sap-fi-bootcamp-training-day3.ppt

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Copyright © 2007 Accenture All Rights Reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture.
SAP Financial Accounting (FI)
Bootcamp
Day 3
Copyright © 2007 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture.

2
• Review of Day 2
• Accounts Payable – Overview
• Accounts Payable – Master Data
• Accounts Payable – Invoice Processing
• Accounts Payable – Payment Processing
• Accounts Payable – Reporting and Conversion Tips
• Accounts Payable – Withholding Tax
• Bank Accounting – Electronic Bank Statement
Agenda – Day 3

3
• Directions
– Participants are split into teams
– Each team is given a topic covered on Day 2
– The team discusses the topic with the intention to
present the concepts of their topic to the class AND
create 4 questions related to any of the topics.
• Timing – 60 minutes
– 20 minutes for group discussion
– 20 minutes to go through team overview
– 20 minutes to go through questions
Review of Day 2

4
• Review of Day 2
Agenda – Day 3

5
Requisition
for Goods /
Services
Purchase
Order
Goods
Receipt
Invoice
Verification
Increase
Inventory
A/P invoice
Vendor
Payment
Account
Assignment
Dr. Material
Cr. GR/IR
Dr. GR/IR
Cr. Vendor
No FI posting
FI/CO
MM
Dr. Vendor
Cr. Bank
• Asset
• GL accounts  Cost Centre,
Internal Order, WBS
• Material  Profit Centre
Purchase to Pay Process

6
Accounts Payable (Sub-Ledger) General Ledger
Invoices
Credit Memos
Recurring Entries
Payments
Account Posting
Reconciliation
Account
Check
Reconciliation
Detailed Data
Summary Data
• Accounts Payable keeps track of vendors and vendor
transaction data
• It is an integral part of the purchasing system
Accounts Payable Overview

7
• Accounts Payable application component functions
like the sub-ledger.
• Each vendor is identified with a unique master record
having a unique account number.
• Each vendor sub-ledger account is assigned to the
General Ledger, via the reconciliation account.
• All transactions – Invoice processing, payments, etc.,
are posted to the vendor sub-ledger and the
transactions get updated in the General ledger, real-
time.
Accounts Payable Overview
(cont.)

8
• Organisation structure for Accounts Payable
• FI-AP uses company code as the organisation entity.
• All accounting transactions, that are posted to a vendor, are
recorded within a company code.
• Vendor sub-ledger and General Ledger are posted real-time
within the company code
• Organisation structure for Purchase transactions
• Purchase-related transactions are posted in the MM module
• MM Module uses other organisation units like plant, purchasing
organisation, etc.
• Purchasing Organisation
• Plant
Accounts Payable Overview –
Organisation Structure

10
• Review of Day 2
• Accounts Payable – Withholding tax
Agenda – Day 3

11
• What is the vendor master?
– Record containing all data required to do business with
vendors
– Stored centrally and is used by both Purchasing (MM) and
Finance (FI)
– Data contains the following:
• Vendor’s name, address, language and phone numbers
• Fax Number and email address
• ABN number
• Bank details
• Account Control data (GL Reconciliation acct)
• Payment method and payment terms set up with vendor
• Purchasing data
• Etc.
Accounts Payable – Master Data

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• There are three segments of vendor master data:
– General data: Maintained at the client level and hence remains
the same for all the modules & their organisation units
• Account number, Name, Address, communication details
• Vendor’s bank account, Tax registration information (VAT No.)
– Company Code data: Data specific to a company code are
maintained in this segment. Prior to posting to a vendor in a
company code, the company code segment should be created
• Reconciliation account, payment terms
• Extended Withholding tax
– Purchasing data: Purchasing related information are maintained
in this segment.
• Order currency, GR-based IV indicator, Schema group
Vendor Master Data – Categories

13
+ =
Purchasing FI - AP Central
• Vendor Master Data can be maintained from different
areas of the system (Finance or Logistics), depending
on what category of data needs to be maintained.
Vendor Master Data – Categories
(cont.)

14
• The account group is a grouping of properties that
control the creation of master records
• The account group controls the number range for the
vendor master records (Each vendor master is
identified with a unique account number)
• Account group also controls if the number range is
externally assigned or internally assigned.
• Account group controls the field status of the vendor
master maintenance – If the field entry is
Suppressed/Required/Optional/Display
Vendor Master Data – Account
Group

15
• Reconciliation Account
– This is a special General Ledger account. It links the
vendor sub-ledger to the main General Ledger
– Reconciliation account is specified in the vendor
master
– Normal business transactions posted to the vendor
sub-ledger are updated real-time in the General
ledger through the reconciliation account
– Examples: Trade Payables – Domestic Vendors,
Trade Payables – Foreign Vendors
Vendor Master Data – Key
Concepts in Vendor Master
(1 of 4)

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• Payment Term
– Terms of payment specify when the payable is due for
payment.
– This contains the rule for determining the net due
date, cash discount terms for early payment,
instalment payment, etc.
– Default payment term is specified in the vendor
master and is applicable for all transactions
– At the time of posting transaction, the defaulted
payment term can be overwritten.
(2 of 4)

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• Alternative Payee
• Alternative payee is the recipient of the payment.
• An alternative payee is created as another vendor
master record and assigned to the vendor, with whom
the normal purchase transactions are posted.
• Outgoing payments are received by alternative payee
instead of the original vendor. Accounting
transactions will get updated in the original vendor
sub-ledger account.
• Alternative payee can be specified in the general data
and / or the company code data of the vendor.
(3 of 4)

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• Head Office – Branch Office
• Some vendors may supply goods and services from multiple
locations. They may be identified with more than 1 vendor
master record.
• However, if the vendor monitors and controls his receivables
(company code’s payables) centrally, then the central vendor is
assigned as the Head office in all the other related vendor
master records.
• Whenever business transactions are posted to the “branch”
office vendors, the transactions get updated to the Head office
vendor’s sub-ledger account.
• Head office and branch office vendor master records are
maintained like any other vendor master.
• Head office vendor master is specified in the company code
segment of the “branch office” vendor master.
(4 of 4)

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• Refer to System Walkthrough 3.1- Vendor Accounts
in your Faculty Guide.
− Vendor Account Group
− Number Ranges for Vendor Accounts
− Assignment to Account Group
System Walkthrough 3.1 –
Vendor Accounts

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• Refer to System Walkthrough 3.2 – Create Vendor in
your Faculty Guide.
− Creation of a vendor using the FI-AP
− Creation of a vendor (centrally)
Create Vendor

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• Refer to Exercise 3.1 – Create Vendor Master with
Reference in your Participant Workbook.
– Your task is to review all information for vendor
R1000, then create a new vendor with reference to
vendor R1000 (centrally).
Exercise 3.1 – Create Vendor
Master with Reference

22
• Refer to Exercise 3.2 – Change Vendor Master in
your Participant Workbook.
– Your task is to change payment terms for vendor
R1000.
Exercise 3.2 – Change Vendor
Master

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• Refer to Exercise 3.3 – Display Vendor Master in
– Your task is to display the Vendor Master for vendor
R1000.
Exercise 3.3 – Display Vendor
Master

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• Refer to Exercise 3.4 – Block/Delete Vendor Master
in your Participant Workbook.
– Your task is to set the transaction flag to delete on a
Vendor Master.
Exercise 3.4 – Block/Delete
Vendor Master

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• Review of Day 2
Agenda – Day 3

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• Invoice process records the liability to the vendor account
• Two types of invoice processing
– Non-Purchase Order-based invoices
– Purchase Order-based invoices
• Non-purchase order based invoices
– These invoices are posted in FI module and expenses are
recorded against the GL account directly.
– Accounting of FI invoices follows one-way match
• Purchase order based invoices
– These invoices are posted in MM module.
– Invoice processing is preceded by purchase order and good
receipt.
– Accounting of PO-based invoices follows two-way/three-way
match
Invoice Processing

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• Non-purchase order-based invoices
• These transactions are meant for expenses like
electricity, rent, water charges, etc. for which purchase
orders are not generally created
• Vendor’s bill is processed and the liability is posted to
the vendor account. The expenses are recorded
directly against the GL account and/or cost centre
• As there are no preceding transactions, this process is
said to follow a one-way matching of invoice
Invoice Processing – Non-PO-
Based Invoices

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Invoice Processing – Non-PO-
Based Invoices (cont.)
Invoice
processing posts
to the GL account
for the expense,
without any
reference to any
purchase order.
• Illustration of non-PO-based invoice processing

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• Purchase order-based invoices
– These transactions are meant for purchase of raw
materials, packing materials, assets, etc.
– Purchase orders are created and goods are received
against the purchase orders. Purchase orders and
goods receipts are posted in MM module
– The invoice will reference a purchase order number
that exists in the SAP system
– This process is termed as “Logistics Invoice
Verification” in SAP system.
Invoice Processing – PO-Based
Invoices (1 of 3)

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• Invoice verification is the process of matching the price and
quantity, within specified tolerances, of the purchase order, goods
receipt and invoice
• If the invoice, purchase order and goods receipt do not match,
SAP can block the invoice from payment until the variance can be
identified
• The process of verifying invoices takes place in real time
Invoices (2 of 3)
GOODS RECEIPT INVOICE
PURCHASE ORDER
PAYMENT
Price Quantity
Price &
Quantity

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Invoices (3 of 3)
• Invoice processing
is with reference
to the purchase
order.
• Illustration of a PO-based invoice processing

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• When an invoice is blocked, financial accounting
cannot pay the invoice. The invoice must first be
released in a separate step before it can be
processed
• An invoice can be blocked for payment due to one of
the following reasons:
– Variances in an invoice item
– Amount of an invoice item
– Stochastic block
– Manual block
• Acceptable variances can be defined as tolerances
Invoice Processing – Blocked
Invoices

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• Once an invoice has been blocked, it remains
blocked until you release it
– Although a blocking reason may no longer be valid,
the system does not automatically release the invoice
• Security considerations should be taken into account
as to whom and how you would like to release
• The following processes are available for releasing
invoices for payment:
– Release Automatically
– Release Manually
Invoice Processing – Releasing
Blocked Invoices

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• When you release invoices automatically, the system deletes all
blocking reasons that no longer apply
– Blocking reasons may no longer be valid when they were applied
due to quantity, price, or schedule variance or due to quality
inspection
– Quantity variance example:
• Purchase order: 100 pieces; Delivery: 80 pieces; Invoice: 100 pieces
• The system blocks the invoice for payment (Blocking reason M)
• Action: Delivery of additional 20 pieces or Credit Memo for 20 pieces
• The blocking reason no longer applies and is deleted automatically by
the system
• When all blocking reasons in an invoice are deleted, the system
automatically releases the invoice
Releasing Blocked Invoices –
Automatic

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• Choosing blocked invoices
– Narrow down the release process to particular invoices
by entering selection criteria
• When the blocked invoices appear, you can delete
individual blocking reasons or select invoices that are
to be released
Releasing Blocked Invoices –
Manual

37
• A credit memo is provided by a vendor when
products have been returned. It reduces or
eliminates the amount owed to the vendor as per an
earlier issued invoice
– Like invoices, credit memos can either refer to a
purchase order in the system or not
Credit Memos

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• Invoice documents, including both invoices and
credit memos, can be automatically cancelled
through the creation of a reversing document
– If an invoice is cancelled, the system automatically
creates a credit memo
– If a credit memo is cancelled, the system
automatically creates an invoice
Invoice Documents

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• Terms of Payment
– Define rules with which the
system can determine the
required terms of payment
automatically
– The conditions specified in
the payment term, along
with the document’s
baseline date, determines
when the document is due
for payment
– As well as specifying when
documents are due,
payment terms can also
capture discounts that are
available for early payment
Invoice Processing –
Configuration Items (1 of 3)

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• Tolerance Limits (OMR6)
• The following tolerance
types can be set:
– Price variance
– Quantity variance
– Order price quantity
variance
– Schedule variance

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• Automatic Account Determination (OBYC)
– When you post a goods receipt, the system updates various accounts
in Financial Accounting. It determines automatically which amounts
have to be posted to which accounts
• Examples
– GR/IR clearing account
– Tax accounts
– Small differences
– Freight clearing account

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• Refer to System Walkthrough 3.3 – Invoice Processing
−Processing a PO-based invoice
−Manually releasing a blocked invoice
−Processing a non-PO-based invoice
Invoice Processing

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• Refer to System Walkthrough 3.4a – Integration
Between FI & MM in your Faculty Guide.
– Review a materials document (invoice)
– Select and display the Purchase Order that the
invoice was based on
– Choose Follow on Documents and select the
Accounting document
System Walkthrough 3.4a –
Integration Between FI & MM

44
• Refer to System Walkthrough 3.4b – Integration
Between FI & MM in your Faculty Guide.
– Review the Accounting document
– Review the Vendor Line item display
– Reconciliation account balance
System Walkthrough 3.4b –
Integration Between FI & MM

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• Refer to Exercise 3.5 – Create PO-Based Invoice in
− Your task is to create a new PO-based invoice. Enter
a price and quantity difference so the invoice is
blocked for payment.
Exercise 3.5 – Create PO-Based
Invoice

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• Refer to Exercise 3.6 – Display Vendor Line Item in
− Your task is to check the vendor line item balance to
see that the invoice is blocked for payment.
Exercise 3.6 – Display Vendor
Line Item

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• Refer to Exercise 3.7 – Release Blocked Invoice in
− Your task is to run the automatic release program for
your invoice.
Exercise 3.7 – Release Blocked
Invoice

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• Refer to Exercise 3.8 – Display Invoice/Credit Memo
in your Participant Workbook.
− Your task is to check that the invoice is now cleared for
payment.
Exercise 3.8 – Display
Invoice/Credit Memo

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• Refer to Exercise 3.9 – Create a Non-PO-Based
Invoice in your Participant Workbook.
− Your task is to create a new non-PO-based invoice.
Exercise 3.9 – Create a Non-PO-
Based Invoice

51
• Review of Day 2
Agenda – Day 3

52
• SAP has an automatic payment program to pay the vendors
once the invoices have been entered
• Processing a payment closes the Purchase-to-Pay process.
The purchase-to-pay process closes by executing the
payment program, which generates checks or other payment
mediums, and closes the open AP item
Accounts Payable – Payment
Processing

53
• Releasing payments to vendors via the SAP payment
program has primary benefits:
– Improves the efficiency of the Purchasing department
by keeping a record of all checks written and all
electronic transfers posted.
– SAP streamlines the process of voiding payments by
allowing you to void and cancel payments and reissue
replacement checks in one step.
– Vendors are paid in a timely and accurate manner,
helping you maintain a strong working relationship with
them.
Accounts Payable – Payment
Processing (cont.)

54
• Before you can use the payment program, you need
to define:
– Your house banks and the accounts at your banks
– The required payment methods
– The necessary payment forms
• The standard system has predefined payment
methods and payment forms. You can copy them
and adapt them to meet your own requirements
Payment Processing –
Configuring the Payment
Program (1 of 3)

55
• Transaction FBZP is a “one-stop shop” for configuring
the Payment Program
• Using this transaction, you specify the following:
– Company code settings
– Payment method settings
– Bank selection
• However, the payment program can be configured in
individual steps
Program (2 of 3)

56
Program (3 of 3)
• FBZP – One-stop configuration

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• House banks are the banks with which your
company (company code) maintains a bank account
– You define these banks in the system under a house
bank key (bank ID)
– You store the accounts that you maintain at these
banks under an account ID
– For each bank account, you create a GL account in
the SAP system
Program – House Banks

58
• The payment method is the procedure by which
payments are made
• The following payment methods are usual in
Accounts Payable:
– Check
– Transfer
– Bill of Exchange
• Allowable payment methods must be specified at
both the country and company code level
Program – Payment Methods

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• Various SAP payment medium programs can be
used to print payment forms:
– Standard programs are available and custom
programs can be written
– Printing programs are specified for each payment
method when configuring the country-specific
definitions for the payment method
Program – Payment Forms

60
• To ensure that the programs print the forms correctly,
the system specifies which data is printed in which
position. The form layout is defined with SAPScript
– You specify the name of the defined payment form
when you make the company code specifications for
the payment method
• You define the form that is used for printing a
payment advice separately
– The payment advice form is set in the specifications
for the paying company code
Program – Payment Forms (cont.)

61
• Bank transfer is a common alternative payment
method to printing checks
• The Data Medium Exchange (DME) tool is used in
SAP to generate a file containing all payment
information and corresponding to the banking rules
for the country in question
– Bank payment file formats typically change from
country to country
Program – DME Payment

62
• The Data Carrier Administrator allows you to
manage the DME files created during payment runs
– Displaying documents for each data carrier created
– Deleting an individual or several data carriers
– Downloading one or more files from the SAP system
to hard drive or disk
Program – DME Payment (cont.)

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• General company code
specifications
– General information is
required for all
company codes using
the payment program
– If one company will be
paying on behalf of
another, the paying
company is specified
here
Program – Company Settings

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• Specifications for the
paying company code
–Here you specify
how the paying
company code
makes the payment
Program – Company Settings
(cont.)

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• Payment method – Country level
Program – Payment Method

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• Payment method – Company code level
Program – Payment Method
(cont.)

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• According to the bank selection
rules specified, the payment
program must determine the most
suitable house bank to use for
each payment
• Information required to allow
accurate bank selection
– Bank accounts available for each
payment type
– Maximum amount available for outgoing
payments for each bank account
– Ranking order for house banks for each
payment method available to a paying
company
– Bank charges and fees
Program – Bank Selection

69
• Other items that require configuration for payment
processing include:
– Define account for Cash Discount taken and lost (OBXU)
– Define account for Exchange Rate differences (OB09)
– Define account for Bank Changes (OBXK)
– Define Payment Block reasons (OB27)
Program – Other Items

71
• The payment program in SAP can be broken down
into four P’s:
– Parameters: Before you can start the payment run, you first have
to enter the payment parameters. You use these payment
parameters to define when, for which period, which company
code, payment method, next posting date, and range of vendors
you desire to pay
– Proposal: After you have specified all parameters, the payment
proposal can be created. The payment proposal displays the
open items whose payment is projected by the payment program.
Once the payment proposal is created, it can be edited. Both
payments and line items can be processed and edited
Payment Processing – Executing
the Payment Program

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– Payment run: Once you have edited and accepted the
proposal, you can plan the payment run. The payment
program creates the payment documents and prepares the
data for printing the checks
– Printout: The final step of the payment program is to
schedule a time to create the payment medium; for example,
print the checks or create the bank transfer file
Payment Processing – Payment
Program (cont.)

73
Payment Program –
Step 1: Defining Parameters

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Payment Program – Step 2:
Generating and Reviewing
Payment Proposal

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Executing Payment Run

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Payment Run (Accounting)

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Payment Program – Printout

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• Refer to System Walkthrough 3.5 – Payment Program
Configuration in your Faculty Guide.
− Company code settings
− Payment method – Country/company code
− Bank determination
− Automatic account determination – cash discount,
exchange rate difference
− Check lot creation
Payment Program Configuration

80
• Refer to System Walkthrough 3.6 – Payment
Processing in your Faculty Guide.
– Payment Proposal (F110)
Payment Processing

81
• The SAP standard check register program generates a list
of all checks belonging to one paying company code (pre-
numbered checks), if they fulfill the given selection criteria
• The register can be used for administration of checks that
have been issued as it forms a direct link between the
purchasing document number and the number of the
check issued
• Check processing is not common outside of north America
• New checks can be added to the register in two ways:
– Automatically when the check creation program runs within
the payment program (F110)
– Manually using transaction (FCH5)
Payment Processing – Check
Register

84
• Reprint Check (FCH7 – Reprint check)
– If a check is lost or is rendered unusable for other
reasons, you can reprint it. The payment document
remains the same, but the original check number is
voided and a new check number is issued
• Cancel Payment (FCH8 – Cancel Payment)
– This is chosen if it proves necessary to reverse all
the cleared items after a check has been printed. The
check in question will be marked as void in the
system, the payment document will be reversed and
the invoices reopened for payment again
Voiding Checks (1 of 3)

85
• Void unused check (FCH3 – Unused checks)
– Before print run, void check numbers that you do not
wish to use
• Void issued check (FCH9 – Issued checks)
– Checks that are voided after the print run with a void
reason

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• Void Reason Codes (FCHV)
– Examples
• Test printout
• Page overflow
• Form closing
• Ripped during printing
• Printed incorrectly
• Destroyed/unusable
• Stolen
• Incorrect lot inserted
• Reversed check payment
• Check voided after printing

87
• Refer to System Walkthrough 3.7 – Manual Check
– Create manual check and view check register
Manual Check

88
• Refer to Exercise 3.10a – Automatic Payment
Transaction in your Participant Workbook.
– Your task is to use the payment program to create
the payment for an invoice.
Exercise 3.10a – Automatic
Payment Transaction

89
• Refer to Exercise 3.10b – Automatic Payment
Transaction in your Participant Workbook.
– Your task is to review your vendor line items and
record the payment number just created.
Exercise 3.10b – Automatic
Payment Transaction

90
• Refer to Exercise 3.11 – Create a Manual Check in
– Your task is to create a check manually in the system
and apply it to this payment.
Exercise 3.11 – Create a Manual
Check

91
• Refer to Exercise 3.12 – Review Check Registry in
– Your task is to review the check register to identify
your check.
Exercise 3.12 – Review Check
Registry

93
• Review of Day 2
Agenda – Day 3

94
• In the Accounts Payable system, there are three
sources for reports that you should be aware of:
– Vendor Account Information – Accounting → Financial
Accounting → Accounts Payable → Account → Display
balances/Display line items
– Information System AP Reports – Accounting →
Financial Accounting → Accounts Payable →
Information System > Reports for accounts payable
accounting
Accounts Payable – Reporting

95
• An evaluation is a dataset you select and summarize
according to predefined rules
– Evaluations allow you to review frequently access data
in a more efficient manner than typical report
generation
• Several evaluations come pre-defined in the system
for use in Accounts Payable:
– Due date analysis
– Currency analysis
– Overdue items
Reporting – Vendor Evaluations

96
• Existing evaluations can be modified and new
drilldown reports created in customizing (IMG)
– Accounts Receivable and Accounts Payable →
Information System → Accounts Payable → Standard
Evaluations
Reporting – Vendor Evaluations
(cont.)

97
• Non-flag blocked, non-one time vendors get
converted to SAP (Allow Posting = Y, One-Time
Vendor = N)
• Vendors will be given an SAP-specific vendor
number
• A vendor cross-reference should be created as part of
the conversion process
Vendor Master Conversion

98
• Cleansing is vital
– Address details need to be validated, e.g., post
codes and other required address fields, as
necessary
– Street fields to be used in a consistent manner, which
is an important consideration for form design
– Confirm all vendors to be converted. Usually a legacy
system will contain a large number of obsolete or
replicated vendors which need to be cleansed
• Determine conversion method is dependent on
number of vendors and skill level of team
Vendor Master Conversion (cont.)

99
• A/P open items can be converted into the SAP
system. Decision on method for handling A/P open
items needs to be considered with dealer; i.e., use
legacy system and print checks or convert to SAP
• Conversion data map needs to be created to define
which legacy fields will be converted and where they
map to in SAP. Data constraints on field lengths and
validated fields need to be considered
• All open items converted must be associated to a valid
SAP vendor master (using criteria listed above)
Accounts Payable Open Items
Conversion

100
• Following the open item conversion, a follow-up check
to confirm that total of A/P open items is equal to value
in the legacy system ledger account(s) should be
conducted
• Ideally, regardless of method for conversion the
number of open items to be converted should be
minimised and managed
Accounts Payable Open Items
Conversion (cont.)

102
• Review of Day 2
Agenda – Day 3

103
• What is withholding tax or extended withholding tax?
– Extended withholding tax GL configuration
– Extended withholding tax configuration
– Business process
Withholding Tax

104
What is Withholding Tax or
Extended Withholding Tax?
• Withholding tax means
– Tax on the income at the rates that are defined by
income tax laws of a country to be deducted from the
invoice or the payment of the vendor
– Withholding tax is also known as tax deducted at
source in certain countries
Note: The provision and the definition of withholding tax may
vary from country to country so please check country-specific
definition as per the tax laws of the respective country

105
Withholding Tax GL
Configuration
• Create GL accounts for posting withholding tax code.
• Secondly, while defining the GL code for the same,
open item management and line item display should
be activated.
• Section code and business place are used for
withholding tax accounting in certain countries and
therefore should be made mandatory for transaction
postings.

106
• Basic settings
• Calculation
• Company code settings
• Postings
Extended Withholding Tax –
Configuration

107
Extended Withholding Tax
Configuration: Basic Settings
(1 of 3)
• Withholding tax countries – Withholding tax country key is defined
for each country. It is also required for printing the W. Tax forms.
• Official withholding tax keys – to identify the different withholding
tax types, you can define these official names for your tax codes
here. This definition varies from country to country.

108
(2 of 3)
• Define reasons for exemption – In this activity, reasons for exemption from
withholding tax have to be defined, for country “IN”. These indicators can be
entered in the vendor master record or in the company code withholding tax
master record information. These will be entered as and when needed
• Check Recipient Types – Different withholding tax type will be defined for
recipient types since the tax rates will be different. Types of recipients are
defined for each tax type, for country “IN”. The types defined are CO for
Companies and OT for Others.

109
(3 of 3)
• Create a business place for each tax deduction account number
(TAN) that your company has
• Assign Business Place to Section Code
• Section Code used to classify withholding tax items for tax
reporting purposes

110
Configuration: Calculation (1 of 6)
• Path – Financial Accounting → Financial Accounting Global Settings
→ Withholding Tax → Extended Withholding Tax → Calculation
• Define withholding tax type – defined for invoice posting and
payment posting – here we define the structure for withholding tax

111
• Withholding tax type screen print

112
• Recommendations for defining withholding tax type.
The following indicators must always be switched on:
– Post w/tax amount – Tax deduction is activated only if
this indicator is set
– W/tax base manual allows changing base amount
– Manual w/tax amount allows changing tax amount
– To activate rounding rules for tax types, table
T001RWT needs to be updated with all tax types, and
the rounding up unit defined as 100.

113
• Withholding tax code – we define the tax rate here
– In this step, tax codes need to be specified. These codes are attached
to tax types in the vendor and the customer masters. The codes
contain the rates of tax applicable to respective code

114
• Define Min/Max amounts for withholding tax types
and tax codes
– Certain income tax sections specify that no tax should
be deducted if the total invoices posted for the vendor do
not exceed a base amount (e.g., under sec.194C). As
per Indian income tax act, tax should not be deducted if
the total of invoices posted during a year for a particular
vendor does not exceed Rs.50,000. If it exceeds the
base amount, tax must be deducted on all invoices
posted till date.
– In this step, the minimum base amount must be
specified.

115
• Screen print of Min/Max amounts for withholding tax
types and tax codes

116
Configuration: Company Code
• In the previous activity, the following specifications must be made for
each tax type:
– The With/tax agent and the Subject to withholding tax indicators must
be clicked to activate EWT deduction on both vendors and customers.
– Validity period must be specified for each tax type, under the vendor
data. Regarding customers, the validity period is specified in the
customer master itself.

117
Configuration: Company Code
(cont.)
• Activate extended withholding tax for the company
code for which we are implementing it

118
Postings
• In this step, GL account determination is done for each tax
type, for Chart of Accounts “INT” for SAP standard process
“WIT”.
• The rules for the process key have been configured for
account determination to be done at the level of the tax type.

119
Certificate Numbering for
Withholding Tax
• Define numbering classes
• Define numbering groups
• Define number range
• Assign numbering groups to numbering classes
• Assign numbering concept to company code country

120
Business Process
• Assign withholding tax types/tax codes in vendor
master data
• Procedural steps to deduct withholding tax at invoice
• Post invoice
• Posting the invoice will result in withholding tax being
withheld; there are no special steps
• Note there are other steps required for reporting and
submitted withholding tax payments to governmental
authorities

121
Attaching Withholding Tax to
Vendors and Customers
• Here we attached the withholding tax to the vendors and liable
should be ticked only when the system calculates tax amount

122
Procedural Steps to Deduct
Withholding Tax at Invoice
• Using Tcode FB60, we created a vendor invoice, given all
details like Vendor, Business Place, Exp account, etc.

123
Procedural Steps to Deduct
Withholding Tax at Invoice (cont.)
• Given all the details, in the vendor master (as covered earlier) if the
withholding tax configuration is there, then system will automatically
calculate the withholding tax amount in the invoice as shown below
• Simulate the document to check the accuracy of entry

124
Post Invoice
• Automatically the system will deduct the tax amount from the vendor
invoice and pass the entry for it; when we simulate, the system doesn't give
the document number and after we save we get the document number.

125
Assign Withholding Tax Code
• Refer to System Walkthrough 3.8 – Assign
Withholding Tax Code in your Faculty Guide.
– Display/change vendor master
– Post an expense invoice to show withholding tax
deduction

126
• Refer to Exercise 3.13 – Vendor Master for
Withholding Tax in your Participant Workbook.
– Your task is to attach withholding tax to a vendor.
Exercise 3.13 – Vendor Master
for Withholding Tax

127
• Refer to Exercise 3.14 – Invoice Processing –
Withholding Tax in your Participant Workbook.
– Your task is to verify that withholding tax has been
attached to a vendor invoice.
Exercise 3.14 – Invoice
Processing – Withholding Tax

129
• Review of Day 2
Agenda – Day 3

130
• Loads the bank statement into SAP for history and posts
the journals for the transactions within the statement
• Assumes an SAP journal is configured for each type of
transaction on the bank statement
• Used to simplify reconciliation: journals posted
• SAP uses the standard international file formats; e.g.,
Multicash, BAI. Depending on the bank file format, you
may need to do one of the following:
– Manipulate the bank file prior to uploading into SAP
– Develop enhancements in SAP for bank data
Electronic Bank Statement (EBS)

131
SAP Multi-cash format
bank correspondence
regarding the provision of the
required SAP files
Bank File Example 1 (1 of 3)

132
Trancode DR/CR Trancode Description
000 DR WITHDRAWAL/CHEQUE
001 DR WITHDRAWAL
002 DR STAMP DUTY ON CHEQUE BOOK
003 DR PERIODICAL PAYMENT TO
012 DR INTERBANK INWARD DISHONOUR
013 DR PAYMENT BY AUTHORITY TO
014 DR WITHDRAWAL FOR
015 DR WITHDRAWAL
050 CR DEPOSIT
051 CR DEPOSIT INTEREST FROM GOV'T INVESTMENT
052 CR DEPOSIT-FAMILY ALLOWANCE
053 CR DEPOSIT-SALARY
054 CR DEPOSIT-PENSION
055 CR DEPOSIT DEFENSE SERVICE ALLOWANCE
056 CR DEPOSIT DIVIDEND
057 CR DEPOSIT-DEBENTURE/NOTE INTEREST
060 CR DEPOSIT
061 CR DEPOSIT
• Commonly used
external
transaction codes
External transaction code
015 has sub codes – refer
to next slide

133
T/CODE SERIAL EXPANDED TRANCODE NARRATIVE
015 0000000
015 0010001 TRANSACTION FEE
015 0010002 ACCOUNT FEE
015 0010003 ACCOUNT KEEPING FEE
015 0010005 BENEFIT FEE
015 0010006 SERVICE FEE
015 0010007 ACTIVITY FEE - REFER ANALYSIS & FEE STMT
015 0010008 FEES ON CLOSING ACCOUNT
015 0010009 PACKAGE FEE
015 0010010 ACCOUNT MAINTENANCE FEE
015 0011001 ACCOUNT REPLENISHMENT/TRANSFER FEE
015 0012001 MERCHANT JOINING FEE
015 0012002 MERCHANT PARTICIPATION FEE
015 0012003 FEE - COPY OF MASTER/BANKCARD STATEMENT
015 0012004 CREDIT CARD PAYMENT
015 0012005 URGENT CREDIT CARD APPLICATION
015 0013001 FEE FOR PURCHASE OF BANK CHEQUE
015 0013002 FEE FOR REPURCHASE OF BANK CHEQUE
015 0013003 FEE FOR REPLACEMENT OF BANK CHEQUE
Items identified on
bank statement
The external transaction code
is a 3-character value;
however, some transaction
codes have multiple records
with different serial codes
Need to determine how this is
going to be handled – in this
situation, the postings were
made by the EBS and a
reversal was done at the end
of the month based on the
actual split of charges

134
T/C
C34
AUX
DOM
C28 Ref 10 CHAR Narative
LASER STATEMENT (40
CHARACTERS)
0 1 check no check no
8 37 BANKCARD PAYMENT TO <Bank> BANKCARD
8 38 VISA CARD PAYMENT TO <Bank> VISA CARD
8 39 MASTERCARD PAYMENT TO <Bank>
8 40 GOLDCARD PAYMENT TO <Bank> GOLD CARD
9 1 check no check no
11 2 DEP ERROR ERROR IN DEPOSIT amount
22 4 AUTOMATIC FUNDS TRANSFER
23 5 AUTOMATIC FUNDS TRANSFER
29 100 2 LC # DOCUMENTARY CREDIT #
29 200 2 A # OS AGENT/BRANCH BILL FOR
29 300 2 XBC # BILL COLLN TO OS
30 0 5
30 1 5 MISC FEE MISCELLANEOUS FEE
30 2 5 CA FEE ACCOUNT KEEPING FEE
30 3 5 ADMIN CHG LOAN ADMINISTRATION FEE
30 10 5 T/O SEARCH TITLES OFFICE SEARCH FEE
30 11 5 REG FEE REGISTRATION FEE
Extract of the external
transaction code and
description provided by a bank:
 The AUX DOM
provides the unique level;
however, standard SAP
only uses the external
transaction code
Bank Files:
Bank File format complies to
SAP format:
Bank File Example 2

135
• This occurred on a global template project
• Enhancements were not made to SAP to read the
file differently; therefore, the file was modified by
the client prior to loading into SAP using an Access
database
Bank File Example 2 (cont.)

136
• To ensure the end of month total is the same for the
General Ledger bank account as it is for the bank’s
records, clearing accounts are used and the EBS is used.
Due to timing differences, if clearing accounts and EBS
are not used, a manual bank reconciliation must be
performed
• When EFT payments are received from customers:
– A remittance advice is received
– Manually credits the customer account and debits the
clearing account
– The EBS credits the clearing account and debits the bank
account
Journals Posted

137
• When payments are made to vendors:
– Online cashed check is used
– Payment program debits the vendor account and
credits the clearing account
– EBS debits the clearing account and credits the bank
account
• A journal needs to be configured for each type of
transaction on the bank statement; otherwise EBS
will error
Journals Posted (cont.)

138
SPRO – EBS Configuration
(1 of 10)

139
Assign Bank Account to Transaction Types
Create Keys for Posting Rules
Assign External Transactions to Posting Rules
Define Posting Rules for Electronic Bank Statement
• SAP expects the following to be configured for
each House Bank Statement to process the
Electronic Bank Statement:
Step 2
Step 4
Step 5
Step 6
Define Transaction Type/s
Step 1
Determine External Transactions for each Transaction Type
Step 3
(2 of 10)

140
Define Transaction Type/s
Step 1
• Define unique Transaction Types for each house
bank or 1 for all
• Configuration: Transaction OBBY
(3 of 10)

141
Assign Bank Account to Transaction Types
Step 2
(4 of 10)

142
• Begin by listing all external (bank)
transactions that occur frequently on
each bank statement
• Describe each transaction
• Summarise a list of unique bank
transactions for each house bank
Determine External Transactions
for each Transaction Type
Step 3
External
Transaction
Name
000 WITHDRAWAL/CHEQUE
001 WITHDRAWAL
050 DEPOSIT
053 DEPOSIT-SALARY
060 DEPOSIT
061 DEPOSIT
071 REFUND FROM EFTPOS
072 CHEQUE RECEIVED-OMITTED FROM DEPOSIT
073 RTGS HIGH VALUE PAYMENT REF NO
080 CHEQUE AMOUNT INCORRECT ON DEPOSIT
102 REVERSAL OF CREDIT TRANSACTION ON
104 INTEREST PAYABLE ON ACCOUNT
110 EFTPOS FEE
114 TRANSFER/REPLENISHMENT BY AUTHORITY
200 DEPOSIT INCLUDES FOREIGN CURRENCY CHEQUE
215 COMMISSION - FORWARD EXCHANGE CONTRACT
251 DEPOSIT
510 DEPOSIT
513 WITHDRAWAL
826 ADJUSTMENT FOR ERROR IN PROCESSING ON
859 DEPOSIT - FUNDS TRANSFERRED
(5 of 10)

143
Posting key Text
BDEP Branch deposits
BRDR Bank raised Debits
BTAX Bank Taxes
CBCR Commercial Bill Disc Credit
CBIN Commercial Bill Interest
CBLE Commercial Bill Line Fees
CDEP Check deposits
CHQ Check Paid
CMIS Credit Miscelaneous
CODD Commercial Bill Drawdown
CORP Commercial Bill Repayment
DICR Direct Credit Receipts
DIDR Direct Debit Payments
DMIS Debit Miscellaneous
EFCR EFTPOS Credit
EFDT EFTPOS Debit
EFTP EFT Payment
EFTR EFT received
Posting key Text
FEES Bank Fees and Charges
INTP Interest paid
INTR Interest received
MMDP Money Market Deposit
MMWD Money Market Withdrawal
NETR Internet Banking Receipts
RDEP Check deposits
STAX BAD & FIN Charges
SWIP Interest Paid on Swap
SWIR Interest Recd on Swap
TFRI Transfer in
TFRO Transfer out
WAGE Wages
Create Keys for
Posting Rules
Step 4
• Define a key for each
posting rule
• The posting rule
represents business
transactions on the
bank statement and
assigns the Debit and
Credit rule
(6 of 10)

144
Assign External Transactions to Posting Rules
Step 5
• For each transaction type, a posting
key is defined, which is linked to a
posting rule
• If there is a posting rule that has the
same journal as another posting
rule, eliminate one of them
• +/- sign of the incoming amount
• Interpretation algorithm enables you
to find separate outgoing payments
using the reference information
returned by the bank. Code 11 →
check number different than
payment document number
Assign External Transaction Types to Posting Rules
Ext
trans +/-
Post.
Key Post. Key Descriptions
int
algorithm
000 - CHQ Check Paid 11
001 - BRDR Bank raised debits
003 - DIDR Direct Debit Payments
007 - RDEP Check deposits
009 - CHQ Check Paid 11
010 - DMIS Debit Miscellaneous
015 - FEES Bank Fees and Charges
016 + CDEP Check deposits
017 - INTP Interest paid
022 - DMIS Debit Miscellaneous
(7 of 10)

145
Define Posting Rules for Electronic Bank Statement
Step 6
Step 6A
• This step defines the posting rules
that are required. Specify the
posting rules for either one or two
posting areas, depending on
whether a posting transaction
concerns only bank-related
accounting or also affects sub-
ledger accounting
• Maintain Account Determination:
Posting Specifications
(8 of 10)

146
Step 6B
• Maintain Account Determination:
Account Symbols
• Account symbols are used to group
together similar business transactions (such
as incoming checks) and direct them to
different accounts according to a predefined
differentiation. It facilitates flexible account
determination when clearing accounts are
posted to differently.
Create Account Symbols
Account Symbol Description
Z_BANK ACCOUNT Bank account
Z_CHQ PAID Check clearing acc
Z_DIRECT DEBIT Outgoing direct debit clearing
Z_EFT PAYMENTS EFT payments clearing account
Z_MISC DR Outgoing miscellaneous clearing
Z_DEPOSIT CLEAR Deposit clearing account
Z_DIRECT CREDIT Incoming Direct Credit Clearing
Z_EFT RECEIPTS EFT receipts clearing account
Z_MISC CR Incoming Miscellaneous Clearing
Z_BANK FEES Bank Fees
Z_COM BILL INT Commercial bills interest
Z_COM BILL TRN Commercial bills transactions
Z_INTEREST PAID Interest paid
Z_INTEREST RECD Interest received
Z_MONEY MKT TRN Money market transactions
Z_STATE TAXES BAD & FIN Charges & Debit Tax
Z_SWAP INT Interest on Swap
Z_UNUSED LMT Unused Limit Fee for Offset Group
Z_WAGES Wages
(9 of 10)

147
Step 6C
• Maintain account determination: Accounts
• Assign accounts to account symbols
• Three options for assigning accounts to account symbols have been
provided on the next slide
(10 of 10)

148
• There are three options to assign the account to the
account number:
– Option 1: Enter the
complete number:
– Option 2: Enter the account
number with masking, using
"+" signs:
• When masking is used, the system replaces the “+” signs with the
account number you maintained for the house bank (for example,
0000113100). When "+" signs are used, the system expects a 10-
character entry for an account. If you are using account numbers
shorter than 10 characters, you must make your entries right-
justified.
0000113100
BANK
GL Accounts
Account symbols
Account symbols GL Accounts
BANK ++++++++++
Assigning Accounts to Account
Symbols

149
– Option 3: Enter part of the
account number and
complete the field with
masking, using "+" signs:
• This option would be used for differentiation between check
outgoing clearing account, check incoming clearing account, etc.
• For option 3, the system replaces the “+” signs with the account
number maintained for the house bank, the part of the number
you entered will be used to determine the final digit/s of the
account number. If account 0000113100 is defined in the house
bank master, the two end digits of the number are replaced by
“02”, this entry would trigger a posting to account 0000113102
++++++++02
BANK
GL Accounts
Account symbols
Assigning Accounts to Account
Symbols (cont.)

151
• Recording Presented Checks
– Updates the encashment date in the check register
– Posts a journal crediting the bank account and
clearing the unpresented check account
• Presented check file
– Can be loaded automatically or manually
– Get the file from the bank in the correct format
(check list only)
– Automatically 
• Transaction FCKR
• File needs to be in SAP format
Check Register (1 of 3)

152
• Presented check file (cont.)
– Manual 
• Transaction FCHR (online cashed checks)
• The data can be cut from excel and pasted into SAP
page by page – chq number and encashment date
• Electronic and Manual Bank Statement can be
configured to update the encashment date.
Interpretation algorithm set to 11 → check number
different than payment document number.
Therefore, no need to post presented checks
separately

153
Encashment
date/Void Date
If no date –>
unpresented
check

154
• Convert the unpresented check line items to the
unpresented check account (check clearing account)
• Create a document number for each payment, rather
than one document number for all payments as it will
make reconciling easier
Check Conversion Option 1 (1 of 3)

155
• Create checks via manual check creation (Environment →
Check information → Create → Manual checks FCH5). This will
create the check in the check register and link it to the
document number (payment document) created in Step 1.
• If there are many checks, to create them automatically, use one
of the following tools:
– Batch Data Communication (BDC)
– Computer Aided Test Tool (Catt)
– Legacy System Migration Workbench (LSMW)
• For more information, refer to http://help.sap.com/ and go to the
documentation tab and review materials for the appropriate
SAP release version; e.g., SAP R/3 and R/3 Enterprise → SAP
R/3 Release 4.6b

156
• When the bank statement is uploaded, the correct
check number and corresponding document in the
check clearing account is processed correctly because
the check is in the check register and linked to the
payment document
• If a check is lost, the standard SAP process can be
followed; void check and reprint

157
• Convert unpresented check line items to the
unpresented check account (check clearing account)
and put the check number in a text field in each line
item document.
• Create a document number for each payment, rather
than one document number for all payments; it will
make reconciling easier
• Don’t enter into the check register; keep a list of
checks in a spreadsheet and identify when presented
to the bank
Check Conversion Option 2

158
• When the bank statement is uploaded, an error will
occur because the check is not found in the check
register. Therefore you need to run the bank statement
batch session and manually correct the check clearing
line item
• If a check is lost/cancelled, manually create the check
(Environment → Check information → Create →
Manual checks FCH5) and link to the applicable
document number created at step 1 then follow the
standard SAP process; void check and reprint
Check Conversion Option 2 (cont.)

160
1. Based on a payment run, answer the following
questions:
– What are ways of finding information about the
payment?
– Identify the vendor open items that were paid
– Identify those open items that were not selected.
Give reasons for this.
– Which bank account/s did the payment come from?
Find the customization screen in the IMG that
determined this.
– What automatic postings were created within the
transaction?
Knowledge Check

161
2. Where is the system setup to allow for the upload of
an Electronic Bank Statement?
3. What are external transactions?
4. What are posting rules?
5. What does masking (+ symbol) do in a posting rule?
6. How do you find out whether a check has been
cashed?
Knowledge Check (cont.)

163
• Accounts payable
– Overview
– Purchase to pay process
– Organisation structure and their inter-linkages
• MM Organisation Units – Plant, Purchasing
Organisation
• FI Organisation Units – Company Code
End of Day 3 Lessons Learned
(1 of 4)

164
• Vendor master data
– General segment, company code segment and purchasing
organisation segment
– Account group
– Reconciliation account
– Payment term
– Alternative payee
– Head office vs. branch office
– Vendor master maintenance
(2 of 4)

165
• Business transactions – invoice processing
– PO-based invoice
– Non-PO-based invoice
– Invoice block & release procedures
– MM-FI integration on automatic account determination
– Key configuration for invoice processing
• Business transactions – payment processing
– Automatic payment processing
– Configuration for automatic postings
– Check register
(3 of 4)

166
• Vendor information system
– Vendor balance reports
– Vendor line item reports
– Due date analysis/aging analysis
• Vendor data conversion – Some useful tips
• Bank accounting
– Electronic Bank Statement
(4 of 4)

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