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4. Account determination 4.1. Document flow 4.2. Sales Order 4.3. Goods issue posting 4.4.

Revenue Posting 4.5. Account determination configuration 4.5.1. Goods issue - MM account determination 4.5.2. Billing - SD account determination

4. Account determination
Now the sales order process is completed. Let's take a closer look at it from the accounting perspective.

4.1. Document flow


You find the document flow from the menu Environment in every phase of the sales order process. There also a button for it. The document flow looks slightly different depending on the phase, but if you open it from the sales order, you will see all the phases and sub phases.

The document flow ties together all the documents of the sales process. Put the cursor on the line and click on 'Display document' to open the document.

Accounting documents are created at the goods issue and billing. The text 'not cleared' beside accounting document means that the invoice is not paid. The integration points are following: Sales order: the profit center is determined and copied to the following documents Goods issue: posting to inventory and inventory change accounts. Invoice: posting to revenue account, accounts receivable and tax accounts

4.2. Sales order


Move from the document flow to the sales order. Place the cursor on the Standard Order and click the 'Display document'-button. The sales order does not create any documents to accounting. However, some of the account assignments are decided at this point. There are accounting relevant fields on both header and item level. The item level fields are more relevant. The sales order items can be splitted into different deliveries and invoices and the accounting information follows the items. Generally you could say that the header level information is customer related and item level is product related. Select the sales order line item and then menu Goto / Item / Account Assignment (or double click the item row and open tab Account Assignment).

The profit center is defined at sales order level. Depending on the system settings the profit center comes either from the material master (View: Sales:General/Plant) according to delivering plant (transaction MM03) or from the Sales order substitution rules defined in profit center accounting (transaction 0KEL). With these rules the profit center can be defined for example according to sales organisation, product or customer characterics. If no profit center is found and COPA is active, the dummy profit center is used. If COPA is not active, the profit center is left empty and you will get an error situation in billing.

4.3. Goods issue posting


In the Document Flow place cursor on the GD goods issue: delvy document and click on 'Display document' -button. This takes you to the MM Material document.

The movement type for sales delivery is 601.

Click the accounting documents button.

A list of created accounting documents is shown. Click on the Accounting document. In this example the goods issue posting looks like this.

The stock posting goes to a balance sheet account and the offsetting posting to inventory change (P&L account). The posting is created automatically at goods issue and the system has to find somewhere all the necessary information for the posting. The accounts used are determined in MM automatic account determination. The account assignments of the offsetting posting depend on the settings. If the account is not defined as a cost element the posting goes to the profit center from the material master. If the account is a cost element, a cost object becomes mandatory. Usually the system looks for it in the CO automatic account assigment table OKB9. In this example the cost assignment is a profitability segmentand the posting rules are defined in COPA IMG.

4.4. Revenue Posting


Move from Document Flow to the billing document. Place cursor over Invoice and click on 'Display Document'.

In the invoice you can find accounting information from several places. There is a direct link to accounting documents. The Accounting button lists all the accountig documents created. From the Environment menu you find Account determination Analysis, which lets you analyze how the account determination is made. On both header and item level you will also find lots of accounting relevant data.

4.5. Account determination configuration


4.5.1. Goods issue - MM account determination At goods issue the the owner of the goods changes and the stock change must be recorded. It is posted in the balance sheet to the inventory account and the offsetting posting (cost) goes to a profit an loss account Inventory changes.

Account assignments The inventory account is a balance sheet account. In Profit center customizing you can define wether you transfer the material stock balance to Profit Center Accounting periodically or on-line. The profit center always comes from the material master according to the delivering plant (tr. MM03, Sales: General/Plant). The account assigments of the offsetting posting depend on how the account is defined. If the inventory change account is not defined as a cost element, the posting goes to a profit center. Here the profit center is copied from the sales order. It can come from a substitution rule or from the material master. If the account is defined as a cost element, it requires a cost assignment, which can be a cost center, order or profitability segment. As the good issue posting is an automatic posting, the system has to find the assignment automatically. It looks for the assignment in CO automatic account assignment table OKB9. You can also define Automatic assignment to a COPA profitability segment (COPA-IMG: PA transfer structures, tr. KEI2), which is the case here. . Accounts The accounts are defined in MM customizing under Valuation and account assignment. MM account determination is not a 'straight forward -task. SAP has has made Wizard to assist in this. Here I will only show you how to find the configurations for our example.

Start the 'Configure automatic postings under 'Account determination without the Wizard'. If you get a pop up for missing account grouping code, press cancel. CLick the 'Simulation' button.

Enter the plant (1200), material number (R-1180) and movement type 601 Goods issue Delivery. Press enter and then click the Account Assignments button.

On the simulation screen the system combines all the relevant information and shows the accounts it has determined.

The MM account determination is based on transaction technique. In inventory postings there is alwaus the transaction Inventory Posting (BSX). It defines the inventory account, which here is 310000. The system finds this account according to the transaction and valuation class of the material. The transaction for offsetting posting is GBB 'Offsetting entry for inventory'. This transaction has an extra specifications called Account Modification key, which has a different meaning depending on the procedure. The system finds this account according to the transaction, account modification key and valuations class. If you are interested on how the account determination works, SAP Press has published a book about SAP Account determination. In book reviews you find my review of this book. 4.5.2.Billing - SD account determination The accounting document created at SD billing contains typically following three lines: - Customer posting in accounts reveivable and simultaneously posting to reconciliation account in general ledger - Sales revenue posting - Tax posting There can also be other accounts like discounts. Let's study the origin of these postings.

Customer line / reconciliation account

The first row in the posting is the customer line. It shows the customer number and makes an open item posting to accounts receivable. At the same time it makes a posting in general ledger to a reconciliation account. Double click the customer line and you can see the reconciliation account. The main rule is, that the reconliliation account comes from the paying customer's master data. For special cases, it is possible to use an alternative reconciliation account. Settings for that can be found in FI and SD customizing. The reconciliation account is a balance sheet account and has no other account assignments. However, you can transfer the posting to a profit center. This does not happen automatically. At period end you must first Calculate Balance Sheet Readjustment in FI closing (tr. F.5D9 and then transfer the postings in profit center accounting (tr. 1KEK). Revenue posting The setting for revenue account are defined in SD customizing.

In spite of the title 'revenue account determination', this is where the settings for all other accounts are made as well.

Select option Assign G/L accounts. SD account determination is based on condition techniques. The system reads the conditions sequentially searching for a match. In this IDES case it will find the match on the second level in condition CustomerAccountGroup/AccountKey.

Click on the second row.The table looks baffling, but is really is not that complicated.

In the first column you have the appilication. It is always V, which comes from the german word for sales. Next you have a condition type. There are two alternatives. You choose KOFI, if the posting goes to accounts that in CO are revenue elements (cost element types 11 and 12) and the account assighment is profitablity segment (COPA) or profit center. This is usually the case for revenues and discounts. KOFIK is used if you want to post to an account that is a cost element (type 01) and the account assignment is cost center. In the third column you give the name of your Chart of Accounts. In the fourth column enter the name of the Sales Organisation. In the fift column you give the Account assginment group of the

paying customer. Next comes the Account assignment key. This is defined in SD customizing and is in SD pricing assigned to SD conditions like sales price. You don't anywhere define the company code in whose accounting the entry is made. This is determined indirectly via the sales organisation, which is assigned to the company code. The Account assignment groups for customers and materials are defined in SD IMG / Account assignment/costing customizing under 'Check masterdata relevant for account assignment'. Tax posting The tax account determination is not done in SD. The account is taken from FI tax account definitions. The tax account is a balance sheet account and has no account assigments.

Integration:
Hi SD-FI Account Determination and Postings This is known in the IMG as "revenue account determination", but it covers a lot more than that (discounts, taxes etc). This is what determines how the financial impact of your SD Billing document is posted into the FI General Ledger. The integration is controlled both in SD and in FI. In SD there is a awesome area of configuration called the pricing procedures. The pricing procedure determines the final price quoted to the customer for a particular product. This could be a complicated calculation taking into account the base price, any special prices or discounts that may apply to that scenario, taxes, freight charges etc. These prices or charges are called 'condition types'. This condition technique is used in a number of areas of SAP. For now all we need to know is that each condition type is assigned to an account key (or in the case of rebates two account keys). You can assign multiple condition types to the same account key. There are a number of account keys that are pre-defined in the system. For example: ERF freight revenues ERL revenues ERS sales deductions EVV cash settlement MWS sales tax Now we start getting to the integration by mapping the account keys to GL accounts. But it is not as simple as that. It can be as flexible (ie: as complex) as you want. Start off with the most simple approach. Generally if one is using a good sales / revenue reporting tool (eg: CO-PA) then one does not need a lot of flexibility and variety in the GL accounts that are posted to. The level of detail that you need in GL should be determined by your financial statement reporting requirements - you may end up with only one Revenue account - it is a good bet!

So, taking the simple approach we would ignore most of the configuration possibilities : procedures, access sequences, condition tables etc (Yes it is that 'condition technique' kicking in again. Once you have worked through it once in one area and encounter it in another then hopefully you will be comfortable in knowing that most of the standard configuration can be left as is. ) We have to decide which access sequences we want to use (Five access sequences are defined in the standard SAP R/3 System). To keep it simple, let us assume we just use one - for example: the access sequence "chart of accounts/sales org./account keys". The chart of accounts part is standard in all account determinations, so let us look at the rest. This access sequence allows us to specify different GL accounts for different Sales Organizations. So if we had a billing document line item where the customer had some special deductions for one of the products he purchased, we could map accounts by Sales Organization. To make it even simpler a document is within one Sales Organization so we have an overall mapping as follows: SD Line Item Condition type SD Amount 1 Sales deduction for being such a nice guy Account Key $10 ERS Sales Organization GL Account 1000 800010 - Sales deductions for 1000

Sales deduction for special promotion on particular product $15 ERS Base Revenue $200 ERL 800000 - Revenue for Sales Org 1000 2 Total for item 1 $175 Base Revenue $100 ERL 1000 800000 - Revenue for Sales Org 1000

Total for item 2 $ 100 Document Total $ 275 So the invoice that the customer gets (and that you can view in SD) will look something like:

Item (Note this is the SD Invoice line item) Item 1: Item 2: $175 $100

Amount

Total owing , 30 days terms etc: $275 The GL document posting that the system will make to FI will look something like this though: FI Line Item Debit / Credit Account Amount 1 Debit (PK=01) Customer (AR Account) $ 275 2 3 Credit (PK=50) Debit (PK=40) Revenue (GL Account) -$ 300 Sales Deduction (GL Account) $25

Balancing to 0 as all GL documents must.... $0 Note : There is no direct relation between an SD Line item and an FI Line Item - they are different things. hope this will help u

Integration II:
Following is the detailed note on SD-FI integration. Sales Process: The sales order forms the basis of the sales process. Once a customer has placed an order, a sales order must be created at the start of the process. The sales order is generated at the distribution chain level. The ordered items can be from different divisions. The sales order is a document in SD and does not cause any postings

in Financial Accounting. When the sales order has been entered, the system carries out an availability check for the required delivery date. On the day of shipping, an outbound delivery document is created. Billing for the delivery can only take place when the goods have been taken from the warehouse stock and posted as a goods issue. The warehouse management function is used for picking . A transfer order has to be created, which generates the pick order. The requested goods are taken from the warehouse and prepared for delivery. The goods to be delivered are posted as a goods issue . A goods issue document is created in MM, and an accounting document is created in FI so that the goods issue is posted to the correct G/L accounts. The last stage in the sales process is billing. A billing document is created in SD, and a printed invoice is sent to the customer. At the same time, a document is created in FI so that the receivables and revenues can be posted to the correct accounts.

Configuration issues: Pricing procedure is dependent on three factors Statistical indicator : This indicator causes a surchage or discount to be set in the document statistically (that is, without altering the value). Account key: Key that identifies different types of G/L account. The account key enables the system to post amounts to certain types of revenue account. For example, the system can post freight charges (generated by the freight pricing condition) to the relevant freight revenue account Account key - accruals / provisions : Key which identifies various types of G/L accounts for accruals or provisions.Eg. With the aid of the account key, the system can post amounts to certain types of accruals accounts. For example, rebate accruals which are calculated from pricing conditions can be posted to the corresponding account for rebate accruals For each billing type a account determination procedure is defined Account determination procedure specifies the condition types that the system uses for a particular type of document (an invoice, for example) to determine the G/L accounts to which amounts should be posted. Depending on these condition type and other parameters such as chart of account, sales organization, account assignment group for customer and material the GL account to which the revenue is posted Hope this makes thing clear. please assign points.

SD Account determination
The accounting document created at SD billing contains typically following three lines: Customer posting in accounts reveivable and simultaneously posting to reconciliation account in general ledger Sales revenue posting Tax posting There can also be other accounts like discounts, but let's find out where these accounts come from. The reconliliation account comes from the paying customer's master data.

SD account determination is defined in SD IMG under Basic Functions /Account Assigment / Costing / Revenue Account determination. Despite the titel, all account determinations