OPEN ITEM

MANAGEME
NT IN SAP
BY, SWATANTRA KUMAR
BARIK
PROCESS WEAVER
ACADEMY

OPEN ITEM
An OPEN ITEM refers to the expenses and
revenues that are currently outstanding and has
not been paid or applied.
This approach is often used in business
accounting to track any financial activity that is
managed over a period of time
Once the activity is considered settled in full and
appropriate postings have occurred in the
accounting records, the activity is considered as
closing transaction.

OPEN ITEM MANAGEMENT:

It is the management of all the open item in a
particular GL account.
Open item management allows you to display the
open and cleared items and the amount in an
account.
Reconciliation is one of the main purpose of open
item management.
It basically reconciles and clears one account
against another.

ACCRUAL ACCOUNT

1.
2.

.
.
.

Accruals are the adjustment for:

Revenues that have been earned but not yet
recorded in the accounts
Expenses that have been incurred but are not yet
recorded in the account.
Examples:
Interest on loans
Goods received and consumed or sold/ service
received, for which no supplier invoice is created.
Taxes incurred and wages incurred.

SOLUTION OF SUCH ACCRUED ACCOUNT

Example:

Barius Ltd pays salaries for the month of December 2015 of Rs 40,000 on 5 th January 2016.

A common approach to solve such a problem would be:

salaries a/c

dr

cash a/c

cr

40000
40000

But such an entry shall offset the balance sheet for the month of December as well as January.

The profit might increase in the absence of the salary expenses for the month of December.

For the month of January the expenses of salary will be doubled.

There will be lot of trouble to reconcile the account at the end of the year.

IN ORDER TO SOLVE THE ABOVE PROBLEM

OPEN ITEM MANAGEMENT IN SAP ENABLES US
TO OPEN PAYABLE ACCOUNTS AS AN OPEN ITEM.
Entry

Explanation:

Salaries exp a/c

Salaries payable a/c

dr
cr

40000
40000

salaries exp a/c is debited to salaries

payable a/c.

Salaries payable a/c

dr

40000

Cash a/c

cr

40000

salaries payable a/c is debited to

cash a/c.

We need to debit the salaries a/c to

salaries payable a/c by the end of
the month, this will recognize the
salaries a/c as a liability for the
month of December. And shall
appear on the balance sheet of the
month.

In the second step, the salaries

payable a/c is debited to cash a/c
on the date of payment i.e., the 5th
of january.

CREATING PAYABLES AS AN OPEN

ITEM A/C:
EDIT GL ACCOUNT
CENTRALLY SCREEN

T CODE FS00
1.

Fill in the GL account as 160000

2.

Give the company code BASP

3.

Select create button.

Under Type Description

tab:
1. Fill in the account
group liabilities.
2. Select the balance
sheet account radio
button.
3. Fill in the short text
4. And the long text
accordingly.

2.

3.

Under Create/ Bank/Interest

tab:
1. Fill field status group as
G001
2. And save it.

c
o
n
t
i

1.

tab:
Select only
balances in local
currency check
box.
Select open item
management and
line item display.
Fill in the sort key
001.

POSTING SALARIES EXPENSES IN THE

MONTH END:
ENTER G/L ACCOUNT
POSTING: HEADER
DATA

T CODE F-02

1.

2.

3.
4.

5.

Fill in the document date (1)

and posting date (4) to be the
last date of the month.
Fill in the document type(2) as
SA
Fill in the period (5).
Fill in the company code(3) as
BASP.
Fill in the currency/rate as
INR.

1. fill in the posting key as

40 as salaries expenses is
to be debited
2. Fill in the account as
420000

1.

Fill in the amount as 40000.

2.

Fill in the business area BAAP.

3.

Fill in the text salaries posted to the payables

a/c

4.

Posting key as 50.

5.

Account as 160000.

1. Fill in the amount as *.

2. Fill in the text as +.
3. Go to menu document and
simulate
4. Save it.

CLEARING OPEN ITEMS:

Clearing means when we are paying against the

expenses/ vendor payments, we have to pay
against the open item which are available in the
vendor accounts/ expenses payable account.
One have to post the entry against the open
item, till that time the open item will show the
red symbol.
After clearing, the same line item will convert
in to green symbol.

TYPES OF CLEARING OPTIONS:

1.
2.

3.

Standard clearing option: The total open item

will be cleared at the time of postings.
Partial clearing option: at the time of clearing
partial amount will be cleared out of the total
amount, up to the total clearing all the line
items belongs to the open item will show as
open items, though one paid partial payment.
Residual clearing option: in this option, partial
amounts can be cleared and for the remaining
pending amount system will create one more
new line item (after clearing the amount at the
same time).

STANDARD
PAYMENT

L
PAYME
NT

RESIDUAL
PAYMENT

DIFFERENCE BETWEEN STANDARD,

PARTIAL AND RESIDUAL PAYMENT
STANDARD
PAYMENT

PARTIAL
PAYMENT

RESIDUAL
PAYMENT

THE END