Sap overview

Day 1
 SAP Overview
 Organizational Units
 Global Settings
 FI Basic Configurations

 Enable improved business performance
 Cycle Time Reduction
 Inventory Reduction
 Order Execution Improvement
 Align with extended business partners
 Support business growth requirements
 New Products
 New Markets
 Provide integrated real-time system
 Better responsiveness across organization
 Eliminate limitations in legacy systems
Enterprise Resource Planning - Drivers

 “Systems, Applications & Products in data processing”
 Founded in 1972 by 5 former IBM employees
 Head-Quartered in Waldorf, Germany
SAP - What does it stand for ?

R/3
Client / Server
ABAP/4
FI
Financial
Accounting
CO
Controlling
AM
Fixed Assets
Mgmt.
PS
Project
System
WF
Workflow
IS
Industry
Solutions
MM
Materials
Mgmt.
HR
Human
Resources
SD
Sales &
Distribution
PP
Production
Planning
QM
Quality
Mgmt. PM-CS
Plant
Maintenance
Integrated
solutions
Open
systems
Client / server
architecture
Enterprise data
model
Designed
for all types
of business
Multinational
Comprehensive
functionality
Country Version
SAP R3 Modules

 Financial accounting (FI)
 Controlling (CO)
 Asset management (AM)
 Treasury (TR)
 Materials management (MM)
 Sales and Distribution (SD)
 Production Planning (PP)
 Quality management (QM)
 Plant maintenance (PM) & Customer Service (CS)
 Project system (PS)
 Human resources (HR)
 Workflow (WF)
 Industry solutions (IS)
SAP R/3 Application Modules

 Designed for automated management and external
reporting of general ledger, accounts receivable,
accounts payable, and other sub-ledger accounts with a
user-defined Chart of Accounts
 Key elements of the FI application module include :
 General ledger
 Accounts payable
 Accounts receivable
 Asset Management
 Special Purpose Ledger (FI-SL)
 Legal consolidation
 Accounting Information System
Module - FI (Financial accounting)

Module - CO (Controlling)
 Represents the company’s flow of cost and revenue
 Management instrument for organizational decisions
 Key elements of the CO application module include :
 Cost center accounting
 Product cost Planning
 Product Costing
 Profitability analysis
 Profit center accounting
 Activity based costing
 Enterprise controlling

Module –AM (Asset Management)
 Designed to manage and supervise individual aspects of
fixed assets
 Key elements of the AM application include :
 Traditional asset accounting
 Asset Acquisitions
 Asset replacement
 Depreciation
 Investment management
 Technical asset management and plant maintenance
 Maintenance
 Repair

Module – MM (Materials Management)
 Supports the procurement and inventory functions occurring
in day-to-day business operations.
 Key elements of the MM application include :
Materials procurement (purchasing)
Inventory management
Invoice verification
Material valuation
Vendor evaluation
External Services management
Purchasing Information System (PurchIS) and Inventory
Controlling Information system

Module – SD (Sales & Distribution)
 Helps to optimize all the tasks and activities carried out
in sales, delivery and billing
 Key elements of the SD application module include :
 Pre-sales support
 Inquiry processing
 Quotation processing
 Sales order processing
 Delivery processing
 Warehouse management
 Billing
 Credit Management
 Sales Information system

Module – PP (Production Planning)
 Used to plan and control the manufacturing activities of a company
 Key elements of the PP application module include :
 Bill of Material (BOM)
 Routings
 Work Centers
 Sales and Operations planning (SOP)
 Master Production Scheduling (MPS) – Capacity Planning
 Materials Requirement Planning (MRP)
 Shop Floor Control (SFC)
 Production orders
 Product costing, activity-based costing
 Work in process
 Kanban
 Production planning for process industries (PP-PI)
 Repetitive Manufacturing

Module - QM (Quality Management)
 A quality control and information system supporting quality
planning, inspection, and control for manufacturing, costing, and
procurement
 Key elements of the QM application module are :
 Quality planning
 Quality during procurement, production, distribution
 Quality Management Information Quality inspection
 Information System (QMIS)

Module – PM / CS
(Plant Maintenance / Customer Service)
 Supports planning, processing and completion of the plant
maintenance tasks.
 Helps keep track of maintenance cost and resources
 Provides information to facilitate decision-making about plant
maintenance concerns
 Key elements of the PM / CS application include :
 Installed base management
 Maintenance notification by date or counters
 Maintenance Orders management
 Maintenance planning
 Maintenance Bill of materials
 Plant maintenance Information system
 Service management of Warranties, Repairs, Service orders,
notifications, Billing

Module - PS (Project system)
 Designed to support planning, control, and monitoring of long
term, highly complex projects with defined goals
 Key elements of the PS application module include :
 Project WBS – Plan, Budget and Monitor
 Network Management
Activity monitoring, Material Planning, Milestones,
Capacities Scheduling
 Project Management Information System

Module - HR (Human resources)
 A complete integrated system for the planning and control of
personal activities across applications
 Key elements of the HR application module include :
 Personnel administration and payroll accounting
Recruitment
Personnel Administration
Payroll
Time management
Travel Expense accounting
Benefits
 Personnel planning and development
Workforce planning
Training administration
Organization management

Module – IS (Industry Solution)
 IS combines the SAP R/3 application modules and
additional industry-specific functionality
 IS is a result of the efforts of the industry Centers expertise
(ICOE) which include the following :
 Consumer Packaged Goods
 Utilities & Telecommunication
 Healthcare
 Process industries (Chemical & Pharmaceutical)
 Oil and Gas
 High Tech and Electronics
 Automotive
 Apparel and Footwear
 ……..

3 Tier Client / Server Architecture
 The SAP R/3 architecture is based on a 3-tier client/server principle
 Presentation Server
 Application Server
 Database Server
 Dedicated Servers are linked by Communication Networks
 Perform tasks without sacrificing data integration and processes within
the system, as a whole

R/3 Technology Environment
DB2 for
OS/390
ADABAS D
DB2 for AIX
INFORMIX-OnLine
ORACLE
Windows 3.1, Windows 95, Windows NT,
OSF/Motif *, OS/2 Presentation Manager (PM),
Macintosh *, Java
ADABAS D
MS SQL Server
INFORMIX-OnLine
ORACLE
ABAP/4, C, C++, HTML, Java
DB2 for
OS/400
OS/390
AIX
Digital UNIX
HP-UX
Reliant
UNIX (SINIX)
SOLARIS
Windows NT OS/400
Hardware Bull/Zenith
Compaq
Data General
...
NCR
Sequent
SNI
Digital
HP (Intel)
IBM (Intel)
Bull
Digital
HP
IBM
SNI
SUN
UNIX Systems
IBM
AS/400
Operating
systems
Dialog
SAPGUI
Languages
Databases
IBM
S/390

SAP Specific Features
 Organizational Units
 Master data
 Match-codes
 Documents
 Customization
 Security

 A mechanism to represent a company’s organizational
structure in the SAP R/3 system
 Data in the system is entered, stored and reported based on
your organizational elements
 Example of organizational data
 Company
 Plant
 Sales organization
 Cost Center
 Storage location
 Business area
Organizational Units

 Master data is records that remain in the database over an extended
period of time (e.g. Customer Master, Material master, Account
master)
 Master data is centrally stored (shared across application modules)
and processed to eliminate data redundancy).
 Customer master is used for sales order processing, delivery,
invoicing, etc.
 Master data has an organizational aspect For eg, a material used in
2 plants have to be created twice
Master Data

 Match codes are query tools used to find specific records
 Match codes are search term characters, such as name, city,
description, etc.
 For example, you can search for a material in the system by
description without having to remember its code
Match codes

 Demonstrate evidence of a business activity
 Provide distinction between Sap R/3 documents and original
source documents such as :
 Printed invoices
 Customer payments
 Contain the following :
 Header and line items
 Document type (invoice, journal entry, etc.)
 Provide audit trail to the originating source document and the
internal SAP R/3 document
Documents

 Defined as the Configuration of the system to represent the
client’s business need (feature of all ERP packages)
 “Source modification through parameters” - No programming
knowledge required.
 SAP R/3 has specific tool know as the IMG (Implementation Guide)
which assist in customizing.
 Major component in an SAP R/3 implementation
Customization

 Security in the SAP R/3 system is administered with objects, profiles
and authorizations :
 Authorization : Assignment of profiles to users to determine what
privileges they have within an object or a group of
 Profiles : A collection of objects used to control system access
privileges
 Objects : Describe various business and system related groupings
such as accounting documents, customer and vendor accounts,
business areas, etc.
Security

SAP R/3 - Benefits of Integration
 Integrated processes, data and organizational elements
 Operational, financial and managerial principals are satisfied
simultaneously
 Common database
 Application integration
 One point of data entry
 Consistency for the user across applications
 Technical integration
 On-line interactive edit and update
 Elimination of redundant data
 Data integrity

SAP Advantage
 Common use of master data across modules
 Single data entry – flow to all modules
 Integrated document flow
 Multi level secured transactions
 Easy configurations

Integrated Organization Structure
Company
Code
Company
Purchasing
Orgn.
Plant
Storage
Location
Sales
Orgn.
Division. Distribution
Channel.
Business
Area
Credit
Control
Area
Controlling
Area
Operating
Concern
Cost
Center
Hierarchy
Profit
Center
Hierarchy
Sales Area
Funds
Mgt area
Personnel
Area

Organization units – MM
 Plant
 The site at which value addition to the production happens and
stocks are handled. A Plant is a place where either materials are
produced or goods & services are provided
 Storage Location
 A location where a group of materials are physically handled
 Purchasing Organization
 Unit responsible for procurement of materials and services and
negotiates with vendors
 Purchase Groups
 Buyers responsible for purchases who handles specific group of
materials or vendors

Organization Units – SD
 External:
 Sales Organization - represents the unit responsible for selling
 Distribution Channel – defines different ways of reaching customer
 Division – Segment responsibility of products
 Sales Area – the combination of Sales Org/DC/Division
 Credit Control Area - Area of an organization grouped from credit
perspective
 Internal:
 Sales District – Sales territories in an organization
 Sales Office – method of representing internal subdivisons
 Sales Groups – further internal divisions of people in sales office
 Sales Employee - an employee carrying out sales
 Shipping Point – location in a plant from where deliveries happen
 Loading Point – Part of a shipping point where physical delivery is
handled

Organization units - FI
 Company
 A group of statutory entities for consolidating results
 Company Code
 The statutory entity for which financial statements are made
 Business Area
 Lines of business within a company code for which financial
statements are required
 Funds Management Area
 Unit in an organization from where funds are monitored and
controlled

Organization units - CO
 Operating Concern
 Highest level from where sales and profits are analyzed in an enterprise
with revenue, cost amalgamation. Can include many controlling areas
 Controlling Area
 The unit for whom costs are planned and monitored and has company
code (s) assigned to it
 Cost Centers
 Lowest place at which cost are planned and collected. Represents a unit
within a company by area of responsibility or location
 Profit Centers
 Subsection of the business for which profit is ascertained like Product
bases, region based, business based

Assignments of Organization Units
 Enables integration of enterprise across functions
 Assignment of Organization units in Logistics to FI
required to facilitate transaction flow

Organizational Units FI
 Organizational units used to structure business functions and for reporting.
 Organizational units of Financial Accounting are used for external reporting
purposes, like statutory compliance as well as management requirements

Organizational Units in FI
Organizational unit
 Client Obligatory
 Company Optional
 Company code Obligatory
 Business area Optional
 FM Area Optional

Client
 A commercially, organizationally, and technically self-contained unit
within an SAP System.
 Have their own master records and set of tables.
 Is the highest level in the SAP System hierarchy.
 Specifications that you make, or data that you enter at this level are
valid for all company codes and for all other organizational structures.
You therefore only need to make these specifications, or enter this data
once. This ensures that the data is consistent.
 CAUTION: Some customizations are client independent and hence
extreme care to be taken to create/change in those cases. ABAP
programs developed are client independent in the respective
environments.

Company
 The organizational unit for which individual financial
statements are created according to the relevant management
requirements. A company can include one or more company
codes
 The definition of the company organizational unit is optional
which is mainly used for Consolidation
 All of the company codes within a company must use the same
chart of accounts and fiscal year. However, each company code
can have a different local currency.

Company Code
 Represent the legal entity for which a complete, self-contained set of
accounts can be created. This includes the entry of all transactions that
must be posted and the creation of all items for legal individual financial
statements, such as the balance sheet and the profit and loss statement.
 The definition of the company code organizational unit is obligatory.
 The company code is the central organizational unit of external
accounting within the SAP System. You must define at least one company
code before implementing the Financial Accounting component.
 Business transactions relevant for FI are entered, saved, and evaluated at
company code level.
Configuration:
 A company code is generally created by copying from an existing company
codes so that all relevant tables will get copied.
 Global settings are to be maintained for company codes

Business Area
 Organizational unit of external accounting that corresponds to a
specific business segment or area of responsibility in a company.
 Financial statements can be created for business areas for internal
purposes.
 The definition of the business area organizational unit is optional.
 Business areas are used in external segment reporting (over and above
company codes), based on the significant areas of operation of a
company (for example, product lines, branches)
Configuration
 Business Area Balance sheet is enabled at Company code global
settings

Assignments - FI Organization Units
 Company code to Company
 Company code to credit control area
 Company code to controlling area
 Company code to FM area
 Plants to company code
 Sales organization to company code
 Company code to business areas

Global Settings
 Calendar
 Public Holidays
 Holiday Calendar
 Factory Calendar
 Unit of Measurements
 Currencies
 Currency codes
 Conversions (quotations)
 Exchange Rate Type
 Rates
 Rounding rules

Calendar
 Use calendar maintenance to maintain and display the components of the calendar
system
 Define Public Holidays
 Define Holiday Calendar
 a combination of a yearly 12-month calendar and a list of all public holidays that
fall within a calendar year.
 gives an overview of all working days and all days off for a calendar year. It can be
created to cover a validity period of several years.
 can be defined according to the country or region in which they are to be
implemented, and adapted to suit individual business requirements
 Define Factory Calendar
 Calendar in which working days are numbered sequentially.
 Defined on the basis of a public holiday calendar. The validity period of a factory
calendar must be within the validity period of the public holiday calendar.
 The weekdays that are working days must also be specified in this calendar.
 Examples:
 Monday through Friday are working days.
 Saturday, Sunday and public holidays are non-working days.

Unit of Measurement
 Enables calculations with quantities and physical units.
 Units of measurement are needed for internal conversions (such as
kilogram <-> gram, but also centimetre <-> inch).
 The international system of units (SI) is used for this.
 UOMs are held centrally in the SAP System for all applications.
 Conversion factors are stored in the system with a unique internal key.
 Unit of measurement can be created according to requirements.
 CAUTION: Extra care to be taken for any creation as this global setting
can affect the whole system performance

Currencies
 Legal means of payment in a country.
 You can manage ledgers in two parallel currencies in
addition to the local currency

Currency settings
 Currency codes
 SAP maintains about 187 currencies. If any transaction in a new
currency will happen for the organization, that currency to be
maintained
 Standard quotation
 Can specify direct or indirect quotation. System by default will take
direct quotes.
 Conversion factors
 Mention the conversion for currency to currency. For example, INR
To Yen will 1:100
 Rounding rules
 ensures that the amounts in this currency are always rounded to
this unit

Exchange Rate Type
 Exchange Rate Type is used for different business purposes where
multiple rates can be maintained for a pair of currencies
 The following exchange rate types exist
 Buying rate (G)
 Bank selling rate (B)
 Average rate (M)
 Historical exchange rate
 Key date exchange rate
 Default exchange rate types can be maintained in document types
 For posting and clearing, the system uses the exchange rate type M
(average rate). This exchange rate type must be entered in the system
and you must also enter the exchange rates for this type.

Exchange Rate
 Exchange rates in the system for the following purposes
 Posting and Clearing
 To translate amounts posted or cleared in foreign currency, or to check a
manually entered exchange rate during posting or clearing.
 Exchange Rate Differences
 To determine gains or losses from exchange rate differences.
 Foreign Currency Valuation
 To valuate open items in foreign currency and foreign currency balance
sheet accounts as part of the closing operations.
 Valuation of Purchase Documents, Sales documents and Commitments
 Exchange rates maintained for a exchange rate type for an effective date
between two currencies

Hands on session
 Create Company Code, Business Area
 Create Calendar
 Create UOM
 Create new Currency, Exchange rate type, exchange rates

Basic Settings in FI
 Chart of Accounts
 Fiscal year
 Account group
 Account type
 Field Status Groups

Chart of Accounts
 This is a list of all G/L accounts used by one or several company
codes.
 For each G/L account, the chart of accounts contains the account
number, account name, and the information that controls how
an account functions and how a G/L account is created in a
company code.
 You can use the same chart of accounts for all company codes

Types of Chart Of Accounts
Operating chart of accounts
 Operating chart of accounts contains the G/L accounts that you use for posting in your
company code during daily activities. Financial Accounting and Controlling both use
this chart of accounts.
 You have to assign an operating chart of accounts to a company code.
Group chart of accounts
 The group chart of accounts contains the G/L accounts that are used by the entire
corporate group. This allows the company to provide reports for the entire corporate
group.
 The assigning of an corporate group chart of accounts to a company code is optional.
Country-specific chart of accounts
 The country-specific chart of accounts contains the G/L accounts needed to meet the
country's legal requirements. This allows you to provide statements for the country's
legal requirements.
 The assigning of an country-specific chart of accounts to a company code is optional.

Fiscal Year
 Usually a period of twelve months for which a company regularly creates
financial statements and checks inventories.
 The fiscal year may correspond exactly to the calendar year, but this is not
obligatory.
 Under certain circumstances a fiscal year may be less than twelve months
(shortened fiscal year) or more than 12 months
 A fiscal year is divided into posting periods. Each posting period is defined
by a start and a finish date. Before you can post documents, you must define
posting periods, which in turn define the fiscal year.
 In addition to the posting periods, you can also define special periods for
year-end closing . For example. For fiscal periods additional 4 periods can be
provides as special periods
 Configuration: Fiscal Year Variants to be created and assigned to the
company code

Account Group
 Homogenous grouping of accounts
 A summary of accounts based on criteria that effects how master records are
created.
 Group represents a number of GL accounts
The account group determines:
 The number interval from which the account number is selected when a G/L
account is created.
 The screen layout for creating G/L accounts in the company code-specific area
 Examples:
 FA – Fixed Assets
 IN – Investments
 CL – Current Liabilities
 SF – Shareholders Funds

Account Types
 System uses four account types to control postings.
 A – Assets
 V – Vendors
 C – Customers
 M – Materials
 During document types, you ascertain to which account types that can be
used

Field Status Group
 This define which fields are displayed when you post accounting
transactions to a G/L account. A field may have one of the following
statuses:
 Hidden (suppressed)
 Entry required (required field)
 Ready for input (optional field)
 Display
 Field Status group has to synchronize with Account, posting key

Hands on session
 Create a new Chart of account
 Create Fiscal years and periods
 Create Account Group
 Create a Fields Status Group

Day 2
 FI Basic Settings
 Document types
 Number ranges
 Posting keys
 Master Data:
 GL Account creation
 Reconciliation Accounts
 Bank Master
 Customer Master
 Vendor Master
 Material Master (Accounting / Costing views)

Document
 Result of a posting in Financial Accounting. There are two types of
documents: Original documents and processing documents
 Examples of original documents
 Receipts
 Invoices
 Checks
 Bank statements
 Examples of processing documents
 Accounting documents
 Sample documents
 Recurring entry documents
 The accounting document represents the original document in the system.

Document Type
 A key that is used to classify accounting documents and distinguish
between business transactions to be posted
 Document type is entered in the document header and applies to the
whole document.
 Document type has the following functions
 Differentiating between business transactions.
 Determines which account types that particular document can be
posted to.
 Assigning document numbers.
 In document type, specify number range, revenue determination,
exchange rate type, besides the Account type applicable like Asset,
Vendor, Customer, Material

Document Line Item
 The part of a document that contains information about an
item.
 Line item includes an amount, an account number, the
credit or debit assignment (posting key), account
assignments like Cost Center, and additional details specific
to the transaction being posted.
 A document can have multiple line items (maximum 999)

Number ranges
 For each document type, number range to be created.
 One number range can be assigned to more than one document type
 When creating number range, specify the number interval and whether
internal or external and the fiscal year
 Number range can be copied from fiscal years for easy maintenance every
year
 Number ranges cannot overlap
 Number ranges for documents are company code dependant
 System used default number ranges for Recurring documents as X1 and
Sample documents as X2

Posting Key
 Two-character numerical key that controls the entry of line items. The posting
key determines
 Account type
 Debit/credit posting
 Layout of entry screens
 Posting keys are automatically derived for most of the logistics transactions
while manual entry of posting key possible for FI transactions
 When you enter a posting, enter a posting key for each item. This key
determines how the item is posted. Posting keys are defined at client level and
therefore apply to all company codes. The posting key determines
 The data you can enter in the line item
 How data you post is processed
 How the system updates the data you enter
CAUTION: It is advisable to use standard posting keys instead of
creating a new one

Hands on session
 Create a document type
 Create number range for the document type

G/L Account Master Records
 GL Account contain data needed by the general ledger to determine the
account's function.
 GL account control the posting of accounting transactions to G/L
accounts and the processing of the posting data.
 Structure
G/L account master records are divided into two areas so that company
codes with the same chart of accounts can use the same G/L accounts.
 Chart of accounts area
 This contains the data that is valid for all company codes, such as the account
number, description
 Company code specific area
 This contains data that may vary from one company code to another, such as
the currency in which the account may be posted.

G/L Master Record - Chart of Accounts Area
 G/L account master data in the chart of accounts area contains
information about the G/L account that is valid for all company
codes.
 The chart of accounts area also contains data that controls how a G/L
account is created in the company code-specific area.
 Information contained in the chart of accounts area of a G/L account
 The chart of accounts
 The account number and account name (short and long text)
 The indicator that specifies whether the account is a balance sheet account
or an P&L statement account.
 The account group

G/L Master Record - Company Code Area
 The company code specific area of a G/L account contains data that is
only valid for one company code
 The following information is contained in the chart of accounts area of
a G/L account master record.
 Account Currency
 Defining Balances in Local Currency Only
 Defining the Tax Category
 Defining Posting Without Tax Allowed
 Define Reconciliation Account for Account Type
 Defining Open Item Management
 Defining Line Item Display
 Assigning Authorizations
 Automatic Postings

Concept - Posting Without Tax Allowed
 If this indicator is selected in GL account , no tax code needs to be
entered when posting to this account. If a tax code is entered, it is
checked according to the tax category for this account.
 This is normally used if taxable and non-taxable postings are to be
entered to an account at the same time. In such a case, you normally
set up your own tax code to allow for non-taxable transactions

Concept - Reconciliation Account for
Account Type
 This field to indicate G/L accounts as being reconciliation accounts
 For each sub-ledger account , you must keep at least one reconciliation
account in the general ledger.
 When you post to an account in the sub-ledger, the system
automatically posts to the corresponding reconciliation account.

Concept - Open Item Management
 For accounts where open items / cleared items need to be managed,
the "Open item management" indicator in the master record is set for
that account
 Balance of an account with open item management is equal to the
balance of the open items.
 GL accounts are kept with open item management if you need to
check whether there is an offsetting posting for a given business
transaction

Concept - Line Item Display
 To use "Line item display" indicator in the master record for an
account, when all line items that have been posted to this
account are to be displayed
 Use line item display to display the document line items from
the account. For line item display, the system lists all the line
items for an account.
Should not use line item display for the following accounts:
 Reconciliation accounts
 Sales revenue accounts
 Material accounts
 Tax accounts

Different Options to Create GL Account
 Copy from Chart of Accounts
 Copy from Company Code
 Copy with reference to a range of accounts
 Copy from a Sample account
 Manual creation of account

Hands on session
 Create new GL accounts for an Asset, Liability,
Income, Expense account

Reconciliation Account
 When posting items to a subsidiary ledger like Customers / Vendors,
the SAP system automatically posts the same data to the general
ledger at the same time.
 This facilitates preparing financial statements at any time without
having to transfer totals from the sub-ledgers to the general ledger.
 Each subsidiary ledger has one or more reconciliation accounts in the
general ledger. For example, you can have one recon account for
Domestic customers and another recon account for Export customers
 Each customer or Vendor account is assigned to a reconciliation
account

A Typical Posting Via Reconciliation Account

Hands on session
 Create new Reconciliation accounts for Domestic
Vendors, Overseas Vendors

Bank Master
 Create House Bank for each Bank account to be maintained
 For each bank, to maintain a Bank key, Acct ID, Bank Account no and
GL Account no. besides other details
 Each house bank of a company code is represented by a Bank ID
 Every account at a house bank is represented by an account ID. Using
bank ID and account ID to specify bank details

Hands on session
 Create a Bank master

Customer Master
 Has 3 Data views
 General data - data assigned directly at client level and available to
the other two areas.
 Sales data - data specific to sales, e.g. sales, distribution, shipping.
(SD)
 Company Code data - financial accounting data (FI)
 Reconciliation account
 Terms of payment
 Dunning procedure
 Customer master to be extended for each Sales Areas where
transaction will happen

Customer Master – Company code data
Name 1
Name 2
Address
Telephone
DE 500 500 10 123 456 78
Name 1Name 1
Name 2Name 2
AddressAddress
TelephoneTelephone
DE 500 500 10 123 456 78DE 500 500 10 123 456 78
General Data
Company Code Data
Reconciliation account nnnn
Terms of payment ZB01
Item sorting 0005
Dunning procedure 0001
:
Company Code Data
Reconciliation account nnnn
Terms of payment ZB20
Item sorting 0001
Dunning procedure 0002
:
Client
Company Codes
Bank Information
30001000

Customer Master - Account Groups
 Account Group codes define what information will be needed;
what fields will be required (control the fields that will appear in
the customer master)
 A payer only needs address information, etc, while a sold-to
party needs an address plus delivery address, etc.
 Using Account group, you can classify a homogenous groups of
customers, like Domestic customers, export customers, etc

Customer Master - Selecting Fields using
Account Groups
 Account groups are already set up in the R/3 system
 Sold-to party
 Specific fields are selected for each of these account groups
 The selection of fields depends on the functionality of the partner function needed.
Account group
0001
Sold-to party
Sales
Shipping
Billing
Partner usage
Documents
Account group
0002
Ship-to party
Sales 1
Shipping
Billing 2
- - - - -
Documents
Account group
0003
Payer
Sales 1
- - - - -
Billing
- - - - -
Documents
Account group
0004
Bill-to party
Sales 1
- - - - -
- - - - -
- - - - -
Documents
1. Controlling for authorization 2. Tax information

Vendor Master
 A vendor master contains information on an enterprise's
vendors
 Contains General data, Purchasing data and Accounting data
 The record contains the following information:
 Name and address of the vendor
 Vendor's currency
 Terms of payment
 Contact persons (sales personnel)
 Accounting data (for example, a control account, payment related
information, Withholding tax related information, etc).

Material Master
 Contains the key information a company needs to
manage a material.
 Defines how a product is sold, manufactured, purchased,
inventoried, accounted and costed.
 Information in the material master is grouped into views
that are organized by business function.
 Material master has more than 22 views+ which are
mostly at plant level other than the Basic view

Material Master
 Contains all data required to define and manage a specific
item of material
 Integrates data from
 Inventory Control (MM)
 Manufacturing (PP)
 Sales and Distribution (SD)
 Accounting (FI and CO)
 And other departments
 Each materials will have a unique view depending on the
usage and purpose

Material Master
 Basic Views
 Contains data relevant across Client, like Code, Description, UOM
 Other Views
 Purchasing related (relevant for procured materials)
 Sales related (relevant for semi finished and finished / trading
goods)
 Production Related (relevant for semi finished and finished
goods)
 Storage related (relevant for all types of materials
 Quality related (relevant for all types of materials)
 Accounting related (relevant for all types of materials)
 Costing relates (relevant for all types of materials)

Materials Master
 Accounting View
 Valuation Class – used to classify different types of
materials
 Valuation type - Mainly used for split valuations
 Price indicator -– V or S – Moving average / Std price
 Prices - Different types of prices
 Costing view
 Lot sizes
 Origin – for costing purposes
 Prices – for update with Standard cost estimates

Hands on session
 Create Customer, Vendor and a Material Master

Day 3
 FI Transactions
 FI Document posting
 Recurring Entry
 Account Assignment Model
 Sample Document
 Document Parking
 Cash Journal

FI Document Posting
 During postings to G/L accounts, enter document header data (usually
document date, document type, company code, posting date, and
currency) as well as a posting key, G/L account number, and the first
line item
 Posting key and the field status group for the G/L account determine
which fields are displayed on the next screen.
 Posting key appear by default based on customization depending on
the transaction like, FI posting, FI invoice, etc.
SAP provides two variants for carrying out G/L account postings:
 Standard transaction: Accounting  Financial accounting  General
ledger  Document entry  Other  General posting.
 Single screen transaction: Accounting  Financial accounting 
General ledger  Document entry ( Enjoy Transactions)

FI Document Posting
 Useful for Cash transactions, accruals of costs/ revenues, Journal
entries
 Each GL document will have a header data and multiple line items
(maximum 999)
 Once after the line items entered tallies for Debit / Credit, system will
allow saving and posting of the document
 Document cannot be cancelled ; it can only be reversed
 Document can be displayed in transaction currency as well as in
company code currency

Hands on session
 FI document posting

Recurring Entries
 Definition
Recurring entries are business transactions that are
repeated regularly, such as rent or insurance.
 Following data never changes in recurring entries:
 Posting key
 Account
 Amounts

Recurring Entries
 First, create a Recurring entry template specifying amount, account,
period , etc.
 In the recurring entry document, need to define when a posting is
to be created (periods) with this document.
 Two options exists for scheduling Postings - periodically or on a
specific date:
 For periodic postings, specify the first and last day of execution, as
well as the interval in months.
 To post recurring entry documents, need to set up a separate
number range (x1) for the company codes that use them. The
system takes numbers for the recurring entry original document
from this number range.
 Recurring entries are posted after periodic recurring entry run.
 If you want to specify certain dates, enter a run schedule in the recurring
entry original document. Store the required dates in the
Implementation Guide (IMG). Choose Financial Accounting Global
Settings  Document  Recurring Entries  Define Run
Schedules/Enter Run Dates.
 Cross-company code transactions cannot be posted with the recurring
entry program

Hands on session
 Recurring entry template creation
 Recurring entry posting

Account Assignment Model
 A reference template for document entry that provides
default values for posting business transactions.
 An account assignment model contain any number of
G/L account items and can be changed or supplemented
at any time.
 In contrast to sample documents, the G/L account items
for account assignment models may be incomplete.

Account Assignment Model
 In Creating Screen Template for Account Assignment Model,
following information to be provided
 Currency (optional)
 Chart of Accounts
 Sample Text (explanatory text)
 Authorizations
 can limit authorization for an account assignment model to
certain users by specifying an authorization group.
 Calculate tax
 Selecting this field, enables the system to calculate taxes
automatically during posting.
 Equivalence to
 Select this field to distribute a total amount to several items using
equivalence numbers. When you use this account assignment
model, you enter an amount, which is then distributed to the
items according to the equivalence numbers specified.

Hands on session
 Create Account Assignment Template
 Create FI document using Account Assignment
Template

Posting with a Sample Document
Procedure
 First create a Sample document with details of Company code,
amount. GL account, posting keys, document types, etc.
 Then post with reference to a sample document
To post with a sample document, proceed as follows
 From the General Ledger, Accounts Receivable, or Accounts Payable
screen, select Document Entry and then a business transaction.
 Then select Document  Posting with reference.
 Enter the document number (such as 1000186), the company code
(for example. US01), and the fiscal year (optional).

Posting with a Sample Document
Following options exists when posting a sample document
1. Enter G/L account items
2. Do not propose amounts
3. Recalculate days/percentages
4. Display line items
5. After confirming entries, the screen with the copied header data
appears.
6. If selected Display line items option , all the copied items are
displayed. Which can be corrected, if required
7. Once all items have been copied, an overview screen appears.
8. When the accounts and amounts are correct, and the debits equal the
credits, post the document by selecting the Post function.

Hands on session
 Post a sample document

Parking Documents
 Document parking is used to enter and store (park)
incomplete documents without carrying out extensive
entry checks.
 Parked documents can be completed, checked, and then
posted at a later date
 Caution: Document number serial of parked documents
will be part of the regular number range of the document
type. This can result in overlapping between dates /
periods

Document Parking
 Accounting  Financial accounting  General ledger/Accounts
receivable/Accounts payable  Document entry  Others 
General document parking/Invoice parking - general/Credit
memo parking - general.  Document Header screen appears.
 Enter the document header and line item data.
 To save the parked data, choose Document  Park.
The message Document xxx (document number) was
parked appears. Document numbers are assigned in the same
way as in the standard document entry function.

Hands on session
 Create a parking document
 Post a parked document

Cash Journal
 Cash journal is a sub-ledger of Bank Accounting to manage a company's cash
transactions
 Cash Journal automatically calculates and displays the opening and closing
balances, and the receipts and payments totals.
 Can run several cash journals for each company code.
 Can also carry out postings to G/L accounts, as well as vendor and customer
accounts.
 Should run a separate cash journal for each currency.
 Can use the cash journal independently of other posting transactions.
 Can enter amounts in different currencies
 Cash Journal is a two step procedure – First save the entries and then Post
the entries

Cash Journal
Prerequisites
 Settings required for setting up a cash journal.
 Number ranges are required to be set up for Cash Journals
 Need to create Business transaction like Customer Receipt,
Bank drawl, Supplier payments, Employee payment in
customization along with corresponding GL accounts. This
business transaction is used during Cash journal
transactions.
 Identify the Bank accounts and assign to cash journals

Cash Journal Features
 Features
 Cash journal is a single-screen transaction. C
 Can enter, display, and change cash journal documents on one screen.
 Entering, saving, and posting cash journal entries
 Can save cash journal entries locally in the cash journal. The system also
calculates the balances. The cash journal entries saved are then posted to
the general ledger.
 For a cash journal document, you can carry out CO account assignments,
and have taxes, including withholding taxes, calculated by the system with
reference to business transactions
 Displaying follow-on documents
 Printing
 Can print all of the cash journal entries posted in the time period displayed.
 Can print receipts for each receipts
 Customization for printing to be maintained for printing cash journals and
receipts
.

Posting Documents in the Cash Journal
 Procedure
 To get to the cash journal document entry screen, proceed as follows
from the SAP R/3 screen: Accounting  Financial accounting 
General ledger  Document entry  Cash journal posting or Banks
 Input or Outgoing  Cash journal.
 Enter a company code and a cash journal number.
 Choose Continue.
 The system notes your entries and user settings.
 Depending on what entries you want to make, select either the
Receipts or Payments tab
 Enter a business transaction, an amount, and depending on the
business transaction, either a customer or a vendor. These are
required entry fields. The other fields are optional entry fields. Enter
account assignments if required
 Choose Enter to make the cash journal entry (document status light
is red). Choose Save to save the cash journal entry (document status
light is yellow). Choose Post to post the cash journal entry
(document status light is green).

Hands on session
 Create a Cash Journal
 Create a transaction using cash journal

Day 4
 Clearing GL Open Items
 Automatic Account Assignments (OKB9)
 GL Account Line item display
 Creation of Display Variants
 GL Work List
 Tax on Purchases / Sales

Clearing GL Open items
 Can be done manually by matching the debit and
credit items in a GL account by ensuring that the net
balance is zero
 Clearing items will appear separately in the GL
account
 Automatic clearing of open debit and credit items
possible by defined criteria like amount, dates, etc.
Items get cleared automatically if they meet the
criteria and balance reach out to zero

Hands on session
 Create GL entries with debit and credit in a GL account
 Match GL open items

Automatic Account Assignment (OKB9)
 Transaction to facilitate automatic assignment of Cost objects
like Cost Center, Profit Center, Profitability Segment to GL
account
 Essential for integrated transactions like MM account
differences, scrapping, cash discounts, forex difference
production variances, etc.
 Default account assignment for specified Cost centers
eliminates error during FI postings
 Caution: Very important to maintain as interface posting will
stop with error if system is unable to ascertain cost objects for
an expense account

Hands on session
 Create an Automatic Cost center assignment for a GL
account – expense account
 Create a GL account and post

Line Item Display
 Line items are document items that were posted to a specific account.
In contrast to a document item, a line item only contains the
information from the document that is relevant from the account
view.
 Can display the following line items:----
 Open items
 Cleared items
 Noted items
 Parked items
 Items with special G/L transactions (in Accounts Receivable and
Accounts Payable)
 Items with customer or vendor items (in Accounts Receivable and
Accounts Payable)

Creation of Display variants
 Display variants enable you to have GL account
display according to the need of individual GL
account
 User can self define as many display variants
 Selection of fields has to be done in the order in
which display of the account to appear in a GL
account

Hands on session
 Create a GL Display variant
 Display GL account using variants

GL Work Lists
 Enables viewing the balances for a group of accounts
 Work lists represents the grouping of GL accounts to
display balances
 Mainly used for information system

Taxes on Purchases / Sales
 Tax Definition Steps
 Tax Procedure
 Tax Classification
 Tax Categories
 Condition types
 Process Keys
 Tax Jurisdiction codes
 Tax codes
 Tax Flow

Tax Definition Steps
Tax Procedure Country Specific
Tax Category
Assigned in Customer/Vendor MasterTax Classification
Condition type (Tax
Type)
Assigned in Logistics pricing procedure
and assigned to Process Key / Tax codes
Process Key Assign Tax GL account
Assigned to Classification
Tax Jurisdiction
code
Tax Code
Specifies the customer / vendor State
Assigned to Region/State
Maintained for a combination of Tax Jurisdiction code
and Tax type for an effective date

Taxes
 Tax functions cover
 Tax calculation
- system calculates tax amounts based on the tax base amount
net of discounts
- Tax codes are used to calculate and check the amounts.
 Tax posting
- system posts the tax amounts to defined tax accounts
automatically
 Adjustments
-system corrects tax amounts, in the case of cash discount or
other deductions
 Tax reporting
Can use the system to create tax returns through program
development
 Tax amount is checked by the system at document level

Tax Calculation Procedure
 A calculation procedure is defined for each country, containing the
specifications required to calculate and post tax on sales/purchases.
 Each calculation procedure contains several tax types (condition types)
.For example, for India it is TAXINJ
 system defaults condition types when you define a tax code.
 Condition type (such as input or output tax) specifies the base amount
on which the tax is calculated and the account key that is used to post
the tax.
 Specifications necessary for calculating and posting tax have been
defined for the condition type and account key.

Typical Tax Calculation Procedure

Tax Classification
 Specifies tax liabilities of vendor / customer / material
 Maintained in vendor / customer / material master

Tax Category
 Identifies the condition that the system uses to
determine country specific taxes automatically
during pricing
 Define Tax category for Customers , Vendors, for eg,
Exempted vendors, Chargeable Vendors
 Tax classification are assigned to Tax categories

Condition Type (Tax Type)
 Use the tax type to specify whether the tax is an input tax or
output tax.
 Assigned in Logistics pricing procedure
 Assigned to process keys
 System uses the tax type to check that you are posting to an
account with an allowed code. An error message is output if
necessary. This happens, for example, if you enter a tax code
for input tax when posting to a customer account for which
only output tax codes are allowed.
 For every individual tax type, there are country-specific
definitions for whether the tax amount fields and the fields
for the percentage specifications are ready for input.

Condition Type (Tax Type)
Define the following information for each condition type:
 Condition type and condition class. For example, where tax is to be
calculated, the condition type might be "base amount" (K) or "tax" (D),
and the condition class "base amount" (A) or "tax" (D).
 Calculation rule: Either "percentage included" (A) or "percentage
separate" (I)
 Debit/Credit side of the account to which the tax amount is posted. This
need only be specified for additional taxes, since these (in contrast to
input, output, and acquisition tax) can be posted to either side of the
account. If you want tax to be posted to the opposite side of the account,
select the +/- sign field.
 Whether it is possible to change the tax amounts and percentages (which
are displayed on a special screen) during document entry. To make this
possible, choose the Manual entries field, then choose either Rate/percent
(to make the percentages changeable), or Value (to make the tax amounts
changeable).

Specifications for the Tax Type
 During tax codes creation, the system defaults certain tax
types that have been defined in the system for specific
countries like Input tax, output tax, and non-deductible
input tax
 System determines which tax types are to be displayed by
means of the country key.
 A calculation procedure is specified for each country key,
and this procedure contains the country-specific
specifications for calculating and posting the different tax
types.

Process Key
The process key contains the following properties:
 Tax type: This is required for reporting purposes, to be able to determine where
the individual tax line items in a document are to be displayed. As tax type you
can specify either output tax ( 1 ), input tax ( 2 ), additional tax ( 3 ) or not
relevant to tax ( 4 ).
 Non-deductible input tax. This specification is also required for reporting.
When input tax and non-deductible input tax is posted, separate line items are
created if the non-deductible part is not to be distributed to the G/L account
line items and asset line items. For tax reporting, must indicate the input tax
line items that do not display the non-deductible portion of input tax.
 Posting indicator. You specify whether the tax amount is posted separately ( 2 )
or distributed between expense and revenue line items 3 The system posts tax
to the tax accounts automatically. Can specify tax account numbers for each
process key. This is not necessary for process keys for which it has been
specified that the tax amount is to be distributed (posting indicator 3 ).
Therefore, these keys are not offered in the function for entering the tax
account numbers.

Process Key
 The system posts tax to the tax
accounts automatically. Can
specify tax account numbers for
each process key. This is not
necessary for process keys for
which it has been specified that
the tax amount is to be
distributed (posting indicator 3
). Therefore, these keys are not
offered in the function for
entering the tax account
numbers.

Tax Jurisdiction Codes
 Defined for each authority that imposes tax
 Maintained in customer / vendor master
 Tax codes are created for a jurisdiction code
 Based on jurisdiction code, system determines tax
codes during transactions

Tax Codes
Tax codes are used to:
 Check the tax on sales/purchases amount in the document
 Calculate the amount of tax on sales/purchases automatically on
request
 Calculate the non-deductible input tax portion
 Check if a tax account with tax type (input or output tax) can be
posted to
 Determine the tax account
 Tax codes are created for a combination of Tax Jurisdiction code,
Tax Type with a validity date

Automatic Tax Posting
 When posting a document, the system creates the tax items
automatically. The data required to do this, the posting key,
and the account number of the tax account must be defined in
the system.
 The posting keys are already defined in the system. The
accounts vary according to the chart of account, and to post
taxes in the system you must therefore define the account
numbers of your chart of accounts.
 To enable the tax accounts to be specified, an account key has
been assigned to the tax types. You enter your tax accounts in
the system for each chart of accounts and account key

Tax Flow
Customer Master
Jurisdiction
Classification
Sale order
Customer
Material
Condition Type
 Based on Country of customer, system identifies the Tax procedure
 Based on customer / material tax classification, system identifies
applicability
 Based on condition type in Sale order pricing, and jurisdiction code of
customer, system identifies the process Key and applicable tax codes
 Based on the tax code applicable, system determines the tax rate
 During posting, GL account determined based on the tax codes

Hands on session
 Create a Tax Jurisdiction code
 Create a Tax Code

Day 5
 Accounts Receivable / Accounts Payable
 Payment Terms
 FI Invoice / Credit Memo
 Special GL Transactions
 Down Payments

Payment Terms
 Decides the payment term rules which are assigned to vendor /
customers
 Limit the permitted account type like Customers, Vendors,
 Baseline date specified – the date from which credit days are
calculated by the system – could be fixed day in a month or no. of
days
 Can specify the discount rates / period in the terms of payment
 Can be with installment periods (called retainage) where % and
terms of payment key can be specified
 Terms of payment coming as default in the transaction can be
changed

Hands on session
 Create a Terms of payment for Vendor / Customer
 Create a terms of payment with retainage

FI Invoice / Credit Memo
 Mainly used for handling invoices from vendors or to
customers for non-logistics transactions
 Can select the correct transaction like Invoice or Credit
Memo or fast entry screen
 Enter header data and then Item details by selecting the
correct posting key depending on the transactions. Enter
vendor or customer accounts as required.
 Select the correct GL account for corresponding debit /
credit
 Once the debit / credit amount equals for the line items ,
post the document
 Can change the payment terms, baseline dates defaulted
by the system

Hands on session
Create an FI Invoice for a customer
Create an Credit memo (actually a debit note) on a
vendor

Special G/L Transactions
 Also Called alternative reconciliation account
 Special G/L transactions are special transactions in accounts
receivable and accounts payable that are displayed separately in the
general ledger and the sub-ledger. This may be necessary for
reporting or for internal reasons.
 Example Down payments must not be balanced with receivables and
payables for goods and services. Consequently, they are treated as
special G/L transactions in the General Ledger (FI-GL) Accounts
Payable (FI-AP) and Accounts Receivable (FI-AR) application
components
 This enables separate identity of such transactions in GL
 Special GL can also be for statistical reasons For eg. To monitor the
list of guarantees given to a customer

Special GL Transactions
 Special GL are created for Account types Customer, Vendor
separately
 In creation, specify the Recon account and Special GL account
 Has indicators for noted item (statistical), credit limit
warning, commitment check, Planning level for cash
management, Posting keys Dr / Cr
 Some transactions that could be under special GL are:
 LC received from customers, Guarantees received from
customers, Security deposits received, etc

Down Payments
 Refers to advances paid to vendors or received from
customers
 Down payments are special GL transactions – thereby
can be classified separately in any Vendor or
Customer accounts
 Down payments are to be created as special GL in
customization for Customers and Vendors

Hands on session
 Create a Down payment to a Vendor
 Create a Special GL for Vendor
 Create an FI invoice with Special GL

Day 6
 Incoming payments
 Accounts for Discounts / Exch differences / Bank charges
 With clearing
 Without clearing
 Outgoing payments
 Accounts for Cash Discounts
 Accounts for Exchange rate differences
 Payment Blocks
 Manual payment
 Payment Forms
 Check management
 Automatic payment program

Customizations Through Automatic
Postings
 Define accounts for Cash discounts
 System posts to cash discount GL Accounts when clearing open
items . Specify a GL account for discount for each Tax code
(SKT)
 Define accounts for exchange rate differences
 Exchange rate differences arise due to realization and valuations
 Realization happens during payments or receipts
 Valuation happens during period end for open items
 For each GL account, Recon account wherever foreign currency
transactions could happen, exchange loss / gain account to be
specified for Realization and Valuation
 Define accounts for rounding off differences
 Define accounts for Bank charges (customers)

Posting Key Incoming payment
 When posting an incoming payment, the system requires a posting key to
generate the offsetting entry for the open items selected. To generate this
offsetting entry, it uses the customer credit posting key that is specified for
the clearing posting.
All the other posting keys are used for special situations that may occur when
posting an incoming payment:
 The customer debit posting key specified for the clearing posting is required
if an incoming payment is posted across different business areas.
If you select, for example, an invoice and a credit memo from different
business areas for the clearing transaction, the system has to make a debit
posting to clear the credit memo as well as a credit posting to clear the
invoice.
 Vendor posting keys are required so that offsetting entries can be made to the
vendor account when open items are cleared between a customer and vendor.

Posting Key Incoming payment
 Posting keys are required for special G/L transactions (for example, down payments)
if you want to clear, for example, an invoice and a down payment in a single clearing
transaction.
 The system can also deal with payment differences when you post and clear items,
but requires a posting key to do this. You can treat payment differences as follows:
 Can post the payment as a partial payment. The system does not mark the open items
you selected as cleared. The partial payment is posted to the customer account with
an invoice reference. This enables you to link the invoice to the partial payment at any
time. For partial payments, the system uses the posting keys defined for clearing open
items. The posting key defined in the standard system for customer partial payments
is posting key "15".
 Post the remaining receivable to the customer account as a residual item. The original
receivable is cleared automatically. To post the residual item, the system uses the
posting keys specified for the residual item balance.
 The posting keys specified for the Transfer posting with clearing transaction are used
for the general clearing function and, if the system has to make internal transfer
postings, for the account clearing function as well.
 The payment program and the special functions for outgoing and incoming payments
use the posting keys defined for the incoming payment and outgoing payment
transactions.

Incoming Payment With Clearing
 Using the posting with clearing function, you enter
document line items and then select the open items to
be cleared. The system generates one or more
offsetting postings for the open items to be cleared.
 Select the open items and ensure balance is zero before
clearing
 Tolerance can be set off for clearing as % or amount
during clearing. These differences can be taken to a GL
account with customization.

Example – Incoming payment with
clearing

Incoming Payment Without Clearing
 Can post incoming payments to customer directly
with no clearing of open items

Hands on session
 Create an Incoming payment from a customer with
clearing of open items
 Create an incoming payment without clearing

Outgoing Payments
 Accounts for Cash Discounts / Exch rate differences, etc
 Default accounts to be specified for cash discount
received, lost cash discount, exchange rate differences,
rounding off differences Vendor bank charges similar to
Incoming payments

Payment Blocks
 Can use to block invoices for payment
 For each payment block, can specify if changes are
allowed in the payment proposal
 Can specify if it is a manual block
 System will ignore line items with payment block
during payment program

Manual Payment
 Can make payments to individual vendors
 Select the transaction for manual payment and enter
details of bank, amount and select option items to be
paid
 Can post with printing of cheques or directly

Payment Forms
 For printing of cheques, payment forms are to be
developed
 These forms are to be attached to the automatic
payment programs

Cheque Management
 Can maintain cheque Lot details for each house bank
 Provision to enter the cheque numbers exist
 Voided / cancelled cheques can be entered in system
 Cheque Stock register can be viewed from system

Hands On Session
 Create Manual payments
 Create Cheque Lot for a House bank

Automatic Payment Programme
 Customizing the Payment Program program configuration involves
determining:
 What is to be paid - To do this, need to specify rules according to
which the open items are selected and grouped for payment.
 When payment is carried out - due date of the open items
determines when payment is carried out. However, can specify
the payment deadline in more detail via configuration.
 To whom the payment is made. – specifying the payee.
 How the payment is made - determining rules that are used to
select a payment method.
 From where the payment is made - determine rules that are
used to select a bank and a bank account for the payment.

Payment Control is divided into 3 areas
 Company Code Parameters
 Specifying company codes involved in automatic
payments and company code making payments
 Maintain general information
 Payment Method Parameters
 Bank Parameters

Company Code Setting Screen

Paying Company Code Setting Screen

Automatic Payment Programme House Bank
 Banks with which a company (company code) maintains a
bank account are referred to as house banks.
 House banks are under a house bank key (bank ID). Store
the accounts that you maintain at these banks under an
account ID along with a GL account
 Bank master data is used generally and uses address data,
SWIFT Code.
 Bank master data maintained for Customer and Vendors
banks also
 By specifying the country and a country-specific key, such as
the bank number or the SWIFT code, connection between
house banks and the bank master data is established

Selection
 Bank Details in Customer / Vendor Master Record
 In the master record of the customer/vendor, can have as many
bank detail entries . If the payment transactions should always be
carried out by a customer/vendor's bank, only specify this bank.
 If only one house bank to carry out payment transactions with a
customer/vendor, enter this bank in the master record of the
customer/vendor
 can specify the bank details of the business partner in the open
items simply by entering a bank type in the item. The bank type is
a feature that you can assign freely for all of your customer or
vendor's banks. If a bank type is specified in the item, a bank with
the same bank type is selected from the master record for
payment.

House Bank Selection

 The payment program determines the house bank in the same
sequence:
 First it determines the bank ID (house banks) based on the
payment method and currency. If it finds no entry for the
combination, it checks the bank for payment method without
currency specification, if such an entry exists.
 It determines the account ID on the basis of the bank ID, the
payment method and the currency.
 Finally, it finds out whether sufficient amounts are available for
both bank ID and account ID.

 During the payment run the payment program therefore attempts to
determine a house bank and a bank account that has a sufficient amount
available for payment. This may result in the following possibilities:
 No house bank is found that fulfills all terms. The payment cannot then be
made with the payment method with which the check was carried out. The
checks are carried out for the next possible bank. If no bank is determined,
the payment method can not be used. If another method is available, it will
then be checked as well. This is noted in the log for the payment run.
 One house bank only is determined. The payment is made via this house
bank.
 The program produces a list with house banks. The payment is made from
the house bank with the highest priority according to the defined ranking
order of the banks. This is not the case if payment optimization has been
specified.

Available Amount in House Bank Selection
 The payment program checks whether the selected bank accounts have
sufficient funds for payment.
 For accounts at the house banks can specify available amounts
separately for incoming payments and outgoing payments For
outgoing payments, can define the size of the amount that can be
paid. For incoming payments, can specify the amount up to which
such payments can be made to a bank account. If this limit is
exceeded, the payment program selects another bank. The
specifications given concerning available amounts determine which
bank account should pay. You should ensure that these amounts are
up-to-date before every payment run.
 The payment program does not carry out amount splitting. If the
amount on a bank account is not sufficient for a payment, the
payment program selects another bank account. If it finds no bank
account from which it can post the entire amount for a payment, it
does not carry out the payment.

Available Amount in House Bank Selection
 Can specify the amounts based on currency and probable value date
(days) at the bank. The value dates are the difference between the
posting date of the payment run and the probable value date (value
date at the bank).
 Can use value dates to plan available amounts on a graduated time
scale. You generally only need this facility if you post payments by bill
of exchange before the due date. In all other cases, you can enter 999 .
 The specified value dates are the maximums in each case.

Payment Method
 The payment method is the procedure such as check, transfer, or bill
of exchange, by which payments are made.
 The following payment methods are usual in Accounts Payable and
Accounts Receivable:
 Payment Methods in the System
 Accounts Payable
 Check, Transfer, Postal Giro transfer, Bills of Exchange, Check/Bills of
Exchange
 Accounts Receivable
 Bank collection, Bank direct debit, Refund by check, Refund by bank
transfer, Bank Bills, Bill of Exchange payment request
 Payment method defined in two steps:
 First, define payment method for each country.
 Define the payment methods you use for each company code

Country-Specific Definitions for the Payment
Method

Country-Specific Definitions for the Payment
Method
 Classify a payment method by selecting the characteristics that are to
apply to it (see (1) of the graphic). The program uses this information
to determine the data required for the payment forms and data media.
 Must also define which information from the customer/vendor master
record is to be used to determine the payment method (see (2) of the
diagram). If this information is missing from the customer/vendor
master record, the payment method cannot be used.
 For the payment method "check", document type "KA" is used and
the print program RFFOD_S. In Previous Screen, to list all the
standard payment medium programs available, proceed as follows:
Choose System  Services  Reporting. Enter RFFO* and select the
function Utilities  Find.

Company Code-Specific Definitions for the
Payment Method

Company Code-Specific Definitions for the
Payment Method
 Enter a minimum and a maximum amount for a payment (1). This tells the
program the value range within which the payment method can be selected
by the payment program. Note that unless a maximum amount is specified
, the payment method cannot be used at all
 Can also specify whether the payment method can be used for foreign
payment transactions. You specify whether payment is made if : a)
customer or vendor is based abroad (2) b) bank to which the payment is
made is based abroad(3)
 Specify whether it is possible to use the payment method in question to pay
in foreign currency (4) in which case any currency can be used.
 Can also specify particular currencies per payment method and country. If
this payment method is selected, payments are only processed in one of the
currencies specified.
 If need to define particular currencies, choose the function Currencies in
the country-specific details for each payment method

Bank Sub account
 Can use the bank sub accounts function, create sub
accounts with whatever degree of differentiation you
require. You can, for example, create a bank sub account
for each bank or for each bank and a group of payment
methods. The charts of accounts supplied along with this
package provide a reference for such differentiation.
 Can specify the account number so that the payment
program can post to the appropriate bank sub account
(see the figure above). This posting is made on the basis
of bank ID, payment method, and possibly currency.

Bank Sub account

Running a Payment Program
 Procedure
 From the SAP Easy Access Menu, choose Accounting  Financial Accounting 
Accounts receivable/Accounts payable  Periodic Processing  Payments. The
Automatic Payment Transactions screen appears.
 Enter the following data:
 Date of Execution
 Run identification
 Parameters Tab - either enter payment parameters or copy parameters from a previous payment
run (choose ).
 Otherwise, enter the following data:
 Posting date
 Documents entered up to
 Due date
 Company code
 Payment methods
 Next Posting date
 Account restrictions

Specifying the Payment Medium Program
and Variants
 There is one payment medium program for each payment method.
This program prints the payment forms or creates the data media on
disk. Can specify different payment medium programs for the payment
methods you specify in the payment parameters.
 Procedure
 On the Automatic Payment Transactions screen, select the Printout/data
medium tab.
 Enter one or more variants for every payment medium program used to
print the payment data for a payment method.
 You can also specify variants for creating the payment proposal list
(RFZALI00) and exception list (RFZALI10) on this screen.

Creating a Payment Medium Report
Variant
1. Choose System  Services  Reporting. This takes you to the initial screen for
report processing.
2. Enter the name of the payment medium program for which you want to create a
variant and choose Goto  Variants. You reach the screen for maintaining variants.
3. Enter a variant name and choose Variants  Create.
4. Select the field Data medium exchange, then enter the name of the printer. This is
necessary so that the system can prepare the form for the accompanying sheet that
is created during DME. Also select the field Print immediately if required.
5. Select the field Issue payment advices (if this field exists), then enter the name of the
printer. Also select the field Print immediately if required.
6. Select the field Print payment summary, then enter the name of the printer. Also
select the field Print immediately if required.
7. Make an entry in the field File name (for DME) as follows: For outputting into the
file system, enter the name under which the file generated is to be stored in the file
system (as long as you have elected not to have the system generate a name).
8. For outputting into the SAP system, enter the name which, if required, is to be
proposed later when running the download.
9. Choose Variant and Save.

Hands on session
 Create an automatic payment program for a bank

Day 7
 Clearing Open items
 Manual clearing
 Automatic clearing
 Business Area clearing
 Dunning procedure
 Correspondence
 Interest Calculation
 Worklist for Vendors / Customers

Clearing
 Prerequisites for Clearing
 The accounts must be managed on an open item basis.
 The accounts that can be cleared automatically must be defined in
Customizing for Financial Accounting.
 The items to be cleared cannot trigger a posting, for example, cash
discounts or exchange rate differences.
 The items cannot be special G/L transactions. You use special
functions to clear these items.
 The standard system contains a clearing transaction for each clearing
function that creates documents.
 The clearing transactions are:
 Incoming payment
 Outgoing payment
 Transfer posting with clearing

Clearing Functions in the General
Ledger
Posting transaction Example
Business transaction
Choose
Incoming payment Credit memo for a check
deposited at the bank
Document entry  Incoming
payment
Outgoing payment Debit memo for an issued
check
Document entry Outgoing
payment
Post with clearing Clearing the GR/IR clearing
account
Document entry  Post with
clearing

Clearing Functions in Accounts Receivable
Choose
Incoming payment Customer payment Document entry Incoming
payment or Payment fast entry
Outgoing payment Debit memo procedure
Cash payments
Document entry Other  Outgoing
payment  Post
Internal transfer posting Invoice posted as credit memo
due to a product defect
Document entry  Others Internal
transfer posting  With clearing
Outgoing payment with printed
form
Immediate payment by check Document entry Other Outgoing
payment  Post + print forms
Online check printing Automatically generated check
damaged during print
Document  More
functions  Print payment forms

Clearing Functions in Accounts Payable
Choose
Outgoing payment Debit memo Document entry Outgoing
payment  Post
Outgoing payment with printed
form
Immediate payment by check Document entry Outgoing
payment  Post + print forms
Internal transfer posting Invoice cleared due to a
product defect
Document entry  Others 
Internal transfer posting 
With clearing
Incoming payment Refund from your vendor, for
example, annual quantity
discount
Document entry  Others 
Incoming payment

Clearing transactions in the standard system
and the functions used to post them

The Clearing Process
 Clearing open items process includes:-
 Entering the document header for clearing transactions
 Selecting a clearing transaction
 Entering line items(optional)
 Selecting open items to be cleared
 Processing open items
 Posting the clearing document
 During clearing, system generates a clearing document that consists of A
document header
 Line items you entered
 Line items the system generated for clearing the selected and activated items
 Other line items generated automatically, for example, cash discounts, tax adjustments,
or gains/losses from exchange rate differences

Clearing Transactions
 Enter header data with document date, company code
and currency
 Select one of the clearing transaction like, incoming
payment
 Enter one or more line items. Once you have entered
the posting key and account at the bottom of the
screen, can enter the line items as you normally would
 Select open items as given in next slide

Manual Clearing Process
 Select open items to be cleared
 Select the options, Account and Account type, (or through work lists)
 Normal items, special GL items
 Enter payment advice reference
 Other accounts - To clear line items of more than one account, select this field and then
enter the accounts on the next screen.
 Distribute by age - The system distributes the clearing amount entered so that the open
items with the greatest number of days in arrears are cleared first.
 Automatic search - The system attempts to find open items that correspond to the
clearing amount entered or are closest to it.
 Additional selection - can even choose specific types of open items to be cleared. For
example, can choose open items by document number or open items within a range of
amounts. To use this option if need to process accounts with several open items.
 Search use additional selection like Gross amount, Document number, Posting date,
Other fields depending on the system configuration
 Then go to-> Open items to view the line items
 Then Overview the document and post

Open Item Management
 Specification that items in an account have to be cleared by other items
in the account.
 Customer and vendor accounts are always managed in this way. This
allows you to monitor your outstanding receivables and payables at any
time. You have to define open item management for G/L accounts in the
master record.
 Open item accounts also called clearing accounts or interim accounts
usually contains debit and credit items that exactly match .
 Example : Assume we post a check received to a clearing account for cash
in transit . Now bank clears the check and credit your account in their
records for the full amount of the check . You then post the entry in the
bank statement to the accounts for cash at bank and cash in transit . You
can then clear ( Close ) items in the cash in transit account .

Clearing Between a Customer and
Vendor
 If selected a customer who is also a vendor when
processing a clearing transaction, such as an
incoming/outgoing payment or account
maintenance, the system also selects the open vendor
items automatically, provided that :-
 The vendor number was entered in the customer
master record and
 The Clearing with vendor indicator has been set.
 The same rule applies if you select a vendor that is also
a customer during a clearing transaction.

Manual Account Clearing
 In this clearing procedure, can manually select open
items that balance to zero from an account.
 The following are examples of situations where you would
carry out clearing manually:
 For bank sub accounts and clearing accounts
 Where you have agreed a debit memo procedure
 If your vendor is making a refund

Automatic Clearing
 To execute the clearing program from the General Ledger, Accounts
Payable, or Accounts Receivable menu :-
1. Choose Periodic processing  Automatic clearing. The initial screen for
entering parameters for clearing appears (Automatic Clearing
with/without Definition of Clearing Currency).
2. Specify the accounts you want to clear, select the lists you want the
program to generate under Output control, and specify whether the
program should clear the items.
3. If you select the parameter Test run (default), the system outputs a list of
the items to be cleared. Clearing is only carried out however, if you have
not selected the field Test run.
4. Choose Program  Execute, Execute and print, or Execute in background.

Automatic Clearing Program
Result
1. Clearing is carried out as long as you have not
selected the test run parameter.
2. The system outputs lists that evaluate the clearing
transaction:
 A line item list, which can be output in either
short form or detailed form.
 Additional log. This contains information about
the line items that were not selected, and any
system messages about the account types for
which no items were selected.
3. You can print the lists by choosing List  Print.

Business Area clearing
 Normally the account clearing function is used without
creating a posting. However, the system may have to
automatically make transfer postings in some cases. This
is necessary for example, if you are clearing in several
business areas, since you have to carry out clearing
between the individual business areas.
 Example : need to clear items in a clearing account. The
items assigned were posted to different business areas.
When clearing the items, the system has to generate a
document since it has to generate a clearing posting for
each business area.

Account Clear (Single account)
 This function differs from posting with a clearing transaction or posting with
a payment in the following ways:-
 No need to enter a document header
 Can only clear open items from one account
 Procedure
1. From the Accounts Receivable, Accounts Payable, or General Ledger
menu, choose Account  Clear. The screen for entering header data
appears.
2. Enter the account number in the Account field and if necessary, also enter
a currency key for the clearing document in the Currency field. If you do
not enter a currency key, the company code’s local currency is used. The
company code and clearing date is proposed by the system.
3. To display the open items for processing, choose Edit ® Open items.
4. You have the option of searching for specific items for clearing. To do
this, select a field (for example, amount) and choose Enter. The next
screen prompts you to specify which open items to select.
5. Process the open items as described in Open item processing.
6. Once the debits equal the credits, choose Account

Hands on Session
 Clearing of single account open items
 Clearing through manual process
 Automatic clearing process

Dunning
 Dunning means REMINDER (or) Follow up used for Customer and
Vendor
 Through automatic dunning, statements and letters can be sent
 Dunning levels represents the intensity of follow up from a simple
letter to legal notice- determines the relevant text. Minimum one
dunning level to specify (Maximum - 9) . Can specify maximum /
minimum amounts for dunning .
 Dunning Areas – represent organization units like Sales Orgn,
Division, Business Area, etc to process the dunning program
 can levy charges and interest for dunning notices and print them out
on the dunning notices. The amounts are not posted
 For the interest calculation, can specify an interest indicator in the
master record of the customer/vendor and per dunning procedure .
The specification in the master record has higher priority

Dunning Procedure
 Defines how business partners are dunned
 important specifications set in procedure
 Defines the frequency and/or the dunning interval with which
accounts are dunned
 Dunning procedure is set in master record – Can also have dunning
block to exclude such customers / vendors
 Dunning notices are printed separately for every account per company
code
 The dunning program checks whether the amount to be dunned is
equal to or exceeds the minimum amount and the minimum
percentage rate . If not, no dunning notice is created
 To enable line items to be assigned to a dunning area, a dunning area
must be entered in the customer or vendor line item. This dunning area
can be entered in the appropriate field during document entry, or can
be transferred from other business transactions in other applications.
 Dunning keys enable you to limit the dunning level for an item
 Can send dunning notice to alternate recipient

Customer and Vendor Clearing
 If you dun customers who are also vendors and want to
clear the items, the dunning program lists both the overdue
customer items and the overdue vendor items in the
dunning proposal, and determines a joint balance.
 When you dun a customer who is also a vendor, only the
master record information of the customer is relevant.
 The items can only be cleared if the same dunning
procedure has been defined in the standard dunning area
for both customer and vendor.

Creating Dunning Proposals
 This is the result of dunning run which contact all items and accounts
for which notices can be issued
 Before you can start the dunning run, you have to enter dunning
parameters. You use these parameters to define when, for which period,
which company code, which business partners, and so on should be
considered by the dunning program
 Enter data like date of execution, identification, start date/time, print
parameters
 Can schedule printing of each dunning notice

Hands on Session
 Create a Dunning Run and check results

Correspondence
 All evaluations and reports you send to your business partners by mail
are considered correspondence
 Correspondence for both customers and vendors includes:
 Account statements and open items lists in letter form
 Individual letters and standard letters
 Balance confirmations
 Document extracts
 Correspondence for customers only includes:
 Payment notices
 Statements of bill of exchange charges
 Generally used correspondence are Account statement and Open items
list
 Correspondence types – Notices with line items / without line items
 To create correspondence, in the master record, need to set account
statement key (1 for weekly / 2 for monthly)

Printing Correspondence
 Printing Correspondence With the Request Program SAPF140, to print your
correspondence
 To print the account statements, open item lists, standard and individual
letters, enter the following:
 correspondence type
 company code
 account type for customers ( D ) or
 account type for vendors (K)
 customer or vendor account numbers, as required
 Choose Program - Execute or Execute and print.
 The letters are sent to the print spool. From there you can send it to a printer.
You can display the entries in the printer spool by choosing System - Services -
Queue .

Hands on session
 Print sample Account statement for a customer with
line items

Interest Calculations
 Interest can be calculated on customer and vendor accounts in two ways:
 Calculation of interest on arrears
 Account balance interest calculation
 Interest is calculated using the debit interest rate defined for the interest indicator. Credit
interest rates are used when interest is being calculated on items paid prior to their due date.
 Different ways of calculating interest
 calculate interest on cleared items only and post this interest
 To calculate interest on open and cleared items and post the interest
 To calculate interest on open and/or cleared items without posting the interest
 Interest calculation is controlled by settings made in the interest indicator. You assign an
interest indicator to the master records of the customer and vendor accounts . Last interest
run date is updated by system in the master
 Interest is calculated based on number of days limit specified in the run and the net due dates
of line items
 Can exclude particular items from interest calculation, by blocking them by placing an X in
the Interest block field in the line item
 When executing an interest calculation run, can give further specifications that also affect the
run and sometimes have priority over the settings in the interest indicator.

Interest Customization Steps
 Create Interest indicator with the calculation type
 For each indicator, specify period determination, the
interest determination, the interest processing, the output
controls, and the payment terms
 Define interest rates with effective dates
 Define interest rate determination with sequence number,
reference interest, currency key, validity date
 Define interest values %
 Specify GL account for interest posting for each interest
indicator for

Executing The Interest Calculation
Program
On Arrears
 Select the Interest Calculation – Arrears and selection
options
 Without / With open items / Without postings / Free
selections
 In selection criteria, specify
 Interval for accounts and company codes
 Calculation period / last date of interest calculation
 Select forms
 Select posting indicator
 Execute test run, actual run and post

Hands on session
 Create an interest indicator and other settings
 Attach to a customer master
 Create an Interest run for that customer

Balance Interest Calculation
 Used to calculate interest on GL balances with open item
display. Can be used to cross check the bank interest
calculation
 Balance interest calculation program is controlled using the
following specifications:-
 Data from the G/L account master record.
 Specifications stored in the interest indicator. These include, among
other things, the interest rates to be used.
 Specifications made for the balance interest calculation run, such as
selection criteria which limit the accounts to be included in the run
 Fields in GL accounts master:
 Interest indicator, Interest calculation frequency, Key date of
interest run, Last int calc run

Specifications Stored Under the Interest Indicator
 Note that, under certain circumstances, no interest is
calculated for an account:-
 If a maximum amount is specified under the interest
indicator, an interest scale is only displayed if the interest
amount calculated exceeds this.
 If you have specified under the interest indicator that no
credit interest payments should be made, interest is only
calculated if the account is in debit.
 The account must be specified for interest calculation either
in the interest calculation period which you specified or that
determined by the system.

Determining the Interest Calculation Period
 The interest calculation period is demarcated by an upper and a lower
limit (i.e. dates). The days in between these two dates are those for
which interest is calculated.
 There are two methods for determining the interest calculation period
in the SAP system:
 Determine the interest calculation period manually by entering the
period. Do not set key date of last int calc in this case
 System determine interest calculation period automatically .

Automatic Determination of Interest Calc. Per.
 For automatic interest calculations, following pre requisites should exist:
 Entering the interest calculation period.
 Field Key date of last int.calc in the account master record must have an entry.
 interest calculation frequency specified in the master record, or in interest
indicator
 Should have an interest calculation day under the interest indicator
 Running Interest run
 In GL, Balance int calculation run, specify parameters like chart of accounts,
G/L account number, company code, interest indicator, and business area, or an
individual value, Interest Calculation period, Day of last interest run, reference
date, calculation calendar, Output , update master record,
 Test Run, check, Actual run and post

Hands on Session
 Create a Balance interest indicator
 Create a interest run for a Loan account

Sap overview

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Viewers also liked

Viewers also liked (9)

Similar to Sap overview

Similar to Sap overview (20)

More from Abhishek Gupta SAP FICO Consultant

More from Abhishek Gupta SAP FICO Consultant (12)

Recently uploaded

Recently uploaded (20)

Sap overview