SI0014

Computerized Accounting
Application II
Accounts Payable

ACCOUNTING PROGRAM
Overview
• Introduce vendor master record
• Introduce some of the daily activities that are
performed in accounts payable (AP), such as creating
invoices and credit memos, creating recurring
documents, and executing the recurring document
program
• Introduce the ways of processing payments
• Introduce the integration points with materials
management and the organizational elements that
are applicable to materials management
• Introduce closing activities necessary to prepare
financial statements in accounts payable, such as
foreign currency valuation
Unit Objectives
After completing this unit, you’ll be able to:
• Create a list of vendors
• Maintain vendor master records in accounting
• Describe the role of an account group
• Post vendor invoices and credit memos in FI
• Create a recurring document and execute the recurring entries program
• Post a manual outgoing payment and print a cheque
• Run the automatic payment program
• Check account balances, line items, and documents
• Describe the most important organizational units in Material Management
• Describe and track the basic purchasing process in Material Management and describe its
effects in Financial Accounting
• Print balance confirmations
• Revalue foreign currency open items
• Regroup accounts payable according to due date
Contents
• Vendor Master Records
• Daily Accounting Transactions in Accounts
Payable
• Integration with Materials Management
• Closing Operations in Accounts Payable
Vendor Master Records
Lesson Overview
• Review an existing vendor master record and
create a new vendor master record in the SAP
system
• Examine how the account group controls the
appearance and numbering of vendor master
records
Lesson Objectives
After completing this lesson, you’ll be able to:
• Create a list of vendors
• Maintain vendor master records in accounting
• Describe the role of an account group
Vendor Account in Financial
Accounting
Vendor Account in Financial
Accounting
• As with G/L accounts, vendor accounts are made
up of two areas:
• A vendor account is defined for all company codes at
the client level. General data, such as the vendor's
name and address, is stored here.
• Postings cannot be made to the account for a
company code until company code‐specific settings
have been created. These settings refer only to the
relevant company code and include details, such as
agreed payment conditions or reconciliation account.
Initial Screen to Display A
Vendor Master Record
Account Groups for Vendors
Account Groups for Vendors
• Vendor accounts can be divided into various account groups in
the same way as G/L accounts, so that they can be organized
and managed more easily
• However, the account group controls the screen layout of all areas of
the vendor master record, not just the company code data as is the
case with G/L account groups
• The accounts in an account group usually have similar
characteristics
• For example, user could have one account group for domestic
vendors, one for vendors abroad, one for affiliated vendors, and one
for one‐time vendors
• Number ranges are assigned to account groups
• These number ranges are usually internal where the system assigns
user a number when user save the vendor master record
• However, some number ranges are external
• With external number ranges, user fill in the vendor number
manually when creating the vendor master record
Lesson Summary
You should now be able to:
• Create a list of vendors
• Maintain vendor master records in accounting
• Describe the role of an account group
 Daily Accounting
Transactions in Accounts
Payable
Lesson Overview
• Discuss in detail daily transactions with accounts
payable (AP)
• Explain invoice transaction
• How to set up the recurring entry program
• Study multiple ways to process payments in
mySAP ERP Financials
Lesson Objectives
After completing this lesson, you’ll be able to:
• Post vendor invoices and credit memos in FI
• Create a recurring document and execute the
recurring entries program
• Post a manual outgoing payment and print a
cheque
• Run the automatic payment program
• Check account balances, line items, and
documents
Account Payable Accounting
• Organizations use subledgers to track money owed to individual
vendors
• Subledgers are not part of the general ledger, but instead are
associated with special accounts in the general ledger known as
reconciliation accounts
• In accounts payable accounting, the accounts payable subledger
consists of individual vendor accounts
• The subledger account number is created when the vendor master
record is created
• The vendor master record and the vendor subledger account share
the same account number
• The associated reconciliation account is a general ledger account that
is designated as the reconciliation account
• The association between the vendor account and the reconciliation
account is established in the definition of the vendor master record
Scenario Example
• In the GBI general ledger, account #300700, accounts payable reconciliation, is the
designated account
• Consider a scenario in which GBI purchases office supplies from three vendors
• Each vendor has a designated vendor account number that is also the subledger
account number
• The purchases are as follows: $2,000 from Vendor 1, $1,000 from Vendor 2, and
$4,000 from Vendor 3
• Further, GBI makes these purchases on credit and then pays the vendors at a later date
via a check
• As illustrated in figure, Steps 1–3 record the purchases from each vendor
• Each purchase results in a debit to the supplies expense account and a credit to the
appropriate vendor account
• Postings to the vendor accounts are automatically posted to the reconciliation
account, accounts payable reconciliation, as indicated by the arrows
• Note that the AP reconciliation account does not track the details of each transaction;
rather, it maintains only the total values
• Payments, recorded in Steps 4–6, result in a credit posting to the bank account and a
debit posting to the appropriate vendor account
• Again, these debit postings are also automatically made to the reconciliation account,
accounts payable reconciliation
Invoice/Credit Memo Entry
Invoice/Credit Memo Entry
• User can easily create and post a vendor invoices or credit memos using a
one‐screen transaction
• This type of invoice entered directly in A/P is a miscellaneous invoice,
without reference to a purchase order
• The A/P entry screen is divided into the following areas:
• Work templates
• Here, user can select screen variants, account assignment templates, or held documents as
references
• Header and vendor data
• Document header and vendor line item data is entered here
• G/L account items
• The G/L line items for the document are entered here
• Information area
• The document balance and information about the vendor is displayed here
• This transaction can also be used to create documents in a foreign currency
• The foreign currency amount is translated into local currency using defined exchange
rates
Enjoy Vendor Invoice Screen
Account Assignment
• When a company purchases materials for consumption,
the transaction must identify the account assignment
object to be charged for the purchase as well as the
general ledger accounts to be debited and credited
• An account assignment object identifies the bearer of the
cost of the purchase and is the entity for which the
materials were purchased
• E.g. When a company purchases office supplies for the marketing
department, it debits a consumption account, such as the
supplies expense account in the general ledger, and it charges
the marketing department cost center for the purchase
• A cost center is a cost object used to accumulate costs for
a department
• In the above example, the account assignment object is the cost
center
Account Assignment (Cont.)
• Companies also use the purchasing process to acquire
assets, such as cars, and to obtain materials needed to
support processes such as production, fulfillment, and
enterprise asset management and projects such as
constructing a new factory
• The specific accounting data needed are determined by
the account assignment category
• The typical account assignment categories are described
below along with the accounting data — specifically, the
account assignment object to be charged and the general
ledger account number — that are required for each
category
• The letters in parentheses are the codes used in SAP ERP
Account Assignment (Cont.)
• Asset (A)
• A company uses this category when it acquires a fixed asset,
such as a car or land
• The value of fixed assets is tracked in separate subledger
accounts with corresponding asset master records
• When assets are purchased using a purchase order, the account
assignment object to be included in the purchase order is the
asset master record
• Order (F)
• Companies use this category when they purchase materials for
different types of orders
• An example of an order is a production order that will be used to
produce another material
• When a company purchases materials for an order, it must
include the order number (the account assignment object) and a
general ledger account number in the purchase order
Account Assignment (Cont.)
• Cost Center (K)
• When a company purchases materials (e.g. supplies) for
consumption, then the purchase order must include both
the cost center to be charged (the account assignment
object) and the appropriate general ledger expense
account number (e.g. supplies expense)
• Sales Order (C)
• When the purchase is associated with a specific sales
order (which is part of the fulfillment process), then the
sales order number and a general ledger account number
must be provided
• Project (P)
• When the purchase is related to a project, then the project
number and a general ledger account number must be
specified
CO Account Assignment Logic
CO Account Assignment Logic
• When entering an expense item for an operating expense,
user must also enter a cost accounting‐relevant
assignment, such as a cost center or internal order
• This means that when the item is posted, documents are created
in Management Accounting and Accounting
• A primary cost element must exist for the G/L account in
order for this to happen
• The Management Accounting document posts the costs
corresponding to the expense to the Management
Accounting object
• User can post costs and revenues in CO either as real
postings or statistical postings:
• User can settle real postings with other CO objects
• Statistical postings are only for information purposes
CO Account Assignment Logic
(Cont.)
• The account assignment object itself can either be a real or a
statistical object
• For example, an internal order is defined as real or statistical when it is
created
• A real order can only be executed with real postings, and a statistical
order only with statistical postings
• Cost centers are an exception to this
• A cost center is always a real object, but user can make statistical or real
postings to them
• To post costs in CO, user need to identify the corresponding real CO
account assignment object in the source document (for example, a
vendor invoice)
• Only one real object can be assigned to each document item in the
source document
• Additional statistical objects can be entered or derived from the
system
The Recurring Entry Program
The Recurring Entry Program
• User can use the recurring entry program for
postings that are repeated at regular intervals, such
as rent payments and payments of fees and property
taxes
• With this program, the necessary documents are
generated automatically
• Recurring business transactions must be stored in
the system as recurring entry original documents for
this to be possible
• Each recurring entry original document contains the
date of the first and last postings, the frequency at
which posting should be made, and the date of the
next planned posting
The Recurring Entry Program
(Cont.)
• The recurring entry program must be started at
regular intervals within a specified period
• The program selects all recurring entry original
documents in which the date of the next posting
falls within the specified period, and then
generates a batch input session
• When the batch input session is run, an
accounting document that corresponds to the
original document is posted, and the date of the
next posting is updated in the original recurring
entry document
Elements of the Payment Transaction

• All payment transactions include the elements

shown in the figure
Overview of The Automatic Payment
Program
Overview of The Automatic Payment
Program
• A payment transaction can be carried out either
manually or automatically using the payment
program
• The standard system contains common payment
methods and corresponding forms that have been
defined separately for each country
• The payment program was developed for the
international payment transactions between vendors
and customers
• This program can be used for incoming and outgoing
payments
• However, it is more commonly used for outgoing payments
Automatic Payment Program
Parameters
• Automatic payment consists of several steps
• The first step is maintaining the parameters
• User use the parameters to define which accounts and items the
payment program is to include in the automatic payment run
Parameters
Proposal Run
• The second step of the payment program is the
proposal run
• During the proposal run, the system does the
following:
• Checks the accounts and documents specified in the
parameters for due items
• Groups items due for payment
• Selects the relevant payment methods, house banks,
and partner banks
Proposal Run
Edit Proposal
• The third step of the payment program involves
checking and editing the payment proposal
• This step can be omitted, but user are advised to
check that the data is accurate before actually
running the payment program
Edit Proposal
Payment Run
• The fourth step of the payment program is the
actual payment run
• During the payment run, the system does the
following:
• Posts payment documents
• Clears open items
• Prepares data for the printing of payment media
Payment Run
Print Payment Media
• The final step of the payment run is printing
• Payment media are generated in this step, which
means that one of the following occurs:
• Payment media, such as cheques, are printed
• IDocs are generated for the electronic data interface (EDI)
• A data file is created as part of the data medium exchange
• The system comes standard with payment media
programs for many countries and many payment
methods
• The payment program RFFOD__S is activated in order to
print cheques in Germany
• In the USA, the program RFFOUS_C is used
• Note that the payment program name contains the code
for the country and for the payment method
Print Payment Media
Automatic Payment Program
• User can skip the payment proposal and execute
the payment run directly
• In this case, business transactions that balance
the open items are posted directly after entering
the parameters
• Also, user can combine the payment run step
with the payment media step by entering a
variant for the payment media program in the
Printout/data medium tab before running the
payment program
Lesson Summary
You should now be able to:
• Discuss in detail daily transactions with accounts
payable (AP)
• Explain invoice transaction
• How to set up the recurring entry program
• Study multiple ways to process payments in
mySAP ERP Financials
 Integration with
Materials Management
Lesson Overview
• Show how a simple purchase order is created
• Deal with the goods receipt and the invoice
verification in the Materials Management
• Discuss integration with Financial Accounting for
goods receipt and invoice verification in the
purchasing process
Lesson Objectives
After completing this lesson, you’ll be able to:
• Describe the most important organizational units
in Material Management
• Describe and track the basic purchasing process
in Material Management and describe its effects
in Financial Accounting
Plant
Plant
• The central organizational object in logistics is
the plant
• A plant is an operating area or branch within a
company
• A plant can be a central delivery warehouse, a
regional sales office, a manufacturing facility, a
corporate headquarters, or a maintenance plant
• A plant must be assigned to a single company
code
• However, one or more plants can be assigned to the
same company code
Purchasing
Purchasing
• Purchasing for the plants is completed by the
purchasing organization
• A purchasing organization is an organizational
element that negotiates conditions of purchase
with vendors for one or more plants
Purchasing Data in The Vendor
Master Record
Vendor Master Record
• General data include the vendor’s name, address, and communication
information such as phone and fax numbers
• These data are defined at the client level and are consistent across all company codes
and purchasing organizations in the enterprise (client)
• General data are common to the purchasing and accounting departments and can be
maintained by either department
• Accounting data include tax‐related data, bank data, and payment terms and
methods
• These data are defined at the company code level and are relevant to all purchasing
transactions in the company code
• The accounting department will typically complete this segment of the vendor master
• Accounting data must also specify the reconciliation account in the general ledger
• A vendor account is a subledger account and that the reconciliation account identifies the
accounts payable account in the general ledger associated with the vendor
• If the vendor supplies multiple companies (company codes) within the enterprise, then the
data very likely will vary for each company
• The reconciliation account will be different if each company uses a different chart of accounts
and general ledger accounts
• Bank data and payment terms may vary as well
• Thus, accounting data are maintained separately for each company code with which the
vendor had dealings
Vendor Master Record (Cont.)
• Purchasing data include various terms related to
determining prices, creating and communicating
purchase orders, verifying invoices, and other steps
involved in executing purchases with the vendor
• The purchasing department will typically complete this
segment
• Purchasing data are defined at the purchasing
organizational level and are applicable only to that
organization
• If an enterprise has multiple purchasing organizations that
deal with the vendor, then it must maintain separate data
for each one
• For example, delivery and payment terms may vary for
different purchasing organizations
Vendor Master Record
Procurement Cycle
Procurement Cycle
• Demand determination:
• The department responsible can register a requirement
for materials manually via a purchase order to Purchasing
• Determining the source of supply:
• The purchaser responsible is supported by the system in
determining possible sources of supply
• One possibility for determining the source of supply is
creating queries and subsequently entering the quotations
• Furthermore, user can access purchase orders and
conditions that already exist in the system
• Supplier selection:
• Comparing the prices in the different quotations makes
selecting suppliers easier
• Letters of rejection can be sent automatically
Procurement Cycle (Cont.)
• Purchase order handling:
• When creating purchase orders, the system provides user in the entry
process
• Purchase order monitoring:
• The purchaser can monitor the processing status of the purchase order in
the system
• For example, he can determine whether the goods or the invoice have been
received for the corresponding purchase order item
• Dunning processes are also supported
• Goods receipt:
• The system checks the amount of goods received against the purchase order
quantity
• Invoice verification:
• The vendor invoices are checked to see if the accounting and the content are
correct
• Payment processing:
• The vendor payment is usually done in the Financial Accounting
Three‐Step Verification
(Standard)
Posting Procurement
Transactions
• The three‐step verification, commonly referred to as the “three‐way
match”, is the standard procedure for posting procurement
transactions in MM
• The procedure contains three steps:
• Purchase order:
• Create a purchase order in Materials Management
• Do not make any postings in Financial Accounting
• Goods receipt:
• To update the receipt of inventory or consumable material, generate a material
document in Materials Management (MM)
• At the same time, create a document in Financial Accounting (FI) that posts the value
of the goods to the merchandise account as a debit and the goods receipt/invoice
receipt to the clearing account (GR/IR) as a credit in the general ledger
• Invoice verification:
• Post a vendor invoice in Materials Management (MM) using invoice verification
• This automatically generates a document in Financial Accounting (FI)
• The accounting document contains the invoice amount that gets posted to the GR/IR
account (debit) and the vendor account (credit)
Posting Procurement Transactions
(Cont.)
• The last two steps can be completed in reverse
order, depending on the order the goods and the
invoice are received
• The goods receipt/invoice receipt clearing
account ensures that goods were received for
each invoice, and vice versa
Invoice Verification
Invoice Verification
• When a company receives a vendor invoice, it
verifies that the invoice is accurate before it makes
payment
• The most common method of invoice verification is a
three‐way match between the purchase order, the
goods receipt or delivery document, and the invoice
• The objective is to ensure that the quantities and
price in all three documents are consistent
• An alternative is a two‐way match between a
purchase order and the goods receipt document
• This method is not very common, and it requires a
high degree of trust and cooperation between
partners
Data Needed for Invoice Verification
Data Needed for Invoice Verification

• The data obtained from the invoice include the

vendor number, invoice date, invoice quantity,
and invoice amount
• The data from the purchase order include vendor
number, materials, quantities, and price
• Finally, the materials and quantities received are
obtained from the material document created
during the goods receipt step
Tasks Within Invoice
Verification
• To complete this step, the user will provide the data from the invoice (vendor, date,
and amount) and the purchase order number
• The system will then retrieve all the needed data from the purchase order (vendor,
materials, quantities, and price)
• It will also retrieve the goods receipt data for the purchase order
• The user will verify that the data are correct and, if they are, will approve the invoice
• Occasionally, there will be discrepancies among the three sets of data
• For example, the quantity delivered or price may vary somewhat
• Whether these discrepancies are acceptable will depend on the organization’s purchasing
and accounting policies, which are specified in the material master or other master data in
the form of over‐ and under‐tolerances
• If the discrepancies are within tolerances, then the invoice is approved for payment
• If not, then the invoice will be blocked, and further action from the accounting or
purchasing department will be required before it can be released
Outcomes from Invoice
Verification
• Invoice verification has an impact on the general ledger
• E.g. GBI placed a purchase order for 500 t‐shirts from Spy Gear. The Miami plant received
the Spy Gear shipment of 5 boxes of 100 t‐shirts (500 total). Spy Gear sent GBI an invoice for
500 t‐shirts. Further, the price in the purchase order and invoice are the same. Thus, GBI can
make a three‐way match between the 500 units it ordered for $15 each, the 500 units it
received, and the 500 units it was invoiced for $15 each
• The next figure illustrates the data for the example
• Specifically, a debit of $7,500 is posted to the GR/IR account, and the vendor account is credited by
the same amount
• Because the vendor account is a subledger account, an automatic credit posting is also made to the
corresponding reconciliation account in the general ledger—the accounts payable reconciliation
account
• A corresponding financial accounting document is created
• In addition, an invoice document is created
• The purchase order history is also updated, and a link to the invoice document is added
• Finally, if the invoice price is different from the price in the purchase order, then the material master
must be updated to reflect this discrepancy, if the moving average price is used for price control
• Recall that when a goods receipt is recorded, the quantity, value, and moving average price are
updated in the material master
• When an invoice is received and the price is different from the one listed in the purchase order, the
material value and moving average price must be adjusted to reflect the new values
Financial Impact of Invoice
Verification
Payment Processing
Payment Processing
• Payment is triggered by the receipt and
verification of an invoice
• Payments can be made manually or
automatically via a payment program
• Typically, an organization will have a number of
invoices to pay, and the most common method is
to execute a payment program periodically, such
as daily or weekly
• The program will retrieve all authorized invoices
over a specified timeframe and automatically
create payments
Data Needed for Vendor
Payment
Data Needed for Vendor
Payment
• Data from the invoice include the date, the
vendor number, and the invoice amount
• In addition, payment terms, method, and address
are obtained from the vendor master
• The dates of the invoices are compared with the
payment terms and the date of the next
scheduled run of the payment program in order
to determine which invoices are due for payment
Tasks within Vendor Payment
• Processing payment involves several steps: selecting a payment method and a bank,
deciding which invoices are ready for payment, calculating payment amounts, posting the
payment documents, and printing the payment medium
• When making payments manually, the user will select the payment method and the bank
and will provide the vendor number and the amount of the payment
• The system will then display a list of open invoices for that vendor
• The user will next select the invoices that are to be paid
• Any applicable discounts based on payment terms are then applied
• For example, if the payment term is
2%/10 Net 30 and payment is being
made within the 10 days specified in the terms, the system will
apply a 2% discount
• Once the payment is posted in the general ledger, the actual payment can be sent
• If payment is made electronically, the system will automatically send the payment
• If it is to be made via a printed check, the user will print and send the check to the vendor
• If the company has an automated payment program, then the program will retrieve and
process all of the invoices that are due for payment using the parameters specified in the
payment program
• Users typically become involved only if there are exceptions that require special resolution
Outcomes from Vendor
Payment
• One obvious outcome of this step is payment to
the vendor, either electronically or via a check
• Appropriate general ledger accounts are also
updated and a corresponding financial
accounting document is created
• The bank account is credited by the amount of the
payment, and the vendor account is debited, as is the
associated accounts payable reconciliation account
Financial Impact of Vendor
Payment
Purchase Order
Purchase Order
• A purchase order is a communication sent to a
vendor in which a company commits to purchasing
the specified materials under the stated terms
• A purchase order is typically created with reference
to a requisition, an RFQ, a quotation, or a previously
created purchase order
• When reference documents are used to create a
purchase order, then much of the necessary data is
copied from these documents
• In addition, a purchase order can be created without
reference to any document
• In this case, all the necessary data are entered
manually
Data in A Purchase Order
Data in A Purchase Order
• A purchase order includes data from a variety of sources
• Besides the source documents, data from several master records, such as
material master, vendor master, info records, and conditions, are also
included
• In addition, data from specific agreements and contracts with the selected
vendor can be incorporated
• Most of the data in a purchase requisition are included in the purchase order
• In addition, the purchase order will contain other data depending on how
the order is created and which reference documents are used
• E.g. Material characteristics such as weight are included from the material master.
Vendor data, such as communication method, contact person, and address, are
included from the vendor master or quotation. Pricing data, payment terms, and
Incoterms® are included from the quotation, purchasing info record, other condition
records, or specific contracts and agreements with vendors, depending on how the
process is configured at each company.
• If the necessary data are not available from a reference document, then the
user must provide this information manually when he or she is creating the
purchase order
Purchase Order Screen
Purchase Order Screen
Purchase Order Screen
• The Purchase Order Screen has several subdivisions:
• type of document and vendor
• header data
• position details
• item detail
• The header includes data such as the purchase order number, vendor,
currency, dates, and payment terms
• These data apply to the entire document, including all line items
• The item details section includes data specific to each item in the purchase
order, such as the material number, description, quantity, delivery date, and
price
Lesson Summary
You should now be able to:
• Show how a simple purchase order is created
• Deal with the goods receipt and the invoice
verification in the Materials Management
• Discuss integration with Financial Accounting for
goods receipt and invoice verification in the
purchasing process
Closing Operations in
Accounts Payable
Lesson Overview
• Learn how to run balance confirmations for
vendors
• Describe the foreign currency valuation program
for open vendor items
• Learn function for Regrouping receivables and
payables to group accounts payable on the
balance sheet based on their remaining life
Lesson Objectives
After completing this lesson, you’ll be able to:
• Print balance confirmations
• Revalue foreign currency open items
• Regroup accounts payable according to due date
Accounts Payable Closing
Operations
Accounts Payable Closing
Operations
• Year‐end closing can be divided into two main sections:
• Legal requirements (procedures required by the government authorities)
• Technical and organizational requirements (procedures that are technically
required or needed to support the accounting organization)
• AC010 only focuses on the legal requirements
• At the beginning of the fiscal year, the balance carry forward program
is run, carrying forward the balances of the vendor accounts to the
next fiscal year
• The posting periods of the old fiscal year are blocked and the special
periods for closing postings for fiscal year‐end adjustments are
opened
• Afterwards, the balances with selected vendors are confirmed, the
foreign currency documents are valuated, and the accounts payable
are regrouped according to remaining life (required only in certain
countries)
• Once complete, the special periods can be closed
Balance Confirmations
Balance Confirmations
• The program for creating balance confirmations also
creates reply requests for a freely definable number
of vendors, a reconciliation list, and a results table
• The balance confirmations and reply requests are
sent to the vendors; the lists are used as a control
measure
• The vendors check the balance information they
receive and send their replies to the control center
audit department, which compares the replies with
the reconciliation list and enters the results in the
results table
Foreign Currency Valuation
Foreign Currency Valuation
• A foreign currency valuation is necessary if vendor accounts
contains open items in a foreign currency
• The amounts of these open items were translated into the
local currency at the time they were entered using the
exchange rate which was valid on the posting date
• The exchange rate is probably different at the time of closing,
and open items need to be valuated again
• A program valuates the open items using the new exchange
rate and enters the valuation difference in the valuated line
items
• It also creates the valuation postings:
• Debit: Expense from foreign currency valuation; Credit: Balance
sheet adjustment account
• Debit: Balance sheet adjustment account; Credit: Revenue from
foreign currency valuation
Foreign Currency Valuation
(Cont.)
• A valuation can not be made by posting to the
payable account, since reconciliation accounts
cannot be directly posted to
• For this reason, postings appear in an adjustment account,
which is displayed in the balance sheet item of the
associated reconciliation account
• A valuation method determines how the individual
line items are valuated
• This has to be set up in conjunction with the country‐
specific valuation regulations
• It defines, for example, whether the lowest value principle,
the strict lowest value principle, or a general principle
(also with revenue from the valuation) is to be used for
valuation
Regrouping Accounts Payable
Regrouping Accounts Payable
• Accounts payable and receivable have to be listed
separately in the balance sheet
• Since it is possible for some vendors to have a debit
balance, these accounts need to be changed to vendors
with a debit balance prior to creating the financial
statements
• In many countries, it is also necessary to group accounts
payable in the balance sheet based on their remaining life
• Both regroupings are carried out using a special program
• At the same time, these regroupings are removed on the
first day of the next period, since regroupings are not
necessary for daily processing
Regrouping Accounts Payable
(Cont.)
• The diagram shows how receivables with long
remaining terms were posted to adjustment
accounts separately, so that the balance sheet
could be prepared
• Additionally, vendors with a debit balance are
regrouped
• An adjustment account is used as the offsetting
account here as well, since adjustments cannot
be posted directly to a reconciliation account
Note
• The foreign currency valuation, as well as the
regrouping, can be completed in different ways
to meet various legal requirements
• The results are then posted to various accounts that
are used by different financial statement versions
• The regrouping program is also used when the
reconciliation account of a vendor has been
changed during the year
Lesson Summary
You should now be able to:
• Show how a simple purchase order is created
• Deal with the goods receipt and the invoice
verification in the Materials Management
• Discuss integration with Financial Accounting for
goods receipt and invoice verification in the
purchasing process
Unit Summary
You should now be able to:
• Print balance confirmations
• Revalue foreign currency open items
• Regroup accounts payable according to due date
Test Your Knowledge
1. Vendor Accounts are made up of two segments. What are they?
2. The reconciliation account can be found in the _____________________
segment of the vendor master record.
3. When creating a vendor master record, you can use the functionality of
a reference vendor. What is a reference vendor?
4. When using the Enjoy screen to do vendor postings in mySAP ERP
Financials, an information section pops up when you enter the vendor
number and choose Enter. What can we use it for?
5. The _____________________ is used in CO to post to cost objects in
controlling.
6. For postings to recur on a regular basis, the _____________________ can be
used to generate the necessary documents.
7. The parameters for the payment program define which
_____________________ , _____________________ and _____________________ to include
in the automatic payment run.
Test Your Knowledge (Cont.)
8. During the proposal stage of the payment program, you cannot make
any changes to what SAP R/3 proposes to pay.
o True
o False
9. The two key organizational elements in MM are the _____________________,
which is an operating area or branch within a company, and the
_____________________, which negotiates conditions of purchase with
vendors.
10. A complete vendor master record consists of three parts:
_____________________, _____________________ and _____________________.
11. When a purchase order is created, a financial document is also created.
o True
o False
Test Your Knowledge (Cont.)
12. In my SAP ERP Financials, one can post adjustments into
_____________________ periods (such as periods 13.16) for year‐end
closing adjustments.
13. If the exchange rate has moved in your favor since a vendor invoice
was posted, the following Debit and Credit transaction is created by
the foreign currency revaluation program: _____________________.
14. The regrouping payables program can be used for three purposes.
What are they?