GR-Based Invoice VerificationMon, 2011-01-03 17:44

In GR-Based Invoice Verification in SAP , goods receipt must occur before the invoice is entered inthe SAP system. Invoice verification is GR-based if the GR-based invoice verification flag is checked in the purchase orders (PO).

This setting is at PO line item level, i.e. it is technically possible that in one PO, one line item requires GR-based invoice verification while another line item does not require GR-based invoice verification.

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In the purchasing organization view of the vendor master, there is also a GR-based invoice verification flag. This checkbox should be checked for all vendors (except import vendors where countries will practice non GR-based invoice verification).

If this checkbox is checked in the vendor master (FK02 transaction), when PO is created for this vendor, the GR-based invoice verification checkbox in the PO will be checked by default.

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In the purchasing organization view of the info record, there is also a GR-based invoice verificationflag. If this checkbox is checked in the vendor master, when PO is created for this vendor, the GR-based invoice verification flag in the PO will be checked by default.

For GR-based invoice verification in SAP, when the invoice is posted, GR/IR account is debited andvendor account is credited. The GR/IR account which gets debited is based on the valuation class of the material.

Logistics Invoice VerificationMon, 2010-12-27 15:56

Logistics Invoice Verification process covers the processing of vendor invoice/credit memo that is linked to a purchase order (PO), service provider invoices (e.g. delivery cost) as well as consignment settlement.

Logistics invoice verification for all PO-based invoices will be GR-based only. For GR-based invoice verification, 3-way match will take place in the SAP system.

This will match the invoice to the PO quantity or price to the goods receipt quantity. If all 3 documents match completely, the SAP system will allow the invoice to be posted.

Generally, invoice should arrive directly in the Accounts Payable Department and posted directly if the invoice is 3-way matched. If there is mismatch and the difference is within tolerance limit that set in SAP configuration, the invoice will be posted.

If the difference is not within tolerance limit, then the invoice will be parked as parked document in SAP system and the buyer will be informed to investigate the discrepancies.

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Possible Corrective Action for Price or Quantity Mismatch during Invoice Verification

• Price in PO is different from Invoice price – Update PO or Create Credit Memo

• GR quantity is different from Invoice quantity – Update GR quantity or Create Credit Memo

• The invoice price or quantity is incorrect – Update PO or GR quantity or Create Credit Memo

• The invoice price or quantity is incorrect – Return the invoice to the supplier to be revised

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When the difference is due to vendor error (e.g. incorrect price on the invoice), the vendor will be requested to provide a credit memo. The invoice is posted after the credit memo has been received.

If the mismatch is not due to vendor error (e.g. price on the PO was incorrect), the invoice should be posted and automatically blocked for payment (as difference exceeds tolerance). The blocked invoices need to be released before payment can be made.

PO price for future POs will then be updated. Alternatively, the GR will be reversed, then PO price updated, post the GR again and then perform theinvoice verification. Countries are free to decide the corrective actions they want to adopt when there is mismatch between invoice and PO/GR.

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If a down payment was paid to the vendor previously, a SAP system message will be shown when the invoice is being posted. The down payment should then be cleared against the invoice. For import invoices where invoice verification is GR-based, down payment functionality will be used if paymenthas to be made prior to GR.

For consignment, payment is made to the vendor based on the quantity of the material which has been used.

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Double (duplicate) invoice checking is carried out by the SAP system to ensure that the same PO invoices is not posted twice. Criteria for checking for duplicates are Vendor, Document Reference Number, Invoice Amount and Currency. Invoice Date is removed as a criterion to tighten the control during invoice processing.

Valuation of a material document postedWed, 2010-12-22 15:22

The difference between the valuation of a material document which is posted to the previous period and a posting to the current period are as follows:

In the previous period, the price or the stock situation can differ from the current period in such a waythat a goods movement is valuated differently than it would in the current period.

In this case two accounting documents are generated in SAP system:

• For the previous period, the SAP system generates a document with the posting lines of the stock posting which are to be expected for the respective constellation in the previous period.

• For the current period, the quantity moved is revaluated (UMB) so that the valuation for this quantity corresponds to the previous period.

Release Credit Cards SettingMon, 2010-12-20 16:24

Release Credit Cards only carry out such as enter the payment method class card payment if you are using the application FSCM Biller Direct.

Specify whether Web users can release their bills of payment by credit card.

Define Additional Permitted Payment Meth.Classifications per Client

The entry Orbian means that Orbian payment methods can be used in this client.

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Define Minimum Term for Clearing Items

Only items whose maturity date is after the current date plus the minimum term are imported.

If a minimum term of nill is entered then all items irrespective of their maturity date are included by the program automatically. In addition, the maximum term continues to be taken into account.

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Define Maximum Term for Clearing Items

Only items whose maturity date is before the current date plus this maximum term are imported.

Operating Concerns in SAPSat, 2010-12-18 06:42

The two forms of profitability analysis in CO-PA in standard SAP system that are:

Costing-based profitability analysis:

Costing-based is a form of profitability analysis in CO-PA. Costing-based Profitability Analysis represents costs, revenues, and revenue deductions for internal controlling purposes. The direct costs are collected from the relevant material cost estimate for the product sold. All values are stored in value fields.

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Account-based profitability analysis:

Account-based is a form of profitability analysis in CO-PA. Account-based profitability analysis reconciles the data between Financial Accounting and Controlling, since all costs and revenues are stored in accounts.

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In order to implement Profitability Analysis (CO-PA), operating concerns have to be defined. An operating concern is an organizational unit in Financials module (SAP FI). The structure of an operating concern is determined by analysis criteria (characteristics) and the values to be evaluated (value fields).

SPRO → Controlling → Profitability Analysis → Structures → Define Operating Concern

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An operating concern consists of:

1. objects valid in all clients: These include the data structures and the environment of the operating concern.

2. client-specific objects: These include the attributes, PA transfer structures, forms, reports, and so on.

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Maintain Characteristics: define characteristics is a number of frequently used characteristics are already predefined in the standard SAP system.

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Maintain Value Fields: define your own value fields. Frequently used value fields, such as “Revenue”and “Sales quantity“, are already predefined in the standard SAP system. The name of a value field is 4 or 5 characters in length and must begin with “VV“, except for the predefined value fields.

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Maintain Operating Concern: define and maintain the operating concerns you are going to use in your SAP system.

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You can work with sample operating concerns to simplify the definition of your own operating concerns. Some of these operating concerns are templates delivered by SAP for you to use for demonstration purposes and as copy templates.

EC-PCA: Dummy Profit CenterTue, 2010-12-14 15:35

Data will be posted to a dummy profit center in SAP system when the original account assignment object (such as an cost object or order) is not assigned to a profit center.

This ensures that the data in Profit Center Accounting is complete. The data in the dummy profit center can be transferred to the correct profit center later then by whether assessment or distribution.

The dummy profit centers can only be created in Customizing for Profit Center Accounting under Master Data → Create Dummy Profit Center.

To change or display a dummy profit center in SAP system, use the change or display function in theapplication menu for profit centers.

The dummy profit center receives all the postings in your SAP system to objects which are not assigned to a profit center.

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Dummy profit center indicator in profit center master

This dummy profit centers flag determines whether the profit center is defined as the dummy profitcenter for the controlling area.

If so, all profit-related postings in the controlling area which cannot be assigned directly to a profit center are automatically posted to this dummy profit center. These postings can then be assessed or distributed as necessary.

An overview of the dummy profit centers can be displayed in the controlling areas in EC-PCA Customizing under Environment COAr settings.

Controlling → Profit Center Accounting → Basic Settings → Maintain Controlling Area Settings

The dummy profit center can be created by using a separate function (KE59 transaction).

Valuation During Goods Movements in SAPSun, 2010-12-12 15:28

The valuation during goods movements is documented in the valuation guide of materials management (MM application). However, there are many special cases are only described in SAP notes such as 212286.

SAP Note 212286 is an overview note should help make this information accessible.

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Overview note: Valuation During Goods Movements

Value of goods movement:

With most goods movements, a corresponding value flow also arises with the quantity flow. This value of the goods movement corresponds in most cases to the value of the stock posting (for example, for consumption).

However, the value can also be determined by a purchase order price (goods receipt for purchase order), can come from plan credit of a production order (goods receipt for production order) or can simply be entered externally as a local currency amount (for example, for an initial entry of stock balances at production startup).

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Stock posting:

The stock posting is determined according to the current price control and the current stock situation. If the value of goods movement deviates from stock posting, the current stock situation must be taken into account.

Example: The complete stock of a material want to be cleared. A value of 100 USD is predefined externally. However, the stock has only a value of 50 USD, thus, a price difference must be posted.

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• For materials controlled by moving average price, the stock posting always corresponds to the value of the goods movement if the current stock situation allows this.

Vice versa, the stock posting always determines the value of goods movement if the value of goods movement is not determined differently (purchase order price, plan credit / production order, external amount in local currency). The stock posting is always determined in proportion to the value for materials controlled by moving average price.

• For materials controlled by standard price, receipts are posted with proportion to the price but issues are posted with proportion to the value.

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Formula for the value determination with proportion to value:

Value of stock posting = (Total value of stock * quantity) / entire valuated stock

Formula for value determination with proportion to price:

Value of stock posting = (Standard price * quantity) / price unit

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Revaluation postings:

If you post goods movement to the previous period, the stock posting amount determined for the current period can deviate from the previous period. If this is the case, a revaluation document must be created in the current period.

Further information in the most important SAP Notes: 0196505

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Negative stocks:

For negative valuated stocks, a special posting logic must be followed for determining the stock posting for moving average price.

Further information in the most important SAP Notes: 0196505

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Price differences and exchange rate differences:

If the value of the goods movement deviates from the value of the stock posting, the difference is posted to a difference account independent of whether a moving average price or a standard price material exists.

Exchange rate differences can be posted during the goods receipt for a foreign currency purchase order.

Further information in the most important SAP Notes: 0191927

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Transfer postings:

For transfer postings, the value of the goods movement is calculated from the stock posting of the stock issued.

Further information in the most important SAP Notes: 0071124, 0180503

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Calculation of clearing entry during goods receipt to purchase order:

During the goods receipt to the purchase order, the value of the goods movement is calculated with the clearing of the GR/IR clearing account. If a quantity is already calculated during goods receipt, the GR/IR clearing account is cleared proportionally, thus, the value of goods movement is determinedby the invoice value.

If there is no invoice for the quantity of goods received, the goods receipt is valuated with the net purchase order value / purchase order price.

The same clearing logic is also used to calculate delivery costs during goods receipts.However, the clearing posting is executed on a separate account.

Further information in the most important SAP Notes: Notes: 0049995, 0191927

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Determination of the debit entry during the goods receipt for an assigned purchase order item:

The account assignment of the purchase order item is posted to the total of the amount posted for the GR/IR clearing account and the provisions fordelivery costs (if available).

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Determination of credit posting to order during the goods receipt for production order:

During goods receipt for the production order, the value of goods movement is determined by the credit of the production order. If a quantity of goods received is not yet calculated, credit posting to order is calculated from plan credit.

If the quantity of goods received is already calculated, the order is credited for actual costs.

Country Key in SAPFri, 2010-12-10 15:24

The country key contains the information which the SAP system uses to check entries such as the length of the postal code or bank account number, check rule, ISO Code and so on.

The two-character ISO code in accordance with ISO 3166, which is delivered by SAP as a default, is usually used.

The entry is used in some countries to check the VAT registration number (VAT reg.no.). The VATregistration number can be stored in the master record of a customer or vendor, or for the companycode.

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The country keys are determined at SAP system installation in the global settings.

SPRO → SAP NetWeaver → General Settings → Set Countries → Specify Countries in mySAP Systems (CRM, SRM, SCM,…)

Since the country key does not have to correspond to the ISO code in all installations, programs that differ according to certain values of the country key cannot query the country key T005-LAND1, but have to program based on the ISO code T005 INTCA.

Posting / Valuation Logics for Goods Receipt ProcessWed, 2010-12-08 17:00

While posting a goods receipt (GR) for a foreign currency purchase order (PO), for example THB,with the local currency being USD. The following describe how SAP system calculate / convert amount from foreign currency to local currency in system.

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Valuation during GR for foreign currency purchase order

The example of posting logics in SAP system for a foreign currency purchase order (PO):

1. The amount of the inventory posting in the local currency is identical with the amount of theinventory posting in the foreign currency. With an exchange rate between USD and THB of 1 : 29.4569

2. The relationship of the amount of the inventory posting in the foreign currency and the amount of the inventory posting in the local currency does not correspond to the exchange rate in SAP system (OB08 transaction).

The described result is caused by rounding in SAP system.

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Sample scenario:

60,000 pieces of material A for 104.5 THB / 1,000 pieces are ordered. The material has a standard price of 0.01 USD / 1 piece in the local currency.

For the goods receipt of 20,000 pieces, the SAP system creates the following postings:

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Local currency in USD:

Inventory posting (BSX) → 20,000 pieces * 0.01 USD / piece

= 200 USD

GR/IR posting (WRX) → (104.5 THB / 1,000 pieces) * 0.03395 * 20,000 pieces = 70.9555

= 70.96 USD (rounded)

Price difference (PRD) → 200 – 70.96

= 129.04 USD

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Foreign currency in THB:

Inventory posting (BSX) → 0.01 USD / piece = 0.294569 THB / piece → 0.29 THB / piece (rounded) = 20,000 pieces * 0.29 THB / piece

= 5,800 THB

GR/IR posting (WRX) → 20,000 pieces * 104.5 THB / 1,000 pieces

= 2,090 THB

Price difference (PRD) → 5,800 – 2,090

= 3,710 THB

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Further explanation for the posting logic of foreign currency purchase orders in SAP Note 191927.

No rounding problems occur when calculate the postings in local currency. When you calculate the inventory posting in the foreign currency (Document currency), the price was rounded, therefore, the relationship between local currency amount and foreign currency amount does not always correspond to the conversion factor.

Since the inventory accounts are managed in local currency, the amounts in document currency are only of informative nature.

SAP General Ledger Reference BooksTue, 2010-12-07 12:00

General Ledger Accounting (FI-GL)

The central task of General Ledger accounting is to provide a comprehensive picture for external accounting and accounts.

Recording all business transactions (primary postings as well as settlements from internal accounting) in a software system that is fully integrated with all the other operational areas of a company ensures that the accounting data is always complete and accurate.

The SAP General Ledger (2nd Edition) provides complete coverage of the SAP General Ledger, including all of the new features such as Document Splitting, Profit Center Accounting, parallel accounting, and Balanced Scorecard.

It also includes a complete chapter on the SAP General Ledger’s role in reporting for IFRS, including parallel valuation.

A must-have for all finance professionals who have migrated or are migrating to the SAP General Ledger, The SAP General Ledger (2nd Edition)book is a resource that can be used in both daily work and at the implementation level.

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Integration of Financial Subledgers with SAP General Ledger

The following are SAP FI General Ledger features:

• Free choice of level: corporate group or company

• Automatic and simultaneous posting of all sub-ledger items in the appropriate general ledger accounts (reconciliation accounts)

• Simultaneous updating of general ledger and cost accounting areas

• Real-time evaluation of and reporting on current accounting data, in the form of account displays, financial statements with different financial statement versions and additional analyses.

Deactivate Update of Classic General Ledger (GLT0)Tue, 2010-12-07 04:53

Deactivate the update of tables of classic General Ledger Accounting

When new General Ledger Accounting is activated, not only the tables of the new General Ledger Accounting are updated in the standard SAP system, but also the balances in the tables of classic General Ledger Accounting (GLT0 table).

This default setting enables you to use comparison reports during the implementation phase of new General Ledger Accounting to ensure that new General Ledger Accounting delivers correct results.

To compare the data, you use the IMG activity Compare Ledgers. Once you have established that new General Ledger Accounting and it is set up correctly and is operating correctly, you can deactivate the updates from classic General Ledger Accounting.

To do this, deselect the indicator Write Classic General Ledger (GLT0).

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Access the activity as follows to deactivate the update of tables of classic General Ledger Accounting:

Financial Accounting(New) → Financial Accounting Basic Settings (New) → Tools → Deactivate Update of Classic General Ledger (GLT0) orSAPLFAGL_ACTIVATION transaction

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One of the key points to be noted to deactivate the classic GL totals table: GLT0, is the results must bethe same when you do a ledger comparison between classic GL (totals table GLT0) and new GL (totalstable FAGLFLEXT).

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The standard ledger comparison tool in SAP system as follow:

IMG → Financial Accounting (New) → Financial Accounting Global Settings (New) → Tools → Compare Ledgers

In this standard tool, classic GL is represented by ledger 0 and new GL by ledger 0L.

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You can use a setting in Customizing to set the option of reading data from the tables in classic or new General Ledger Accounting.

If you want data to be read from the tables in classic General Ledger Accounting, go to the Implementation Guide for Financial Accounting (New), choose Financial Accounting Global Settings (New) → Tools → Deactivate Update of Classic General Ledger (GLT0), and set the Read Classic General Ledger (GLT0) indicator.

• When Read Classic General Ledger (GLT0) indicator is set, you can use the drilldown function inclassic General Ledger Accounting for reporting in new General Ledger Accounting.

• When Read Classic General Ledger (GLT0) indicator is not set, all programs that use the logical database in Financials (General Ledger Accounting) read data from the totals table in new General Ledger Accounting.

Define Ledgers for General Ledger AccountingTue, 2010-12-07 04:37

To define the ledgers that will be used in General Ledger Accounting (New G/L). The ledgers are based on a totals table. SAP recommends using the delivered standard totals table, FAGLFLEXT table.

There are 2 types of ledgers are available:

• Leading Ledger

The leading ledger is based on the same accounting principle as that of the consolidated financial statement. It is integrated with all subsidiary ledgers and is updated in all company codes. One ledger must be designated as the leading ledger.

In each company code, the leading ledger automatically receives the settings that apply to that company code: the currencies, the fiscal year variant, and the variant of the posting periods.

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• Non-Leading Ledger

The non-leading ledgers are parallel ledgers to the leading ledger. They can be based for example on local accounting principles such as German Commercial Code.

A non-leading ledger must be activated by company code. For each ledger that you create, a ledger group of the same name is automatically created.

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Define Ledgers for General Ledger Accounting Steps:

1. Access the activity SPRO transaction

Financial Accounting (NEW) → Financial Accounting basic settings (NEW) → Ledgers → Ledger → Define Ledgers for General Ledger Accounting

2. Make the following entries:

Ledger: 0L

Ledger Name: Ledger Principal

Totals Table: FAGLFLEXT

Leading: X

Clear G/L Account (F-03)Wed, 2010-12-01 16:31

The following are differences between clearing accounts function and posting with a clearing transaction or posting with a payment:

• A document header don’t need to be entered

• You can only clear open items from one account

Clearing accounts function can be used to clear debits and credits that balance to zero (for example, invoices and payments that have already been entered).

Since internal transfer postings may have to be generated, a document type must be defined for clearing in customizing by selecting the activityDefine Posting Keys for Clearing in the Implementation Guide for Accounts Receivable and Accounts Payable.

The Maintain Accounting Configuration: Clearing Procedures – List screen appears. Select the Transfer Posting with Clearing transaction. A detailed screen appears. For each account type,you can specify a default document type to be used for posting a clearing document (if this is required for the clearing transaction).

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To clear a G/L account, proceed as following steps:

1. From the Accounts Receivable, Accounts Payable, or General Ledger menu, choose Account → Clear. Then the screen for entering header data is displayed.

2. Enter the account number in the Account field and if necessary, also enter a currency key for the clearing document in the Currency field. If you do not enter a currency key, the company code local currency is used. The company code and clearing date is proposed by the SAP system.

3. You have the option of searching for specific items for clearing. To do this, select a field (for example, Amount) and choose Enter. The next screen prompts you to specify which open items to select.

4. To display the open items for processing, choose Goto → Open items.

5. Process the open items as described in Open Item Processing.

6. Once the debits equal the credits, choose Account → Clear.

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SAP system will assign the clearing date and clearing document number to each open item cleared. To check whether an open item has been cleared in the line item display (FBL3N transaction) or document display (FB03 transaction).

In the line item display, the last three digits of the clearing document number are displayed if you choose the standard line layout variant.

Long runtime while display line itemsTue, 2010-11-30 17:16

While using FBL1N, FBL3N or FBL5N transaction to display line items for vendors, G/L accounts or customers. As of ERP2004 (Support Package 10),FAGLL03 transaction can also be used to display lineitems for G/L accounts in the new general ledger.

When execute these SAP transactions, the runtime is too long then system throw runtime error.

How do FBL1N, FBL3N and FBL5N transactions select the data?

These SAP transactions use logical databases (KDF/SDF/DDF) to select the master data and line item data. These logical databases are used for the selection in many SAP reports such as for RFDEPL00, RFKEPL00 or RFDOPR10.

In the transactions, the master data is read in advance. Then, an access to the line items with ’25′ packages of accounts is created. This is a technical requirement. Otherwise, the selection may trigger a runtime error.

Example:

You select an account range of 100 accounts in a company code.

First, the master data is determined:

FBL1N → LFA1/LFB1 TablesFBL3N → SKA1/SKB1 TablesFBL5N → KNA1/KNB1 Tables

The SAP system then uses the selected account information to read the line items in packages.

FBL1N → BSIK/BSAK TablesFBL3N → BSIS/BSAS TablesFBL5N →s BSID/BSAD Tables

In the example, the document tables are accessed four times in each case. However, in every accessto the tables, opening the SQL statement requires quite a long runtime. Therefore, SAP recommend that you keep the account – company code combinations that are transferred to a minimum.

The solution is in SAP Note: 1135916 – Line items: Help for analysis for long runtime

SAP Error Message GLT2152, GLT1170Sun, 2010-11-28 10:50

While clearing the open items (using F-03 transaction, for example) wherein SAP system throws a SAP error message “Acct determination 01001/missing” (Message no. GLT2152). The diagnosis of message is given at the end.

When trying to assign the item category ‘01001‘ in customizing node for “Classify GL a/c for Doc Splitting“, again getting the SAP error – “The (technical) item category 01001 is not permitted” (Message no. GLT1170).

This SAP error relating to Document Splitting. The solution is in SAP note no. 1137217

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Diagnosis of SAP Message no. GLT2152

The online document splitting is active in your SAP system. Here, each document is assigned to a accounting transaction variant and each document row to an item category.

You determine for each business transaction variant which item categories can or must be posted here. A splitting rule is defined for each business transaction variant, which determines which item categories are to be split and how the splitting should be determined.

Additional rows need to be created in a G/L account that was defined in the account determination in an account determination key.

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The following error occurred in SAP system for the document you entered:

The account determination key does not exist yet. So the document cannot be posted in SAP system.

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Procedure

Either check the splitting rule or create the account determination key

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Internal Order in SAPSun, 2010-11-21 11:22

Internal orders are normally used to plan, collect, and settle the costs of internal jobs and tasks. The SAP system enables you to monitor your internal orders throughout their entire life-cycle;

from initial creation, through the planning and posting of all the actual costs, to the final settlement and archiving

Internal order is a object in Controlling used to monitor costs (expense or budget) and revenues for an organization as well in sometime. Internal orders can be used to:

• Monitor the costs of short-term measures

• Monitor the costs and revenues related to a specific service

• Monitor ongoing costs

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Internal orders are divided into the following categories:

1. Overhead orders

For short-term monitoring of the indirect costs arising from jobs.. They can also be used for detailed monitoring of ongoing plan and actual costs independently of organizational cost center structures andbusiness processes.

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2. Capital investment orders

Capital investment orders monitor investment costs which can be capitalized and settled to fixed assets.

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3. Accrual orders

Accrual orders monitor period-based accrual between expenses posted in Financial Accounting and accrual costs in Controlling.

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4. Orders with revenues

Orders with revenues let you monitor costs and revenues that are incurred for activities for externalpartners, or for internal activities that do not form part of the core business for your organization.

Data between Financial Accounting and Cash AccountingSat, 2010-11-20 16:54

The data source for cash accounting is the posting material in financial accounting. In financial accounting, cash accounts, balance sheet accounts, and profit and loss accounts (P&L accounts) are interrelated.

This account-based integration (Accounting and consequently ERP systems are structured according to the principle of double-entry accounting.

A triple-entry accounting system has not been implemented yet) enables you to determine the cash flow required in cash accounting.

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In addition, business transactions related to accounting can be classified as affecting net income and not affecting net income, and as having an effect on liquidity and having no effect on liquidity.

The payment of a dividend, for instance, is a transaction that affects the net income and the liquidity; therefore, it is relevant for both cash accountingand the profit and loss statement.

The depreciation of an asset merely affects the net income, but not the liquidity. This distinction makes it easier to determine the source of funds and their application.

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The following are 14 different account assignment types available to post business transactions in accounting. For each account assignment type, we have provided an example:

1. Cash payment for office equipment

2. Revenue from cash sales

3. Depreciation of tangible assets

4. Posting of supplier invoice

5. Invoicing of an activity

6. Dissolving of provisions

7. Revenues from invoices

8. Borrowing

9. Payment of supplier invoices

10. Cash payment for material purchases

11. Accounting exchange on the assets side

12. Contribution in kind from shareholders

13. Clearing of receivables and payables

14. Accounting exchange on the liabilities side

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It is apparent that the connection between two account assignment types demonstrates the source or application of funds. This is because the central task of cash accounting is the “What for” search: “What have funds been received or paid for?”

The Concept of Cash AccountingMon, 2010-11-15 17:47

In business literature, you’ll find countless discussions about the concept of cash accounting and its definition. In these discussions, you’ll also encounter the following terms: cash budget management, flow-of-funds analysis, and cash flow statement, as well as cash flow accounting.

Cash accounting records the changes of cash flows, cash flows being incoming and outgoing payments of liquid funds such as cash in hand and bank savings.

In accordance with national and international accounting standards such as FASB and IAS, we will use the term “cash flow” in this book to describe the changes in the means of payment. Liquidity is referred to as a financial accounting-related concept.

Within a certain period, cash accounting records transactions that have a direct influence on the stock of liquid funds, regardless of the period the payments refer to.

This type of recording and displaying of cash flows can be compared to fiscal accounting, which is usedin the public sector. Therefore, cash accountingdistinguishes itself from accrual accounting and cost accounting.

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In addition, it is now apparent that in business theory, cash accounting always refers to several periods. This concept is generally adopted by SAP Liquidity Planner.

Because the SAP Liquidity Planner component consists of two applications, the first application, Cash Accounting, refers to past and current periods, while the other application, SAP Liquidity Planning (SAP BW/SEM), considers future periods.

Steps Involved in Document SplittingSun, 2010-11-14 16:40

The SAP system always processes document splitting in the following sequence. Simplified, the document splitting process can be divided into three steps:

1. Passive split:

During clearing (during a payment, for example), the account assignments of the items to clear are inherited to clearing line items such as payable line items. This step can not be customized.

2. Active (rule-based) split:

The SAP system split documents on the basis of document splitting rules. Document splitting rules canbe configured.

3. Clearing lines / zero balance formation by balancing char. (and document):

The SAP system creates clearing lines automatically to achieve a split. This process can be controlled with the “zero balance indicator”

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In situations involving clearing, the passive split not only ensures that the account itself is balanced, but also the additional dimensions.

Clearing lines are always formed when values have to be reposted between account assignment objects.

For example: Transfer posting from profit center A to profit center B. The clearing lines ensure that not only the document itself is balanced internally, but also the additional dimensions (→ such as business area, segment, or profit center).

Between steps two and step three, document splitting is supported by two things: inheritance and default account assignment.

Dummy Profit Center Creation in SAPThu, 2010-11-11 15:54

To create the dummy profit center for the controlling area in SAP.

The dummy profit center is updated in data transfers whenever the object to which the data was originally posted (cost center, order, and so on) is not assigned to a profit center.

This ensures that the data in Profit Center Accounting is complete. The data can be sent later on the dummy profit center to the other profit centersusing assessment or distribution.

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The dummy profit center’s master record is created using this special transaction ( KE59 ). Normal SAP transaction to create normal profit center isKE01 transaction. To change or display it, use the normal profit center maintenance functions ( KE52 – KE53 transaction ).

The name of the dummy profit center is displayed in the controlling area settings for Profit Center Accounting.

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Before dummy profit center can be created in SAP system, the standard hierarchy must exist for the current controlling area ( KCH4 transaction ).

The standard hierarchy is a tree structure for organizing all the profit centers belonging to a controlling area. In the standard hierarchy, there are two types of node as structure elements:

• Profit centers can be assigned directly to an end node.

• Summarization nodes do not themselves contain profit centers. Instead, they summarize other nodes (end nodes or summarization nodes).

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Dummy Profit Center Creation

Enter the name of the dummy profit center. The rest of the steps are the same as when you create a normal profit center.

Choose the function Extras → Set controlling area first to make sure that the correct controlling area isset.

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Controlling Area Settings

In the following steps, the basic settings required can be made to run Profit Center Accounting according to your requirements.

Under Maintain Controlling Area Settings

• Assign certain master data to the controlling area

• Make the settings for the distribution scenario (ALE)

• Make the settings for elimination of internal business volume

• Determine which currencies and, where required, which valuation views you wish to use

• You make settings which control postings of transaction data in the actual and plan systems under Activate Update.

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All of the basic controlling area settings can be checked under Analyze Settings (1KE1)

Profit Center Accounting → Basic Settings → Controlling Area Settings → Analyze Settings

and be changed in certain cases using the function Update Basic Settings.

Profit Center Accounting → Basic Settings → Controlling Area Settings → Update Basic Settings

Use of the Entity Segment in SAP New GLWed, 2010-11-10 17:53

The segment field is one of the standard account assignment objects available in mySAP ERP for running analyses for “objects” below the company code level.

The segment field (SEGMENT) appears in the standard version of the totals table in New General Ledger Accounting (FAGLFLEXT) in mySAP ERP.

The following are the alternative account assignments used in the past (previous SAP software version):

• Profit Center

• Business Area

• Profitability segment

The segments can be used to meet the requirements of international accounting principles ( IAS / IFRS / U.S. GAAP) regarding “segment reporting“.

The segment is provided in addition because the business area and/or profit center were frequently used for other purposes in the past and thereby to meet other requirements.

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The SAP ERP system enables to assign a segment in the profit center’s master data under basic datasegment (KE51 – KE53 transaction). All postings are automatically made to the segment when the profit center is posted to. However, there is no “dummy segment posting“, as in the profit center logic (dummy profit center).

If the profit center does not have a segment, there is no segment account assignment either.

The default setting involves deriving the segment from the profit center, but users can develop their own derivation solutions through a user exit (BAdI – FAGL_DERIVE_SEGMENT).

Valuation of Open Item AccountsSun, 2010-11-07 11:56

All SAP documents that are open items in foreign currency are valuated as part of the foreign currency valuation:

• The individual open items of an account in foreign currency form the basis of the valuation, that is, every open item of an account in foreign currency is valuated individually.

• The total difference from all the open items in an account is posted to a financial statement adjustment account. The account therefore retains its original balance.

• The exchange rate profit or loss from the valuation is posted to a separate expense or revenue account for exchange rate differences as an offsetting posting.

To valuate foreign currency balances, certain accounts must be defined. These accounts is definedper reconciliation account in SAP system:

• Expense and revenue accounts for the exchange rate differences from the valuation

• A financial statement adjustment account, reported in one financial statement item withthe valuated account. The valuation is therefore not performed in the account itself, instead, it is posted to a separate account. This is necessary for example, since the accounts for receivables and payables are only updated by postings to the customer and vendor accounts. However, the valuation must be performed in the G/L account area for the relevant reconciliation accounts.

The required accounts are defined in the Implementation Guide ( IMG ) under :

Financial Accounting (New) → General Ledger Accounting (New) → Periodic Processing → Valuate → Foreign Currency Valuation → Prepare Automatic Postings for Foreign Currency Valuation.

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The following options are used for valuating open items in foreign currency:

• Saving the exchange rate difference per valuation area

In addition to the posting in SAP system, the exchange rate differences are saved per document. This information is available for subsequent evaluations, for example, Transferring and Sorting Receivables and Payables

Unrealized exchange rate differences

When you valuate open items in foreign currency, the exchange rate difference determined is posted as an unrealized exchange rate difference.

Realized exchange rate differences

For an incoming payment, that is, when you are clearing the open items, the current exchange rate is determined. Since the exchange differences that were not realized are reversed, the full exchange ratedifference is posted as realized.

• Resetting postings for exchange rate differences

The valuations can be reset. By doing so, you recreate the status before the valuation run, that is, all valuations posted are set to zero by an inverse posting. To reset the valuations, enter the same selection criteria for the valuation run to be reset and set the Reset Valuations indicator.

Change Message ID in SAPSun, 2010-11-07 05:58

How to change the customization of field ‘Message ID’

To change this field or “Message class” in transaction GGB0 → Financial Accounting → Line Item → Validation → Step… → Message.

In case there does not exist any validation, and you attempt to create a new validation, the SAP system will pop-up another window and you need to input the ‘Message class‘ that will be used for all other validations for a particulat call-up point.

However, if the message ID already exists for a call-up point, you may maintain the entry in GB02C table and modify the message ID for boolean class009 (in case of line item validation)

Purchase to Pay SAPSat, 2010-11-06 17:16

The following are the basic of the purchase to pay sap flow:

• Determination of Requirements

In this step, there is a requirement of material or service, which must be procured externally, from theuser. The requirement must be recorded as Purchase Requisition (PR) document in SAP MM.

Purchase Requisition (PR) is an internal purchasing document in SAP ERP that is used to give notification to responsible department about the requirement of material/service and to keep track of such requirement.

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• Determination of the Source of supply

After the purchase requisition ( PR ) has been created in the previous step, the responsible department must process it. The buyer of the procurement department must determine the possible sources of supply of the material/service specified in the PR.

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• Vendor Selection

If in the previous step, there are some outline agreements or info record documents that can be used as references to create a PO, the buyer can select or choose which vendor that will be appointed to provide the material/service at this time.

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• PO Processing

In the previous step, the buyer has selected the vendor which will provide the material/service neededin PR. In this step, the buyer creates aPurchase Order (PO) based on the PR and the reference document (that can be an outline agreement, an info record, or a quotation).

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• PO Monitoring

After the PO has been sent to the vendor, the buyer has the responsibility to monitor whether the vendor delivers the material/service at the right time on the right place.

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• Goods Receipt

When the vendor delivers the material or perform the service, the responsible person of the company must perform the goods receipt (GR) or service acceptance (SA) transaction. The GR/SA will update the PO history.

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• Invoice Verification

After the vendor delivered the material/service, it will send the invoice to the person responsible in thecompany.

Invoice is a formal document issued by a vendor to the company to request the payment for the material or service that the vendor has already provide to the company according to the terms of payment agreed in the PO.

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• Payment Processing

After the Invoice Receipt (IR) transaction has been posted, the vendor’s account payable will increase and the company must process the payment to that vendor as stated in the terms of payment of the PO.

The payment transaction will be performed in SAP FI module. After the payment has been posted, the vendor’s account payable will be debited and the cash or bank account will be credited.

Resource: ezsap.com

Entry View and General Ledger View in New GLFri, 2010-11-05 17:22

When New General Ledger Accounting is active, a Financial Accounting document in SAP system (SAP FI documents) always has two views:

• The entry view and

• The general ledger view

Besides the leading ledger, you may also see the document in other, non-leading ledgers in the general ledger view.

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Definition of Entry View and General Ledger View

Entry View:

View of how a document also appears in the subledger views / subledgers (AP, AR, AA, taxes).

General Ledger View:

View of how a document appears ( only ) in the general ledger.

How to define the Business Place in SAP ECC 6Tue, 2010-11-02 18:05

The business place is used in countries that by law require returns for taxes on sales/purchases to be submitted at a level below the company code. For this reason, companies have to register each business place with the tax authorities as the unit responsible for tax reporting.

The business place can also be used for the payment program, whereby you can make separate payments per business place, and separate house banks can be filtered per business place.

This SAP function is currently available for Brazil, South Korea, and Thailand.

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How to define the Business Place in SAP ECC 6

IMG → Financial Accounting → Financial Accounting Global Settings → Tax on SALES/Purchase → BasicSettings → South Korea → Business Places → Define Business places

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For each business place, you enter the tax numbers that the tax authorities have issued to the organizational unit responsible for reporting taxes on sales/purchases. Additionally, you maintain all address data.

By making these settings, you establish the business place in the SAP system as the entity registered with the authorities that is responsible for issuing tax invoices and for tax reporting.

The exact information you enter when defining the business place depends on the country with which you are working.

SAP Business Objects (SAP BO)Sun, 2010-10-31 15:54

The cost-effective mailing and database-management software solution offers complete database management, combining address correction and standardization, merge/purge processing, presorting, custom-printing options, and other valuable features in one easy-to-use software solution.

The updated software and directories can be downloaded from the SAP Service Marketplace. The following instructions is how to download software or directories.

.Downloading software from SAP Service Marketplace (SMP)

To download software from the Service Marketplace:

Go to https://service.sap.com/bosap-support.

Sign in with your S-User ID and password.

In the Download Software & Directories section, click Support packages: service packs, fix packs, merge modules.

Select your product three times (on three successive pages).

Select your operating system (Win32).

Scroll down to the Download section and select the product(s) to add to your download basket.

Follow the instructions on screen to download your software

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Downloading directories from SAP Service Marketplace (SMP)

To download directories from the Service Marketplace:

Go to https://service.sap.com/bosap-support.

Sign in with your S-User ID and password.

In the Download Software & Directories section, click Address directories for Data Quality / Postalsoft. Available directories are listed, with the exception of eLOT, which will bepresented after you select the Diversified directories (see step 6).

Click the item that you want to download (for example, SBOP ADDR DIR US – DIVERSIFIED), and click it again.

Click Installation. Make sure that you download all corresponding files for the same month andthat you download the .exe files, not the .tgz files.

For each file that you want to download, click its checkbox so that a checkmark appears, and then click Add to Download Basket.

If you haven’t already installed Download Manager, click Get Download Manager to install it now. Download Manager is a Java-based utility that allows you to download multiple products and schedule downloads for a later time. When you click Get Download Manager, further instructions are available to follow.

To add more directories, click Address Directories near the top of the page, and repeat steps 4-6 for each remaining directory.

Open Download Manager on your computer and use it to complete the download.

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The software’s address standardization engine (ACE) is CASS-certified, which means that it meets USPS regulations for applying correct postal codes and standardizing addresses, cities, and states. This gives you maximum postage discounts and fast, accurate delivery of your mail.

Additional options of cost-effective mailing and database-management software solution are available to increase productivity, revenue, and cost savings.

Creation of material master data in SAPSun, 2010-10-31 12:54

Creation of material master data in SAP

All the information your company needs to manage a material is stored in a data record in the material master, sorted by various different criteria. Each department has its own view of the material master record and is responsible for its data being correct.

Basically, material master record will be created in the following cases:

• If no material master record exists for a particular material. In this case, you create the material master record.

• If a material master record exists for a particular material, but the master data for your user department is missing. In this case, you extend the material master record.

• If a material master record exists for a particular material and the master data for your user department has been entered, but not at the appropriate organizational level (for example, if it has been entered for a different plant). In this case, you extend the material master record.

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A material master record can be created or extended in SAP system in one of the following ways:

Immediately

By scheduling it

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Before creation of material master data in SAP (not extend) , check that one does not already exist for this material. You can check this using the search help or by calling up the materials list.

Check whether a material master record exists for a similar material that you can use as a reference; that is, whose data you can copy as default values.

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At most companies, material master records are created in one of the following ways:

Centrally

A central body enters a minimum amount of all user department data. Users in the individual departments add to this data in Change mode. For the central body to create data for all departments,it must be authorized to process all user department data.

Decentrally

Each department creates its own material master records. Users are authorized to process data for one or more departments as required.

Tax Invoice Printing FunctionThu, 2010-10-28 16:27

The business documents will be entered to SAP system for customers in the usual components (Accounts Receivable (FI-AR), Sales and Distribution (SD), and in Cash Journal). If a business document serves as a tax invoice, the SAP system automatically generates a tax invoice number and enters it in the accounting document header.

Customer tax invoices can be print out in Financial Accounting (FI) using the generic correspondence functions.

And in Sales and Distribution (SD) , you can print out the business documents from the billing documents using the generic output functions. But you cannot print out tax invoices that you have created in the General Ledger (FI-GL).

Once an accounting document have been entered in the SAP system, you can print out the appropriatebusiness document in the approved format using the generic correspondence functions. For example, when you enter a customer invoice, you can print a combined invoice/tax invoice from it.

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Tax Invoice Printing

For printing a Customer invoice, you need to develop a script/form. You can copy standard SAP script and make the required changes.

You can use Correspondence type SAP19 for Customer invoice. This you can see in OB77 transaction.The menu path for Correspondence in SPRO is as under:

IMG → Financial Accounting → Financial Accounting Global Settings → Correspondence → Define Correspondence Types

• OB78 transaction relevant correspondence type is assigned to program which has variant defined.

• FB03 transaction & then F.64 transaction to print.

• Environment → correspondence in FB03 transaction.