SAP Financial Accounting (FI)

Bootcamp
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2007 Accenture
Day 2
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 Agenda – Day 2
• Review of Day 1
• General Ledger – Period End Closing & Reporting
• Bank Accounting – House Bank/s
• Accounts Receivable – Key Concepts
• Accounts Receivable – Organisation Structure
• Accounts Receivable – Master Data
• Accounts Receivable – Configuration
• Accounts Receivable – Business Transactions
• Accounts Receivable – Reporting and Conversion Tips
2
 Review of Day 1
• We covered the following topics on Day 1:
– Financial Accounting
– General Ledger – Master Data
– Enterprise Structure
– General Ledger – Business Transactions & Open
and Cleared Items

3
 Agenda – Day 2
• Review of Day 1
• General Ledger – Period End Closing & Reporting
• Bank Accounting – House Bank/s
• Accounts Receivable – Key Concepts
• Accounts Receivable – Organisation Structure
• Accounts Receivable – Master Data
• Accounts Receivable – Configuration
• Accounts Receivable – Business Transactions
• Accounts Receivable – Reporting and Conversion Tip
4
 General Ledger – Period End
Closing & Reporting
• Month End Closing
– Open/close posting period
– GR/IR accounts automatic clearing
– Record accrual/deferral
– Recurring Document Entries
– Bank reconciliation
– Foreign currency revaluation
• Year End Activity
– Balance carried forward (for Year end closing)
– Document Number Range (for Year end closing)
• Reporting
– Month End Closing
– Reporting 5
 Month End Closing
• After period end closing, all transactions for the
period/month is completed and periodic reporting;
i.e., financial statements, statutory reporting, internal
reporting, can be produced
• No accounting postings could be made to the closed
period

6
 Month End Closing (cont.)
• Key month end and year end activities:
– Open/close posting period
– GR/IR accounts automatic clearing
– Record accrual/deferral
– Recurring Document Entries
– Bank reconciliation
– Foreign currency revaluation
– Balance carried forward (for Year end closing)
– Document Number Range (for Year end closing)

Month end closing should be seen as integrated activities between all FI

sub-modules, Controlling module (e.g., cost allocation & closing), and
other modules. Comprehensive step by step and detailed schedule need
to be defined and followed by the business 7
 Month End Activities:
Open/Close Posting Period
• Open/close period is done per variant and
account types. One variant can be used for
more than one company code
• Period setup for account type ‘+’ all will
override all other account types
• Posting period can be made available for
limited set of users using the authorization
group

8
 Month End Activities:
Open/Close Posting Period
(cont.)
• There are two set of periods that can be open at
the same time
– In the example below, the current period was January
2007. However, posting period 13/2007 – 16/2007
was still open for adjustment postings; e.g., based on
audit/tax issues

Variant

Account type
(A, D, K, M, S, +)

9
 Month End Activities: GR/IR
Account Automatic Clearing
• To match goods receipts with their
corresponding invoice and there by reconciling
the Goods Receipt/Invoice Receipt (GR/IR)
account

Goods receipt: Dr. Inventory

Cr. GR/IR
automatically cleared

Invoice verification: Dr. GR/IR

Cr. A/P

10
 Month End Activities: Record
Accrual/Deferral
• Tcode FBS1
• An accrual represents current period revenue or
expense for unrecorded transactions
• A deferral delays represents previously recorded
revenue or expense
• Can be posted with account assignment model or
posted with reference function
• Accruals/deferrals are reversed in a later period, as
they are often caused by posting delays from other
sources. 11
 Month End Activities: Recurring
Document Entries
• Recurring documents represent entries posting to same set of
accounts, repeatedly, for multiple periods.
• Transaction postings for expenses like rental expenses, where
the tenure, amount and the GL accounts are fixed, can be
repeated automatically using recurring document entries
• A recurring document therefore represents a template for
repeating the same entry for several periods. Recurring
document does not impact the books of accounts until posted to
the GL
• Recurring document programme, when executed, posts an
accounting document; The values, accounts etc. for the
document are based on the recurring document template.
12
 Month End Activities: Bank
Reconciliation
• In most cases, each bank account will have a
corresponding bank clearing account
• Before being verified against actual bank statement, all
postings should be made to a bank clearing account.
• It allows clear understanding of which processes have
cleared the bank (i.e. have been fully completed) and
which ones are in process – i.e. check sent out, but not
yet cashed.
• It can be used to further segment the information being
posted to the bank account; e.g., same bank account
but different payment method
13
 Month End Activities: Bank
Reconciliation (cont.)
• Bank Account: actual bank account that is
reconciled with bank statement
• Bank reconciliation matches entries in bank
clearing account against actual bank statement
and journal transaction into the bank account
– Manual bank reconciliation: User manually clears
each bank clearing open items and journal entries
to the bank account
– Automatic bank reconciliation: Bank statement from
the bank is uploaded into the system and the
system automatically post the reconciliation journal 14
 Month End Activities: Currencies
and Foreign Currency
Revaluation
• Transaction, local or company code currency, Group
currency
• Exchange rates are used to make conversions at the time of
document entry
• Foreign currency revaluation
- At month end, transactions recorded in foreign currency needs to
be adjusted according to the end of month exchange rate
- The system defaults to using exchange rate type “M”. If a different
rate is required it can be set up in configuration
- Adjustment for open vendor items, open customer items, loan, and
deposit accounts will be posted to unrealized gain/loss foreign
exchange account. These entries will be reversed in the next period
- Foreign currency gains/losses are not realised until the money
comes out/in of the bank account
15
 Month End Activities: Currencies
and Foreign Currency
Revaluation (cont.)
• Revaluation of foreign currency bank accounts
will incur a realized gain/loss that is posted to
the foreign exchange gain/loss account. These
entries will not be reversed in the next period
• It is required for US GAAP and other accounting
standards
• Tcode F.05 (Classic GL)

16
 Year End Activities: Balance
Carried Forward
• Balance Sheet, customer and vendor accounts are
carried forward to the same accounts
• Profit & Loss accounts are carried forward to retain
earnings account's) as specified in the configuration.
The P&L accounts balance is 0 in the new year

As noted before, year end closing should be seen as integrated

activities between all FI sub-modules, Controlling module (e.g.,
cost allocation & closing), and other modules. Comprehensive step
by step and detailed schedule need to be defined and followed by
the business
17
 Year End Activities: Document
Number Ranges
• It is a common practice to use Year-dependent
document number ranges for accounting document
• As part of the year end process, document number
ranges have to be defined for the next fiscal year.
• Analysis of the document number status reflects the
usage of the document number range in a fiscal year.
• Accordingly the document ranges for the new fiscal year
can be defined. It can be copied from the previous year
and modified if required.

18
 System Walkthroughs 2.1 & 2.2
– Period End Closing
• Refer to System Walkthroughs 2.1 & 2.2 – Period
End Closing in your Faculty Guide.
− Open/Close Posting Period (OB52)
− GR/IR Automatic Clearing (F.13)
− Record Accrual/Deferral (FBS1, F.81)
− Recurring Document (FBD1, F.14)
− Document Number Ranges

19
 Exercise 2.1 – Create Recurring
Entry
• Refer to Exercise 2.1 – Create Recurring Entry in
your Participant Workbook
– Your task is to create a template and run a recurring
entry

20
 Exercise 2.2 – Process Recurring
Entry
• Refer to Exercise 2.2 – Process Recurring Entry in
your Participant Workbook
– Your task is to run a recurring entry that was created
previously

21
 Closing and Reporting
• Reporting
– Accessed from Information Systems folder and can be
executed at any given time
– User needs to enter selection criteria at selection screen
before executing the report (e.g., account number, vendor
number, posting date, etc.)
– SAP provides the following facilities to ease report generating
process:
• Save to local file (text, Excel, HTML format)
• Variant  user defined set of criteria at selection screen that
can be saved and retrieved
• Dynamic Selection  to add field(s) as selection criteria
• Multiple Selection  to include/exclude certain values from
the selection criteria 22
 Closing and Reporting (cont.)
• Balance Sheet and Profit & Loss

 The format of the financial

statements is determined by the
Financial Statement Version
(FSV) that is defined in the
configuration – transaction OB58
 Financial Statement Version
contains Heading and Sub-
heading and GL account range
 This is one sample of many
reports available

GL account range
23
 System Walkthrough 2.3 –
Reporting
• Refer to System Walkthrough 2.3 – Reporting in your
Faculty Guide.
– Display Chart of Accounts (S_ALR_87012326)
– GL Account Balance (S_ALR_87012277)
– GL Account Line Items (S_ALR_87012282)
– Balance Sheet and Profit & Loss (S_ALR_87012284)
– Define Financial Statement Version (OB58)
*note this is just a sample of reports that are delivered

24
 Exercise 2.3 – Display Chart of
Accounts
• Refer to Exercise 2.3 – Display Chart of Accounts in
your Participant Workbook
– Your task is to display the chart of accounts

25
 Exercise 2.4 – GL Account
Balances Report
• Refer to Exercise 2.4 – GL Account Balances Report
in your Participant Workbook
– Your task is to access the GL Account Balances
Report screen

26
 Exercise 2.5 – GL Account
Balance Display
• Refer to Exercise 2.5 – GL Account Balance Display
in your Participant Workbook
– Your task is to access the GL Account Balance
Display screen

27
 Exercise 2.6 – GL Account Line
Items Report
• Refer to Exercise 2.6 – GL Account Line Items
Report in your Participant Workbook
– Your task is to display the GL Account Line Items
Report

28
 Exercise 2.7 – Generate Balance
Sheet/Profit and Loss Statement
• Refer to Exercise 2.7 – Generate Balance
Sheet/Profit and Loss Statement in your Participant
Workbook
– Your task is to run the Balance Sheet/Profit and Loss
Statement reports

29
 Exercise 2.8 – Leading Ledger &
Non-Leading Ledger posting
• Refer to Exercise 2.8 – Leading Ledger & Non-
Leading Ledger posting in your Participant Workbook
– Your task is to post transactions in all ledgers and
local ledgers and display the transactions

30
 Exercise 2.9 – New GL Reporting
versus Classic GL Reporting
• Refer to Exercise 2.9 – New GL Reporting versus
Classic GL Reporting, in your Participant Workbook
– Your task is to run the reports and view the
differences in features

31
Questions

32
 Agenda – Day 2
• Review of Day 1
• General Ledger – Period End Closing & Reporting
• Bank Accounting – House Bank/s
• Accounts Receivable – Key Concepts
• Accounts Receivable – Organisation Structure
• Accounts Receivable – Master Data
• Accounts Receivable – Configuration
• Accounts Receivable – Business Transactions
• Accounts Receivable – Reporting and Conversion Tip
33
 House Bank/s & Bank Account
• Each bank that a company uses for incoming and outgoing
payments is set up as a house bank and bank account in SAP

House Bank
Such as: Westpac

Bank Account Bank Account

• Each house bank of a company code is represented by a bank ID

in the SAP system, every account at a house bank by an account
ID
• The house bank account master record contains the house bank
ID, unique account number, Bank GL account
34
 House Bank/s & Bank Account
(cont.)
• The GL account for the specified bank account is to be
managed in the same currency as the account at the bank
• For domestic banks, you should enter the bank number in the
"bank key" field and for foreign banks, you should enter the
SWIFT code in this field
• An appropriate Bank Account GL Structure must be formed to
use the flexibility of SAP
• An strategic Bank Account GL structure helps in determining
how much confirmed cash, floating cash out, and floating cash
in there is on a particular day

35
Back Account Representation

Bank Account
(Confirmed Cash)
GL acct #113100

EFT Check
Clearing Account Clearing Account
GL acct # 113102 GL acct # 113101

Vendor Vendor
Account 1 Account 2
36
 Configuration – House Bank/s
• The house bank master record is created and changed in
configuration (SPRO), it can also be changed from the SAP
menu (next slide)
• The house bank account master record can only be changed
from configuration
• House bank is dependent on company code
• House bank is represented by alphanumeric character whose
length can be up to 5
• Lockbox configuration is not required for Australia, 3rd party
collect funds and deposit into bank account

37
Configuration – House Bank/s
(cont.)

38
 Bank Master Records
• The bank master record for Business Partners (Vendors,
Customers, Employees) is created and changed from the
SAP Menu
• The bank master record for Business Partner can also be
created while creating vendor and customer record at the
time of entering bank details
• Bank master records can be created in the Business Partner
master record; however, in a live system authorizations
should not allow the Business Partner Master Record creator
to also create Bank Master Records (separation of duties –
Sarbanes Oxley Control)
39
Create Bank Master Records

40
 Bank Accounts
• In a house bank we can have number of bank accounts (e.g.,
current account, foreign exchange account, term deposit
account)
• Each bank account is identified by a house bank ID and a
specific account ID
• The GL accounts which needs to be entered in bank account
details has always to be a GL account for confirmed cash
account not clearing account
• While creating GL master record for the confirmed cash
account, the house bank ID and account ID needs to be
entered in bank details in company code (on the tab
Create/Bank /Interest). Relevant to cash flow box should be
checked
41
 Create Bank Accounts
Screen 1 Screen 2

42
 System Walkthrough 2.4 –
Display House Bank
• Refer to Walkthrough 2.4 – Display House Bank in
your Faculty Guide.
– Display House Bank

43
 System Walkthrough 2.5 –
Create House Bank
• Refer to Walkthrough 2.5 – Create House Bank in
your Participant Workbook.
– Create House Bank
– Create GL account and assign to new House
Bank/Account ID

44
Questions

45
 Agenda – Day 2
• Review of Day 1
• General Ledger – Period End Closing & Reporting
• Bank Accounting – House Bank/s
• Accounts Receivable – Key Concepts
• Accounts Receivable – Organisation Structure
• Accounts Receivable – Master Data
• Accounts Receivable – Configuration
• Accounts Receivable – Business Transactions
• Accounts Receivable – Reporting and Conversion Tips
46
 Key Concepts
• Order to Cash Overview
• Purpose
• Sub Ledger
• Customer Master Data
• Invoice / Credit Memo
• Credit Management
• Head Office
• Alternate Payer

47
Order to Cash Process Overview

Credit Decrease AR Customer

Check Inventory Invoice Payment

Dr. Bank
Cr. Customer
FI/CO
Dr. COGS Dr. Customer
No FI posting

SD Cr. Material Cr. Sales

Pre-Sales Sales Order Inventory

Delivery Billing
Activities Processing Sourcing

CO: Profit Centre assignment

(default from material being sold)
48
 Accounts Receivable – Purpose
• Accounts Receivable records accounting data for all customers
who have master data. The accounting data includes: sales,
credits, payments, adjustments
• Standard Reports provide many views of the Accounts
Receivable data for management of the amounts owing. They
can be used for day to day reporting and for month end
procedures
• AR can provide key information to help with Credit Management
and liquidity planning, through its link to Cash Management
module

49
 Sub Ledger
• The Accounts Receivable Sub Ledger is made up of the
customer accounts
• All postings in the Accounts Receivable Sub Ledger are
recorded directly in the General Ledger to a reconciliation
account. A reconciliation account can only have postings made
to it by the sub ledger, no direct postings can be made
• The reconciliation account is stored in the customer’s company
code master data
• A special general ledger indicator is used to update other
reconciliation accounts, for down payments, and bills of
exchange

50
 Special GL Indicator
• Special GL indicator can be used to record customer transactions
to different reconciliation account, such as:
– Down payments
– Bills of exchange
– Guarantees
– Reserves for bad debts
– Security deposits
– Additional transactions can be defined by the user, such as
employee advances / loans etc
• Posting key for special GL transactions are:
– 09 – Debit Customer
– 19 – Credit Customer
Define the Special GL Indicator in the configuration and specify the indicator upon posting
51
Special GL Indicator (cont.)

52
 Customer Master Data
• Customer master data (records) are used by both the
accounting (FI-AR) and the sales (SD) departments of an
organisation
• By storing Customer Master Data centrally, it can be accessed
throughout the organisation and avoids the need to enter
information twice. It also avoids inconsistencies in master data
by maintaining it centrally. If the address of one of your
customers is changed, for example, you only have to enter this
change once, and your accounting and sales departments will
always have up-to-date information

53
 Customer Master Data (cont.)
• There are 3 views of Customer Master Data:
– General data
• The general area includes the customer's name, address, language,
and telephone data
• This data applies to every company code and sales organisation
– Company code data
• This data is specific to an individual company code. Company code
data includes the reconciliation account number, payment terms,
and dunning procedure
– Sales data
• This data is relevant to the sales organisations and distribution
channels of your company. Sales data includes data on order
processing, shipping, and billing
• SD module needs to be implemented for this to be activated
54
 Invoice/Credit Memo
• Invoice Posting Key Extract

– Is an accounting document (a request for payment)

for goods or services provided to a customer
entered via transaction FB70 (or F-22)
– Debits the customers account (posting key 01)
• Credit Memo
– Is an accounting document reducing the amount to
be paid by a customer due to the return of goods,
dispute with goods or services, etc. entered via
transaction FB75 (or F-27)
– Credits the customers account (posting key 11)
– Invoices and credit memos can also be created
automatically based on integration with SD
55
 Credit Management (1 of 3)
• Credit management allows a company to minimize credit risk
by defining a credit limit for customers
– If both Accounts Receivable (FI-AR) and Sales and Distribution (SD)
modules are implemented, the system can be customized to check on
the customer’s credit limit. This can be done one or multiple points
during the Sales and Distribution process (point of order, delivery,
goods issue)
– If the SAP Accounts Receivable (FI-AR) module is used to manage
receivables, but a non-SAP system manages sales and distribution,
credit management can be used. When an invoice is posted in
Accounts Receivable the system can check whether the amount
exceeds the credit limit

56
 Credit Management (2 of 3)
• Credit management structure includes:
– Credit Control Areas: an organisational unit representing
the area where customer credit is provided and
monitored. The organisational unit can either be a single
(de-centralized) or several company codes (centralized),
depending on how credit is managed
– Risk Category: determines which checks the system
should carry out when processing orders in Sales and
Distribution (SAP or non-SAP)

57
 Credit Management (3 of 3)
• Credit management structure also includes:
– Credit Representative Groups: credit management
employees can be assigned to a credit representative
group. The credit representative group can be used as a
selection criterion for evaluations and release functions
– Customer Group: groups of customers can be defined in
accordance with the company’s needs. An example would
be to group customers by industry, country, or other criteria
that help to carry out credit management more effectively

58
 Head Office (1 of 3)
• Customers could place orders locally via their branch,
but pay invoices centrally from head office. This can be
represented with head office and branch accounts.
• An invoice can be entered for goods delivered to a
branch, but have the system automatically post the
invoice to the head office account. The system records
the customer account number of the branch in the
document. The payment is collected from the head office
account. As a result, you can collect payments from
several branches in one step.

59
 Head Office (2 of 3)
• The head office and branch accounts are created,
displayed, changed, deleted, and blocked like all
other customer master records.
• To link a branch account to the head office account,
the account number of the head office account is
entered in the Head office field in the customer
master record (Account Management Tab) of the
branch account.

60
 Head Office (3 of 3)
• You can only use a customer account as a head office
if it is not a one-time account or branch account.
• Branch accounts and head office accounts must
belong to the same company code.
• Dunning is only executed for the head office account.
• Credit is maintained at the head office level.
• Customer statements are generated at the head office
level.

61
 Alternative Payer (1 of 6)
• An Alternative Payer (customer number) is defined
in the master record of the customer who created
the invoices.
• Automatic payments/receipts are made using the
banks of the alternative payer account, rather than
the original customer.
• The alternative payer must have a customer master
record.
• Authorization to deduct from the alternative payers
account must be received.
62
 Alternative Payer (2 of 6)
• The alternative payer can be specified in the general
and the company code area of the customer master
data.
– If you specify an alternative payer in the general
data, that alternative payer is valid for the
customer in all company codes.
– If you specify an alternative payer in both areas,
the specification in the company code area takes
precedence.

63
 Alternative Payer (3 of 6)
• The payer may need to be entered in the document.
In this case, the option can be selected in the
general data area. When you enter a document,
there is a field on the screen in which you can enter
an alternative payer. If this field is selected, the
system displays a screen for the payer’s master
data.
• You can only use a customer account as an
alternative payer if it is not a one-time account.

64
 Alternative Payer (4 of 6)
• Alternative payer and customer accounts do not
have to belong to the same company code.
• The following business processes are managed at
the customer who created the invoices and NOT at
the alternative payer level: dunning, credit,
customer statements.

65
Alternative Payer (5 of 6)

Enter Alternative
Payer account Payment document –
number Alternative Payer details
included 66
 Alternative Payer (6 of 6)
• Note: If the SAP Sales & Distribution Module is
implemented, the alternative payer can be handled
by the Customer Account Group: Payer.
• Other Customer Account Groups can be used for the
following SD Partner functions:
– Sold-to party
– Ship-to party
– Payer
– Sales prospect
– One-time customer
67
 Your Experiences
• Have you been involved in the implementation of an
Accounts Receivable application?
• If you have been involved, what were the key
challenges?

68
Questions

69
 Agenda – Day 2
• Review of Day 1
• General Ledger – Period End Closing & Reporting
• Bank Accounting – House Bank/s
• Accounts Receivable – Key Concepts
• Accounts Receivable – Organisation Structure
• Accounts Receivable – Master Data
• Accounts Receivable – Configuration
• Accounts Receivable – Business Transactions
• Accounts Receivable – Reporting and Conversion Tips
70
 Organisation Data – Credit
Control Area
• Credit control area is an organisational unit that
represents an area responsible for granting and
monitoring credit .
• This organisational unit is either a single company
code or, if credit control is performed across
several company codes, multiple company codes.
Credit information can be made available per
customer within a credit control area.

71
 Organisation Data – Sales Area
• Sales Area is a combination of Sales Organisation,
Distribution Channel and Division:
– Sales Organisation is responsible for selling materials and
services
– Distribution Channel is a channel through which saleable
materials or services reach customers. It includes wholesale,
retail, and direct sales. You can assign a distribution channel to
one or more sales organisations
– Division is an organisational unit based on responsibility for sales
or profits from saleable materials or services

72
Organisation Data – Sales Area
(cont.)

Client

Sales
Organization 1000 2000 3000

Distribution 10
10 20 10
Channel

Division 01 02 01 02 01 02 01

= Sales area

73
Questions

74
 Agenda – Day 2
• Review of Day 1
• General Ledger – Period End Closing & Reporting
• Bank Accounting – House Bank/s
• Accounts Receivable – Key Concepts
• Accounts Receivable – Organisation Structure
• Accounts Receivable – Master Data
• Accounts Receivable – Configuration
• Accounts Receivable – Business Transactions
• Accounts Receivable – Reporting and Conversion Tips
75
 Customer Master – General Data
• This data applies
to every sales
organisation and
company code.

76
 Customer Master – Company
Code Data
• This data is
specific to an
individual
company code.

77
 Customer Master – Sales Area
Data
• This data is
specific to a
Sales Area and
provides details
for ordering,
shipping and
billing.

78
 Customer Master Data (1 of
4)
• Why is the customer master data maintained in 3
areas?
– In an organisation, there are two company codes that do
business with the same customer. The general data, such as
the address, is stored in the general area. Both company
codes use this data for communication with the customer.
Each company code maintains data for financial accounting
(such as the reconciliation account) and for their business
relationship with the customer (such as payment terms) in
their own company code area. The sales area data provides
the details for ordering, shipping and billing the customer
– The Sales and Distribution (SD) module is required to enter
the sales data and to print invoices 79
 Customer Master Data (2 of 4)
• Examples of how the master data specifications are
used:
– Values in the master data are default values when you
post items to the account; e.g., payment terms are
defaulted during document entry
– For processing business transactions; e.g., interest
calculations, dunning
– Account control data, such as the number of the GL
reconciliation account, head office
– Users can be prevented from accessing an account by
setting up authorization groups
80
 Customer Master Data (3 of 4)
• Examples of how the master data specifications are
used (cont.):
– For internal management of the account an Accounting
clerk can be assigned
– For communication with the customer; e.g., the address,
telephone and fax numbers, contact personnel
– Cash Flow forecasting within the Treasury module uses
the Cash Management Group, which defines the type of
payer group the customer belongs to

81
 Customer Master Data (4 of 4)
GL Account:
• Reconciliation Account
• Groups type of
receivables; e.g.,
domestic, foreign,
subsidiaries.
• Customer creator must be
aware of how to assign
the reconciliation account
to provide the accurate
view of the postings

82
 Accounting Clerk
• The Accounting Clerk Identification Code is entered in
a customer’s master data.
• The accounting clerk performs AR finance duties and
may also be responsible for debt recovery from the
customer. The ID is used to sort dunning.
• The Accounting Clerk can also be defined as the
Credit Rep Group.

83
 Customer Master Data –
Account Group
• The account group is a grouping of properties that
controls the creation of master records.
• The account group controls the number range for the
vendor master records. (Each vendor master is identified
with a unique account number.)
• Account group also controls if the number range is
externally assigned or internally assigned.
• Account group controls the field status of the vendor
master maintenance – If the field entry is
Suppressed/Required/Optional/Display.
84
 System Walkthrough 2.6 –
Configuration
• Refer to System Walkthrough 2.6 - Configuration in
your Faculty Guide.
– Define Account groups with Screen Layout (customers)
– Create Number Ranges for customer accounts
– Assign Number Ranges to customer account groups
– Enter Accounting Clerk Identification Codes

85
 System Walkthrough 2.7 –
Master Data Maintenance
• Refer to System Walkthrough 2.7 - Master Data
Maintenance in your Faculty Guide.
– Display customer without Sales Org View
– Display customer with Sales Org View

86
 Exercise 2.10 – Create Customer
• Refer to Exercise 2.10 - Create Customer in your
Participant Workbook.
− Your first task is to create a customer
− Next display the customer

87
 Exercise 2.11 – Change
Customer Record
• Refer to Exercise 2.11 - Change Customer Record
in your Participant Workbook.
− Your task is to change the customer record

88
Questions

89
 Agenda – Day 2
• Review of Day 1
• General Ledger – Period End Closing & Reporting
• Bank Accounting – House Bank/s
• Accounts Receivable – Key Concepts
• Accounts Receivable – Organisation Structure
• Accounts Receivable – Master Data
• Accounts Receivable – Configuration
• Accounts Receivable – Business Transactions
• Accounts Receivable – Reporting and Conversion Tips
90
 Business Transactions
Configuration
• We will review the configuration of:
– Payment terms
– Reason codes
– Default accounts assignment
– Define tolerances for customers
– Dunning
– Interest calculation
– Credit management

91
 Payment Terms
• Terms of payment involves discount amount and the
related time frame sent to the customer.
• The terms of payment configuration is same for both
AR and AP.
• The same terms of payment can be used for both AR
and AP.
• Installment payment system can also be defined as
Payment Terms.

92
 System Walkthrough 2.8 –
Payment Terms
• Refer to System Walkthrough 2.8 – Payment Terms
in your Faculty Guide.
− Terms of Payment
− Installment Payment Terms

93
 Reason Codes
• Reason codes are defined to handle the payment differences in
the form of:
– Residual items
– Partial payments
– Postings on account
• Per reason code, you can determine:
– In which company code it is valid
– Which correspondence type (payment notice to the customer) is
connected to it
– Short text and long text of the reason code
• You can set the C indicator to charge off the differences for
each reason code and D indicator for disputed item. 94
 System Walkthrough 2.9 –
Reason Codes
• Refer to System Walkthrough 2.9 - Reason Codes in
your Faculty Guide.
– Display the Reason Codes and Payment Differences

95
 Default Account Assignment
• Default account assignment is configured for Cash Discount
Granted, Exchange Rate Difference, Rounding Difference &
Bank Charges (Customers).
• For the above default account assignments, the following needs
to be done:
– Ensure that the GL Account for the above account assignment is
created in the Chart of Accounts
– Ensure the new accounts are an Expense account, not a Cost of Sales
account
– The above expenses account is created as cost element in Controlling
Area
– Default Cost Centre must be set up via transaction OKB9

96
 System Walkthrough 2.10 –
Default Account Assignment
• Refer to System Walkthrough 2.10 – Default Account
Assignment in your Faculty Guide.
– Define Accounts for Cash Discount Granted (Tcode
OBXI)
– Define Accounts for Exchange Rate Differences
(Tcode OB09)
– Define Account for Rounding Differences (Tcode
OB00)
– Define Accounts for Bank Charges (Customers)
(Tcode OBXK)
97
 Tolerances for Customers
• The tolerances are used for dealing with payment
differences and residual items that may arise when
payment clearing is carried out.
• You specify the tolerances in one or more tolerance
groups and assign a tolerance group to each
customer/vendor using the master record.
• In case of no tolerance:
– Ensures payments equate to invoices
– Must have manual journals entered to account for the
write-off differences
– Provides control, as a conscious decision has to be
made to allow the customer to underpay 98
 Tolerances for Customers
(cont.)
• A tolerance group can be set for specific customers.
• If a tolerance group is set up, you must also
configure OBA4
– Tolerance for Employees (Users) with the same tolerance
parameters to authorise them to post the allowable
difference

99
 System Walkthrough 2.11 –
Tolerances for Customers
• Refer to System Walkthrough 2.11 – Tolerances for
Customers in your Faculty Guide.
– Define Tolerances for Customer
– Define Tolerances Group for Employees
– Assign Users to the Tolerance Groups

100
 Dunning (1 of 3)
• Dunning
– Selects open items that are due
– Sends letter/s to customers to remind them to pay
• Dunning area
– Dunning areas are used if several organisational units
are responsible for carrying out dunning within one
company code
– These organisational units are referred to as dunning
areas. The dunning area can correspond to a profit
centre, a distribution channel, a sales organisation or a
business area
101
 Dunning (2 of 3)
• Dunning procedure
– Set of dunning levels with different parameters for
each level
– A customer is assigned to a dunning procedure in their
customer master data
• Dunning level
– Allows different strength of dunning letters to be sent,
which depends on how overdue the invoice is
• Dunning letter is created in a form

102
 Dunning (3 of 3)
• Dunning run
– Calculates overdue status for each invoice
– Assigns a dunning level depending on the
procedure that has been assigned to a particular
customer
– Prints out dunning letters that will be addressed to
each customer – strength of these dunning letters
will be based on the dunning level of the invoice

103
 Dunning Configuration (1 of 4)
• Dunning program configuration is divided into the
following categories:
– Dunning procedure defines:
• The key for the dunning procedure to be used
• A description of the dunning procedure
• Dunning interval in days
• Minimum days in arrear (account) after which a dunning
notice will be sent
• Grace period per line item
• Interest calculation indicator for calculation of dunning
interest 104
Dunning Configuration (2 of 4)
– Dunning Level: For each dunning procedure
define the following under the tab dunning level:
• Minimum number of days, referring to the due date of
net payment to reach a certain dunning level.
• If interest is to be calculated
• Print parameters
• If you wish to get dunning notice although no further
account movement occurred

105
Dunning Configuration (3 of 4)
– Charges: For each dunning procedure define the
following:
• Dunning charges, depending on the dunning level
• dunning charges can be either a fixed amount or a
percentage of the dunned amount
• A minimum amount for the dunning charges can be
set

106
Dunning Configuration (4 of 4)
– Minimum Amount: For each dunning process
define:
• Minimum amount or percentage of the overdue items to
reach a dunning level.
• Minimum amount to be reached in order to calculate
interest per dunning level
– Dunning Text: For each dunning process,
maintain the name of the form that will be used at
each level
107
 System Walkthrough 2.12 –
Dunning Configuration
• Refer to System Walkthrough 2.12 – Dunning
Configuration in your Faculty Guide.
– Display a Dunning Configuration

108
 Interest Calculation
• Does the company calculate interest on overdue
payments?
– No  This configuration is not required
– Yes  Continue
• Be aware: setting up the interest calculation in SAP is a
complicated process
• Define the interest process:
– How often is interest calculated?
– What is the formula?
– What are the journal implications?
– Will the interest be recorded against one profit centre or
against multiple? 109
 Interest Calculation (cont.)
• SAP provides two types of interest calculation:
– Balance interest calculation is applied to the entire
balance of a GL or customer account, applying a
particular interest rate for a specified period of time
– Interest on arrear is applied to individual item in
accounts receivable or accounts payable. A certain
interest rate is applied to the items that are still open or
unpaid at a specified date

110
 System Walkthrough 2.13 –
Interest Calculation
• Refer to System Walkthrough 2.13 – Interest
Calculation in your Faculty Guide.
–Define interest calculation types
–Prepare interest on arrears calculation
–Define reference interest rates
–Define time based terms
–Enter interest values
–Calculation of interest on arrears

111
 Credit Management Configuration
• In Credit Management
Configuration, we will review
the creation of:
– Credit Control Areas
– Credit Representative
Groups
– Risk Categories
• And we will review
Automatic Credit Control,
which is configured in the
Sales and Distribution
Configuration
112
 Credit Control Areas
• Credit Control Areas are defined
in the Enterprise Structure
1
Configuration and assigned to
company codes in the Credit
Management Configuration

3
2

113
 System Walkthrough 2.14 –
Credit Management
• Refer to System Walkthrough 2.14 – Credit
Management in your Faculty Guide.
– Credit control area

114
 Risk Categories
• Classifies the risk level of a customer
• Risk categories are assigned to each credit control
area
• Parameters are set based on the risk category and
credit control area to set conditions which will block
sales to a customer, e.g. number of outstanding
invoices; day of oldest open invoice (from document
date)

115
 Risk Categories (cont.)
• Risk categories are configurable:
– Create as many as required
– Define the parameters for each risk category and credit
control area combination; it is best not to overcomplicate
parameters
– Category examples:
• X01 New Customer: Tighten Parameters
• H01 High Risk
• M01 Medium Risk
• L01 Low Risk: Loosen Parameters

116
 Credit Representative Groups
• What is a credit representative group?
– Could be a collective of people or individual clerk
– Point of contact between credit department and
customer
– Manages debt recovery for a specific customer
– Credit reps are responsible for collecting monies from
customers in their credit rep group

117
 Credit Representative Groups
(cont.)
• Used in credit management reports
– To follow up outstanding amounts
– Makes it easier to identify amounts owing and who is
responsible for collecting these amounts

118
Automatic Credit Control
• Automatic Credit Control is
defined in the Sales and
Distribution Configuration
using the combination of
the Credit Control Area
and Risk Category

119
Questions

120
 Agenda – Day 2
• Review of Day 1
• General Ledger – Period End Closing & Reporting
• Bank Accounting – House Bank/s
• Accounts Receivable – Key Concepts
• Accounts Receivable – Organisation Structure
• Accounts Receivable – Master Data
• Accounts Receivable – Configuration
• Accounts Receivable – Business Transactions
• Accounts Receivable – Reporting and Conversion Tips
121
Business Transactions – Invoice
An invoice is an accounting document
(request for payment) for goods or
services provided to a customer.

Press enter to see which fields

you have missed entering – a
message will appear to advise
fields missing
122
 Credit Memo
• A credit memo is an
accounting document
reducing the amount
to be paid by a
customer due to the
return of goods,
dispute with goods or
services, etc.

123
System Walkthrough 2.15 –
Customer Invoice
• Refer to System Walkthrough 2.15 – Customer
Invoice in your Faculty Guide.
− Customer Invoice
− Credit Memo

124
 Dunning Run Process
Dunning Process

125
 System Walkthrough 2.16 –
Dunning
• Refer to System Walkthrough 2.16 – Dunning in your
Faculty Guide.
– Dunning procedure (F1500)

126
 Exercise 2.12 – Create Invoice
with Cash Payment Terms
• Refer to Exercise 2.12 - Create Invoice with Cash
Payment Terms in your Participant Workbook.
– Your task is to create an invoice with cash payment
terms

127
 Exercise 2.13 – Create Invoice
with 30-Day Payment Terms
• Refer to Exercise 2.13 - Create Invoice with 30-Day
Payment Terms in your Participant Workbook.
– Your task is to create an invoice with 30-day payment
terms

128
 Exercise 2.14 – Reverse an
Invoice
• Refer to Exercise 2.14 - Reverse an Invoice in your
Participant Workbook.
– Your task is to reverse an invoice

129
 Exercise 2.15 – Execute
Dunning Procedure
• Refer to Exercise 2.15 – Execute Dunning
Procedure in your Participant Workbook.
– Your task is to create a dunning run for your
customer (refer to Dunning in Configuration section)

130
 Exercise 2.16 – Create a Partial
Credit Memo
• Refer to Exercise 2.16 – Create a Partial Credit
Memo in your Participant Workbook.
– Your task is to create a Credit Memo for part of the
cash payment terms invoice

131
 Entering Payments
• Payments are entered into SAP using transaction F-28
• Both full and partial payments can be accounted for

Cash/Cheque View result

Enter payment Yes Standard
Receipt Fully FBL5N
From customer Clearing
From Customer Paid? YCUSTSTAT
F-28 F-28

No
View result
No Partial
Required FBL5N
Clearing
Clearing? YCUSTSTAT
F-28

View result
Yes Residual
FBL5N
Clearing
YCUSTSTAT
F-28

132
 Payment Clearing
• An incoming payment should be
cleared off against an invoice as
soon as possible via F-28
– However, if a follow-up is required, the
payment can be cleared later via F-32
• Payments are initially posted to
the bank clearing account
– When the EBS is loaded, open items
in the bank clearing account need to
be cleared via transaction F-03

133
 System Walkthrough 2.17 –
Payments
• Refer to System Walkthrough 2.17 – Payments in your
Faculty Guide.
– Apply partial payment

134
 System Walkthrough 2.18 –
Clearing of Open Items
• Refer to System Walkthrough 2.18 – Clearing of Open
Items in your Faculty Guide.
− Clear the open invoice, credit memo and partial
payment documents

135
 Exercise 2.17 – Apply Incoming
Manual Partial Payments
• Refer to Exercise 2.17 – Apply Incoming Manual
Partial Payments in your Participant Workbook.
– Your task is to apply incoming manual partial
payments

136
 Exercise 2.18 – Clear Open Items
• Refer to Exercise 2.18 - Clear Open Items in your
Participant Workbook.
– Your task is to clear open items

137
Questions

138
 Agenda – Day 2
• Review of Day 1
• General Ledger – Period End Closing & Reporting
• Bank Accounting – House Bank/s
• Accounts Receivable – Key Concepts
• Accounts Receivable – Organisation Structure
• Accounts Receivable – Master Data
• Accounts Receivable – Configuration
• Accounts Receivable – Business Transactions
• Accounts Receivable – Reporting and Conversion Tips
139
 Customer – Reporting
• Key reports used for FI-AR include:
– Line Item display of customer accounts
– Customer account balances
– Due date/Ageing Analysis

140
 System Walkthrough 2.19 –
Reports
• Refer to System Walkthrough 2.19 – Reports in your
Faculty Guide.
− Display reports

141
 Exercise 2.19 – Display Account
Balances
• Refer to Exercise 2.19 - Display Account
Balances in your Participant Workbook.
– Your task is to display and browse account
balances

142
 Exercise 2.20 – Browse Account
Line Items
• Refer to Exercise 2.20 - Browse Account Line
Items in your Participant Workbook.
– Your task is to Browse Account Line Items

143
 Exercise 2.21 – Generate AR
Reports
• Refer to Exercise 2.21 – Generate AR Reports in
your Participant Workbook.
– Your task is to use your customer to execute different
Accounts Receivable Reports

144
 Customer Master Conversion
• If the Sales & Distribution (S&D) module is used,
customers will generally be given an SAP-specific
customer number (internally assigned)
• If a legacy S&D system is used, the number will
generally be externally assigned; however, this
assignment will depend on where the customer is
created (for example, in the legacy system or SAP)
– A customer cross reference should be created as part of
the conversion process

145
 Customer Master Conversion
(cont.)
• Cleansing is vital:
– Address details need to be validated e.g., post codes and
other required address fields as necessary
– Confirm all customers to be converted. Usually a legacy
system will contain a large number of obsolete or replicated
customers which need to be cleansed
– Street fields to be used in a consistent manner, which is an
important consideration for form design
• Determine conversion method – dependent on
number of customers and skill level of team
146
 Open Items Conversion
• A/R open items need to be converted into the SAP
system. The aging of converted documents needs to be
correct:
– Easier to set the payment terms to cash (0 days) – therefore, the
baseline date is the due date
– More difficult to assign the appropriate payment terms to the
document
• Conversion data map needs to be created to define which
legacy fields will be converted and where they map to in
SAP. Data constraints on field lengths and validated fields
need to be considered
147
 Open Items Conversion (cont.)
• All open items converted must be associated to a valid
SAP Customer Master (using criteria listed above)
• Following the open item conversion, a follow-up check
to confirm that total of A/R open items is equal to value
in the legacy system ledger account(s) should be
conducted
• Ideally, regardless of method for conversion, the
number of open items to be converted should be
minimized and managed

148
Questions

149
 Knowledge Check
1. Where are the three views of Customer Master
Data?
2. What is the difference between a bank master
record, a house bank and a business partner bank
master record?
3. How are both sets of data created and changed?
4. Explain how to run the GL Account Balances
Report.

150
End of Day 2 Q & A

151
 End of Day 2 Lessons Learned
(1 of 5)
• General Ledger – Period End Closing & Reporting
– Month End Closing
– Year End Activity
– Reporting
• Bank Accounting Concepts and Transactions
– House Bank & Bank Accounts
– Bank Account Representation in SAP
– Bank Master Creation
• Bank Key
• House Bank
• Account ID 152
 End of Day 2 Lessons Learned
(2 of 5)
• Accounts Receivable – Concepts and Organisation
Structure
– Order to Cash Process
– Purpose of Accounts Receivable
– Organisation Units and their inter-linkages
• SD Organisation Units - Sales Area
• Credit Management - Credit Control Area, Risk Category,
Credit Representative groups
• FI Organisation Units – Company code, Accounting Clerk

153
 End of Day 2 Lessons Learned
(3 of 5)
• Accounts Receivable – Customer Master
– Account Groups – Screen layouts, Number Ranges
– Alternative Payer
– Head office vs. Branch office
– Reconciliation Account
– Master data - General segment, Company code segment,
and Sales Area segment
– Master Data Maintenance

154
 End of Day 2 Lessons Learned
(4 of 5)
• Accounts Receivable – Business Transactions
– Payment Terms
– Account Assignment for Automatic Postings
– Dunning Process
– Invoice Processing and Payments
– Credit management and credit limits for customers
• Accounts Receivable – Information System
– Customer Balances report
– Customer Line item reports
– Trial Balance/Aging reports
• AR Conversion – Useful Tips
155
 End of Day 2 Lessons Learned
(5 of 5)
• Accounts Receivable – Business Transactions
– Payment Terms
– Account Assignment for Automatic Postings
– Dunning Process
– Invoice Processing and Payments

156