Pete

Introduction To Sap Special General Ledger Transactions

All the transactions carried out by a business must be reflected in the general ledger accounts in order for them to be available and displayed in the financial statements like the balance sheet or the profit and loss statement. The vendor and customer accounts are created as sub ledger accounts. These are linked to the general ledger by means of the vendor and customer reconciliation accounts respectively.

Therefore, if any entry is passed to any of the vendor or the customer account, then a duplicate entry is passed to the corresponding reconciliation account in the general ledger.

It is necessary at times to post some special transactions related to vendors and customers to general ledger accounts, other than the vendor and customer reconciliation accounts. This allows the special transactions to be displayed separately in the general ledger as well as the sub ledger. Such a requirement may arise because of statutory reporting requirements or for some other internal reasons.

For example, in normal general ledger transactions, the accounts payable is netted against the accounts receivable for a partner who acts both as a vendor as well as a customer while executing the automatic payment program. But in case of certain special transactions like down payments, the down payment amount must not be netted with the receivables or payables. Therefore, a transaction like down payment must be considered as a special general ledger transaction.

In order to record the special general ledger transactions separately from the normal general ledger transactions, alternative reconciliation accounts are defined. The special general ledger transactions are then posted to these alternative reconciliation accounts in the general ledger. This allows the balance of these transactions to be displayed separately on the balance sheet.

The following major special general ledger transactions are available in the standard SAP system. The special general ledger indicators used to identify the special general ledger transactions are mentioned in the brackets:

• Down payments (A)
• Down payment requests (F)
• Bills of exchange receivable (B)
• Letter of Credit (L)
• Payment requests (P)
• Guarantees (G)
• Reserves for bad debt (E)
• Security deposits (H)

Different Types Of Special General Ledger Transactions

The special general ledger transactions are categorized into different types on the basis of business as well as technical factors. This results in two different classifications of special general ledger transactions.

The business related factors represent the main purposes of the special general ledger transactions are used. On the basis of the business related factors the special general ledger transactions can be categorized into the following three types:

• RELATED TO DOWN PAYMENTS: The down payment requests and down payments are the special general ledger transactions provided by SAP to deal with business scenarios where an advance payment is made by a customer or is made to a vendor, for future delivery or receipt of products and services respectively.
• RELATED TO BILLS OF EXCHANGE: Bills of exchange are used by businesses when transporting goods across countries. These special ledger transactions are provided by SAP to deal with business scenarios where businesses are involved in exchange of goods across countries via the banking channel using bills of exchange.
• OTHER SPECIAL GENERAL LEDGER TRANSACTIONS: SAP allows other special general ledger transactions such as Security deposits, etc. to be configured as per the requirements of the business. These configurations can be done by defining the special G/L indicator, posting keys and the alternative reconciliation accounts.

On the basis of technical factors the special general ledger transactions can be classified into the following three categories:

• REAL POSTINGS: These are special general ledger transactions which have freely definable offsetting entry account. They usually form an item on the balance sheet. E.g. down payments. These postings are reflected in the line-item display of the sub ledger accounts and affect the overall balance of the sub ledger accounts.
• STATISTICAL POSTINGS: These are special general ledger transactions where the offsetting account always remains the same. The offsetting account can be defined while configuration of a statistical special general ledger posting. The system then posts the offsetting entry automatically to the offsetting account defined during the configuration.
• NOTED ITEMS: These items serve as a reminder about the payments which are to be made or payments which are to be received. They are not displayed in the accounts but can be processed using a Dunning or payment program. These special general ledgers postings do not update the account balances and merely appear in the account line-item reports as an open item. These open items act as a reminder about the pending payments.

Configuring Special General Ledger Transactions

STEP 1: The special general ledger transactions are identified by means of special G/L indicators. Execute the transaction code FBKP to display the screen as shown below.

FIGURE 1 (EXECUTE THE TRANSACTION CODE FBKP)

Dunning in SAP is the process to send reminders to business partners from whom payments are due. SAP allows the messages which are sent to range from simple reminders to strong messages indicating legal action. SAP makes use of payment terms to identify the credit period that is offered to a particular customer and subsequently the line items for which the payments are due. The Dunning process picks up these items and sends a message to the concerned business partner reminding about the due payment.

The Dunning program makes use of the Dunning areas to identify the entities for which the Dunning is to be carried out. It is not necessary to carry out Dunning for a company code. Dunning can be carried out for a smaller entity within a company code like a sales organization. The Dunning program also allows the Dunning charges to be imposed to customers who have delayed the payments. Interest calculation is possible in the Dunning program for the payments which have been delayed.

Dunning Process

INTRODUCTION TO ELECTRONIC DATA INTERCHANGE

All businesses need to exchange information with their business partners during their day to day activities. Electronic Data Interchange (EDI) as the name suggests is the exchange of business documents electronically between a business and its partners over a communication network using a standard format.

A customer might send a purchase order to the vendor with the details of the goods that he requires. On receipt of the purchase order, the vendor will produce a sales order in order to sell the goods to the customer. This will be followed by a delivery document and a billing document. The vendor will finally send the invoice to the customer along with the goods. On receiving the goods, the customer will produce the goods received note. The customer will then pass on instructions to its bank to make payment to the vendor. The bank will then issue the payment to the vendor.

In the above example, the various documents are exchange between the business and its partners like vendors, customers, banks, etc. Electronic Data Interchange allows these documents to be exchanged electronically using communication networks in internationally accepted standard formats.

ADVANTAGES OF ELECTRONIC DATA INTERCHANGE

Electronic data interchange provides multiple benefits to the businesses irrespective of the industry in which they operate. The main advantages of electronic data interchange include:

• REDUCTION IN DATA ENTRY ERRORS: In legacy systems, the data from the received documents needs to be manually entered into the computer. This manual entry is prone to human error. Electronic Data Interchange removes this problem by avoiding the entry of the same data at multiple stages of a business cycle manually.
• FASTER PROCESSING OF DOCUMENTS: Documents which are transmitted electronically can be processed as soon as they are received. Sending the documents manually by a courier service or post office will take a considerable amount of time.
• REDUCTION IN THE USE OF PAPER: Electronic Data Interchange allows all the information to be communicated electronically. This allows all business operations to be carried out without using a single piece of paper. This not only saves the cost incurred due to the use of paper but also makes the entire operation environment friendly. It is difficult to edit the content printed on a paper. In contrast, electronic data can be edited as many times as required.
• REDUCTION IN COSTS: Due to the above mentioned advantages, the cost of operations reduces as the efficiency of conducting in the business increases. Electronic data interchange allows the businesses to concentrate on the information that they need to communicate rather than concentrating on the logistics of sending the information.
• EDI DOCUMENTS ARE A LEGAL STANDARD: The documents transmitted and received in the electronic form are considered as legal documents and can be used for reporting purposes.

THE ELECTRONIC DATA INTERCHANGE PROCESS

The electronic data interchange process consists of exchanging information between a sender and receiver. Both the sender and receiver must have end applications which can process information transmitted electronically. The basic components of the electronic data interchange process are shown in the figure below.

SAP EDI – THE ELECTRONIC DATA INTERCHANGE PROCESS

Just a very quick update to let you know that Udemy are running a 2 day special discount to my course. You get the full course for only $97! This is cheaper than I can offer it myself through the ads on my site. Grab the cheap rate while it is available.

SAP HANA: IN MEMORY COMPUTING

SAP High Performance Analytic Appliance (HANA) or in-memory computing is the latest technology offered by SAP. SAP HANA allows the processing of massive amounts of data in real-time. Many large business using SAP records millions of transactions every year. These transactions are recorded in the SAP database and can be used by various SAP modules such as the SAP BI module to generate reports for senior management for decision-making purposes.

It often takes a a great deal of time to extract and process the millions of transactions that are recorded every year to produce KPI’s etc… which can be used by management teams to make effective business decisions. This often results in a time lag for reporting.

This can often impact the efficiency and effectiveness of decision making processes. SAP HANA or in memory computing aims to overcomes this problem by providing real-time analysis of transactional data allowing management teams to have access to the most up to date picture of their business. For example, SAP HANA allows the marketing managers to have access to real-time sales data even before the customer has left the retail store.

SAP HANA uses the latest in the hardware as well as software technologies to achieve the objective of processing huge amounts of data in real-time. SAP HANA is just a technology involving a few tools and does not replace the existing SAP modules in any way. It consists of tools for storing and retrieving data from the in-memory database (IMDB) and the new proprietary SAP database optimized for in memory computing. SAP HANA therefore makes the use of ERP systems even more meaningful and important for businesses.

TRADITIONAL COMPUTING VERSUS IN MEMORY COMPUTING

In traditional computing, the operating system, applications and other data is stored on spinning hard disks. This data is retrieved from the hard disk and passed to the random access memory (RAM) as and when required and then processed by the Central Processing Unit (CPU). The main disadvantage of this model is the bottleneck created in extracting the data from the spinning hard disks.

The spinning hard disk forms the secondary memory which is very slow when compared to the RAM. Therefore, with traditional computing system design a lot of time is wasted in extracting the data from the hard disk and moving it to the fast memory i.e. RAM.

FIGURE 1 (TRADITIONAL COMPUTING)

SAP HANA removes this bottleneck by storing the entire database in RAM in real-time.

I have been talking with some SAP colleagues who specialize in SAP Project Management and I twisted their arm to produce a video presentation for everyone who visits SapTrainingHQ.com. The video presentation below gives a fantastic insight into how Peter and Rasmus are leading the way with SAP Project Management methodologies. Peter goes through topics such […]

If you are a SAP Consultant and decided that it’s time to seek out new opportunities that have better compensation package, new challenges, or employers that provide better learning / training then you need to create the best marketing tool, your Resume. There are many different styles of resume as there are professionals, so this […]