesson: 4.1 Correspondence Overview.....................................................................39
Lesson: 4.2 Correspondence Types..............................................................................40
What is a Correspondence Type?....................................................................................40
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Correspondence Type Components:............................................................................40

Unit-5:
Closing Process overview..................................................................................42
Lesson:-5.1 Month End & Year End Closing Processes.................................................42
Pre-closing activities that begin in the old month include:..........................................43
Closing activities for external Purposes include:......................................................43
Pre-closing activities that bein in the old month include:............................................43
Unit-6: Financial Statements.................................................................................................44
Lesson:-6.1 Financial Statements Versions......................................................................44
Financial Statement Versions:.....................................................................................45
Balance Sheet Version of Financial Statements:..........................................................46
Texts:.......................................................................................................................... 46
Account Group Assignment According to Balance:......................................................46
Profit and Loss Section of a Financial Statement Version:...........................................46
Lesson:-6.2 Drilldown Reporting......................................................................................47
Unit-7:
Receivables and Payables....................................................................................48
Lesson:-7.1 Balance Confirmation...............................................................................48
Balance Confirmations:............................................................................................... 48
Customizing 1: Balance Confirmations:.......................................................................48
Customizing II: Balance Confirmations:.......................................................................48
Lesson:-7.2 Foreign Currency Valuation.......................................................................49
Definition:................................................................................................................... 49
Valuation Methods Customizing..............................................................................50
Delta Posting Logic..................................................................................................... 50
Lesson:-7.3 Value adjustments....................................................................................52
Lesson:-7.4 Regrouping............................................................................................... 53
Balancing of Affiliated Companies:..............................................................................53
Non-SAP system:..................................................................................................... 53
Unit-8:
Accruals and Deferrals.........................................................................................54
Lesson:-8.1 Accrual /Deferral Postings.........................................................................54
Accrual /Deferral of Expenses and Revenue:..................................................................54
Accruals................................................................................................................... 54
Deferrals.................................................................................................................. 54
Other payable:.................................................................................................. 54
Provisions:........................................................................................................ 54
Lesson:-8.2 The Accrual Engine...................................................................................55
Basic Data............................................................................................................... 55
Create/change basic data:................................................................................55
Periodic start of the accrual run........................................................................55

Advantages of the Accrual Engine:..........................................................................56
Activate the Application Component:..........................................................................56
Closing Activities of the Accrual Engine:.....................................................................56
Reconciliation: Accrual Engine/General Ledger........................................................56
Balance carry forward............................................................................................. 57
Lesson:-8.3 Manual Accruals.......................................................................................58
Accrual Calculation:.................................................................................................... 58
Lesson:8.4 Posting Controls and Account Determination.............................................59
Definition of Posting Controls.........................................................................................59
Use of Account Determination:...................................................................................59
Account Determination Task:......................................................................................59
Parallel accounts..................................................................................................... 60
Parallel ledgers........................................................................................................ 60
Unit-9: Technical, Organizational and Documentary Steps....................................................61
Lesson:-9.1 Technical Steps......................................................................................... 61
Balance Carry Forward:...............................................................................................61
Defining Posting Periods:............................................................................................61
Posting period Control:................................................................................................... 62
Technical Reconciliation:............................................................................................. 62
Lesson:9.2 Documentary Steps...................................................................................63
Lesson:-9.3 Ledger Group Posting...............................................................................63
Different accounting rules.......................................................................................63
Non Leading Ledgers:.................................................................................................64
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Unit-10: Financial Closing Cockpit.........................................................................................65

Lesson:-10.1 Financial Closing Cockpit........................................................................65
Possible applications of the Closing Cockpit:...............................................................65
What is it About:...................................................................................................... 65
Financial Closing Cockpit: Procedure...........................................................................66
Copying Templates:..................................................................................................... 66
Choose Destination:.................................................................................................... 67
Task Types:-................................................................................................................. 67
1- Programs:......................................................................................................... 67
2- Online transactions:.......................................................................................... 67
3- Note:................................................................................................................. 67
4- Flow definition:.................................................................................................67
Arranging Tasks (Defining Flight Route)......................................................................68
Template > Create Autopilot (e.g. Transaction Clococ)............................................68
Schedule Tasks:........................................................................................................... 69
Flight Schedule Monitor (Schedule Flight Destinations)..............................................69
Monitor: Status of Flight Destinations:........................................................................69
List Display: Task Details:............................................................................................ 69
Flight Destination Not Reached >Analysis:..............................................................70
Flight Destination Not Reached >Rout Adjutment:..................................................70
List of Flight Destinations (Accessibility).....................................................................70
SAP Net weaver Portal /Business Client:....................................................................70
SAP Net Weaver Business Client (NWBC)...................................................................70
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Unit-1: Fundamentals
Lesson:1.1 Customer / Vendor Account -The
Financial Accounting View of the Customer
/Vendor Account
Like General Ledger accounts, customer/vendor accounts have two segments
in the financial accounting view:
Segment 1: Contains general data at client level. This data can be
accessed by any company code it contains account number, name, and
address, control data.
Segment 2:Contains data specific to company code. This data is created
and remains available only with that company code which has specific
relations with customer / vendor. This segment contains the reconciliation
account, terms of payment, data for dunning procedures and so on.
Explanatory texts can be entered in every segment.
When you create a company code by copying one company code (called
source company code) to another company code (called target company
code) you can also transfer your customer and vendor master data.
You can also create new customer / vendor master records with reference to
an existing master record by copying data that does not directly refer to the
customer /vendor to a new account. Before saving the new record the copied
data should be checked and changed, if found necessary.
It is a good idea to create a template for every account group.
Important fields:
Search term: You can enter an abbreviation for the customer/vendor

name in this field. Format is usually determined by company guidelines
and practice. In release 4.6 and later an additional search field is
provided.
Group key: You can group together customers or vendors who belong to
one corporate groupwith a user-defined group key. This key can be used
for running reports, transaction processing, or for the F4 search help.
Accounting clerk: You must save the name of the clerk under an ID. You
can enter this codein the customer/master records, for which the clerk is
responsible. The clerks name is thenautomatically printed on all
correspondence. The code is also used to sort dunning andpayment
proposal lists.
Line item display and open item management are always preset to ON for
every customer/vendoraccount.
AR /AP Groups
With general ledger accounts, you can bundle Accounts Payable /Accounts
Receivable into different account groups. When creating customer / vendor
master record you enter the account group on the initial screen. In financial
accounting once the customer / vendor account has been created its account
group cannot be changed. The account groups controls
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The account number range, to make sure that all the accounts in the
group have similaraccount numbers.
The field status of the account fields. All accounts of an account group
have the same screenlayout.
Whether the account is used as a one-time account (for one-time
customers or vendors).
Controlling the Field Status:

The layout for customer/vendor master data is defined by three field status
definitions:
1-Account group-dependent Controls - Usually the field status is
controlled only by theaccount group. This way, all the accounts in an
account group have the same screen layout
2-Transaction-dependent Controls - The field status can also be
dependent on the master datatransaction (Create, Change or Display).
The transaction dependent fields should be set to display for the change
transaction if the field should not be changed after creation.You can use
the account group-dependent field status todefine the field status for all
three segments, the transaction-dependent field status onlyprovides
access to the client and company code segments. Reason: The
transactions takeeffect locally. In other words, they do not affect the sales
area segment.
3- Company code-dependent Controls - The field status for fields in the
company code segment for customer and vendor master records can also
be controlled by the company code department screen layout.You can
hide (suppress) fields that are not to be used in a specific company code.
But enter values in these fields in other company codes.
The field statuses definitions of all above three controls are combined and
the one with highest priority is used. The priorities are: 1- Hide, 2- Display,
3- Required, 4- Optional.
A field set to display in any of the above controls can only be set to hide
by any other control.
If you do not want to use transaction dependent or company Code
dependent controls, set the field status for all the fields to optional
entry. Since this field status has lowest priority, Account group control is
always used.
International Bank Account Number (IBAN)

(Note:- Same as given in Lesson 2.3 of 1st Manual)
IBAN is an internationally recognized, unique identification number for a

specific 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 as a part of the bank details for
customer / vendor master record in customizing setting for your house bank.
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The IBAN can only be entered in customer / vendor master record if he

provides his IBAN and requests the 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 the place provided on the screen for IBAN is active in then the user can
enter the IBAN manually without requiring knowledge of the
corresponding bank account number.
If necessary make sure that the payment medium programs used can also
output the IBANs.
Clearing Customer /Vendor

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 vice 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

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.
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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 here
between the goods flow and the cash flow. You can reflect this in the SAP
System via Head Office and Branch office Accounts.
All items posted to a branch account are automatically transferred to the
head office account. Usually dunning notices are sent 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.
Lesson1.2 Bank Accounts

Bank Directory:
Guidanc
e for
Instruct
or
Each bank that is used must have a bank master record in the bank
directory in the system.
Bank master data can be copied into the bank directory manually or
automatically.
Each bank masterrecord in the bank directory is uniquely identified by the
bank country and a bank key.
House Bank:
The house bank is the bank used for internal business.

A bank becomes a house bank when youassign a house bank ID to
it.
The payment program uses the house bank ID to determine the
bank tobe used.
Internally the house bank ID replaces the bank key.
Bank Master Data:
You have to create a bank master record for every bank that is used in the
system, either as a house bank or as a customer / vendor bank.
Bank master records are stored centrally in the bank directory and
identified by bank country and the bank key.
Bank Master Record includes address data and control data e.g. SWIFT
Code, postal data, and bank group.
House Bank
Banks that are used by a company are defined as its house banks.
House bank in created in Customizing. They contains:
o Bank Master Data.
o Information for electronic payment transactions,
o The bank accounts for each house bank and
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o The General Ledger Accounts for each Bank Account.

iiiiiiiv-
There are four ways to create bank master data:

When entering bank information in the customer or vendor master record, or
in theCustomizing for house banks:
Using the Create Bank transaction in the Accounts Receivable/Payable
master data menu.
The bank directory can be imported from disk or tape which can be obtained
from one of thecountry banking organizations.
Customers that use the lockbox function can create a batch input session
that automaticallyupdates customer banking information in the master
record.
When you enter bank details in the customer and vendor master record, you
can access banks already created in the bank directory. You only have to
enter the bank country and the bank key; the name and address of the bank
are determined automatically.
In the customer / vendor master record the Bank Type field is used to
distinguish between different banks. When processing invoices, if the
customer /vendor has more than one bank, the user can choose a bank by
using the match code in the partner bank field.
House Bank ID and Account ID
In SAP ERP system each house bank is represented by bank ID and the
account ID. The combination is entered in a General Ledger Account that
represents the bank account in General Ledger.
You must also define bank accounts that are managed at the house banks.
The accounts can be identified by an account ID that is unique for each
house bank. The bank account data contains the number of the account at
your bank
A G/L account must be created for each bank account. This G/L account is
assigned to the bankaccount and vice versa. Both accounts must have the
same account currency.
Lesson 1.3 Simple Documents in SAP

Financial Accounting
The SAP Document Principle:
As a rule, at least one document is created for each business transaction.

Each document receives aunique document number.
Document numbers can be assigned either internally (by the system) or
externally (by the user). Thenumber is assigned when the document is
entered.
Several documents can be created for a single business transaction. Some
business transactions do not have a accounting document such as purchase
orders issued by material department.
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Financial Accounting Documents in the SAP System:

The SAP system uses the document principle. A document is saved for every
posting.
A document remains in the system as a complete unit until it is archived.
Every document is uniquely identified by the following fields:
Document number
Company code
Fiscal year
Contents of Document:
Every document in SAP Financial Accounting consists of:
A document header (information that applies to the entire document)

Between 2 and 999 line items (information that is specific to that line
item).
If a document is posted via accounting interface i.e. from sales department
or purchase department, this also results in the Financial Accounting
document that is identical in nearly all fields.
Two important control keys:
Document type for the document header

Posting key for the line items
Simple Posting in SAP Financial Accounting:

There are different posting transactions for different postings:
The postings can be as follows:
G/L Account postings

Customer invoice postings
Customer credit memo postings
Vendor invoice postings
Vendor credit memo postings.
Enjoy Posting Screen:

The design of the posting transaction for entering documents in vendor,
customer, and G/L accounts has been changed to enable the user to make
postings more quickly and easily and with a little training.
The new single screen transactions display the most important input fields
on one screen. The important input fields are on the foreground on a tab
page; the fields used less frequently are on the subsequent tab pages.
With customer and vendor invoices, you enter the business partner account
data in this section together with amount. When you choose Enter, the
business partner master data is also displayed such as the account name,
address, bank details etc. You can display an open items list by pressing the
Open Items pushbutton.
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In addition to header and item data, the entry screen also contains an
information area where you see the display balance.
By choosing the tree button you can access screen variants, account
assignment templates, and held documents that you can select as
templates.
Enter the additional line items for the document in the table in the lower part
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 a nd
sequences of the columns and fields. You can also copy line items.
After the top of the screen, you can choose 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 from
the menu. You cannot return to the initial screen from this complex posting
transaction.
You can enter an explanatory text for the line item. This item text can be
used internally and externally. If you want to use the texts for external
purposes such as in correspondence, dunning notices, payment advice notes,
and son, enter * in front of the text (the * is removed in the printout)
In Customizing, you can define text templates under a four digit key these
text templates are copied into the line when you enter the relevant key in
the text field during document entry.
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Unit-2: Automatic Payments

Lesson-2.1Payment Run Overview:
Preparation:
For handling mass transactions a payment program is available in SAP FI that
runs at specified intervals and processes the relevant transactions.
The program can be used for:
Paying many open items at once,
Posting them in the system
File information about bank transfer created for further processing with
the bank.
Directly printing checks and
Sending them to vendors.
Payment program:
Developed for international payment transactions with customers and

vendors.
So flexible that it includes the specific payments modalities for each
country such as payment method, payment forms.
The standard system contains the common payment methods and forms.
Payment Process:
Invoices are entered

Analyze open invoices for due
date
Invoices due for payment are
prepared for review
Payments are approved and / or
modified.
Invoices are paid.
Figure of the Book
Every company needs a way to pay its vendors. The automatic payment
program is a tool that will help its users in managing their payables locally as
well as internationally.
SAP payment program lets you automatically:
Select open invoices to be paid or collected.

Post payment document
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Print payment media, use Data Medium Exchange (DME) or generate

Electronic Data Interchange (EDI) {Means the method used for
communication /Transferring date between printing area or other storage
medium}.
It is flexible enough to allow users to define those payment features that

vary from country to country such as payment methods, payment forms, or
data carrier specifications.
Settings for Payment Program:

Settings for Payment program are defined in three places:
In the master record for the business partner, e.g. banks details and
payment methods.
In the items e.g. payment methods in the document, terms of payment.
In customizing for payment program.
If the data in master record and in the document differs, the data in the
document takes precedence over the data in the master record(the system
assumes that the user has changed the standard data on purpose).
SAP System Program Over view:

The payment process consists of following four steps:
1- Setting parameters (configuring the payment program)
While setting Parameters following questions are to be answered:
What is to be paid?
Which payment method is to be used?
When is the payment to be made?
Which company codes are to be considered?
How are they to be paid?
2- Generating a Proposal:
Once you have entered the parameters the system starts the proposal
run and Generates a list of business partners and open invoices that are
due for payment. These lists are to be verified first. During verification
invoices can be blocked or unblocked for payment.
3- Scheduling the Payment Run
Once the payment lists has been verified the payment run is scheduled.
A payment document is created and the general ledger and sub-ledger
accounts are updated
4- Printing the Payment Media:
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The accounting function is completed and a separate print program is

scheduled to generate payment media.
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Lesson-2.2 Payment Program

Configuration:
There are six configuration areas for the payment program:
123456-
All company codes ( open items are automatically counter or included)

Paying Company Codes
Payment method per country
Payment method per company code
Bank selection
House Banks
In the first three areas minor changes are required. The standard system
contains the common payment methods and their corresponding forms,
which have been defined separately for each country.
The main payment program configuration menu has push button for each
area. To ensure that the configuration is complete, work from left to right
through each pushbutton.
1-
All Company Codes

For all company codes define:
Intercompany payment relationships
The Company codes that processes

payments
Cash discounts
Tolerance days for payments
The customer and vendor transactions to

be processed.
Payment relationships across all company codes are defined here:

1- Sending Company Code: Means the company code whose payment
methods are accepted. If company code A is making payment on behalf of
another company code B, then B is the sending company code, if a
company code is not specified, the system automatically regards the
sending company code as the paying company code.
2- Paying Company code:- The company code that is responsible for
processing the outgoing payments, it records the bank postings. The subledger postings are recorded in the sending company.
3- Cash Discounts and Tolerance Days for payables: If you know that
your vendor usually grants a certain number of grace days you can enter
tolerance days for payables for every company code. These tolerance
days postpone the payment for some due items until the next payment
run, while still receiving the appropriate discounts.
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4- Vendor /Customer and Special General Transactions to be paid

specify which special general ledger transactions e.g. payment of bills if
exchange, advance to staff, can be processed with the payment program.
5- Payment Method Supplements:These are two-character alphanumeric
codes that are taken from the business partner master record that is
transferred to document when the payment is posted.If payment method
supplements are activated, it allows you to print and sort payments. When
you enter a document in the system the relevant data is automatically
assigned to the individual items. They can also be manually entered or
overwritten in the line item when you enter a document. Payments are
sorted and can be printed by supplement.
2- Paying Company Code:

For each individual company code user define:
Minimum amount for incoming and outgoing payments to be made

Forms for payment advice to be used EDI. Types of forms are:
SAP Script Form
Smart Form
SAP PDF Form
If you choose no exchange rate differences, the full exchange rate
differences are not posted until the bank posting has been received.
Bill of exchange specificationsincludes: How many bills of exchange are created for each account during the
payment run for bills of exchange payment method?
Which open items for the bill of exchange payment method are to
be considered during the payment run using the due date
specification.
In the sender screen, users can define any company code dependentstandard texts to the payment forms.
3- Payment Method per Country:

The basic requirement and specifications are defined for each payment
method:
Payment method has two components:
Country Specific Settings and
Company Code specific Settings.
In this section we shall see the basic requirements and specifications for
payment method for each country.
For each country define:
Define the methods of payment i.e. check, bank draft, bill of exchange,
payment advice etc. for both outgoing and incoming payments.
Characteristics for classifying the payment method: what is the method of
payment and what are its characteristics. ( if a payment method have
certain maser record requirements, invoices will not be paid with this
payment method unless the requirements are met)
Specify the document typesthat will be used for posting and clearing
documents.
Name of the Printing programs and the print data set for this payment
method.
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Payment method may be restricted to Permitted Currencies on the

permitted currencies screen. If there are no entries on this screen, the
payment method is valid for all currencies.
4- Payment Method per Company Code:

In this area following specifications are defined for each company code (they
may differ across company codes)
Fixing minimum and maximum amounts to be processed. Amounts

lower /higher than this limit will be excluded from the payment run. These
amounts are analyzed to see whether a split into several payments is
possible with the specified maximum amount.
Define whether foreign payments and payment in foreign currency shall
be made by this method. If allowed then give:
Foreign Business Partners Address
Customer /Vendor Banks abroad allowed.
Foreign Currency allowed.
When the option Bank optimization is used is selected the payment
program try to pay from the same clearing house.
If Postal code option is used the payment program looks to make
payment from the bank based on the customer/vendors city of
residence.
5-Bank Selection:
On this screen, the file folders are arranged for each of these sections:1Ranking order, 2- amounts, 3- Accounts, 4- Charges, 5 value date. The user
work through each of the folders, to complete the configuration of the
payment program.
1- Ranking Order: On this screen enter the house banks order in which
house banks are to be used i.e. 1st, 2nd,3rd, and so on. If the bank payment
method combination does not exist create one by defining:
a. The payment method
b. The currency(this folder must be empty if the payment method for this bank is to apply to
all currencies. Otherwise the payment method only applies to the currency entered here)
c. The ranking order: The payment program will take this into
consideration when determining which bank to pay from.
d. The house bank identifier to be used with this payment method.
2- AmountsAvailable: System uses this figure to check whether sufficient
funds are available in this bank account. (Note that system do not update
the amount field automatically)
3- Accounts on this screen give the offsetting account for the sub ledger
posting (bank sub-account) To add a new house bank, here define the
following:
a. The bank and the bank account
b. The days until the value date when using bills of exchange. This
enables payments to be posted before their due date. In all other
cases enter 999. The value date then not taken into account.
c. Currencies
d. Amount available for outgoing payment.
4- Expenses / Charges: Incoming and outgoing payment functions have a
bank charges field for entering all types of bank charges. For incoming
payments the system subtracts the bank charges from the clearing
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amount. For outgoing payments, it adds the charges to the clearing

amount.
5- Value Date: is used for cash management to track the out flow of funds.
It is usually calculated from posting date of the payment run plus the
number of days up to the value date.
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Lesson-2.3 Running the Payment Program

Individual Steps
Various decisions have already been made in the basic configuration.
Additional criteria, however, are also specified during each payment run. For
this following questions are to be answered:
Who is going to be paid?
Which payment method will be used?
When will the payment be made?
Which Company Codes are to be considered?
Every payment run is identified by two fields:

1- Run date it is recommended as the actual date when the program is
executed. Its main purpose to identify the program run.
2- Identification This field is used to differentiate between program run
that have the same run date.
Open Item Selection:
All documents that were entered up to (Documents entered up to)

date are included in the payment run.
The posting date is the date when the General Ledger is updated with
the postings. The date is defaulted from the run date on the previous
screen.
If multiple company codes are to be listed, they have to be separated by

commas. If you want to give range of company codes, give first and the
last company code in parentheses.
HINT: Do not enter a space between commas
Company codes in the payment run must be in the same country.
For each country, already defined payment methods can be used within
that particular country.
If more than one payment methods are used, remember that their order
of entry is very important. The method entered first has the first priority
and the next has second, and so on. The system makes the payment
using the highest priority possible after checking them.
What happens in the proposal run?
The items to be paid are selected (on the basis of search criteria entered
with the parameters).
The items for payment are collected and payment methods and bank
details are assigned.
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If the system cannot find a payment method or bank details, the items are
added to the exception list.
The proposal and exception list are generated after the proposal run.
How the Due Date of Payables is Determined:
A vendor item is paid if the following applies at the next payment run
(taking tolerance days in to account)
The Discount has expired
A lower discount should be received.
The net due date would have been exceeded.
Proposal Run:
After the parameters are entered on the main payment program screen,
schedule of payment proposal is to be created.
In the proposal run, the program (using the search criteria specified in the
parameters) selects documents and accounts with items that are pending
for payment.
Then the system group these items to payments and assigns the payment
method and bank details to be used.
The items that do not fulfill the criteria and the blocked items are added
to the exception list.
After this the system generates two reports

The payment proposal list and
the exception list.
You can edit these lists / reports or print them.
The Proposal List:
The proposal list shows the business partners and the amount to be paid
or received.
Depending on the line layout users choose for the screen, the associated
document numbers and cash discounts can be displayed.
The exceptions are also listed here.
The user can drill down any item to view and change the details of the
individual item.
Exception List:
Invoices that match the specified payment parameters but for any reason,
cannot be paid are listed in the exception list.
If the user select the additional log the list shows why the invoice cannot
be paid
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Payment Block(Stop payment of specific Transaction):

There are several ways to configure a payment block:
If a problem arises during the invoice verification process, the user usually
blocks it in the master record.
If there is a reason as to why a vendor should not be paid, he can create

a payment block in the master record. This block prevents invoices from
the vendors from being paid.
A block for removing it can also be configured manually, so that it has to

be removed manually in the master record before a payment can be
processed.
When an invoice for Accounts Payable is entered, it may be blocked for

payment.
The type of payment block determines whether it can be removed during

the payment proposal or not.
You can define additional payment block in the system. Users can also
specify whether the payment block can be removed when payments are
processed.
Editing the Payment Proposal:
To further analyze the proposal list, user can edit the list to view the
details of a particular payment
He can change the payment terms, or add a payment block.
After the payment run created it can be edited by accounting clerks.
User can assign an accounting clerk to a customer / vendor by entering

clerks key in the customer /vendor master data.
Editing the Payment:
The first screen in the editing transaction shows an overview of all the
payments the program proposes.
By double clicking a payment, you can display a list of all the open items
that are due to be paid with the payment.
You can change the payment block and cash discount for these line items.
After you have edited the payment proposal the system uses it as a basis
for the actual payments
During Payment Run:
Payment Documents are created or posted.
Open items are cleared
Postings are made to general ledger and sub-ledgers.

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Bank Subaccounts:
It is advisable to use bank subaccounts for posting incoming and outgoing

payments.
There are many advantages for using sub-accounts.

You can reconcile the bank account balance at any time with the
corresponding general ledger account as subaccounts contains all
incoming and outgoing payments until the money is actually debited or
credited to a bank account as they are generally managed on an
open item basis and with the line item display.
Payment Document:
The document type for payment documents is defined in the countryspecific, specifications for the payment method.
For cross company code payments, you can enter a further document
type that is used for the clearing postings.
Both document types must be defined using internal number assignment.
Documents of the payment run contains the date and identification

number (for example, 20140301-ID) for the run in the document header
text.
For calculating the value date of check payments, you can enter a check
cashing time in the master data. This has priority over the days to value
date for checks.
If payments are made for individual business areas, bank posting is made
for the business area to which the paid items belong.
If payments are not maid for specific business area, you can specify the
business area for the bank postings.
In all other cases the postings to the bank sub-accounts are carried out
without reference to business area.
Cheques are issued on the basis of payment document.
Printing Payment Media:
The print run starts the print program, which do the following:
The payment media, payment advice notes and payment summary

are sent to the print administration.
Transfer the DME payment data to DME administration
Creates intermediate documents for selected payments, which can

be forwarded to the EDI sub system.
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A print program is assigned to each payment method for each country

when it is configured.
To run the print programs, the system needs at-least one variant for each
print program and payment method runs the program once for each
variant.
If several variants are assigned to a print program, the system runs the
program once for each variant.
Forms for Payment Media:
In the configuration setting for payment program, you have to assign

payment medium forms either to the paying company code or to each
payment method for each company code.
SAP system offers standard forms that can be altered for users
requirements.
Details on the payment forms and formats in the users country can be
found in the country-specific program documentation.
EDI(Electronic Data Interchange)and Payment Advice Notes:
The first print program run by the payment program is the print program
RFFOEDII.
This report chooses all the payments that are selected for EDI, creates
intermediate SAP document for them, and forwards them to the EDI
subsystem.
The EDI subsystem then converts the intermediate documents into EDI
data, which is sent to the bank.
DME Data Media Exchange:
With DME a file is created that contains all payment related information
according to the banking rules of the country.
File is saved in DME administration and can be down loaded to a data

medium. You can also download DME accompanying note.
The data medium and the DME notes are then sent to the bank
To use DME for specific payment, you have to select it in the variant. To
generate separate DME files for each house bank, you have to enter a
variant for each house bank.
The DME files can either be stored in SAP TemSe (Temporary Sequential
File) within the SAP System or in the PC file system. In TemSe file cannot
be accessed by unauthorized person.
The Print Program:

Assign cheque number to payment documents.
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Update the payment documents and original invoice documents with the
check information.
Print cheques and accompanying documents.
If you are using cheque management you have to use check lots to print
checks.
Cheques are managed in batches, or lots. If the pre-numbered checks

from bank are being used, then specify the check number ranges in the
lots otherwise start the check numbering from 1.
For monitoring purposes, it is advised to use a separate lot for each type
of payment.
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Lesson-2.4 Payment Medium Workbench

(PMW)
This lesson shows the participants how to use the payment medium
workbench as an alternative to the standard payment medium print
program.
What is PMW:
PMW is used to create payment media. The user is provided with a generic
payment medium program for all payment medium formats whose variants
are to be entered in Customizing. The user can create the structure of the
note to the payee and choose different notes to the payee according to their
origin (vendors, customers, personnel, travel expenses, treasury, online
payments, and so on). Developers, consultants, and system administrators
have simple tools for changing delivered formats without modifying or
setting up new formats. Well-known development tools are (Data Dictionary,
Foundation Builders etc.) and the new DME Engine are integrated, enabling
PMW to function like a workbench.
Advantages of PMW
Simple, modification-free options for adjusting delivered formats to meet

customer or bank requirements (including individual selection parameters
for the payment medium program).
Simple tools for creating new formats (no programming experience is

required for using DMEE).
Customizing to structure the note to the payee.
Standardized creation of advice notices with the new program.
Improved performance, especially for large payment runs.
The Payment Medium Workbench (PMW) is a tool used to configure and create payment media sent by organizations to their house
banks. This generic tool will gradually phase out the classic payment medium programs (RFFO*) due to the range of advantages
that it provides.
Superior control and verification of payment procedure
Improved performance with mass payments (> 50,000)
Better sort functions with payment advice notes
Clearer to work with than the myriad previous payment medium programs
Easier to maintain and to extend
How to activate PMW:

A payment method becomes a PMW in four steps:
Payment medium format is assigned to the payment method after you

have determined that you want to use PMW. You may have to enter a
substitute format.
The note to the payee is assigned to the payment method by origin.

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Enter the form for the accompanying sheet provided by SAP in the
payment method for each company code (under next form)
Create and assign selection variants.
Additional Information on PMW
Set the PMW formats
Release information on PMW
Documentation on the generic payment medium program
Integration of check management in PMW
Creation of cross-payment run payment media
PMW connection to online payments.
Adjust the Payment Medium Format:
It is an activity in which you can adjust payment medium formats

according to your special requirements.
Its prerequisite is that it is necessary to modify a delivered format and it is

not possible to adjust the existing format using customizing.
If you want to modify the format you must know the structure and the
properties of the format.
The create payment medium Format section explains the properties of the
format.
Granularity: You can create more files (one file per company code, for
example by specifying the granularity.
Create Payment Medium Format:
The Data Medium Exchange Engine (DMEE) is used for this purpose.
You can define file formats for DME in several applications using DMEE.
In this graphical tool you can define both the format hierarchy and the
mapping rules for individual format fields without having to write ABAP
code.
This makes it much easier to create new formats and maintain existing
formats.
The DMEE is currently used in the various applications like payment

formats (PMW), generic withholding tax messages and VAT messages.
The Payment Medium Workbench (Features):
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Previously payment media formats were programmed in approximately 60

standard payment media programs. In the PMW, however these formats
are defined outside the payment medial program.
Uniformity
Formats can be easily changed without making modifications
New formats can be created (no programming experience is required if
you use the DME Engine.
The note to payee can be freely defined in Customizing
The note to payee can be assigned according to origin and payment
method in Customizing.
Improved performance for mass payments.
Conversion of Payment Methods to PMW:
You can convert each payment method individually to the PMW payment
media formats.
This means you can use the standard payment media programs RFF and
the new PME payment media formats in the same system and even in the
same payment Run.
Conversion Steps for the Payment Method:
Switch the PMW radio button in the payment method definition / country.
Enter an existing PMW format in the payment method definition / country.
Assign notes to payee (general and / or origin specific) to the payment
method definition / country.
Assign a PMW form for accompanying sheets.
Remove the form for document-based payment medium.
Create and assign selection variants for each payment group.
When the payment media is created for payment with PMW payment
method the program SAPPAY_SCHEDULE is launched.
It firstly carries out a pre-service. The pre-service progress the data supplied
by the payment run again specifically for the PMW
The payments are stored according to PMW format and other formatspecific fields.
Payment groups are created based on the level of granularity (one
payment medium file is usually created later for each group)
The note to payee is formed.
Payment Medium Formats:
A payment medium format contains various fields that are filled with
contents from you SAP System. The process is called mapping and can be
carried out in one of two ways:
With programmed function modules.
Using the DME Engine.
Granularity and Payment Groups:
The granularity is specified in the definition of the payment medium
format and determines how the payment media is to be output separately
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in payment groups. A payment group usually corresponds to one payment

file.
Note to Payee:
A PMW payment method is always assigned a PMW format and a content
template for the note to payee.
Every PMW form (with or without supplement) has up to three types of
text fields for reference information
Invoice information (classic note to payee)
Internal reference (in case the payment media is returned).
External reference (for the business partner)
The contents of the note to payee are defined in a content template,
independent for the format either in customizing or by means of a
function module. In Customizing, you can define the contents of a
language-specific basis to ensure that your business partner always
receive the text in their own language.
Lesson-2.5 Debit Balance Check

Payment Despite Debit Balance:
In some cases, the payment run can result in payments being made
ever though the account has a debit balance. This may happen if a
payment method for incoming payments, however, has not been
defined in the master record or in the credit memo.
The debit balance check can be carried out after a payment proposal
has been created.
The check offsets all the due debit items without an incoming payment
method against the proposed payments.
If the resulting debit balance or credit balance is less than the

minimum payment amount, the payments are added to the exception
list and the amount is placed on the list of blocked accounts.
The relevant accounts remain blocked ever if the payment proposal is

then deleted.
This means that the payments for the blocked account are not made in
the subsequent update run with the same payment run identification.
The blocks are not removed until the proposal is created again with the
same identification.
Blocked accounts can be released manually
The debit balance check is carried out with program RFF110SSP.
Lesson-2.6 Automating the Payment

Process
Program RFF110S is used to schedule the payment program SAPF110S in the

background. The selection screen for this program essentially features the
same parameters as transaction F110. This means that you can save these
parameters in a variant and schedule the program RFF110SS to run
periodically with this variant.
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You have to use selection variables to automatically adapt the time data
to the periodic run date.
The grogram RFF110S should be called automatically to perform the debit
balance check.
After the debit balance check the program RFF1110S is called again
automatically. The time, however, as an update run with possible
generation of payment media.
The programs can be scheduled to run periodically using job management
or the Schedule Manager.
The status of the payment run is visible online in transaction F110 from
the point at which the parameters are created by the report RFF110S.
Schedule Manager:
You can use schedule manager to automate periodically recurring

activities, e.g. you can start the Schedule Manager with the transaction
SCMA or directly from the Accounting menu.
The task list is the key element in the Schedule Manager. It represents a
collection of activities (which you can show or hide) to help you create
your tasks.
You can define your different type of tasks in the task plan: Program with
variant, notes, transaction, and process definition.
You can use the Schedule Manager and program scheduling functions for
your payment processes.
Unit-3:-Automatic Dunning
Lesson: 3.1 Dunning Overview:

Contents Taken from Internet:
In general practice dunning means sending letters to our customers reminding
them to pay invoices which are due and/or well past it. SAP system has a
complete dunning program.
In SAP dunning program is influenced by different factors. These include

customized settings, master data, documents and the parameters
defined for the dunning run.
By entering parameters in the dunning program, you can specify, how it

is to be run. You can also use the parameters of an existing dunning run
and adjust the dates.
During the dunning run, the system chooses the accounts and checks
them for items that are overdue. Finally a check is made as to whether
reminders have to be sent and dunning levels are to be allocated.
All dunning data is saved in one dunning proposal.

Four steps that have to be taken by the dunning program to perform the
automatic dunning procedure.
Maintain parameters.
Proposal run
Edit the dunning proposal
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Print the dunning notices.
The dunning proposal can be edited, deleted, and re-created as often as

required until the accounting clerk is satisfied with the result.
You can skip this step. After the dunning run has been completed, you
can print out the dunning notices immediately.
In release 4.0 and later dunning notices can also be printed individually
In just one step, dunning notices are printed and dunning data is updated
in the master records and associated documents.
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Lesson: 3.2 Dunning Program

Configuration
The Dunning Procedure:
The dunning procedure controls how dunning is carried out. Every account
that is to be included in the automatic dunning process needs to have a
dunning procedure.
One time accounts also have a dunning procedure that is valid for all onetime customers.
You can define any number of dunning procedures. The SAP system
already contains several predefined dunning procedures, which can be
used as templates for other procedures.
In the dunning program you have to define the following:
1. Dunning procedure (defining interval in days for performing dunning)
2. Dunning levels(number of days, referring to the due date of net
payment, to reach a certain dunning level)
3. Expenses /charges (to be incurred on dunning e.g. printing, sending
letters, etc.)
4. Minimum amount (for which dunning notice is to be issued).
5. Dunning Text (What is to be written in the letters)
6. Environment
1- Dunning Procedure Overview:

For each dunning process define:
Key for the dunning procedure to be used.
A description of the dunning procedure
The dunning interval in days(after how many days the dunning run to be
performed)
The sum of items due from the dunning level (all the due items are
totaled)
The minimum days in arrears (after which a dunning notice will be sent. At
least one item in the account must have reached at this number of days)
Grace periods per line item(Number of days taken into account when the due
date is determined for the dunning run. A line item whose number of days in arrears
is less than or equal to the number of grace days is not considered due during the
dunning run)
Interest calculation indicator (for calculation of dunning interest) .

Dunning letter ever if account balance is positive (if this flag is not set, the
system will perform dunning of only those accounts which have debit balance i.e.
A/R)
For each dunning procedure, you have to specify the intervals after which
the accounts (that use this procedure) are to be checked for dunning.
(e.g. dunning shall be performed after every 5 days)
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During the dunning run, the system checks whether the run date is
atleast this number of days after the date of the last dunning run. If this
is not the case, a new dunning note cannot be created. This even applies
if new items have become overdue in this account
The number of dunning levels represents the highest dunning level that is
possible in the procedure. (How many times dunning letters are to be
issued for an item which is overdue)
The minimum days in arrear (account) are the days that at least one time
in the account must have. Otherwise, the account is not dunned, that is,
a dunning notice is not created.
An item whose number of days in arrears is less than or equal to the

number of grace days is not considered due for this time dunning notice.
If you want dunning interest to be calculated, you have to enter an

interest indicator.
If you want to issue a dunning notice to an account which currently have

credit balance (amount paid in advance), you have to select this option in
the dunning procedure.
2- Dunning levels
The minimum number of days in arrears is set as a default in the system.

The system proposed the Line item grace period as the first level
dunning. For all further dunning levels, the system adds the dunning
interval in days to the days in the arrears of the previous dunning level.
For each dunning level you can specify that interest is to be calculated.
If you choose the Always Dun option, dunning notices are printed even
if dunning proposals have not changed since the last dunning run. A
dunning proposal is considered changed if it fulfills at least one of the
following criteria:
At least one item has reached a dunning level.
A new item has added to the dunning notice
The dunning level of the account has changed.
The items can be printed to give the customer / vendor an overview of the
overall account balance.
You can enter a number of days if a payment deadline for payment of the
overdue items is to be specified in the dunning notice. This number is
added to the issue date of the payment run. The result is the payment
dead line.
You can print a dunning notice in a legal dunning procedure, even though
no further account movement has occurred.
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The maximum number of levels of dunning is fixed as nine.
3- Expenses /charges
You can specify the dunning charges for each dunning level.
These charges may be a fixed amount or a percentage of the dunned

amount.
Dunning charges can be defined for each currency and depends on the
dunning level.
You can use the word processing features to print these charges on
dunning forms.
You can also define a minimum amount (from dunning amount) for
every dunning level.
4- Minimum amount
For each dunning process maintain:
Minimum amount or percentage of the overdue item to reach a dunning

level.
Minimum amount required before interest is calculated for each dunning

level.
5- Dunning Text
Dunning program can generate payment advice notes, dunning notices

and payment forms.
In SAP ERP 2004 and later, another technology is available for generating
and printing forms in addition to SAP script and SAP smart Forms which
is named as PDF-based forms based on Adobe technology.
6- Environment
In the Company Code Dunning Control Screen, you can specify

whether dunning notices are to be created separately by dunning area
rather than by account for a company code.If you choose this option the
dunning data in the business partner master record is updated according
to dunning areas. A dunning area is an organizational entity, i.e.
substructure of a company code that is responsible for dunning.
In contrast to standard dunning, where all items at all dunning levels are
dunned with one dunning notice, you can choose to use a separate
dunning notice with a different accompanying text for each dunning level
in an account.
If you want to sort your dunning notices and items according to specific
criteria, you can maintain sort variants.
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Standard text has to be assigned to a company code and (optionally) a

dunning area. A standard text contains the text for the letter head which
can include a company logo and a telephone number.
A dunning key determines that the line items can only be dunned with
restrictions or is to be displayed separately on the dunning notice.
A dunning block prevents accounts and items from being dunned.
You can maintain the interest rate to be used to calculate for the interest
due on debit balances.
In nut shell you can divide the debtors which are to be dunned on any of the
following basis:
Company code data
Sort fields
Sender details
Dunning areas
Dunning Keys
Dunning block reasons
Interest
Dunning grouping.
Lesson: 3.3 Parameters for the Dunning

Run
Every dunning program run is identified by the following two fields:

Run date
Identification
The run date does not have to be actual date when the program is
executed, but this is recommended. Its main purpose is to identify the
program run.
The identification is used to differentiate between programs that have the
same run date.
The parameters provide the dunning program with information on the
dunning run. You can copy the parameters from existing dunning runs.
Open Items Selection:
Parameters are used to specify which company code, documents, and

accounts are to be searched for overdue items.
You can also activate an additional log to check, after dunning run,
whether the run was successful. Use this log for testing and training
purposes only since it requires a lot of system resources.
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Lesson: 3.4 The Dunning Run
Dunning run creates a dunning proposal which can be edited, deleted

and re-created as often as necessary.
If necessary you can automatically print out the dunning notices directly
after the dunning run. In this case you decide not to edit dunning
proposals.
Steps in Dunning Run
The dunning can be divided in to three steps

Account Selection: in this step the program checks which accounts
should be considered in dunning run according to the parameters and
configuration.
Dun Line Items: In this step the system checks which line items are
over due in the selected account and which dunning level should be
applied.
Dun Accounts: In this step the system checks, whether the account is
to be dunned and how
1- Account Selection
Program checks all the accounts using the criteria entered in the
parameters. If they fulfill these criteria, the accounts are included in the
dunning run. Otherwise they are ignored.
The following criteria must be fulfilled:
A dunning procedure be entered in the master data
The date of the last dunning run entered in the account must be
earlier than the dunning interval date of the dunning procedure.
Due Dates for Receivables and Credit Memos

Receivables are due at the due date for net payment.
Usually the payment terms of a credit memo do not apply. Instead the
following rules are valid:
If the credit memo is invoice-related, it has the same due date as the
invoice.
All other credit memos are due at the base line date.
If you want the payment terms in a credit memo to apply you have to enter V
in the invoice reference field.
Clearing with Credit Memos or Vendor Items:
The due net debit items on the account are cleared with the due net credit
items. The credit items are assigned to the debit items with the highest
dunning level and are cleared with these items.
If you have chosen clearing between customer and vendor, the due net
credit items in the vendor account are also cleared with the items with the
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highest dunning level. The same dunning procedure must be defined for both
the customer and vendor.
General check: After all the due debit items have been cleard with the due
net credit items, the account must have a debit balance for it to be dunned.
If you set the Dunning Letter Even if Account Balance is Positive flag in
Customizing for the dunning procedure, however, this basic check of the
account balance is ignored: Dunning letters are created regardless of the
account balance. Note: In any case, the total of overdue items for each
dunning notice must be in debit; otherwise no dunning notice is generated.
The dunning notice lists all the items that were cleared.
Dunning Date
The difference between the due date and the dunning date is the following:
Due date: Date by which the liabilities should have been paid
Dunning date: Day when the overdue items are dunned
Every dunned item must be overdue, but not all overdue items are dunned.
Usually all items which are overdue at the date of issue have to be dunned
If line item grace periods have been defined in the dunning procedure, only
those items that are still overdue after the grace days have been deducted
and dunned.
Dunning Block in Items or Accounts.
If items are overdue but there is a dunning block in the item, the system
adds these items to the blocked items list.
If payment has to be dunned for an account, but the account contains a
dunning block, the system adds the account to the list of blocked accounts.
Payment Method in the Item or Account
If a payment method for incoming payments has been specified for an item,
the item is usually not dunned because the payment program is responsible
for collecting the money. These items are only dunned if they have a
payment block.
If payments for accounts are to be dunned, a payment method for incoming
payments is specified in the master data, the system usually does not dun
them because the payment program is responsible for collecting the money.
These accounts are dunned only if they have a payment block.
2- Dunning Levels for Line Item:

Each dunning procedure contains up to nine dunning levels.
The dunning notice wording is usually influenced by the dunning level. The
higher the leve the stronger the formulation in the dunning text.
Each item to be dunned is assigned a dunning level according to its days in
arrears. For invoice-related credit memos, the dunning level of the invoice is
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used. From one dunning run to another the dunning level can only be raised
by one, that is, no dunning levels can be skipped.
When setting up a dunning procedure, the system defaults the number of
days in arrears on the dunning levels screen. The system proposes the line
item grace periods as the first dunning level. For all further dunning levels,
the system adds the dunning interval in days to the days in arrears of the
previous dunning level.
HINT: Although you can overwrite these default values, but it is not
recommended.
Dunning procedures will only one dunning level are referred to in the system
as payment reminders. These procedures are used for very important
customers and public receive only a payment reminder.
Dunning Keys
By assigning a dunning key to an item, you can prevent the item from
exceeding a certain dunning level.
Minimum Amounts per Dunning Level:
The total amount of all the items in an account with a certain dunning level
must be greater than a defined minimum amount. The relationship between
the total amount and the total open items must be greater than a minimum
percentage.
HINT: Usually the minimum amounts and percentages at higher dunning level
are greater than those at lower levels.
Minimum Days in Arrears (Account)
The account can ONLY be dunned if AT LEAST ONE item reaches the
permitted minimum number of daysin arrears per account
Line item grace
Minimum days in
periods
arrears account
Due Dates
Item-1
Item-2
Item-3
Item-4
Overdue
Days
overdue
Overd
ue
Days
overdue
Overdue
Days
overdue
Overdue
Days
overdue
Example
In this example item 4 have more days in arrears than the minimum days in
arrears (account). As a result, the account id dunned. The dunned items are:
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Item-1, item-3 and item 4. Item 2 is not dunned because it is still within the
line item grace period.
Class Notes:
The system performs three checks:
1- Due date
2- Grace period
3- Minimum days in arrear ( including grace period).
3- Dunning Level in Account

The account gets the highest dunning level of all the items to be dunned. If
all items are dunned with one dunning notice, the dunning text is worded
according to highest dunning level.
Note that the dunning levels are not yet entered in the items or accounts.
This happens later when the dunning notices are printed. At this point,
however, the dunning levels have already been determined.
Dunning Requirements
After it has determined the dunning data, the system checks whether
dunning is really necessary. Normally, it is not necessary to send a dunning
notice if the dunning data has not changed since the last dunning run. This
means that an account is only dunned if one of the following conditions is
fulfilled:
The dunning data has changed since the last dunning run.
The Always Dun checkbox has been selected for the dunning level. This
option is usually selected for the last dunning level and for payment
reminders (dunning procedures that comprise only one dunning level)
Accounts in a legal dunning procedure are subject to a different rule. If the

start date of the legal dunning procedure is entered in the account master
data, the account is always dunned if one of the following conditions is
fulfilled:
Postings have been made since the last dunning run.

The Always Dun is Legal Dunning Procedure indicator is selected.
HINT: The system does not send any dunning notice to a customer with legal
dunning procedure, even if the dunning data has changed. It does not make
any sense to send a dunning letter to a customer who has obviously not
responded to any previous dunning notice. If an account is dunned according
to one of the criteria above, an internal note is printed on special form and
sent to a legal department. The Always Dun in Legal Dunning Procedure
field should be selected to prevent any open items that were posted before
the start of the legal dunning procedure from being overlooked.
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Lesson: 3.5 Editing the Dunning Proposal

After the dunning proposal has been created, it can be edited by a clerk.
To support the clerks work, the following lists can be printed:
Dunning Statistics
Dunning list
Blocked accounts
Blocked line items
Dunning history.
A sample printout can be made or displayed on screen.

The changes to the dunning proposal are saved.
Important: if a dunning proposal is not to be used for printing, it must be
deleted. Otherwise, it blocks the selected items for processing on other
dunning runs.
Editing Dunning Data

The clerk can
Block an account in the current dunning proposal or remove the dunning

block.
Block a line item in the current dunning proposal or remove the dunning
block.
Lower the dunning level of an item in the current dunning proposal.
Change the dunning and correspondence data of an account in the master
record.
This change does not apply to the current dunning run.
Change a document.
This change does not apply to the current dunning run.
HINT: Only changes in the dunning proposal apply to the current dunning run.
The dunning level can be raised or lowered as required in the master data
and documents.
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Lesson:3.6 Printing Dunning Notices

It is the last step in the dunning process involves printing the dunning
notices.
Run Date
Account
C or V
03/01/xx
xx
AC201
Identification
Status
Maintain
parameters
Parameters entered
Schedule dunning
run
Dunning run has finished
Change dunning
notices
Dunning data has been changed
Start dunning
printout
Printing of dunning notices is
complete
Documen
t
Printer
Scheduling Printing:
The print program for the dunning procedure:
Group items to be dunned with a dunning notice according to various

rules.
Generates a dunning notice for each group
Enter the dunning date and level in the dunned items and accounts.
If dunning notices are to be sent to one time customers, the dunning date is
updated only in the relevant items.
Dunning notices are printed in a sequence defined by sort criteria.
Grouping Items in Dunning Notices

Items that are to be dunned are grouped together in dunning notices as long
as they have the same:
Company code
Dunning area ( if dunning areas are used)
Account
Items in a one-time account are grouped together in one dunning notice if

they have the same address.
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The items in a dunning notice are sorted according to various sort criteria.
Special Grouping (I)

You can also group items by the following criteria: Examples:
Dunning by Dunning Level:
In the company code specific settings for the dunning program, you can
choose whether a separate dunning notice is to be printed for each dunning
level. In this case, the text for the dunning notice is selected according to the
dunning level of the grouped items.
Grouping Key
You can enter a grouping key in the customer /vendor account to group items
in dunning notices that have the same values in the fields assigned to the
grouping key. You can use the field in the index tables for open items.
Decentralized Processing.
If a customer has a head office with several branch offices, items are posted
to the central account. As a result, the head office usually receives one
dunning notice with all the due items from its branch offices. If decentralized
processing is selected in a branch accounts, dunning is processed locally,
that is the notices are sent to the branch offices.
Special Grouping (II)

You can use cross-company code dunning to combine overdue items from
different company codes in one dunning run. The overdue items from one
customer that exist in different company codes are dunned with one dunning
notice. The items are grouped according to predefined rules, for example, by
dunning levels, dunning areas, or dunning grouping, and assigned to one or
more dunning notices. This means that you do not have to send the
customer a separate dunning notice for each company code.
If you want to dun different company codes at the same time, you have to
assign the relevant company codes to a shared dunning company code.
If a date for the legal dunning procedure has been specified for an account in
the dunning company code, this also affects the department company codes.
Dunning Text Control (Based on SAPscript)

Standard texts are available for entering company code or dunning area data
in a company code independent form.
The dunning recipient can be different from the address of the dunned
account.
If no specific dunning clerk is entered in the master data, the accounting
clerk is displayed
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Data in a dunning text element: The dunning interest depends on the

dunning level and is calculated using an interest indicator. Minimum amounts
for interests can be used. To prevent the payment deadline from falling on a
holiday, a public holiday calendar ID is assigned to the dunning procedure.
The total of all due items from a specified dunning level is calculated and can
be used in the dunning text.
All Items are generally printed at higher dunning levels to provide the
customer / vendor with an overview of the overall account balance. Items
with dunning block or collection method are not displayed. If the dunning
notices for each dunning level option are selected, a list with all the
items cannot be printed. Items with special dunning keys can be printed
separately.
Dunning Charges depend on the dunning level and can be either a fixed
amount or a percentage of the dunned amount. A minimum amount for the
dunning charges can be set.
Dunning notices can be printed with an attached payment form for bank
transfer. The customer can use this form to pay the dunned amount.
The dunning notice must only contain items with the company code currency.
The payment program can create a payment advice note containing the
items in the dunning notice. When the customer pays a dunned amount, this
advice note can be used to assign the incoming payment to the relevant
items.
The payment advice number has 10 digits and starts with 08. Payment
advice type 08 must be defined in the configuration setting.
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Unit-4: Correspondence
Lesson: 4.1 Correspondence Overview
Every day, companies need different types of correspondence. Everyone
tries to automate his correspondence as much as possible but also tries to be
able to create specific correspondence for his customers.
There are many opportunities to generate correspondence
Document creation
Display / change line items
Balance display
Line item processing
Payment
Automatically generate:
Periodic bank account statements

Balance confirmation.
There are various types of correspondence in the system:

Public Correspondence is triggered by specifications made in the master
record, such as invoices and account statements. The interval (weekly,
monthly, and so on) is specified in the customer / vendor master record.
You can create correspondence online when you process payments manually
and from the line item display.
In Customizing, you can configure appropriate correspondence for certain
postings, such as payment differences.
The correspondence creation process comprises of the following steps:
1st Step: Request the required correspondence. Here, the system initially only
notes internally which correspondence types are to be created.
2nd Step: The requested correspondence types are printed. Typically
correspondence is printed automatically with a particular frequency, for
example dunning letters, account statements, and so on. In certain cases, it
is possible to print certain correspondence types individually and on demand.
The print request is sent to the spool system. Following this correspondence
is printed on the selected printers.
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Lesson: 4.2 Correspondence Types

How can you define correspondence in the system?
You define periodic correspondence (e.g. bank account statements) in the

master record
You request individual correspondence directly in the application ( such as
for processing payments manually or display line items).
In Customizing, for example, attach correspondence to payment
differences using reason codes.
Steps involved in creating correspondence:
Request the required correspondence

Print the requested correspondence
What is a Correspondence Type?

A correspondence type represents a type of letter in the system. You have to
create a correspondence type for every type of letter you need.
The correspondence type can be selected by the user when processing
business transaction or are used automatically according to rules defined by
the user or the system.
You can use the standard correspondence type accordingly. This is necessary
because the standard correspondence types could be overwritten with the
next release.
Correspondence Type Components:

You define following information for correspondence types:
The required information

o Account number
o Document number
If additional text can be added to the form
If the correspondence can be used across company codes.
o Establish intercompany relationship with the correspondence
company code.
The number of date fields required
Following data is necessary for different types of correspondence:
Correspondence
Required Data
Payment notice
Document number
Bank statements
Account number and date
Bill of exchange charges statements
Document number
Internal documents
Document number
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Individual letters
Account number
Document extracts
Document number
The data is either entered manually by the user or determined automatically by the
system after the user has selected the relevant correspondence type.
Data from several company codes can be combined in one letter. Select the Cross
Company checkbox in the correspondence type and assign the company codes to
correspondence company codes in the IMG. You can use the following
correspondence types in all company codes:
Payment notices,
Account statements,
Bill of exchange,
Chargesstatements,
Internal document,
Individual letters and
Document extracts
Each correspondence type has a corresponding printing program
Each print program has a selection variant:
o Contains parameters to generate the desired correspondence
o Used when creating correspondence automatically.
Each program is assign a form.
Printing Correspondence:
A suitable print program and selection variant are defined for each
correspondence type. The selection variant is used to print the requested
correspondence.
You can distinguish your specifications by company code. This is usually
necessary for companies with several company codes, since you also enter
the printer on which you want your correspondence to be issued in the
selection variant.
In a separate step, you define the form that the program is to use to create
the correspondence. A correspondence type can have several different
forms letters. The individual forms are distinguished by their form ID. This ID
is assigned to the selection variant to make sure that the right letter is
printed. You can change these forms to add your company logo, address, and
an additional text if necessary.
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Unit-5:

Closing Process overview
Lesson:-5.1 Month End & Year End Closing

Processes
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Pre-closing activities that begin in the old month include:

1. Technical Open new accounting period (FI)
2. FI Enter accruals /deferrals, process recurring entries and bad debt
expenses in A/R, post depreciation and interest expenses in Asset
Accounting.
3. MM Maintain GR / IR clearing account, post material revaluations.
4. HR Post payroll expenses.
5. SD Post goods issues for deliveries to customers.
6. Technical Close old months in MM, close sub-ledgers (FI), preliminary
close of G/L (FI)
Managerial closing activities include CO allocations and re-postings, locking
the old accounting period in CO, and re-opening the G/L for adjustment
posting.
Closing activities for external Purposes include:
FI Foreign currency valuation
Technical Final closing of the old period
FI/CO Creating external and internal reports.
Pre-closing activities that bein in the old month include:
Technical Open the first accounting period of the new fiscal year (FI)
MM Perform physical inventory count (may be performed on up to a
monthly basis)
PP / CO Update product cost estimates (may be performed more
frequently)
MM Lowest value determination and LIFO/FIFO valuation.
AA Asset valuations and investment support.
FI Balance confirmations for customers / vendors.
Technical Fiscal year change (AA) and balance carry forward (FI)
Closing activities for external purpose include:
FI GR/IR clearing account analysis, receivables and payables

reclassification, reconciliation of prior year to new year, and other
adjustment posting.
Technical Final closing of the old period (AR / AP and G/L)
FI/CO Creating external and internal reports.
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Unit-6: Financial Statements

Lesson:-6.1 Financial Statements Versions
The SAP ERP system provides a standard report (RFBILA00) for creating
financial statements. You can produce different outputs from this report
program by specifying different financial statement versions.
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Financial statement versions are also used in the

o Structured balance list,
o Drilldown reporting,
o Planning, and
o Transferring data to consolidation.
You can define as many financial statements versions as you need to
prepare reports according to various criteria, e.g. for internal users,
external users, tax authorities etc.
The financial statement version enables you to configure the report
format. You determine the following:
o Which items are to be included and the sequence and hierarchy of
these items
o The text describing the items.
o The charts of accounts and the individual accounts relevant to the
report.
o The totals to be displayed.
You can use the selection parameters for making TCode RFBILA00 to make
additional specifications to createthe report at :
o Business area level,
o Segment level,
o Profit center level,
o Company code level and soon (the document split must be
activated to create financial statements for additional entities).
HINT: Customers already using classic General Ledger Accounting can only
use the TCode RFBILA00 to create a financial statement at the business are
level and company area level.
As an alternative to financial statements you can use the T Code RFBILA00 to
create a structured list of account balances. It does, however, have the
following restrictions:
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No profit or loss neither calculated nor displayed.

Accounts that are not assigned to a financial statement item are not
displayed
The item unassigned account does not appear in the report.
As of SAP enhancement package 5 for SAP ERP6.0, business function New

G/L Accounting you can read total records from the archive. When you
select the Button Data Sources in the report RFBILA00 you can specify
whether the data is read from the archive, form the database or from both.
The standard system is delivered with sample financial statement versions.
You can copy these and modify them to create your own versions.
Financial Statement Versions:

Financial statement version can be defined in two steps:
1- Enter it in the directory of financial statement versions
2- Define hierarchy levels and assign accounts
Each version must have the following special items
Assets
Liabilities
Profit
Loss
Profit and loss results
Accounts not assigned
Notes to Financial Statement
Non Assigned Accounts.
The net profit or net loss and profit and loss results are calculated using
same report that you use to create the financial statement. In addition the
report list the accounts that were not assigned to an item in the financial
statement version under the item Non-Assigned Accounts.
The net profit or loss is determined only from the accounts that are assigned
to the assets and liabilities items. Accounts belonging to the items notes to
financial statement and notassigned are not taken into account for
determining net profit or net loss. Profit and loss result is derived from the
balance of all the other documents.
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Balance Sheet Version of Financial Statements:

A financial statement version consists of a maximum of 20 hierarchy levels.
Assign items to each level. The system calculates a total/subtotal for
each item, which isthen displayed when the program is run.
Assign texts to each item
Assign the accounts whose balance and account name are to be listed
to the lowest levels.
Texts:
You can write additional texts for each item in a financial statement. You
can write up to four linesof text at the beginning and/or the end of an
item.
Account Group Assignment According to Balance:
You use account group assignment to determine in which cases the

balance of a specific accountgroup is to appear in a specific financial
statement item, e.g. Bank Account(with positive or negativebalance),
Accounts Receivable etc.
The balance will always appear here irrespective of whether the balance
of the accounts is a debit or credit.
Profit and Loss Section of a Financial Statement Version:
In the profit and loss statements, hierarchy is maintained, in the same

way as in assets and liabilities in the balance sheet.
In profit and loss statement area, you can use the graduated total
function to display the result of business transactions,
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Lesson:-6.2 Drilldown Reporting

Drilldown reporting is a tool that enables you to analyze General Ledger
Account transaction figures andfinancial statements.
You can also carry out variance analyses such as plan/actual
comparisons, or
fiscal year comparisons, and so on.
As of SAP Enhancement Package 5 for SAP ERP6.0 business function, New
G/L Accounting, you can read total records from the archive. When you
select the Button Data Sources in a Drilldown Report, you can specify
whether the data is read from the archive, from the database, or from both.
Drilldown reports make navigating through your data simple. You can move
to different details levels or in different objects for analysis purposes, or
change between drilldown view and detailed views. Drilldown reporting also
provides functions for processing lists, such as sorting, conditions(threshold
values), ranking lists, and so on. You can also access SAP Graphics,SAP mail,
and theExcel List viewer from your report.
The menus and the functions directly available in the drilldown report make
it easy to use the information system.
Characteristics and key figures form the basis of the drilldown report
presentation. Characteristicsdefine how your data can be classified or
provide a time reference. Key figures include stored valuesor quantities and
calculations based on these values and quantities.
In G/L drilldown reports:
Characteristics can include company, company code, business area,
segment, profit center,chart of accounts, financial statement item,
currency, fiscal year, period, and so on.
Key figures can include total credit balance, total debit balance, balance
sheet value,accumulated balance, balance carry forward, and so on.
Drilldown List and Detail List Reporting:
Each report consists of a number of lists that are divided into two categories
according to theircontent: drilldown lists and detail lists.
A drilldown list displays a selection of key figures in combination with at-least
one characteristic (for example, balance sheet value for a fiscal year, the
variance calculation) for a number of drilldown characteristics. The key
figures appear in the columns of a drilldown list. The lowest level of the
drilldown characteristics appear in the rows of this list, while all other levels
and their selected values appear at the top of the report.
A detail list always shows all the key figure and characteristic combinations
for a single combination of drilldown characteristic values. The key figures
appear in the rows of a detail list. All selected drill down characteristics,
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including their selected values appears at the top of the report of the order
chosen.
Unit-7:
Receivables and Payables
Lesson:-7.1 Balance Confirmation
At the beginning of the fiscal year, the balance carry forward program is
run, for carrying forward thebalances of the customer accounts to the
next fiscal year.
The posting periods of the old fiscal year are blocked and the special
periods for closing postings areopened.
A technical reconciliation guarantees that posting of documents is
technically problem-free.
The balances are then confirmed, the foreign currency documents
valuated, the values adjusted, andthe receivables regrouped.
Once complete, the special periods can be closed.
Balance confirmations are generated, foreign currencies valuated, and
receivables regrouped in thesame way as in accounts payable accounting.
HINT: The closing process may vary from country to country.
Balance Confirmations:
The program for creating balance confirmations automatically creates

balance confirmations(including reply slips) for a freely definable number
of customers and vendors, as well as areconciliation list and a results
table. The balance confirmation and reply slips are sent to the customers
and vendors and the lists are forwarded to a control center. In IDES
(Testing Server), this control center is the internal audit department.
The customer or vendor checks the balance information they receive and
sent their reply to the control center. Here the replies are compared with
the reconciliation list and the results entered in the results table.
Customizing 1: Balance Confirmations:
Reports SAPF130D and SAPF130K create correspondence to and from your

customers and vendorsto enable you to check the balance of receivables
and payables.
You can choose one of from the following procedures:
Balance Confirmation Balance notification Balance request
For each company code, the reports output a checklist and an error list
which are used to check thereceipt of balance confirmations.
You can also create a results list to evaluate the replies. For example, you
would include the number of replies received and the total amount
contained in the replies received.
The system can print a selection coversheet for each report run.
Alternatively, you can use the reports to print reminders for overdue
balance confirmations and inquiries. To do so, enter the customers
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concerned in addition to the old issue date and old reply date on the
selection screen.
Customizing II: Balance Confirmations:
You must specify at least one address to which balance confirmations

should be sent. Enter an ID orleave the field blank. Depending on what
you decide to enter here, the corresponding ID has to be included in the
selection criteria when the program is run.
Lesson:-7.2 Foreign Currency Valuation

Definition:
Before closing or creating financial statements we have to perform foreign
currency valuation for the transactions done in foreign currency. These
transactions can be cleared or open. For cleared items the exchange rate
would be that of the date on which it was cleared. For open items current
rate is applicable. This is done because at the yearend there could be
some revenue or expenses due to exchange rate fluctuation which should
be reflected in the financial statements.
You carry out the foreign currency valuation before you create the financial
statements. Thevaluation includes the following accounts and items:
Foreign currency balance sheet accounts, that is, G/L accounts that you
manage in a foreigncurrency (the balances of the G/L accounts in foreign
currency are valuated)
Open items (customers, vendors, G/L accounts) posted in foreign currency
(the line items arevaluated)
The posting document generated by the foreign currency

program is reversed automatically with the same program, on
the first day of the next month.
New with SAP ERP: the reversal is independent of the valuation area for
which the foreign currency valuation run was started.
If you want to (or have to) avoid the reset document / reversal
document, you must make additional configurations for using
the delta posting logic.
Foreign Currency Valuation:
A foreign currency valuation is necessary if vendor accounts contain open
items in a foreign currency. The amount of these open items was translated
into the local currency at the time they were entered using the current
exchange rate.
The exchange rate may be different at the time of closing, and open items
need to be valuated again. A program valuates the open items using the new
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exchange rates and enters the valuation difference in the valuated line
items. It also creation valuation posting.
A valuation cannot be made by a posting to the A/R and A/P Accounts, since
the direct postings cannot be made in reconciliation accounts. For this
reason, the amount is posted to an adjustment account, whichappears in the
same line of the balance sheet as the reconciliation account.
Valuation method determines how the individual line items are valuated.
This has to be set up inconjunction with the country-specific valuation
regulations. It defines, for example, whether
o the lowest value principle,
o the strict lowest value principle, or
o a general principle (also with revenue from the valuation) is to be
used for valuation.
Exampl
e
Receivable
180
(1)
180
Realized
(3)
(2) b
20
20
(2) a
30
(3)
Receivable
Adjustment
Bank
(3)150
Valuation
(2) a
20
Revenue
20
b
1. Invoice
(2)
180(1)
100 FC
1.8
2. Valuation
1.6
3. Payment
1.5
Explanation of Example:
At the time of purchase and receipt of invoice the rate was 1.8 so the
amount was 180
When valuation was performed the rate was 1.6 which means the amount
comes 160
At the time of payment rate was 1.5 it means the amount comes 150.
Thus the organization has to bear realization loss or 30, out of which 20
was show at the time of closing
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Valuation Methods Customizing

The valuation method contains the valuation approach to be used for
carrying out a foreign currency valuation as part of the closing operations.
For valuation you use one of the following two principles:
1- Lowest Value Principle: Valuation is carried out only if the valuation
difference is negative i.e. to recognize the loss only.
2- Strict value Principle: The valuation is carried out if the new value has
a greater de-valuation or greater re-evaluation for the entry than the
previous valuation. ( difference in the value of currencies is to be
displayed whether it is a profit or a loss).
Delta Posting Logic

Under delta posting logic the difference in the value of AR / AP is not
reversed on the first day of the next month. These differences are stored in
the table FAGL_BSBW_HISTRY
The figure provides an example of the valuation postings that would result as
the value of an open item changes from period to period, depending on
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whether the lowest principle or strict lowest value principle method is

selected.
Although the foreign currency valuation program FAGL_FC_VALUATION

requires a valuationarea, valuation area Blank is sufficient in account
maintenance that is, you define the accountswithout a valuation area.
A valuation area is assigned exactly one valuation method but the same
valuation method can beassigned to multiple valuation areas.
The posting document generated by the foreign currency program is

reversed automatically with thesame program, on the first day of the next
month. New with SAP ERP: The reversal is independentof the valuation
area for which the foreign currency valuation run was started.
Foreign currency accounts are valuated by balance. Exchange rate

differences in foreign currencybalance sheet accounts are posted to
various gains and losses accounts based on the exchange ratedifference
key that you enter in the G/L account master record.
Lesson:-7.3 Value adjustments

Value adjustment means adjusting the Accounts Receivable by deducting
doubtful debts.
There are three ways for making value adjustment of Accounts Receivables:
Individual Value Adjustment IVA
Flat-rate Individual Value Adjustment FIVA
Flat-rate Value Adjustment FVA
The following options are available for creating value adjustments for
receivables:
1-
You enter individual value adjustments (IVA) as a special G/L transaction

E.
2- You use the program SAPF107V Additional valuations to carry out a flatrate individualvalue adjustment.
3- Once you have determined the amount of the value adjustment, you
adjust the flat-ratevalue by making a manual G/L account posting. The
posting record is as follows: Expensefrom flat-rate value adjustment to
value adjustment.
Doubtful receivables are written off as an individual value adjustment

(IVA) during year-endclosing. The special general ledger method is
suitable for this procedure since the transaction isentered in the customer
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account and is also posted to a special G/L account, Individual

ValueAdjustments for Receivables.
After you have ascertained that the debt is irrecoverable or that the
receivable has been paid, the individual value adjustment is reversed. If
the debt is irrecoverable, the receivable is cleared from customers
account and the amount is posted to the account for depreciation of
receivables. The sales tax is adjusted in the posting
Since Release 4.5 you have the ability to perform automatic flat-rate
individual value adjustments for overdue receivables.
In accounts receivable configuration, you define the debit rate percentage

(bad debt expense percentage) for a valuation adjustment key and an
overdue time period in days. You must also set up the appropriate
adjustment and bad debt expenses account for doubtful receivables in the
account determination table.
You assign the valuation adjustment key to the master record of any
customer account that you wantto include in the flat-rate individual value
adjustment posting.
Periodically you carry out a valuation run to calculate the bad debts
expense posting for overdue items. The Valuation run produces a
valuation proposal that you can manually change, if desired. If you agree
with the proposal, you can transfer the valuation to the general ledger to
generate the postings. The system then makes the adjustment posting for
the relevant key date and the reversal posting for the relevant key data
and the reversal posting for the day after the key date.
Lesson:-7.4 Regrouping
To provide outsider with a better overview of the liquidity situation, the receivables and payables
must be grouped in the balance sheet according to remaining life.
Payables and receivables have to be listed separately in the balance sheet. Since it is possible
forsome vendors to have a debit balance, these balances need to be changed to customer-like
vendoraccounts prior to creating the financial statements.
In some countries it is also a requirement that payables are grouped in the balance sheet
according totheir remaining life.
Both regroupings are carried out using a special program. At the same time, these regroupings
areremoved on the first day of the next period, since regrouping is not necessary for daily
processing.
HINT: The foreign currency valuation as well as the regrouping can be completed in different
ways to meet various legal requirements. The results are then posted to various accounts that are
used by different financial statements versions.
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HINT: This program is also used if reconciliation account for a vendor was changed during the
year.
Before you create financial statements, you have to group your receivables and payables
according to remaining life so that they are correctly displayed in the financial statements. To do
this, you have to make adjustment postings.
For this purpose you can use report FAGL_CL_REGROUP to determine where transfer postings
are required. When you define the sort method in Customizing, you can select the case where
receivable and payables should be regrouped.
Balancing of Affiliated Companies:

Scenario: Your company code has receivables from and payables to a businesspartner that:
Is a customer as well as a vendor
Is an affiliated company (for example, another company code in your group)
Non-SAP system:
In the general control data in the customer and vendor master data, define the same companyID
in the Trading Partner field.
We recommend that you define an alternative reconciliation account in the master
data(receivables from, payables to affiliated companies).
In customizing you should assign the adjustment accounts based on these
special reconciliation accounts.
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Unit-8:

Accruals and Deferrals
Lesson:-8.1 Accrual /Deferral Postings

In order to charge expenses and incomes to the period to which they relate
accrual/deferral documents are created which are reversed in a later step
(collective processing) on the next day i.e. the first day of the financial year.
The reversal date of thatdocument is then regarded as the posting date of
the reversal document.
When
you
enter
the
accrual/deferral document,
you have to enter a
reversal reason. The reason
isnoted in the document
that is reversed.
The reversal reason also
defines whether:
The reversal document
can have a different
posting date.
The reversal document
can be comprised of negative postings
Accrual /Deferral of Expenses and Revenue:

Expenses and revenue posted in one period can often originate in other
periods. For this reason, at the end of the financial year expenses and
revenue have to be recorded as accrued/ deferred.In other words, they are
distributed to the periods to which they relate.
A distinction is made between
Accruals
Expenses/revenuesbelong to the current period and are paid / received in a
subsequent period once an invoice has been received or issued.
You have to create accruals when an expense or revenue is to be paid /
received in future but incurred or earned partly or completely in the current
period. The recurring entry program is suitable for posting accruals, since the
exact same amount is posted to the same account in each period.
Deferrals
Expenses/revenue paid / received in the current period on receipt/issue ofan
invoice, but economically they belong, at least partially, to a future period.
In each period the posting record is Expense to Other Payables (or
Provisions).
It is posted to the account:
Other payable: If you are certain about the reason and amount of the
accrual.
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Provisions: If you are uncertain about the amount and / or reason of the
accrual and can only estimate it.
In each period in which you carry out accruals, the credit balance on the
account Other Payables or Provisions increases.
Lesson:-8.2 The Accrual Engine

The Accrual Engine is a generic tool for calculating and creating accrual
postings.As input it receives basic data that describes the subject matter to
be accrued, for example, data for arental agreement. The Accrual Engine
uses this data to calculate the accruals and creates the relatedperiodic
postings.
Just like the motor of a machine, the Accrual Engine itself is not visible for
the end user. Instead, the user works with the application components of the
Accrual Engine. The subjects to be accrued are entered there and are
forwarded to the Accrual Engine.
SAP develops and delivers the application components of the Accrual
Engine. They cannot be developed by customers. The application component
always refers to a special accruals scenario and provides an optimized user
interface for this scenario.
The Accrual Engine is used amongst other things for:
Manual Accruals in Financial Accounting

Provisions for Awards
Lease Accounting
Intellectual Property Management

The Accrual Engine stores two types of data:
Basic Data
The basic data consists of a description of the subject to be accrued
(accrualobject) and all other information required for carrying out the
accruals. Basic data is timedependent.
Accrual Engine Documents and Totals Records All accruals postings create
documents in theAccrual Engine (Accrual Engine documents) and update
fiscal year-specific totals records.
The Accrual Engine documents automatically create corresponding
documents in FI. Variouslevels of summarization are possible. If errors occur
during the FI update, you can trigger thisagain manually.
Usually, two main processes are triggered from the application component:
Create/change basic data: Depending on the Customizing settings; an
opening posting may bemade immediately.
Periodic start of the accrual run or reversal of an accrual run.
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An Info system gives you directaccess to totals records and documents in

the Accrual Engine. You can also carry out accruals simulations.
Advantages of the Accrual Engine:

Accrual engine calculates the accrual amounts automatically. You do not
have to calculate the amounts manually and enter them as fixed values in
recurring entry documents.
You can make periodic accruals posting automatically as performanceoptimized mass data processing using an accrual run The delta amount of
the cumulative accruals minus the accruals already carried out is posted.
If the amount to be accrued changes, the accruals amount are adjusted
automatically.
You can simulate planned future accruals; Depending on how the
application component is configured you can also carry out complete
simulation scenarios.
The accrual Engine supports parallel accounting with either different
account areas or parallel ledgers.
An extensive Information System provides information about planned
accruals and accruals that have already been carried out.
Activate the Application Component:

To activate an application component of the Accrual Engine you have to carry
out the followingCustomizing activities:
The application component must be assigned to the company codes that

are to use it.
The required accounting principles must be defined if this has not already
been done.
The application component must be assigned to the required combination
of accountingprinciple and company code.
The current fiscal year must be open for the application component.
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Closing Activities of the Accrual Engine:

The Accrual Engine requires only a small number of closing activities of a
purely technical nature.
Reconciliation: Accrual Engine/General Ledger- Accrual Engine
documents and
General Ledger documents are reconciled with one another to check whether
the transferto the General Ledger was complete and without errors.
Balance carry forward - At the end of the fiscal year you have to carry
forward thebalances of the accruals objects into the next fiscal year. This has
nothing to do with thebalance carry forward in the General Ledger.
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Lesson:-8.3 Manual Accruals

Before you can use the functions in Manual Accruals , you have to make extensive Customizing settings. You
can tailor certain functions to meet your individual requirements. For example, you can add your own fields
or parameters.
In the application component Manual Accruals, you create the basic data
manually via a simple user interface.
The basic date is usually subject matter to be accrued based on different
contracts such as rental agreements, insurance contract.
A report must be written to select the data, export it, and adjust it to the
structure of the function modules. The function modules can then be called
up to load the data into the Accrual Engine. You can also transfer legacy data
this way.
The subject to be accrued is defined as an accrual object. You make this
definition manually in the application component Manual Accruals. Accrual
objects in this application component are identified uniquely for each
company code using an accrual object number from a defined number range.
The accrual objects are grouped in accrual object categories for manual
accruals. These summarized the subject matter of similar accrual objects. For
example, insurance contracts (accrual objects) can be assigned to the
accrual object category Insurances
You can use accrual object categories:
As a navigation level to find accrual objects more easily
To assign special customer-defined parameters that describe the
accrual objet in more details.
Each accrual object can have several accrual items. An accruals item
describes how a related accruals type(usually costs or revenues) is
accrued using a specific accounting principle
Accrual Calculation:
The accrual is calculated for each accrual item, for each combination of
accrual type and accounting principle specified. In addition to the amount to
be accrued and possibly also a quantity to be accrued, the accrual item
contains an accrual method.
A function module is defined for the accrual method, and this calculates the
accruals. For the Manual Accruals area, several function modules are
delivered. However you can also develop you own function modules for the
accruals.
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You can also define derived accruals types. These accruals amounts are
calculated from the accrual amounts of other accrual types and not directly.
However, derived accrual types are not particularly relevant for manual
accruals and are more important for other application components
Lesson:8.4 Posting Controls and Account

Determination
Definition of Posting Controls
An order automatically generated in the Posting Control Office to check and process problems that have occurred
during posting of payment items during creation of promotes, or during processing of payment distribution items in
the Account Management system.
The posting control is defined for each
Company code
Accounting principle
Accrual type
You define
How frequently accruals are carried out (for each posting period, daily,
monthly, quarterly, every six months, annually)
The level of summarization for postings before the update to FI You can
make the following settings
No Summarization: A separate line item is created for each accruals
item.
Summarization at accrual object level: A line item is created for
each accrual object.
Maximum Summarization: The postings are summarized to the level
of different additional account assignments.
Use of Account Determination:

We use account determination to determine which adjustment accounts the SAP R/3
System should post to, forreconciliation postings.
You can maintain account determination for primary postings, but for secondary
postings this is absolutely necessary. This is because secondary cost elements do
not have an equivalent in FI.
You can determine adjustment accounts as follows:
1.
Using standard account determination

Using enhanced account determination (substitution)
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Account Determination Task:

The purpose of account determination is to
Determine the document type
Determine the debit account (here: target account)
Determine the credit account (here: start account)
For each accrual type, you define in Customizing which postings are to be
made automatically and, therefore, for which postings account determination
is required.
None (the accruals are calculated in the Accrual Engine, but not
posted)
Only the opening posting
Only periodic postings (useful, for example, for accruals)
All (opening posting, periodic accruals, and - if the accrual object is
terminated prematurely - a closing posting)
For parallel accounting, the Accrual Engine supports
Parallel accounts - For parallel accounts, you must configure the account
determination of the Accrual Engine accordingly, that is, the accounts must
be found depending on the accounting principle.
Parallel ledgers - For the ledger approach, you have to assign the
accounting principles in
Customizing, if you have not already done so.
Accounts are determined using derivation rules. These rules consist of
Conditions under which the derivation rule is executed (optional)
Determination of fields used in the derivation rule Here you define
o Source fields (derivation rule input) all fields filled from the
Accrual Engine.
o Target fields (derivation rule output) all fields that must be
filled for successful account determination, or user-defined
parameters that you can use for sequential derivation rules.
The rule entries themselves that derive the input for the target fields from
the content of the source fields.
The derivation rules are processed sequentially and results are cumulative:
1. Vary vague account determination
2. Detailed account determination
3. Very detailed account determination.
Or using extender account determination:
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1- Determination of characteristic combinations.

2- Determination of account symbols
3- Determination of accounts.
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Unit-9: Technical, Organizational and

Documentary Steps
Lesson:-9.1 Technical Steps
At the beginning of the fiscal year, the balance carry forward program is run,
for carry forward the balances of the G/L Accounts to the next fiscal year.
The posting periods of the old fiscal year are blocked and the special periods
for closing are opened. A technical reconciliation between transaction figures
and documents guarantees that the posting of document is technically
problem-free.
Foreign currency documents are then valuated, accrual are carried out, and
the GR / IR clearing accounts are analyzed, including regrouping of the
balance.
Once complete, the special periods can be closed.
For documentation purposes, the balance audit trail is then carries out and
the financial statement created. Finally messages are created for statutory
reporting.
HINT: The closing process may vary from country to country.
Balance Carry Forward:

The system calculates the balance carried forward to the new fiscal year for
each balance sheetaccount.
The balance of the P&L accounts is posted to the P&L carry-forward account.
You can display the balances of individual P&L account that are carried
forward to a special retained earnings account. This enables you to
understand how the total balance of the retained earnings account made up.
If you have accounts in different currencies, in the master record of P&L
carry-forward Account, you can set the indicator to translate and summarize
all the currencies Only Balance in Local Currency.
You can run the program (of balance carry forward) as often as you want.
You can even run the program in the old fiscal year, since the balance carried
forward to the new year is automatically updated for each posting. If you
intend to carry out the balance carry forward during the current fiscal year.
SAP recommends running the program as late as possible.
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Defining Posting Periods:

The system uses the posting date that you specify during document entry to
determine to which posting period the document is posted.
The posting periods for your company are defined by the fiscal year variant.
You can use the fiscal year variant to make the following system settings:
Begin and end of fiscal year
Number of normal posting periods (1-16)
Number of special (remaining periods up to 16 after selection of
Normal periods).
Posting period length.
Posting period Control:

Posting periods table is used to open and close posting periods. You can
have as many or as few posting periods open as you want.
Accounts are open for the periods specified in the table and closed for
periods not specified.
The line with account type + (valid for accounts) determines the maximum
length of the open periods for an account type.
Technical Reconciliation:
The report carries out an extended reconciliation in Financial Accounting. As
part of general ledger month-end closing, the following consistency checks
are performed:
1- Debit and credit transaction figures for customer accounts, vendor
accounts, and G/Laccounts (table FAGLFLEXT) with the debit and credit
totals of the posted documents (tableBSEG).
2- Debit and credit transaction figures for customer accounts, vendor
accounts, and G/Laccounts (table FAGLFLEXT) with the debit and credit
totals of the application index(secondary index tables BSIS/BSAD,
BSIK/BSAK,BSIS/BSAK).
The application indexes are used for the general ledger view of accounts with
open item management or line item display.
If new G/L Accounting is not active perform reconciliation with report
financial accounting comparative analysis.
All the results of the reconciliation are added to historical management. This
enables statements tobe made about the execution and accuracy of the
reconciliation activities on a time basis.
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Lesson:9.2 Documentary Steps

Accounting Documents, by law, have to be stored for several years. The
employees in Financial Accounting wants to be introduced to the balance
audit trail.
The Balance Audit Trail displays the balance at the beginning of a period and
the changes to theaccount to the period end.
The main reasons for balance audit trails
To display posting information for a fiscal year and document a status in
the financialaccounting
To provide a statement for an external audit
Legislation generally stipulates that it must be possible to explain account
balance at any time for more than one fiscal year using the relevant
document items. This is possible while the relevant documents are still
stored in the system.
Older documents, however, usually have to be archived and deleted from the
database in order to reduce the load on the system. If you then want to
explain an account balance, you should start the balance audit trail before
you archive any documents. This generates the compact journal for a period
in the form of a list. The balance audit trail displays the balance at the
beginning of a period and the changes to the account to the period end.
Lesson:-9.3 Ledger Group Posting

Sometimes, for the sake of deviating accounting values, it may be necessary
to post directly to aledger group. This procedure is discussed in this part.
Parallel financial reporting means that the financial statements of a company
must be created in accordant with different accounting rules. This is because
a local view is no longer sufficient by itself in a globalized world of creditors
and business partners. An internationally respected standard is in increasing
demand.
Examples of internationally recognized accounting rules include IAS / IFRS,
US GAAP.
Different accounting rules:- can (still) be modeled using the accountbased solution in the new G/L. Inaddition to accounts, however, the new G/L
also lets you use different ledgers to save the differentvaluation approaches
this is called the ledger solution (in the new G/L).
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However, do not confuse the new Ledger approach with the Special Ledgers
(FI-SL). These ledgers can be used in the Release R/3 Enterprise, but they are
nowhere near as functional and uniform as the ledger solution in the new
G/L.
Non Leading Ledgers:

An important question to decide is which accounting rule will be modeled in
the leading ledger: We recommend that existing customers who upgrade to
SAP ERP do not change the leading view. Achange of the leading view should
always be dealt with in a separate project, as before. The leadingledger is
the (only) ledger that is integrated with CO.
Non-leading ledgers also enablesyou to use different fiscal year variants
within one company code
A leading ledger can be assigned one scenario, several scenarios, or even all
six at once. The decision as tohow many scenarios to assign depends solely
on which "facts"/"business aspects" you want to modelin the corresponding
(non-leading) ledger.
The ledger group is option for simplifying and/or accelerating the work in
certain cases. Nocustomer should be forced to create their own ledger
groups.
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However, a new ledger group is created automatically for each ledger in the
new G/L. This new ledger group contains the relevant ledger and has the
same name as it.
The document is then only posted to the selected ledger. Accordingly, you
can only display this one ledger in the general ledger view.
Unit-10: Financial Closing Cockpit

Lesson:-10.1 Financial Closing Cockpit
Possible applications of the Closing Cockpit: This support
function enables you to create a structuredinterface for executing
transactions and programs that form part of complex processes, such
asclosing processes. The structural layout supports processes within an
organizational structure, suchas a company code, as well as scenarios
affecting multiple organizational structures.
The Closing Cockpit can be used as an application tool in the following cases
in particular:
When activities recur periodically

When more than one person responsible may be involved
When the activities are performed within a process that has a fixed
chronological sequence oris determined by dependencies
The activities need to be supported by a shared, uniform interface for all
involved
The status of all periodic activities needs to be documented and made
transparent andavailable for all involved
The closing tasks are documented for later checks
What is it About:
SAP ERP 6.0, EHP 3 provides with the SAP Financial Closing cockpit web
access to the closing tasks and related files of all users associated with the
close. This allows every stakeholder associated with the financial close to
access their tasks, initiate the tasks in the system or monitor automatically
scheduled tasks and report status information and issues associated with the
task.
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It is also possible to set manual status for the tasks and document the fact
that the task has been checked or to manually confirm that a transaction has
be performed.
To get an overview of where we are in the closing process, the task
list provides access to the status information to issues associated
with the tasks, and to any job logs, spool lists and application logs
created by the system during the execution of the tasks
independently whether they have been executed automatically or
manually.
The business package is included in the portal contents directory and can be
accessed either via the SAP Net-weaver Portal or the SAP Net-weaver
Business Client.
To support the closing process, the Closing Cockpit offers the following
options:
Hierarchies to display the organizational objects involved in the closing

process.
A task list template based on the organizational structure.
A detail view of the characteristic values of the individual hierarchy levels
used in the tasklist template.
Task lists that are derived from the task list template.
A list display in which all tasks to be managed or executed from the
respective task list aremade available for processing or for monitoring
task progress
A monitor that provides an overview of the sequence of tasks, their status
and dependencies,and critical paths in graphical form.
Detailed information for evaluating the technical settings of tasks as well
as for analyzingbackground programs (spool, job log information)
Dependencies for displaying the conditions that are prerequisite to
processing the individualtasks
Financial Closing Cockpit: Procedure

The organizational hierarchy allows you to organize the closing process
according to organizational structures. This means that special features of
the individual independent accounting units can be taken into account during
closing, for example, at company code leave. This enables you to avoid
applying identical process steps to all company codes.
The Closing Cockpit can be used once a task list template has been created
and assigned to anorganizational structure (such as controlling
area/company code, ), tasks(subfolders, transactions, programs, flow
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definitions, notes) have been assigned to the task listtemplate, and a task
list has been derived and released for the application.
The entry you select in the (Superordinate Org. Level) field determines the
later use of theorganizational object in the organizational hierarchy. If you do
not define a super ordinateorganizational level, the organizational object is
only available in the hierarchy as an initial node.
You can summarize the data in the task list template across organizational
levels by chart ofaccounts, fiscal year variant, currency, or valuation area.
The system proposes the same substructure(subfolder) for the different
attributes on one organizational level.
Copying Templates:
The system generates a proposal for a task list template in accordance with
the selected hierarchiesand using all organizational objects available in the
system
In the context menu, you can add organization hierarchies to those already
available or delete hierarchy levels from existing hierarchies.
For example, you can use a template that was designed for all the controlling
areas/company codes in the system and stored in the respective client to
create a copy for a particular client and selected company codes and to add
tasks to task folders, cut folder or insert folders.
Choose Destination:
A template (ten-character technical key) is used to structure the individual
steps of a process. In thisinterface, all users involved in the closing process
can access the relevant activities in tasks that areexecutedonline or in
background processing. The scope of a template should not be determined
byapplication-related aspects. Instead, its scope should be oriented towards
the overall process and theorganizational units involved.
The time dependent selection variables that are relevant for the template
are now displayed in the template header.
The system generates a proposal for a task list template in accordance with
the selected hierarchies and using all organizational objects available in the
system (controlling areas with assigned company codes, including any
subfolder defined).
Task folders are used to arrange organizational levels into substructures in
the task list template.Default values for task folders can be stored as
subfolders in the generic maintenance of theorganizational levels.
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Task Types:Users in the Closing Cockpit (CLOCO) application can access the required
transaction orbackground processing for programs and flow definitions
directly from the central interface.
Four types of task are available:
1- Programs:
With program variant (background processing) Standard programs are
generallyavailable for processing activities in the background. If these
programs are included in thetask list template with corresponding
parameters (that is, with a variant), you can later startbackground
processing directly from the Closing Cockpit. Without program variant
thereport can be started and processed online in the task list of the Closing
Cockpit application.
2- Online transactions:
You can start these transactions manually from the task list and godirectly
from the Closing Cockpit to the relevant application transaction.
3- Note: Used only as a reminder or milestone.

4- Flow definition:
Flow definitions are used for multiple programs with variants that are tobe
processed automatically. Such programs are combined to form a logical flow
chain withunique predecessor and successor relationships.
When a flow definition is executed (or scheduled to be executed), all of the
related programsare processed in the specified sequence, and then the
results are made available for analysisunder Detailed Information.
Arranging Tasks (Defining Flight Route)

When you double-click the required task list template, the relevant
organization structure is displayed. You can now create different tasks in the
task folders:
When you assign the task to a user as the person responsible or as the
person processing the task, you build the List Display as follows:
In the list display, you use the functions Display Tasks (Person
Processing) and Display Tasks (Person Responsible) to list the
relevant tasks and to make them available for processing by the assigned
processor or for monitoring by the assigned person responsible
Task dates:In the graphic display of the Monitor, you can portray the
planned runtime on the basisof the scheduling dates. This planned runtime is
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displayed in the MONITOR accordingly. In thisway, you can schedule dates for
closing operations.
If completion of the task has an essential deadline for closing operations, this
activity can beidentified as a critical path and then displayed accordingly in
the application (CLOCO)
The closing Type indicator enables you, when you create task lists, to filter
out the tasks from a given template that are relevant for the different closing
types (such as month-end closing or year-end closing). For this reason, it is
important that you assign tasks to at-least one closing type.
Template > Create Autopilot (e.g. Transaction Clococ)

To perform programs included in a task list, you need to specify variant
values. With the separationof the task list template from the task list, you
can define the structured process flow as a generictemplate and then make a
task list available for processing with specific parameter values.
The task list generated from the template automatically updates the timerelated program parameters of the selection variants by entering
corresponding header information in the task list.
From the current task list template, the system creates a task list of the
same name. You enter values for the parameters Key Date, Fiscal Year, and
Posting Period for this task list. All task lists created are listed under the
relevant template according to their key date.
On the basis of the closing type selected in the task list the system transfers
from the task list template to the task list only those activities that are
permitted in the task definition for that particular closing type.
To enable the task list to be used in the application, you release it. To do so,
choose the Released entry in the Status Field.
Compliance is a big topic for running SAP Financial Closing Cockpit, since the
closing process usually covers most of critical financial processes and
financial information. With SAP ERP 6.0 EHP5, the new transaction CLOCOT
enables the working division between closing planner on group level and
closing responsible on local level.
Schedule Tasks:
Once the task list has been released, the tasks defined in the task list are
selected and scheduled in the Financial Closing Cockpit application.
Programs and transactions that have been included in the task list template
using chronologicalprocess steps as part of an organizational structure
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frequently involve business-related or systemrelateddependencies that need

to be portrayed for the process flow to be processed smoothly.
Flight Schedule Monitor (Schedule Flight Destinations)

In the monitor, you can display your schedule tasks and identify your
schedule tasks and identify which are to be processed automatically; and
which are to be processed manually. The connecting lines between tasks
shows the dependencies (predecessor> suiccessor jobs).
Monitor: Status of Flight Destinations:

The monitor shows you the processing status of the tasks:
Blue: Scheduled
Gray: Initial
Green: Ended without errors
Red: Canceled/Ended with errors
White: Active
Yellow: Ended with warnings
A vertical blue line shows the current time.
List Display: Task Details:

You can toggle between the monitor and the list delay. You can identify the
processing status of a particular task in the list display as well.
In addition, the detailed view for a task shows you:
Name and description

Report name and variant name
Processor and person responsible
Start time and end time
Flight Destination Not Reached >Analysis:

In the list display, you can display all the details for the tasks as well as the
processing status. Youcan navigate directly to the detail list for a task at any
time, where you can immediately check orprocess:
The spool request
The job log
The batch input session
Flight Destination Not Reached >Rout Adjutment:

If you change the status of a task, the system updates change documents for
the task to make it easierfor you to track and document the history of the
processes.
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In the flow definition, you can group tasks that are to be executed in the
background in a particularorder. You use the workflow to control these flow
definitions. You can structure sub flows andinclude them in a flow definition.
You can insert user decisions for testing purposes. Use the task list to group
individual tasks. If you need to run sequences of jobs, create a flow definition
including all dependent work items.
List of Flight Destinations (Accessibility)

To specify your tasks further, you can also store notes and documents for
your tasks. In the monitor,you can also display the tasks according to
processor or person responsible. In addition, you cansend mails to the people
assigned to the task list.
Safe Landing with the Financial Closing Cockpit
SAP Net weaver Portal /Business Client:

SAP Net weaver Portal offers a single point of access to SAP and non-SAP
information sources. For example, enterprise applications, information
repositories, databases and services available inside and outside of your
organization can be integrated into a single user experience. Access is based
on the users assigned roles. SAP provides Work sets for reuse in portal roles.
SAP Net Weaver Business Client (NWBC)

SAP net weaver business client is an SAP user interface (UI) which offers a
unified environment to work with classic SAP GUI- based transactions and
newer web Dynpro-based applications.
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SAP Manual-2-2014

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COMPILED BY MUHAMMAD AKHLAQ KHAN

Compiled by Muhammad Akhlaq Khan

SHORT TABLE OF CONTENTS

Compiled by Muhammad Akhlaq Khan

Compiled by Muhammad Akhlaq Khan

Forms for Payment Media:..............................................................................................21

Compiled by Muhammad Akhlaq Khan

Correspondence Type Components:............................................................................40

Create/change basic data:................................................................................55

Periodic start of the accrual run........................................................................55

Compiled by Muhammad Akhlaq Khan

Unit-10: Financial Closing Cockpit.........................................................................................65

Compiled by Muhammad Akhlaq Khan

Search term: You can enter an abbreviation for the customer/vendor

Compiled by Muhammad Akhlaq Khan

Controlling the Field Status:

International Bank Account Number (IBAN)

IBAN is an internationally recognized, unique identification number for a

Compiled by Muhammad Akhlaq Khan

The IBAN can only be entered in customer / vendor master record if he

Clearing Customer /Vendor

Alternative Payer / Payee

Compiled by Muhammad Akhlaq Khan

Head Office /Branch:

(Note:- Same as given in Lesson 2.3 of 1st Manual)

Lesson1.2 Bank Accounts

The house bank is the bank used for internal business.

Bank Master Data:

Compiled by Muhammad Akhlaq Khan

o The General Ledger Accounts for each Bank Account.

There are four ways to create bank master data:

Lesson 1.3 Simple Documents in SAP

As a rule, at least one document is created for each business transaction.

Compiled by Muhammad Akhlaq Khan

Financial Accounting Documents in the SAP System:

A document header (information that applies to the entire document)

Document type for the document header

Simple Posting in SAP Financial Accounting:

G/L Account postings

Enjoy Posting Screen:

Compiled by Muhammad Akhlaq Khan

Compiled by Muhammad Akhlaq Khan

Unit-2: Automatic Payments

Developed for international payment transactions with customers and

Invoices are entered

Figure of the Book

Select open invoices to be paid or collected.

Compiled by Muhammad Akhlaq Khan

Print payment media, use Data Medium Exchange (DME) or generate

It is flexible enough to allow users to define those payment features that

Settings for Payment Program:

SAP System Program Over view:

Compiled by Muhammad Akhlaq Khan

The accounting function is completed and a separate print program is

Compiled by Muhammad Akhlaq Khan

Lesson-2.2 Payment Program

All company codes ( open items are automatically counter or included)

All Company Codes

Intercompany payment relationships

The Company codes that processes

Tolerance days for payments

The customer and vendor transactions to

Payment relationships across all company codes are defined here: