Clearing Open Items

you learn how to prepare automatic clearing for open items, define a maximum exchange
rate difference, and perform foreign currency valuation.
At the end of this chapter, you will be able to:

• Prepare automatic clearing

• Create accounts for clearing differences
• Define a maximum exchange rate difference
• Check company code settings
• Define valuation methods
• Prepare automatic postings for foreign currency va

Clearing Open Items

In SAP R/3, posted transactions with business partners are said to be open or partial
full payments are made and the related accounts are cleared. For example, a busine
an invoice; the invoice is posted in the system. At this point, the transaction remains
account until payment of an equivalent amount of the invoice is made and the accou
Once payment is made and cleared with the associated open item, the system gene
number. Only then is the transaction complete
Assume that on January 1, 20XX, a customer ordered 1,000 items, the accompanying invoice w
generated, and the invoice was entered into the system immediately.
The amount of 1,000 remains in the account as an open item. At this point the transaction is un
because payment has not been received.
On February 1, 20XX, payment of $1,000 is received. The incoming payment is matched with th
item of 1,000 and cleared. The net effect of this transaction will be a nil balance. At this point,
is complete.
Account clearing can be carried out for an individual item or for collective items in the system.
ERP system documents clearing can be carried out manually or automatically using automatic p
programs. Clearing open items manually means that the user performs the clearing process, w
system performs automatic clearing. For the system to perform automatic clearing of open item
to specify certain settings during customizing.
In this chapter, you will complete an exercise on how to set up automatic clearing. Later,
you will look at how to perform manual clearing of open items in detail. But before I walk throu
automatic clearing configuration, I’ll briefly describe the two options in manual clearing.

Manual Clearing Overview

There are two ways to clear open items in the system manually: posting with clearing and acco

1….Posting with Clearing

Posting with clearing occurs when an open item on an account is matched against pa
to bring the account balance to nil. It is also possible to group open items, match the
and clear them simultaneously. The system will mark them as cleared items, assign a
number, and enter the date that the items are cleared in the system.
In SAP ERP, posting with clearing can be performed on an individual open item or on
items (that is, several open items in the system are cleared with a payment simultan
clearing can also be performed on an account type and several currencies at the sam
payment to open items. When you’re using the posting with clearing option, the net
business transactions end up with a zero balance. Open items and payment included
equal. For example, the balance on an account of £1000 must be equal to a paymen
On the contrary, if the open items and payment are not equal, it is still possible to po
the system. The system will treat the posting as a payment on the account and not a
on account is when the item remains in the system as an open item

2….Account Clearing
G/L accounts and sub-ledgers managed in open items are cleared using an account c
With account clearing, you don’t need to post an item. All you need to do is select th
that balance out to zero. When you post them, the system flags the selected items a
clearing document number and clearing date for the cleared items.
 Problem: The accounting staff wants to clear open items using the Automatic Clearing
function. Your task is to maintain settings that will allow the system to clear open items
using the Automatic Clearing function

In SAP ERP, you define account types for customers, vendors, and general ledger accounts, and
criteria for the assignment number (used in relation to the sort key, which enables the automa
process in FI), business area, and trading partners (used to control vendor/customer payment/
for grouping an account with open items for automatic clearing. Once these settings are made,
program will look for open items in local and foreign currency that equal a zero balance, group
them together, and clear them simultaneously. The system then generates a clearing number a
enters them into the cleared document.
In order for the system to perform automatic clearing, you need to customize certain specificati
part of your customization, you specify several criteria, including account type and number. You
define up to five additional criteria.

To customize automatic clearing programs, follow this menu path: IMG: Fin
General Ledger Accounting (New) ➤ Business Transactions ➤ Open Item C
Clearing. Or you can use the transaction code OB74

CLICK ON NEW ENTRIES

1…. Chart of Accounts: Enter your Chart of Account in this field. This is the four-digit
character you defined

2…. Account Type: Enter the account type in this field. In SAP ERP, account types are
represented by letters, such as D (customer), V (Vendor), and S (General Ledger).
 3… From Account/To Account: Specify the account range for each activity type
for internal and external number range assignments. For internal number
assignments, use the range 0 to 99999999999. For external number range
assignments, use the range A to Z.

4… Criterion 1-3: Define the criteria for open item clearing in the Criterion 1,
Criterion 2, and Criterion 3 fields.

■■Note Criterion 1 is the technical field ZUONR for an assignment number. Criterion 2 is the technical field
GSBER for a business area. Criterion 3 is the technical field VBUND for a trading partner.

In the next activity, you will look at how to assign G/L accounts for automatic clearing. This is an
important aspect of the customization process, as it gives you the opportunity to see how the G/L accoun
you have created are assigned in the system to automatic posting.

Create Accounts for Clearing Differences

IN PREVIOUS LECTURES ,look at the three levels of tolerance represented in SAP ERP

• Tolerance groups for G/L accounts

• Tolerance groups for employees
• Tolerances for customers/vendors

You have also defined limits for acceptable payment differences during posting by setting the m
amount per document that is permitted for posting, the maximum amount employees are auth
post per open item in a customer/vendor account item, and the maximum cash discount an em
is permitted to grant to business partners. During account clearing, the system will check the to
groups to ascertain if the differences are within acceptable limits and automatically post the di
predefined accounts.

NOTE…. Accounts for Clearing Differences” for the G/L accounts you need
in order to complete this activity’s customizations.

In this activity, you will create and assign G/L accounts’ posts payment differences. To begin the
customization process, follow this menu path: IMG: Financial Accounting (New) ➤ General Led
Accounting (New) ➤ Business Transactions ➤ Open Item Clearing ➤ Clearing Differences ➤ Cre
Accounts for Clearing Differences. You can also use the transaction code OBXZ
 The Enter Chart of Accounts dialog box pops-up. Enter your chart of account key in t
Accounts field and click Enter at the bottom of the screen or press Enter on your key
Configuration Accounting Maintain: Automatic Posts – Rules screen is displayed (Figu
you set the automatic posting rules to determine if accounts are posted as debits or
you include tax codes with your account assignment.

Specifying debits/credits for account determination

Click the Debit/Credit checkbox circled red in the Accounts Are Determined Based On section.
function allows you to assign G/L accounts for both debits and credits to automatic posting. If y
Tax Code field, you will also need to specify your tax code. The tax code you specify will be app
account. The Tax Code checkbox is blank in this example. This means that all tax codes can be p
G/L accounts you assign in this activity for payment differences. Click the Save button. The Mai
Configuration: Automatic Posting – Accounts screen appears (Figure ). This is where you assign
predefined G/L accounts for posting payment differences for automatic posting
 Account determination for automatic posting

Enter the G/L account you created for G/L Clearing Differences for any debit transactions (this i
230110 in the Debit column in the Account Assignment section). Likewise, enter the G/L accou
created for G/L clearing differences (this is 280110 in the credit column in the Account Assignm
See Figure .
Click the Enter button or press Enter on your keyboard so the system to confirm if your entries
accepted. Then save your work.
The next step in this activity is to look at how to specify a maximum exchange rate in SAP ERP.

Define a Maximum Exchange Rate Difference

In SAP R/3, it’s possible to set a maximum exchange rate difference for each type of foreign cur
This setting specifies the maximum exchange rate deviation allowed between foreign currency
currency, in percentage terms. Maximum exchange rate differences are performed at the comp
level and are therefore company code dependent

When you enter a foreign currency manually into the system and specify the appropriate excha
rate in the document header, the system will perform a validation check for the exchange rate
calculate the percentage exchange rate deviation, and compare it to the defined maximum exc
difference. If the exchange rate difference exceeds the maximum exchange rate difference you
system will issue a warning. This measure ensures that any errors are identified and rectified ea
For example, if 10% is specified as the maximum exchange rate difference, when the exchange
exceeds this specified rate, the system will automatically identify this problem and issue a warn
Figure illustrates how the system performs checks in SAP ERP using a flowchart.
A flowchart diagram depicting how maximum exchange rate is processed in SAP R/3

Now let’s set the maximum exchange rate difference in SAP ERP. To define the maximum excha
difference, follow this path: IMG: Financial Accounting (New) ➤ Financial Accounting Global Se
(New) ➤ Global Parameters for Company Code ➤ Currencies ➤ Maximum Exchange Rate Diffe
Define Maximum Exchange Rate Difference per Company Code. You can also use the transactio
The Change View “Maximum Differences Between Exchange Rates”: Overview screen appears
(Figure ). This screen contains the list of company codes defined previously in the system.
 Specifying the maximum exchange rate difference

Click the button at the bottom of the screen to search for your company code from
the list of company codes displayed. Assign a maximum exchange rate difference to your comp
entering the percentage rate in the Max.exch.rate.dev box. In this activity, we used 10 (10%) as
exchange rate.
 Save your settings.

Checking the Company Code Settings

Although it is not mandatory, it is recommended that you check your company code settings to
customizations you have made so far. You can check your company code settings in the global p
by following this menu path: IMG: Financial Accounting (New) ➤ Financial Accounting Global S
(New) ➤ Global Parameters Company Code ➤ Enter Global Parameters. Or you can use the tra
code OBY6.

The Change View “Company Code Global Data:” Overview screen is displayed (Figure 6-7). From
list of displayed company codes, search for your company code. Select your company code from
company codes by clicking on it.

The Company Code Global Data Overview screen

Click the Details button at the top-left side of the screen (circled in red in Figure ). Th
View “Company Code Global Data”: Details screen is displayed (Figure ). This screen
global settings in your company code. You can specify other important settings here
The Company Code Global Data Details screen

VAT Registration No.: Entering data in this field is optional. Do this only if y
company requires it. When you enter your company’s VAT registration nu
the system will automatically use this number for VAT correspondence.

Propose Fiscal Year: This field is optional. When you click this checkbox, th
system will automatically propose a fiscal year during document entry

Define Default Value Date: This setting is also optional. When you select it
during document entry, the system will automatically propose a current d
when entering a document into the system.

Negative Postings Permitted: When this checkbox is clicked, this will allow
to reverse transactions in the system without posting the reversed docum
the associated reversal document. In other words, the original transaction
in the system will stay the same as before

When you have updated the Change View “Company Code Global Data”:
Figure , click the Enter button at the top-left side of the screen and then s
The next step in this configuration exercise is to customize foreign currenc
part of this customization process, you will also define valuation methods
automatic posting settings for foreign exchange valuation.
efine a maximum exchange

erences
e difference

oreign currency valuations

ers are said to be open or partially complete until

e cleared. For example, a business partner sends in
is point, the transaction remains an open item in the
he invoice is made and the account is cleared.
ted open item, the system generates a document
 ms, the accompanying invoice was

At this point the transaction is unfinished,

ming payment is matched with the open

ll be a nil balance. At this point, the transaction

r collective items in the system. The SAP

r automatically using automatic payment
performs the clearing process, whereas the
m automatic clearing of open items, you have

automatic clearing. Later,

in detail. But before I walk through an
ptions in manual clearing.

y: posting with clearing and account clearing

an account is matched against payment and cleared

e to group open items, match them with payments,
k them as cleared items, assign a clearing document
ed in the system.
on an individual open item or on a group of open
cleared with a payment simultaneously). Posting with
and several currencies at the same time by assigning
ting with clearing option, the net effect should be that the
pen items and payment included in the clearing must be
1000 must be equal to a payment receipt of £1000.
not equal, it is still possible to post the difference in
yment on the account and not as a cleared item. Payment
as an open item

ms are cleared using an account clearing procedure.

m. All you need to do is select the items in the account
system flags the selected items as cleared and enters a
e cleared items.
 the Automatic Clearing
stem to clear open items

nd general ledger accounts, and set the

t key, which enables the automatic clearing
trol vendor/customer payment/transaction)
g. Once these settings are made, the systemclearing
that equal a zero balance, group
n generates a clearing number and date and

d to customize certain specifications. As

ng account type and number. You can also

w this menu path: IMG: Financial Accounting (New) ➤

nsactions ➤ Open Item Clearing ➤ Prepare Automatic

is is the four-digit

account types are

(General Ledger).
 activity type

mber range

on 2 is the technical field

atic clearing. This is an

unity to see how the G/L accounts

olerance represented in SAP ERP, namely

s during posting by setting the maximum

mum amount employees are authorized to
e maximum cash discount an employee
ring, the system will check the tolerance
its and automatically post the difference to

nts you need

ayment differences. To begin the

Accounting (New) ➤ General Ledger
ing ➤ Clearing Differences ➤ Create
tion code OBXZ
 er your chart of account key in the Chart of
creen or press Enter on your keyboard. The
s – Rules screen is displayed (Figure ). This is where
accounts are posted as debits or credits and also where

Determined Based On section. This

credits to automatic posting. If you click the
tax code you specify will be applied to the G/L
means that all tax codes can be posted in the
s. Click the Save button. The Maintain FI
igure ). This is where you assign the
utomatic posting
 for any debit transactions (this is
n). Likewise, enter the G/L account you
t column in the Account Assignment section)

ystem to confirm if your entries are

mum exchange rate in SAP ERP.

Difference
ence for each type of foreign currency.
owed between foreign currency and local
nces are performed at the company code

nd specify the appropriate exchange

tion check for the exchange rate difference,
e it to the defined maximum exchange rate
um exchange rate difference you defined, the
ors are identified and rectified early.
e difference, when the exchange rate
fy this problem and issue a warning message.
using a flowchart.
 processed in SAP R/3

P. To define the maximum exchange rate

➤ Financial Accounting Global Settings
➤ Maximum Exchange Rate Difference ➤
e. You can also use the transaction code OB64.
ates”: Overview screen appears
d previously in the system.
 company code from
nge rate difference to your company code by
his activity, we used 10 (10%) as the maximum
 k your company code settings to see the
pany code settings in the global parameters
➤ Financial Accounting Global Settings
ameters. Or you can use the transaction

en is displayed (Figure 6-7). From the

e. Select your company code from the list of

reen (circled in red in Figure ). The Change

s displayed (Figure ). This screen displays all the
fy other important settings here
 field is optional. Do this only if your
r company’s VAT registration number,
mber for VAT correspondence.

When you click this checkbox, the

year during document entry

also optional. When you select it

utomatically propose a current date

heckbox is clicked, this will allow you

hout posting the reversed document and
er words, the original transaction figures

w “Company Code Global Data”: Details screen as shown in

eft side of the screen and then save your work.
e is to customize foreign currency valuation in SAP ERP. As
ll also define valuation methods and learn how to specify the
hange valuation.