Bidcoro - Fi - BBP - V1 0 - 23.05.16

SAP Project
SAP ERP Implementation

BIDCORO AFRICA LTD
RUIRU KENYA
Financial Accounting
Business Blueprint
Final Version 1.0
SEAL Infotech Private Limited

Cyber Pearl, B-Block, Third Floor
Hi-tech city, Madhapur
Hyderabad 81 India
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SAP Project
PROJECT IDENTIFICATION
Project Name Project Type : Implementation
SAP ERP ECC 6.0

Customer Name Planned Start/Finish
BIDCORO Africa Limited

Project Sponsor Program Manager
BIDCORO
Project Manager (SEAL) Project Manager (BIDCORO)
APPROVAL D OCUMENT CONTROL :

VERSION 1.0
Name Title Date Approved
FI Consultant, SEAL Srinivas Yakkala

FI Core Team,
BIDCORO
Business Process
Owners (BPOs),
BIDCORO
Project Manager, SEAL
Project Manager, Mr. Alkane Patel
BIDCORO
Steering Committee BOD of BIDCORO, and Mr.
Members Satya Devaki.
REVISION HISTORY
Summary of changes: List of changes done
Revision Date Name Title
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SAP Project
PURPOSE
The information contained herein is the property of M/s BIDCORO Africa

Limited and may not be used, reproduced or disclosed to others except as a
specially permitted in writing from M/s BIDCORO Africa Limited
The purpose of this document is to capture the overall Financial Accounting

Module requirements for the BIDCORO Africa Limited for SAP ERP ECC 6.0
Implementation project.
Intended Audience
This document is intended for the usage of BIDCOROs top management and
their respective, authorized employees involved with the mySAP ERP ECC
6.0 Implementation project.
DOCUMENT DISTRIBUTION
Through SAP Project Central Folder, E-Mail, Print
1. Core Team Member

2. Business Process Owners - FI
3. Project Manager, BIDCORO
4. Project Manager, SEAL
5. Project Sponsor, BIDCORO
6. Steering Committee Members
7. Project & Implementation Team (BIDCORO & SEAL)
SEAL Infotech Pvt. Ltd.,

Cyber Pearl, B-Block, Third Floor,
Hi-tech city, Madhapur, Hyderabad 500 081
Andhra Pradesh - India
www.sealconsult.com | www.in.sealconsult.com
ASIA-PAC: Chennai |Hyderabad |Mumbai |Hong Kong
USA: New Jersey | Phoenix | San Mateo| West Chester-IL
Africa: Nairobi
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Table of Contents
1.1. Organizational Data..........................................................................................6
Introduction.......................................................................................................................6
1.2. Company...............................................................................................................6
1.3. Company code....................................................................................................7
1.4. Credit Control Area..................................................................................................7
1.5. Chart of Accounts....................................................................................................8
1.6. Chart of Depreciation...............................................................................................8
2. MASTER DATA..............................................................................................................................9
2.1. General Ledger.........................................................................................................9
2.2. Profit Centre...........................................................................................................12
2.3. Bank Master...........................................................................................................13
2.4. Vendor Master........................................................................................................13
2.5. Vendor Accounts Groups.......................................................................................15
2.6. Payment Terms.......................................................................................................15
2.7. Asset Master......................................................................................................16
3. BUSINESS PROCESS...............................................................................................................17
3.1. GENERAL LEDGER ACCOUNTING.......................................................17

3.1.1. Scope..................................................................................................................17
3.1.2. Requirements/Expectations................................................................................17
3.1.3. Functions and Events (To-Be)...........................................................................18
3.1.3.1. Overview New General Ledger......................................................................18
3.1.3.1.1. Document...............................................................................................18
3.1.3.1.2. Account type..........................................................................................19
3.1.3.1.3. Document type.......................................................................................19
3.1.3.1.4. Posting Key............................................................................................20
3.1.3.1.5. Currency.................................................................................................25
3.1.3.1.6. Foreign Currency...................................................................................25
3.1.3.1.7. Document Splitting................................................................................26
3.1.3.1.8. Automatic Posting..................................................................................26
3.1.3.2. Basic Settings.....................................................................................................26
3.1.3.2.1. Field Status Variant................................................................................26
3.1.3.2.2. Fiscal Year & Posting period Variant.........................................................27
3.1.3.2.3. Account Groups.........................................................................................28
3.1.3.3. Park and post general ledger document.............................................................29
3.1.3.4. Post/Display/Change general ledger document.................................................29
3.1.3.5. Document Reversal............................................................................................30
3.1.3.6. Open item Clearing............................................................................................31
3.1.3.7. Post Recurring document...................................................................................32
3.1.3.8. Fixed Deposits with Banks................................................................................33
3.1.3.9. Bank Guarantees................................................................................................34
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3.1.3.10. Employees Travel Advances & Settlement................................................34

3.1.3.11. GL Payments / Receipts.............................................................................34
3.1.3.12. Journal Voucher..........................................................................................34
3.1.3.13. Bank Reconciliation...................................................................................35
3.1.3.14. With holding Tax........................................................................................36
3.1.3.15. Cash Journal...............................................................................................37
3.1.3.16. Foreign currency valuation........................................................................38
3.1.3.17. Periodic Processing....................................................................................39
3.1.4. Special Organizational considerations...............................................................39
3.1.5. Business Model..................................................................................................39
3.1.6. Changes and Implications..................................................................................44
3.1.7. Description of Improvements............................................................................44
3.1.8. System Configuration considerations................................................................44
3.1.9. Report requirements/Considerations..................................................................44
3.1.10. Authorizations and User roles............................................................................45
3.2. ACCOUNTS PAYABLE.................................................................................47
3.2.1. Scope..................................................................................................................47
3.2.2.1. Vendor Down Payment & clearing....................................................................51
3.2.2.2. Vendor Normal Payment....................................................................................53
3.2.2.3. Vendor Foreign Payment....................................................................................55
3.2.2.4. Bank Guarantees................................................................................................55
3.2.2.5. Subsequent Debit and Credit.............................................................................56
3.2.2.6. Debit Note & Credit Note..................................................................................56
3.2.2.7. Adjustment / Clearing Process...........................................................................57
3.2.3. Special Organizational considerations...............................................................58
3.2.5. Data Migration considerations...........................................................................61
3.2.6. Interface Considerations....................................................................................61
3.2.7. Report requirements/Considerations..................................................................61
3.3. ASSET ACCOUNTING.................................................................................63
3.3.1. Scope..................................................................................................................63
3.3.2.1. Asset Acquisition...............................................................................................63
3.3.2.2. Asset Capitalisation...........................................................................................63
3.3.2.3. Periodic Processing............................................................................................63
3.3.2.4. Asset Transfer....................................................................................................64
3.3.2.5. Asset Scrapping / Retirement.............................................................................64
3.3.3. Business Model..................................................................................................66
3.3.4. Description of Improvements............................................................................70
3.3.5. Description of Functional deficits (Gaps)..........................................................70
3.3.6. Approaches to cover the gaps............................................................................70
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1.1. Organizational Data
Introduction
BIDCORO Africa Limited (BIDCORO) is a new joint venture by BidcoAfrica
Limited and CO-RO A/s to manufacture of fruit based soft drinks
The Enterprise Structure in SAP Finance module consists of the following entities
under Client:
o Company
o Company Code
o Chart of Accounts
1.2. Company
Definition and Meaning
The Company is used in SAP to aggregate/ consolidate the financial

statements for several operating companies into a consolidated statement for
the group, suitable for statutory reporting. Companies can be grouped
together according to legal entity structures. A group company represents a
consolidated legal entity in which Inter-company transactions have been
eliminated.
Definitions at BIDCO Africa Limited
The naming convention for Company will be 4 digit numberic key. The
company code of BIDCORO Africa Limited 8100 will be attached to
Company 1000.
Company Description
1000 HEMBY Holdings Ltd.
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1.3. Company code
The company code represents an organization unit. It gives structure to

the business organization from a financial accounting perspective. It is the
smallest organizational unit for which a complete self-contained set of
accounts can be drawn up for purposes of external reporting. Generally, a
company code is defined to represent a legal entity.
The process of external reporting involves recording all relevant

transactions and generating all supporting documents required for
financial statements (balance sheets, profit and loss statements and cash
flow statements). All transactions in the financial application are recorded
with reference to a company code
It is a four character numeric key and is entered while posting business

transactions or creating company code-specific master data like GL Master
Record, Vendor Master Record, for example.
Definitions at BIDCO Africa Limited

The naming convention for Company will be 4 digit numberic key. The
company code of BIDCORO Africa Limited 8100 will be attached to
Company 1000.
Company Code Description

8100 BIDCORO Africa Limited.
1.4. Credit Control Area

The credit control area is an organizational unit that specifies and checks a
credit limit for customers.Within a credit control area, the credit limits must
be specified in the same currency. This organizational unit is either a single
company code or, if credit control is performed across several company
codes, Credit information can be made available per customer within a credit
control area
Credit Control Area Description

9100 BLOL Credit Control Area
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1.5. Chart of Accounts

Chart of Accounts is a classification scheme consisting of a group of
General Ledger accounts. Chart of Accounts provide the framework for an
orderly rendering of accounting data. 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.
A chart of accounts must be assigned to each company code. The chart of

accounts is used in both financial accounting and cost accounting. Multiple
company codes can have a common chart of accounts.
Definitions at BIDCORO Africa Limited

BIDCORO will have one Operating Chart of Account. The common
information in a General Ledger like account number, description, type
(P&L OR B/S) is at COA level. A single Chart of Accounts will be used for
BIDCORO. The document numbering will be year specific using internal
document numbers. The account number will be 8 digits G/L Account. The
maintenance language for chart of accounts will be English.
Chart of Accounts"9000" is assigned to Company Code "8100".
Chart of Accounts Description

9000 BIDCO Group Chart of Accounts
1.6. Chart of Depreciation
Definition and Meaning:

The chart of depreciation contains the defined depreciation areas. It is
predefined to contain the rules for the evaluation for assets. The Chart of
Depreciation is assigned to the Company Code. One company code can be
attached to only one chart of depreciation. The chart of depreciation and
the chart of accounts are completely independent of one another.

The chart of depreciation key "9100" defined will be assigned to Company
code "8100"
Chart of Depreciation Description

9100 BIDCO Group Chart of Depreciation
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2. Master Data
Master Data is the data created once in the life time and recalled every time
when related transactions are posted.
In SAP master data will be managed as follows:
Create
Change
Display
2.1. General Ledger

G/L account master records contain the data that is always needed by the General
Ledger to determine the account's function. The G/L account master records control
the posting of accounting transactions to G/L accounts and the processing of the
posting data.
The G/L account master records are divided into two areas:
Chart of accounts area

The chart of accounts area contains the data that is valid for all company
codes, such as the account number.
Company code specific area
The company code specific area contains data that may vary from one
company code to another, such as the currency, field status group, open item
management, line item display etc.
The following processing options are available in management of General

Ledger master record:
Create
Change
Display
Block - Blocking of GL account refers to obstruction of the account
from posting. Blocking shall be done only after confirming that all
locations have stopped using the account or after being satisfied
that the account is unnecessary or keeping it open would allow data
input inconsistencies.
Mark for Deletion.
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Field/Field Group Purpose

Chart of Accounts Level
Account Number The G/L account number identifies the G/L
account in a chart of accounts
Account Group The account group determines the fields for
the entry screens if you create or change a
master record in the company code. The
account group also determines in which
number interval the account number must
be.
Balance Sheet/Profit & Loss Indicates whether the account is managed
as a balance sheet or profit and loss
account.
Description (Short text) Short text is used for online displays and
evaluations which do not have sufficient
space for the long text.
Description (Long Text) Given sufficient space, long text is used for
online displays and evaluations.
Company Code Level
Currency Currency indicates the currency in which the
account is held. If a currency other than the
company code currency is specified, items
can only be posted in that currency. If the
company code currency is specified, items
can be posted in any currency.
Tax Category and Posting Without Tax Category determines whether the
Tax Allowed account is tax relevant, whether it is a tax
control account, or whether it is tax code
specific. Posting Without Tax Allowed
indicates that the account can still be posted
to even if a tax code has not been entered
Reconciliation Account Type An entry in this field characterizes the GL
account as a reconciliation account. The
reconciliation account ensures the
integration of a sub-ledger account into the
general ledger.
Open Item Management Determines that open items are managed
for the account. Items posted to accounts
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managed on an open item basis are marked

as open or cleared. The balance of these
accounts is always equal to the balance of
the open items.
Line Item Management Indicates that line item display is possible on
the account. For line item display, the
system stores an entry per line item in an
index table which contains the link between
line item and account.
Sort Key Indicates the layout rule for the Allocation
field in the document line item. The system
uses a standard sort sequence for displaying
line items. Among other things, it sorts the
items according to the content of the
Allocation field. This field can be filled either
manually or automatically (by the system)
when a document line item is entered.
Field Status Group The field Status Group is entered in the GL
master record and determines which fields
are optional, suppressed or mandatory when
using each account in a posting, such as
creating a GL journal or a vendor invoice.
Post Automatically Only Indicates that this account can only be
posted to by the system using account
determination tables.
GL account groups are created as listed under Chart of Account. The groupings
are normally made with reference to Balance Sheet and P&L reporting layout as
per Legal requirements. A Eight Digit number will be used for creating GL
account and the GL naming convention / logic will be:
GL Accounts Description
1 Series Liability
2 Series Assets
3 Series Revenue
4 Series Expenses
5 Series Inter Company
9 Series Upload Accounts
ACCOUNT GROUPS:
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COA Group Description From TO

9000 LIAB Balance Sheet A/C - Liabilities 10000000 13999999
9000 BNKL Bank Accounts - Liabilities 14000000 14599999
9000 PABL Reconciliations Account - Vendor 14600000 14999999
9000 DEPN Accumulated Depreciation 19900000 19999999
9000 FXAS Fixed Assets 20000000 20499999
9000 MATL Material Management - Inventories 20500000 20999999
9000 RCBL Reconciliations Account - Customer 21000000 22099999
9000 CASH Cash Accounts 22100000 22199999
9000 BANK Bank Accounts 22200000 23099999
9000 ASET Balance sheet Accounts - Assets 23100000 23199999
9000 REVN P&L A/Cs - Revenues 30000000 39999999
9000 CONS Material Management - Consumption 40000000 41099999
9000 EXPN P&L A/Cs - Expenses 41100000 41199999
9000 INCO Inter Company Accounts 50000000 59999999
9000 MISC SAP Specific & Sundries 90000000 99999999
2.2. Profit Centre

A profit center is an organizational unit in accounting that reflects a
management-oriented structure of the organization for the purpose of
internal control.
The operating results for an operating unit can be analysed by using

either the cost of sales or the period accounting approach
The profit center master data contains the structural concepts according
to which we can post and subsequently analyze the data that is relevant
for Profit Center Accounting.
Definitions at BIDCORO Africa Limited.

The Locations/Plants will be created as Profit Centers for BIDCORO Africa
Limited.
Profit Center Description

8100 BIDCORO Profit Center
2.3. Bank Master
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Bank master data is stored centrally in the SAP system in the bank
directory. The bank directory must contain master data on all the banks
that will be used for payment made / received between BIDCORO and
their customers and vendors.
BIDCORO is currently operating with approximately around 6 House banks

and around 12 account Ids will be created in SAP.

HOUSE Bank
code Description Bank Account
Standard Chartered
1SKES (Kes) 01-040-462642-00
Standard Chartered
1SUSD (Usd) 87-040-462642-00
Standard Chartered
1SEUR (EUR) 93-040-462642-00
2.4. Vendor Master
Definition and Meaning:

Vendor Master Records contain the data that controls how business
transaction are recorded and processed by the system. Details such as
Address, Bank details, Payment related details, Correspondence,
Withholding tax details.
Each vendor master record is assigned to a GL (Reconciliation) account,

which is updated as and when transactions are posted to the vendor
account. Such GL accounts purpose will be to collect the transactions
posted into vendors that are linked to it. Such GL account will not be open
for any direct entry into it.
Similar classes of transactions related to vendors such as advances, can

be mapped to different GL (special) accounts. For example, when an
invoice is booked against a vendor, the regular Sundry Creditors account
will be updated. If an advance is given to the vendor, such advance will
update Advance to Sundry Creditors and not the regular Sundry Creditors
account. This facility would result in easier reconciliation/settlement and
automatic classification of transactions to meet with the business needs
and financial statement disclosure needs.
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Vendor Master Records are divided into three segments.

General Data Segment: This is at the client level and contains
data that is common to all the company codes using the vendor.
Example Vendor Name, Vendor Address
Company Code Segment: This contains accounting information.
Example Sort key, Field Status Group, Currency, Payment
methods, Vendor information.
Vendors are generally classified as:
General vendor:
General vendor means a regular supplier who will be rendering either
goods or service from within the country or out side country. Since he is
very frequent vendor with whom company is willing to have long time
relationship, in SAP R/3, all the master information such as name,
address, bank details, payment terms etc. should be made available at
the time of vendor master creation.
One time vendor:

One time vendor means a vendor who does adhoc services to the
company and will not hold long term relationship. Since he is not a
frequent vendor, in SAP R/3, it will not expect vendor master details at
the time of master creation. It will only expect the name, address and
bank details at the time of payment transaction.

The following Reconciliation Accounts will be configured for BIDCORO
Africa Limited.
Vendor
Recon GL Description
14600100 Local capital goods creditors
14600200 Local trade creditors
14600300 Local expense creditors
14600400 Local service creditors
Following special G/L Indicators be configured for BIDCORO Africa Limitd.

Special
GL Description Spgl Ind
2440080 Advance payment to
0 Creditors A
2440090 Deposit with overseas
0 suppliers E
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2.5. Vendor Accounts Groups

The Vendor account group is an object created to distinguish between
different types of vendors and to group vendors of similar nature
transaction wise. Specifications that are to be incorporated at the time of
creation of a vendor master record are configured in Vendor Account
groups. Vendor accounts groups carry the number ranges of vendor
master records.

The following is the list of vendor account groups apllicable:
S.No Vendor Group Description

1 Local capital goods creditors
2 Local trade creditors
3 Local expense creditors
4 Local service creditors
2.6. Payment Terms

Payment terms enable the system to determine the required terms of
payment automatically. The specified terms of payment are assigned
using a key. This key can be:
Stored in the master record of the customer/vendor account (in the
purchasing or sales view and in the accounting view)
Entered when the FI document is created (or changed)
Entered when the logistics documents (in the purchase order / sales order
and incoming invoice or in the order and the outgoing invoice, for
example) are created (or changed)

Payment terms will be defined in system and will maintain in vendor master.
Standard SAP payment terms are: -
K
ey Text/Meaning
1 Payable Immediate
2 Within 14 days 2 % cash discount
Within 30 days Due net
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2.7. Asset Master
The Asset master data is to ensure that all the necessary details about
the Assets is captured to facilitate smooth transactions pertaining to
Financial Accounting avoiding data redundancy and data inaccuracy.
The master data also ensures that necessary information/data needed to be
passed on to the other modules is captured.
Asset master record controls how the asset transactions including the
depreciation are recorded and processed in the system. Also additional asset
types can be created as and when need arises and the same can be depreciated
according to legal requirements.
This part of the master record contains concrete information about the fixed
asset. The following field groups exist:
General information on assets description, quantity, etc
Posting information (for example, capitalization date)
Time-dependent assignments (for example, cost center, plant etc)
Information on the origins of the asset
Depreciation
Asset Classes: From an accounting point of view, the asset class is the most
important element for structuring fixed assets. Each asset must be assigned to
one asset class only. The asset class assigns the assets and their business
transactions to the appropriate general ledger accounts. Several asset classes
can be assigned to the same account. This makes it possible for fixed assets to
be structured in more detail at asset class level. Such detailed structuring is not
necessary at general ledger account level. It is also possible to define the screen
layout, tab layout, and asset number assignment for each class.
Data for Calculating Asset Values

Depreciation terms in the asset master record can be specified for each
depreciation area in the chart of depreciation. In order to make these
specifications, the master record contains an overview of the depreciation areas.
In addition, there is a detailed display available for each depreciation area. If
there are depreciation areas that are not needed for a specific asset, it is
possible to deactivate these depreciation areas at the asset level.
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3. Business Process
3.1. GENERAL LEDGER ACCOUNTING

General ledger is a comprehensive financial management solution that
dramatically enhances financials controls, data collection, information access
and financial reporting through the organization. General ledger is the central
repository of all the accounting information of the organization. Most of the
transactions will be handled in respective sub-ledgers and subsequently
consolidated and posted to General Ledger. However the module shall provide
specific functions of passing journal entries (Manual, Provisional, Recurring and
Reversal Journals) and posting them, which will be purely rectification and
provisional in nature.
3.1.1.Scope
The General Ledger is integrated with all other modules in SAP and thus serves
as a complete record of all business transactions. This means that all postings
that originate in other sub-modules of SAP will be automatically transferred to
GL during day-to-day processing, thus considerably reducing the amount of
manual journals. For example, when a purchasing officer records a receipt of
goods that was purchased in the Purchasing module, the inventory value is
updated in the GL immediately. Each transaction updates the GL at the
individual transaction level and summary level by account, debit or credit total
and period total. All these items can be displayed on-line.
3.1.2.Requirements/Expectations
Ability to manually process journals/Provisional JVs

Processing of foreign currency transactions
Foreign exchange transaction with gain loss information is required
On-line data entry validation and correction facility.
Integration to other modules with real time
Financial statements as and when required
System to facilitate the parking of transaction and to be posted on specific
Approval.
System to facilitate the posting and reversal of provisional entries by the
system.
System to facilitate the automatic posting of recurring entries.
To facilitate the month closing activities.
To facilitate the smooth and proper closure of books at the end of the
accounting year and carry forward of balances to new accounting year.
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3.1.3.Functions and Events (To-Be)
3.1.3.1. Overview New General Ledger
3.1.3.1.1. Document
A document consists of a document header and line items.
Document header is the 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, user.
Line items are the 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. For example you
can enter terms of payment, a cost center, or an explanatory text in a line item.
You can display the line items for one or more accounts.
Line items are document items that were posted to a specific account. In
contrast to a document item, a line item only contains the information from the
document that is relevant from the account view.
You can display the following line items in GL account balances:

Open items
Cleared items
Noted items
Parked items
Items with special G/L transactions (in Accounts Receivable &Accounts
Payable)
Items with customer / vendor items(in Accounts Receivable &Accounts
Payable)
The SAP system adheres to the document principle. This means that each
posting is always stored in the form of a document; each document has a
document type, which is generally used to identify the source and nature of the
transaction (e.g. AP Invoice, AR Debit Memo etc.), and a unique document
number. Each document remains in the system until it is archived.
Only complete documents can be posted in the SAP system. "Complete" means
that the balance from the debit and credit items is zero. Further conditions for
posting a document are that you must enter the basic document data, such as
document date, posting date, document type, posting key, account number and
amount. You must make entries in all the required fields (these are defined as
"required" during system configuration of Field Status Groups).
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When you enter documents, the system checks whether these conditions have
all been met. It also checks/validates the entries themselves. For example, if
you have entered a key that is not defined in the system, the system issues an
error message to this effect. If this is the case, you can only continue processing
after you have corrected the error. These system checks & validates that all the
required data is entered into the system in complete and in error-free form.
If you are interrupted on entering a document and want to save the information
you have already entered, you can do so by using the Hold function. On the
other hand, you cannot post the document as account assignments are missing,
or something is unclear, you can use the preliminary posting function to park the
document until you are ready to complete it.
3.1.3.1.2. Account type
Account type is a key that specifies the accounting area to which an account
belongs.
Examples of account types are:
Asset accounts - A
Customer accounts - D
Vendor accounts - K
G/L accounts - S
Materials accounts - M
3.1.3.1.3. Document type

Document types are the 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. It is
possible to restrict/default the account types (general ledger, vendor, material
etc.) to which a business transaction can be posted using the document
type.Additional document types will be created wherever necessary. Recurring
document will have a separate independent document type.
All document numbers will be created automatic internally. Document number
ranges are assigned to document types and determine the number assigned to
the documents. We can define whether the numbers will be internally generated
or externally assigned. Document number ranges are Year Dependent number
ranges and will be created and maintained annually.
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The following are some of document Types are identified for use from SAP
Standard.
Doc Description No. Range From To External Reverse

Type Number Number Doc. Type
AA Asset posting 1 100000000 199999999 AA
AB Accounting Document 1 100000000 199999999 AB
AF Dep. Postings 5 500000000 599999999 AF
KG Vendor credit memo 17 1700000000 1799999999 KA
KR Vendor invoice 19 1900000000 1999999999 KA
KZ Vendor payment 15 1500000000 1599999999 KA
PR Price change 48 4800000000 4899999999 PR
RE Invoice gross 51 5100000000 5199999999 RE
WA Goods issue 49 4900000000 4999999999 WA
WE Goods receipt 50 5000000000 5999999999 WE
ZP Payment posting 20 2000000000 2999999999 ZP
3.1.3.1.4. Posting Key

The posting key is a two digit numeric key that controls the entry of document
line items. It specifies whether the line item is a debit or a credit entry, the
account type that can be posted (Vendors, Customers, General Ledger etc.) and
the screen layout.
For posting special G/L transactions special posting keys, are used which are
supplemented by a special G/L indicator. The system uses the specifications
(posting key and special G/L indicator) to determine the alternative
reconciliation account.
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SAP standard posting keys to be retained and used.

Key Description Account Usage Remarks
Type
01 Customers Customer Debit Customer invoices will be posted using
invoices this key.
02 Reverse Credit Customer Debit Credit memos issued to customers will
Memo be reversed using this posting key.
03 Bank Charges Customer Debit Any charges to be recovered from the
customer will be debited to the
customers account using this posting
key.
05 Outgoing Customer Debit All payments to customers for credit
Payment balance in customer account (due to
credit notes, excess payments received
from customers) will be posted using
this posting key.
06 Payment Customer Debit Any difference in payments, in the case
differences of payments made to customers, will
be posted into the system by using this
posting key.
This entry will be generated by the
system when there is a difference in
payment.
08 Payment Clearing Customer Debit Clearing entries for payments to
customers with the Credit entry in
customers account will be posted by
using this posting key.
09 Outgoing debit Customer Debit Any debit transaction with customers
posting will be debited to customers account
( except as specified in this table) will
be handled by using this posting key.
11 Credit memos Customer Credit Credit memos to customers will be
posted using this key.
12 Reverse Invoice Customer Credit Customer Invoices will be reversed
13 Reverse Charges Customer Credit Posted charges will be reversed using
this posting key.
15 Incoming Customer Credit All payments received from customers
Payment will be posted using this posting key.
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Type
16 Payment Customer Credit Payment difference in case of payment
differences received from customers will be posted
into the system by using this posting
key.
system when there is difference in
payment.
18 Payment Clearing Customer Credit Clearing entries for payments from
customers will be posted by using this
posting key.
19 Outgoing credit Customer Credit Any credit transaction with customers
posting will be credited to customer account
(except as specified in this table) will be
handled by using this posting key.
21 Credit memos Vendor Debit All vendor credit memos will be posted
key.
22 Reverse Invoice Vendor Debit All reversal of vendor invoices will be
posted into the system by using this
posting key.
25 Outgoing Vendor Debit All payments to vendors will be posted
Payment into the system by using this posting
key.
26 Payment Vendor Debit Any difference in payments, in the case
differences of payment to vendors, will be posted
key.
system when there is a difference in
payment.
28 Payment Clearing Vendor Debit Clearing entries for payments to
vendors with the Credit entry in vendor
account (payable to vendor) will be
posted by using this posting key.
system as a part of the periodic
processing run for clearing all open
items for which payment has been
made.
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Type
29 Incoming debit Vendor Debit Any debit transaction with vendors will
posting be debited to vendor account (except
as specified in this table for down
payments etc.) Will be handled by
31 Vendors invoices Vendor Debit Vendor invoices will be posted by using
this posting key.
32 Reverse Credit Vendor Credit Reversals of vendor credit memos will
Memo be posted using this posting key.
35 Incoming Vendor Credit All payments from vendor for debit
Payment balance in vendor account (due to debit
note, excess payments to vendors) will
be posted using this posting key.
36 Payment Vendor Credit Payment difference in case of payment
differences received from vendor will be posted into
the system by using this posting key.
system when there is difference in
payment.
38 Payment Clearing Vendor Credit Clearing entries for payments from
vendors with the Debit entry in vendor
account (payable to vendor) will be
posted using this posting key.
39 Incoming credit Vendor Credit Any credit transaction with vendors will
posting be credited to vendor account (except
as specified in this table for bills
payable etc.) Will be handled by using
this posting key.
40 G/L account G/L Debit All Journal vouchers for debit to G/L
Account Account will be posted by using this
posting key.
50 G/L account G/L Credit All Journal vouchers for debit to G/L
Account Account will be posted by using this
posting key.
70 Debit Asset Asset Debit All assets transactions for debit to
Assets Account will be posted using this
posting key.
75 Credit Asset Asset Credit All assets transaction for credit to
Assets account will be posted using this
posting key.
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Type
80 Inventory Taking G/L Debit MM Module uses this.
Account
81 Costs G/L Debit Affect the General Ledger accounts on
Account the debit side.
82 Inventory G/L Debit
Difference Account
83 Price Difference G/L Debit
Account
84 Consumption G/L Debit
Account
85 Change in Stock G/L Debit
Account
86 GR/IR debit G/L Debit
Account
89 Stock Inward Material Debit MM Module uses this.
Movement
90 Inventory Taking G/L Credit MM Module uses this.
Account
91 Costs G/L Credit Affect the General Ledger accounts on
Account the credit side.
92 Inventory G/L Credit
Difference Account
93 Price Difference G/L Credit
Account
94 Consumption G/L Credit
Account
95 Change in Stock G/L Debit
Account
96 GR/IR Credit G/L Credit
Account
99 Stock Outward Material Credit MM Module uses this.
Movement
3.1.3.1.5. Currency
For any document that is posted in SAP R/3 will have two currency displays:
1. Document currency (Transactional currency)
2. Local currency (Company code currency)
3. Group Currency (USD).
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3.1.3.1.6. Foreign Currency

Exchange rates are used to translate an amount into another currency. You
define exchange rates in the system for the following purposes:
Posting and Clearing - To translate amounts posted or cleared in
foreign currency, or to check a manually entered exchange rate during
posting or clearing.
Exchange Rate Differences - To determine gains or losses from
exchange rate differences.
Foreign Currency Valuation - To valuate open items in foreign
currency and foreign currency balance sheet accounts as part of the
closing operations.
When you post a document in foreign currency, the system stores the amount in
both local currency and foreign currency in each line item. The system checks
whether the currency key has been defined and is therefore permitted.
Foreign currency rates are needed, for example,
To post and save receivables and payables in foreign currency
For handling payment transactions in foreign currency
Managing accounts in foreign currency.
Exchange rate Types permit maintenance of multiple exchange rates with

reference to the same From / To currency relationship. This facilitates use of
different exchange rate for different transactions. For all currency From / To
relationship exchange rates will be maintained from time to time as per polices
laid out in the relevant user procedures.
ExchangeRate Type Description

M Standard translation at average rate
3.1.3.1.7. Document Splitting
The system has a concept of new General ledger which is different from
the previous release version of SAP. In this concept the ledger is
introduced at the general ledger accounting level. In this method
document splitting is mandatory.
Document splitting allows you to display documents using a differentiated
representation. In the representation, line items are split according to
selected dimensions (Profit centers & Segments). In this way, you can
draw up complete financial statements for the selected dimensions (Profit
centers & Segments) at any time.
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3.1.3.1.8. Automatic Posting
With certain transactions, the system generates automatic postings. These

include:
Input and output tax postings

Exchange rate differences
Cash discount gains and losses
Withholding Tax
Each automatic posting is shown as a separate line item. In the document

overview, therefore, the automatically generated line items are displayed in
addition to the manually entered items. For each automatic posting, you must
define the G/L account to which the system is to post and the rules according to
which the system generates the posting.
3.1.3.2. Basic Settings
3.1.3.2.1. Field Status Variant

Definition and Meaning: Several field status groups are grouped together in
one field status variant. The field status variant is assigned to a company code.
The field status variant can be attached to more than one company code. This
allows us to work with the same field status groups in any number of company
codes. We can also define and process field status groups. We must define a
field status group in the company code-specific area of each G/L account. The
field status group determines which fields are ready for input, which are
required entry fields, and which are hidden during document entry.
Definition at BIDCORO Africa Limited

Field Status Variant Description
9000 BIDCO Fields status variant
3.1.3.2.2. Fiscal Year & Posting period Variant
Fiscal Year variant - Definition and Meaning:

A fiscal year is the period for which financial statements are prepared. It generally consists
of 12 months. A fiscal year can contain special periods that can be posted to for any year-
end transactions such as provisions, adjustments, etc.
In SAP, fiscal year variant sets up the fiscal year. Each company code is assigned a fiscal
year variant. Several company codes can use the same fiscal year variant.
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BIDCORO financial year is from January to December and consists of 12 calendar months.
The fiscal year variant "K4" consists of 12 normal periods (from January to December) with
4 special periods to manage year end entries, will be attached to company code "8100":
Posting Period variant - Definition and Meaning:

The posting periods can be opened and closed for different accounts by account types and
number ranges.
For year-end closing, special periods can be used. In the standard general ledger, up to 16
periods can be defined. All specifications are made at client level and defined as fiscal year
variants. Each company code is assigned to a fiscal year variant.
BIDCORO follows the January - December financial year for annual accounts purposes.
This will be defined as the fiscal year in the system. For example, the four-digit fiscal year
2016 will denote the financial year from Jan 2016 - Dec 2016.

A Posting Period Variant is defined & assigned to one or more company codes. This variant
controls opening and closing of one or more posting periods in Financial Accounting.
Posting Period Variant Description

8100 BIDCORO Posting Period Variant
Posting Periods:
One posting period should generally be kept open for the current month.
At the month end next posting period should be opened.
The previous month should be closed after the month end closing procedures are
carried out.
One or more posting periods may be kept open for certain accounts on selective
basis, if required. However the authorization for this will be maintained at a very high
level.
A document is uniquely identified by the combination of fiscal year, company code
and document number.
Old Posting Periods have to be closed after carry forwarding all ledger balances to
next year and New posting periods will be opened for new year.
It will be possible to post to the current and the previous fiscal years until the
previous fiscal year is not closed.
All document numbers will be reset to the minimum number of the range for the new
fiscal year.
Var. A From To account From Year To Year From Year To Year Autho
9100 + 1 2016 12 2016 13 2016 16 2016
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9100 A ZZZZZZZZZZ 1 2016 12 2016 13 2016 16 2016

9100 D ZZZZZZZZZZ 1 2016 12 2016 13 2016 16 2016
9100 K ZZZZZZZZZZ 1 2016 12 2016 13 2016 16 2016
9100 M ZZZZZZZZZZ 1 2016 12 2016 13 2016 16 2016
9100 S 1 999999 1 2016 12 2016 13 2016 16 2016
The above matrix may be further refined and more specific closure of posting periods by
specific Account Number Ranges for GL as well as Vendor / Customer Accounts may be
made if required.
3.1.3.2.3. Account Groups
The 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 Master
account is created.
The screen layout for creating master accounts in the company code-specific area
To have a better control over the account codes, an Account Group is created for each
different grouping of accounts.
3.1.3.3. Park and post general ledger document
An incomplete document may be parked and then posted at a later date; this may be done
by the same or a different user.
Generally the documents are parked when the user is waiting for an approval from the
superior. Subsequently the user can book the same as a G/L document.
One advantage of parking is that you can evaluate the data in documents online for
reporting purposes from the moment they are parked, rather than having to wait until they
have been completed and posted.
A list of parked documents can be generated in the SAP for the benefit of the
supervisor/manager. The document can then be checked and corrected by the user. This
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document can then be posted in the General ledger. Parked documents can be modified or
deleted before posting.
The documents are entered in to the system and depending on the authorizations; the
documents are parked and posted later.
The user will park all the documents in R/3. Then the designated approver will view the
list of all the parked documents and post the parked documents before the end of the
day.
3.1.3.4. Post/Display/Change general ledger document
Document Posting
Header information like company code, posting date, document date currency
is entered.
Items details like general ledger account, amount, tax code , cost assignment
will also be entered for each line item.
New line items can be added.
A line item before posting may be deleted if required.
An automatic internal number will be created for each document posted in the
system.
Document display in accounting document will allow viewing all the header
and line item details.
Document change of the accounting document will allow changes to the
Header text, reference, line item next and assignment field.
Post general ledger documents
To make general ledger business transaction available, you must post them to the
general ledger account. The system creates the document and makes the data
available in accounts.
When you carry out the postings to G/L accounts, you enter the document header data
and line items data. Upon simulation of the document, the system carries out the
consistency checks before posting the data. If the error exists, the data will not be
posted and proposes error information. Once the data is error free, then the system
updates the document file and G/L accounts amount may be posted.
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The expense GL account is made mandatory to input a cost center.
Journal creation will be mainly used for adjustments of incorrect postings, ad-hoc
entries, or period-end adjustments. All GL transactions from other modules will be
generated automatically with their own document types and number ranges.
In addition, the standard journal creation program provides for the creation of an
Account Assignment Template. At any time during the creation of a document, the
user may save the document as a template for future use. The template may contain
any number of individual line items (up to the SAP maximum of 999), and any
combination of GL account assignments and individual line item values.
The values posted to the G/L accounts appear in the Trial Balance which will provide
financial statements like Balance Sheet, Profit and Loss Statement.
3.1.3.5. Document Reversal
It is possible for a user to make an input error. As a result, the document created will
contain incorrect information. In order to provide an audit of the correction, the user
must first reverse the document in error, and then capture the document correctly.
The system provides a function to reverse G/L, A/R and A/P documents both
individually or in mass.
When reversing a document, a reversal reason code must be entered to explain the
reversal. The reason code also controls if the reversal date is allowed to be different
from the original posting date.
Documents with cleared items cannot be reversed. The document must first be reset.
However, it needs to be noted that reversal of any document will effect the allocation cycles
in case if these processes are completed. It will be required to re-run all these cycles once
again after reversing the document.
3.1.3.6. Open item Clearing
Open items reflect unfinished transactions. For example, a Liability that has not been
settled remains in the Liability account as an open item until it is settled.
The open items of an account can only be cleared once you post an identical
offsetting amount to the account. In other words, the balance of the items assigned
to each other must equal zero.
During clearing, the system enters a clearing document number and the clearing
date in these items.
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Open items can only be cleared if they are posted to accounts that are managed on
an open item basis. Open item management is automatically set for customer and
vendor accounts. For GL accounts, however, you have to set the open item
management option in the master record.
Open item management would be set for the following GL accounts:

Cheque clearing accounts (bank clearing accounts).
Goods receipt/invoice receipt.
Other General Ledger Balance Sheet Account
Open items of an account can be cleared manually using the Account Clearing function, or
they can be cleared automatically by the system. Automatic clearing is especially useful for
clearing accounts in the GL account area.
Users will clear open items from GL accounts by running the clearing program. This
program uses predefined criteria to group together open items per account. If the
balance of the group of open items equals zero in local or foreign currency, the items
are marked as cleared.
The clearing program is used to automatically clear open items based on predefined
criteria. Manual clearing of open items is therefore not usually necessary.
Automatic clearing (i.e. clearing based on SAP-defined fields such as assignment,
amount, ref. field).
Manual clearing (i.e. matching of amount performed by users).
Within the general ledger module, account clearing shall be performed using the
following functions:
Account clearing (ad hoc).
Automatic clearing (part of closing activities).
Post with clearing (during the course of posting a document).
3.1.3.7. Post Recurring document
For postings that recur on a regular basis, such as payments for rent or interest,
legal fees, and property taxes, the recurring entry program can be used to have the
necessary documents generated automatically.
The recurring business transactions must be stored in the system as recurring entry
original documents.
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Each recurring entry original document contains the date of the first and last posting,
the frequency at which posting should be made, and the date of the next planned
posting.
The recurring entry program must be started at regular intervals within a specified
period. The program selects all recurring entry original documents in which the date
of the next posting falls within the specified period, and then generates a batch input
session.
When the session is processed, an FI document that corresponds to the riginal

document is posted, and the date of the next posting is changed accordingly in the
recurring entry original document.
Flow diagram of recurring entries
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3.1.3.8. Fixed Deposits with Banks
Making/Breaking/Maturity of Fixed Deposits/Investments

The company operates fixed deposits of various values with several banks Though the
deposits made for a fixed period with a defined maturity date these will be broken based on
the business needs.
As on the date of maturity, a manual entry will be posted for recording the interest due on
the deposit.
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3.1.3.9. Bank Guarantees

System allows Bank guarantees entry against vendor as a noted item.
Bank guarantees are statistical information

Bank guarantee are recorded as special general ledger transactions
FBL1N - Display/Change Line Items for a particular vendor
3.1.3.10. Employees Travel Advances & Settlement
Travelling Advances and Settlement Process: At the time of releasing the advance to
the employee the following entry is as follows:
Employee Travel Advance A/c (spl GL) Dr

ToCash/Bank
Other Advances and Settlement Process:
Other than Travel Advances to Employee will be taken by the HR Module. :
While processing the salary by HR Loan deductions will be from the employee master data.
3.1.3.11. GL Payments / Receipts

.
Services can be paid directly through bank routing through vendor by branch itself by
deducting WHT.
Bank charges can be posted at the time of reconciling the Bank statement.
Funds/statutory payments can be transfer/paid.
SAP supports for park/post of any document depending the roles and authorization
Services received will be treated as other income and cheque can be directly
deposited into concerned banks in GL
All Cash payments are routed through Cash Journal by selecting the proper GL's,
system will post the relevant document.
Authorization to post to cash journal would be restricted to users of the location.
All sorts of cash receipts will be captured through Cash Collection GL A/C.
3.1.3.12. Journal Voucher

Here all adjustment entries related to vendors or customers is to be passed through FI (JV).
It covers following:
1. Vendor/ customer reconciliation entry.

2. GL rectification JV.
3. Accrual JVs
.
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In SAP R/3 on line integration with sub ledgers, hence no such duplicate and wrong
posting will be occurred.
FA related transactions like capitalization, depreciation,

disposal/sale/additions are routed through sub ledger. Hence no such JV's is
required in Main ledger.
3.1.3.13. Bank Reconciliation

SCOPE :
To reconcile the bank balance in our books of accounts with the balance available in
Bank Books
For Bank Reconciliation every Bank account should have 3 GL Accounts.
1. Main Bank Account.

2. Cheque Issue Account.
3. Cheque Receipt Account.
These two bank sub-accounts (Cheque Issue and Deposit Accounts) will hold the
entries, in other words bank transactions are posted to these two accounts. Whenever
the cheques get cleared by the bank and those entries will get updated to the Bank
Main Account.
Multiple upload methods are available for bank reconciliation of bank Transaction
Code FF67/FF_5 shall be used to upload the bank Statement.
Entries passed after Bank Statement Uploading:
Debited by Bank:
Cheque issued Account Debit
Main Bank Account Credit
Credited by Bank:
Main Bank Account Debit
Cheque Deposit Account Credit
Except Main bank account, all the other 2 accounts shall be maintained as clearing
account (Open item Management).
While uploading bank statement, each line item in Bank Statement should be
identified with relevant Transactions Type in SAP. The following transactions will be
created in SAP.
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1. Clearing of Cheques Issued.

2. Clearing of Cheques Deposited.
3. Bank Charges
.
Auto Matching:
While uploading Bank Statement system will match all the entries based on Cheque
No. and amount. These entries will move to cleared from open items.
Forced Matching:
The entries which dont match based on cheque no. or amount due to any mismatch
or error needs to be match manually using Transaction code F-03.
Cheques Deposit
In case of depositing customer cheques, it is mandatory to enter the some identity
no. in Bank Line Item. This field is used to reconcile line items in Deposit Account
with the line items in the bank statement.
Bank Charges:
All bank charges which come through bank statement, those expenses will be
directly debited to relevant expenses account and credited to Main Bank Account.
Clearing and entries matching concept will not be applicable for this entries.
Bank Balance:
For Bank Balance a variant needs to be created in FS10N and FBL3N Report which
consists of all the 3 bank GL accounts, which shall give Bank Balance as per
BIDCORO books.
3.1.3.14. With holding Tax
Requirements/Expectations:
System to provide deduction of With holding tax at the time of invoice entry or
payment whichever is earlier.
System should allow the deduction of WHT from all the vendors whose bills are liable
for deduction of WHT at specified rates.
Functions & Events (TO BE)
Payments to Transport
Fees for professional or technical services
Interest
Payment to foreign Services.
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Royalties
Rent
Insurance.
The Income Tax Act requires calculating taxes as soon as an invoice is entered. However, if
a down payment is made to a vendor before an invoice has received, WHT has to be
deducted on the down payment.
When you prepare your annual returns, the act also requires making provisions for taxes on
services received but not yet invoiced.
Adjust withholding taxes when you clear a down payment against an invoice
As SAP standard system allow defining two different tax types in withholding tax namely one
for invoice posting and one for payment (including down payment) posting, the customer
requirement can be achieved with SAP standard functionality.
WHT vendor master data information will be maintained in the vendor master.
Tax type will be defined.
Tax code will be defined.
As per BIDCORO Requirement withholding Tax code for company code: 1100 will be
extended for example below.
Category Resident Non Resident

Mgnt. Professional Fees 10 20
Dividends 5 10
Interest 15 15
Royalties 5 20
3.1.3.15. Cash Journal
Cash Transactions will mainly represent transactions relating to Reimbursement of

Staff Expenses, Petrol, Conveyance, Medical Expenses, Travel Advances, Postage
etc.,
Functions & Events (TO BE)

Cash journal is used to manage company's petty cash transactions. The system
automatically calculates and displays the opening & closing balances, and the receipts &
payments totals. Several cash journals can be configured for each company code. System
allows carrying out postings to G/L accounts, as well as vendor and customer accounts.
Amount limitation can be set and when the user tries to post a payment exceeding this limit,
system throws a message.
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In BIDCORO 1 cash journals (Approx.) will be created location wise.
Cash Journal Coee Description

8100 BIDCORO Cash Journal
3.1.3.16. Foreign currency valuation

This process performs the revaluation of all foreign currency open items, primarily in
customer and vendor accounts, using the month end exchange rate maintained.
This process carries out foreign currency valuation for accounts managed on an open item
basis. Valuation takes place according to the single valuation principle. This means that
individual open item on the key date only are taken into consideration for the valuation.
SAP selects open items for customers, vendors, and G/L accounts posted in foreign
currencies. Based on the exchange rate on the key date, exchange rate difference is
calculated automatically and valuation document is posted.
The balance of the foreign currency balance sheet accounts, i.e., the balance of the G/L
account managed in a foreign currency forms the basis of the valuation. The exchange rate
profit or loss from the valuation is posted to a separate expense or revenue account for
exchange rate differences.
For the period end, this loss / gain is to be recognized only for the purposes of drawing
correct financial statements as of the end of the period and should be subsequently
reversed on the first day of the next period.
Revaluation procedure for year end:

Foreign currency calculation and posting of loss / gain on foreign currency balances
& open items should be in comparison with the rate as of 31st December and the
rate in the transaction.
For the year-end, this loss / gain are to be recognized as unrealized loss / gain for
the purposes of drawing correct financial statements at the year-end.
When foreign invoice is raised in SAP the system will enter the document in foreign currency
and also in equivalent local currency at the prevailing SAP forex table rate.
When the invoice is not settled during the period, the system will revaluate the foreign
transaction taking the closing rate prevailing in the forex rate table and post an unrealized
adjustment entry
Forex unrealized gain or loss transaction:

On period end:
Unrealized forex B/S adjustment account DR/CR
Unrealized forex P&L adjustment account DR/CR
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On first day of next period

SAP R/3 will automatically reverse of the above entry.
Forex realized gain or loss transaction:

Foreign cur local cur
Vendor account (with transaction rate) DR xxx xxx
Forex Gain /Loss account DR/CR xx
Bank account CR xxx xxx
3.1.3.17. Periodic Processing
Closing Procedures:
Apart from the normal day-to-day transaction processing that is undertaken within SAP,
there are many processes that require completion on a periodic basis. These include the
regrouping of customer credits and vendor debits, and unmatched invoice receipts and
material receipts, revaluing of foreign currency items, and month-end accruals and deferrals.
BIDCORO has identified the following requirements which SAP standard provides:
The functionality to generate recurring journals (e.g. repayment of rent, insurance

etc)
The ability to create accrual journals in the current period and reversals in the
following period.
Run system generated journals (i.e. foreign exchange of AR, AP, Inter company
transaction, depreciation)
Close of month-end period
Accruals and Reversal of provisions
Closing & opening of posting periods
Balance carried forward to next fiscal year
3.1.4. Special Organizational considerations

3.1.5. Business Model
Creation of GL account:
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Park / Post a General ledger document:
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WHT is deducted based on nature of transaction between the service provider and
BIDCORO.
.
Start
Is Vendor applicable to
End NO
WHT?
Yes
Yes Is it advance payment?
NO
Calculate WHT on advance? S
Is it invoice booking?
Yes
Whether down payment

exists?
Yes
Calculate adjusted WHT Invoice

S
amount
Post Entries S
End
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Cash Journal (Petty cash)
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3.1.6. Changes and Implications
3.1.7. Description of Improvements
a. In SAP R/3 on line integration with sub ledgers hence no such duplicate and wrong
posting will be occurred.
b. Fast processing of cash transactions through cash journal
c. Better control over cash predefined cash payments and receipts transaction reduces
end user discretion for making and receiving cash payments.
d. System generated cash book available with the nature of transaction.
3.1.8. System Configuration considerations

Creation of Cash Journals and Business Transactions
Spl GL Indicator for Advances
Tax types and tax codes will be maintained.
Creation of House Banks
Financial Statement Version
Foreign Currency Revaluation valuations
3.1.9. Report requirements/Considerations

This section covers ad hoc account enquiry and management functionality, as well as the
periodic reporting facilities that are provided by SAP and/or required by BIDCORO.
Report Description Code

Trial Balance Company Code wise. S_ALR_87012277/ F.10
Balance Sheet as per companies act 1956 F.01/ S_ALR_87012284
(Schedule VI) - Company Code wise, Business
area wise
Compact Document Journal S_ALR_87012289
GL Account Analysis FS10N
GL Account Balances and Totals S_ALR_87012301
GL Account Line Items S_ALR_87012282
List of GL Accounts S_ALR_87012328
Chart of Accounts F.10
Customer Sales S_ALR_87012186
Customer Due Date Analysis for Open Items S_ALR_87012168
Customer Balance Line item wise FBL5N

Customer List S_ALR_87012179
Vendor Due Date Analysis for Open Items S_ALR_87012078
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Vendor balance line item wise FBL1N

Vendor List S_ALR_87012086
Check Register S_P99_41000101/FCHN
Asset balance by Asset Class S_ALR_87011964
Asset balance by Cost center S_ALR_87011966
Asset balance by Plant S_ALR_87011967
Assets wise Monthly, Quarterly, Half Yearly And AR01
Yearly and as and when required Report
containing Gross value, Accumulated Depreciation,
Depreciation for the year, Net Value.
Depreciation Values AR03

Depreciation Simulation - forecast S_ALR_87012936
Asset History S_ALR_87012075
Display Plant Stock Availability MB53
Stock in transit MB5T
Purchase Orders by Vendor ME2L
Purchase Orders by Material ME2M
Sub-Contracting Stock Monitoring (Vendor) ME2O
Stock Analysis MC.9
Plant Anal. Selection: Stock MC.1
Plant Anal. Selection, Receipt/Issue MC.2
Analysis of Slow-Moving Items MC46
3.1.10. Authorizations and User roles
GENERAL LEDGER
GL Master- 1 GL Account -centrally -Create FS00
Individual
Processing
2 GL Account -centrally -Change FS00
3 GL Account -centrally -display FS00
4 GL Account -Display changes FS04
Document Entry 5 Enter G/L Account Document FB50
6 General Posting F-02
7 Cash Journal Posting FBCJ
8 Post with Clearing F-04
Park documents 9 General Document Parking F-65
10 Post/Delete FBV0
11 Change FBV2
12 Display FBV3
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Document 13 Change FB02
14 Change Line Items FB09
15 Display FB03
16 Display Changes FB04
17 Reset Cleared Items FBRA
Reverse 18 Individual Reversal FB08
19 Mass Reversal F.80
Sample 20 Create F-01
document
Reference 21 Post with reference FBR2
Documents
Account 28 Clear F-03
29 Display Balances (Old) FS10N
30 Display Line Items (Old FBL3N
31 FAGLB03 - Display Balances (New) FAGLB03
32 FAGLL03 - Display/Change Items (New) FAGLL03
Automatic 33 Automatic clearing with reference F.13
Clearing
Valuate 34 Open items in foreign currency FAGL_FC_VAL
Carry forward 35 G/L Account Balances (New) S_PL0_860000
30
36 Balance Carry Forward FAGLGVTR
37 Financial Statement: Actual/Actual S_PL0_860000
Comparison 28
Bank Accounting
Bank Master 1 House Bank FI01
Check numbers 2 Check Lot creation FCHI
Check 3 Manual checks FCH5
Information-
Create
Change 4 Renumber FCH4
Display 5 For check FCH1
6 For payment document FCH2
7 Check register FCHN
8 Reprint check FCH7
Void 9 Unused checks FCH3
10 Issued checks FCH9
11 Cancel payment FCH8
Delete 12 For payment run FCHD
13 Manual checks FCHF
14 Voided checks FCHE
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15 Reset data FCHG
3.2. ACCOUNTS PAYABLE
3.2.1. Scope
The Accounts Payable application component records and administers accounting data for
all vendors. It is also an integral part of the purchasing system. Deliveries and invoices are
managed according to vendors. The system automatically makes postings in response to
the operative transactions.
Payables are paid with the payment program. The payment program supports all standard
payment methods.
Postings made in Accounts Payable are simultaneously recorded in the General Ledger
where different GL accounts are updated based on the transaction involved (payables and
down payments, for example). The system contains due date forecasts and other standard
reports that you can use to help you monitor open items.
You can design balance confirmations, account statements, and other forms of reports to
suit your requirements in business correspondence with vendors. There are balance lists,
journals, balance audit trails and other internal evaluations available for documenting
transactions in Accounts Payable.
3.2.2. Functions and Events (To-Be)
Procurement Process / Invoice Posting
Direct Bills Processing (Non PO Based)
Accounting Document is generated manually by debiting the expense and crediting the
vendor. WHT is also deducted at this stage which will be called up automatically.
Invoice will be raised on the vendor directly i.e PO is not created.
Vendor invoices without MM purchase order would be booked through FI vendor
invoice and has no impact on the stock.
In the FI vendor invoice, GL account is to be entered for the debit posting. Due date,
payment terms is to be mentioned in the invoice.
PO based Bills processing (Revenue & Service)
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In this process Purchase Order is raised with reference to Purchase Requisition where
accounting has no impact, its only a commitment item. When the goods are received from
the vendor based on the PO, we execute MIGO where goods receipt is posted and both
Material document and FI document is generated.
Material document will be for accounting stock into stores and FI entry will
Inventory / Stock a/c Dr.

GR/IR Clearing a/c Cr.
Here GR / IR clearing account is a clearing account and gets knocked off at the time posting
the invoice (MIRO execution).
All the Incoming Invoices are verified in terms of their content, prices and arithmetic and the
invoice is posted, the data is saved in the system. The system updates the data saved in the
invoice documents in Materials Management and Financial Accounting.
After the invoice has been posted, the document appears as an open item inn the vendor
account. (Payment proposal list).
Accounting Entries when invoice is posted will be:
GR/IR A/c Dr.

VAT Clearing A/c Dr (if applicable)
Vendor Account Cr.
In case of Service PO following entry will be triggered:-
Goods Receipt:
Expense a/c Dr.
Service GR / IR Clearing a/c CR
Invoice Posting:
Service GR/IR A/c Dr.
Vendor Account Cr.
Delivery costs can be divided into:

Planned delivery costs
Unplanned delivery costs
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Planned Delivery Cost:
Planned delivery costs are entered at item level in the purchase order.
Planned delivery costs can be divided into:
Freight costs
Customs relevant
Insurance
Planned delivery costs can be invoiced in the following ways:

Fixed amount, independent of scope of supply
Quantity-dependent amount
Percentage of value of goods to be delivered
For planned delivery costs, the System makes postings to a clearing account at goods
receipt.
If the delivery costs in the invoice differ from the planned delivery costs, the System posts
the differences in the same way as it posts normal price and quantity variances.
In case of planned delivery cost such as Freight:
Freight clearing A/c Dr
Freight Vendor A/c Cr
In case of planned delivery cost for Customs duty (Bill of Entry items),
Customs clearing A/c Dr
.
Customs Officers A/c Cr (Govt Vendor)
Unplanned Delivery Cost:

Enter the unplanned delivery costs on the Extras tab page. The System distributes
unplanned delivery costs among the items; it treats them in the same way as price
differences. However, it does not check the price after distributing the delivery costs. It does
not list them separately in the purchase order history. They are only included in the invoiced
value.
Then accounting entries will be,

Vendor A/c Cr
Stock A/c (or) Price Difference Dr
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Domestic Purchases (material) -- which includes freight,VAT:
During GR:
Material Stock Dr
GR/IR Clearing A/c Cr
Freight Clearing A/c Cr
During Invoice Verification:

GR/IR Clearing A/c Dr
Freight Clearing A/c Dr
VAT A/c Dr
Vendor A/c Cr
Freight Vendor A/c Cr
For Domestic Procurements of Capital Goods:
During GR:
Material (Asset) A/c Dr

GR/IR Clearing A/c Cr
GR/IR A/c Dr
Vendor Payable A/c Cr
Domestic Purchases (Services) -- which includes
Goods Receipt (MIGO) Stage :
Expense a/c Dr.

Service GR / IR Clearing a/c CR
Invoice Verification (MIRO) Stage:
Service GR/IR A/c Dr.

Service Vendor A/c Cr.
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Import Purchases (material) -- which includes freight, Duty
During Customs Duty Clearing Invoice
Custom Clearing A/c Dr

Custom Officer A/c Cr
Here Custom Officer is created as a vendor.
During GR:
Material Stock Dr
GR/IR A/C Cr
Custom Clearing A/c Cr
(The custom duty portion of value is loaded to the inventory and the Customs clearing
a/c will get nullified)
GR/IR A/c Dr
Vendor A/c Cr
3.2.2.1. Vendor Down Payment & clearing
Payment / Receipt process (Advance & Regular)

Requirements/Expectations/Concerns on Payment/Receipt process (Advance &
Regular)
Advance Payment: Once the APR (Advance Payment Request) received from
Purchase / Intending department, AP user will cross check the request with PO for
compliance.
Cross Functional with MM
For all the purchase based advances, PO numbers will be referred/attached to

prepayment voucher. So system will allow to pay the advance always less than or
equal to the advance amount mentioned in the PO. More than one PO can be
referred for a single pre payment against each vendor.
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Advance Payment:
A Down Payment request is raised by the authorized person requesting for payment. Based
on the request, a down payment may be released to the particular vendor and request item
is cleared. Down payment request is a noted Item special General Ledger account which will
not be displayed in the Balance Sheet. In SAP, processing of a down payment involves a
number of steps:
Down Payment request, a notational item recorded against the vendor,

Make payment against the payment request,
Post the invoice which required the down payment,
Clear the down payment against the invoice, and
Make final vendor payment, the balance of the invoice.
The accounting entry for making the down payment will be:
Vendor account (Spl. G/L: Down Payment) Dr
Bank A/c Cr
Invoice booking & Settlement of advance:
The concept of authorizing the document entry can be achieved by the standard SAP
functionality creating and authorizing the payment request. Payment request will be created
by one person and authorized by another person to keep the control.
It is also possible to post invoices from FI without the necessity of purchase order. That can
be used to fulfil the requirement of postings like miscellaneous payments, employee related
payments, travel agent payments, hotel bills and consultancy payments.
The following entry is passed on receipt of invoice
GR/IR account Dr
Vendor account Cr
An information message will be flashed at the time of invoice booking that a down payment
exists for the particular vendor.
Settlement of down payments to the vendor account and clearing of Invoice against Down
Payment
Vendor A/c Dr
Vendor A/c (Spl. G/L: Down Payment) Cr
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Wherever, WHT is applicable, the WHT will be deducted at the time of down-payment to the
vendor and will be adjusted at the time of settlement of advances.
Regular Payment:
By using the SAP standard functionality all the cheque payments/EFT can be managed. The
typical procedure under SAP with respect to cheque will be
a) Defining the cheque lots for each and every house bank of BIDCORO.
b) Entering the vendor invoice.
c) Entering the vendor payment by clearing the open item created by invoice.
d) Attach cheque to the payment document number generated in step (C).
e) Check the cheque register to see the cheque updated./3
Business
Vendor Payments can be manual or automatic. The general aspects related to vendor
payment are Terms of Payment, Method / Media of Payment, manual payment & Automatic
Payment.
Terms of Payment
Terms of Payment will be defined by the Company, which will be updated in the Vendor
Master for each vendor and will be defaulted in the PO and Invoice level. Where the
payment terms have been changed in the invoice level, the due dates will over-ride the
original due date (calculated based on Purchase Order). Terms of payment will define the
credit period, due date and cash discount, if applicable. The due date will be calculated from
a baseline date as per the payment terms, which will be either of the following dates:
Document Date
Posting Date
No Default
3.2.2.2. Vendor Normal Payment
BIDCORO has to make payments to vendors during their course of transactions, vendors
invoice due date is checked and if it is due, then the payment process begins. Prior to
making any payment down payments if any are to be checked and cleared against the
invoices. Only then Payment process can be carried out.
The payment can be full payment or part payment or residual payment. In case of full
payment, the system clears the open item. In case of part payment, the open item is not
cleared and has to be cleared manually subsequently, when the entire amount is paid. In
case of residual payment, the original invoice is cleared and the balance amount is created
as fresh open item.
Availability of the funds is checked before making the payment. In case funds are not
available, after making the funds available, the payment has to be carried out.
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Payments can be made through automatic payment program or through manual payment.
Check payment can be made through automatic payment program or through post plus print
option transaction. In case of automatic payment program, the parameters have to be
entered and the system prints the checks for all the vendors who are due as per specified
parameters. In both cases, the cheque is printed.
In case of post plus print option, the individual vendor has to be selected and payments are
to be made by selecting the required open items and with that reference of payment
document cheque can be printed.
Automatic Payments
The payment program is designed so that you can pool and process outgoing payments.
The payment program processes domestic and foreign payments for vendors and
customers. It creates payment documents and supplies data to the payment medium
programs. These payment medium programs print either a payment list, payment forms (for
example, cheques).
The payment program processes the open line items in three steps:
It determines the open items to be paid according to the parameters entered and creates
a proposal list. You then have the ability to edit the proposed payments before the
transactions are posted. Any items that you do not want to pay can be blocked for
payment, however, if you need additional items to be included in the proposal list, the
previous proposal must be deleted, the parameters changed to pick up the additional
transactions and the payment program rerun.
The payment program makes the payments based on the edited proposal list. Only the
open items contained in the proposal list are taken into consideration. The payment
program posts documents, sets up data for the form printout (cheque), the remittance
advice, and the payment summary as required.
Payment program will automatically update the cheque register (if used) and the relevant
general ledger accounts and also clear the vendor invoice for which payment run is
executed.
The payment parameters that need to be specified include:

Company Code
Vendors to be paid (and customers for refunds)
Posting and document date for open transaction items that must be included in the
proposal list
Defining the bank from which the payments will be made
Payment methods that are permitted (e.g. Cheque, EFT)
Currency
During the payment run accounting document is generated clearing the vendor open item.
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Manual Payment
With manual payments you can print cheques without running automatic payment program.
There are two ways of doing this:
You can print a cheque for a payment already posted. This may be necessary if a
cheque is damaged during printing.
Cheque is prepared manually i.e. outside the SAP system and then cheque details are
updated to the payment document which updates the cheque register.
3.2.2.3. Vendor Foreign Payment

Procurement of Import Materials and rising of PO in Foreign currency and payment at
differential exchange rate. In case of Import materials, Purchase orders will be processed
and sent to the selected vendor with all terms and conditions. At the time of invoice
verification for Customs and paying the relevant duties. Then capturing excise invoice &
posting the excise invoice will be performed.
If goods received are as per the PO order quantity, Goods receipt will be posted with
reference to purchase order when material is physically received. Invoice verification will be
processed with reference to goods receipt and vendor invoice receipt as per the payment
terms stated in purchase order. Vendor payment will be processed with reference invoice
verification posted in Materials Management by Financial Accounting. For such an IR, the
exchange rate is picked up from the PO in which we have defined a fixed exchange rate.
All import purchase orders are to be raised in foreign currency but the transactions are to be
recorded in KES. Once the PO is raised, the finance department will book a forward contract
for the remittance to be made against the purchases for due date.
Bank/Cash Receipt from Vendor:
3.2.2.4. Bank Guarantees

System should allow Bank guarantees document entry against vendor as a noted
item.
Bank guarantees are statistical information

Bank guarantee are recorded as special general ledger transactions.
FBL1N - Display/Change Line Items
Noted item is posted to the vendor with special gl indicator defined for Bank Guarantees.
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3.2.2.5. Subsequent Debit and Credit

A subsequent debit/credit changes the total invoice value of a purchase order item; the total
invoice quantity remains unchanged.
Subsequent debits or credits are flagged in the purchase order history
Subsequent Debit:
An invoice must be entered as a subsequent debit if a purchase order item has already
been invoiced and further costs are incurred. (For example, a vendor has inadvertently
invoiced at too low a price and then sends a second invoice for the difference.)
Accounting Entries will be for Subsequent Debit
Stock A/c or Price Difference A/c Dr

VAT A/c Dr (if applicable)
Vendor A/c Cr
If the stock is consumed Price difference account will come into picture.
Subsequent Credit:
Subsequent Credit is applicable if a purchase order item was invoiced at too high price and
it has received a credit memo. (For example, a vendor has inadvertently invoiced at too high
price and then sends a credit memo for the difference.)
Accounting Entries will be for Subsequent Credit
Vendor A/c Dr
Stock A/c or price difference Cr

VAT A/c Cr (if applicable)
3.2.2.6. Debit Note & Credit Note
Requirements/Expectations/Concerns on Debit/Credit Note Process
All the support/relevant documents will be submitted by purchase to generate the

debit/Credit note on the identified process like discounts on the qty purchase.
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Credit Memo:
A credit memo can be entered with reference to a purchase order or a goods receipt.
Purchase Dept/Accounts Dept enter a credit memo for a purchase order item when the
goods are returned to the vendor. First MIGO is to be posted for the return quantity and then
credit memo to be posted in MIRO for the return PO.
Accounting Entries will be for Credit Memo (returned goods)
Goods Receipt - MIGO
GR/IR A/c Dr
Inventory A/c Cr
Posted for the returned quantity, stock value & quantity is reduced.
Invoice Posting MIRO
Vendor A/c Dr
GR / IR A/c Cr
VAT Receivable A/c Cr
3.2.2.7. Adjustment / Clearing Process
Open items reflect unfinished transactions. For example, a Liability that has
not been settled remains in the Liability account as an open item until it is
settled.
The open items of an account can only be cleared once you post an identical
offsetting amount to the account. In other words, the balance of the items
assigned to each other must equal zero.
During clearing, the system enters a clearing document number and the
clearing date in these items.
Open items can only be cleared if they are posted to accounts that are
managed on an open item basis. Open item management is automatically set
for customer and vendor accounts. For GL accounts, however, you have to
set the open item management option in the master record.
Open item management would be set for the following GL accounts:

Cheque clearing accounts (bank clearing accounts).
Goods receipt/invoice receipt.
Other General Ledger Balance Sheet Account
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Open items of an account can be cleared manually using the Account Clearing function, or
they can be cleared automatically by the system. Automatic clearing is especially useful for
clearing accounts in the GL account area.
Users will clear open items from GL accounts by running the clearing
program. This program uses predefined criteria to group together open items
per account. If the balance of the group of open items equals zero in local or
foreign currency, the items are marked as cleared.
The clearing program is used to automatically clear open items based on
predefined criteria. Manual clearing of open items is therefore not usually
necessary.
Automatic clearing (i.e. clearing based on SAP-defined fields such as
assignment, amount, ref. field).
Manual clearing (i.e. matching of amount performed by users).
Within the general ledger module, account clearing shall be performed using
the following functions:
o Account clearing (ad hoc).
o Automatic clearing (part of closing activities).
o Post with clearing (during the course of posting a document).
3.2.3. Special Organizational considerations
Vendor Down Payment

BIDCORO has to pay, during their course of transactions, advance payments to the
vendors. Advance payments are known as down payments in SAP. Down payment request
can be created by the materials management department and the same can be viewed by
the accounts payable person. After checking the purchase order terms, the down payment is
made by the accounts payable person.
The system posts the down payment transaction as a special general ledger transaction in
the vendor account. Hence, it will not appear in the regular balance but only in special
general ledger balance. Once, the down payment is cleared against an invoice, the balance
is shifted from the special general ledger balance to the regular vendor account balance.
At the time of document entry, the appropriate special general ledger indicator needs to be
chosen.
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Figure: Flow diagram for vendor down payment
Vendor Payment Process
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Figure: Flow diagram for vendor payment process
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Creation of Vendor Groups

Recon Accounts
Spl, GL Indicators
Foreign currency valuation methods
Reco. Special G/L

A/C Description Spl.Ind A/C
14600100 Local capital goods creditors A 24400800
14600200 Local Trade Creditors A 24400800
14600300 Local Expense Creditors A 24400800

14600400 Local Service Creditors A 24400800
3.2.5. Data Migration considerations
3.2.6. Interface Considerations
EFT-Upload file to be generated using t.code: ZFI002/equivalent transaction.
3.2.7. Report requirements/Considerations
Accounts Payable Reporting and Account Management

This section covers ad hoc account enquiry and management functionality, as well as the
periodic reporting facilities that are provided by SAP and/or required by BIDCORO. SAP
provides many standard reports, account management transactions, and query/report
toolsets for accounts Payable. These include vendor evaluations, master data reports, due-
date analysis, payment history, aging reports, transaction, and open item listings.
The standard reports contain broad selection criteria and output options
Report Name Description Standard / Development
MIR5 Invoice Document List Standard

GL accounts line item GL accounts line item FBL3N
display display
Account balance display Account balance display FS10N
Vendor line item display Vendor line item display FBL1N
Due date analysis for Due date analysis for S_ALR_87012078
vendor open items vendor open items
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ACCOUNTS PAYABLE
Vendor Master 1 Create FK01
2 Change FK02
3 Display FK03
4 Block/unblock FK05
5 Mark for deletion FK06
6 Display Changes FK04
Document Entry 7 Invoice FB60
8 Credit memo FB65
Document 9 Invoice Parking FV60
Parking
10 Credit Memo Parking FV65
11 Post/delete FBV0
12 Change FBV2
13 Display FBV3
Document 14 Change FB02
15 Change line items FB09
16 Display FB03
17 Display changes FB04
18 Reset cleared items FBRA
Reverse 19 Individual reversal FB08
20 Mass reversal F.80
Logistics Invoice 21 Enter Invoice MIRO
Verification
22 Park Invoice MIR7
23 Display Invoice Document MIR4
24 Cancel Invoice document MR8M
25 Release Blocked Invoices MRBR
26 Invoices Overview MIR6
Vendor -Account 27 Display balances FK10N
28 Display/ Line Items FBL1N
29 Clear F-44
Outgoing 30 Post F-53
payment
31 Post + print forms F-58
32 Automatic Payment Program F110
33 Print payment forms FBZ5
Down payment 34 Down payment F-48
35 Clearing F-54
Automatic 36 Automatic Clearing F.13
clearing
Correspondence 37 Debit note and credit note printing F.61
38 Delete print request for debit and credit F.63
note
Carry forward/ 39 Balances F.07
receivables/
payables
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3.3. ASSET ACCOUNTING
3.3.1. Scope
The Fixed Asset module is an integrated asset management solution for additions, updating,
tracking, depreciation and purposes. Assets are depreciated periodically to arrive at their
current net value. Once an asset is capitalized, it can be transferred between locations, cost
centres. Assets can be removed from the Assets Ledger by disposing/scraping them.
3.3.2. Functions and Events (To-Be)
3.3.2.1. Asset Acquisition

For purchasing new Assets, PO is raised by three ways
a) Account Assigned If PO is Account Assigned, then on the preparation of GRN the

Asset is directly capitalized.
b) No Account Assignment If PO is not Account Assigned then on the preparation of

GRN Inventory Asset A/c is debited. Once the Asset is ready to use the Inventory
Asset A/c is transferred to the Asset A/c.
For the assets, which are not yet installed, an asset master is created as Capital work in
Progress. As and when the asset is installed, the balances under WIP asset will be
transferred to the final asset, for which an asset master record will be prepared under an
appropriate asset class.
3.3.2.2. Asset Capitalisation

All Asset purchases would be routed through Materials Management in the form of a
Purchase order. The Accounts section will create the Asset Master record before Purchase
Order is raised through MM Module. All Asset purchases in BIDCORO in the nature of Office
Equipment, Computer Equipment, Furniture and Fixtures and Vehicles will be routed
through Capital Work in Progress (CWIP) to make it capitalized.
During the construction phase, all the assets are initially booked to the assets under
construction account (capital works in progress Account).After the completion of the
construction and when the assets are put to use the assets under construction need to be
transferred to the assets account. This transfer of assets from assets under construction
to the assets is known as settlement in SAP. Before making the settlement, it is to be
clearly known, as to in which proportion the line items under assets under construction
are to be settled to the assets. Basing on this, the distribution rules are defined and then
assets can be settled.
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3.3.2.3. Periodic Processing
Depreciation Run
SAP gives a functionality of Depreciation Forecast Report wherein one can analyze the
Depreciation of the existing Asset over a period of years.
The planned depreciation is posted to the general ledger at the time of the monthly
depreciation posting run. This posting run uses a batch input session to post the planned
depreciation for each posting level for each individual asset.
The depreciation posting cycle is determined by entering the length of time (in posting
periods) between two depreciation-posting runs. This means that a setting of 1 indicates
monthly posting, 3 means quarterly posting, 6 means semi-annual, and 12 means annual
(for a fiscal year version with 12 posting periods). When a depreciation-posting run is
started, one has to enter the period for which one wants it to be carried out.
3.3.2.4. Asset Transfer

Asset transfer within a company code is made mainly for 2 reasons
a) Wrong Asset Class: In case, the asset was created under a wrong asset class
then a new asset has to be created in a New Asset Class and an Intra Company
Transfer will to be executed. During the Asset transfer, SAP transfers Acquisition
Value, Accumulated Depreciation as of the day of the Transfer from the Old Asset to
the New Asset. Depreciation will be prospectively calculated with the new rate.
However we can use the transaction for unplanned depreciation to make an

unplanned posting of previous depreciation.
b) Change in Location (profit centre): In case of a change in location (profit centre)

of the asset, the master record is to be changed.
3.3.2.5. Asset Scrapping / Retirement

Management approval is necessary for retirement of assets. Retirement can be through a
customer, either with revenue or without revenue. It may be for net book value as well. The
customer may / may not exist in the accounts receivable module.
In case of retirement with revenue, the profit or loss on sale of assets is recorded
automatically by the system, even if it is partial or full retirement is made. In case of
retirement with net book value, no profit or loss sale of asset is triggered.
Asset retirement can be done in many ways and if the asset is retired with revenue and with
customer, then a customer liability is created while retiring the asset and the system will take
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care of all the background processing like calculating the net book value, loss/gain on sale
of asset etc.,
Asset retirement can happen by way of sale of an asset to a customer, sale without
customer, debiting customer account for loss of asset and also by way of scrapping. In case
of scrapping, the asset scrap will be without customer and this can also be with and without
revenue.
The asset retirement consists of any of the following:
Sale of asset with customer: - An asset is sold, resulting in revenue being
earned. The sale is posted with a customer
Without customer: - An asset is sold, resulting in revenue being earned. The
sale is posted against a clearing account (no customer record needs to be
maintained)
Scrapping of an asset: - An asset has to be scrapped, with no revenue being
earned
Inter-unit transfer from one Profit Center to another Profit Center or from one
location to other location
Posting revenue / loss on asset sale or scrapping of asset
Profit or loss on disposal will be automatically calculated and posted to the
relevant general ledger accounts.
Retirement may involve a single, multiple or partial asset(s).
For partial retirement of an asset, the value, quantity or percentage of an
asset can be entered when posting the retirement.
The profit or loss from retirement will be assigned to separate general ledger
accounts.
The accounting treatment for a retirement without revenue is as follows:
Accumulated Depreciation Dr
Profit / Loss on Sale of Asset
Asset Cr
The accounting treatment for retirement with revenue (without customer) is as follows:
Clearing Revenue From Asset Sale / Transfer Dr

Asset a/c Cr
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The accounting treatment for retirement with revenue (with customer) is as follows:
Customer A/c Dr
Asset a/c Cr
The proceeds for disposals with revenue without customer will be recorded against an Asset
Disposal Clearing account.
3.3.3. Business Model

Create Asset Master:
Figure: Flow diagram for creation of asset master
Page 67 of 73
SAP Project
Settlement of Assets Under Construction
: Flow diagram for settlement of assets under construction
Page 68 of 73
SAP Project
Retirement of Assets
Figure: Flow diagram for retirement of assets
Page 69 of 73
SAP Project
Depreciation posting process
Start
Review Run Batch

Planned Perform Batch Yes Recalculation
Depreciation Recalculation? Program
No
Perform
Depreciation
Run in Test
Mode
Review Results Run

and Error Log Amend Depreciation in
No
Items? Actual Mode
Yes
Correct/Amend Review and

Entries Release Batch,
Post-process
Errors
Run Reports
and Review
Postings
End
Page 70 of 73
SAP Project
3.3.4. Description of Improvements

1. Manage the history of Assets from their origin to their disposal/scrapping
2. Proper capitalisation of all the incidental expenses till the time of capitalisation.
3. Cost centre wise Assets detail will be available
4. Capitalisation of asset can be done through AUC (Asset under construction) wherever
relevant.
5. From AUC part capitalisation is possible with the balance written off as expense in a
cost centre.
3.3.5. Description of Functional deficits (Gaps)

None
3.3.6. Approaches to cover the gaps

None

Creation of Asset Classes
Account Determinations
Screen Layouts & Rules
Asset Depreciation
Depreciation Keys
Different depreciation rates are configured using different depreciation keys and they will be
attached with the asset masters at the time of creating an asset master.
In BIDCORO, One depreciation area will be delivering as follows:
Dep. Description
Area
01 Book Depreciation.
15 Depreciation for Tax Purpose
For BIDCORO there would be monthly posting for Book Depreciation. A batch input session
will be run called depreciation run for posting of planned depreciation using periodic
execution functionality. The unplanned depreciation will be calculated manually and posted
through System. The required posting documents are created once this is executed, this will
be execute as a background job every period end to post the depreciation postings to the
general ledger.
Page 71 of 73
SAP Project
Asset Classes & Account Determination
Asset Classes are used to classify the Assets under various heads for Legal and reporting
purposes. Asset Classes facilitate creation of individual Asset Masters with certain default
values and characteristics that may, if required, be changed at individual asset master level.
Account Determination forms the link between Asset Classes in Asset Accounting Module
and FI module for integration with GL. Various GL Accounts for APC, Depreciation, and
Asset Disposal etc. are assigned in various depreciation areas through account
determination.
Each asset class is maintained with different depreciation areas as required by BIDCORO.
Once the asset classes are defined different asset master records will be created under the
asset classes. Each class will be assigned a different number range to give different
numbers to assets.
Details Asset Class Dep Rate

Free hold Land Z010 Nil
Lease hold Land Z020 Z06/UFL
Buildings, Road & Compound Z030 2.50%
Furniture & Fixtures Z040 12.50%
Office Automation Z050 30%
Heavy Vehicles Z060 37.50%
Light Vehicles Z070 25%
Plant & Machinery Z080 12.50%
Intangible Assets Z110 NIL
Investment Property Z090 2.50%
Capital Work in Progress Z100 NIL
Page 72 of 73
SAP Project
Asset Accounting
Asset Master 1 Create Asset AS01
2 Change Asset As02
3 Display Asset As03
4 Asset Explorer AWOIN
5 Lock the Asset AS05
6 Delete asset AS06
7 Asset acquisition F-90
8 Asset acquisition thru MM MIRO
9 Capex Budgeting thru Internal Order KO22
10 Asset Transfer ABUMN
11 Retirement with customer and revenue F-92
12 Asset Scrapping ABAVN
13 AUC-Settlement rule KOB5
14 AUC-Order Settlement KO88
15 Depreciation Run AFAB
16 Fiscal Year change AJRW
17 Document Display AB03
18 Document Change AB02
19 Reverse AUC settlement document KO88
20 Reverse Asset Document AB08
21 Asset Document display AB03
Page 73 of 73

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SAP Project

SAP ERP Implementation

SEAL Infotech Private Limited

SAP ERP ECC 6.0

BIDCORO Africa Limited

APPROVAL D OCUMENT CONTROL :

FI Consultant, SEAL Srinivas Yakkala

Revision Date Name Title

The information contained herein is the property of M/s BIDCORO Africa

The purpose of this document is to capture the overall Financial Accounting

Through SAP Project Central Folder, E-Mail, Print

1. Core Team Member

SEAL Infotech Pvt. Ltd.,

3.1. GENERAL LEDGER ACCOUNTING.......................................................17

3.1.3.10. Employees Travel Advances & Settlement................................................34

1.1. Organizational Data

Definition and Meaning

The Company is used in SAP to aggregate/ consolidate the financial

Definitions at BIDCO Africa Limited

1.3. Company code

Definition and Meaning

The company code represents an organization unit. It gives structure to

The process of external reporting involves recording all relevant

It is a four character numeric key and is entered while posting business

Definitions at BIDCO Africa Limited

Company Code Description

1.4. Credit Control Area

Credit Control Area Description

1.5. Chart of Accounts

Definition and Meaning

A chart of accounts must be assigned to each company code. The chart of

Definitions at BIDCORO Africa Limited

Chart of Accounts"9000" is assigned to Company Code "8100".

Chart of Accounts Description

1.6. Chart of Depreciation

Definition and Meaning:

Definitions at BIDCORO Africa Limited

Chart of Depreciation Description

In SAP master data will be managed as follows:

2.1. General Ledger

Chart of accounts area

The following processing options are available in management of General

Field/Field Group Purpose

managed on an open item basis are marked

COA Group Description From TO

2.2. Profit Centre

Definition and Meaning

The operating results for an operating unit can be analysed by using

Definitions at BIDCORO Africa Limited.

Profit Center Description

2.3. Bank Master

Definition and Meaning

BIDCORO is currently operating with approximately around 6 House banks

Definitions at BIDCORO Africa Limited

2.4. Vendor Master

Definition and Meaning:

Each vendor master record is assigned to a GL (Reconciliation) account,

Similar classes of transactions related to vendors such as advances, can

Vendor Master Records are divided into three segments.

Vendors are generally classified as:

One time vendor:

Definitions at BIDCORO Africa Limited

Following special G/L Indicators be configured for BIDCORO Africa Limitd.