sap-fi-bootcamp-training-day2.ppt

Copyright © 2007 Accenture All Rights Reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture.
Copyright © 2007 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture.
Day 2
SAP Financial Accounting (FI)
Bootcamp

2
Agenda – Day 2
• Review of Day 1
• General Ledger – Period End Closing & Reporting
• Bank Accounting – House Bank/s
• Accounts Receivable – Key Concepts
• Accounts Receivable – Organisation Structure
• Accounts Receivable – Master Data
• Accounts Receivable – Configuration
• Accounts Receivable – Business Transactions
• Accounts Receivable – Reporting and Conversion Tips

3
• We covered the following topics on Day 1:
– Financial Accounting
– General Ledger – Master Data
– Enterprise Structure
– General Ledger – Business Transactions & Open
and Cleared Items
Review of Day 1

4
• Review of Day 1
• Accounts Receivable – Reporting and Conversion Tip
Agenda – Day 2

5
• Month End Closing
– Open/close posting period
– GR/IR accounts automatic clearing
– Record accrual/deferral
– Recurring Document Entries
– Bank reconciliation
– Foreign currency revaluation
• Year End Activity
– Balance carried forward (for Year end closing)
– Document Number Range (for Year end closing)
• Reporting
– Month End Closing
– Reporting
General Ledger – Period End
Closing & Reporting

6
• After period end closing, all transactions for the
period/month is completed and periodic reporting;
i.e., financial statements, statutory reporting, internal
reporting, can be produced
• No accounting postings could be made to the closed
period
Month End Closing

7
• Key month end and year end activities:
– Open/close posting period
– GR/IR accounts automatic clearing
– Record accrual/deferral
– Recurring Document Entries
– Bank reconciliation
– Foreign currency revaluation
– Balance carried forward (for Year end closing)
– Document Number Range (for Year end closing)
Month end closing should be seen as integrated activities between all FI
sub-modules, Controlling module (e.g., cost allocation & closing), and other
modules. Comprehensive step by step and detailed schedule need to be
defined and followed by the business
Month End Closing (cont.)

8
• Open/close period is done per variant and
account types. One variant can be used for
more than one company code
• Period setup for account type ‘+’ all will
override all other account types
• Posting period can be made available for
limited set of users using the authorization
group
Month End Activities:
Open/Close Posting Period

9
• There are two set of periods that can be open at
the same time
– In the example below, the current period was January
2007. However, posting period 13/2007 – 16/2007
was still open for adjustment postings; e.g., based on
audit/tax issues
Variant
Account type
(A, D, K, M, S, +)
Month End Activities:
Open/Close Posting Period
(cont.)

10
• To match goods receipts with their
corresponding invoice and there by reconciling
the Goods Receipt/Invoice Receipt (GR/IR)
account
Goods receipt: Dr. Inventory
Cr. GR/IR
Invoice verification: Dr. GR/IR
Cr. A/P
automatically cleared
Month End Activities: GR/IR
Account Automatic Clearing

11
• Tcode FBS1
• An accrual represents current period revenue or
expense for unrecorded transactions
• A deferral delays represents previously recorded
revenue or expense
• Can be posted with account assignment model or
posted with reference function
• Accruals/deferrals are reversed in a later period, as
they are often caused by posting delays from other
sources.
Month End Activities: Record
Accrual/Deferral

12
• Recurring documents represent entries posting to same set of
accounts, repeatedly, for multiple periods.
• Transaction postings for expenses like rental expenses, where
the tenure, amount and the GL accounts are fixed, can be
repeated automatically using recurring document entries
• A recurring document therefore represents a template for
repeating the same entry for several periods. Recurring
document does not impact the books of accounts until posted to
the GL
• Recurring document programme, when executed, posts an
accounting document; The values, accounts etc. for the
document are based on the recurring document template.
Month End Activities: Recurring
Document Entries

13
• In most cases, each bank account will have a
corresponding bank clearing account
• Before being verified against actual bank statement, all
postings should be made to a bank clearing account.
• It allows clear understanding of which processes have
cleared the bank (i.e. have been fully completed) and
which ones are in process – i.e. check sent out, but not
yet cashed.
• It can be used to further segment the information being
posted to the bank account; e.g., same bank account
but different payment method
Month End Activities: Bank
Reconciliation

14
• Bank Account: actual bank account that is
reconciled with bank statement
• Bank reconciliation matches entries in bank
clearing account against actual bank statement
and journal transaction into the bank account
– Manual bank reconciliation: User manually clears
each bank clearing open items and journal entries
to the bank account
– Automatic bank reconciliation: Bank statement from
the bank is uploaded into the system and the
system automatically post the reconciliation journal
Month End Activities: Bank
Reconciliation (cont.)

15
• Transaction, local or company code currency, Group
currency
• Exchange rates are used to make conversions at the time of
document entry
• Foreign currency revaluation
- At month end, transactions recorded in foreign currency needs to be
adjusted according to the end of month exchange rate
- The system defaults to using exchange rate type “M”. If a different
rate is required it can be set up in configuration
- Adjustment for open vendor items, open customer items, loan, and
deposit accounts will be posted to unrealized gain/loss foreign
exchange account. These entries will be reversed in the next period
- Foreign currency gains/losses are not realised until the money
comes out/in of the bank account
Month End Activities: Currencies
and Foreign Currency
Revaluation

16
• Revaluation of foreign currency bank accounts
will incur a realized gain/loss that is posted to
the foreign exchange gain/loss account. These
entries will not be reversed in the next period
• It is required for US GAAP and other accounting
standards
• Tcode F.05 (Classic GL)
Month End Activities: Currencies
and Foreign Currency
Revaluation (cont.)

17
• Balance Sheet, customer and vendor accounts are
carried forward to the same accounts
• Profit & Loss accounts are carried forward to retain
earnings account's) as specified in the configuration.
The P&L accounts balance is 0 in the new year
As noted before, year end closing should be seen as integrated
activities between all FI sub-modules, Controlling module (e.g.,
cost allocation & closing), and other modules. Comprehensive step
by step and detailed schedule need to be defined and followed by
the business
Year End Activities: Balance
Carried Forward

18
• It is a common practice to use Year-dependent
document number ranges for accounting document
• As part of the year end process, document number
ranges have to be defined for the next fiscal year.
• Analysis of the document number status reflects the
usage of the document number range in a fiscal year.
• Accordingly the document ranges for the new fiscal year
can be defined. It can be copied from the previous year
and modified if required.
Year End Activities: Document
Number Ranges

19
• Refer to System Walkthroughs 2.1 & 2.2 – Period
End Closing in your Faculty Guide.
− Open/Close Posting Period (OB52)
− GR/IR Automatic Clearing (F.13)
− Record Accrual/Deferral (FBS1, F.81)
− Recurring Document (FBD1, F.14)
− Document Number Ranges
System Walkthroughs 2.1 & 2.2
– Period End Closing

20
• Refer to Exercise 2.1 – Create Recurring Entry in
your Participant Workbook
– Your task is to create a template and run a recurring
entry
Exercise 2.1 – Create Recurring
Entry

21
• Refer to Exercise 2.2 – Process Recurring Entry in
–Your task is to run a recurring entry that was created
previously
Exercise 2.2 – Process Recurring
Entry

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

23
• Balance Sheet and Profit & Loss
 The format of the financial
statements is determined by the
Financial Statement Version
(FSV) that is defined in the
configuration – transaction OB58
 Financial Statement Version
contains Heading and Sub-
heading and GL account range
 This is one sample of many
reports available
GL account range
Closing and Reporting (cont.)

24
• Refer to System Walkthrough 2.3 – Reporting in your
Faculty Guide.
– Display Chart of Accounts (S_ALR_87012326)
– GL Account Balance (S_ALR_87012277)
– GL Account Line Items (S_ALR_87012282)
– Balance Sheet and Profit & Loss (S_ALR_87012284)
– Define Financial Statement Version (OB58)
*note this is just a sample of reports that are delivered
System Walkthrough 2.3 –
Reporting

25
• Refer to Exercise 2.3 – Display Chart of Accounts in
– Your task is to display the chart of accounts
Exercise 2.3 – Display Chart of
Accounts

26
• Refer to Exercise 2.4 – GL Account Balances Report
in your Participant Workbook
– Your task is to access the GL Account Balances
Report screen
Exercise 2.4 – GL Account
Balances Report

27
• Refer to Exercise 2.5 – GL Account Balance Display
in your Participant Workbook
– Your task is to access the GL Account Balance
Display screen
Exercise 2.5 – GL Account
Balance Display

28
• Refer to Exercise 2.6 – GL Account Line Items
Report in your Participant Workbook
– Your task is to display the GL Account Line Items
Report
Exercise 2.6 – GL Account Line
Items Report

29
• Refer to Exercise 2.7 – Generate Balance
Sheet/Profit and Loss Statement in your Participant
Workbook
– Your task is to run the Balance Sheet/Profit and Loss
Statement reports
Exercise 2.7 – Generate Balance
Sheet/Profit and Loss Statement

30
• Refer to Exercise 2.8 – Leading Ledger & Non-
Leading Ledger posting in your Participant Workbook
– Your task is to post transactions in all ledgers and
local ledgers and display the transactions
Exercise 2.8 – Leading Ledger &
Non-Leading Ledger posting

31
• Refer to Exercise 2.9 – New GL Reporting versus
Classic GL Reporting, in your Participant Workbook
– Your task is to run the reports and view the
differences in features
Exercise 2.9 – New GL Reporting
versus Classic GL Reporting

33
Agenda – Day 2
• Review of Day 1
• Accounts Receivable – Reporting and Conversion Tip

34
• Each bank that a company uses for incoming and outgoing
payments is set up as a house bank and bank account in SAP
• Each house bank of a company code is represented by a bank ID
in the SAP system, every account at a house bank by an account
ID
• The house bank account master record contains the house bank
ID, unique account number, Bank GL account
House Bank
Such as: Westpac
Bank Account Bank Account
House Bank/s & Bank Account

35
House Bank/s & Bank Account
(cont.)
• The GL account for the specified bank account is to be
managed in the same currency as the account at the bank
• For domestic banks, you should enter the bank number in the
"bank key" field and for foreign banks, you should enter the
SWIFT code in this field
• An appropriate Bank Account GL Structure must be formed to
use the flexibility of SAP
• An strategic Bank Account GL structure helps in determining
how much confirmed cash, floating cash out, and floating cash
in there is on a particular day

36
EFT
Clearing Account
GL acct # 113102
Check
Clearing Account
GL acct # 113101
Bank Account
(Confirmed Cash)
GL acct #113100
Vendor
Account 2
Vendor
Account 1
Back Account Representation

37
• The house bank master record is created and changed in
configuration (SPRO), it can also be changed from the SAP
menu (next slide)
• The house bank account master record can only be changed
from configuration
• House bank is dependent on company code
• House bank is represented by alphanumeric character whose
length can be up to 5
• Lockbox configuration is not required for Australia, 3rd party
collect funds and deposit into bank account
Configuration – House Bank/s

38
Configuration – House Bank/s
(cont.)

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

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

42
Create Bank Accounts
Screen 1 Screen 2

43
Display House Bank
• Refer to Walkthrough 2.4 – Display House Bank in
your Faculty Guide.
–Display House Bank

44
Create House Bank
• Refer to Walkthrough 2.5 – Create House Bank in
your Participant Workbook.
–Create House Bank
–Create GL account and assign to new House
Bank/Account ID

46
Agenda – Day 2
• Review of Day 1

47
• Order to Cash Overview
• Purpose
• Sub Ledger
• Customer Master Data
• Invoice / Credit Memo
• Credit Management
• Head Office
• Alternate Payer
Key Concepts

48
Inventory
Sourcing
Delivery Billing
Sales Order
Processing
Pre-Sales
Activities
Decrease
Inventory
AR
Invoice
Customer
Payment
Credit
Check
Dr. COGS
Cr. Material
Dr. Customer
Cr. Sales
FI/CO
SD
No FI posting
Dr. Bank
Cr. Customer
CO: Profit Centre assignment
(default from material being sold)
Order to Cash Process Overview

49
• Accounts Receivable records accounting data for all customers
who have master data. The accounting data includes: sales,
credits, payments, adjustments
• Standard Reports provide many views of the Accounts
Receivable data for management of the amounts owing. They
can be used for day to day reporting and for month end
procedures
• AR can provide key information to help with Credit
Management and liquidity planning, through its link to Cash
Management module
Accounts Receivable – Purpose

50
• The Accounts Receivable Sub Ledger is made up of the
customer accounts
• All postings in the Accounts Receivable Sub Ledger are
recorded directly in the General Ledger to a reconciliation
account. A reconciliation account can only have postings made
to it by the sub ledger, no direct postings can be made
• The reconciliation account is stored in the customer’s company
code master data
• A special general ledger indicator is used to update other
reconciliation accounts, for down payments, and bills of
exchange
Sub Ledger

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

52
Special GL Indicator (cont.)

53
• Customer master data (records) are used by both the
accounting (FI-AR) and the sales (SD) departments of an
organisation
• By storing Customer Master Data centrally, it can be accessed
throughout the organisation and avoids the need to enter
information twice. It also avoids inconsistencies in master data
by maintaining it centrally. If the address of one of your
customers is changed, for example, you only have to enter this
change once, and your accounting and sales departments will
always have up-to-date information
Customer Master Data

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

55
• Invoice
– Is an accounting document (a request for payment)
for goods or services provided to a customer
entered via transaction FB70 (or F-22)
– Debits the customers account (posting key 01)
• Credit Memo
– Is an accounting document reducing the amount to
be paid by a customer due to the return of goods,
dispute with goods or services, etc. entered via
transaction FB75 (or F-27)
– Credits the customers account (posting key 11)
– Invoices and credit memos can also be created
automatically based on integration with SD
Posting Key Extract
Invoice/Credit Memo

56
Credit Management (1 of 3)
• Credit management allows a company to minimize credit risk
by defining a credit limit for customers
– If both Accounts Receivable (FI-AR) and Sales and Distribution (SD)
modules are implemented, the system can be customized to check on
the customer’s credit limit. This can be done one or multiple points
during the Sales and Distribution process (point of order, delivery,
goods issue)
– If the SAP Accounts Receivable (FI-AR) module is used to manage
receivables, but a non-SAP system manages sales and distribution,
credit management can be used. When an invoice is posted in
Accounts Receivable the system can check whether the amount
exceeds the credit limit

57
• Credit management structure includes:
– Credit Control Areas: an organisational unit representing
the area where customer credit is provided and
monitored. The organisational unit can either be a single
(de-centralized) or several company codes (centralized),
depending on how credit is managed
– Risk Category: determines which checks the system
should carry out when processing orders in Sales and
Distribution (SAP or non-SAP)

58
• Credit management structure also includes:
– Credit Representative Groups: credit management
employees can be assigned to a credit representative
group. The credit representative group can be used as a
selection criterion for evaluations and release functions
– Customer Group: groups of customers can be defined in
accordance with the company’s needs. An example would
be to group customers by industry, country, or other criteria
that help to carry out credit management more effectively

59
Head Office (1 of 3)
• Customers could place orders locally via their branch,
but pay invoices centrally from head office. This can be
represented with head office and branch accounts.
• An invoice can be entered for goods delivered to a
branch, but have the system automatically post the
invoice to the head office account. The system records
the customer account number of the branch in the
document. The payment is collected from the head office
account. As a result, you can collect payments from
several branches in one step.

60
• The head office and branch accounts are created,
displayed, changed, deleted, and blocked like all
other customer master records.
• To link a branch account to the head office account,
the account number of the head office account is
entered in the Head office field in the customer
master record (Account Management Tab) of the
branch account.

61
• You can only use a customer account as a head office
if it is not a one-time account or branch account.
• Branch accounts and head office accounts must
belong to the same company code.
• Dunning is only executed for the head office account.
• Credit is maintained at the head office level.
• Customer statements are generated at the head office
level.

62
• An Alternative Payer (customer number) is defined
in the master record of the customer who created
the invoices.
• Automatic payments/receipts are made using the
banks of the alternative payer account, rather than
the original customer.
• The alternative payer must have a customer master
record.
• Authorization to deduct from the alternative payers
account must be received.
Alternative Payer (1 of 6)

63
• The alternative payer can be specified in the general
and the company code area of the customer master
data.
– If you specify an alternative payer in the general
data, that alternative payer is valid for the
customer in all company codes.
– If you specify an alternative payer in both areas,
the specification in the company code area takes
precedence.

64
• The payer may need to be entered in the document.
In this case, the option can be selected in the
general data area. When you enter a document,
there is a field on the screen in which you can enter
an alternative payer. If this field is selected, the
system displays a screen for the payer’s master
data.
• You can only use a customer account as an
alternative payer if it is not a one-time account.

65
• Alternative payer and customer accounts do not
have to belong to the same company code.
• The following business processes are managed at
the customer who created the invoices and NOT at
the alternative payer level: dunning, credit,
customer statements.

66
Enter Alternative
Payer account
number
Payment document –
Alternative Payer details
included

67
• Note: If the SAP Sales & Distribution Module is
implemented, the alternative payer can be handled
by the Customer Account Group: Payer.
• Other Customer Account Groups can be used for the
following SD Partner functions:
– Sold-to party
– Ship-to party
– Payer
– Sales prospect
– One-time customer

68
Your Experiences
• Have you been involved in the implementation of an
Accounts Receivable application?
• If you have been involved, what were the key
challenges?

70
Agenda – Day 2
• Review of Day 1

71
Organisation Data – Credit
Control Area
• Credit control area is an organisational unit that
represents an area responsible for granting and
monitoring credit .
• This organisational unit is either a single company
code or, if credit control is performed across
several company codes, multiple company codes.
Credit information can be made available per
customer within a credit control area.

72
Organisation Data – Sales Area
• Sales Area is a combination of Sales Organisation,
Distribution Channel and Division:
– Sales Organisation is responsible for selling materials and
services
– Distribution Channel is a channel through which saleable
materials or services reach customers. It includes wholesale,
retail, and direct sales. You can assign a distribution channel to
one or more sales organisations
– Division is an organisational unit based on responsibility for sales
or profits from saleable materials or services

73
Organisation Data – Sales Area
(cont.)
Client
1000 2000 3000
10 20 10
10
01 02 01 02 01 02 01
= Sales area
Sales
Organization
Distribution
Channel
Division

75
Agenda – Day 2
• Review of Day 1

76
Customer Master – General Data
• This data applies
to every sales
organisation and
company code.

77
Customer Master – Company
Code Data
• This data is
specific to an
individual
company code.

78
Customer Master – Sales Area
Data
• This data is
specific to a
Sales Area and
provides details
for ordering,
shipping and
billing.

79
• Why is the customer master data maintained in 3
areas?
– In an organisation, there are two company codes that do
business with the same customer. The general data, such as
the address, is stored in the general area. Both company
codes use this data for communication with the customer.
Each company code maintains data for financial accounting
(such as the reconciliation account) and for their business
relationship with the customer (such as payment terms) in
their own company code area. The sales area data provides
the details for ordering, shipping and billing the customer
– The Sales and Distribution (SD) module is required to enter
the sales data and to print invoices
Customer Master Data (1 of 4)

80
• Examples of how the master data specifications are
used:
– Values in the master data are default values when you
post items to the account; e.g., payment terms are
defaulted during document entry
– For processing business transactions; e.g., interest
calculations, dunning
– Account control data, such as the number of the GL
reconciliation account, head office
– Users can be prevented from accessing an account by
setting up authorization groups

81
• Examples of how the master data specifications are
used (cont.):
– For internal management of the account an Accounting
clerk can be assigned
– For communication with the customer; e.g., the address,
telephone and fax numbers, contact personnel
– Cash Flow forecasting within the Treasury module uses
the Cash Management Group, which defines the type of
payer group the customer belongs to

82
GL Account:
• Reconciliation Account
• Groups type of
receivables; e.g.,
domestic, foreign,
subsidiaries.
• Customer creator must be
aware of how to assign
the reconciliation account
to provide the accurate
view of the postings

83
• The Accounting Clerk Identification Code is entered in
a customer’s master data.
• The accounting clerk performs AR finance duties and
may also be responsible for debt recovery from the
customer. The ID is used to sort dunning.
• The Accounting Clerk can also be defined as the
Credit Rep Group.
Accounting Clerk

84
• The account group is a grouping of properties that
controls the creation of master records.
• The account group controls the number range for the
vendor master records. (Each vendor master is identified
with a unique account number.)
• Account group also controls if the number range is
externally assigned or internally assigned.
• Account group controls the field status of the vendor
master maintenance – If the field entry is
Suppressed/Required/Optional/Display.
Customer Master Data –
Account Group

85
• Refer to System Walkthrough 2.6 - Configuration in
your Faculty Guide.
– Define Account groups with Screen Layout (customers)
– Create Number Ranges for customer accounts
– Assign Number Ranges to customer account groups
– Enter Accounting Clerk Identification Codes
Configuration

86
• Refer to System Walkthrough 2.7 - Master Data
Maintenance in your Faculty Guide.
– Display customer without Sales Org View
– Display customer with Sales Org View
Master Data Maintenance

87
• Refer to Exercise 2.10 - Create Customer in your
Participant Workbook.
− Your first task is to create a customer
− Next display the customer
Exercise 2.10 – Create Customer

88
• Refer to Exercise 2.11 - Change Customer Record
in your Participant Workbook.
− Your task is to change the customer record
Exercise 2.11 – Change
Customer Record

90
Agenda – Day 2
• Review of Day 1

91
Business Transactions
Configuration
• We will review the configuration of:
– Payment terms
– Reason codes
– Default accounts assignment
– Define tolerances for customers
– Dunning
– Interest calculation
– Credit management

92
Payment Terms
• Terms of payment involves discount amount and the
related time frame sent to the customer.
• The terms of payment configuration is same for both
AR and AP.
• The same terms of payment can be used for both AR
and AP.
• Installment payment system can also be defined as
Payment Terms.

93
Payment Terms
• Refer to System Walkthrough 2.8 – Payment Terms
in your Faculty Guide.
−Terms of Payment
−Installment Payment Terms

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

95
Reason Codes
• Refer to System Walkthrough 2.9 - Reason Codes in
your Faculty Guide.
–Display the Reason Codes and Payment Differences

96
• Default account assignment is configured for Cash Discount
Granted, Exchange Rate Difference, Rounding Difference &
Bank Charges (Customers).
• For the above default account assignments, the following needs
to be done:
– Ensure that the GL Account for the above account assignment is created
in the Chart of Accounts
– Ensure the new accounts are an Expense account, not a Cost of Sales
account
– The above expenses account is created as cost element in Controlling
Area
– Default Cost Centre must be set up via transaction OKB9
Default Account Assignment

97
Default Account Assignment
• Refer to System Walkthrough 2.10 – Default Account
Assignment in your Faculty Guide.
–Define Accounts for Cash Discount Granted (Tcode
OBXI)
–Define Accounts for Exchange Rate Differences (Tcode
OB09)
–Define Account for Rounding Differences (Tcode
OB00)
–Define Accounts for Bank Charges (Customers) (Tcode
OBXK)

98
• The tolerances are used for dealing with payment
differences and residual items that may arise when
payment clearing is carried out.
• You specify the tolerances in one or more tolerance
groups and assign a tolerance group to each
customer/vendor using the master record.
• In case of no tolerance:
– Ensures payments equate to invoices
– Must have manual journals entered to account for the
write-off differences
– Provides control, as a conscious decision has to be
made to allow the customer to underpay
Tolerances for Customers

99
• A tolerance group can be set for specific customers.
• If a tolerance group is set up, you must also
configure OBA4
– Tolerance for Employees (Users) with the same tolerance
parameters to authorise them to post the allowable
difference
(cont.)

100
• Refer to System Walkthrough 2.11 – Tolerances for
Customers in your Faculty Guide.
–Define Tolerances for Customer
–Define Tolerances Group for Employees
–Assign Users to the Tolerance Groups

101
• Dunning
– Selects open items that are due
– Sends letter/s to customers to remind them to pay
• Dunning area
– Dunning areas are used if several organisational units
are responsible for carrying out dunning within one
company code
– These organisational units are referred to as dunning
areas. The dunning area can correspond to a profit
centre, a distribution channel, a sales organisation or a
business area
Dunning (1 of 3)

102
Dunning (2 of 3)
• Dunning procedure
–Set of dunning levels with different parameters for
each level
–A customer is assigned to a dunning procedure in their
customer master data
• Dunning level
–Allows different strength of dunning letters to be sent,
which depends on how overdue the invoice is
• Dunning letter is created in a form

103
• Dunning run
– Calculates overdue status for each invoice
– Assigns a dunning level depending on the
procedure that has been assigned to a particular
customer
– Prints out dunning letters that will be addressed to
each customer – strength of these dunning letters
will be based on the dunning level of the invoice
Dunning (3 of 3)

104
Dunning Configuration (1 of 4)
• Dunning program configuration is divided into the
following categories:
– Dunning procedure defines:
• The key for the dunning procedure to be used
• A description of the dunning procedure
• Dunning interval in days
• Minimum days in arrear (account) after which a dunning
notice will be sent
• Grace period per line item
• Interest calculation indicator for calculation of dunning
interest

105
– Dunning Level: For each dunning procedure
define the following under the tab dunning level:
• Minimum number of days, referring to the due date of
net payment to reach a certain dunning level.
• If interest is to be calculated
• Print parameters
• If you wish to get dunning notice although no further
account movement occurred

106
– Charges: For each dunning procedure define the
following:
• Dunning charges, depending on the dunning level
• dunning charges can be either a fixed amount or a
percentage of the dunned amount
• A minimum amount for the dunning charges can be
set

107
– Minimum Amount: For each dunning process
define:
• Minimum amount or percentage of the overdue items to
reach a dunning level.
• Minimum amount to be reached in order to calculate
interest per dunning level
– Dunning Text: For each dunning process, maintain
the name of the form that will be used at each
level

108
Dunning Configuration
• Refer to System Walkthrough 2.12 – Dunning
Configuration in your Faculty Guide.
–Display a Dunning Configuration

109
• Does the company calculate interest on overdue
payments?
– No  This configuration is not required
– Yes  Continue
• Be aware: setting up the interest calculation in SAP is a
complicated process
• Define the interest process:
– How often is interest calculated?
– What is the formula?
– What are the journal implications?
– Will the interest be recorded against one profit centre or
against multiple?
Interest Calculation

110
Interest Calculation (cont.)
• SAP provides two types of interest calculation:
–Balance interest calculation is applied to the entire
balance of a GL or customer account, applying a
particular interest rate for a specified period of time
–Interest on arrear is applied to individual item in
accounts receivable or accounts payable. A certain
interest rate is applied to the items that are still open or
unpaid at a specified date

111
• Refer to System Walkthrough 2.13 – Interest
Calculation in your Faculty Guide.
–Define interest calculation types
–Prepare interest on arrears calculation
–Define reference interest rates
–Define time based terms
–Enter interest values
–Calculation of interest on arrears
Interest Calculation

112
Credit Management Configuration
• In Credit Management
Configuration, we will review
the creation of:
– Credit Control Areas
– Credit Representative
Groups
– Risk Categories
• And we will review
Automatic Credit Control,
which is configured in the
Sales and Distribution
Configuration

113
• Credit Control Areas are defined
in the Enterprise Structure
Configuration and assigned to
company codes in the Credit
Management Configuration
Credit Control Areas
1
2
3

114
Credit Management
• Refer to System Walkthrough 2.14 – Credit
Management in your Faculty Guide.
–Credit control area

115
• Classifies the risk level of a customer
• Risk categories are assigned to each credit control
area
• Parameters are set based on the risk category and
credit control area to set conditions which will block
sales to a customer, e.g. number of outstanding
invoices; day of oldest open invoice (from document
date)
Risk Categories

116
• Risk categories are configurable:
– Create as many as required
– Define the parameters for each risk category and credit
control area combination; it is best not to overcomplicate
parameters
– Category examples:
• X01 New Customer: Tighten Parameters
• H01 High Risk
• M01 Medium Risk
• L01 Low Risk: Loosen Parameters
Risk Categories (cont.)

117
• What is a credit representative group?
– Could be a collective of people or individual clerk
– Point of contact between credit department and
customer
– Manages debt recovery for a specific customer
– Credit reps are responsible for collecting monies from
customers in their credit rep group
Credit Representative Groups

118
• Used in credit management reports
– To follow up outstanding amounts
– Makes it easier to identify amounts owing and who is
responsible for collecting these amounts
Credit Representative Groups
(cont.)

119
• Automatic Credit Control is
defined in the Sales and
Distribution Configuration
using the combination of
the Credit Control Area
and Risk Category
Automatic Credit Control

121
Agenda – Day 2
• Review of Day 1

122
Business Transactions – Invoice
Press enter to see which fields
you have missed entering – a
message will appear to advise
fields missing
An invoice is an accounting document
(request for payment) for goods or
services provided to a customer.

123
Credit Memo
• A credit memo is an
accounting document
reducing the amount
to be paid by a
customer due to the
return of goods,
dispute with goods or
services, etc.

124
• Refer to System Walkthrough 2.15 – Customer
Invoice in your Faculty Guide.
− Customer Invoice
− Credit Memo
Customer Invoice

125
Dunning Run Process
Dunning Process

126
Dunning
• Refer to System Walkthrough 2.16 – Dunning in your
Faculty Guide.
–Dunning procedure (F1500)

127
Exercise 2.12 – Create Invoice
with Cash Payment Terms
• Refer to Exercise 2.12 - Create Invoice with Cash
Payment Terms in your Participant Workbook.
–Your task is to create an invoice with cash payment
terms

128
Exercise 2.13 – Create Invoice
with 30-Day Payment Terms
• Refer to Exercise 2.13 - Create Invoice with 30-Day
Payment Terms in your Participant Workbook.
–Your task is to create an invoice with 30-day payment
terms

129
Exercise 2.14 – Reverse an
Invoice
• Refer to Exercise 2.14 - Reverse an Invoice in your
–Your task is to reverse an invoice

130
Exercise 2.15 – Execute
Dunning Procedure
• Refer to Exercise 2.15 – Execute Dunning
Procedure in your Participant Workbook.
–Your task is to create a dunning run for your customer
(refer to Dunning in Configuration section)

131
Exercise 2.16 – Create a Partial
Credit Memo
• Refer to Exercise 2.16 – Create a Partial Credit
Memo in your Participant Workbook.
–Your task is to create a Credit Memo for part of the
cash payment terms invoice

132
• Payments are entered into SAP using transaction F-28
• Both full and partial payments can be accounted for
Enter payment
From customer
F-28
Fully
Paid?
Standard
Clearing
F-28
Required
Clearing?
Residual
Clearing
F-28
No
No
Yes
Yes
Cash/Cheque
Receipt
From Customer
Partial
Clearing
F-28
View result
FBL5N
YCUSTSTAT
View result
FBL5N
YCUSTSTAT
View result
FBL5N
YCUSTSTAT
Entering Payments

133
Payment Clearing
• An incoming payment should be
cleared off against an invoice as
soon as possible via F-28
– However, if a follow-up is required, the
payment can be cleared later via F-32
• Payments are initially posted to
the bank clearing account
– When the EBS is loaded, open items
in the bank clearing account need to
be cleared via transaction F-03
Invoice 1000 1000 Payment
Payment 1000 1000 EBS Load
EBS Load 1000
Customer Account
Bank Clearing
Bank Account

134
• Refer to System Walkthrough 2.17 – Payments in your
Faculty Guide.
– Apply partial payment
Payments

135
• Refer to System Walkthrough 2.18 – Clearing of Open
Items in your Faculty Guide.
− Clear the open invoice, credit memo and partial
payment documents
Clearing of Open Items

136
• Refer to Exercise 2.17 – Apply Incoming Manual
Partial Payments in your Participant Workbook.
–Your task is to apply incoming manual partial
payments
Exercise 2.17 – Apply Incoming
Manual Partial Payments

137
• Refer to Exercise 2.18 - Clear Open Items in your
–Your task is to clear open items
Exercise 2.18 – Clear Open Items

139
Agenda – Day 2
• Review of Day 1

140
Customer – Reporting
• Key reports used for FI-AR include:
– Line Item display of customer accounts
– Customer account balances
– Due date/Ageing Analysis

141
• Refer to System Walkthrough 2.19 – Reports in your
Faculty Guide.
− Display reports
Reports

142
• Refer to Exercise 2.19 - Display Account
Balances in your Participant Workbook.
– Your task is to display and browse account
balances
Exercise 2.19 – Display Account
Balances

143
• Refer to Exercise 2.20 - Browse Account Line
Items in your Participant Workbook.
– Your task is to Browse Account Line Items
Exercise 2.20 – Browse Account
Line Items

144
• Refer to Exercise 2.21 – Generate AR Reports in
your Participant Workbook.
– Your task is to use your customer to execute different
Accounts Receivable Reports
Exercise 2.21 – Generate AR
Reports

145
• If the Sales & Distribution (S&D) module is used,
customers will generally be given an SAP-specific
customer number (internally assigned)
• If a legacy S&D system is used, the number will
generally be externally assigned; however, this
assignment will depend on where the customer is
created (for example, in the legacy system or SAP)
– A customer cross reference should be created as part of
the conversion process
Customer Master Conversion

146
• Cleansing is vital:
– Address details need to be validated e.g., post codes and
other required address fields as necessary
– Confirm all customers to be converted. Usually a legacy
system will contain a large number of obsolete or replicated
customers which need to be cleansed
– Street fields to be used in a consistent manner, which is an
important consideration for form design
• Determine conversion method – dependent on
number of customers and skill level of team
Customer Master Conversion
(cont.)

147
• A/R open items need to be converted into the SAP
system. The aging of converted documents needs to
be correct:
– Easier to set the payment terms to cash (0 days) –
therefore, the baseline date is the due date
– More difficult to assign the appropriate payment terms to
the document
• Conversion data map needs to be created to define
which legacy fields will be converted and where they
map to in SAP. Data constraints on field lengths and
validated fields need to be considered
Open Items Conversion

148
• All open items converted must be associated to a
valid SAP Customer Master (using criteria listed
above)
• Following the open item conversion, a follow-up
check to confirm that total of A/R open items is equal
to value in the legacy system ledger account(s)
should be conducted
• Ideally, regardless of method for conversion, the
number of open items to be converted should be
minimized and managed
Open Items Conversion (cont.)

150
1. Where are the three views of Customer Master
Data?
2. What is the difference between a bank master
record, a house bank and a business partner bank
master record?
3. How are both sets of data created and changed?
4. Explain how to run the GL Account Balances
Report.
Knowledge Check

152
– Month End Closing
– Year End Activity
– Reporting
• Bank Accounting Concepts and Transactions
– House Bank & Bank Accounts
– Bank Account Representation in SAP
– Bank Master Creation
• Bank Key
• House Bank
• Account ID
End of Day 2 Lessons Learned
(1 of 5)

153
• Accounts Receivable – Concepts and Organisation
Structure
– Order to Cash Process
– Purpose of Accounts Receivable
– Organisation Units and their inter-linkages
• SD Organisation Units - Sales Area
• Credit Management - Credit Control Area, Risk Category,
Credit Representative groups
• FI Organisation Units – Company code, Accounting Clerk
(2 of 5)

154
• Accounts Receivable – Customer Master
– Account Groups – Screen layouts, Number Ranges
– Alternative Payer
– Head office vs. Branch office
– Reconciliation Account
– Master data - General segment, Company code segment,
and Sales Area segment
– Master Data Maintenance
(3 of 5)

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

156
– Payment Terms
– Account Assignment for Automatic Postings
– Dunning Process
– Invoice Processing and Payments
(5 of 5)

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