• Price reductions non PO related
• Goods procured and paid for without a PO, subsequently returned
• Agency commissions from advertising agencies
• Special schemes announced for quantity discounts
• Cancellation of travel tickets post payment.

It is required to account for these credit notes through direct financial accounting.

Receive Credit note from Vendor

Pass the following entry for the credit note (when service tax credit is availed):

Vendor a/c Dr
Expense a/c Cr
Service tax Credit Receivable a/c Cr
Education cess on Service tax Receivable a/c Cr

Pass the following entry for the credit note (when service tax credit is not availed):

Vendor a/c Dr
Expense a/c Cr

Release the voucher from hold to enable deduction from subsequent payments
If there are no subsequent payments to be made, liaise with vendor to receive remittance for amount debited to vendor

Accounts Receivable down payment means advance received from the customer.
These advances are received from customer for

•    Product Sale ( Local & Exports)
•    Project sale
•    Scrap Sale
•    Service Sale

During down payment customer will deduct withholding tax (TDS). withholding tax (TDS) is required to be tracked separately.

Downpayment is a Special G/L transactions and Special G/L transactions are special transactions in Accounts Receivables that are displayed separately in the General Ledger & Sub Ledger. This is necessary for External Reporting Purpose.

An Organization can receive downpayment in following scenarios

•    Down Payment received from Project Customer
•    Down Payment received from Service Customer
•    Down Payment received from Product Customer
•    Down Payment Received from Scrap Customer
•    Down Payment received from Employee Customer
•    Down Payment received from Export Customer

Down Payment Request (F-37)

When entering a down payment request in F-37, commercial will enter target special G/L indicator as ‘A’ in a Customer Block. The system records this request as ‘Noted Item’ which is a single line item entry and therefore this request is not included for accounting purpose. The withholding tax code (TDS) will be mentioned in the Down Payment Request (only) if the down payment is subjected to TDS (To be explored).

Post Customer Down Payments (F-29)

Finance will verify the Down Payment request details along with Physical Cheque (Cheque Covering Memo) .Commercial to provide the Customer code & Down Payment Request Number to Accounts .In case of any difference , Finance can modify the Down Payment Request  & Post the document.
Down Payment can also post directly in Finance without any Request.

Accounting Entries :

Cheque Deposited But Not Cleared         Dr.
To Advance Received –Customers                  Cr

T Code to be used

Creation of Down Payment Request    :    F-37
Posting Down Payment            :    F-29
Knocking off Down Payment with Invoice     :    (F-32)
Modify text mentioned in down payment    :    FB02
Reversal of Down Payment Request    :    FB08
Down Payment Clearing            :    F-39
Reversal  of Down Payment        :    FBRA
Customer Line Item display        :    FBL5N

This Process Definition document describes the process of Incoming Payment (Other than down payment) received from the Customer against an Invoice.

These Payments are received from the Customer for

•    Product Sale
•    Project sale
•    Service Contract
•    Export Sale

An organization Can receive incoming payment on following account

Incoming Payment Received from Customers (Product / Project / Service )
Incoming Payment from One Time Customers
Incoming Payment Received from Employees against sale of Products.
Incoming Payment received from Export Customers

Creation of Payment Advice (FBE1)

Payment advice will be prepared by Commercial Department .This will facilitate Cheque information to  flow in Accounts . Finance will select the payment Advice & post the payment by using the T-Code

F-28 once the Cheque is received with payment advice number.

Commercial will Input the following details in Payment Advice:

•    Company Code
•    Account Type – D( Customer)
•    Account – Customer Code
•    Payment Amount – Cheque Amount
•    Deductions  with reason for deduction
•    Assignment (Cheque Number),
•    Invoice Number

Save the Payment Advice document. A payment advice number will be generated.

Posting of Customer Receipt will be done in Finance by using T-Code F-28. Procedure of Processing the payment is same as mentioned below except enter or select the payment advice number in the “payment advice number” field.

Post Incoming Payment Procedure – (F-28)

Case I : Incoming payment with reference to payment advice

All Cheque which are received by Commercial are to be handed over to Accounts based on the prerequisites defined above. Accounts will simulate & post the  Payment using the Incoming Payment transaction F-28

Following inputs to be entered by accounts

•    Payment Advice number
•    Document Date (date of the instrument)
•    Posting Date
•    Document Type (DZ for Customer Payment),
•    Assignment –Cheque Number
•    GL Account code for bank Incoming Clearing A/c,
•    Amount
•    Value Date (Expected date of credit in bank account)
•    Profit Centre
•    Text (Narration )

In case of Cheque received against payment advice, no open items other than Invoice number enter in the payment advice will be displayed.  Simulate & Post the payment document.
Accounting Entry will be passed:

Cheque Deposited but not Cleared         Dr.
Freight/Water/Electricity Expenses        Dr.
To Customer Account                Cr.

Payment advice number will be deleted from the system ,once the incoming document is posted.

Case II : Incoming payment without payment advice

In case Cheque is received by finance directly we have to enter all above parameter & Customer number then Select option “Process Open Items “.System will show all open items of that customer. Choose the billing document to be cleared. Choose relevant option from  “Standard” or  “Residual Payment”. Simulate & Post the document.
Accounting Entry will be passed:

Cheque Deposited but not Cleared         Dr.
Freight/Water/Electricity Expenses        Dr.
To Customer Account            Cr.

Incoming Payment Procedure from Customers (Fast Entry) F-26

This is another method of entering Cheque received from the Customer against an Invoice .System will default the Bank Header Data throughout the Incoming Payment Process. Select respective Invoice & Clear the Document. Simulate the Accounting Entries & Post the Document

Following inputs must be entered.

Bank header Data

Bank GL Account
Bank Profit Center
Currency
Cheque Value Date
Posting Period

Payment Details

Customer Code
Cheque Amount
Cheque Date
Cheque Number

Select option “Process Open Items“. Choose relevant option from Options “Standard”, “Residual Payment”. All open transactions of the customer including down payments are displayed. Select the Invoice & clear the outstanding. Simulate & Post the document.

Accounting entries:

Cheque Deposited but not Cleared             Dr.
Water/Electricity/Freight expenses Account        Dr.
To Customer Account                    Cr.

Incoming Payment Procedure –Employee Customer

Initially the employee will be created as customer and vendor as well. When a product is sold to the employee, the customer employee balance will be updated by the commercial with installment payment terms.   When the salary is due at the end of the month, then installment which was also became due will be deducted  from the salary & posted in Employee Vendor account.

Accounting Entries created at the time of billing (VF01)

Receivable –Employee            Dr.
To Sales Revenue Account        Cr.

Accounting Entries at the time of Salary Process – Month end (Installment)

Payroll Clearing Account                Dr.
To Employee -Vendor Account            Cr.

Accounting entries at the time of Knocking monthly installment

Employee Vendor Account                Dr.
To Employee Customer Account            Cr.
To Outgoing Clearing (Bank)  Account        Cr.

Incoming Payment – Export Customers (F-28)

Incoming Payments against Export Customers is received directly at accounts.Then account will post the Incoming payments as per the procedure mentioned above.

Bank Account        Dr.
To Customer Account     Cr.

Foreign Exchange Rate Fluctuation (In case of Export)

Exchange rate fluctuation is booked for all incoming payments received from  the Foreign Customer. Unrealized gain/loss will be calculated based on the exchange rate maintained as on last day of the month. In case of Realized gain/loss, exchange rate fluctuation will be calculated based on the date   payment is received.

If there is a Gain in Foreign exchange rate  (Unrealized)

Adjustment for Exchange Fluctuation A/C        Dr.
To Exchange Gain –Export Unrealized            Cr.

If there is a loss in Foreign Exchange rate (Unrealized)

Exchange Loss –Export Unrealized            Dr.
To Adjustment for Exchange Fluctuation A/C         Cr.

These entries will get reversed on next day of the month.

If there is a Gain  in Foreign Exchange rate (Realized)

Adjustment for Exchange Fluctuation A/C        Dr.
To Exchange Gain –Export Realized         Cr.

If there is a loss in Foreign Exchange rate (Realized)

Exchange Loss – Export Realized             Dr.
To Adjustment for Exchange Fluctuation A/C        Cr.

SAP T Codes to be used

Post Incoming Payments    :    F-28
Reset Cleared Items    :    FBRA
Customer Line item display    :    FBL5N
Incoming Payments-Fast Entry        F-26
Customer Balance    :    FD10N
Create Payment Advice    :    FBE1

This process in Accounts clearing for Accounts Receivable is for linking of customer open transactions in customer ledger.

Following are the scenarios in Accounts clearing

•    Manual Clearing
•    Automatic Clearing

Automatic Clearing – F.13

This process clears open items from customer, vendor and G/L accounts (in particular, GR/IR clearing accounts) automatically. Clearing of transactions will be based on certain common field i.e. Sale order number and profit centre (both), in payment request, billing document etc.

Manual Clearing

In order to clear open items, with some common fields e.g. sales order. Respective modules has to enter Sales Order, Project i.e WBS element and Contract number in Payment request (F-37) as well as in Logistics i.e. sales order.

In case of vendor as customer, logistics will have to enter both vendor code in a customer master and customer code in vendor master to create a link in Master, further there is one more setting in customer and vendor master, i.e. in payment transaction Form one has to put (√) in Clearing field with respective vendors and customer Masters.

•    Manual clearing indicates linking of open items in customer account, either in
standard or in Residual Form.
•    Standard clearing, indicates one to one clearing (Full Amount) ie if Advance
and Invoice amount are similar.
•    In case of Residual clearing, partially adjustment will be carried out.

In case of Dealer as customer and vendor i.e. for commission payable, one can clear open vendor invoices against open customer invoices.

Following are the entries in case of clearing with Advance:

Advance to Customer A/c.            Dr.
To Trade Receivables A/c.        Cr.

(Above Invoice and Advance value are similar)

Following are the entries in case of partial clearing with Advance.

Trade Receivables    A/c.                Dr.
Advance to customer A/c (partial Advance)        Dr.
To Trade Receivables                Cr.

(Above Invoice value is more than Advance)

Following are the entries in case of clearing with Vendor Invoice

Account payable – domestic (Vendor A/c Adjustment)        Dr.
Trade Receivables                    Dr.
To Trade Receivables                    Cr.

(Above Vendor invoice is less then customer invoice)

In case of multi profit center clearing, system will pass additional entry in clearing account.

In case of project Advances, reversal of withholding Tax will happen to the proportionate of money received, in that case withholding Tax amount will reflect high in withholding Tax suspense account i.e. deducted at time of Invoice and Advance.

Multiple selection of Invoices is not available in case of F-39.

For Account clearing of Debtors, if we go for automatic session (F.13) it does not run for each profit centre or group of profit centers for knocking off. Knocking of will happen at Global level.

Sap T Code to be used

Clear Customer    F-32
Clear Customer down payment    F-39
Automatic clearing    F.13

Following are the reports available for Accounts Analysis (A/R)

1)    Customer Line item Analysis
2)    Balance Analysis
3)    Customer Evaluation

Customer Line item Analysis – FBL5N / S_ACO_52000887

Customer line item report will be available based on open items, Cleared items. All items i.e. open as well as Cleared and profit centre wise. Option is available to see transactions based on type: i.e. special G/L, Noted items, Parked items and vendor items.
A User has a facility to incorporate required fields by changing the report layout

Customer Balance – FD10N

This report will generate customer wise / period wise balances, including debit and credit amount separately. It will also display the balances related to special G/L under different form & gives total.
Balances of open Sales Invoice, Debit note and Credit note is available under separate column in the same report.
User has a facility to incorporate required fields by changing the report layout.

Customer Evaluations – F.30 (Dash Board)

This report will help to analysis customer open transactions company wise, group wise, Credit control etc. User can define open transactions criteria based on due date, Payment history, Currency analysis, overdue items etc.
SAP T Code to be used..
Customer line item display :    FBL5N
Customer Balance Display   :    FD10N
Accounts Receivable info system – path (By Evaluation type) :    F.30

By F.30 You can analysie customer by following method

Evaluation view
|
—   Customer standard evaluations
|
|–   Due date analysis
|   |
|   |–   Evaluation by  Company Code
|   |–   Evaluation by  Business Area
|   |–   Evaluation by  Country
|   |–   Evaluation by  Risk category
|   |–   Evaluation by  Credit rep.group
|   |–   Evaluation by  Credit Control Area
|   |–   Evaluation by  Dunning Level
|   |–   Evaluation by  Accounting clerk
|   |–   Evaluation by  Industry
|   |–   Evaluation by  Planning group
|   —   Evaluation by  Reconciliation acct
|
|–   Payment history
|   |
|   |–   Evaluation by  Company Code
|   |–   Evaluation by  Country
|   |–   Evaluation by  Risk category
|   |–   Evaluation by  Credit rep.group
|   —   Evaluation by  Credit Control Area
|
|–   Currency analysis
|   |
|   |–   Evaluation by  Company Code
|   |–   Evaluation by  Business Area
|   |–   Evaluation by  Country
|   |–   Evaluation by  Risk category
|   |–   Evaluation by  Credit rep.group
|   —   Evaluation by  Credit Control Area
|
|–   Overdue items
|   |
|   |–   Evaluation by  Company Code
|   |–   Evaluation by  Business Area
|   |–   Evaluation by  Country
|   |–   Evaluation by  Risk category
|   |–   Evaluation by  Credit rep.group
|   —   Evaluation by  Credit Control Area
|
|–   DSO analysis
|   |
|   |–   Evaluation by  Company Code
|   |–   Evaluation by  Country
|   |–   Evaluation by  Risk category
|   |–   Evaluation by  Credit rep.group
|   —   Evaluation by  Credit Control Area
|
—   Terms offered / terms taken
|
|–   Evaluation by  Company Code
|–   Evaluation by  Business Area
|–   Evaluation by  Country
|–   Evaluation by  Risk category
|–   Evaluation by  Credit rep.group
—   Evaluation by  Credit Control Area

This Process Definition Document Describes the process of Revenue Accounting directly in FI .It means booking of Debit/Credit Notes  in Accounts  without sales order. i.e.Manual booking in Customer Account.

Scenarios considered for Invoices & Credit Memos (Without SO)

Debit Note (FI Invoice)  to Customer against Freight Recovery
Debit Note (FI Invoice) to Customer against Tax less charged in Invoice
Debit Note (FI Invoice)  to Customer against Octroi Recovery
Debit Note against any other Miscellaneous Recoveries
Credit Note to Customer against Price Difference
Credit Note to Customer against Tax excess charged in Invoice
Credit Note against non fulfillment of LD Clause
Credit Notes issued to Project Customer against Reimbursement of expenses incurred by them on our behalf like (Electricity/Water, Fuel etc…)

Parking of Customer Invoice (FV70)

Parking refers to the process where the document that is to be posted into the accounting system is held in the pipeline either awaiting corrections or awaiting approval from the respective authority. Parked accounting documents may be completed/ checked and then posted on a subsequent date. A document can be parked multiple times by different users.

A parked document is numbered in the sequence of posted documents. When documents are parked, financial data is not updated.parking documents can be evaluated in selected reports.

The document currency, payment terms, baseline date, payment method, payment block, cost center etc. should be entered at the time of parking the document.

Posting of Parked Invoice (FBV0)

Parked documents will be available for posting either individually or collectively.  A list of parked documents will be available from the system from which the user can selectively choose documents that are to be posted. Corrections may be made before posting the document.  It is also possible to delete a parked document without posting it.

An overview of the financial entry can be observed in the simulation option. This feature would act as the primary step in identifying any input errors before posting a document.

Parking of Customer Credit Memo (FV75)

Parking refers to the process where the document that is to be posted into the accounting system is held in the pipeline either awaiting corrections or awaiting approval from the respective authority. Parked accounting documents may be completed/ checked and then posted on a subsequent date. A document can be parked multiple times by different users.

A parked document is numbered in the sequence of posted documents. When documents are parked, financial data is not updated. Parking documents can be evaluated in selected reports.

The document currency, payment terms, baseline date, payment method, payment block, cost center etc. should be entered at the time of parking the document.

Posting of Parked Credit Memo (FBV0)

Parked documents will be available for posting either individually or collectively.  A list of parked documents will be available from the system from which the user can selectively choose documents that are to be posted. Corrections may be made before posting the document.  It is also possible to delete a parked document without posting it.

An overview of the financial entry can be observed in the simulation option. This feature would act as the primary step in identifying any errors before posting a document.

Sales Invoice Raised to Customers without Salese Order

Manual Sales Invoice (Debit Note) will be prepared in finance using T-Code FB70.Enter Customer Code, Amount, Tax Code as Debit &Credit Expense GL A/C, Profit/Cost centre. Enter nature/Reason of Debit Note in Text field.

Simulate & Post the document.

Accounting Entries for Debit Note (Manual Invoice)

Debtors Control Account            Dr.
To Vat Payable                Cr.
To Bank Charges Account            Cr.
To Sales Account                Cr.

Credit Note to Customer Other than Sales Return (FB75)

Any Credit notes which is not flowing from integration can pass through FI Module.
These are mainly for
•    Tax Excess Charged in Invoice
•    Wrong Selection of Price Master
•    Any Trade Discount/Cash Discount which was not calculated at the time of Invoice

Enter Customer Code, Amount , Tax Code as Credit & Debit Expense GL Account, Profit /Cost Centre. Enter Nature /Reason for Credit Note in Text field.
Simulate & Post the Document.

Expense     Account            Dr.
To Customer Account            Cr.

Customer Accounting Document Reversal

Customer Accounting  Document can be reversed in two ways.
•    Individual Reversal (FB08)
•    Mass Reversal (F.80)

Following Details must be required for Reversing  a Customer Accounting document(Applicable for Individual & Mass Reversal)

•    Document Number – GL Document Number
•    Document Type – Accounting Document Type
•    Reason for Reversal –Reason for Document Reversal
•    Posting Date – Date of the Document which is posting in Finance
•    Posting Period –Fiscal Period

SAP T Code to be used

Transaction Description    :    Transaction Code

Enter Customer Invoice    :    FB70
Enter Customer Credit Memo    :    FB75
Customer Line item display    :    FBL5N
Reverse GL Document    :    FB08

Mass Reversal GL Documents    :    F.80

Park/Edit Invoice    :    FV70
Park Credit Memo    :    FV75
Post Parked Invoices    :    FBV0
Change Parked Invoices    :    FBV2
Display Parked Invoices    :    FBV3
Reject Parked Invoices    :    FBV6

Customer Master Records are divided primarily into General data, Company code Data and Sales Organization data so that each company code and each sales organization can store its own information for doing business with customers.

Customer Master in SAP > General data

This data is applicable to every Customer in the company. The General data  includes, the Customer name, Customer address with Pin Code, E-mail address, Fax number, Language, Telephone number Etc.

Customer Master in SAP > Company code data

Information such as Reconciliation account (Customer control account), payment terms, House bank, payment methods, Withholding tax information are recorded in company code data.

Customer Master in SAP > Sales area data

This data is relevant to the sales organizations and distribution channels of a company. Data that is stored in this area includes,  data on order processing, shipping address, and billing address.

Customer Account Groups and Number Ranges

The Account group differentiates role of partners during master data creation. Account group determines the number ranges for Customer Master. The account group also determines which screens and fields are allowed for creating master record.

Customer Category will be bifurcated as follows:
Dealer
Local
Exports

Different account groups are created to cater to the reporting requirements of the organization. By assigning a separate number range, the customers belonging to one group can be easily traceable

Creation of Customer Master – Centrally (XD01)

Input document for this process is a Standard Template for  Requisition of a new Customer Code. This Master template will carry the details of the new  Customer Like Account Group, Customer Number, Title, Name of the Customer, City, Country, Pin Code, Telephone number, Reconciliation Account, VAT Registration Number & Date of Registration, CST Number, Pan Number etc.

Customer Master Details can be changed but some specific field such as Reconciliation account should not be changed so that data consistency is ensured.

Customer Master Can be Blocked / unblocked, to prevent transactions being posted, at any time. In case a request for blocking / unblocking a customer for posting transactions is received, the status will be accordingly set using Transaction Code XD05.

Redundant / unused master can be set for deletion and subsequently can be deleted. However permanent deletion can take place only when all the dependent data is deleted.

T Code to be used

XD01 Create Customer
XD02 Change Customer
XD03 Display Customer
XD04 Block/unblock Customer
XD05 Mark for Deletion Customer

This set of documents explain in step by step manner with screenshots, how to do transaction in SAP FI Accounts Receivable (AR).

These documents can be used for power user training or end user training in the final preparation phase during implementation.

These documents help you to understand how to run transactions in SAP and complete your business process. These documents are very helpful for the entire sap user even if they are new to SAP screens.

In this document set we cover following transactions

Invoice Processing

FB70 Enter Customer Invoice

FB75 Post Credit Memo

FBV0 Post Parked Document

FBV2 Change Parked Document

FV70 Park Customer Invoice

FV75 Park Customer Credit Memo

Credit Management

F.31 Credit Management Overview

F.33 Brief Credit Overview

FCV3 Early Warning List

FD24 Credit Limit Changes

FD32 Credit Limit Maintenance

S_ALR_ 87012218 Credit Limit Maintenance

VF05 View Billing Document

VKM1 Blocked Billing Document

Incoming Payment

F-28 Manual Payment

F-29 Customer Down Payment

F-30 Internal Transfer Posting without Clearing

F-36 Bill of Exchange Receivable

F-37 Customer Down Payment Request

F-52 Post Incoming Payment

FBE1 Incoming Payment Advice

FBL5N Line Item Display

Account Clearing

F.13 Automatic Account Clearing

F-21 Internal Transfer without Clearing

F-22 Enter Customer Invoice

F-32 Manual Clearing

F-39 Clear Customer Down payment

Customer Account Analysis

FD10N Account Balance Display

FD11 Account Analysis

Customer Correspondence

F.27 Periodic Statements

F.61 Print Correspondence

F.63 Delete Requests

F.64 Maintain Request

F150 Dunning

FB12 Customer Correspondence Request

Reporting

F.29 Create Customer Evaluations

OBAJ Select Customer Evaluations

OBAN Customer Eval. Specify Data Volume

S_ALR_87012167 Customer Evaluations

S_ALR_87012168 Due Date Analysis

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SAP FI Accounts Receivable (AR) End User Documents

This document is very useful for all SAP FI consultant and or who are having aspiration to be FI consultant. This document help you to understand sap FI Account payable (AP) and Account Receivable (AR) configuration in systematic manner and you need not to waste your time in SPRO for Account payable (AP) and Account Receivable (AR) configuration.

You can use this document for learning and implementing projects. If you are going to attend SAP certification examination, this document may help you to understand the concept of SAP Account payable (AP) and Account Receivable (AR) and configuration option available for the same.

This document covers following aspects of configuration,

1. Customer Master and Vendor Master
2. Account Group
3. Screen Layout for Master Record
4. Number Range for AP / AR Master
5. Invoicing (Incoming / outgoing) / Credit Memo
6. Outgoing payment
7. Manual Payment
8. Automatic Payment Program
9. Incoming Payments
10. Down payments

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SAP FI AP AR Configuration Document

All postings in Accounts Receivable are also recorded directly in the General Ledger. Different G/L accounts are updated depending on the transaction involved (for example, receivables, down payments, and bills of exchange). The system contains a range of tools that you can use to monitor open items, such as account analyses, alarm reports, due date lists, and a flexible dunning program. The correspondence linked to these tools can be individually formulated to suit your requirements. This is also the case for payment notices, balance confirmations, account statements, and interest calculations. Incoming payments can be assigned to due receivables using user-friendly screen functions or by electronic means such as EDI and data telecommunication.

The payment program can automatically carry out direct debiting and down payments.

Accounts Receivable Concept Document

This document explains about what all concepts are involved in SAP Accounts Receivable (AR). This presentation helps you to understand

1. SAP Accounts Receivable (AR) overview

2. Accounts Receivable (AR) Master data

3. Credit Management

4. Invoice Processing

5. Receipts / Cash

6. Account Analysis

7. Account Reconciliation

8. Periodic processing

9. Reporting

This document is in the form of PPT. You may use this document for your self study and client demo. This readymade presentation helps you to make your client understand the potential of SAP Accounts Receivable (AR) functionality.

This is a base level of document. If you are new to SAP Accounts Receivable (AR), or you are working in other sap module (like SD, HR, MM, PP … etc). You will find this document very useful. This will make you understand SAP Accounts Receivable (AR) very clearly and very quickly.

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SAP Account Receivable Concept Presentation