This document relates to SAP Financials User Guide - GL, AR, AP, BA, AA, and Closing Operations. This document is no where related to Real Time Project. I have prepared this by keeping my SAP IDES ERP6 EHP5 system.
SAP Finance - User's Guide
I have covered how to setup and configure FI in SAP, in this section I show you how to use the FI components, I will be
covering GL accounting, accounts payable and receivable, asset accounting, bank accounting and closing operations. I
will also show you some of the error messages that may appear where the configuration has not been setup correctly or
missing, this section will heavily link back to the FI configuration and setup section.
General Ledger Accounting
New General Ledger
Evaluations in G/L accounting
Integrated Business Transaction
Entering Incoming Invoices
Automated Payment Transactions
Manual Payment Run
Evaluations in Accounts Payable
Integrated Business Transaction
Monitoring Credit Limits
Evaluations in Account Receivable
New G/L and Asset Accounting
Processing Bank Statements
Check Deposit Transaction
G/L Accounting (User's Guide)
We have already discuss G/L accounting configuration in the FI configuration and setup section, hopefully in this
section we will use what we have configured as this will help you understand the configuration from a users point of
view, some of the topics I would have already discussed. I will also be touching on documents, posting keys and how
the relationship of these come together when performing a document entry, if you need to refresh your memory then
have a look at the FI configuration and setup document section, you should end up with a full picture from the entry
and the behind the scenes configuration, which will help you when trying to diagnose problems.
Accounting relevant data of a company is entered, controlled, shared and documented, a distinction is made between
external accounting area (FI component) and an internal accounting area (CO component (controlling)), the FI
component includes the general ledger (G/L) and administrative accounting with statutory sub-ledgers and the CO
component covers cost and activity accounting, both areas are often enhanced by statistics and planning areas.
Accounting provides the cost and activity accounting with the relevant expense and revenues postings, cost and activity
accountings adds costing based valuation approaches and clearings which are also to be posted on the G/L account of
a shared chart of accounts, this allows controlling to be coordinated with all individual transactions and G/L
accounting in the SAP system. Statistics provide operational evaluations using comparison calculations contrasted with
earlier periods or companies from the same industry. The statistics are used as a source for planning the activities of a
company to obtain a basis for future decision making.
The following tools ensure integration between accounting and cost accounting
Common chart of accounts
Consistent document principles with single posting based on the real-time principle
Parallel account assignment features for general and sub ledger's and cost and activity accounting
Reconciliation's regarding periodic and translation-related documents and totals
Mutual clearing flow from general ledger accounting and sub ledger accounting into the systems for cost and
General ledger accounting (G/L accounting, expenses) and overhead cost management
Asset accounting and project controlling (investment management)
Inventory accounting and product cost by order or period
Profitability analysis with all accounting system
An import fact to remember is that the general ledger is regarded as complete verification of all business transactions,
it represents the main current element of financial reporting, you can access individual transactions at any-time in real
time using documents, line items and transaction figures at various levels, such as
Totals and transaction figures
Balance sheet and profit and loss statements (P&L)
The balance sheet is a key element of accounting and gives brief summary of the assets and liabilities of a company, the
balance sheet provides information about the size, type and composition of the assets of a company measured in money
at a specific time and establishes how much borrowed capital and company capital has been used to finance the assets.
The main evaluation groups of a SAP system from the perspective of financial accounting is the client (generally the
corporate level), the chart of accounts and the company code (normally the level of the individual company). I have
already discussed these in my SAP introduction section; however here is a quick review
This is the highest hierarchy level in the SAP system, each client is a self-contained unit with separate master records and a complete set of
tables, all entries are saved separately according to client to ensure that processing rules are consistently observed, you can only process and
evaluate data within one client. Therefore you cannot evaluate customers of different clients in a dunning run. A user's master data must be
defined in each client to allow access to a client’s data.
See client in my basis introduction section for more details
is a systematically structured directory of all G/L account master records required in one or more company codes, the chart of accounts contains
the account number, account name and control information for each G/L account master record, you can use any number of chart of accounts
within a client. You may need to do this if company codes belong to different industries or nationalities; the chart of accounts used within a
client form the chart of accounts list.
For more information regarding configuration and setup see chart of accounts in my Financial Global Settings and Company Code Parameters
is the smallest organizational unit for which a complete self-contained set of accounts can be drawn up, this includes recording all relevant
transactions and generating all supporting documents required for a statutory consolidated financial statement (balance sheet and P&L
statement) and reporting, it is therefore an independent accounting unit, any number of company codes can be setup in a client, a company code
must be assigned to one and only one operating chart of accounts but can be used by several company codes.
See company codes in my enterprise section for more details
Is not subject to any legal requirements, but describes a separate area of operation or responsibility in the company, they are only suitable for
internal purposes, evaluating and analyzing internal data. You can evaluate all transaction figures and results (balance sheet and P&L statement)
for each business area, business areas can represent any results level (divisions, plants, sales organizations, etc) in a structured way according to
business relevant contents.
See business area's in my enterprise section for more details
Are management-oriented divisions of the company and are used for internal control of sales and acquisition of activities from other
departments. Profit centers also determine specific key figures such as return of investment, cash flow, working capital. Cost and revenue
bearing objects in the system (internal order, sales order, profitability segment, asset, cost center) are assigned to exactly one profit center
each. When entering documents you can use additional account assignments to map each relevant business transaction to the related profit
center, if an account assignment is not assigned the costs and revenues within profit center accounting are assigned to the dummy profit center
and must be available as a master record like every real profit center.
See profit centers in my enterprise section for more details
Is an area within a company for which complete, self-contained cost accounting can be performed. Controlling is viewed as a management
function with the task of supplying information to the decision makers in the company, controlling is normally structured according to the areas
Planning and control of costs
Planning and control of equity holdings adjustments
Internal accounting does not have any external regulations, data is transferred in real-time from financial accounting, each controlling area must
be assigned to at least one company code, the following applies
company codes and the controlling area must use the same operating chart of accounts
if the company codes work with different currencies, the company code objects use the company code currency as the object currency
The company is divided into individual areas of responsibility within the controlling area these are
Adhering to a cost budget (cost controlling)
Investment framework (profit center with assets)
SAP general ledger is rarely viewed in isolation, value flows begin in other SAP component such as MM (Materials
Management), SD (Sales and Distribution) and PP (Production Planning), each is outlined briefly below
In the purchasing process you normally receive the requested goods first and this leads to an increase in material stock. An
automatic entry to a reconciliation account is executed accordingly on the material stock account in the general ledger (account
determination in material master). The entry is offset on the goods receipt/invoice receipt account (GR/IR) that is cleared again by
posting the liability on the vendor account when the invoice is received.
The goods issue and outgoing invoices sales process runs in a similar way in accounts receivable, again the general ledger only
receives values from connected components
Asset Acquisition from
Asset Accounting (FI-AA)
When a vendor acquires an asset the system creates a posting with some automatically derived posting items. The balance sheet
account (class 0) determined using the account determination key in the master record of the asset increases its value by the
amount invoiced by the vendor. The entry is offset on the vendor account and in parallel on the reconciliation account (liabilities)
stored in the vendor master record.
Settling a Production Order
from Production Planning
A production order settlement is structured according to certain logic in the SAP system. The costs accumulated on the production
order are grouped according to a stored system and settled using a defined rule. The production order is credited using the primary
"Plant activity" cost element and the settlement correspondingly increases the "Finished products" stock.
Values flows in Controlling
The material withdrawal through cost center and depreciations from asset accounting examples below explain in more detail the
values flows that flow from general ledger accounting into other components.
Material withdrawal through cost center - when a material withdrawal is entered into the system it clears the amounts and
values between different objects. A price that is used to evaluate a goods movement (normally the standard price) is
stored in the material master record, a material number and quantity is specified when a material withdrawal is entered,
the value of the goods movement is calculated as a product from the quantity with the stored price of the material. The
value of the material stock is now reduced accordingly in the SAP system and an automatic entry to a reconciliation account
is executed on the material stock account. The entry is offset on a primary cost element (G/L account in FI) that requires a
mandatory additional account assignment on a CO object.
Depreciation from asset accounting - when depreciations are posted from asset accounting values are also transferred from
financial accounting to controlling. looking at two examples the commercial valuation approach and the costing-based
valuation approach. The indirect method involves posting the commercial depreciation on the accumulated depreciation
account (balance sheet account) not on the balance sheet account and thereby reducing the value of the asset. The entry is
offset on a neutral expense account (P&L account). This ensures that the asset balance sheet value is reduced and the
corresponding amount is included in the P&L statement. You post the costing-based depreciation on a primary cost
element. This leads to the relevant amount being transferred to cost accounting by an additional account assignment (CO
object). The entry offset on an accumulated depreciations P&L account, because the two accounts in question are profit
and loss accounts the costing-based depreciation remains cost-neutral.
G/L accounts uses balance sheets and P&L statements, you manage receipts and issues for a stock on balance sheet
accounts and you close them at the end of the fiscal year using the financial statement. The balance on a balance sheet
account is carried forward to the new fiscal year, in contrast you enter expenses and revenues for a company on P&L
accounts, you close them using P&L statement and they have a zero balance at the start of each fiscal year.
The collection of all G/L accounts used by a company is called a general ledger, the below diagram gives you some
examples of G/L accounts
Postings are sorted in chronological sequence within the account. You create the balance sheet and the P&L statement
from the general ledger. Subledger's describe a general ledger account (known as the reconciliation account). When
you create a G/L account you must first specify an account group which is why you need at least one account group.
Accounts that require the same master record fields and number range are created with the same account group. An
account group is a group of properties that controls the management of master records. The account group controls
the screen layout when you enter master data and it defines the number ranges for the account name.
G/L account master data is split into two parts (see below diagram), one for specifically for the chart of
accounts (related to cross-company code data) and the other for the company codes, for example the G/L account
number is assigned once at the chart of accounts level, for the company code data you define how you enter documents
(field control group) and manage accounting data (manage open items, display line items) or control currency you can
use to post the account (account currency).
I will be covering all fields in the master data but will only discuss them in the relevant section, so don't worry if I skip
a few options they will be discussed.
To create or maintain a G/L account at the chart of accounts level you can use transaction code FSP0, enter an
existing account to see details of that account or create a new account, you can also copy an account from another
chart of accounts (known as create from template).
Account group - This field controls the screen layout of the area specifically for company codes when you create
or change the master record and assignment of account numbers. You can define and hide fields or make them
optional, the account group applies in all company codes that use this chart of accounts.
P&L statement acct - You must specify the account to which the balance is carried forward for the new fiscal
year, remember the P&L accounts will be reset to zero at the end of the fiscal year.
Balance sheet acct - The balance on the balance sheet is carried forward to the new fiscal year
Account group number - you can link up to three chart of accounts with each other in the SAP system, for
example the funds are consolidated in consolidation item (group account) 125300.
Trading Partner - if applicable, you enter this for consolidation-related activities
The key word/transaction tab allows you to use multiple languages for keywords, the information tab provides details
about the history of the master data record.
You can create the G/L account in both the chart of account and company code level in one go using transaction FSS0,
Account currency - if the currency key is the same as the local currency (company code currency) for a balance
sheet account , a posting can be made into any currency at the document level, if you choose another currency
both the local currency and the foreign currency are maintained.
Only balances in local currency - allows you to keep transaction figures in the local currency only for this
account, you would normally select this for clearing accounts to clear line items in various currencies with one
local currency amount and without posting any exchange rate differences that may occur. You usually select this
for the balance sheet accounts without open item management, in which no foreign currencies are managed.
Tax category - in tax account you can specify the taxes (input or output) on sales and purchases that can be
posted to this account, options are - only input taxes, + only output taxes and * both input and output taxes are
allowed, or you can specify a tax code for example V1 or V2.
Posting Without tax Allowed - this allows you to post with no tax code.
Recon. account for acct type - at least one reconciliation account must exist in the G/L accounts area for each
sub ledger (customers, vendors, assets), an entry in this field denotes that the G/L account is a reconciliation
account, you cannot directly post into a reconciliation account. When posting a customer or vendor transaction
the system automatically posts to the corresponding reconciliation account in additional to the subledger.
Open item management - you can clear items for an account if you can assign an identical offsetting amount to
the account, you also need to display the line items, this is generally used for bank clearing accounts, clearing
accounts for goods receipt and invoice receipt and salary clearing accounts.
Line item display - displays the document items for the account and thus you can go to the individual document
items. You don't generally display the line items for reconciliation accounts as the details are contained in the
sub-ledger, sales revenue accounts (details in SD), material accounts (details in MM) and tax accounts (detail is
not needed because tax data is contained and checked in the document).
Sort key - is used to display the line items
Exchange rate difference key - used for accounts that are managed in foreign currencies, it helps in account
determination of the gains and losses when converting to the local currency
Valuation Group - you can map the exchange rate gains and losses differently
Alternative Account No - you can use this to map the operating chart of accounts to the country-specific chart
of accounts, if you enter a value here you can check the alternative account indicator in various reports, which
allow you to generate balances sheet as per the alternative chart of accounts.
Acct Managed in Ext System - this indicates whether the account is being maintained in an external system via
application link enabling (ALE)
Inflation key - used only when a general ledger account is managed for inflation, you can make the actual
adjustments in the appropriate subledger
Tolerance Group - you use these groups to define how you treat the differences resulting from open item
Authorization Group - this allows you to limit the personnel who can make changes to the general ledger
Account Clerk - you can use this field to assign the responsibility of the reconciliation of the account
Before I move on I want to discuss the line item display option, if you forgot to enable this and now want to change it
this indicator which will only apply to future documents, not prior documents. If you want to clear prior documents
there are a few steps you need to take to activate open item management for both prior and future documents in the
general ledger account
Enable in the General Ledger account master data (see above screenshot)
Block the account for posting while you make the changes (use transaction code FS05, select g/l account ->
Run transaction code FAGL_ACTIVATE_IT and enter the general account and company code, this process
may take some time.
Use transaction code FAGLL03, to confirm line items have been generated, check against balance using
transaction code FAGLB03.
Generally to turn on the line item the G/L balance should be zero, to correct any problems use transaction
code FAGL_ACTIVATE_OP, enter the general ledger and company code details and the effective date, enter if the
account is not balanced you will be asked to enter a document type and account for transfer posting to make the G/L
account balanced to zero, select the perform reposting checkbox so that the posting that is made to bring the balance of
the account to zero is reversed after the open item has been turned on, which will bring the account back to its original
The next screen details control, bank and interest information
field status group - along with the field status group in the relevant posting key jointly controls the screen layout
that determines if a field is optional, required or hidden
interest indicator - can be used to calculate interest on a G/L account automatically
interest calc. frequency - the interval (in months) in which the balance interest (automatic process) will be
calculated on the account.
key date of last int. calc./Date of last interest run - a date is stored regarding the interest calculation run date.
The last tab is the information data, most of this screen contains historical information.
You can use the edit financial statement version button to define where you want the G/L account to be shown in the
financial statement (you can choose which financial statement that you want), an G/L account can be stored in one or
more financial statements, in the below example looking at the CAUS financial statement we can see that the G/L
account is in the assets section and as its in the asset side not the liabilities side you know that this account is in debit
and not credit.
You can change all the fields except for the account number however you need to take in account the following
You can only change the currency key and tax category for the accounts that have not been posted too.
You can only define an account as a reconciliation account if it has a zero balance
You can only set or undo the open item management indicator if the account has a zero balance
You can perform mass data changes (because as it can cause you lots of trouble), you can use transaction
I have already discussed G/L account creating for more details see G/L Account Creation and Processing, you can also
block an account either at the chart of accounts or company code level,
at the chart of accounts - blocks the master record for creation in the company code and an account for posting
at the company code - you only block the account for posting.
You can archive G/L accounts that you no longer need, the master record data is extracted from the database, deleted
and put into a special file, however the account must be blocked from posting, the account must be selected for
deletion, the system will check that the account has not been posted too in the past and current periods and no
transactions exist for these periods.
For more information on G/L accounts regarding the configuration and setting up see my other G/L
Cost accounting is directly tied to the operating chart of accounts as such the chart of accounts assignment depends on
how the cost accounting is organized. When assigning an operating chart of accounts to a company code you have the
option to either assigning the country-specific chart of accounts or your group chart of accounts, this is depends on
how your company operates, in other words whether the cost accounting department is centralized, decentralized or
regionalized, a summary table is below
Organization of Charts
Cost Accounting Operating Chart of accounts Group chart of accounts
Centralized Cross-company code Group chart of accounts Not Require For local requirements
Decentralized by regions such as Europe, APC,
Region-specific chart of
For corporate group
For local requirements
Decentralized At the company code level
Country-specific chart of
For corporate group
The next table shows the pros and cons of the centralized and decentralized approaches of chart of accounts
organization, there are many ways for you to configure how cost accounting relates to your general ledger chart of
Approach Pros Cons
Cross-company cost accounting is possible
Consolidation is carried out using the operating
chart of accounts, which is the corporate group
chart of accounts
The accountants cannot work with
their own country-specific charts of
The accountants can work in their own country-
specific chart of accounts
You cannot consolidate data using the corporate
group chart of accounts
Cross-company code cost
accounting is not possible
Each business transaction is stored in the system as a transaction-related posting document, the document is self-
contained and has its own unique document number, checks are made before a document can be posted thus ensuring
that the document data is correct. SAP uses the document principle which ensure that all integrated systems with their
posting relevant transactions or line items are linked to one another at the transaction level and in an audit-proof way
for every business transaction created in the system.
Each business transaction is entered and documented in a single posting document
Posting is only possible for zero balances (with the exception of statistical documents such as down payment
Each document contains a unique document number to the relevant company code
Document numbers can be assigned internally or externally depending on the business transaction
Each document has a document header and 2 to a maximum of 999 document items or posting items. The document
header contains information regarding the document as a whole such as document date and number, the document
items will minimally contain a posting key, account number and amount. Depending of the type of transaction other
data may be contained in the document for example a G/L account line will contain different data from a customer or a
Lets discuss the document lifecycle, although not needed from a users perspective it’s good to understand a few
advanced topics that can help with problems, as mentioned before you can only post a complete document in which the
debit balances equals the credit balances, they will also include basic account assignment data, such as document date,
posting date, document type, posting key, account numbers and amounts. In order for the document to be completed in
the system it goes through various steps that constitute the document lifecycle, there are three stages
Data entry to posting - during this stage the document can be held, parked, released, simulated or ultimately
Posting to change - once the document has been posted there is very little that you can do with it, in this stage
you can perform the splitting, display the document or make minor changes
Posting to Archiving - in this stage you can clear a document or reserve a document or you can archive the
Lets discuss in more detail the above three stages to get a full understand of a document, the below diagram show the
various states a document can be in before it is posted (data entry to posting)
this is like temporarily saving the document before all the data has been entered, perhaps you need to obtain more information before the
document is posted, to hold the document it does not need to be complete, account balances are not updated and the document data it not
available for evaluation. During the holding of a document, a document number is not assigned, a held document can be either completed or
is when you enter and store incomplete documents in the system and it allows you to bypass the extensive entry checks. This is similar to holding
but with a difference, parking a document creates a document number in the system. When documents are parked the system does not update any
data, such as transaction figures, except cash management. However data from parked documents can be used for current evaluations, you can
perform the following evaluations
Output of parked documents in the document journal
Valuation and where appropriate posting of payables from parked documents as a total
Document parking is linked to the account display function and the reporting function, the following are some uses of parked documents
Amounts from parked invoices can be used for the advanced return for tax on sales and purchases
Payment requests can be used to pay parked invoices on time and without any loss of cash discount
Parked documents will also be mentioned in the closing operations section.
allows you to see accounting entries before you actually post them, if offers an overview of the line items which allows you check them before
posting, during simulation the document goes through all of the checks required for posting. You can simulate the document in both the entry
view and the general ledger view in which you will see the simulation for specific ledgers.
I show you how to perform both types of later in this section and in the accounts payable and accounts receivable sections.
is when you setup rules to release a document for approval via workflow, the below diagram show the workflow that can be triggered depending
on the assigned release authorization. Once the document is created and parked which triggers the workflow event there are two possible
you can have it authorized by a person with release authorization
you can have the accounting clerk complete the document before routing to the appropriate person for release authorization and posting.
Once the document has passed all the checks the system can post it, this generates a real accounting document in the system and updates the
transactions and accounting figures in the system, which then can be accessed in various reports.
You can either post an general ledger account document or you can process a recurring entry original document.
Now let’s discuss posting to change, this shows the states of a document after it has been posted or is in the process of
document splitting is concept that was introduced in SAP general ledger from ECC 5.0, it displays documents where line items are split
according to selected dimensions allowing you to have financial statements for the selected dimensions.
See my document splitting section for more details on how to configure
Display Once a document has been posted you can display it in the general ledger view or in the entry view
After a document has been posted you can only change those fields that have been configured as changeable, these are generally referred
to as soft fields and they include text and allocation.
Lastly we come to posting to archiving which shows the transactions that create further accounting documents with
reference to the original document, the system maintains the linkage between the original documents posted and the
new document that is created.
allows you to keep track of open items that have been posted for a particular account, another document is used to clear the open item, for
example a vendor payment clears a vendors invoice.
Clearing can be performed automatically or manually
allows you to retract a document if it has been posted in error, when this is done the open items corresponding to the document are cleared and
the general ledger automatically assigns a number for the reversal document. The reversal is general posted in the same period as the
corresponding original document, however if the posting period is closed then the current open period should be entered.
You can only reversal a document if the following conditions are met
The document has not cleared, if the document has been cleared you have to reset the cleared items before it can be reversed
The document contains only vendor, customer and general ledger account line items.
The document was posted in financial accounting, otherwise you must reverse it from the original component
All entered values - cost center, tax code, etc are still valid
You can either individually reverse a document or perform a mass reversal
When you reverse a document you can mark it as negative posting, which reduces the debit and credit balances, this allows you to return to a
stage where the initial document balance which was reversed was never posted in the first place
Archiving allows you to delete documents from the system, archiving object FL_DOCUMENT is available for archiving posted documents.
I mentioned above that a number of checks have to be performed before document is posted, let’s take a look at those
checks in detail, the checks are called consistency checks
The debits and credits must be equal for a document to posted
The system checks that all required fields have entries and whether the entries have been filled in the required format. Some of the fields
might have already provided by the system, including the fields for the document type and posting keys.
The system checks whether entries for each specific field are correct, this applies to the document header, individual line items and any
predetermined control logic, for example
you can only enter document types that are already available in the system
you can only use document numbers contained in the specified number interval that have not yet been assigned for the external
document number range
you must specify for which account types each document type is permitted, as a result you can only use posting keys that belong to
one permitted account types.
The system will check authorizations and tolerances, for example a employee might only be authorized to post to certain accounts within one
company code, also tolerances will be checked which includes maximum cash discounts, maximum amount per vendor or customer line item
and a maximum amount per document.
If any of the above checks fail the document cannot be saved or posted, however the system will prompt you with any
errors and then allows you to correct them, the checks prevent input errors and inconsistent or incomplete entries.
Lastly before we start entering documents I just want to cover special documents, these allow you to simplify document
entry by predefining the template in which you will enter the information in the system, they are sample
documents and recurring documents.
Sample documents allow you to start creating a document by using them as a reference. They have a special number
range and serve as a data source to post the final accounting document, the system does not update any transaction
figures using the sample document. You can transfer the data from the sample documents without any changes, use
them for reversal postings, change data, omit some components of data and enhance the document as you go through
the posting process.
Recurring documents allow you to post a transaction in the system using a recurring entry program when the posting
keys, accounts and amounts do not change from one entry to another. For example you can use this for when you are
collecting rent, it allows you to create a recurring document for the rent you can post month by month. You can create
a recurring document using the customer-specific template for creating an accounting entry on a regular basis, you
can then run the recurring entry program at the frequency needed.
Here are some use transaction codes regarding sample and recurring documents
Description Transaction Code
Change sample document FBM2
Display sample document FBM3
Display changes in sample document FBM4
Delete sample document F.57
Change recurring document FBD2
Display recurring document FBD3
Display changes in recurring document FBD4
Delete recurring document F.56
Let’s start by having look at some existing documents, you can use transaction code FB03 to display all the documents
as per the screenshot on the left, by double-click on the document you can see some of the document information and
the document line items.
You can see the document header in detail by selecting the display document header (top hat icon), remember the
document here applies to the whole document not just specific line items, I have a detailed section on the document
header in my FI configuration and setup section.
Each document contains a document type, in the above example the type was KR (vendor invoice), the type classifies
the document. The document type has the following functions
Differentiates business transactions
Provides information about the type of posted business transaction and is therefore used for documentation
Specifies the type of accounts which the document can be posted too
Restricts the posting keys that you can use (controlling factor for document items)
Assigns document numbers and controls document storage.
Let’s have a look at the document type KR, we will use transaction code OBA7, as you can see on the left hand
screenshot there are many document types, asset posting, vendor invoice, customer invoice, if you notice some
document types appear to have the same name however they may have slightly different configurations, you can see
the KR (vendor invoice) document type configuration screen in the right hand screenshot, I have covered document
types in details in my FI configuration and setup section. You can also see number ranges in detail in my FI
configuration and setup section.
Document items only contain information about the relevant posting item, this always includes the posting key, amount
and account number but you can add information such as cost centers, profit centers, business areas, etc. If you
double-click on a line item you can obtain more details such as posting key (look at the line item 2 line), amount, cost
center, asset number, value date (see below screenshot)
A document cannot be posted without entering a posting key, the posting key controls the entry as well as the
processing of a line item in a document, it determines the type of account that can be posted with that key whether the
amount should be posted to the debit or the credit side of the account, what fields will be displayed on the document
entry screen and the field status of these fields (see FSG and FSV). You can see posting keys in my FI configuration
and setup section for more details.
I also want to mention the assignment field which is a free text field that you can use to sort items of an account in a
line item display, it is lap used as a clearing criterion for automatic clearing, the assignment field (technical name
ZUONR) is a key table field in tables were open or cleared items are read ( for example BSID and BSAD tables). It can
be populated manually by entering up to 18 characters in the field or by using a sort key, which pulls the value of the
predefined accounting field into the assignment field. To create sort keys to can use transaction code OB16, the left-
hand screenshot show some of the standard SAP supplied sort keys, the right-hand screenshot display the sort key 000
which sorts on the field ZUONR the assignment field. Remember the sort key is used in accounts for example in the G/L
account in the control data section.
Lastly I want to mention the special G/L indicator which informs the system that a certain special G/L transaction is to
be posted, there are a number of special G/L indicators that are delivered with the system (you can also create your
own), you can use transaction code FBKP to view these, basically you instruct the transaction to go to a different
account normally either a reconciliation account or a special G/L account, you can also define the planning level. I
will cover the special G/L transaction when we start posting into SAP.
The document type defines the document number and allows the document to be posted to specific account types, the
posting key determines if the item is a debit or credit and defines the appearance of the screen using field status groups.
When you first enter a document you supply the header information and at the bottom you specify the posting key and
account (plus any other options) which then creates the screen layout based on the posting key (field status groups),
then next screen you perform the same, basically what I am saying is that the posting key defines the next screen layout.
There are a number of ways to enter a G/L document
F-02 - General Posting
FB50 - G/L document entry (preferred to F-02)
Fast Entry Posting (inside FB50)
Use the SAP easy menu (see below screenshot)
As a side point the system may enter some default values, the system will automatically provide these default values
from various sources
the system - the system will automatically provide the current date as the document date, in certain functions the
system using manual entries also provide a special general ledger indicator a transaction type for clearing and
the account type.
account master record - the system pulls some fields from the master record of the account, for example if you
have entered terms of payment in a vendor master record, the system provides these terms when you enter a
default value for accounting function - using customizing you can define various settings (posting key,
document type, etc) as default values for each of the accounting functions
use master record and parameter memory - the parameter memory is a user-oriented memory in which the
system saves data entered at one sitting when you log on to the system, this memory is filled immediately from
the user master record. The data in the parameter memory is deleted when you log off.
Another side point is that you seemed to be entering the same data you can use the holding and setting this data allows
you to configure the system to provide it as default data, you access this from system -> user profile
holding data - the next time you call up this screen with the same function, the system will automatically hold the
data from the screen
setting data - the next time you call up this screen with the same function, the system will automatically enter the
data in the appropriate fields
resetting data - clear the held data for this screen
Let’s have a look at all three methods, we will start by using transaction code F-02, the first screen is the initial screen
which contains the document header information, at the bottom of the screen you can see the first item line, remember
the posting key here will determine the next screen layout, the second screenshot is in two parts the top part being the
data for the first line item and the bottom part details the second line item (again the posting key will determine the
next screen layout). The third screenshot is the details for the second line item, you can then continue to add line items.
Before you post you can check the document by simulating a posting, here I got an error regarding the tax code which I
had to change to I0 (original U0), just double-click on the line that is giving an error and correct the problem and then
rerun the simulation again.
Once the document has been checked you can run a simulation in the General Ledger which basically displays it as if it
was posted, you might notice that profit center and segment have automatically been filled, I will discuss this in a later
When you are happy you can post the document (disk icon), you will receive the below confirmation that the document
has been posted, it also details the document number
Let’s use transaction code FB03 to view the posted document, as you can see it is the same as when we viewed in the
simulated General Ledger.
Now if we take a look at the petty cash account we can see one half of the double-entry document (the credit), we will
use transaction code FAGLL03, again I will be talking about the below in more detail in other sections, as you can see
the line item is in a open state (red light icon).
Now let’s have a look at entering the same document but using the general document entry FB50 (which is known as
the enjoy transaction), which lets us see the difference between the two types of entry, the initial screen basically has
everything you need (single screen entry), the header information and the line items, also you have a zero balance
check (red box), the status can be either red (balance is not zero), yellow (the balance has not been checked) or green
(the balance is zero), again you can enter additional information such as cost centers, profit centers, business areas on
the line items. Notice that the line items are also checked (green tick) any problems will be highlighted.
Again you can simulate and general ledger simulate the document to check for any errors
Once you post the document again you will receive confirmation
Again you can check the document entry (transaction code FB03) and the account balance (transaction
The last way to enter a document is called fast entry using transaction code F-02, you complete the header information
(left hand screenshot) and then select the fast entry button, which display the right hand screenshot, here you enter the
line items, if you notice I have had to enter a cost center to obtain the tax jurisdiction (I will covering cost centers in
my controlling section), again you can simulate to check for any errors.
You can use templates for entering documents which is called an account assignment model, you can make life a little
easy by using them, let’s see an example using the above document entries we have been using, we will use transaction
code FKMT to create the template which we will call DD-TMP01, in the screenshot below I have entered the bare
Next we need to add the line items which we do by selecting go to -> line items
Then we enter the line items which should be familiar to you now, however we will leave off the cost center so that we
have to enter this when we use the template, save the template.
Now we use transaction code F-02 and complete the header information, but this time we select the acct model button
which allows us to select our template DD-TMP01
Which then populates our line item entries, all we have to do is fill in the amounts and post. Obviously we would use
this when there are many line items that are the same on a invoice week in and week out.
New General Ledger
The new general ledger is optional and connects the solutions distributed across several applications in SAP, I have
already discussed the new features that the new general can give you in my FI configuration and setup section, with the
new general ledger you can use parallel accounting to create different parallel ledgers to report on the different
financial reports that are required for the financial authorities, there another other ways to do this but SAP are now
advising to use parallel ledgers. There is a new field for the document header called the ledger group which allows you
to determine the ledger or ledger group that the document should be posted too, you can use transaction FB50L
As you can see I have setup a number of ledgers, I have a section on parallel accounting which goes in depth on this
subject, the new general ledger also includes a number of new evaluations that allow you to display individual ledger
contents in a financial statement, you can then select a IAS valuation approach for the L5 ledger, which is structured in
accordance with commercial law.
When you update the new general ledger you can activate document splitting (online split), which enhances the
original document with additional information (such as segment), the objective of this is to project account assignment
object into document rows where they were not originally assigned, for example the profit center from the revenue lines
into the receivables lines, this increases the transparency of the postings and enables you to create additional internal
financial statements. Collective postings for the financial statements adjustment is therefore no longer necessary
because all information is already available at the document level.
Evaluations in G/L accounting
SAP maintains two sets of reports both for the classic and new general ledger, you will generally find two folders
containing each of the reports, as you can see in the below screenshot, for very quick access you can also use
transaction code F.97 to access general ledger reports, you can even turn on the technical names for the reports in
the settings menu.
All business transactions are posted (books of original entry) chronologically in the journal (daybook, compact
journal), the posting data entered chronologically in the journal is transferred from the accounts of the general ledger
(balance sheet, P&L accounts). The single column journal is the original form of journal and includes all transactions
in one column (separated according to debit and credit), for example a retail company buys goods worth £1,000 on
credit from a supplier (non-cash), the company then sells the retail goods worth £500 to a customer for £1,200, which
would look like something below
Date Posting Explanation
18/07/2013 goods purchased on credit 1,000.00 1,000.00
20/07/2013 goods picked for sale 500.00 500.00
22/07/2013 goods sold on credit 1,200.00 1,200.00
It is hard to identify the overview of the credit transactions, to remove this flaw we separate the postings on sub-ledger
accounts and other G/L accounts, we end up with a two column journal, one column for sub-ledger accounts and the
second column for the other G/L accounts, so we end up with something looking like below
Date Posting Explanation
Subledger Accounts G/L Accounts
Debit Credit Debit Credit
18/07/2013 goods purchased on credit 1,000.00 1,000.00
20/07/2013 goods picked for sale 500.00 500.00
22/07/2013 goods sold on credit 1,200.00 1,200.00
Then we can go one step further by specifying a column for each customer and vendor posting, which means we have a
three column journal, this was used in the majority of copying procedures (automatic entry to reconciliation accounts),
Date Posting Explanation
Customer Account Vendor Account G/L Accounts
Debit Credit Debit Credit Debit Credit
18/07/2013 goods purchased on credit 1,000.00 1,000.00
20/07/2013 goods picked for sale 500.00 500.00
22/07/2013 goods sold on credit 1,200.00 1,200.00
The four column journal, the G/L accounts are split into one for the balance sheet and one for the P&L accounts, this
allows the profit and loss made up to a certain period which could be determined to some degree of accuracy.
Date Posting Explanation
Customer Account Vendor Account G/L Accounts P&L Accounts
Debit Credit Debit Credit Debit Credit Debit Credit
18/07/2013 goods purchased on credit 1,000.00 1,000.00
20/07/2013 goods picked for sale 500.00 500.00
22/07/2013 goods sold on credit 1,200.00 1,200.00
Looking at the above table we can see that we received retail goods from our vendor (sender) which was deposited in
our warehouse (recipient), when then withdraw the ordered goods from the warehouse (sender) and delivered them to
our customer (recipient of goods), finally we invoice our customer (recipient of invoice) for the delivered goods, in this
case the sender is the sales order created in the SD component. It shows that the stock of retail goods has increased by
£500, it also shows that the profit was made through the sale of the retail goods. Here you can see the overview of the
financial assets and profit situation of a company.
The G/L account and P&L accounts can include COGS (cost of goods), bank, bank clearing, cash/early payment
discount and here we start to progress into a more business model of accountancy.
Lastly in this section I will cover the balance sheet which compares and contrasts assets and capital (liabilities),
liabilities provide information about the origin of funds and assets inform us about the utilization of funds. The balance
sheet details only information about values not quantities, the asset and liabilities are made up of the following
At the beginning of a fiscal year there is an opening balance sheet that contains assets and liabilities for the balance
sheet key date, the balance sheet items are transferred to individual balance sheet accounts. All business transactions
are posted on the balance sheet and P&L accounts throughout the year. The screenshot below shows the balance sheet
of my data disk mobile company (company code DD11)
You can even drill down to the line item level, by selecting the individual account and selecting the call up report icon
(see left hand screenshot), and the line items are detailed in the right hand screenshot
Accounts Payable (User's Guide)
We cover the basic business principles of accounts payable accounting, we describe the SAP sub ledger, FI-AP
(accounts payable) and the different posting methods, we will cover four alternative transactions for entering
documents, general posting, fast data entry, single screen entry and integrated invoice verification, we will also cover
the payment runs for paying vendors invoices. The main new feature in release ERP 6.0 is accounts payable accounting
in the context of payment transactions and bank communication, I will be covering bank accounting in other section.
For subledger accounts you differentiate between vendors (accounts payable) and customers (accounts receivable),
where in general ledger (G/L) you only mange the total of payables for the financial statement, you use accounts
payable for all details regarding business transactions, such as invoices, credit memos and outgoing payments. You
have to ensure correct documentation of goods receipt because it is used as the basis for release of payments of
invoices. The FI-AP component keeps and manages account based data of all vendors, it is also an integral part of the
purchasing system, purchase orders, deliveries and invoices are managed based on vendors and update vendor
FI-AP ensures that all legal obligations are kept by keeping records that are fulfilled for reliable accounting but also
serves as the information source for an optimal purchasing policy and supports the enterprise's liquidity planning
owing to the direct integration with cash management and forecasting, account analyses, due date forecasting and
further standard reports are available for the open item management. The payment program automatically pays due
payables and closes the corresponding items. To document the processes in account payable you can use account
balances, journals, balance audit trails and numerous standard reports. For key date valuations you revaluate foreign
currency items, determine vendors on the debit side and scan the balances established this way for remaining terms.
I do have a whole section on payable accounting in my FI configuration and setup section, this covers the subject from
a configuration point of view.
We will now have a look at the vendor master record, which is used for business transactions in the accounting area
and in the purchasing area. The master data is made up of three parts, general data, company code data and
purchasing data, you can use transaction code XK03 (centrally) or FK03. The data
General Data - is maintained at the client level, the data is available for all company codes. At this level you
specify the name of the subledger account in subledger accounting, the tax number and the bank details
Company Code - individual company code data is maintained in this section, this includes the account number
of the reconciliation account in the general ledger, the terms of payment and the settings for the dunning
Purchasing Data - is used with the MM module (materials management), you can enter data on requests, on
purchasing orders and for invoice verifications, the data can include conditions (for example purchase order
currency, terms of payment or minimum purchase order value), sales data (sales person including telephone
number) and control parameters, use transaction code XK03.
Lets create a vendor account using transaction code FK01 (use transaction code XK03 if you need to enter purchasing
data), I am not going to cover every option as we will be discussing some of them later, here I am filling the details just
to get the vendor account created, The vendor account number is controlled by the account group and the account
number assigned to it, the account number can have just numbers, characters or both, here the account number
is vendor10, which is assigned to the account group 0001 (left-hand screenshot), you can use SPRO to configure
account groups and account numbers (right-hand screenshot)
The next screen you enter the vendors details, the title can be a person or a company as seen in the left-hand
screenshot, the search terms is used for searching vendors, it’s the primary key with which you can search for master
records rapidly. The rest of the details are pretty self-explaining
The next two sections are the control parameters and the payment details, the control parameters can help if the vendor
is a customer, which allows you to have the option to have the system clear receivables and payables automatically
(automatic payment program or dunning), you can also enter tax information and the VAT registration number, you
can also enter the vendors locations which can help with determine freight charges, you can even specify the type of
industry the vendor is in. The payment details are entered on the right-hand screenshot, you specify each bank account
that allows the automatic payment program to pay the vendor. If you have multiple bank accounts you have bank keys
to determine which account to use, you can also specify an alternate payee which allows the business partner bank to
pay, we will discuss IBAN (and SEPA) in the bank accounting section.
The next two screens are the contact person details (self-explaining) and the accounting information details, here you
specify the reconciliation account, remember a vendor account is a subledger in order to automatically post to the G/L
account we use the reconciliation account field (in this case trade payables). The field status group in the master
record of the reconciliation account specifies the screen layout for document entry, the items of the vendors account
are managed in the currency of the reconciliation account. The sort key is used to display the line items in order, if the
sort key is not used then the system will sort via the assignment number. You can use the authorization to control who
reads and controls the vendors account.
You can only assign one reconciliation account to the customer or vendor master, which as you know postings made to
the sub ledger account will automatically update the specified general ledger account (reconciliation account),
however sometimes you may need more than one reconciliation account for the same customer or vendor, to classify
the different types of transactions you make with them. We can use the IMG
In the initial screen you can create multiple reconciliation accounts, if you need more than one alternative
reconciliation account linked to the same general ledger account then enter the general ledger account multiple times
as you have alternative accounts. You can also use a short key to represent the alternative reconciliation account to
ease document entry, you simply enter a two character alphanumeric key as per the below screenshot
You need to make sure that in the general ledger account (reconciliation account) you have the recon.acct ready for
input checkbox ticked, if you do not see it in the section you can use transaction OBD4, select the document entry field
and you should be able to see the reccil.acct ready for input entry. When you are posting to the vendor or customer
account you can use either the general account or the ID
The next screens details the payment terms and types of payments, you can also specify tolerance groups which can
limit the granting of cash discounts and for the handling of payment differences, this affects dunning and the entry of
payment transactions. You can block payments and specify house banks (I will discuss this in my banking section) and
specify alternate payee's. The screenshot below details the types of payment methods that we will accept from this
vendor, this is important as we will select the payment types when we run the payment run.
The last two screens are the dunning configuration (I will be discussing this in the accounts receivable section) and the
withhold tax configuration, for the time being I will leave these blank.
When you save the account you should receive the below confirmation message
You can block an account using transaction code XK05, you can block the vendor in all company codes or the selected
company code, you can also block it in purchasing. A dunning or payment block can be set at the company code level,
you can set or unblock the blocking indicator in the sub ledger at anytime.
SAP provides a special master record type for one-time or sporadic vendors, this master record does not contain
specific data of the business partner such as address or bank details, this information is separately entered during
document entry. When posting to a one time account the system automatically navigates to a master data screen where
you can enter the specific data of the business partner. The master records for one-time accounts are stored separately
in a specific account group. The system hides the specific fields of the business partner when the master data is entered.
If you have lots of one-time accounts you should create multiple accounts and separate them for example first letter
and industry, this will help otherwise it may get confusing when clearing and try to find accounts quickly. You can
perform dunning on one-time accounts, open items can be dunned and processed using the payment program.
Overview of the Integrated Business Transaction
Accounts payable in the context of integrated business transactions usually concerns the individual steps from
purchase orders to outgoing payments (purchase to pay). Integration also means that the information flow involves
different departments. This examples includes the departments of purchasing, accounts payable accounting, controlling
The ordering process starts with a purchase requisition, before you can generate a purchase order for the vendor this
internal approval process ensures clarity and transparency, the purchase requisition defines exactly at which price
goods or services may be ordered and an approval of the purchase requisition requires a dual-control or three-control
principle. This early implementation facilitates later invoice verifications, additionally the purchase requisition enables
the involved departments, controlling and treasury to obtain an overview of the expected expenses or cash outflows.
If the goods have been received for the purchase order the goods receipt is not only based on quantities but also
documents the exact value of the goods for the purchase order. If no vendor invoice that corresponds to the goods
receipt is available at the end of the month, this value serves as the basis for accrual and deferral posting (we will
discuss the automatic maintenance of the GR/IR account in the closing operation section).
Processing of incoming invoices is one of the traditional areas in accounts payable accounting, services are normally
documented in paper form and sent by post, the documents are normally scanned and then archived, which means that
documents can be obtained quickly. In addition to having a central inbox and an early scanning process, the optical
recognition and interpretation of paper invoices is the next step on your way to an optimized process. OCR allows for
default account assignment of the accounting document. Provided that the system finds the corresponding purchase
order for the invoice and provided that there are no price differences or quantity variance the system can automatically
post the document in the background.
If very large volumes are involved the transfer of invoice data via EDI (Electronic Data Interchange) including a
subsequent printout of the collective invoice has become established as a process, these are one-to-one connections
between customers and vendors. In some industries for example the automotive industry this procedure is already
widely used. You can summarized between the following types of processing incoming invoices
Manual processing with late scanning
Manual processing with early scanning, so that an optical image is provided for the workflow in the enterprise
Automatic processing and early scanning via OCR, which also creates default account assignments in additional
to the optical image
Automatic processing where large invoice volumes are transferred via EDI
If the goods and invoices have been received and the invoice verification has a positive result, the automatic payment
program is responsible for making the payments at the optimal time. The payment run includes the planned liquid funds
and cash discounts and due dates for net payment invoices, because the accounts payable accountant is involved in this
process the sections discuss the manual and automatic payment transactions.
Cashed checks enable specific evaluations, you can evaluate when and whether vendors cashed the receive checks and
even indicate this as an average value in the master record.
Entering Incoming Invoices
The general FI-AP posting transaction code is FB01, this is similar to the G/L document entry, we first enter the
header details and the first line item, remember the posting key determines the next screen layout,
The next screen we enter the full details for the first line item, and then we enter the details for the second line item
We lastly enter the full details of the second line item, at this point we can perform a simulate and a simulate G/L
The left-hand screenshot is the simulate and the right-hand screenshot is the simulate G/L, here you should be able to
pick up any errors, you only have to perform a simulate when you are testing the system, once live you should have the
confidence that you do not need to simulate every time.
Once you are happy with the document you then post it, the system will confirm the posting as per the message below
We can then have a look in the vendors account (left-hand screenshot) and we should be able to see our posting (in an
open state), remember this is a sub ledger account and thus we have a reconciliation account (right-hand screenshot)
where all documents will be posted as well, in this case account 160000 (trade payables), we should see the same
As this is a double entry we should see the other side (debit) of the double entry in the Goods Recvd/Invoice Recvd - not
yet delivered (G/L account 191101)
Like the G/L document entry we have a single screen document entry for accounts payable, using transaction
code FB60, we can enter a incoming invoice, the initial screen is the data entry (left-hand screenshot), notice in the
left-hand screenshot the balance still has a yellow icon which means the document has not been checked, also notice
that the line item does not have a green tick, again it means that the line item has not been checked, once checked you
will notice that the balance icon turns green and that the line item has a green tick which indicates that the document
should be ok to be posted (see right-hand screenshot)., if not then check for any errors in the document.
Again we can simulate and G/L simulate the posting to check the document
Once the document is posted we will receive confirmation as per the screenshot below
Again we can check the vendor account the left-hand screenshot (and reconciliation account right-hand screenshot)
and see that the document was posted
Again the double entry debit side is posted to the Goods Recvd/Invoice Recvd - not yet delivered (G/L account 191101)
Lastly we can take a look at the fast entry screen, this is a little different than the last two ways on entering a document,
you use transaction code FB10, the initial screen has some basic document header information and allows you to
select the input fields for the document header and vendor, depending on what you select here will determine the screen
layout in the next screen
Now we will see the familiar screens we saw using FB01, again the system will provide you with confirmation that the
document was posted successfully (right-hand screenshot)
You can also enter an invoice which is related to a purchase order, which was created in MM (Material Management),
the transaction code for this is MIRO, I will cover material management at a later date and thus I want you to be
aware of this option.
When entering invoices using the above methods (FB50, FB60 or FB70), you normal don't need to enter the document
type or postings as the system supplies a default, you can change these using transaction OBZO, you can specify a
particular company code and transaction type, as you can see in the screenshot below it is pretty self-explaining, as
you can SAP already supply default document types.
Automated Payment Transactions
The payment transaction refers to the processing of the incoming and outgoing payments of an enterprise, this includes
Incoming payments via debit memos
Outgoing payments via bank transfers or checks
Incoming checks with manual check pre posting
Incoming payments via bank transfers returned debit memos and returned checks
You can distinguish between the accounting view and the process view, the accounting view differentiates between
incoming payments and outgoing payments. The process view in contrast differentiates between the outgoing and
incoming payment processes. The outgoing payment process is triggered by a payment run by the company and the
corresponding information (bank, account amount, etc) are defined by the SAP system and passed on to third parties,
this includes bank transfers and outgoing checks to third parties. The incoming process is triggered by third parties
and the corresponding information is provided from the outside (banks, vendors, customers), this includes bank
transfers and incoming checks from the third parties. SAP's automatic payment program manages the outgoing
payments of an enterprise but also processes the outgoing payment process and thus includes both outgoing and
incoming payments (debit memos). There are a number of sections to the payment program
Selection of the due date and open items
Posting of payment documents (accounting documents)
Generation of payment lists and logs
Generation of payment media (check forms, payment advice notes)
I have covered how to setup the automatic payment program in my FI configuration and setup section under outgoing
payments and automatic outgoing payments, a quick recap the payment method defines which procedure (check, bank
transfer, bill of exchange, etc) is used for payment, the specifications for a payment method are made during the system
configuration at two levels, there are basic settings that depend on the country that is settings for "US" (United States)
apply to all company codes, in addition there are checks that you can define individually for each company code and
You can also define specific checks as such
Minimum and maximum amounts
Allowed business partners abroad (country code in the master record)
Allowed bank details abroad (country code in the bank master record)
Allowed foreign currency
You can use transaction code FBZP to setup or change any of automatic payment program configuration but make
sure that you have read the outgoing payments and automatic outgoing payments sections first.
A payment block indicator can be used to block accounts or individual items for payment, if a payment block is set the
system will display an error message "Account blocked for payment" or "Item blocked for payment" for the
corresponding item. The payment block reasons can be accessed via transaction code OB27, you can block a item
payment in the document header as seen in the right-hand screenshot, notice the payment block key matches the
payment block reasons.
Now let’s see the payment run, we use transaction code F110, when the initial screen appears everything is blank, you
enter the run date and a unique identification and select the parameter tab, here we enter the posting date, documents
that are to be included (up to date) and the customer items due day, the payments control section allows us to fine tune
the payments that we are looking for, in my case only company code DD11 will be searched for, payment methods CT
(Check and Bank Transfer) will be checked for, see right-hand screenshot for all payment methods.
The free selection screen allows you to perform some filtering for instance you could only select USD currency (left-
hand screenshot), in this case I will not filter, The middle screenshot allows you to increase the logging here I have
increased the logs so that we can see them later (see below for each description), the right-hand screen allows you to
configure of the print output of proposal lists, release lists and checks.
The logging type information
Due date check - define the due date check is logged for open items
Payment method selection in all cases - ensures that the selection of all payment methods and all banks is
documented in the log, you can then use the log to trace the procedure for payment method selection
Payment method selection if not successful - defines that the attempted selection of the payment method and
bank is only documented in the log if no allowed payment method or bank is found. The log enables you to
identify whether corrections have to be implemented in the master record of the business partner or in the
Line items of the payment documents - ensures that the log outputs all posted documents including the
Once you have filled in the tabs section and then select the status tab you are asked to save the parameters (right-hand
screenshot), this means you can come back to this parameter list later. You can see old parameter lists, proposal runs
and payment runs if you select on the identification (see right-hand screenshot), you can also see if any proposals or
parameter lists have been deleted.
We can now run the proposal using the parameters we entered above, we select the proposal button and fill in the
schedule, here I will run the proposal immediately,
Depending on your systems performance and the number of transactions to check it may take a while to complete, keep
clicking on the status button to refresh the screen, you can see that the proposal is being started (left-hand screenshot),
eventually the proposal will finish (right-hand screenshot)
Let’s take a look at the logs (right-hand screenshot), remember we turned on additional logging so that we can see
more details, as you can see in the log the proposal found a number of payments however as we have set a grace period
(transaction code FBZP -> all company codes - right-hand screenshot) the proposal will ignore these transactions.
Depending on the transactions in your system you may or may not have any payments. If you select the proposal button
(with the spyglasses) you will see that no transactions are available for payment.
Now I have changed the grace period and re-run the payment proposal, again the payment proposal is the same apart
from the dates
This time let’s take a looks at the proposal (the spyglasses icon), we can see that a payment of 12,500 is due
to vendor10, now this could be made up of a number of transactions, if you double-click on the payment you should be
able to see how the payment is made up
You can see that it is made up of 3 transactions, from here you can obtain the document numbers, amounts, posting
date, document date, etc
Now that we are happy with the proposal it’s time to perform the payment run, remember nothing has posted, it is
possible to make changes to proposal or you can even delete the proposal, we select the payment run icon, again use
the status icon to refresh the screen, you may first see the screen on the left-hand side notice that the posting orders
generated is 1 and the completed is 0, after a short while both should be 1, which means that the postings are complete,
let’s take a look
First let’s have a look at the payment run log, here you can see a single payment has been made into two accounts
(remember it’s a double entry system), you can see that the vendor has been has been debited and the citibank bank
(G/L 113101) account has been credited, we will verify this in a moment
Let take a look at the account balance for the vendor, we can see the payment of 12,500 with a document ID of 70001
which is a vendor invoice but it is also a clearing document, notice the 3 line items we saw earlier, they all have been
cleared using this document, basically what we are saying is that we have received the goods and the invoice, however
we have yet to actually pay for the items, and this instructs the next phase of the payment process that is to actually pay
the vendor, internally someone will now authorize the actual payment to take place.
We then check the citibank G/L account, you can see we have a new posted item of 12,500.00, which tells us that we
need to pay for this item, once we have paid for this item the bank will issue a bank statement, this statement could be
automatically or manually entered and then this document could be cleared confirming that the line items
for vendor10 have been paid for, we will cover this in more detail the bank accounting section.
During the payment run lots of things are happening in the background, the account determination is all configured
using transaction code FBZP, see outgoing payments and automatic outgoing payments sections for more details on
how to configure the account determination and then you will have a better understanding on what happens during the
As mentioned above when you make a payment to a customer or vendor the system automatically selects all of the open
items that are due and groups them together in one payment, if for example we have a credit memo with a specific
invoice that it relates to during the automatic payment it will net it off with all the other open invoices in the account.
This may be acceptable however sometimes you may need to group common open items together so that they are
groups together in a single payment, we can setup grouping keys to group similar items for payment using transaction
code OBAP, in the below left-hand screenshot the fields for grouping payments you can group up to three fields which
can be used to group the open items together. Once the grouping key has been created you can add it to the master
data of the customer or vendor, for example using transaction code FK02 on the payment transaction accounting tab
we can select the grouping key (right-hand screenshot).
Manual Payment Run
There will be times when you need to enter a vendors payment manually, perhaps you only run the automatic payment
run at the end of the month, and then vendor wants his payment earlier, we can use transaction code F-53 (you can
also use F-03 or F-51, (F-44 vendors, F-32 customers) which are very similar), here I enter a outgoing payment of
1000.00 specifying the bank account to be 113101 which we saw in the automatic payment run above, this time I use
the vendor account pvalle, once the details have been entered I then select the process open items button
The system will now search of the open items of the vendor account pvalle, as you can see there are a few of them, now
you have to look carefully as the USD GROSS column could have all items in black or all items in blue, what this
means this if the item is in blue then it will be available for payment, if in black then it’s not available for payment, you
can either select the item and use the items button (activate or deactivate) or you can just double-click the item to
activate or deactivate the item. The important thing to remember is that not assigned box contains a zero balance. You
also have the options to enter any cash discounts either as an amount or a percentage.
Again we can simulate left-hand screenshot) or simulate the G/L entry (right-hand screenshot) to confirm the posting
The posting again will be confirmed (left-hand screenshot) and we can see the posting and clearing document in
account balance of the vendor (right-hand screenshot)
The manual payment is very similar to the automatic payment run except you enter banking details manually, there
may be differences that exceed the tolerances limits for posting during a manual payment these limits are defined on
the accounting clerk during system configuration, for more information see tolerance groups in the documents sections.
There are a number of options available for open items
Posting as a residual item - the systems closes the original open item and simultaneously generates a new open
item with the remaining amount
Posting as a partial payment - the original open item is not cleared, the system posts the payment with an
invoice reference, for this purpose it enters the invoice number in the invoice reference field of the payment
Let’s take a look at a residual item, the payment amount exists below the open item, use again use transaction code F-
53 selecting the residual items tab, again the initial screen needs to be filled in, this time I will use vendor pvalle, the
amount is going to be used against an invoice of 1000.00 leaving a residual of 50.00
Here you can see that I have selected the residual items tab and only selected the invoice of 1000.00, initially
the residual items column will be blank double-click the column and it will automatically be filled with the residual, in
our case 50.00
Again we can run a simulate or a simulate G/L account
Once we are happy we can post the document
Let’s have a look at the vendors account balance, as you can see the original invoice has not been cleared using the
document above as the clearing document and a new document has been created with the remaining 50.00
Partial payments is the same as residual payment, again create the document header information
Then select the payments that you wish to make the partial payment against
The two items are indicated as open and are linked to each other with identical content in the assignment field.
Evaluations in AP Accounting
To make sure that payments are made on time and are not being held up due to security checks (where a payment
requires two authorizations), you can use transaction code FK09, in the initial screen (left-hand screenshot) you can
search vendors and or company codes and you have a number of options on what to look, when you have made your
selection you a list will be generated detailing what payments need authorizing (confirming), in my case I do not have
Another report transaction code S_ALR_87012078 (due date analysis for open items) allows you to view the expected
outgoing liquidity in advance, the initial screen (left-hand screenshot) allows you to perform some filtering, here I will
check company code DD11, the report (right-hand screenshot) details what is due in the coming days (right up to
99999 days), as you can see I have 94,900 due in the next 30 days and I only have one vendor.
You can also change how the report looks by changing the navigation, here I have selected the posting key and you can
see a breakdown of the payments, notice the payment difference we created earlier.
The vendor data information system is a kind of cube that is filled with up-to-date information at regular intervals, you
can view, rotate and turn this cube from different perspectives, you can use transaction code F.46, you can configure
and update the information use the below
The initial screen allows you to drill down on a specific path, here you can see that I have drilled down to evaluate the
open items in the group client 800.
Here you can see the interest that has been accumulated due to the open items, also notice the date in the right-hand
corner, obviously this information is out of date and needs refreshing
You can also have quick access to the payable reports using transaction F.98, you can even turn on the technical name
of the reports.
I have explained how to update this information in my account receivable section, using transaction code F.29.
Accounts Receivable (User’s Guide)
In contrast to general ledger accounting in which you only manage the total of receivables for the financial statement,
you use accounts receivable accounting for recording all details regarding the business transactions such as invoices,
credit memos and incoming payments. The interaction between the sales department and accounts receivable
accounting assumes a significant role here. The sales employees are interested in sales orders and sales volume and
they receive incentives in the form of bonus payments for their work. The task of accounts receivable accounting is to
convert the invoice amount that was agreed on by contract with the customer into cash receipt. There is a general
saying that states "sold and delivered goods remain a gift until they are paid".
The management will include rules to handle certain business cases for example how to handle insolvency of one or
more customers or total loss in receivables, or if customers are paying too late or don't pay the total invoice amount,
these all result in delayed or loss in the cash receipt, however the management must keep the business running. A key
figure that is mentioned in business is the DSO (days sales outstanding) value, that is the period outstanding of
receivables. Another addition to management is how much time and hence money is invested internally to go from sales
order to cash receipt, this determined how well sales and financial account interact with each other, this calls for very
clear responsibilities and goals.
I will not be mentioning on how to enter incoming invoices in this section as they are the same as in accounts payable,
the only different is the transactions codes and the easy access menu location which can be seen below, which means
we can focus on the sections that are related to the account receivable.
I do have a whole section on receivable accounting in my FI configuration and setup section, this covers the subject
from a configuration point of view.
The SAP system includes two components or sub ledger's to save customer data
FI-AR (accounts receivable)
FI-CA (contract accounting)
This dualism is due to that enterprises use different business models - business to business (B2B) and business to
consumer (B2C) in practice. The B2C business model primary concerns SAP industry solutions for communication
enterprises, electricity provides and the media segment. One challenge is to map millions of end customers quickly and
efficiently, the data model and the existing programs for FI-AR quickly reach their (time) limits. This is where FI-CA
(contract accounting) emerged, which is based on the industry solutions for mass accounting. The processes and hence
the programs such as invoice posting, dunning procedures or incoming payments are developed for these industries
specifically for the FI-CA subledger. FI-AR and the general ledger are connected in real time, however they are
connected asynchronously that is they are connected to the background processing with a time delay.
The FI-AR component keeps and manages account-based customer data, the component is an integral part of sales and
distribution controlling, it also provides effective credit management through a close integration with SD (Sales and
Distribution) module and information for the optimization of the liquidity planning through a connection with the cash
management and forecast.
Account analyses, alarm reports, due date lists and flexible dunning are available for the open item management, an
incoming payment can be assigned to the corresponding receivables manually on the screen or by electronic means. By
means of the payment program you can automate both the debit memo procedure and the payment of credit memos. To
document the processes in accounts receivable accounting you can use account balances, journals, balance audit trails
and numerous standard reports. For key date valuations you revaluate foreign currency items, determine customers on
the credit side and scan the balances established this way for remaining terms.
Master data is made of three parts, the general data is maintained at the client level, this data is available for all
company codes, at this level you specify the name of the subledger account in subledger accounting, the tax number
and the bank details.
Next is the company code data, this includes the account number of the reconciliation account in the general ledger,
the terms of payment and the settings for the dunning procedure. For integrated use with the SD module you are
provided with additional fields for the customers master record, these fields contain information that is required for
handling business transactions in the sales and distribution area and that is used exclusively in the SD module, the data
includes terms of delivery, price list type and remarks regarding the customer, these specifications control the order
processing, the shipping data and the billing information provided that these business transaction are recorded by
means of a transaction to SD. I will be fully covering sales and distribution in another section.
The SAP system provides a special master record type for one-time customers, in contrast to the regular master
records, this is similar to the accounts payable, the master record does not contain specific data of the business partner
such as address or bank details. The information is entered for each business transaction during document entry. When
posting to a one-time account the system automatically navigates to an entry screen to enter the business partners
Creating a customer is very similar to creating a vendor which we performed in the accounts payable section, you can
either create a customer centrally or create it centrally/company code level, the below screenshot displays both
methods, we will use transaction code FD01
The initial screen requests for a account group, customer name and the company code, the account determines the
account numbering or lettering and the field status parameters. here I will just enter the minimum to get started, also if
you notice you can copy an existing account using the reference fields.
The first details we will fill in is the address tab (left-hand screenshot), this is all self-explaining, the next screen/tab is
the control data (right-hand screenshot), here we can enter tax details, locations (this help in SD for delivery locations,
etc), you can also specify if the customer is also a vendor (if you do then a field called Clearing with ... in the account
management tab in the company code will appear, you need to activate this field), and you can implement
authorizations so that specific users can alter the customers details.
The next screen is the bank details (left-hand screenshot) again this is self explaining, the account management screen
(right-hand screenshot) details the reconciliation account (remember the customer is a subledger), sort key, cash
management group, also you can setup the interest calculation parameters, below are some of the parameters for the
account management screen
reconciliation account - Each posting to an account of subledger accounting automatically creates an entry to
the general ledger, this is done via the reconciliation account, the field status group in the master record of the
reconciliation account specifies the screen layout for document entry. The items of the customer’s account are
managed in the currency of the reconciliation account
sort key - used to sort line items, normally line items are sorted using the assignment field in the document.
authorization - specify who receives change or read authorization for this account
I have also mentioned how you use multiple reconciliation accounts in my account payable master data section.
Next we fill in the details for the payment transactions here we have the payment terms, tolerance group, automatic
Terms of payment - is used for orders, purchase orders and invoices and provide information about dunning
and payment transactions, the value entered here is used as a default value for the document entry
Tolerance group - you make specifications for granting of cash discounts and for handling of payment
differences for each tolerance group, this entry affects dunning and entry of payment transactions. For manual
closing the payment differences are accepted by the system up to the define tolerance and the items are closed
Payment history record - the system records the customer payment history, this is important for credit
Payment methods - you can define the payment methods that are allowed for the customer if the automatic
payment program is used.
Payment block - this causes a block on the account, in the automatic payment program the block is effective if it
is set either in the master record or in the document, if set in the master record all open items of this customer
are transferred to the exception list.
Single payment - determines that all open items are paid or collected separately, this prevents multiple open
items being cleared jointly with one payment.
Clearing with vendor - this checkbox only appears if a value is entered in the vendor field in the control
data tab, however an actual clearing within the automatic SAP procedure only takes place if this field is selected
Next is the correspondence screen which involves dunning, the accounting clerk, bank statements, etc.
Dunning procedure - the dunning procedure which is company code independent and can be used by all
company codes within a client. Only the dunning notices are controlled separately for each company code. To be
considered as part of the dunning process you must define a procedure here.
Dunning Frequency/Interval - determines the minimum number of days that must elapse after a dunning run
before an account can be dunned again. The date of the last dunning run is recorded in the master record, using
this date and the frequency/interval the SAP can determine if it is available to be in the dunning run.
Grace day/minimum number of days in arrears - used to determine the due date of open items and whether an
account can be dunned. An item whose days in arrears are smaller or equal to the grace days must be
considered as not due.
Number of dunning levels - for each dunning level you can specify how many days in arrears a line item must
be to reach the corresponding dunning level. The dunning level determines the associated dunning notice.
Processes to be dunned - you specify whether the stand and/or special G/L transactions are dunned with a
procedure, special G/L transaction include bill of exchange payment request, payment requests, down payments
and down payment requests.
Dunning block - the business partner is not included in the dunning run, you can enter a blocking key which is a
descriptive text that indicates the reason for the block, blocked accounts are output in an exception list which
includes the block reason.
Dunning level - normally this is set within the dunning program, however you can set it here, the dunning level
influences the next dunning run, if set to 0 the system uses the minimum number of days in arrears that are
specified in the dunning procedure to calculate the necessary days in arrears for all other dunning levels the
system uses grace days
Dunning clerk - the name of the clerk whose ID is indicated in this field is printed on the dunning notices, the
dunning and account clerks can be same of different
Accounting clerk - the name of the clerk whose ID is indicated in this field appears on all correspondence
documents sent to the business partner, additionally it is printed on the dunning notices, if the dunning clerk
field is blank
The last screen is regarding any insurance that you may have, I have already covered withholding tax in my FI setup
and configuration section.
policy number - you can define the link to an export credit insurance policy
institution number - you can define a number for the institution
amount insured - you define the value of the insurance
valid to - here you can enter the renewal date
lead months - this signal factor you must maintain the maximum date of required payment to be granted for your
deductible - some export credit polices include a deductible share of the policy-holder, this rate is between 20
and 40% depending on the insurance risk
When you save the customers account you will be informed by SAP as per the below screenshot