SAP Procure to Pay (P2P) Accounting and How

to Audit
Jul 18, 2017 | SAP | 4 

Introduction
Accounting In SAP
In SAP Procure to Pay (P2P), we create 4 documents to complete the entire process of procuring
the goods to payment to the vendor.

1. Purchase Order (PO)

2. Goods Receipt (GRN)

3. Invoice (Invoicing)

4. Payment

In some cases, there can be Purchase Requisition, before Purchase Order.

There is no accounting entry for creation of Purchase Order, accounting entries start from
posting of GRN. Let’s see in a general scenario which accounting entries are created in SAP.
Let’s Take an example, we have a PO for 50Kg Price as 520/kg. Thus PO amount –  26,000

At the time of GRN Accounting Entry will be

Raw Material a/c Dr – (GRN Qty X PO Price) [310000]
To GR-IR a/c [191100]

At the time of Invoice Accounting Entry will be

GR-IR a/c Dr – (Invoice Qty X Invoice Price)  [191100]
To Vendor a/c  [16000]

At the time of Payment to Vendor Accounting Entry will be

Vendor a/c Dr – (Invoice Qty X Invoice Price)

To Bank a/c

In this Article we will only focus accounting entries at the time of GRN and Invocing.
Account Determination
Accounting Configuration
The Accounting entries which we saw in above section is governed by account determination
configuration. Users while creating documents like GRN, Invoicing should not be confused /
bothered for GL Account to be selected. Hence GL Accounts are automatically selected based on
configuration and accounting entry is posted. Now let’s see how each of the accounts is selected.

Raw Material Account Determination at the time of GRN (i.e. Dr)

Go to TCode FBKP and Click on “Automatic Posting”

Search for “Material Management Posting (MM)” and Double Click

Now we need to select Transaction. The transaction we are interested is “BSX” aka “Inventory
Posting”. Double Click “Inventory Posting”.
Here we define GL Account which will be hit at the time of Inventory. This setting is defined at
“Chart of Accounts”. Hence when you click on “Inventory posting” in the previous screenshot,
SAP will ask for Chart of Accounts (COA). In our example, the COA is “CAUS”.

As you can observe, we can define GL Account for each Valuation Class and Valuation Modifier
(also called as valuation grouping code). Thus in our case, we know that GL account was
310000, now let’s check Material Master if the Valuation Class is correctly defined.

To minimise the necessary effort involved, valuation areas with the same account number
assignment can be grouped together. This is done through the valuation grouping code (aka
Valuation Modifier). The valuation grouping code is then used to assign the G/L account
numbers. The valuation grouping code (dependent on the valuation area) helps you to configure
automatic account determination with the minimum possible effort.
Open Material Master in View Mode using TCode MM03. You can observe that Valuation Class
is set as “3100”. You need to go to “Accounting 1” Tab of Material Master to View Valuation
Class. Since Valuation Class is defined for each Plant, you will need to enter plan number to
open “Accounting 1” Tab. In our example, plant code is 3200.
GR-IR Account Determination at the time of GRN (i.e. Dr) and Invocing (i.e. Cr)

Open TCode OBYC. This will get us a list of transactions for which we need to configure GL
Accounts. As you can see in the screenshot, we are on “RMK” Group. Thus we are seeing the
list of transactions for P2P Cycle.

Double click on “GR-IR Clearing Account” (i.e. WRK) Transaction.

When you double click on “WRK” transaction, you will be asked for Chart of Accounts (COA).
In our example, COA is “CAUS”. The GL Account can also be defined for “Valuation Modifier”
as explained above.

As you may have noticed we have not defined whether the GL account is to be Debited or
Credited. SAP will automatically dtermine whether account is Debited or Credited.
Vendor Account Determination at the time of Invocing (i.e. Cr)

GL Account determination for Vendor is simple and straight forward. Open XK03 which will
ask for Vendor Code.In our example, Vendor Code is 3021. In the “Accounting Info” Tab we
can see that Recon Account is defined as 160000.
Extracting Configuration
How to conduct system audit
Vendor GL Determination – Extraction

Recon Account of Vendor is saved in Table – LFB1. Using SE16N you can easily extract recon
accounts. Parameters which needs to be filtered – Company Code

GR-IR GL Determination – Extraction

GR-IR account determination information is stored in T030 Table. Go to SE16N and extract this
using following parameter – Chart of Accounts (COA) and Transaction “WRX”
Inventory GL Account Determination – Extraction

Inventory account determination information is stored in T030 Table. Go to SE16N and extract
this using parameter – Chart of Accounts (COA) and Transaction “BSX”

Introduction
Enterprise Structure
P2P – Purchase to Pay – MM Module
Purchasing Organization
Purchasing Org to Company Code
One to Many. i.e one Purchasing Org can be assigned to Many Company Codes.

Table – T024E
Purchasing Org to Plant
Many to Many. i.e Any Purchasing Org can be assigned to Any Plant

Table – T024W
Plant
Plant to Company Code
Many to one. i.e one Plant can be assigned to Many Company Codes.

Table – T001K
O2C – Order to Cash – SD Module
Sales Organization
 Sales Organisation is an organisational unit which groups the enterprise according to the
requirement of Sales & Distribution. Sales Organisation distributes goods & services. It is liable
for products which are sold and also responsible for the customers right of recourse &
negotiating sales condition.

Each Sales Organization has its own master data, for eg customer & material master data, as well
as conditions, pricing & output type. A Sales Organization is the highest level (after the Client)
to which sales figure are summed.
Sales Org to Company Code
One to Many. i.e one Sales Org can be assigned to Many Company Codes.

Table – TVKO
Sales Org to Division
Many to Many. i.e Any SalesOrg can be assigned to Any Division

Table – TVKOS
Sales Org to Distribution Channel
Many to Many. i.e Any SalesOrg can be assigned to Any Distribution Channel

Table – TVKOV
Credit Control Area
Company Code to Credit Control Area
Many to One. i.e Many Company Code can be assigned to one Credit Control Area.
Table – V_001_X