SAP ERP

SAP ERP combines the most complete, scalable, and effective software for enterprise resource planning (ERP) with a flexible,

open technology platform that can leverage and integrate SAP and non-SAP systems. Our industry-leading solution provides

end-to-end software functionality for enterprise management and support -- plus support for systems management -- all

powered by the SAP NetWeaver platform. SAP ERP is enhanced by industry-specific features and best practices based on

three decades of SAP experience. The solution enables organizations to reduce total cost of ownership, achieve a faster return

on investment, and benefit from a more flexible IT infrastructure that helps drive innovation. And SAP ERP offers a complete

solution designed to support international operations so that businesses can efficiently and successfully operate and compete

on a global scale.

Copy/Delete/Check / Edit Project IMGMore information: Extended functions for working on organizational units

Copy

Delete

Check

Create and work on Project IMG view

CopyThis function is for creating a new organizational unit using the settings for an existing OrgUnit as your

template.

If you have already made system settings for the new OrgUnit you can still use copy functions. Only

the missing settings will be copied. Settings you have already made are not affected.

When you use the copy functions a Project IMG view is generated that contains all the objects that

are copied into the new OrgUnit so you can work on them.

DeleteThis function is for deleting an existing OrgUnit and all its settings.

CheckThis function is for checking all the settings for an existing OrgUnit.

There are two stages

First all the tables that have the OrgUnit in their table key are checked to ensure the entry is

present.

Then the dependent tables that are tested against the table key are also checked to ensure

the specified entry is present.

Project IMGThis function is for generating a new Customizing project view. The view generated contains all the

IMG activities needed for work on the OrgUnit as part of the project. There must already be a

Customizing project for this to work.

Further NotesOnly system settings are copied or deleted. Master data is not affected.

To delete an OrgUnit:

1. Carry out a reorganization for the data that is dependent on the OrgUnit.

2. Delete the OrgUnit.

RecommendationIf you want to limit your system settings work to the mandatory activities, you must create your new

OrgUnit using the copy functions. This ensures the required system settings are generated.

Mandatory activities are the IMG activities that you have to configure because meaningful standard

settings cannot be suplied. You are expected to create all OrgUnits with the copy function, because

otherwise all system settings that have an Orgnit in their keys would have to be mandatory activities.

Organizational Units and Basic Settings DefinitionElements of the SAP System logical structure, important for Financial Accounting .

Organizational units are used to structure business functions and for reporting. The organizational units of Financial Accounting

are used for external reporting purposes, that is, they fulfil requirements that your business is subject to from external parties,

for example, legal regulations. The financial statements for example, are created based on the organizational units of Financial

Accounting .

Basic settings in Financial Accounting are Customizing settings that you have to make in order to be able to carry out

processes in Financial Accounting .

UseYou create your company-specific organizational structure in the SAP System by defining the organizational units and making

the basic settings. Defining organizational units for Financial Accounting is obligatory, that is, you have to define these units in

order to be able to implement the Financial Accounting component.

Organizational unit Definition

Client Obligatory

Company Optional

Company code Obligatory

Business area Optional

Basic setting  

Chart of accounts Obligatory

Fiscal year Obligatory

Currencies Obligatory

IntegrationIn the SAP System, you define the relevant organizational units for each component that you are implementing. For example,

for Sales and Distribution , you define sales organizations, distribution channels, and divisions (product groups). Similarly, for

Purchasing , you define purchasing organizations, evaluation levels, plants, and storage locations. The organizational units are

independent of one another at this stage.

Components and Organizational Units

Component Organizational unit

Sales and Distribution Sales organization, ...

Logistics Purchasing organization, ...

Financial Accounting Company code, ...

Controlling Controlling area, ...

Human Resources Employee groups, ...

To transfer data between the individual components, you have to assign the organizational units to each other. You only need

to make these assignments once in the system. Whenever you enter data subsequently, it is automatically transferred.

 Example

For example, invoices that are posted in SD are transferred to FI.

Client DefinitionA commercially, organizationally, and technically self-contained unit within an SAP System. Clients have their own master

records and set of tables.

The definition of the client organizational unit is obligatory .

UseThe client is the highest level in the SAP System hierarchy. Specifications that you make, or data that you enter at this level are

valid for all company codes and for all other organizational structures. You therefore only need to make these specifications, or

enter this data once. This ensures that the data is consistent.

Users must enter a client key when they log on to the SAP System. This defines the client in which they wish to work. All the

entries you make are saved per client. Data processing and analysis is also carried out per client.

 Example

This means that you cannot include customer accounts from different clients in one dunning run.

End of the example.

Access authorization is assigned per client. You must create a user master record for each user in the client where he or she

wishes to work.

 Note

The SAP System is delivered with the clients 000 and 001 - these clients already contain default settings. For more information,

see Setting Up Clients in Customizing. These sections are automatically selected when you create your implementation

projects (company IMG, project IMG).

Define clientsIn the R/3 System, the client is a legally and organizationally independent unit. This means all

business and commercial data are secure from other clients.

Clients are identified by a three-figure client number. A client has the following parameters:

Name, place and logical system

These are descriptive parameters.

Role of the client

The possible roles are: production ("live"), Customizing, test, training, and demonstration.

Change and transport of client-specific objects

This parameter controls whether or not changes to Customizing settings are automatically recorded in

a change request.

Changes to cross-client objects

This parameter controls whether or not changes to R/3 Repository objects or cross-client Customizing

objects are permitted.

Copy overwrite protection

CATT runs permitted

Currently locked, Client copy in progress

Protected against SAP upgrade

NoteFor information on the above parameters, use F1 help in the maintenance transaction.

Standard SettingsWhen you install the standard R/3 delivery system, you have the following clients:

Client 000

Client 000 is the SAP Reference Client. It contains a complete set of preconfigured tables. This client

is continuously updated by SAP.

You should not work in client 000.

The parameters for client 000 are set as follows:-

Client role

SAP Reference

Change and transport of client-specific objects

No changes permitted

Changes to cross-client objects

No changes to R/3 Repository objects or cross-client Customizing objects are permitted.

Client 001

Client 001 is a complete copy of client 000, and is intended for your Customizing work.

It is preconfigured with some settings you can work with right away and with some sample settings

that help you in your configuration work.

Set the parameters for client 001 as follows:-

Client role

Customizing

Change and transport of client-specific objects

Changes recorded automatically

Changes to cross-client objects

Changes to Repository objects or cross-client Customizing objects are permitted.

Set the following parameters for Customizing:

Client role

The client set for Customizing is the one in which the system generates the SAPoffice folder

hierarchies for your Customizing project documentation, so set this parameter to "Customizing" for

your Customizing client.

Change and transport of client-specific objects.

ActivitiesSet the parameters for each of your clients.

Further notesTake care with the settings concerning changes to Repository objects and cross-client Customizing

objects. Such changes should be permitted only in the Customizing client, and you should on no

account allow them to be made in a training or test client.

The standard settings for country-specific parameters in client 001 are for Germany (DE).

Copy source clientYou can use the client copy function to copy a source client to the target client.

Setting up the new client involves:

Resetting those table contents in the target client that have not been copied. This is to create

a consistent environment.

Copying data from the source client to the target client.

Post-generation of the runtime environment using post-processing actions (client validation

exits), used to adjust report, screen, and number ranges to the current status of the data.

NoteMost of the time is taken up by the physical copying, as all the client-specific data of the SAP System

is copied. For production systems, this can be several 100 MB (when copying application data) and

can take several hours.

Pure Customizing data can still be up to 100 MB in size. Depending on computer hardware and load

copying can still take hours.

RecommendationFor this reason, SAP recommends that you execute client copy in the background. You can find out

the status of an online run directly from the monitor; for a background run, you can query the status at

any time using transaction SCC3. The client copy is restartable, so you can always restart if a run is

canceled.

Requirements

You must not work in the source or target client during a copy run.

This is why the target client is locked for all users other than SAP* or DDIC during the copy run.

To avoid data inconsistencies, you must not work in the source client, that is you must not change any

of the tables to copied.

This is another good reason for scheduling a background processing job at night.

Authorizations

Because of possible damage resulting from faulty copying of a client to the target client, authorization

is necessary, as follows:

S_TABU_CLI to maintain cross-client tables

S_TABU_DIS to maintain the contents of table CCCFLOW

If you want to copy user master data and user profiles, you must have the appropriate authorizations:

S_USER_PRO for user profiles

S_USER_AUT for user masters

User SAP* has all the necessary authorizations.

RestrictionsGeneral RestrictionsDuring the client copy, the tables are always deleted in the target system first, and then the new data

is read block by block from the source client and inserted in the target client. If the tables are very

large, this can result in very long runtimes and, depending on the database, can also cause an

overflow of the rollback segments.

Handling Number Ranges

When copying a client, you must take the number ranges into consideration. There are three

possibilities:

1. Copying customizing data and application data.

In this case, the number ranges are also copied, as the application data refers to these number

ranges.

2. Customizing data only is copied; the application data is deleted.

The number ranges are reset, since the application data that refers to them is deleted and application

data set up again.

3. Customizing data only is copied; the application data is not deleted.

The number ranges are kept with the application data.

ActivitiesTo copy a client within a single R/3 System:

1. Log on in the target client as user SAP* with using password PASS.

2. Start the client copier.

3. Choose the copier profile you require.

SAP provides the following profiles:

a) SAP_UPRF

Only user master data and profiles are copied.

b) SAP_CUST

All Customizing tables, inlcuding user profiles, are copied.

c) SAP_UCUS

All Customizing tables, inlcuding user data and user profiles, are copied.

d) SAP_APPL

All Customizing data and application data, including user profiles, is copied.

e) SAP_UAPP

All Customizing data and application data, including user profiles and user data, is copied.

4. Specify the source client.

5. Run the program in the background, or, if you are only copying user data and profiles, run it online.

Additional InformationFor more information see the R/3 Online Documentation under Basis -> System administration -> Client copy

Define companyIn this step you can create companies. A company is an organizational unit in Accounting which

represents a business organization according to the requirements of commercial law in a particular

country.

You store basic data for each company in company definition. You only specify particular functions

when you customize in Financial Accounting. Company G0000 is preset in all foreign key tables.

In the SAP system, consolidation functions in financial accounting are based on companies. A

company can comprise one or more company codes.

When you create a company you should bear in mind the following points relating to group

accounting:

If your organization uses several clients , the companies which only appear as group-internal

business partners, and are not operational in each system, must be maintained in each

client. This is a precondition for the account assignment of a group-internal trading partner.

Companies must be cataloged in a list of company IDs which is consistent across the group.

The parent company usually provides this list of company IDs.

It is also acceptable to designate legally dependent branches 'companies' and join them

together as a legal unit by consolidation.

RecommendationSAP recommends that you keep the preset company ID G00000 if you only require one company. In

this way you reduce the number of tables which you need to adjust.

ActivitiesCreate your companies.

Further NotesAll company codes for a company must work with the same operational chart of accounts and fiscal year . The currencies used can be different.

Company Code DefinitionSmallest organizational unit of external accounting for which a complete, self-contained set of accounts can be created. This

includes the entry of all transactions that must be posted and the creation of all items for legal individual financial statements,

such as the balance sheet and the profit and loss statement.

The definition of the company code organizational unit is obligatory .

UseThe company code is the central organizational unit of external accounting within the SAP System. You must define at least

one company code before implementing the Financial Accounting component. The business transactions relevant for Financial

Accounting are entered, saved, and evaluated at company code level.

You usually create a legally independent company in the SAP System with one company code. However, you can also define a

company code according to other criteria. A company code could also be a separate, but not independent, commercial place of

work. This is necessary for example, if the place of work is actually situated in a different country and evaluations therefore

have to be carried out in the appropriate national currency and in accordance with other tax and legal specifications.

If you want to manage the accounting for several independent companies simultaneously, you can set up several company

codes in one client. You must set up at least one company code in each client.

To define a company code, choose the following in Customizing for the  Enterprise Structure : Definition Financial

Accounting Define, Copy, Delete, Check Company Codes .

IntegrationIf you use other components of the SAP System, you have to make assignments between the company code as the central

organizational unit of Financial Accounting , and the organizational units of the other components. This is necessary to ensure

that data can be transferred between the components.

The assignment between the controlling area and the company code is particularly important. The controlling area is the

central organizational unit of the Controlling (CO) component.

For more information about the assignment between the company code and the controlling area, see Company Codes and Controlling Areas

Define, copy, delete, check company codeIn this activity you create your company codes. The company code is an organizational unit used in

accounting. It is used to structure the business organization from a financial accounting perspective.

We recommend that you copy a company code from an existing company code. This has the

advantage that you also copy the existing company code-specific parameters. If necessary, you can

then change certain data in the relevant application. This is much less time-consuming than creating a

new company code. See "Recommendations" for more details about copying a company code.

If you do not wish to copy an existing company code, you can create a new company code and make

all the settings yourself. You define your company codes by specifying the following information:

Company code key

You can select a four-character alpha-numeric key as the company code key. This key identifies the

company code and must be entered when posting business transactions or creating company code-

specific master data, for example.

Company code name

Address data

The address data is necessary for correspondence and is printed on reports, such as the advance

return for tax on sales/purchases.

Country currency

Your accounts must be managed in the national currency. This currency is also known as the local

currency or the company code currency. Amounts that are posted in foreign currency are translated

into local currency.

Country key

The country key specifies which country is to be seen as the home country; all other countries are

interpreted as "abroad". This is significant for business and payment transactions because different

forms are used for foreign payment transactions. This setting also enables you to use different

address formatting for foreign correspondence.

Language key

The system uses the language key to determine text automatically in the language of the relevant

country. This is necessary when creating checks, for example.

You do not specify the functional characteristic of the company code until configuring the relevant

application.

You can set up several company codes per client to manage the accounts of independent

organizations simultaneously. At least one company code must be set up in each client.

To take full advantage of SAP system integration, you must link company codes to the organizational

units of other applications. If, for example, you specify a CO account assignment (for example, cost center or internal order ) when entering a document in FI, then the system must determine a

controlling area to transfer this data to CO. You must specify how the system is to determine the

appropriate controlling area.

The system derives the controlling area from the company code if you assign it directly to a company

code. You can also assign several company codes to one controlling area.

Standard SettingsCompany code 0001 has already been created in clients 000 and 001 for the country DE (Germany).

All country-specific information ("parameters") is preset in this company code, such as the payment

methods, tax calculation procedures, and chart of accounts typical for this country.

If you want to create a company code for the USA and its legal requirements, you must first of all run

the country installation program in client 001. The country of company code 0001 is then set to "US"

and all country-specific parameters related to it are set to the USA. For more information, see the

Set Up Clients activity under "Basic Functions" in the Customizing menu.

RecommendationYou should keep the preset company code number 0001 if you only require one company code. This

keeps to a minimum the number of tables you need to set up.

You can copy a company code using a special Customizing function. Company code-specific

specifications are copied to your new company code. The target company code must not yet be

defined, it is defined automatically during the copying procedure.

SAP recommends the following procedure when creating company codes:

1. Create the company code using the function "Copy Company Code".

2. Enter special company code data with the function "Edit Company Code Data".

You can also use the function "Edit Company Code Data" to create a company code. However, in this

instance, the company code "global data" is not copied. If you create a company code using the

"Copy" function, most of the "global data" is also copied.

Further NotesYou should create a company code according to tax law, commercial law, and other financial

accounting criteria. As a rule, a company code in the SAP system represents a legally independent

company. The company code can also represent a legally dependent operating unit based abroad if

there are external reporting requirements for this operating unit, which can also be in the relevant

local currency.

For segment reporting according to Anglo-American accounting practices, you need to represent the

regions in which the company has significant dealings. This reporting data can be generated entirely

on the basis of company codes.

For processing company codes, there are extended functions that you can access with the function

call "administer" or "Copy, delete, check company code". The entry in the company code table is

processed in these functions as well as all dependent Customizing and system tables in which the

plant is a key.

For more information on the extended functions, see Copy/Delete/Check/Process Project IMG.

In addition to these functions, there is also the "Replace" function. You use this function if you want to

change a company code key. This is only possible if no postings have been made in the company

code that is to be replaced. You should therefore only use this function for newly-created company

codes.

Activities1. Create your company codes based on the reference (company code 0001) delivered with the

standard system. SAP recommends using the function "Copy Company Code" to create your

company codes.

2. Go to the activity "Edit Company Code Data" and change the name, description, address, and

currency. Maintain the company code data that has not been copied.

3. Use the project IMG view to postprocess data that is changed automatically. You can also carry out

postprocessing at a later stage since the system keeps the generated project view.

Company Codes and Controlling Areas The controlling area is the central organizational unit of the Controlling (CO) component. You use the controlling area to carry

out cost accounting.

If you implement the Controlling component, postings are forwarded from Financial Accounting to Controlling . During posting,

you can specify any additional account assignments relevant for cost accounting (for example, cost center or internal order).

You must assign a controlling area to your company code to ensure that this data is forwarded to Controlling for further

processing for cost accounting.

The company code and controlling area do not have to exist in a one-to-one relationship. You have the following options for this

assignment:

The company code can correspond to exactly one controlling area (see the following figure, 1 ).

Several company codes can correspond to one controlling area (see the following figure, 2 ).

For more information, see Assignment of Company Codes and Controlling Areas .

Assigning Controlling Areas and Company Codes  

The company code assignment to the controlling area must be made according to the processes your company has in logistics

and accounting. The organizational environment is also very important. It is difficult or at best, time-consuming to change the

1:1 or 1:n relationsip between the controlling area and company code after the decision and the assignment have already been

made.

The company code and controlling area organizational units can be combined in a number of ways. Using these combinations

you can represent organizations with different structures.

One Controlling Area is Assigned to One Company Code

In this example, the financial accounting and cost accounting views of the organization are identical.

Multiple Company Codes Assigned to One Controlling Area

This example is Cross-Company Code Cost Accounting. Cost accounting is carried out in multiple company codes in

one controlling area. All cost-accounting relevant data is collected in one controlling area and can be used for

allocations and evaluations. In this case, the external and internal accounting perspectives differ from each other.

For example, this method can be used if the organization contains a number of independent subsidiaries using global

managerial accounting. Cross-company code cost accounting gives you the advantage of using internal allocations

across company code boundaries.

Maintain consolidation business areaIn this activity you create consolidation business areas. A consolidation business area is an

accounting organizational unit that represents a central business segment within a business organization and that has a balance sheet which can be included in business area consolidation.

In the SAP system, you execute the functions for consolidating business areas based on

consolidation business areas.

ActivitiesDefine consolidation business areas by assigning them 4-character IDs.

Chart of Accounts DefinitionThis is a list of all G/L accounts used by one or several company codes.

For each G/L account, the chart of accounts contains the account number, account name, and the information that controls how

an account functions and how a G/L account is created in a company code.

UseYou have to assign a chart of accounts to each company code. This chart of accounts is the operating chart of accounts and is

used for the daily postings in this company code.

You have the following options when using multiple company codes:

You can use the same chart of accounts for all company codes

If the company codes all have the same requirements for the chart of accounts set up, assign all of the individual company

codes to the same chart of accounts. This could be the case if all company codes are in the same country.

In addition to the operating chart of accounts, you can use two additional charts of accounts

If the individual company codes need different charts of accounts, you can assign up to two charts of accounts in addition to the

operating chart of accounts. This could be the case if company codes lie in multiple countries.

 Note

The use of different charts of accounts has no effect on the balance sheet and profit and loss statement. When creating the

balance sheet or the profit and loss statement, you can choose whether to balance the company codes which use different

charts of accounts together or separately.

End of the note.

StructureCharts of accounts can have three different functions in the system:

Operating chart of accounts

The operating chart of accounts contains the G/L accounts that you use for posting in your company code during daily

activities. Financial Accounting and Controlling both use this chart of accounts.

You have to assign an operating chart of accounts to a company code.

Group chart of accounts

The group chart of accounts contains the G/L accounts that are used by the entire corporate group. This allows the company to

provide reports for the entire corporate group.

The assigning of an corporate group chart of accounts to a company code is optional.

Country-specific chart of accounts

The country-specific chart of accounts contains the G/L accounts needed to meet the country's legal requirements. This allows

you to provide statements for the country's legal requirements.

The assigning of an country-specific chart of accounts to a company code is optional.

IntegrationThe operating chart of accounts is shared by Financial Accounting as well as Controlling. The accounts in a chart of accounts

can be both expense or revenue accounts in Financial Accounting and cost or revenue elements in cost/revenue accounting.

You can find additional information on this subject under Cost Accounting and Chart of Accounts .

Chart of Accounts List DefinitionThe chart of accounts list is a directory of all charts of accounts that can be used in a client.

UseYou enter all the charts of accounts that you require for your company in this list. To do this, in the Financial Accounting

Implementation Guide, choose  General Ledger Accounting G/L Accounts Master Data Preparations Maintain Chart of

Accounts List .

In the FI system, you can use as many charts of accounts as you require within a client. You can thus meet the varying needs

of the individual company codes regarding the chart of accounts structure. The following characteristics of the individual

company codes could, for example, place various demands on how the chart of accounts is set up:

Location (country)

Branch

Corporate structure

Corporate size

Legal requirements

However, several company codes can also use a common chart of accounts if a different grouping of the chart of accounts is

not required.

You must assign one chart of accounts to each company code. You therefore need at least one chart of accounts for your

company in the system.

 Note

The chart of accounts is shared by Financial Accounting as well as cost/revenue accounting. The items in a chart of accounts

can be both expense or revenue accounts in Financial Accounting and cost or revenue elements in cost/revenue accounting.

End of the note.

StructureIf you enter a chart of accounts in the chart of accounts list, note the importance of the following settings:

Maintenance language

The chart of accounts is created and changed in one language, the maintenance language. This means that the names of the

G/L accounts are created and changed in the maintenance language. If the chart of accounts is used by multiple company

codes using varying languages, you can translate the account names into the languages needed. For more information on this,

see Translating a Chart of Accounts .

Group chart of accounts

You can assign an alternative group chart of accounts to the chart of accounts. For more information, see Chart of Accounts .

Length of the G/L account number

You can define the length of the G/L account numbers. The maximum length is ten characters. Internally, the system keeps the

account numbers with a ten character length. The system pads purely numeric account numbers with zeroes from the left, and

alphanumeric account numbers from the right.

To change the chart of accounts list, read Changing the Chart of Accounts List .

Cost Accounting and Chart of Accounts You have to assign an operating chart of accounts to each company code. Cost accounting also uses this chart of accounts,

that is, the accounts of the operating chart of accounts can be revenue and expense accounts in Financial Accounting and can

be cost or revenue elements in cost accounting.

If your organization consisting of multiple company codes (such as a global company) needs various chart of accounts, you

should note that cost account is only connected to the operating chart of accounts. How you organize your chart of accounts

depends on the hierarchy level at which you want to carry out cost accounting.

You have two basic methods for organizing your chart of accounts.

Central organization

At the corporate group level, a chart of account is defined which contains all accounts and can be used by all company codes.

This chart of accounts is the operating chart of accounts for all company codes. To meet specific country requirements, you can

enter an additional (country-specific) chart of accounts for each company code.

Advantage: Cross-company code cost accounting is possible. Consolidation is carried out using the operating chart of

accounts, which is the corporate group chart of accounts.

Disadvantage: The accountants cannot work with their own country-specific charts of accounts.

Decentral organization

Each company code uses its country-specific chart of accounts as the operating chart of accounts. For consolidation, you enter

the corporate group chart of accounts additionally for each company code.

Advantage: The accountants can work in their own country-specific charts of accounts. You cannot consolidate data using the

corporate group chart of accounts.

Disadvantage: Cross-company code cost accounting is not possible.

Organization of the chart of

accounts

Cost accounting Charts of accounts

Corporate group chart of

accounts

Operating chart of accounts Country-specific chart of

accounts

Central Cross company code   Corporate group chart of

accounts

For local requirements

Decentral At the company code

level

For corporate group

requirements

Country-specific chart of

accounts

Currencies DefinitionLegal means of payment in a country.

UseFor each monetary amount that you enter in the SAP System, you must specify a currency. You enter currencies as the ISO

standards, for example, USD for US dollar.

You define currencies in Customizing.To do this, in Customizing choose  SAP NetWeaver General Settings Currencies

Check Currency Codes .

In Financial Accounting, you have to specify for each of your company codes, in which currency ledgers should be managed.

This currency is the national currency of the company code, that is, the local currency (or company code currency). From a

company code view, all other currencies are then foreign currencies .

You can manage ledgers in two parallel currencies in addition to the local currency, for example, group currency or hard

currency. For more information, see

General Ledger Accounting (new) under Parallel Currencies in Parallel Ledgers and

classic General Ledger Accounting under Parallel Currencies in Financial Accounting .

In order for the system to translate amounts into various currencies, you must define exchange rates . For each currency pair,

you can define different exchange rates and then differentiate between them by using exchange rate types .

IntegrationIn Financial Accounting , currencies and currency translation are relevant in the following circumstances:

General Ledger Accounting Accounts Receivable and Accounts Payable

Account master data Defining the Account Currency Defining the Reconciliation Account

Post Posting Documents in a Foreign Currency

Clearing Clearing Open Items in Foreign Currencies

Foreign Currency Valuation Foreign Currency Valuation

Fiscal Year DefinitionUsually a period of twelve months for which a company regularly creates financial statements and checks inventories.

The fiscal year may correspond exactly to the calendar year, but this is not obligatory.

Under certain circumstances a fiscal year may be less than twelve months (shortened fiscal year).

StructureA fiscal year is divided into posting periods . Each posting period is defined by a start and a finish date. Before you can post

documents, you must define posting periods, which in turn define the fiscal year.

In addition to the posting periods, you can also define special periods for year-end closing.

In General Ledger Accounting , a fiscal year can have a maximum of twelve posting periods and four special periods. You can

define up to 366 posting periods in the Special Purpose Ledger .

UseIn order to assign business transactions to different time periods, you must define a fiscal year with posting periods. Defining

the fiscal year is obligatory .

You define your fiscal year as fiscal year variants which you then assign to your company code. One fiscal year variant can be

used by several company codes.

You have the following options for defining fiscal year variants:

Fiscal year same as calendar year

Fiscal year differs from calendar year (non-calendar fiscal year). The posting periods can also be different to the

calendar months.

You define your fiscal year variants in Customizing for Financial Accounting as follows:  Financial Accounting Global Settings

Fiscal Year Maintain Fiscal Year Variant (Maintain Shortened Fiscal Year)

IntegrationWhen you enter a posting, the system automatically determines the posting period. For more information, see Determining Posting Periods During Posting

In the general ledger, the system saves the transaction figures for all accounts for each posting period and each special period

separately according to debits and credits. In the Special Purpose Ledger component (FI-SL), you can save the transaction

figures as a balance.

Shortened Fiscal Year DefinitionFiscal year that contains less than twelve months.

A shortened fiscal year could be necessary in the following cases, for example:

Establishment of a company

Changeover from a calendar year to a non-calendar fiscal year, or vice versa.

UseWhen you define a shortened fiscal year, you have to make the following specifications:

A shortened fiscal year must always be defined as year-dependent, since it can only apply to a specific year and

must be followed by a complete fiscal year.

You define a shortened fiscal year and the following or previous complete fiscal year in one fiscal year variant.

You define a shortened fiscal year in Customizing for Financial Accounting as follows:  Financial Accounting Global Settings

Fiscal Year Maintain Fiscal Year Variant (Maintain Shortened Fiscal Year)

IntegrationThe options available for defining a shortened fiscal year depend on whether you are using Financial Accounting with or without

Asset Accounting .

If you are using Financial Accounting without Asset Accounting , each fiscal year can start with any period.

If you use Financial Accounting with Asset Accounting , each fiscal year must start with period 001, so that the

depreciation can be calculated correctly.

For more information, see the Asset Accounting documentation under Shortened Fiscal Years

Special Periods DefinitionSpecial posting periods that subdivide the last regular posting period for closing operations.

UseIrrespective of how you have defined your fiscal year, you can also use special periods. Special periods subdivide the year-end

closing period. They therefore merely divide the last posting period into several closing periods. This enables you to create

several supplementary financial statements.

A fiscal year usually has 12 posting periods. In General Ledger Accounting , you can define up to four special periods.

 Note

If you do not need 12 posting periods, you can use the posting periods that are not required as special periods. If you use these

additional closing periods, you must specify the number you require in the field No. special periods . when defining the fiscal

year variants. You cannot exceed a maximum of 16 periods.

End of the note.

IntegrationWhen posting to special periods, you must take the following into consideration:

The posting date must fall within the last regular posting period.

You have to enter the special periods in the document header in the Period field, since the special periods cannot be

determined automatically by the system.

Determining Posting Periods During Posting UseWhen you record a document, you enter the posting date. When you post the document, the system uses the posting date

specified to automatically determine the posting period. The posting period consists of a month and a fiscal year.

These are both displayed in the document overview. The posting period determined is entered in the document and the

transaction figures for this period are updated.

If you want to display the balance of an account, the transaction figures are displayed separately according to posting periods.

This process is illustrated below:

IntegrationIf you use the Special Purpose Ledger , you can define different posting periods per ledger. Only the posting period defined for

the general ledger is stored in the document.

PrerequisitesIn order for the system to determine posting periods, you must fulfil the following prerequisites:

Define your fiscal year. For more information, see Fiscal Year and Calendar Year .

The periods in which you want to post must be open. For more information, see Opening and Closing Posting

Periods

FeaturesFor postings to the previous fiscal year, the system carries out the following adjustments:

For balance sheet accounts , the system adjusts the carry forward balance of the accounts concerned in the current

fiscal year.

For profit and loss accounts , the profit or loss carried forward to the retained earnings account is adjusted.

Fiscal Year and Calendar Year You have the following options for defining your fiscal year variants in relation to the calendar year:

Fiscal year same as calendar year

Fiscal year differs from calendar year (non-calendar fiscal year). The posting periods can also be different to the

calendar months.

Your fiscal year is year-dependent. This means that the fiscal year only applies to a specific calendar year.

Fiscal Year Same as Calendar Year

If your fiscal year is the same as the calendar year, the following specifications apply:

The fiscal year begins on January 1.

Twelve posting periods are available.

The periods correspond to calendar months. You do not have to define the individual periods. The system

automatically uses the calendar months.

Non-Calendar Fiscal Year

If your fiscal year differs from the calendar year, you must specify:

How many posting periods you require

How the system should determine the posting period and fiscal year from the posting date during posting:

Posting Periods

To enable the system to determine the posting period, specify month and day limits for the end of each period.

 Caution

Enter 29 as the day limit for February . This ensures that the system can also determine the posting period correctly in a leap

year. If you enter 28 as the day limit for February, transaction figures posted on 29 February will be updated in the next period.

If the next period is not open, the system issues an error message.

End of the caution.

Fiscal Year

Since your fiscal year is not the same as the calendar year, you have to specify the year displacement for each posting period.

You can use the entries -1, 0 , and +1 for this.

 Example

In the illustration that follows, your fiscal year begins on April 1 and ends on March 31. The period limits correspond to the

beginning and end of the calendar months.

Since the fiscal year does not correspond to the calendar year, you specify how the fiscal year is to be determined by entering

the year displacement. If you post with a posting date of 02/03/99, the system uses your definition of the fiscal year variant to

determine that posting period 11 is in fiscal year 1998.

End of the example.

Posting Periods Do Not Correspond To Calendar Months

If you are using a non-calendar fiscal year, and your posting periods do not correspond to the calendar months, define the

difference by specifying the day of the period end.

 Example

Your fiscal year begins on April 16 and ends on April 15. The start and end of your posting periods do not correspond to the

start and end of a calendar month.

You must split the period 12/16 to 01/15 in two posting periods, since you require different specifications for the year

displacement. This means that for posting period 9, you have to define two posting periods (with year displacements 0 and -1).

In the example given, the system would determine the following posting periods and fiscal years from the posting dates given:

End of the example.

Posting Date Year Displacement Period Fiscal Year

20.12.1998 0 9 1998

13.01.1999 -1 9 1998

Year-Dependent Fiscal Year Variants

You can define a year-dependent fiscal year variant. This is a fiscal year variant that only applies to a specific calendar year.

To do this, select the field Year-dependent when you define your fiscal year variants. You then have to enter the period ends,

defined by month and day limits, for each calendar year.

In this case, the year displacement specifications refer to the calendar year for which you have defined posting periods. The

year is displayed when you maintain the period ends

Opening and Closing Posting Periods UseYou define posting periods in your fiscal year variants. You can open and close these posting periods for posting. As many

periods as you require can be open for posting simultaneously.

Usually, only the current posting period is open for posting, all other posting periods are closed. At the end of this posting

period, the period is closed, and the next posting period is opened.

Special periods can be open for closing postings during the period-end closing.

FeaturesYou have the following options for opening and closing posting periods.

Posting Period Variants

You can specify which company codes are open for posting in a posting period variant. Posting period variants are

cross-company code and you have to assign them to your company codes. The posting periods are then opened and

closed simultaneously for all company codes via the posting period variants.

Working with posting period variants is recommended if you are responsible for a large number of company codes.

Since you only have to open and close the posting period once for the variant, your work is considerably reduced.

Account Type

You can differentiate the opening and closing of posting periods by account type. This means that for a specific

posting period, postings can be permitted to customer accounts, but not to vendor accounts.

 Caution

For each posting period that should be open, you must always specify at least account type + (valid for all account

types). You can exercise more detailed control by specifying further account types.

Using the minimum entry, when you enter the posting date in the document header, the system checks whether the

posting period determined in the posting period variant can be posted to. As soon as you then enter an account

number, in a second step, the system checks whether the posting period is permitted for the account specified.

End of the caution.

Account Interval

You can differentiate the opening and closing of posting periods by account intervals. This means that you only open

a posting period for posting to specific G/L accounts.

Account intervals are used exclusively with G/L accounts. If you want to open subledger accounts, you have to enter

the corresponding reconciliation account and the account type.

 Example

During the closing operations, you can use the reconciliation accounts to close customer and vendor accounts before

G/L accounts, for example. This allows you to prevent further postings to these accounts after you have confirmed

the balances with your customers and vendors. Balance confirmation is one of the prerequisites for further closing

operations.

End of the example.

Users

You can open and close posting periods only for specific users. To do this, enter an authorization group for account

type + (at document header level) and, if necessary, for other account types (at the line item level).

 Note

This authorization group is effective only in time period 1 and prevents users who do not have the appropriate

authorization for the authorization object F_BKPF_BUP (accounting document: Authorization for posting periods)

from posting in periods that are only open for time period 1 .

For more information on allocating authorizations, see the following sections of the Implementation Guide:

o For new General Ledger Accounting, choose  Financial Accounting (New) Financial Accounting Global

Settings (New) Authorizations Maintain Authorizations

o For classic General Ledger Accounting, choose  Financial Accounting Financial Accounting Global

Settings Maintain Authorizations .

End of the note.

ActivitiesYou make the settings for opening and closing posting periods in Customizing:

For new General Ledger Accounting, choose  Financial Accounting (New) Financial Accounting Global Settings

(New) Ledgers Fiscal Year and Posting Periods Posting Periods .

For classic General Ledger Accounting, choose  Financial Accounting Financial Accounting Global Settings

Document Posting Periods

Opening and Closing Posting Periods: Example You want to limit posting to G/L accounts (with a few exceptions) to the current and subsequent period only. The same applies

to your customer and vendor accounts. Certain G/L accounts (140100 to 149999), which you need for preparing the financial

statements, are to be permitted for the previous period also. Account number 140150, however, is to be excluded from this

interval (140100 to 149999). The current period is 01/2000.

You can define the posting periods for these accounts by specifying account intervals. First open all your G/L accounts for

posting in the current period and the subsequent period only. You then define your exceptions. by opening accounts 140100 to

149999 for posting in the previous period as well. Enter accounts to be excluded from the interval separately.

You can do this by making the entries shown below.

1. Specify the minimum entry + to open the periods you need for all your accounts.

2. Open the current period and the following period for all your G/L accounts by entering an account number interval

containing all account numbers.

3. For the interval 140100 to 149999, specify the current, the following and the previous period.

4. For account 140150, specify only the current and the following period.

5. For your customer and vendor accounts, use the reconciliation accounts to specify the permitted posting periods. To

do this, enter the account type in the column headed A . Then specify the permitted posting periods for the desired

account number interval.

 Note

For account types D and K , you specify the numbers of the reconciliation accounts rather than those of the customer and

vendor accounts themselves. This entry determines the posting periods permitted for the sub-ledger accounts.

Opening New Fiscal Years UseThe new fiscal year is automatically opened when you make your first posting in the new fiscal year or once the balance carried forward program has been run. You do not have to close the old fiscal year before you can post data in the new one.

You therefore do not need to create closing or opening financial statements.

PrerequisitesThe prerequisites for posting to a new fiscal year are as follows:

If you are using a fiscal year variant which is year-specific, you first have to create a variant for this fiscal year and

assign it to the relevant company code. See Fiscal Year and Calendar Year If you have also defined year-dependent document number assignment , you must have already set up the document

number ranges for the new fiscal year. For more information, see Document Number Assignment The relevant posting periods must be open in the new fiscal year. See Opening and Closing Posting

Balance Carryforward  

Balance carryforward involves carrying forward account balances into the new fiscal year. The balance to be carried forward is

shown in the account balance display. To carry forward balances, you can use a program for G/L accounts and another

program for customer and vendor accounts.

 Caution

You have to carry out the balance carryforward manually; it is not performed automatically even if you have already made

postings to the new fiscal year.

End of the caution.

The system carries balances forward as follows:

Balance Sheet Accounts and Customer/Vendor Accounts The balances on these accounts are carried forward to the same accounts in the new fiscal year.

Additional account assignments are transferred.

Profit and Loss Accounts P&L accounts are carried forward to one or more retained earnings accounts. The balances of the profit and loss

accounts are set to 0.

Additional account assignments are not transferred.

Transaction currencies are no longer applicable and are summarized in local currency.

Prerequisites Balance Sheet Accounts and Customer/Vendor Accounts

There are no prerequisites for carrying forward balances from balance sheet accounts and customer/vendor

accounts.

Profit and Loss Accounts

For profit and loss accounts, the following prerequisites must be met:

o A profit and loss account type must be specified in the master record of every profit and loss account. This

is the key with which you define a retained earnings account for each chart of accounts.

o You need to have defined your retained earnings accounts.

You make the settings in Customizing for Financial Accounting under  Financial Accounting Business

Transactions Closing Carry Forward Define Retained Earnings Account .

For the Special Purpose Ledger, you make the setting in Customizing for Financial Accounting under  

Special Purpose Ledger Periodic Processing Balance Carryforward Retained Earnings Accounts

Maintain Local/Global Retained Earnings Accounts .

 Note

Most companies use only one retained earnings account. However, by using the profit and loss account

type, you can use more than one retained earnings account. This could be useful for international

corporations, for example, that have to meet various requirements when producing their profit and loss

statement. For more information, see Special Features in P&L Accounts.

End of the note.

Features

General Functions Automatic Balance Adjustment

When you perform balance carryforward for G/L accounts at the end of a fiscal year, any postings made to the

previous year lead to automatic adjustments of the balances. The system uses an indicator to determine whether

balance carryforward has already occurred. From then on, whenever a posting is made, the balance is automatically

carried forward, even when a posting is made to the previous year. Consequently, it is not necessary to repeat the

balance carryforward.

Account Adjustments

If, in the new fiscal year, you find that a G/L account was mistakenly set up as a P&L account in the prior year instead

of as a balance sheet account (or vice versa), you must first adjust the master data of the affected account record

and then repeat the balance carryforward.

Special Features in General Ledger Accounting Parallel Currencies

If you use parallel currencies in General Ledger Accounting, and the second or third currency of your general ledger

is the group currency, the balances are managed in this group currency in ledger 00 and carried forward as part of

the balance carryforward.

If you run parallel currencies in additional parallel general ledgers other than ledger 00, you have to perform the

balance carry forward separately for the parallel general ledgers.

Special Features in Special Purpose Ledgers User-Defined Field Movements

If you carry forward additional account assignments, such as profit centers or functional areas, to the new fiscal year,

or you want to summarize account data using additional account assignments, you must assign to your ledger field

movements for balance sheet accounts and P&L accounts. To assign the field movements, go to Customizing for

Financial Accounting and choose  Special Purpose Ledger Periodic Processing Balance Carryforward Assign

Field Movements .

 Caution

If you want to use a field movement for balance sheet accounts, your field movement must contain the dimension

Account. However, the field movement for P&L accounts must not contain the dimension Account (except for when

you want to change the account using a user exit).

End of the caution.

Secondary Cost Elements

In the standard system, the program only carries forward G/L accounts from Financial Accounting. If you also want to

carry forward secondary cost elements in your ledger, you have to use a user exit (transaction SMOD or CMOD,

enhancement GVTRS001).

ActivitiesTo perform the balance carryforward, you must call the program as follows:

G/L Accounts

From the SAP Easy Access screen, choose  Accounting Financial Accounting General Ledger Periodic

Processing Closing Carryforward Balance Carryforward .

Customer and Vendor Accounts

From the SAP Easy Access screen, choose  Accounting Financial Accounting Accounts Receivable/Accounts

Payable Periodic Processing Closing Carryforward Balance Carryforward .

 Caution

For the balance carryforward in Accounts Receivable or Accounts Payable, you can only perform balance

carryforward for individual accounts. For the balance carryforward in General Ledger Accounting, you have to

perform balance carryforward for all G/L accounts.

End of the caution.

Special Purpose Ledgers

From the SAP Easy Access screen, choose  Accounting Financial Accounting Special Purpose Ledger

Periodic Processing Closing Carryforward Balance Carryforward .

Document Types  

A key that is used to classify accounting documents and distinguish between business transactions to be posted. The

document type is entered in the document header and applies to the whole document.

 

The document type has the following functions:

Differentiating between business transactions. The document type tells you immediately what sort of business

transaction is involved. This is useful, for example, when displaying line items for an account.

Controlling the posting to account types (vendor, customer, or G/L accounts). The document type determines which

account types that particular document can be posted to.

Assigning document numbers. A number range is assigned to every document type from which the number of the

document in the SAP system is selected. The original documents from one number range should be stored together.

In this way, the document type controls document storage.

For more information, see Document Number Assignment and Controlling Document Storage Using the Document Type.

Applying the vendor net procedure. This means that any discount and the net amount are calculated (and posted)

when the vendor invoice is posted.

The following figure illustrates the significance of the document type:

Significance of the document type

You define your document types at client level. The standard system already contains document types which you can use or

change. Before deleting document types, check whether they are currently being used in the system.

 Note

The system usually defaults the appropriate document type when a business transaction is entered. With some transactions

(such as clearing transactions), you define document types that are required for automatic postings yourself.

Document Number Assignment UseIn the SAP System, every document is assigned a number that identifies it uniquely within a fiscal year and company code.

There are two types of number assignment:

External (by the user)

The accounting clerk enters the number of the original document during document entry, or the number is transferred

automatically from a pre-invoicing system. A prerequisite is that the document numbers are unique. The system checks

whether the number entered already exists and prevents users from assigning the same number twice. Numbers assigned to

documents that have been archived however, can be reused.

Internal (by the system)

The system automatically assigns a sequential number. The accounting clerk transfers this SAP document number to the

printed original document and then files it using this number. This method is used if the original documents do not have a

unique document number. This is the case, for example, with vendor invoices.

You use a number range to define how the document number is assigned. Each document type has a specific number range

from which the document number is selected.

IntegrationReversing Documents

When you reverse documents, the system automatically assigns a number for the reverse document. To do this, the system

requires a document type that has internal number assignment. Every document type with external number assignment must

therefore be assigned a reverse document type that has internal number assignment.

 Note

Documents posted with a document type that has internal number assignment are reversed by the system using the same

document type if you do not specify a separate reverse document type.

End of the note.

Sales and Distribution (SD)

If you have installed the Sales and Distribution (SD) component, your system administrator can configure the system so that

either the invoice number from SD is used for the accounting document, or separate document numbers are assigned to

invoices from SD. For more information, see the SD - Sales and Distribution documentation Number Assignment for Material Master Records and Validity Period for the Document Number Interval

Number Assignment for Material Master Records UseThe material number can either be entered externally by the user, or assigned internally by the system. Both internal and

external number assignment is possible. If you do not enter a material number when creating a material master record, the

system automatically carries out internal number assignment.

Document Header DefinitionThe part of a document that contains information valid for the whole document, for example, document date and number. It also

contains controlling information such as the document type.

Entering Document Headers UseThe document header contains data that applies to the entire document. To enter a document, you must first enter the

document header.

Procedure1. From the SAP Easy Access screen, choose  Accounting Financial accounting General ledger Document entry

Others General posting .

2. To enter a document in Accounts Receivable or Accounts Payable , from the SAP Easy Access screen choose  

Accounting Financial accounting Accounts receivable/Accounts payable Document entry Other Invoice -

general/Credit memo - general or another business transaction.

3. Enter the data required on the Enter G/L Account Posting: Header Data screen. Depending on your settings in

Customizing, the following entries are required:

Document date

The document date is the date the business transaction (such as a transfer posting, or the issue date of an invoice or payment)

took place. The document date can be different from the posting date, which is the date that G/L account balances or the

customer/vendor balances are updated.

Document type

For some document types, you also have to make entries in the fields Reference and Document header text .

Document number

Depending on the document type, document numbers are either internally assigned by the system or entered by you externally.

Company code

The system defaults this company code in all subsequent documents you enter that day.

Posting date

The system automatically defaults the current date as the document date. When you post the document however, you can

enter any other date (past or future) from a permitted posting period. The posting date can be different to the document entry

date and the document date (date the original document was created).

The posting date determines the posting period.

Period

The periods that are permitted for posting are determined by your system configuration. You can also post to periods in a

previous fiscal year. If you do this, the carry forward balance for the current year is automatically corrected in special periods.

Currency/Exchange rate

When you enter the first document of the day, you must enter a currency key. The system defaults this currency key in all

subsequent documents entered on that day.

You have the following options when entering an exchange rate in a document header:

Enter the currency key. The system automatically transfers the exchange rate valid on the posting date. The

exchange rate must be defined in the system.

or

Enter the currency key and the translation date required. The system transfers the exchange rate valid on the

translation date. The exchange rate must be defined in the system.

or

Enter the currency key and the exchange rate manually in the document header.

Trading partner business area

This entry is then defaulted in each G/L account item that is not generated automatically. It can however be overwritten if

required.

Other document header fields

Doc.header text

The document header text contains explanations or notes that are applicable to the whole document, not just specific document

line items.

Reference number

The reference number could be the number of an invoice, for example.

Cross-company code no.

Either you enter the number of a cross-company code document manually, or it is determined by the system.

In the document header you can edit the following fields:

Reference

Doc.header text

Cross-company code no.

Trading partner business area

Line Items DefinitionThe part of a document that contains information about an item. This includes an amount, an account number, the credit or

debit assignment, and additional details specific to the transaction being posted.

UseYou can enter terms of payment, a cost center, or an explanatory text in a line item for example

Editing Line Items UseBefore you post a document, you can display the document overview and then edit one or more line items. In this way, you can

correct any input errors.

See Document Overview

FeaturesIn the document overview you can:

Adjust individual items (for example, change an amount field)

Add new items

Delete items

Hold an incomplete document.

Note that before you post the document, you can edit any field in any line item, except the following:

Pk (Posting key)

Account

Special G/L indicator

Company code

Generating Line Items Automatically UseDepending on your system’s configuration, you can have the system generate and post line items automatically.

IntegrationWhich line items are generated depends on which business transactions you have entered:

FeaturesThe following table gives you an overview of the different business transactions for which line items can be generated

automatically.

Business transaction Line items

Entering a customer or vendor invoice Tax on sales/purchases (output tax when posting a customer invoice, input tax when

posting a vendor invoice)

Payables and receivables between company codes (when posting cross-company

code transactions)

Posting a customer or vendor payment and

clearing open items

Cash discount (paid and received when posting payments)

Backdated tax calculation for tax on sales/purchases (after cash discount deduction)

Gains and losses from exchange rate differences (between invoice and payment)

Unauthorized deduction of cash discount (when a payment is slightly different to the

amount due)

Residual items

Bank charges

Entering special G/L transactions Bill of exchange charges

Tax adjustment for a down payment

ActivitiesAdding Details to Automatically Generated Line Items

Adding Details to Automatically Generated Line Items UseYou can add details to any automatically generated line item. For example, you can add text to a tax on sales/purchases line

item.

If you are permitted (or required) to make additional account assignments to the automatically generated line items, the system

branches directly to the document overview. Here, the automatically generated items are highlighted.

PrerequisitesMake sure that the G/L account is marked as adjustable and that the appropriate field is defined as optional or required in the

field status group.

Procedure1. Select the item for which you want to make an additional account assignment by placing the cursor on an

automatically generated line item and choosing  Goto Line item Choose .

2. Edit the line item.

3. Choose  Document Post to post the document.

 Note

If you use fast entry to enter G/L account line items, and required fields are not displayed on the fast entry screen, you must

add details to the G/L account line items. This process is the same as adjusting an automatically generated line item.

You can also adjust line items after posting by changing the document

Document Reversal PurposeIf you have entered an incorrect document, you can reverse it, thereby also clearing the open items.

A document can only be reversed if:

It contains no cleared items

It contains only customer, vendor, and G/L account items

It was posted with Financial Accounting

All entered values (such as business area, cost center, and tax code) are still valid

 Note

If a line item from a source document has been cleared, a reversal can only be carried out after the clearing is reset.

Information on clearing is available in FI General Ledger Accounting as well as FI Accounts Receivable and Accounts

Payable .

End of the note.

IntegrationDocuments from SD can be reversed with a credit memo. Documents from MM must be reversed with functions in that

component because the reversal function in FI does not reverse all the values required. For more information on reversals in

SD and MM, see the documentation for those applications.

FeaturesThere are two ways of updating transaction figures when reversing a document:

The document and the reverse document increase the account transaction debit and credit figures by the same

amount.

After a document has been reversed, the balance of the account affected is shown as if the document had never

been posted. ( Negative Postings)

ConstraintsYou generally post the reversal document in the same posting period as the corresponding original document. If the posting

period of the source document has already been closed, you have to enter a date that falls in an open posting period (for

example, the current one) in the Posting date field.

Negative Postings Use

Reverse and adjustment postings can also be marked as negative postings. Negative postings are used to reduce the

transaction figures in G/L, customer, and vendor accounts. This allows you to give the transaction figures (following the

reversal) the status they would have had without posting the reversed document and its reversal document. This type of

reversal is called a negative posting.

Use

Reverse and adjustment postings can also be marked as negative postings. Negative postings are used to reduce the

transaction figures in G/L, customer, and vendor accounts. This allows you to give the transaction figures (following the

reversal) the status they would have had without posting the reversed document and its reversal document. This type of

reversal is called a negative posting.

Integration

IntegrationOther applications have to mark reversal transactions that affect Accounting with a checkbox. This obligation to inform is

independent of the marking of negative postings in FI and applies to reversals for:

Customer billing documents and credit memos (SD)

Order settlements (CO)

Invoice verification (LO)

Goods movements (MM)

Negative postings give rise to changes in the reconciliation between documents and transaction figures. A debit item marked as

a negative posting reduces the credit transaction figures, a credit item correspondingly reduces the debit transaction figures.

These changes are considered in the standard reconciliation programs and various standard reports (for example, SAPF070

and RFBELJ00).

PrerequisitesPermit negative postings. You do this per company code in Customizing for Financial Accounting according to account type in

General Ledger Accounting/Accounts Receivable and Accounts Payable → Business Transactions → Document Reversal →

Permit Negative Postings

Features Reversal

You must specify the reasons for the reversal transaction. For each reason, you specify whether negative postings are to be

generated. The reversal reason is noted in the header of the reversed document. This additional information cannot be

accessed in reversals which take place via invoice verification (MM) or billing (SD).

If the reversed document had already been revaluated, additional line items are generated during reversal for resetting the

foreign currency valuation. The system automatically marks these items as negative postings.

If the reversed document already contains negative postings, then the corresponding line items in the reversal document are

not negative postings.

Accrual/deferral documents for reverse postings

You must enter a reason for a reverse posting when entering an accrual/deferral document. The reason for the reverse posting

is noted in the accrual/deferral document and used as a reversal reason during resetting. You can enter any reversal reason for

which a reversal with an alternative posting date can be carried out.

Residual items

The system marks residual items as negative postings. This prevents debit and credit transaction figures increasing simply

because of the creation of residual items.

Outstanding payables and receivables that the system generates according to an amount entered in the field Difference

postings are also automatically marked as negative postings.

Adjustment documents

In order to exclude the effects of incorrect postings on the transaction figures, you can enter adjustment documents in which

individual line items are marked as negative postings.

If, for example, you posted a line item to the wrong account, you can use an adjustment document to correct the wrong account

using a negative posting, and make the posting to the correct account.

Adjustment postings of this sort are only possible for document types specifically defined for this.

To mark individual line items as negative postings when entering a document, select the field Negative posting under More data

.

Automatic postings

If you mark manually entered document items as negative postings, this does not affect the generation of automatic postings

such as tax postings for example. These are not immediately marked as negative postings. You can however mark the relevant

items as negative postings within a supplementary account assignment. The account must not however be marked for

supplementary account assignment in the master record.

During automatic account determination, you have to mark individual items of the document as negative postings for those

transactions where debit and credit postings affect different accounts.

Line item display

The indicator for negative postings is available as a display field for the line item display.

ActivitiesTo enter reversal and accrual/deferral documents, you have to specify reversal reasons . For each reversal reason, specify

whether negative postings are to be created in the reversal document and whether the reversal date may differ from the posting

date of the document to be reversed. You define reversal reasons in Customizing for Financial Accounting according to account

type in General Ledger Accounting/Accounts Receivable and Accounts Payable → Business Transactions → Document

Reversal → Define Reasons for Reversal

You define document types for adjustment postings in Customizing for Financial Accounting under Document → Document

header →Financial Accounting Global Settings → Define Document Types

If you want to see the indicator for negative postings in the line item display, you must either create appropriate display variants

or expand existing variants. You do this in Customizing for Financial Accounting according to account type in General Ledger

Accounting (G/L Accounts) and/or Accounts Receivable and Accounts Payable (Customer/Vendor Accounts) → Line Items →

Line Item Display → Define Line Layout

Validity Period for the Document Number Interval For each document number interval, you must specify a validity limit (year value).

You can define the same number range for several fiscal years (see following illustration). After changing fiscal years, the

system starts assigning numbers again from the lower limit of the interval. The same document numbers are assigned in each

fiscal year, but are uniquely identified by the year specification.

If you do not want to have numbers assigned based on each year, you must specify a year which lies far into the future, for

example "9999". Documents are then assigned numbers from an interval that is unaffected by changes in fiscal year (see the

following illustration).

 Note

External number assignment is automatically year-specific. A unique number results from the document number and fiscal

year. You can therefore reuse your number ranges for external number assignment in each fiscal year without having to define

them based on the year.

End of the note.

To edit or display a document, you must specify the fiscal year in addition to the document number on the request screen if

your system assigns numbers based on each year. You can also have the system automatically default the fiscal year. To

implement this function, you must specify it for each company code.

The following overview shows the effects of defining different number ranges.

Special Features in P&L Statement Accounts Before you can include P&L statement accounts in the chart of accounts, you need to specify the retained earnings account to

which profits or losses are transferred. There is a special program designed to transfer these amounts to this account. In order

for this program to be able to carry forward the profit or loss, you have to enter the number of this retained earnings account in

the system.

Each P&L account is assigned to a retained earnings account via a key. You have to enter this key in the P&L statement

account type field found in the chart of accounts area of each P&L account.

You create the retained earnings account and related key in Financial Accounting Customizing under  General Ledger

Accounting G/L Accounts Master Data G/L Account Creation Preparations Define Retained Earnings Account .

Using One Retained Earnings Account

1. Normally, companies use one retained earnings account. For this reason, X can be used as the key. In the chart of

accounts you enter X in theP+L statement account typefield, and for account determination you enter the retained

earnings account under the key X .

Using Several Retained Earnings Accounts

By having more than one P+L statement account type in the FI system, you are able to specify several retained earnings

accounts.

You would use different retained earnings accounts in an international corporate group to meet various requirements for

preparing financial statements (See Using Several Retained Earnings Accounts: Example ).

Taxes (FI-AP/AR) PurposeYou can use the SAP System to manage various types of tax according to the legal requirements of a country or a region. The

Financial Accounting components Accounts Receivable (FI-AR) , Accounts Payable (FI/AP) , and General Ledger provide the

following comprehensive tax functions:

Tax calculation

The system calculates tax amounts with or without cash discount based on the tax base amount.

Tax codes are used to calculate and check the amounts.

Tax posting

The system posts the tax amounts to defined tax accounts.

Adjustments

The system corrects tax amounts, in the case of cash discount or other deductions, for example.

Tax reporting

You can use the system to create tax returns.

Implementation considerationsTo make use of the various tax types, make the relevant settings in the Implementation Guide (IMG) for Financial Accounting

under Financial Accounting Global Settings .

For more information, see the individual activities in the IMG.

IntegrationYou can process tax in all components in which tax is incurred as a result of business transactions that are later posted to

Financial Accounting.

FeaturesThe SAP System supports the following tax types for calculating, posting, and correcting tax, as well as for tax reporting.

Tax type Description

Tax on sales and purchases

Taxes on sales and purchases are levied on every sales transaction in accordance with the principles of VAT. This applies

to input and output tax, for example.

Input tax is calculated using the net invoice amount and is charged by the vendor.

Output tax is calculated using the net price of products and is charged to the customer.

Companies can offset input tax against output tax, paying the balance to the tax authorities. Tax authorities can set a

nondeductible portion for input tax which cannot then be claimed from the tax authorities.

Additional tax Additional taxes are taxes that are posted in addition to tax on sales/purchases. They are usually country-specific, such as

investment tax in Norway, or sales equalization tax in Belgium.

Sales tax An example of sales tax is the sales and use tax that exists in the USA. Sales transactions that are taxed must be kept

strictly separate from sales transactions that are not taxed.

In general, goods that are intended for production or for resale to a third party are procured untaxed; that is, the vendor

does not calculate tax on the sale of these goods (sales tax). Procurement transactions for individual consumption, on the

other hand, are taxable (use tax).

The principle of sales tax does not permit the option of offsetting input tax against output tax. The vendor must pay the

taxes to the tax authorities.

The system calculates sales tax based on material and customer location and posts it in Sales and Distribution (SD) and

Materials Management (MM). If customers or vendors are exempt from taxation, you can specify this in their master

records by entering the appropriate indicator.

Withholding tax In some countries, a portion of the invoice amount must be withheld for certain vendors and paid or reported directly to the

tax authorities.

SAP currently provides two functions for calculating withholding tax: Classic withholding tax and extended withholding tax .

Extended withholding tax includes all the features of classic withholding tax and, in addition, also fulfills a number of further

country-specific requirements.

If you wish to implement the withholding tax functions in your organization, you should choose extended withholding tax.

For more information about changing over from classic withholding tax to extended withholding tax, see Withholding Tax Changeover .

The SAP System provides the following types of taxation:

Taxation type Description

At national level Tax calculation with standard tax rates

At regional/jurisdiction

level

Tax calculation with tax rates levied for the region or the tax jurisdiction

USA: In the USA, there are more than 67,000 tax jurisdictions. Software from third parties is used in this case, and

supported by SAP using generic interface software (see also the SAP Library under Country-Specific Documentation ).

Taxes on sales/purchases, additional taxes, and sales taxes are determined and calculated using condition methods. For the

calculation, the system requires details of the calculation procedure, the tax code, the jurisdiction code if applicable, and so on.

These taxes are posted when the documents are processed.

Withholding tax, by contrast, is not calculated using condition methods, nor is it posted during document processing.

Withholding tax is not considered until the outgoing payment is made.

Taxes on Sales/Purchases, Sales Taxes, and Additional Taxes The Accounts Receivable, Accounts Payable, and General Ledger application components support the calculation and posting

of tax as follows:

The tax amount can be determined upon request

The tax amount is checked by the system at document level

The tax amount is posted to the tax accounts automatically

A tax adjustment can be performed automatically, if required, for cash discount postings and other deductions

These transactions are controlled using Customizing, whereby the following specifications need to be made:

To determine the tax amount, the system calculates a base amount , the composition of which varies from country to

country. You determine whether the base amount for tax calculation is to include the specified cash discount amount.

This information must be defined for each company code. See also Base Amount and Cash Discount . To enter and determine taxes automatically, a tax code is required, which will include the tax rate prescribed by law.

See also Tax Codes .

The tax amount is generally posted automatically . For posting, specify the tax accounts to which the individual taxes

are to be posted. See also Automatic Tax Posting .

In a G/L account master record , you can specify whether the account is a tax account, and if so, which tax type

(input tax or output tax) can be posted to the account. For all other G/L accounts, you can use the master record to

specify a tax rate and a tax type, or specify that it is not tax-relevant. See also Specifications in G/L Accounts .

See also:

Tax on Sales/Purchases for Down Payments

Specifications for the Tax Type

Separate Exchange Rate for Translating Taxes into Foreign Currency

Tax Return to the Tax Authorities

Base Amount and Cash Discount The tax amount that you input when entering an invoice is checked by the system when the invoice is posted. Alternatively, you

can have the system calculate the tax amount automatically. The tax amount is usually calculated from the expense or revenue

item, which is the tax base amount. The composition of the base amount varies from country to country. The base amount can

(but does not have to) include the cash discount amount. This information must be defined for each company code.

If the tax base amount includes the cash discount amount, the tax base is gross; if not, it is net. You make these specifications

in the Implementation Guide for Financial Accounting in the activity Specify Base Amount. See also Configuring the System Using the Implementation Guide .

In addition to the tax base amount, you can also define the base amount for calculating the cash discount (per company code).

For information about the cash discount amount, see Terms of Payment and Cash Discount . Note that only the following combinations are possible:

Gross cash discount base and gross tax base

Net cash discount base and gross tax base

Net cash discount base and net tax base

Net tax base and gross cash discount base only for tax calculation with jurisdiction code

Tax Codes Tax codes are used to:

Check the tax on sales/purchases amount in the document

Calculate the amount of tax on sales/purchases automatically on request

Calculate the non-deductible input tax portion

Check if a tax account with tax type (input or output tax) can be posted to

Determine the tax account

You define a tax code by entering a two-digit code to represent a tax percentage rate. See also Tax Rates . In addition, the

following technical specifications (characteristics) are required:

Tax type: You specify whether it is input or output tax. See also Input or Output Tax .

Target tax code

Check indicator: You use this indicator to specify whether the system is to output a warning message or an error

message if the tax amount entered manually does not match the amount calculated automatically. See also Check Indicators .

EU indicator

" " = Not EU-relevant

1 = goods delivery within EU, display in EC sales list

2 = services within the EU

3 = subcontracting within the EU

9 = acquisition tax

The system defaults tax types when you define a tax code. These tax types are the taxes that are relevant to your country or

group of countries.

The tax types are defined in the system as country-specific and they determine how the tax is calculated and posted. The

system determines the tax types by means of the country key that you specify when you define a tax code. For more

information on the tax type, see Specifications for the Tax Type .

For information on how to proceed if you need a tax code for tax-exempt sales, see Tax Codes for Tax-Exempt Sales .

For information on how to define tax codes, see the Implementation Guide for Financial Accounting under the documentation

for the activity Define Tax Codes for Sales and Purchases. See also Configuring the System Using the Implementation Guide .

Automatic Tax Posting When posting a document, the system creates the tax items automatically. The data required to do this, the posting key, and

the account number of the tax account must be defined in the system.

The posting keys are already defined in the system. The accounts vary according to the chart of account, and to post taxes in

the system you must therefore define the account numbers of your chart of accounts.

To enable the tax accounts to be specified, an account key has been assigned to the tax types. You enter your tax accounts in

the system for each chart of accounts and account key. For the tax types "Input tax" and for "Travel expenses", for example,

the same account key (VST) is specified. You enter a tax account for all three tax types.

You can distinguish tax accounts by tax codes. That is, you can determine whether for a tax transaction represented by an

account key, a single tax account should always be posted to, or separate accounts according to the tax code in each case.

Since the advance return for tax on sales/purchases is created from the documents, you do not need to differentiate tax

accounts according to tax code.

If the non-deductible portion of the input tax can be assigned, it can be apportioned to the G/L accounts and fixed asset

accounts which have the same tax code. If it cannot be assigned, it is posted to a separate account. Whether or not the posting

can be assigned is predefined for the tax types that the system defaults. If you want to post the input tax amount to a separate

account, you define the account number for the automatic posting in the system.

The Define Tax Accounts activity in the Implementation Guide for Financial Accounting explains how to make the settings for

automatic posting of taxes. See also Configuring the System Using the Implementation Guide .

Specifications in G/L Accounts You can make specifications for calculating, checking, and posting taxes on sales/purchases in three fields in G/L accounts .

These are:

Tax category

By means of this field, you determine in the master record of a G/L account whether the account is a tax account, a tax-relevant

G/L account, or a G/L account that is not tax-relevant. For a tax-relevant G/L account, you can determine the tax codes that can

be used to post to the account.

Posting without taxes allowed

By means of this field, you can indicate the accounts that are tax-relevant, but for which posting of non-tax-relevant

transactions without a tax code is allowed. This is especially necessary for postings with a jurisdiction code to avoid having to

define "dummy" jurisdictions. For tax processing with a jurisdiction code, the jurisdiction code is also ready for input on the G/L

accounts/asset screen, in addition to the tax code.

Automatic posting only

For each account, you can use this field to determine whether you want to have the account posted to by the system only, that

is automatically, or manually as well.

See also:

Tax Accounts

Reconciliation Accounts

Other G/L Accounts

Change to the Specifications in G/L Accounts

Tax Adjustment for Payment Transactions

Withholding Tax DefinitionTax that is charged at the beginning of the payment flow in some countries. Usually, the party that is subject to tax does not pay

the withholding tax over to the tax authorities himself.

When a customer that is authorized to deduct withholding tax pays invoices from a vendor subject to withholding tax, the

customer reduces the payment amount by the withholding tax proportion. The customer then pays the tax withheld directly to

the appropriate tax authorities (see diagram).

Withholding Tax

An exception to this rule is self-withholding. The vendor subject to tax then has the right to pay the tax to the authorities himself.

UseTo calculate, pay, and report the withholding tax, the SAP System provides two functions:

Classic Withholding Tax (all Releases)

Extended Withholding Tax (from Release 4.0)

For each company code, you can decide whether you want to use classic or extended withholding tax. Since the extended

withholding tax option includes all the functions of classic withholding tax, SAP recommends the use of extended withholding

tax (see below: Table of Classic and Extended Withholding Tax Functions).

If you have previously used classic withholding tax, and now wish to change over to extended withholding tax, you must first

convert the withholding tax data in all the company codes affected.

Do not activate extended withholding tax before you have converted the data.

SAP has developed a special tool to support the withholding tax changeover. For more information, see Withholding Tax Changeover

Classic and Extended Withholding Tax FunctionsIndividual Functions Classic Withholding Tax Extended Withholding Tax

Withholding tax on outgoing payment X X

Withholding tax on incoming payment   X

Withholding tax posting at time of payment X X

Withholding tax posting at time of invoice   X

Withholding tax posting on partial payment   X

Number of withholding taxes for each document item Max. 1 Several

Withholding tax base: Net amount X X

Modified net amount   X

Gross amount X X

Tax amount   X

Modified tax amount   X

Rounding rule   X

Cash discount considered   X

Accumulation   X

Minimum/maximum amounts and exemption limits   X

Number assignment on document posting (certificate numbering)   X

Calculation formulas X X

Country-Specific RequirementsDue to legal requirements, the following countries use extended withholding tax:

America Europe and Africa Asia/Pacific

Argentina United Kingdom India

Brazil Slovakia The Philippines

Chile Turkey South Korea

Colombia   Thailand

Mexico    

Peru    

Venezuela    

Tax Adjustment for Payment Transactions If you want tax on sales/purchases to be adjusted automatically for cash discount postings when payments are cleared, you

must make an entry in the Tax category field for the accounts for cash discount received and cash discount paid.

If you do not want tax on sales/purchases to be adjusted automatically, do not make an entry in the Tax category field for the

cash discount accounts. Tax adjustment is not necessary in Italy, for example. Note that the system does not allow tax

adjustment to postings made with a jurisdiction code.

Payment transactions can be posted manually or automatically using the payment program. For adjustment postings, the

system divides the calculated gross cash discount amount into net cash discount amount and tax portion. It needs a tax code to

do this.

The following scenarios can be distinguished:

Case 1: The whole document contains one tax code only.

Customer/vendor line item V1

G/L account line item 1 V1

G/L account line item 2 V1

When the payment transaction is posted, the system uses tax code V1 to calculate the tax amount for the cash discount

amount. It then automatically adjusts the tax on sales/purchases amount previously posted to the tax account.

Case 2: The document contains different tax rates. A tax code has been entered in the customer/vendor line item.

Customer/vendor line item V1

G/L account line item 1 V2

G/L account line item 2 V3

In this case, the system corrects the tax on sales/purchases amount per tax on sales/purchases code. Line items that are not

liable for cash discount are ignored when the adjustment posting is made. When the payment transaction is posted, the system

uses the tax code in the customer/vendor line item to make the adjustment. As above, the tax on sales/purchases amounts

already posted to the tax accounts are automatically adjusted per tax on sales/purchases code.

Case 3: The document contains different tax rates. A "**" is entered in the customer/vendor line item in place of a tax code.

Customer/vendor line item **

G/L account line item 1 V1

G/L account line item 2 V2

If the customer/vendor line item does not contain a code, the codes from the G/L account line items are used. The system

calculates the tax amount for the cash discount amount for each tax code. As above, the tax on sales/purchases amounts

already posted to the tax accounts are automatically adjusted per tax on sales/purchases code.

 Example

You have posted an outgoing invoice for USD 3,370 (see the following figure, 1 ). The tax amount (USD 370) was posted

automatically to the tax account.

The customer pays the invoice amount of USD 3,370 minus three percent cash discount, that is, USD 3,268.90 (see the

following figure, 2 ). The invoice contained one line item for USD 2,000 with 15 percent tax (A1) and an item of USD 1,000 with

7 percent tax (A2). When posting the payment transaction, the system determines (per code) the net cash discount amount and

the tax amount. From these tax amounts, the system automatically makes an adjustment posting to the tax accounts.

End of the example.

The system posts the following amounts during the payment transaction:

Number Range DefinitionArea in which numbers are assigned that refer to business objects of the same type. Examples of objects:

Business partners

G/L accounts

Orders

Posting documents

Materials

One or more number range intervals are specified for each number range, as well as the type of number assignment.

There are two types of number assignment:

Internal

When saving a data record, the SAP system assigns a sequential number that lies within the corresponding number

range interval.

External

When saving a data record, either the user or an external system assigns a number. The number must lie within the

corresponding number range interval.

 Note

You maintain number ranges  in Customizing for Controlling under GeneralControlling Organization Maintain

Number Ranges for Controlling Documents .

End of the note.

UseThe system generates a document number for each business transaction. Business transactions are classified according to CO

transactions.

 Example

The business transaction Direct Internal Activity Allocation belongs to the Controlling transaction Actual Activity Allocation .

End of the example.

This means that you must assign each transaction to a number range interval. It is also possible to define multiple business

transactions in one number range interval.

The Controlling component provides a large number of transactions for each controlling area.

Defining Number Ranges PurposeThe SAP system creates a numbered document for each posting in Controlling. The document numbers are unique in every

controlling area as each number is only used once.

PrerequisitesYou define number ranges in Customizing under  Controlling: General Organization Maintain Number Ranges for CO

Documents .

You can:

Create business transaction groups

Assign business transactions to business transaction groups

Maintain number range intervals for individual business transaction groups

Maintain number range intervals and number range statuses in the controlling area

Process FlowYou define number ranges in two steps:

1. You create individual business transaction groups for each controlling area.

2. You can, for example, group all planning transactions into a business transaction group and then assign it to a

number range interval.

You can also create a business transaction group for each business transaction if you require a greater level of detail

for the number assignment. If this is the case, you make assignments to the number range on the business

transaction level.

3. Assign the business transaction groups to number range intervals .

This enables you to combine similar or related business transactions into one number range.

 Example

If all planning transactions are grouped together, the system processes all the business transactions connected with planning in

one number range.

The SAP system includes standard default assignments of business transactions to number ranges for controlling area 0001.

You can copy these assignments to other controlling areas if you wish. You then only need to maintain the number ranges if

you require other assignments or other number range groups.

End of the example.

The following graphic illustrates the steps required for defining number ranges.

Environment: G/L Account Master Records The following objects play a central role in the creation and management of master records:

Chart of Accounts List

Chart of accounts

Account group

The sample account and the data transfer rules are optional and provide special functions. The following figure gives an

overview of these objects.

The chart of accounts list contains all of the charts of accounts that you support within a client.

The chart of accounts in the SAP system is a list of all G/L account master records which are used in one or several

company codes. For every G/L account master record, the chart of accounts contains the account number, the

account name and controlling information.

The sample account and the data transfer rules determine which field values are predefined when creating a G/L

account master record and whether these values can be overwritten.

The account group is a summary of characteristics that control the creation of master records. You can use it to

determine which fields must or can be filled when creating the master record. In addition, it can be used to predefine

a number interval, from which the numbers for the master records should be chosen. Accounts that require the same

master record fields and use the same number interval are created with the same account group.

The G/L account master record in the company code contains company code-specific information which controls the

entry of data to this account and the management of the account.

G/L Master Record in the Chart of Accounts DefinitionG/L account master data in the chart of accounts area contains information about the G/L account that is valid for all company

codes. The chart of accounts area also contains data that controls how a G/L account is created in the company code-specific

area.

UseTo make certain that company codes using the same chart of accounts can also use the same G/L accounts, a master record is

created for the G/L account in the chart of accounts and in the company code-specific areas.

StructureThe following information is contained in the chart of accounts area of a G/L account master record.

The chart of accounts

The account number and account name (short and long text)

The indicator that specifies whether the account is a balance sheet account or an P&L statement account .

At the start of a new fiscal year, the balance of a balance sheet account is carried forward to itself. With P&L statement

accounts, you must specify the account to which the profit or loss is carried forward at the end of a fiscal year.

The account group

With the account group, you group similar accounts together and control the creating and changing of master records. They

control

The account number interval in which the account number must lie.

The screen layout for creating G/L accounts in the company code-specific area. This means that you can define

whether fields require an entry, may have an entry, or are hidden when creating or changing a master record in the

company code-specific area.

You defined the account groups prior to creating G/L accounts. For more information, read Account Group

Entries which are necessary for consolidation are trading partner and group account number

G/L Account Master Records in the Company Code DefinitionThe company code specific area of a G/L account contains data that is only valid for one company code, such as the currency

in which the account may be posted.

UseBefore you can make postings to a G/L account, you have to create a master record in your company code for the account. The

G/L account must already be in the chart of accounts. For more information, see G/L Account Master Records in Chart of Accounts .

StructureWhen creating a G/L account in a company code, you have to make several specifications. These specifications are saved in

the G/L account master record and will affect future transactions, such as postings to this G/L account.

Some of the specifications have serious impact on future work and are described in the following sections. Before you make

your specifications, you should read these sections.

G/L Master Record in the Chart of Accounts DefinitionG/L account master data in the chart of accounts area contains information about the G/L account that is valid for all company

codes. The chart of accounts area also contains data that controls how a G/L account is created in the company code-specific

area.

UseTo make certain that company codes using the same chart of accounts can also use the same G/L accounts, a master record is

created for the G/L account in the chart of accounts and in the company code-specific areas.

StructureThe following information is contained in the chart of accounts area of a G/L account master record.

The chart of accounts

The account number and account name (short and long text)

The indicator that specifies whether the account is a balance sheet account or an P&L statement account .

At the start of a new fiscal year, the balance of a balance sheet account is carried forward to itself. With P&L statement

accounts, you must specify the account to which the profit or loss is carried forward at the end of a fiscal year.

The account group

With the account group, you group similar accounts together and control the creating and changing of master records. They

control

The account number interval in which the account number must lie.

The screen layout for creating G/L accounts in the company code-specific area. This means that you can define

whether fields require an entry, may have an entry, or are hidden when creating or changing a master record in the

company code-specific area.

You defined the account groups prior to creating G/L accounts. For more information, read Account Group

Entries which are necessary for consolidation are trading partner and group account number.

Account group DefinitionThe account group is a summary of accounts based on criteria that effects how master records are created.

The account group determines:

The number interval from which the account number is selected when a G/L account is created.

The screen layout for creating G/L accounts in the company code-specific area

UseWhen you create a G/L account in the chart of accounts area, you must specify an account group.

Using the account group, you can group the G/L accounts according to functional area.

 Example

For example, you can group all bank accounts, postal giro accounts, and cash in the account group FIN. for "liquid funds".

End of the example.

The account group also defines the set up when creating a G/L account in the company code and chart of accounts. By

defining the number interval and the screen layout, you simplify G/L account creation by reducing the number of entry fields.

The account groups are entered in Customizing per chart of accounts. You do this in Financial Accounting Customizing under

 General Ledger Accounting G/L Accounts Master Data Preparations Define Account Group .

StructureThe account group contains the following definitions:

Number interval

Standard charts of accounts are recommended in most countries. These are generally created so that the numbers of accounts

belonging to the same functional area begin with the same digits. You use the account group in the chart of accounts to

indicate this grouping principle. For more information on this, see Defining Number Ranges .

Screen Layout

The accounts within a functional area require the same fields for storing information when entering and processing business

transactions. Using the account group, you define the fields needed for each functional area and the form needed. For more

information on this, see Defining the Screen Layout .

 Note

Make certain you define the field status when defining an account group. Otherwise, all fields are hidden. For more information,

see Field Status Definition

Changing the Account Group UseYou may need to change an account group, if fields do not have the necessary field status for creating G/L accounts.

 Example

You may need to change the account group, for example, if you want to implement a new application component that requires

fields that originally were hidden. These fields now need an entry, that is, they have to be defined as required fields.

End of the example.

PrerequisitesIf you want to delete an account group, note the following:

 Caution

You can only delete an account group is no G/L account master records exist for this account group. Otherwise, you cannot

display or change the G/L accounts.

End of the caution.

FeaturesYou may make the following changes:

Different account group

You can enter an account group for an existing G/L account. By doing so, you change the field status definition and the number

interval (see the following points).

Changing the field status definition

You can change the field status definition of an account group.

This change affects the display and change mode for G/L account master records that were created with this account group.

The current field status definition always applies. Field contents that were entered before the change remain in the system,

even if they become hidden fields, that is, they are no longer displayed. The field contents continue to take effect.

In the following cases, the G/L account master records have to be updated, if they were created with the changed account

group:

Old field status definition New field status definition

Optional field Required field

Hide Display

Changing the number interval

You can change the number interval of an account group. If you have chosen a number interval that is too small, you can

increase it as necessary.

This change only has an effect when creating new G/L accounts. The system checks whether the account number entered is in

the number interval.

Defining the Number Interval UseStandard charts of accounts are recommended in most countries. These are generally created so that the numbers of accounts

belonging to the same functional area begin with the same digits. You use the account group in the chart of accounts to

indicate this grouping principle.

When you define an account group, you also determine the number interval in which the accounts of this group must lie. When

creating a G/L account, the system checks whether the number you entered lies in the predefined number interval.

 Example

The account numbers of bank accounts, postal giro accounts, and cash accounts begin with the number 1. The accounts in

account group "Liquid funds accounts", to which all of these accounts belong, all lie in the number interval between 100000 and

129999.

If you create a G/L account with this account group, you must select a number from this number interval. Account number

131000 for G/L account petty cash would be rejected as incorrect since it does not fall within the number interval of account

group "Liquid funds". However, you could create this account using the account number 101000.

End of the example.

The number intervals for G/L account groups can overlap. As a result, for G/L accounts that you do not want to assign to any

special functional area, you can create a separate account group that has a number interval already contained in a different

account group.

IntegrationYou can change the number interval of an account group at a later time. For more information, see hierzu Changing the Account Group .

PrerequisitesIn the chart of accounts list, you define the length of the account numbers for the entire chart of accounts. The maximum length

is ten characters. For more information, see Chart of Accounts List .

FeaturesYou have the following options when assigning account numbers.

You can reassign the account numbers of G/L accounts that were previously deleted.

You can assign alpha-numeric account numbers.

In order to have an orderly display of the account numbers, you should note the following points.

Equal length

Always use account numbers of the same length.

Do not mix alphanumeric and numerical account numbers.

Use either alphanumeric or numerical account numbers. The system pads purely numeric account numbers with zeroes from

the left, and alphanumeric account numbers from the right.

 Example

 113000 0000113000

 1131DB 1131DB0000

End of the example.

ActivitiesTo define the number interval for an account group, from Financial Accounting Customizing choose  General Ledger

Accounting G/L Accounts Master Data Preparations Define Account Group .

Defining the Screen Layout UseThe account group in which you can combine G/L accounts of a similar type determines the screen layout when creating G/L

accounts in the company code-specific area. For each account group, you determine the screen layout, that is, you determine

which fields are relevant for this group of G/L accounts.

For each field, you can assign the field status. This is important when creating G/L account master records in the company

code-specific area. To preclude the need to give every field a status, fields are combined into field groups.

You can assign the following field statuses to the fields of a field group.

Field status Description

Required entry This field requires an entry when creating a G/L account

Optional entry You may make an entry in this field when creating a G/L account

Display The field is displayed, but you cannot make an entry in it.

 You should not use this status, since the fields should be available for entry when creating

Suppressed The field is not displayed, that is, you do not see the field when creating a G/L account.

 Caution

If you do not assign a field status, the field status "Suppress" is automatically used.

End of the caution.

FeaturesThe screen layout does not only effect the creation of G/L accounts in the company code-specific area, but also the changing

G/L account master records. When you make changes, the system always uses the current definition. For more information,

see also Changing the Account Group .

 Note

The fields "Currency" and "Field status group" require an entry. These fields must be contained in the master record of the G/L

account.

End of the note.

ActivitiesTo define the screen layout, in Financial Accounting Customizing choose  General Ledger Accounting G/L Accounts

Master Data Preparations Define Account Group .

You set the field status by selecting the required field status for each field group:

Example: Defining the Screen Layout For example, you can group all bank accounts, postal giro accounts, and cash in the account group FIN. for "liquid funds".

For some of the fields, you determine the following field status in the account group:

Reconciliation account

These accounts will never be used as reconciliation accounts, that is, this field has no relevance for this account group and can

thus be suppressed.

Post automatically only and Supplement automatic postings

These accounts are posted to directly, that is, the fields can be suppressed.

Cash flow

Each G/L account in this account group is relevant to cash flow. The system requires this information, for example, to

determine the payment amount from a customer for a payment confirmation. This field thus requires an entry.

This figure shows the screen layout for creating G/L account in the company code-specific area for the field groups "Account

control", "Document entry", Bank/financial details" with all the fields and the screen layout for the account group "Liquid funds

account".

Field Status Definition UseYou have to define field status outside of the master record. Mark the field status you need for each field or field group under a

field status group. Then assign the field status group to individual G/L accounts in the G/L account master records.

Field status groups are independent of company code, attaching instead to the field status variant. A separate variant exists in

each company code for field status groups in the standard system. The name of the variant is identical to the company code.

Each company code is assigned to the variant with the same name.

You can work with the same field status groups in more than one company code, as outlined below: Proceed as follows:

1. Maintain field status variants

2. Assign a company code to the field status variant

 Note

Do not forget to maintain the field status. Otherwise, all fields are suppressed.

End of the note.

Example of a field status group

You defined a separate field status group for bank accounts because you always need the same fields for posting to bank

accounts. Within this group, the assignment number, text, and value date fields are optional. You have specified that all other

fields be suppressed.

The figure below shows the standard screen in which no fields are suppressed, and the screen for posting to a bank account.

IntegrationBesides the field status group in the account master record, your posting key specifications also effect posting. For each

posting key, you can decide what status the fields should have when posting with a key. But because there are only two posting

keys for posting to G/L accounts in the standard system, you should use the field status groups from accounts in the master

record for your screen layouts. The field status definition for posting keys 40 (debit posting to G/L accounts) and 50 (credit

posting to G/L accounts) have optional status for each field in the standard system. Do not change this.

Some fields are controlled by other specifications. If you work with business areas, display the field centrally using company

code specifications. The component documentation for general ledger accounting (FI-GL) as well as accounts receivable and

payable (FI-AP/FI-AR) explains in greater detail when fields can be suppressed or shown independently of a field status group.

Field status groups and reconciliation accounts

You must also enter field status groups in reconciliation accounts. These specifications affect the customer or vendor accounts

during posting. You cannot enter any field status groups in the master records of these accounts.

Field Status Definitions for Transactions: UseYou can also determine the status of a field group dependent on the transaction with which the master record is edited. This is

possible for the following editing functions.

Display

Create

Change

For each editing function, you can specify the field status for the company code-specific area of a G/L account.

IntegrationWhen you create, display, or change a master record, the system links the field status definitions you made for the account

group with those made for the editing function. The fields in a field group take the status with the highest priority.

The status with the highest priority is the suppressed field, followed by display, optional, and required entry fields.

Basic Data for Sales Support PurposeThe success of your business depends on the quality and depth of information which you have at your disposal on the market

in which you are competing. The Sales Support component provides you with a powerful environment for gathering a wide

range of information on your market. You can create and maintain the various kinds of master data that you need for activities

such as direct mailings and regular sales calls as well as for sales reports.

You can store master data on:

Customers

Sales prospects

Competitors

Products

Sales materials

Competitors’ products

Master Data in Sales and Distribution PurposeSales processing is based on the following basic structures:

Every company is structured in a certain way. In order to work with the SAP System your company structure has to

be represented in the system. This is done with the help of various organizational structures.

In sales and distribution, products are sold or sent to business partners or services are performed for them. Data

about the products and services as well as about the business partners is the basis for sales processing. Sales

processing with the SAP System requires that the master data has been stored in the system.

In addition to sales and distribution, other departments of the company such asaccounting or materials management

access the master data. The material master data is stored in a specific structure in order to allow access from these

different views.

The processing of business transactions in sales and distribution is based on the master data. In the SAP System,

business transaction are stored in the form of documents. These sales and distribution documents are structured

according to certain criteria so that all necessary information in the document is stored in a systematic way.

Organizational Structures in Accounting A group can be represented in the system using the terms client and company code. Generally, a client represents a group,

while a company code represents a company in the sense of an independent accounting unit. Company codes are independent

from each other in the legal sense.

The following figure illustrates how the client is subdivided in company codes.

Organizational Structures in Material Management To monitor the stock of material it is necessary to be able to store in the system the locations at which materials are kept. You

can do this using the terms plant and storage location. A plant can either be a place of production or a single storage location,

or a combination of closely situated storage locations where stock is kept.

Every plant is assigned to a company code. This ensures that stocks and stock values can be managed separately in each

company.

The following figure illustrates how the client is subdivided in plants and storage locations.

Link between Sales and Distribution and Accounting By assigning sales organizations and plants you create a link between company codes and sales organizations. A plant, though

always linked to one company code, can be assigned to different sales organizations. Within a company code several sales

organizations can be active. Business transactions can also be carried out between different company codes (for example,

during inter-company sales processing).

The following figure displays possible assignments of company codes, sales organizations and plants.

Plants 1, 2 and 3 belong to company code 1. Sales organization 1 uses plants 1 and 2. Sales organization 2 uses plants 2 and

3. Sales organizations 1 and 2 can make cross-company sales for goods from plants 4 or 5

Link to Materials Management Structure The plants allowed for sales are determined for each sales organization according to the distribution channel, so that a sales

organization can sell goods from several plants. A plant can be assigned to different sales organizations. All of these sales

organizations can sell from that plant.

You can differentiate further between the plants belonging to a sales organization from the sales view using the distribution

channel. For certain plants within a sales organization, the distribution channel "sales from plant" is allowed, but not for others.

The following figure shows an assignment of sales organizations and plants.

Sales organization 1000 sells from plants 1000 and 2000

Sales organization 2000 only sells from plant 2000

Sales organization 3000 only sells from plant 3000

Creating Customer Master Records UseYou create a customer master record when you start a business relationship with a new customer.

You can find out how to call up maintenance of the customer master under Processing Customer Master Records .

Procedure1. Choose an account group such as sold-to party from the Account group field in the Create customer: Entry screen.

2. Enter a customer number in the customer field or leave it empty, depending on whether external or internal

assignment is set for the account group.

3. Enter a sales area:

Sales organization

Distribution channel

Division

By selecting All sales areas you can find out which combination of sales organization, distribution channel, and division is

possible for the customer.

1. Press Enter.

You reach the Create Customer: General data.

The customer master screens are divided into tab pages. You can enter the required data in whichever combination you want.

Address

Enter the address data.

Enter a name in the field Search term which will later make it possible for you to retrieve the customer master record using a

matchcode.

Control data

Enter data for account control and control processing. If the customer comes from an EU country, you must enter a sales tax

number.

Contact person

Here you can enter data on the contact persons. You can use the buttons to enter additional data for each contact person, for

example, visiting times, etc.

1. To enter sales-specific data, choose Sales area data.

You reach the Create Customer: Sales area data You can enter the following data on the tab pages:

Sales

Enter the data for pricing here.

Shipping

Enter the shipping priority and shipping requirement.

Billing document

Here you can enter the delivery and payment requirements.

Partner functions

Define the possible partner functions for this customer and the business partner, that should be automatically proposed in a

sales document such as a sales order. These functions could be, for example, contact partners, sales executives, different

payers and so on.

You can display additional information, for example, on the account group, when processing the data. You can find further

information under Displaying Additional Information on Customer Master Records .

1. If you want to work in the central view, you can enter company code specific data using the Company code data

button.

2. Save your data.

The following message is displayed at the bottom of the screen:

The customer <Customer number> was created in the sales area <Sales organization> <Distribution channel> <Division>.

 Note

Create with reference

If a customer master record already exists with similar data, you can use this one and cut down on the time taken to enter data.

Enter the number of the customer whose master record you wish to use as a reference in the Customer field in the Reference

screen area of the entry screen.

If you only enter the customer number in the reference section, the system will only copy the general data into the new

customer master record. If you also enter data on the sales area, the sales and distribution data will also be copied. Only data,

which can be identical for both master records, is copied. For example, address and unloading points are not copied, while

country, language and account group are. You can change all copied data.

Create an already available customer master record for a new sales area

If you create a customer master record for a customer, for which a customer master record already exists in another sales area,

then use the customer that has already been created as a reference. In this case you do not need to enter the general data for

the second master record again.

End of the note.

See also:

Logistics – General : Business Partner Structure of the Master Data in the Business Partner Record

General Sales Master Data

Processing Customer Master Records To call up the individual functions in the table, choose the following path from the initial screen:  Logistics Sales and

Distribution Master Data Business Partners Customer

Function Menu path What you should know

Creating a Customer Master Record for Sales and

Distribution  Create Sales and

Distribution

See Creating Customer Master Records

Creating central customer master record, for Sales and

Distribution and Accounting  Create Whole Enter a company code in the entry screen.

See Creating Customer Master Records

Changing customer master record, sales and distribution

view  Change Sales and

Distribution

Enter a sales area in the entry screen, for which the

changes are applicable.

If you do not enter a sales area, the system

displays only the general data.

Change central customer master record (Sales and

Distribution and Accounting view)  Change Whole Enter a company code and a sales area in the entry

screen.

Displaying customer master record, sales and distribution

view  Display Sales and

Distribution

Displaying central customer master record (Sales and

Distribution and Accounting view)  Display Whole

Changing an account group ⇒ Changing an account group See Changing Account Groups

Mark the customer master record for deletion ⇒ mark for deletion See Deleting Customer Master Records

 Note

You often need to enter a valid sales area in the entry screen for customer master record maintenance. There are two buttons

to help you with this entry.

End of the note.

You can use the button All sales areas ... to select one of the sales areas created in the system

You can use the button Customer sales areas ... to display all sales areas valid for the customer and then select the

required sales area

Additional FunctionsWhen processing a customer master record, you can execute other functions such as creating text or setting blocks. When you

are in display mode, you can only display these functions.

To call up the individual functions in the table, choose Extras in the Change Customer or Display customer screen .

Function Menu path What you should know

Blocking ⇒ Blocking data You can process blocks for the transactions

Sales order

Delivery

Billing document

Sales support

for example.

Deletion indicators ⇒ Deletion indicators The company code data can be marked for deletion separately from the sales and distribution data.

Texts ⇒ Texts Different text types and the first line of the text are listed.

Function Menu path What you should know

By double clicking on the first line you reach the detail display for a text.

See also:

Displaying Additional Information for Customer Master Records

Business Partners Definition

Business partners are the different legal persons or natural persons with whom a company has a business relationship. The

following partners are important for Sales Support:

Customers

Sales prospects

Competitors

Internal personnel

Suppliers

An individual master record is created for each business partner.

Use

From Sales Support, you can access existing business partner master records or, depending on your authorization profile,

create new ones. The transactions with which you create and maintain data about customers or other business are identical to

the master data transactions that you use from anywhere within the Sales and Distribution application environment.

Customers and Business Partners DefinitionA company deals with different natural and legal persons during business transactions: A customer orders goods from your

company. A forwarding agent might deliver goods to the customer. An employee within the company processes the business

transactions. All roles a natural or legal person can assume are represented by business partners in the SAP System.

Business partnersA company has contact with its business partners, who are customers and vendors. Data on each of these and on the

company's personnel is stored in a separate master record.

CustomersThe term “customer” is used to define all customers to whom the company has contact. The term “vendor” is used to define all

business partners who carry out a delivery or a service for the company. A business partner can be a customer and a vendor at

the same time if, for example, your customer also supplies goods to you. In this case, both a customer master record and a

vendor master record must be created for the business partner. You can create a link between the master records by entering

the vendor number in the customer master record and the customer number in the vendor master record.

VendorsData on business partners who are vendors, for example, forwarding agents, is managed in the vendor master record. If a

vendor is also a customer, a link can be created.

PersonnelData on employees of your own company, for example, sales personnel or clerical staff, is managed in the personnel master

record. Data on each employee can be managed by his or her personnel number.

Only the personnel department of your company is authorized to create a personnel master record, using Human Resources

(HR). The personnel department of your company manages the personnel numbers of the employees. If HR is not used in your

company, you can create a personnel master record yourself for employees in sales and distribution.

See also:

Logistics – General: Master Data Business Partners

Partner Determination in Sales and Distribution

Business Partner Master Data Structure UseYou enter data on business partners with whom your company has a business relationship in master records. Master records

contain all data necessary for processing business transactions. This is known as master data.

If you enter all master data, you spend less time processing business transactions because the system proposes the master

data in these transactions.

Financial Accounting and Logistics use master data. General data and data relevant to both departments is stored in shared

master records to avoid duplication.

FeaturesYou can create and change master records using groups of data that differ in the level of detail.

Master records for business partners who are customers or vendors have the following structures:

Customer Master Records Vendor Master Records

General Data

General data does not depend on the company code, the sales and distribution organization or the purchasing organization.

General data applies to one business partner for all company codes, and in all sales areas and purchasing organizations. It

includes:

Company name

Address

Telephone number

General data is not limited to information used by both Financial Accounting and Logistics. The unloading point, for example, is

unique for a customer and is only relevant for Sales and Distribution. However, because it is not part of the sales and

distribution organization of your company, it is not sales and distribution data. It is general data.

If you edit a master record using the customer or vendor number without specifying a sales area, a purchasing organization, or

a company code, the system displays only general data screens.

The department that creates the master record for a business partner also enters general data. If Financial Accounting creates

the master record, it must also enter general data, such as the address. When Logistics then enters data, the general data for

the business partner exists. Logistics can display the general data.

Company Code Data

Company code data only applies to one company code. This data is only relevant to Financial Accounting, and includes:

Account management data

Insurance data

If you edit a master record, you must specify the customer or vendor number and company code to access the screens

containing company code data.

You can only invoice a business transaction if the data on the payer partner function is entered in the Financial Accounting

view.

Sales and Distribution Data

The data for one customer can differ for each sales area. The sales area is a combination of sales organization, distribution

channel and division. This data is only relevant to Sales and Distribution, and includes:

Pricing data

Delivery priority

Shipping conditions

If you edit a customer master record, you must enter the customer number and the sales area in order to access screens

containing sales and distribution data.

You can only process sales and distribution transactions, for example, a sales order, after entering the sales and distribution

data for a customer.

Purchasing organization data

The data for one vendor can differ for each purchasing organization. This data is only relevant to Purchasing, and includes:

Purchasing data

Partner functions

Other data retention levels within the purchasing organization

In addition to data that is valid for the whole purchasing organization, you can enter information on the Purchasing data and

Partner functions screens that is only valid for a particular site or vendor sub-range. This includes terms of payment or

incoterms that differ from those valid for the purchasing organization. Such data is retained at the following levels:

Vendor sub-range

Site

A particular combination of vendor sub-range and site

 Example

You negotiate better prices and conditions for a particular vendor sub-range than those valid for the purchasing organization.

You create a vendor sub-range and maintain the different terms of payment for it.

Customer Hierarchies UseWith customer hierarchies you can now create flexible hierarchies to reflect the structure of customer organizations. For

example, if your customer base includes multi-level buying groups, cooperatives, or chains of retail outlets, you can create

hierarchies to reflect the structure of these groups. You use customer hierarchies in order and billing document processing for

partner and pricing determination (including rebate determination) and for creating statistics.

You can use customer hierarchies to assign price conditions and rebate agreements to one of the customer’s subordinate

levels, to ensure that all subordinate levels are valid for the customer. For each node that you indicate as relevant for pricing,

you can create condition records for pricing. If one or more nodes in a hierarchy path for a sales order contain pricing data, this

is automatically taken into account in pricing.

IntegrationYou can also use customer hierarchies for evaluations in profitability analysis (CO-PA) and in the Sales Information System

(SIS):

To evaluate customer hierarchies with the sales information system and in the profitability analysis, you can maintain the field

Hierarchy assignment on the Marketing tab page in the customer master record for a hierarchy customer. Here you can

maintain 10 features for hierarchy customers (HIEZU01 to HIEZU10). You can use these to evaluate hierarchies statistically

with up to 10 levels. (Field catalogue VHIE)

 Note

Note that the hierarchy assignment is statistical. If you change the customer hierarchy, you may need to change the hierarchy

level manually in the customer master record in the Hierarchy assignment field.

End of the note.

FeaturesA customer hierarchy is a flexible structure consisting of customers . Each customer - with the exception of the uppermost

customer - refers to another customer at a higher level in the hierarchy (known as a higher-level customer ). Customers that are

assigned to higher-level customers are known as dependent customers .

To be able to display organizational elements, that are not independent partners, you can assign pure hierarchy nodes

(account group 0012) in the hierarchy. Specific data can be assigned to a hierarchy node (for example, address, price

conditions, rebate agreements) and this then applies to all subordinate customers.

As all nodes in a hierarchy are time-dependent, you can adapt the customer hierarchy to changes in the structure of a customer

at any time.

Customers can be reassigned in a hierarchy When reassigning a customer, all subordinate customers are moved

with it

You can add new customers to a hierarchy When you assign a new customer to an existing hierarchy, all pricing

data, that applies to the higher-level hierarchy node, is automatically copied from the customer

You can also remove customers from the hierarchy

See also:

Customer Hierarchies and Pricing

Basic Functions in SD PurposeThe most important basic functions are:

Pricing

Availability Check

Credit Management

Material Determination

Output Determination

Text Processing

Tax Determination

Account Determination

Pricing and Conditions PurposeThe term pricing is used broadly to describe the calculation of prices (for external use by customers or vendors) and costs (for

internal purposes, such as cost accounting). Conditions represent a set of circumstances that apply when a price is calculated.

For example, a particular customer orders a certain quantity of a particular product on a certain day. The variable factors here -

the customer, the product, the order quantity, the date - determine the final price the customer gets. The information about each

of these factors can be stored in the system as master data. This master data is stored in the form of condition records .

The Condition Technique in Pricing

The condition technique refers to the method by which the system determines prices from information stored in condition

records. In Sales and Distribution, the various elements used in the condition technique are set up and controlled in

Customizing. During sales order processing, the system uses the condition technique to determine a variety of important pricing

information. For example, the system automatically determines which gross price the customer should be charged and which

discounts and surcharges are relevant given the conditions that apply.

 Example

Example of Pricing in the Sales Order

End of the example.

The following figure shows how the condition technique works in the background to produce the pricing information. The

diagram shows how the various elements in the condition technique work together.

1. The system determines the pricing procedure according to information defined in the sales document type and the

customer master record.

2. The pricing procedure defines the valid condition types and the sequence in which they appear in the sales order. In

the example, the system takes the first condition type (PR00) in the pricing procedure and begins the search for a

valid condition record.

3. Each condition type in the pricing procedure can have an access sequence assigned to it. In this case, the system

uses access sequence PR00. The system checks the accesses until it finds a valid condition record. (Although you

cannot see this in the diagram, each access specifies a particular condition table. The table provides the key with

which the system searches for records).

4. In the example, the first access (searching for a customer-specific material price) is unsuccessful. The system moves

on to the next access and finds a valid record.

5. The system determines the price according to information stored in the condition record. If a pricing scale exists, the

system calculates the appropriate price. In the example, the sales order item is for 120 pieces of the material. Using

the scale price that applies to quantities from 100 pieces and more, the system determines a price of USD 99 per

piece.

The system repeats this process for each condition type in the pricing procedure determines a final price.

For further information on the condition technique, see Introduction to the Condition Technique

Introduction to the Condition Technique UseThis section describes the elements within the condition technique. It is organized to reflect the likely sequence of events that

you go through when you implement pricing in Customizing. The standard SAP System includes predefined elements for

routine pricing activities. For example, the standard system includes condition types for basic pricing elements, such as

material prices, customer and material discounts, and surcharges such as freight and sales taxes. In the case of each element,

you can use the standard version, modify the standard version, or create entirely new definitions to suit your own business

needs. The sequence of activities is generally as follows:

1. Define condition types for each of the price elements (prices, discounts, and surcharges) that occur in your daily

business transactions.

2. Define the condition tables that enable you to store and retrieve condition records for each of the different condition

types.

3. Define the access sequences that enable the system to find valid condition records.

4. Group condition types and establish their sequence in pricing procedures.

For more information about implementing and customizing pricing in sales order processing, see Customizing for Sales and

Distribution.

For a more technical description of how the condition technique works, see the Business Workflow documentation for Message

Control.

Elements Used in the Condition TechniqueCondition Types

Condition Tables

Access Sequences

Pricing procedures

Condition Types UseA condition type is a representation in the system of some aspect of your daily pricing activities. For example, you can define a

different condition type for each kind of price, discount or surcharge that occurs in your business transactions.

 Example

Example of a Condition Type

You define the condition type for a special material discount. You specify that the system calculates the discount as an amount

(for example, a discount of USD 1 per sales unit). Alternatively, you can specify that the system calculates the discount as a

percentage (for example: a 2% discount for orders over 1,000 units). If you want to use both possibilities, you must define two

separate condition types. The following figure illustrates how condition types can be used during pricing in a sales document.

End of the example.

In the example in the preceding figure, two discounts apply to the item in the sales order. The first discount is a percentage

discount based on the quantity ordered. The second discount is a fixed discount based on the total weight of the item.

 Note

You determine the calculation type for a condition type in Customizing. This determines how the system calculates prices,

discounts and surcharges for a condition. When setting up condition records, you can enter a different calculation type than the

one in Customizing. At present all available calculation types are permitted. The field ‘Calculation type’ can however not be

accessed if this field is left empty. After the data release has been printed, if the field has not been completed manually, the

proposal is automatically taken from Customizing. After this it is no longer possible to make manual changes.

If you use different calculation types for what are otherwise the same conditions (for example, percentage, as a fixed amount or

quantity-dependent), you do not have to define different condition types in Customizing. You can set a different calculation type

when maintaining the individual condition records.

End of the note.

Condition Types in the Standard Version of the SAP SystemThe standard system includes, among many others, the following predefined condition types:

Condition type Description

PR00 Price

K004 Material discount

K005 Customer-specific material discount

K007 Customer discount

K020 Price group discount

KF00 Freight surcharge (by item)

UTX1 State tax

UTX2 County tax

UTX3 City tax

Creating and Maintaining Condition TypesYou can change and maintain condition types provided in the standard version of the SAP System or you can create new

condition types to suit the needs of your own organization. You create and maintain condition types in Customizing.

To reach the condition type screen from the initial Customizing screen for Sales and Distribution:

1.  Basic Functions Pricing Pricing Control Define condition types .

A dialog-box appears, listing the transaction options. Select the corresponding transaction for defining the condition

types.

2. In the Conditions: Condition Types view, you can change existing condition types or create new ones

Condition Tables UseA condition table defines the combination of fields (the key) that identifies an individual condition record. A condition record is

how the system stores the specific condition data that you enter in the system as condition records. For example, when you

enter the price for a product or a special discount for a good customer, you create individual condition records.

 Example

Example of a Condition Table

A sales department creates condition records for customer-specific material prices. The standard version of the SAP System

includes condition table 005 for this purpose. The key of table 005 includes the following fields:

End of the example.

Sales organization

Distribution channel

Customer

Material

The first two fields identify important organizational data and the last two fields express the relationship between customers and

specific materials. When the sales department creates a condition record for a material price or discount that is specific to one

customer, the system automatically uses condition table 005 to define the key and store the record.

The following figure illustrates the connection between the condition table and the subsequent condition records.

Condition Tables in the Standard VersionThe standard system includes predefined condition tables and specifies them for each access in each predefined access

sequence.

Creating or Maintaining Condition TablesYou can change and maintain the condition tables in the standard system. You can also create new condition tables to meet

the needs of your own organization. You create and maintain condition tables in Customizing.

From the initial screen of Customizing for Sales and Distribution, you reach the condition table screens by choosing  Basic

functions Pricing Pricing Control Define condition tables. Then select the mode you want to work with (create, change,

display).

Information About FieldsThe fields that you choose to make up the key are called the selected fields . The fields from which you can make your

selection are called the allowed fields .

Selected FieldsThe preceding figure shows the fields that make up the key for condition table 005 (the table for customer/material condition

records in Sales). The selected fields show organizational data, such as Sales organization .The fields Customer and Material

define the relationship between a particular customer and material.

Field Catalog (Allowed Fields)When you select fields for the key, you must choose the fields from the list of allowed fields.

Making Changes to Condition TablesYou can make limited changes to existing condition tables. For example, you can change the name of the table or the format of

the fast entry screens for the condition records. (Fast entry screens are screens where you can quickly, on a single screen,

create and maintain the condition records that refer to the condition table).

Format of a Fast-Entry ScreenThe screen consists of header and item lines. Each item line represents a separate condition record. The header lines include

the fields that are general to all item lines. When deciding on the format of the fast-entry screen, you can determine whether

each field in the key appears as a line in the header or as an item line.

Changing the Format of a Fast-Entry ScreenTo change the format of the Fast-Entry screen, choose F6 ( Technical View) on the screen where you create or maintain a

condition table.

When you determine the format, you have the following possibilities:

If you want the... Do the following...

Field to appear as a header line Leave the line field blank

Field to appear as an item Mark the line field

Text for an item line to appear Mark the text field

After you make changes to a condition table, choose F16 Generate) to regenerate the table.

Creating a New Condition TableYou can create new condition tables to meet the pricing needs of your organization. When you create a new condition table,

you select a combination of fields from the list of allowed fields. The selected fields define the key for the subsequent condition

records.

Before you select the fields for the key, there are two things to consider:

The sequence (or hierarchy) of the fields

Which fields you want to appear in the header and item areas of the corresponding fast-entry screens

Important FieldsIn sales, the fields you should take into consideration are Sales organization and Distribution channel . The sales organization

is nearly always used as a criteria in pricing, because different sales organizations often want to use their own prices,

discounts, and surcharges. If you use the sales organization as a criterion in pricing, you should also use the distribution

channel. If you do not want to establish different prices, discounts, and surcharges for each distribution channel, use the field

anyway. In Customizing for Sales, you can use one distribution channel as a reference for all others (thereby sharing the same

pricing data).

Deciding the Sequence of FieldsThe order of the fields in a condition table affects the performance of the system during pricing. Two general guidelines will help

you create an efficient condition table:

1. If you select fields that are connected to the structure of your organization (for example, sales organization and

distribution channel), assign the fields according to the level of general applicability: Put the most general field, for

example, the sales organization in the highest position and the most specific field in the lowest.

2. After organizational fields, place fields from the document header before those that come from the item level. (For

example, Customer comes before Material )

After you have selected the fields for the key on the screen where you maintain and define condition tables, choose F16

Generate to generate the table in the system. Generation prepares the condition table for storing condition data.

Access Sequences UseAn access sequence is a search strategy that the system uses to find valid data for a particular condition type. It determines the

sequence in which the system searches for data. The access sequence consists of one or more accesses. The sequence of

the accesses establishes which condition records have priority over others. The accesses tell the system where to look first,

second, and so on, until it finds a valid condition record. You specify an access sequence for each condition type for which you

create condition records.

 Note

There are some condition types for which you do not create condition records (header discounts that you can only enter

manually, for example). These condition types do not require an access sequence.

End of the note.

 Example

A sales department may offer customers different kinds of prices. The department may create, for example, the following

condition records in the system:

A basic price for a material

A special customer-specific price for the same material

A price list for major customers

End of the example.

During sales order processing, a customer may, in theory, qualify for all three prices. The access sequence enables the system

to access the data records in a particular sequence until it finds a valid price. In this example, the sales department may want to

use the most favourable price for a certain customer. For this reason, it ensures that the system searches for a customer-

specific price. The following figure shows how the system searches for the relevant record.

Access Sequences in the Standard Version of the SAP SystemThe standard version of the SAP System contains access sequences that are predefined for each of the standard condition

types. The names of the access sequences often correspond to the condition types for which they were designed. For example,

the access sequence for a material discount (condition type K004) is also called K004.

Creating and Maintaining Access SequencesYou create and maintain access sequences in Customizing. For more information, see the online Implementation Guide for

Sales and Distribution.

To reach the access sequence screen, go to the initial screen for Sales and Distribution Customizing and choose:

1.  Basic Functions Pricing Pricing Control Define access sequences

Select the transaction that you want to execute ( Maintain access ).

Pricing Procedures UseThe primary job of a pricing procedure is to define a group of condition types in a particular sequence. The pricing procedure

also determines:

Which sub-totals appear during pricing

To what extent pricing can be processed manually

Which method the system uses to calculate percentage discounts and surcharges

Which requirements for a particular condition type must be fulfilled before the system takes the condition into account

 Example

Example of a Pricing Procedure

If a sales department processes sales orders for a variety of foreign customers, the department can group the

customers by country or region. A pricing procedure can then be defined for each group of customers. Each

procedure can include condition types that determine, for example, country-specific taxes. In sales order processing,

you can specify pricing procedures for specific customers and for sales document types. The system automatically

determines which procedure to use.

End of the example.

Pricing Procedures in the Standard Version of the SAP SystemThe standard system contains pre-defined pricing procedures, which contain frequently used condition types along with their

corresponding access sequences. You can, of course, modify these procedures or create your own from scratch.

Creating and Maintaining Pricing ProceduresYou create or maintain pricing procedures in Customizing for Sales. For more information on creating pricing procedures, see

the online Implementation Guide for Sales and Distribution.

To reach the pricing procedure screen from SD Customizing:

1. Choose  Basic Functions Pricing Pricing control Define and assign pricing procedures.

2. Select the transaction that you want to execute.

Availability Check in Sales and Distribution Processing About the Availability Check in Sales and Distribution Processing

Working with the Availability Check in Sales and Distribution Processing

Fixing Quantities and Dates in Sales Documents

Blocking Confirmation of Quantities in Sales Documents

Deferring Confirmation of Quantities in Sales Documents

Rescheduling of Sales Documents

Performing Rescheduling of Sales Documents

Shortage Check

Processing Sales Documents in Backlog

Displaying the Availability Situation in Sales Documents

Credit and Risk Management (SD-BF-CM) Credit managementPurpose

Outstanding or uncollectible receivables can spoil the success of the company greatly. Credit Management enables you to

minimize the credit risk yourself by specifying a specific credit limit for your customers. Thus you can take the financial pulse of

a customer or group of customers, identify early warning signs, and enhance your credit-related decision-making. This is

particularly useful if your customers are in financially unstable industries or companies, or if you conduct business with

countries that are politically unstable or that employ a restrictive exchange rate policy.

Integration

If you are using the Accounts Receivable (FI-AR) component to manage your accounting and an external system for sales

processing, Credit Management enables you to issue a credit limit for each customer. Every time you post an invoice (created

in FI-AR), the system then checks whether the invoice amount exceeds the credit limit. Information functions such as the sales

summary or early warning list help you to monitor the customer’s credit situation.

If you are using both the Accounts Receivable (FI-AR) component to manage your accounting and the Sales and Distribution

(SD) component for sales processing, you can also use Credit Management to issue credit limits for your customers. You can

make settings in Customizing to decide the scope of the check and at what stage in the process (for example, order entry,

delivery or goods issue) a credit limit should take place. General information functions are also available for use with credit

checks.

Features

If you are using both the SD and FI-AR components, Credit Management includes the following features:

Depending on your credit management needs, you can specify your own automatic credit checks based on a variety

of criteria. You can also specify at which critical points in the sales and distribution cycle (for example, order entry,

delivery, goods issue) the system carries out these checks.

During order processing, the credit representative automatically receives information about a customer’s critical credit

situation.

Critical credit situations can also be automatically communicated to credit management personnel through internal

electronic mail.

Your credit representatives are in a position to review the credit situation of a customer quickly and accurately and,

according to your credit policy, decide whether or not to extend credit.

You can also work with Credit Management in distributed systems; for example if you were using centralized

Financial Accounting and decentralized SD on several sales computers.

 Note

You can find information about where to make Customizing settings for Credit and Risk Management in Settings for Credit and Risk Management End of the note.

Risk Management for ReceivablesSee Risk Management for Receivables in SD for information about managing risks for receivables

Material Determination UseMaterial determination enables the automatic substitution of materials in sales documents during sales order processing. For

example, during the course of a sales promotion, the system can, during sales order entry, automatically substitute a material

that has promotional packaging. A consumer product may have a special wrapper for, for example, the Christmas season.

Using material determination, the system substitutes the material only during the specified period.

The following graphic illustrates the determination of a promotional product in the sales order.

In addition, you can use material determination if you want the system to automatically substitute, for example:

customer-specific product numbers with your own material numbers

International Article Numbers (EANs) with your own material numbers

Substituting discontinued materials with newer materials

Free Goods Use

In many industry sectors it is common in the sales of certain goods for other goods to be supplied in addition for free, or,

indeed, to supply the customer with a portion of the goods for free.

The following kinds of free goods exist:

Inclusive bonus quantity

The customer only pays for some of the goods requested. The rest of the goods are free of charge. The inclusive bonus

quantity is also called inclusive free goods and means that a proportion of the order quantity is granted as free goods, i.e. is not

paid for.

The materials delivered as free goods also match the ordered material in terms of the unit of measure.

 Example

Two out of ten bottles of sparkling wine are free goods. Therefore, if you order 10 bottles, 10 will be delivered and you will not

be charged for 2 of them. So in this case, you have ordered an inclusive bonus quantity.

End of the example.

Exclusive bonus quantity

The customer pays for the goods ordered and is given extra goods free of charge. The exclusive bonus quantity is also called

exclusive free goods and means that in addition to the purchase order, a certain quantity of materials are guaranteed as free

goods. In other words, a larger quantity is delivered than is ordered, whereby no charge is made for the additional quantity

delivered.

The materials delivered as free goods do not necessarily have to be the same as the materials orders.

 Example

If the customer buys 4 coffee machines, the vendor provides a packet of coffee as free goods. So if you order 4 coffee

machines, a packet of coffee is delivered too, but you are not charged for it.

End of the example.

Scope of FunctionsYou create a free goods agreement like a condition. For this, you can create conditions when a free goods is guaranteed on

any levels, for example, at customer/material level or customer hierarchy/material level. In the standard system, you use

customer/material level. The free goods agreement has a validity period. In the free goods agreement, you can create different

rules to determine the free goods quantity. You can define a minimum quantity for the sold material. Once this minimum

quantity is reached, the free goods are guaranteed. The free goods quantity can be defined as a quantity proportional to the

sold quantity. Another rule defines the free goods quantity for each whole-number unit of the sold quantity. For example, the

free goods here are only guaranteed for full pallets and not for pallets that have already been opened.

Free goods can be mapped in the sales order in sales from the warehouse. When creating a sales order, the free goods items

are automatically created in accordance with the agreement. The free goods are displayed as a separate item. The free goods

item is a subitem of the original item. The free goods items are delivery-relevant and are copied to the delivery. The free goods

item can be copied to the billing document. This makes it possible to prove the free goods are items that are free of charge on

the invoice.

Pricing can be carried out for a free goods item in the sales order and in the billing document. The item becomes an item that is

free of charge once the pricing is finished due to the automatic 100 percent markdown. This enables the prices and items to be

displayed very precisely in the statistics and in the profitability analysis. The free goods cannot be displayed with the production

costs, but they can be displayed as a special form of sales deduction.

ConstraintsFree goods can only be supported on a 1:1 ratio. This means that an order item can lead to a free goods item. Agreements in

the following form are not supported: ‘With material 1, material 2 and material 3 are free of charge‘ or ‘If material 1 and material

2 are ordered at the same time, then material 3 is free of charge‘.

Free goods are not supported in combinations with material structures (for example, product selection, BOM, variants with

BOM explosion).

Free goods are only supported for sales orders with document category C (for example, not quotations).

Free goods are not supported for deliveries without reference to a sales order.

Free goods cannot be used in make-to-order production, third-party order processing and scheduling agreements.

If you defined a free goods for variants in a generic article (only SAP Retail), you can only process the variants in the purchase

order and goods receipt individually (as single articles). In other words, you cannot process them using the generic article

matrix.

Cross Selling UseMail order catalog retailers frequently use cross selling to increase sales. When a customer orders an article over the phone,

the order taker can suggest additional articles that the customer might buy. For example, if the customer orders a VCR, you

might suggest purchasing some blank tapes; for a cellular phone, a leather carrying case.

The sales transaction takes place as normal: The customer chooses an article and the order taker enters it on the sales order

screen. The order taker can press Enter after each article, or wait until the customer has finished selecting the article he or she

wants.

If the order taker presses Enter after entering the data for one article, then a dialog box appears automatically,

displaying a list of articles to be suggested to the customer. These cross selling articles are ones that pertain

specifically to the purchased article.

If the order taker waits to press Enter until the customer has finished ordering, then the dialog box appears

automatically, this time showing all of the articles in the sales order, along with their corresponding cross selling

articles.

 Note

The articles that appear in the cross selling dialog box always depend on which articles are in the sales order. If you

want to have the system suggest articles based on the customer's past purchasing history or other factors, see

Dynamic Product Proposal in the standard SD documentation.

End of the note.

The cross selling dialog box displays the following information:

Article number

Description

Sales unit of measure (each, 3-pack, etc.)

Price per unit of measure (calculated either by the standard SAP pricing scheme or by a custom pricing scheme you

have defined)

Availability check

Delivery flag (that is, whether the cross selling articles can be delivered independently of their corresponding main

articles in the sales order, or whether the cross selling articles can only be shipped either together with or after the

main articles have been shipped)

 Note

You can turn off the availability check in Customizing, thereby increasing system performance.

End of the note.

IntegrationYou can set up the system so that if a customer orders a specific article, a list of other suggested articles appears as well. If the

customer chooses to accept one of the suggested articles, the article is flagged in the sales transaction data indicating that this

article was a result of cross selling. You can then analyze the results in the Business Workbench or Retail Information System

to see how successful your cross selling strategy is (that is, how frequently a suggested article is actually purchased by the

customer).

For each article, you can assign one or more cross selling articles.

PrerequisitesTo set up cross selling, you must make the following settings in Customizing:

Create the conditions tables, access sequence, and calculation schemes for determining cross selling articles, since

the cross selling function relies on the conditions technique. (Alternatively, you can use the analysis discussed in

“Activities” below to create the data automatically.)

Create a cross selling profile with the following attributes:

Determination of cross selling articles via function module

Price calculation scheme

Scheme using conditions technique

Flag indicating how the cross selling dialog is to appear

Flag indicating whether an availability check is to be performed

Assign the cross selling profile to a sales area, document scheme, and customer scheme.

ActivitiesIn order to determine which products are most frequently purchased together, you can use report SDCRSL01 (transaction

SE38) to analyze sales orders for a specified period time (for example, for the previous 30 days). The system will search

through all the orders, list all the articles purchased, and how often certain pairs of articles (or even three or more) appeared in

the same sales order: for example, 10% of the time, customers purchased a specific shirt-and-tie combination. In this way, you

can mine the database to find article combinations that might not have occurred to you (for example, a movie and a CD with the

sound track for the movie.

Alternatively, you can manually assign combinations of articles for cross selling purposes, based on other information you may

have.

Output Determination (SD-BF-OC) PurposeThe Output Determination component offers output functions for sales, shipping, transportation, and billing to help you manage

sales transactions with your customers and within your company. You can create sales activity output (for example, customer

telephone calls, mailing campaigns) and group output (for example, freight lists). Your company employees can send and

receive output. Output is directly linked to the corresponding sales transaction (for example, the system automatically sends an

order confirmation via Electronic Data Interchange (EDI) as soon as the employee creates an order).

IntegrationThe output determination component is used for output control. Output control is used to exchange information with internal and

external partners.

Output control includes the following functions, described in the cross-application (CA) - Output Control documentation:

Output Determination

Output Processing

FeaturesThe system can automatically propose output for a sales and distribution document. You can change this output in the sales

and distribution document.

The system uses the condition technique to determine output. For more information on the condition technique, see

Conditions and Pricing .

See also:

For further information on output, refer to the following documentation:

Application Documentation

Basis-Services SAP Internet Mail Gateway

SAP Communication: Configuration (BC-SRV)

Cross-Application Components CA – Output Control

BC - SAP Business Workflow

SD – Sales and Distribution: Workflow-Scenarios

For information on Customizing settings and examples, refer to Output Control Customizing in Sales and Distribution (SD) in

the CA - Output Control documentation.