TB1100 EN Col96 FV A4 PDF

 Version 96
 Material number: 50116775
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 Welcome to the course on accounting for the sales and purchasing processes.
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 In this topic, we will cover some general accounting conventions and give examples of the
automatic journal entries that are created during the sales, purchasing, and inventory
processes. We will also talk about some financial settings that affect these automatic journal
entries.
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 Imagine that you are implementing SAP Business One at a new customer OEC Computers.
Your main contact is the OEC Computers accountant, Maria.
 Maria is very interested in the implementation and asks you about how SAP Business One
handles the financial accounting process.
 She wants to make sure she understands the big picture so she can report business results to
the company owners each period.
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 Let us discuss some financial basics.
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 Every business transaction is recorded in the company's books.
 This allows you:
 To manage your company effectively with the option of producing financial reports
 To report the business transactions to the authorities.
 Every business transaction results in a value exchange:
 A certain account increases value and another decreases value, resulting in the recording of
balancing debit side and credit side postings.
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 In previous topics we learned about the documents in the sales process and their
consequences on bookkeeping.
 To review this process let us try to answer the following question:
 In a standard sales process which documents affect the accounting system?
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 These are the documents in the sales process that create automatic journal entries and
therefore affect the accounting system: the delivery, the A/R invoice, the incoming payment
and the deposit. Note that the delivery only creates an accounting posting if you are using
perpetual inventory.
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 In SAP Business One, a journal entry is automatically posted for many documents during the
sales, purchasing and inventory processes.
 Now let us assume for a moment that we are in a non-perpetual inventory system in order to
keep our example simple. In that case, in our sales process example, the A/R Invoice
automatically creates the following journal entry:
 There is a debit to the customer account for the total price of the sale.
 There is a credit to the tax account for sales tax and a credit to the revenue account for the
sales price (excluding tax).
 Let us focus on the debit side. Each transaction registered for the customer affects the
customer account balance. Now let us look at the customer account in more detail.
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 This is an example of the customer account.
 The account balance represents the difference between the total debit transactions and the
total credit transactions recorded for that account.
 The transaction summary or the balance of a certain G/L account or business partner is the
initial information the accounting system can provide about the business.
 In the graphic, we see that the total debits are greater than the total credits, so the account has
a debit balance.
 Previously, we mentioned that in each journal entry a certain account increases value and
another decreases value, resulting in the recording of balancing debit side and credit side
postings.
 The effect on the account balance would be:
 Assets, Expenses, and Drawings accounts are generally in debit.
 Liability, Revenue, and Capital (Equity) accounts are generally in credit.
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 Here, we see the typical account balance of the different account types.
 For example, let us look at the value exchange for assets and liabilities.
 For assets:
 Debit transactions always increase the asset value.
 Credit transactions always decrease the asset value.
 For liabilities:
 Credit transactions always increase the liability.
 Debit transactions always decrease the liability.
 We will discuss the different account types in a later course.
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 In a typical A/R invoice, what is the effect of the debit and credit amounts on the involved
account balances?
 Once again we will make some assumptions to keep the example simple: Let us assume that
the customer is tax exempt and that this is a non-perpetual inventory system
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 The answer is that the two accounts increase their values.
 The customer account is considered an asset so any debit to this account increases the
account’s value.
 A credit to the revenue account, as we saw on the previous slide, increases the account’s
value.
 Note that you can preview the corresponding journal entry posting and the involved accounts
before you add a document that generates journal entry. You can do so by choosing the
Journal Entry Preview icon from the toolbar or by right click the document and choosing the
Journal Entry Preview option.
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 Next, we review the necessary financial settings and how they affect the journal entries that are
automatically posted by documents.
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 In the journal entries that are automatically posted by documents in SAP Business One, how
does the system “know” which accounts to use?
 The system knows which accounts to use because when you initialize SAP Business One, you
define default G/L accounts related to a specific business processes in the G/L Account
Determination window.
 In this window, you also define control accounts that link the business partner sub-ledger
accounts to the general ledger.
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 First let us review how accounts are determined for items used in business processes.
 As we mentioned, when you first implement SAP Business One you define default G/L
accounts to be used when transactions are created during the different business processes,
such as sales, purchasing and inventory.
 These default accounts are defined in the setup menu under the Administration module.
Under Setup you will find a section for Financials which includes the transaction for G/L
Account Determination.
 When items are used in the transactions, there are 2 options for account determination:
 In the traditional solution the system looks for the default accounts based on the account
determination set in the item master data.
 Starting at version 9.0, you can work with the advanced solution for account determination.
 The advanced solution provides a centralized matrix to determine rules for assigning G/L
accounts in journal entries according to a predefined (closed) list of criteria.
 Both options are based on the G/L Account Determination window.
 We will discuss these options in the Manage the Chart of Accounts topic.
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 In the G/L Account Determination window you also define the Control Accounts: Accounts
Receivable for the Sales process and Accounts Payable for the Purchasing process.
 A control account links the business partner sub-ledger accounts to the general ledger.
 You need to define a G/L account as a Control Account in the Chart of Accounts.
 Whenever you post a document to a business partner, the system automatically registers the
journal entry to:
 The Business Partner Master Data account balance, and
 The control account balance.
 You cannot post journal entries directly to a control account.
 In an A/R Invoice, for example, when the customer is debited the Accounts Receivable account
is also debited.
 This journal entry appears now in both accounts balances (the customer and the control
account).
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 Note, that the Business Partner Master Data balances do not appear in the Chart of Accounts.
Only the receivable and payable control accounts appear.
 The receivable and payable control accounts accumulate the customers’ and vendors’
transactions in their balances.
 Therefore, the Chart of Accounts presents the complete financial status of the company.
 The Financial Reports also show the full picture. For example, the balance sheet contains the
accounts receivable and accounts payable accounts.
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 We have learned how the system “knows” which accounts to use in automatic journal entries.
 This is done using the values defined in the G/L Account Determination window.
 But, how does the system “know” the value to be credited and debited in those automatic
journal entries? For example, in an automatic journal entry created by an A/R Invoice?
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 Let us refresh our memory with some of the topics we learned before. Here is a common
scenario of how prices are set in SAP Business One during the sales process:
 Note! In the following slides we assume that no special prices or discounts were defined for the
involved items and business partners.
 Our customer Star Trek Computers asks for an offer on 4 portable media players.
 Jean creates a sales quotation. She chooses the customer and then the item. The price per
unit appears in the quotation. How?
 The Item master data includes 3 optional prices for this item. Each one of them is
represented in a different price list.
 Star Trek Computers is a reseller customer and so his default price list as defined in his
master data record is the Reseller Price List.
 Therefore, in the Sales Quotation, the unit price for a portable media player is 110, the price
from the Resellers Price List.
 The sales person Jean enters quantity of 4.The total value of the quotation is 440 (assuming
there are no additional items in the quotation and that no discount, freight charges or tax
amounts are added).
 Star Trek Computers mails us a Sales Order based on the Sales Quotation.
 In SAP Business One, Jean copies the Sales Quotation to a Sales Order.
 2 days later Joe, the warehouse manager, dispatches the company truck with the weekly
deliveries, including 4 portable media players for Star Trek Computers.
 Later on the day, the accountant copies the Delivery to an A/R Invoice.
 Since no change was done to the price during the Copy To process, the Invoice’s total value is
440, and these are the Credit and Debit amounts in the automatic journal entry created by the
A/R Invoice.
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 In the Purchasing process a common scenario of how prices are set would be:
 Joe, the warehouse manager, issues a purchase order of 10 portable media players. He
chooses the vendor Coconut Devices and then the item - portable media player. The price per
unit appears in the Purchase Order. How?
 Since Coconut Devices is a vendor, his default price list as defined in his master data record
is the Purchasing Price List.
 Therefore, in the Purchase Order, the unit price for portable media player is 100, the price
from the Purchasing Price List for the portable media player item master data.
 Joe enters a quantity of 10. The total value of the Purchase Order is 1000 (assuming there are
no additional items in the Purchase Order and that no discount, freight charges or tax amounts
are added).
 Joe e-mails the Purchase Order to the vendor.
 Few days later Joe receives a delivery including 10 portable media players from Coconut
Devices.
 In SAP Business One, he copies the Purchase Order to a Goods Receipt PO.
 A week later, the Invoice from Coconut Devices arrives via mail and the accountant copies the
Goods Receipt PO to an A/P Invoice.
 Since no change was made to the price during the Copy To process, the A/P Invoice total
value is 1000, and these are the Credit and Debit amounts in the automatic journal entry
created by the A/P Invoice.
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 Let us go one step back, to the Goods Receipt PO that Joe entered based on the Delivery he
got from the vendor.
 Assuming the company runs perpetual inventory, an item cost value is being calculated
automatically in each stock transaction.
 More details on perpetual inventory are provided in a separate course.
 When Joe entered the Goods Receipt PO to SAP Business One, the Purchasing Price List
value (100 per unit) affected the unit price in the Goods Receipt PO and also the item cost
value.
 The item cost value is calculated automatically, behind the scenes, according to the valuation
method chosen for the item (Moving Average, FIFO, or Standard). This particular item was set
up as moving average, so based on the total number of items in stock and the purchase prices
previously paid, the calculated item cost value after the Goods Receipt PO was 90.
 Joe entered a quantity of 10 portable media players. Therefore, the total value of the journal
entry created by the Goods Receipt PO was 1000 and these are the Credit and Debit
amounts registered to the inventory default accounts.
 However, the value of the journal entry linked to the Delivery sent to the customer is 360. That
is, the quantity of 4 items multiplied by the item cost value at that moment (90).
 Remember that the total value of the Invoice based on that Delivery was 440. It was calculated
according to the Reseller Price List (110) that is defined as the default price list in the customer
master data record.
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Here are some key points to take away:
 The account balance represents the difference between the total debit transactions and the
total credit transactions recorded for that account.
 In each journal entry a certain account increases value and another decreases value and the
debit side and the credit side balance.
 Assets, Expenses, and Drawings accounts are generally in debit.
 Liability, Revenue, and Capital (Equity) accounts are generally in credit.
 In automatic journal entries the system ‘knows’ which accounts to use because you defined
default G/L accounts in the G/L Account Determination window. These default accounts
include control accounts that link the business partner sub-ledger accounts to the general
ledger.
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 The Business Partner Master Data balances are represented in the chart of accounts in the
receivable and payable control accounts that accumulate the customer and vendor
 In an A/R Invoice the system ‘knows’ the value to be credited and debited in the automatic
journal entry using the default price list as defined in the customer master record and the item
price in this price list.
 In a Delivery the system ‘knows’ the value to be credited and debited in the automatic journal
entry using the item cost value that is calculated automatically, behind the scenes, according to
the valuation method chosen for the item.
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Exercises
Unit: Accounting for Sales and Purchasing

Topic: G/L Account Determination and Control Accounts
At the conclusion of this exercise, you will be able to:

 Review and update the G/L Account Determination window.
 Check the Control Accounts: Accounts Receivable for the Sales
process and the Accounts Payable for the Purchasing process.
When you choose a pre-defined Chart of Accounts template, most of the

defaults are already defined in the G/L Account Determination window.
You can change them if required.
In the G/L Account Determination window you also define the Control
Accounts.
1-1 G/L Account Determination

1-1-1 Review the G/L Account Determination window.
Review the existing accounts defined in all four tabs. Each tab contains
the definitions for G/L accounts related to a specific business process:
Sales, Purchasing, General, and Inventory.
1-1-2 Define a default G/L account.
In the General tab, define a default G/L account for bank charges.
1-1-3 Check the account details.
Browse to the account you have just set as a default account and verify
that it is defined as a default account in the chart of accounts.
Tip: Accounts that you have defined in the G/L Account
Determination window are displayed in green in the Chart of Accounts.
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1-2 Control Accounts
1-2-1 Review the Accounts Receivable and the Accounts Payable control
accounts.
Under the Sales tab, in the G/L Account Determination window, review
the Accounts Receivable accounts (domestic and foreign) and under
the Purchasing tab review the Accounts Payable accounts (domestic
and foreign).
Tip: choose the button next to the Accounts Receivable/ Accounts
Payables field at the top, to define dedicated control accounts for Open
Debts and Down Payments. Otherwise, the system will use the regular
control accounts.
Browse to the Domestic Accounts Payable account and verify that it is
defined as a control account in the chart of accounts.
1-2-3 Check the automatic posting.
Browse to an existing A/P Invoice and open the automatic journal
entry. Check that the entry was registered to the Accounts Payable
control account.
Tip: add the control account column to the Journal Entry display and
focus on the vendor’s row.
1-2-4 Check the control account’s balance in the chart of accounts.
Browse to the Accounts Payable account in the chart of accounts.
Note! The receivable and payable control accounts accumulate the
customers and vendors’ transactions in their balances. This way, the
Chart of Accounts presents the complete financial status of the
company.
Review the account balance details for the current fiscal year.
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Solutions
Unit: Accounting for Sales and Purchasing

Topic: G/L Account Determination and Control Accounts
1-1 G/L Account Determination

1-1-1 Review the G/L Account Determination window.
Choose Administration  Setup  Financials  G/L Account
Determination G/L Account Determination.
Review the existing accounts defined in all four tabs.
Field Name or Data Type Values
Sales, Purchasing tabs The accounts under the

General tab
General, and Inventory tabs All accounts
1-1-2 Define a default G/L account.

In the General tab, define a default G/L account for Bank Charges.
Bank Charges Account <Press TAB in the Account

Code filed>
In the List of Accounts window, double click the Account Name

column header to sort the list, start typing Bank Charges. The Bank
Charges Paid account is highlighted, click Choose (or choose any
other account code).
Choose Update.
Choose the linking arrow next to the Bank Charges Account code.
Check that the account is displayed in green in the Chart of Accounts.
Tip: choose the account below it to see the green color of the default
Bank Charges Account.
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1-2 Control Accounts
1-2-1 Review the Accounts Receivable and the Accounts Payable control
accounts.
Choose Administration  Setup  Financials  G/L Account
Determination  G/L Account Determination.
Choose the Sales tab. Under the General tab:
Domestic Accounts Receivable <Click the linking arrow to

review the account>
Foreign Accounts Receivable <Click the linking arrow to

review the account>
Choose the Purchasing tab. Under the General tab:
Domestic Accounts Payable <Click the linking arrow to

review the account>
Foreign Accounts Payable <Click the linking arrow to

review the account>

Choose the Purchasing tab. Under the General tab:
Domestic Accounts Payable <Click the linking arrow in

the Account Code filed>
In the Chart of Accounts window, on the left, verify that the Control
account box is checked.
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1-2-3 Check the automatic posting.
Choose Purchasing – A/P  A/P Invoice
From the toolbar choose the Last Data Record icon.
Choose the Accounting tab.
Journal Remark <Choose the linking arrow>
In the Journal Entry window, from the toolbar, choose the From
Settings icon. Choose the Table Format tab. Check the Visible box in
the Control Acct row.
Choose OK.
In the vendor’s row, check the control account column.
1-2-4 Check the control account’s balance in the chart of accounts.
In the journal entry of the A/P Invoice, in the vendor’s row, choose the
linking arrow in the control account column to open the Chart of
Accounts window.
Balance <Choose the linking arrow>
In the Account Balance window, ensure that the dates in the From and
To fields present the current fiscal year and review the different journal
entries.
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 Welcome to the handling payments topic.
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 After completing this topic, you will be able to:
 List the steps of the payment process and perform them in SAP Business One including:
Incoming Payments, Outgoing Payments, Deposits and the Payment Wizard.
 Explain the consequences of each step on the involved G/L accounts.
 Adjust the appropriate payment scenario to the customer needs and localization according
to decisions made together with client accountant.
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 First, let us look at a typical manual payment process:
 The customers pay their debts, that is open A/R Invoices, according to agreed payment terms:
Cash Basic, Installments, Net 30, etc.
 In our business example, Maria, the accountant at OEC Computers, deals with incoming
payments every afternoon.
 She views the company bank account on-line to see the amount of bank transfer Incoming
Payments received from customers.
 In SAP Business One, she checks the credit card accounts (Visa and Master Card) to see the
amount of credit card Incoming Payments issued in the store point of sale and in the customer
service center during the day.
 Then, Maria enters a Credit Card Deposit in SAP Business One to record the payments Visa
and Master Card transferred to the company bank account.
 Note that in this business example we focus on the manual payments process.
 Remember, that you have the Payment Wizard and the Bank Statements Processing options
that enable you to create incoming and outgoing payments automatically and semi-
automatically, depending on your localization.
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 This topic covers both incoming and outgoing payments. We will begin with incoming
payments and look at the payment means, the structure of a payment document and the
working methods, and deposits.
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 There are four payment means options for incoming payments. We will first look at the three
payment means that typically have a two-step process: cash, check and credit card.
 Regardless of the payment means, when you issue a full Incoming Payment the open invoice
on the customer account is closed.
 Cash, check, and credit card payments are posted to a clearing or temporary account.
 Note that the term “clearing” is used in the US localization. In other localizations the term could
be: “Temporary Account” or “Suspense Account”. The clearing accounts must be predefined
during the setup.
 In the example shown we see an Incoming Payment on the left for 105 that generates the
following automatic journal entry:
 Debit to a clearing account - cash on hand/ credit card/ checks received.
 Credit to customer account.
- External tools like point of sale system and authorization of credit card transactions can
be integrated into the standard process.
 The system retrieves the cash and the checks received accounts from the G/L Account
Determination window.
 The credit card account is retrieved from the G/L Account field in the credit cards definition
window under the banking setup in the Administration module.
 On the right, we see the second posting from a Deposit document used to transfer the funds
from the clearing account to the house bank account and clear the clearing account.
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 Another option for the payment means is the bank transfer.
 When a customer pays using the Bank Transfer payment means the transaction does not
involve a clearing account. The customer transfers the payment directly to your house bank.
 Here we see the debit to the house bank account, and the credit to the customer account.
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 The windows for incoming and outgoing payments are almost identical. The window is divided
into the following parts:
 The document header area (on the top)
 The area for selecting open invoices, credit memos and journal entries, and for assigning
the payment amounts (in the middle).
 The area for entering remarks and displaying totals (at the bottom)
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 In the middle area, you select open transactions for payment from the table by using the
checkbox in the Selected column.
 The system offers you tools to quickly identify the nature of the documents displayed and to aid
in your selection.
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 An asterisk (*) after the invoice date indicates that the invoice is currently due. That is, the
invoice due date is earlier than or equal to the current date.
 The cash discount percentage displays the rate of the cash discount defined for the business
partner, depends on the incoming payment date and the invoice date. You can change it if
required.
 The Total Payment column, displays the amount that is outstanding on an invoice. The system
proposes the balance due as the amount to be paid. Change this amount if the payment is only
for part of the invoice amount.
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 The document type column tells you the origin of each line. For example IN for invoice, CN for
credit memo and JE for journal entry.
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 Using Form Settings, you can choose to display the BP Reference Number indicator in the
table. This allows you to base the payment on the vendor’s invoice number rather than your
own internal document number when you issue an outgoing payment.
 You can choose whether to have the system display all transactions in the table or to restrict
the display to invoices and credit memos. The setting to display all transaction by default is
found in the document settings for incoming and outgoing payments.
 In case you want to document a payment that is not based on an invoice. For example,
payment in advance, choose the Payment on Account option.
 In the presented example, the Total Amount Due includes the payment on account and the total
payment amount of the open transactions from the table.
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 After you determine the payment amount, you must specify the payment means. You can
select one of the following payment means: Check, Bank Transfer, Credit Card, or Cash.
 In some countries, you can also use the Bill of Exchange payment mean.
 Choose the Payment Means icon in the toolbar to open the Payment Means window.
 In most cases, the payer pays the amount in full using one means of payment. However, it is
possible to split the amount among several means of payment. The system takes the details on
the means of payment for incoming payments from the customer master record.
 When you post a payment, the system reconciles the payment with the selected invoices, and
closes the transactions. If the payment was posted as a Payment on Account, the invoices and
the payment stay open. If a partial payment was made, the system adjusts the Balance Due
appropriately.
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 If you take cash from your cash register or checks from your check drawer and bring them to
your bank, you can use the Deposit transaction to post this transfer.
 In this graphic we see the process for cash payments. The incoming payment credits the
customer account and debits the cash on hand account. When the deposit is made, the cash
deposit is credited and the bank account is debited.
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 A deposit of checks is similar.
 The incoming payment credits the customer account and debits the checks received account.
When the deposit is made, the checks received account is credited and the bank account is
debited.
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 SAP Business One supports various scenarios of cancelling payments, deposits and checks.
 For example:
 In case you enter a wrong payment or deposit,
 In situations where a payment is cancelled, or
 In case you need to cancel a payment or deposit after the check related to a payment was
already deposited.
 Note that starting at 9.0 version, you can cancel one deposited check out of a deposit with
multiple checks.
 For more details on how to cancel payments, deposits and checks refer to the Online Help.
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 Next, we will discuss the outgoing payment option that completes the purchasing process. We
will also deal with the payment wizard.
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 Working with outgoing payments is similar to incoming payments, except of course that you
pay money instead of receiving money.
 When you create an outgoing payment:
 There is a debit to the vendor account,
 And a credit to the bank account
 Unlike incoming payments, typically the process of manual outgoing payments does not
involve clearing or temporary accounts for credit cards, checks and bank transfers. Instead,
the credit posting is done directly on the bank account.
 If you wish to use a clearing or temporary account, an interim account can be manually
inserted in the G/L account field in the Payment Means window. Then, when the payment is
reduced from the bank, a manual entry should be created to debit the interim account and
credit the bank account.
 Additionally, the payment wizard can be used to automatically generate payments against a
clearing account if you define one in the House Bank Accounts – Setup window.
 If you want to set the system to use clearing accounts automatically, you can use the Bank
Statement Processing functionality (if it is available in your localization). This functionality can
be set up to automatically post the transfer between the clearing and bank accounts.
The same is true for the Cash and Bank add-on which is relevant for some localizations. Note
that Cash and Bank add-on is not available if the Bank Statement Processing functionality has
been switched on.
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 The Payment Wizard enables you to create outgoing and incoming payments in batches for
bank transfers, checks and bills of exchange. The payments are created according to your
selection criteria and payment methods.
 The Payment Wizard creates:
 Incoming bank transfer payments, and
 Outgoing checks and bank transfer payments
 Payment Wizard runs cover A/P and A/R documents and transactions that are not fully paid,
credited, or reconciled. The runs also cover payments on account that are not allocated or
reconciled to specific transactions.
 If the created payments are bank transfer payments or direct debit payments, the Payment
Wizard creates payment files in the correct country-specific format.
 There is also an option for issuing a Payment Order Run that creates a bank file, does not
create any journal entry and leaves the invoices open. The invoices will be closed after getting
the bank confirmation.
 This feature is supported by 2 reports:
 Payment Orders Report by Business Partner, and
 Payment Orders Report by Payment Run
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 In the Payment Wizard, payments are created according to your selection criteria and
payment methods.
 This graphic shows the steps in the Payment Wizard.
 First, each run of the payment wizard is identified by a payment run name and the date of the
payment run.
 Then you specify several selection criteria as follows:
 General parameters, such as the date of the next planned payment run, type (outgoing or
incoming), payment means (check or bank transfer), and the document series used to
create the payment documents.
 The business partners that the system checks for invoices due. Including expanded
selection criteria.
 Selection criteria for the documents that the system includes, such as date ranges.
 And lastly, the payment methods to be used in the payment run.
 Based on these selection criteria the system creates a recommendation report or a list of
suggested payments:
• You can accept or reject the recommendations.
• Using the Add Manual Row button, you can create a payment document or a payment
order row between a house bank account and a business partner or a target account
without referencing any documents in SAP Business One.
• The button Non-Included Transactions creates a list of all open items that could not be
included in the payment run.
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 At the Save Options step, you can:
• Save the selection criteria without the recommendation report. This option does not reserve
the selected open transactions for this payment run. You can still clear the transactions either
using the incoming or outgoing payment documents or using a new payment run.
• The second option is to save the recommendations and proceed at a later date. This
reserves the selected open transactions for this payment run only, which means that open
transactions saved by this option cannot be cleared using the incoming or outgoing payment
documents or a new payment run.
• In order to delete a recommended payment run, in the first step of the payment wizard, select
the payment run, right-click and choose Cancel.
• There is also an option for issuing a Payment Order Run that creates a bank file, does not
create any journal entry and leaves the invoices open. The invoices will be closed after
getting the bank confirmation.
• When getting the bank confirmation you can load the saved payment run, execute the
payments and close the invoices.
• And using the last option you can simply execute the payments.
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 When you execute the payments, the system automatically creates the payment documents for
your accepted recommendations.
 A payment usually consolidates invoices for a business partner, unless you specify otherwise
in the business partner master. For example, you can choose “single payment” to create one
payment for each invoice for that business partner.
 If the created payments are bank transfer payments or direct debit payments, the Payment
Wizard creates the payment files in the correct country-specific format. If you need to create or
adapt file formats you can use the Electronic File Manager. This SAP Business One add-on is
a graphical tool that lets you define and modify incoming bank statement formats.
 If the created payments are check payments, they can print directly from the system. After the
check is printed, the system assigns the check numbers. Once the process is complete, use
the Check number confirmation option in the Banking module to confirm the numbers
assigned.
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 It is very important to define payment methods when configuring the banking setup in the
Administration module. This data is used by default in every payment run.
 With the payment method, you control the entire payment process.
 In the definition of a payment method, you define the following:
 First, the type of payment and payment means: for outgoing payments: check or bank
transfer, for incoming: only bank transfer.
 Second, the house bank and the bank account that should usually receive or issue the
payment made with this payment method. If the company works with additional house bank,
define a payment method for each bank or branch.
 Third, validation checks that the system is to carry out before using this payment method,
as well as amount restrictions.
 And lastly, postings in relation to G/L interim accounts.
 Note! You can define a payment method as inactive by deselecting the Active box. This
method will not be included in the payment run.
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 All incoming/ outgoing payment methods defined in SAP Business One appear in the master
records of the business partners, under the Payment Run tab.
 You must specify which payment methods you want to use with each business partner. To
do this, select the Include box for the preferred payment method.
• Note that you might need to scroll to the right to view the Include column.
 You can set a default payment method that will be assigned automatically to new business
partners on the BP tab in General Settings.
 In the master record, you can also set one method as the default payment method to be used
in all documents for this business partner.
 From the payment methods included in the business partners master records, the system
automatically chooses one, based on the settings in the payment run. If you want to use a
specific payment method for a certain invoice, you can also directly enter the payment
method in the invoice itself.
 Note! To use the payment wizard, make sure you have also set up banks and house bank
accounts:
 You can define the banks with which your company works with in the banking setup area
in the Administration module.
 You can define more than one branch or account as house banks in SAP Business One.
This is done in the House Banks Accounts window in the banking setup area in the
Administration module.
 In the vendor business partner master data, under the Payment Terms tab, define the
business partner bank details. This information will be used for payments created by the
payment wizard.
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 Here are some key points to take away:
 In incoming payments, cash, check, and credit card payments are usually posted to a
clearing or temporary account.
 A Deposit document must be processed in order to transfer the funds from the clearing account
to the house bank account and clear the clearing account.
 When a customer pays using the Bank Transfer payment means, the transaction does not
involve a clearing account. The customer transfers the payment directly to your house bank.
 In a payment document, an asterisk (*) after the invoice date indicates that the invoice is
currently due. That is, the invoice due date is earlier than or equal to the current date.
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 In outgoing payments typically the process does not involve clearing or temporary accounts.
Instead, the credit posting is done directly on the bank account.
 If you wish to use a clearing or temporary account in outgoing payments, you can do this in
three ways. You can manually insert an interim account in the G/L account field in the Payment
Means window. You can use the payment wizard to automatically generate payments against
a clearing account. Or, if it is available in your localization, you can use the Bank Statement
Processing functionality.
 The Payment Wizard creates payments in batches for incoming bank transfer payments, and
outgoing checks and bank transfer payments.
 In the payment wizard there is also an option for issuing a Payment Order Run that creates a
bank file, does not create any journal entry and leaves the invoices open.
 With the payment method, you control the payment wizard process.
 In the master records of each business partner, you specify which payment methods you want
to use for the business partner and one default payment method to be used in all documents
for this business partner.
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Exercises
Unit: Banking
Topic: Incoming Payments

 Post incoming payments manually using different payment means
You can use manual payments to post payments for a single customer or
vendor.
1-1 Incoming Payment (using cash payment means)

1-1-1 Create an A/R Invoice.
Create an A/R invoice for any domestic customer, for example,
C20000. To make sure that discount is not applied for prompt payment,
change the Due Date and select a date that is over one month in the
past (this is for the exercise only). Ignore the system message about the
Due Date field. Leave the Posting Date as today.
Select any item and add the invoice.
1-1-2 Post an incoming cash payment.
The customer pays the invoice in cash. Post an incoming payment
using the cash payment means.
1-1-3 Check the Posting.
Check the journal entry posted by the payment.
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1-2 Incoming Payment with Cash Discount (using check payment means)
1-2-1 Create an A/R Invoice with Cash Discount
Create an A/R invoice for any domestic customer. Post this invoice
with a payment term that allows cash discount.
Tip: To check the payment terms for a customer, click the orange
navigation arrow on the Payment Terms field. If the Cash Discount
field is blank, select a cash discount from the dropdown list. To see the
terms for the cash discount, click the orange navigation arrow.
1-2-2 Post an incoming check payment.
The customer pays the invoice amount less the discount using a check.
Post the payment using the check payment means.
1-2-3- Check the Posting.
Check the journal entry to see if the cash discount was applied.
1-3 Partial Incoming Payment (using cash payment means)

The customer pays part of his debt on an open A/R Invoice.
1-3-1 Create an A/R Invoice
Create an A/R invoice for any domestic customer, for example,
C20000. Change the Due Date and select a date that is over one month
in the past. Ignore the system message about the Due Date field. Leave
the Posting Date as today.
Select any item and add the invoice.
1-3-2- Post partial incoming payment
The customer has cash flow problems and cannot pay the invoice in
full. Select the invoice and post an incoming payment with cash
payment means for part of the invoice amount.
1-3-3 Post an incoming cash payment for the remaining invoice sum
The customer pays the remaining sum of the invoice in cash. Select the
invoice and post an incoming payment. Tip: Use CTRL+B to enter the
remaining balance in the payment means window.
1-3-4 Check the customer Account Balance
Check the customer’s account balance to see if the invoice has been
completely reconciled.
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Solutions
Unit: Banking
Topic: Incoming Payments
1-1 Incoming Payment (using cash payment means)

Choose Sales – A/R  A/R Invoice.
Posting Date <Today's date>
Due Date < Past date >
Post this invoice to any domestic customer with any item.

Ignore the system message about the due date.
1-1-2 Post incoming cash payment.
Choose Banking  Incoming Payments  Incoming Payments.
Code <Code of the customer you

used in the previous step>
Select the open invoice you posted in the previous step.

Choose Goto  Payment Means, or choose the Payment Means icon
from the menu bar. You can also right click and choose the Payment
Means option.
Choose the Cash tab.
Click in the Total field.
Select CTRL + B to copy the payment amount to the Total field. Or
right click the field and choose the Copy Balance Due option.
Choose OK.
Choose Add and confirm your entries.
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Tip:
 To post cash payments for one time customers who do not have a
master data record, you can set up a dummy business partner.
Check customer C99999 in the training database.
 Note that the default cash clearing account appears automatically
in the Payment Means window. You can choose a different G/L
account if necessary.
Open the incoming payment document that you just created and
navigate into the journal entry through the Transaction No. field.
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1-2 Incoming Payment with Cash Discount (using check payment means)
1-2-1 Create an A/R Invoice with Cash Discount
Choose any domestic customer
Select any item (from the Contents tab).

Choose the Accounting tab.
Check if the default payment term allows discounts. Tip: To check the
payment terms for a customer, click the orange navigation arrow on the
Payment Terms field. If the Cash Discount Name field is blank, select a
cash discount from the dropdown list. To see the terms for the cash
discount, click the orange navigation arrow.
Approve the system message. Choose Update.
Choose OK, then Add.
1-2-2 Post an incoming check payment.
The customer pays the invoice amount less discount using a check.


Choose Goto  Payment Means.
Choose the Check tab.
Press Tab to move to the Amount field in the row.
Select CTRL + B to copy the payment amount to the Amount field.
Choose OK.
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Tip:
 The default check clearing account appears automatically in the
Payment Means window, at the top.
 If the customer bank details were defined in the customer master
data, under the Payment Terms tab, it will appear as the default
check details here.
Open the payment document that you just created and navigate into the
journal entry through the Transaction No. field. Check the automatic
cash discount posting.
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1-3 Partial Incoming Payment (using cash payment means)
The customer pays part of his debt on an open A/R Invoice.
Due Date <Past date >
Post this invoice to any domestic customer with any item.

Ignore the system message about the due date.
1-3-2 Post partial incoming payment
Post a partial incoming payment paid by cash by your customer.


Click in the Total Payment field of the selected open item end enter an
amount less than displayed.
Note that the Balance Due field displays the reduced amount.
Select CTRL + B to copy the payment amount to the Total field.
Choose OK.
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1-3-3 Post an incoming cash payment for the remaining invoice sum
Let us say that a few days have passed and the customer pays the
remaining sum of the invoice in cash.
Open an incoming payment document: Choose Banking  Incoming
Payments  Incoming Payments.

Select the open invoice you posted the partial payment in the previous
step.
Note that the Balance Due field displays the open amount of the
invoice. We leave the Total Payment amount as is since the customer
pays the entire debt on account of this invoice.
Select CTRL + B to copy the remaining payment amount to the Total
field.
Choose OK.
1-3-4 Check the customer Account Balance
Open the incoming payment document that you just created.
Choose the orange arrow to the left of the business partner code. This
opens the business partner master data.
Choose the orange arrow to the left of the account balance amount.
Select the check box Display Unreconciled Trans. Only. Make sure the
invoice and the two partial payments are not displayed.
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Exercises
Unit: Banking
Topic: Cash and Check Deposits

 Post a cash deposit
 Post a check deposit
You transfer money from your cash register to your bank account. You
also deposit the checks received from your customers to your bank
account. This has to be reflected and controlled in the accounting system.
2-1 Post cash deposit.

You have 2000 in your cash on hand (or the petty cash) which you received as
cash payments. You pay this into your bank. Post this transaction as a deposit.
2-2 Post checks deposit.

You have a check received from one of your customers. Post this transaction as
a deposit.
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Solutions
Unit: Banking
Topic: Cash and Check Deposits
2-1 Post cash deposit.

Choose Banking  Deposits  Deposit
Note that the default cash clearing account appears automatically as the account
you deposit money from.
The balance of this account appears too. This is a debit amount since you
deposit money from an account that holds some amount.
You can choose different Cash Account if you deposit money from another
account.
G/L Account (Header) <select the house bank account to which you
deposit the cash>
G/L Account (Cash Tab) <Account number of your cash on hand account>
Amount 2000
Choose Add.
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2-2 Post checks deposit.
Choose Banking  Deposits  Deposit
Choose the Checks tab.
Note that Cash Checks, the checks which have a Due Date that is equal or until
today, and that are not deposited yet appear in the checks table.
G/L Account <select the house bank account to which you

deposit the checks>
Checks Select the check you received from your

customers in the Incoming Payment exercise.
Tip: you can choose multiple checks in a deposit form using CTRL + Click or
Shift + Click.
Choose Add.
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Exercises
Unit: Banking
Topic: Payment Wizard

 Use the payment wizard
To efficiently process multiple payments for multiple business partners,

use the payment wizard.
3-1 Outgoing Payment with Payment System – Bank Transfer

3-1-1 Prepare Vendor Master Record – Bank Transfer.
Open vendor V10000 and ensure that the payment term is – Cash
Basic - and that the Outgoing Bank Transfers (Payment Method
Code = Outgoing BT) payment method is available.
Set this payment method as default for this vendor.
Tip: To check the payment term, open the business partner master
record and choose the Payment Terms tab. To check the payment
method, choose the Payment Run tab.
Make sure that the business partner bank account in the vendor master
record is located in the same country as the business partner.
3-1-2 Create A/P Invoice with past Due Date.
Create an A/P invoice for the vendor. To make sure that discount is not
applied for prompt payment, change the Due Date and select a date that
is over one month in the past. Set the Posting Date as today.
Add the invoice and ignore the warning messages.
3-1-3 Use the payment wizard.
Use the payment wizard to pay your vendor liabilities by bank transfer.
Assume that you run the payment wizard once per week.
During the wizard steps, add a payment to the same vendor.
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Solutions
Unit: Banking
Topic: Payment Wizard
3-1 Outgoing Payment with Payment Wizard – Bank Transfer

3-1-1 Prepare Vendor Master Record – Bank Transfer.
Open vendor V10000 and ensure that the – Cash Basic - payment term
is entered and that the Outgoing Bank Transfers (Payment Method
Code = Outgoing BT) payment method is available.
Choose Business Partners  Business Partner Master Data.
Select vendor V10000.
Choose the Payment Terms tab.
Enter – Cash Basic – in the Payment Terms field.
Make sure that the business partner bank account in the vendor master
record is located in the same country as the business partner.
Choose the Payment Run tab.
Include the Outgoing BT payment method. Make sure that the Include
and Active boxes are checked.
Then select this method and choose Set as Default.
3-1-2 Create A/P Invoice with past Due Date.
Create an A/P invoice for vendor V10000 whose due date is one month
past. You can post this invoice into the current posting period and just
manually change the due date. Ignore the warnings that will come up.
Choose Purchasing – A/P  A/P Invoice.
Vendor V10000
Due Date <Today’s date minus 1 month>
Post this invoice to the vendor with any item.
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3-1-3 Use the payment wizard.
Use the payment wizard to pay your vendor liabilities by bank transfer.
Assume that you run the payment wizard once per week.
Choose Banking  Payment Wizard.
Choose Next.
Select Start New Payment Run.
Payment Run Date <Today’s date plus seven days>
Select Outgoing.
Select Bank Transfer.
In the Next Payment Run Date enter date a week from today.
Choose Next.
In the Code From and To fields enter vendor V10000.
Choose Add To List.
Choose Next.
Due Date…To <Today’s date plus two weeks >
Choose Next.
Select the payment method Outgoing BT.
Choose Next. The system displays the recommendation report.
Select the payments that you want to generate.
Choose the Add Manual Row button.
Choose the same vendor V10000 and enter a payment amount.
Choose OK.
Choose Next.
Choose Execute Payment Run.
Choose Next.
A window appears that states The Payment Wizard has been executed
successfully.
Choose OK.
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Check if the system has correctly created the payment documents.
Choose: Banking  Outgoing Payments  Outgoing Payments.
Navigate to the last two data records. The indicator Created by
Payment Wizard is set in the outgoing payment document.
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 Welcome to the Chart of Accounts topic.
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 In this session, we will explore how to set up a chart of accounts adapted to the company type.
We will discuss the chart of accounts structure and the effect of standard processes on the
Chart of Accounts. We will look at how you manage the chart of accounts. And discuss the
options for defining default G/L accounts.
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 Imagine that you are implementing SAP Business One at a new customer.
 Maria the accountant, tells you that moving to SAP Business One is a good opportunity for
her to organize the company accounts structure.
 You show Maria the pre-defined Chart of Account templates in SAP Business One. You tell
her that she can use this template as the basis for her Chart of Accounts and adjust it before
go-live.
 Maria says that this structure will help her in presenting the financial reports in a clear and
structured way.
 You discuss with Maria the effect of the sales and purchasing processes on the chart of
accounts, and as a result, on the financial reports.
 Maria has chosen a Chart of Account template, and now, you show her how to adjust the
accounts: add, remove and update.
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 We start by defining the company chart of accounts.
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 How are the Business Partner Master Data balances presented in the Chart of Accounts?
 The Business Partner Master Data balances do not appear in the Chart of Accounts.
 The receivable and payable control accounts accumulate the customer and vendor
 For example, when you post an A/R invoice, the accounts receivable account related to the
customer is used, in addition to the customer account.
 Therefore, the Chart of Accounts presents the complete financial status of the company, as
well as the Financial Reports (Profit & Loss, Balance Sheet).
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 The chart of accounts is an index of all G/L accounts used by your business.
 Every G/L account has:
 An account code
 An account description, and
 Additional information that determines the functions of the G/L account.
 When you implement SAP Business One you define (or import):
 The Chart of Accounts, and
 Default G/L accounts to be used when transactions are created in the regular business
processes: Sales, Purchasing, Inventory and more.
 The documents in the Sales and Purchasing processes create automatic journal entries that
are registered in the Journal Entry file and affect the account balances.
 The account balances are also affected by manual journal entries and other accounting
transactions, such as the Period End Closing process that transfers the balances of the Profit
and Loss accounts to a Balance Sheet account.
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 You have 3 options for defining a Chart of Accounts:
 The first option is selecting a pre-defined Chart of Accounts template.
 This option could be suitable for a standard company, especially a new company without a legacy
chart of accounts.
 Note that once you have started to work with the company database you cannot choose a different
Chart of Accounts template. You can however add, update or remove accounts in the Chart of
Accounts.
 The second option is to import the chart of accounts data from your legacy system using the Data
Transfer Workbench (DTW) tool.
 If the company wants to keep their chart of accounts, they can still reorganize the structure before
the import.
 Alternatively, you can define your own Chart of Accounts.
 This option allows you to create your own customized chart of accounts. An organization can use
this opportunity to determine what the chart of account structure should look like to accommodate
their needs.
 Defining the entire chart of accounts is a long, complex procedure.
 You can use one of the existing standard charts of accounts and adapt it to the company’s needs.
 Work together with the client accountant to decide on the company’s chart of accounts content and
structure.
 Although using one of the existing standard chart of accounts could suffice in many situations,
organizations can take this opportunity to determine what the chart of account structure should look like
to accommodate their needs.
 Note that the practice of choosing a pre-defined Chart of Accounts template will be done in a separate
course.
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 The Chart of Accounts is organized by drawers and levels.
 Let us look at this example of a Chart of Accounts. The chart of accounts varies according to
the company’s localization.
 The organization of the chart of accounts follows Generally Accepted Accounting Principles.
The Chart of Accounts window organizes your accounts by drawers. These drawers, which
have been defined by SAP and cannot be changed, organize your accounts by level in a
logical fashion appropriate to your localization’s financial accounting and reporting processes.
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 In the General Ledger, we distinguish between Balance Sheet Accounts and Income
Statement Accounts, also called Profit and Loss Accounts.
 Let us start with Balance Sheet Accounts:
 The first 3 drawers: Assets, Liabilities, Equity (Capital and Reserves) hold the Balance
Sheet Accounts, such as the Sales Tax account and the Accounts Payable Account.
 The bookkeeping balance of these accounts is kept from one fiscal year to the next.
 The Balance Sheet Accounts – reflect the monitory value of the company - stock, assets,
debt, etc.
 Next, we have the Profit and Loss Accounts:
 The last 5 drawers: Revenues (or Turnover), Cost of Sales, Expenses (or Operating Costs),
Financing (or Non-Operating Income and Expenditure), and Other Revenues and Expenses
(or Taxation and Extraordinary Items) hold the Profit and Loss Accounts, such as the
Income Accounts. Note that in some localizations, the lower drawers are not all profit and
loss account drawers.
 The bookkeeping balance of these accounts has to be cleared at the end of each fiscal year
during the Period End Closing process.
 The Profit and Loss Accounts reflect the changes in the company value, such as: when you
sell stock – the cost of goods sold account is affected and increases revenues.
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 Next, we discuss the chart of accounts structure in association with financial reports.
 We will see the levels in the chart of accounts and how to manage the chart of accounts
structure
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 Financial reporting requirements drive most of the initial settings and configuration decisions in
the chart of accounts.
 The different financial reports run on the account balances relevant to a selected date range
and present them according to their drawer, level and type:
 The Balance Sheet summarizes the value of the business’ assets liabilities, and owner’s
equity accounts.
 The Trial Balance displays for each account: beginning balance for a particular period, all of
the debits and credits, and the ending balance.
 The Profit and Loss Statement is determined after the end of the fiscal year. The balances
of the expense accounts will be subtracted from the balances of the revenue accounts to
come up with the profit or the loss for the fiscal year.
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 A chart of accounts arranges a company's general ledger accounts in a hierarchical structure.
The top level in the structure (level 1) consists of sections or groups for different type of
accounts (assets, liabilities, capital and reserves, turnover, and so on). The number of account
groups depends on the localization that was selected when the company was created and
cannot be modified by the user.
 The system displays the section as a cabinet drawer. Each drawer has a section title, which
you cannot change. The system displays lower-level titles in blue and normal active accounts
in black. Accounts that you have entered in the G/L Account Determination (default accounts)
are displayed in green.
 The chart of accounts varies according to the company’s localization. Let us look at this
specific example of Chart of Accounts that contains 5 levels:
 Levels 2 through 4 can contain either active accounts or titles that combine several active
accounts. Level 5, in this example, contains only active accounts.
 Because only active accounts can be posted to in SAP Business One, it is a good practice to
have all your active accounts at the same level.
 In reports, a title account summarizes all the balances of each active account below it.
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 We have two windows for maintaining the chart of accounts: the Chart of Accounts window and the Edit
Chart of Accounts window. Let us discuss the tasks we can perform in each window.
 For the Chart of Accounts window we go to the Financials module and choose the Chart of Accounts
option. The main goal of the Chart of Accounts window, is to:
 Add a new G/L account to an existing title. For example add new expense accounts to the Utilities
title.
 View information about existing accounts.
 And update different properties of existing accounts using the Accounts Details button.
 The accounts colors represent their functionality:
 Titles appear in blue.
 Normal active accounts in black
 Accounts that were entered in the G/L Account Determination window (that is default accounts) are
displayed in green.
 For the Edit Chart of Accounts window, we choose the Edit Chart of Accounts option from the Financials
module and then we choose a drawer. For example, the Operating Costs. In this window we can:
 Add a new title
 Delete an account.
 Change the structure of the chart of accounts and move titles and accounts within the structure of the
chart of accounts.
 We can also add an account in the Edit Chart of Accounts window using the Add Sub-Level Account
button.
 Note: it is a good practice to have all your active accounts at the same level. For example,
level 5.
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 And finally, we will discuss the two available options for defining default G/L accounts.
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 As we mentioned in earlier, when you first implement SAP Business One you define default
G/L accounts to be used when transactions are created during the different business
processes, such as sales, purchasing and inventory. This is done in the G/L Account
Determination window in the Financials Setup area of the Administration module.
 When choosing a pre-defined Chart of Accounts template, most of the default G/L accounts are
already defined. You can change them if required.
 When items are used in the transactions, there are 2 options for account determination: the
traditional solution and the advanced solution.
 Note! It is very important to ensure you make decisions about G/L Account Determination
together with the client accountant.
 Both options are based on the accounts defined in the G/L Account Determination window.
 The first option is the traditional solution that was available prior to version 9.0.
 According to the traditional solution there are three options to define a default G/L method
for an item: warehouse level, item group level, and item level. Each item will have one
method defined for it. You can set the method in advance for all new items. You can then
change the method per item.
 The values that you define under the tabs in the G/L Account Determination window are
defaulted into all 3 levels. You can then change the default accounts for any of the levels.
For example, you can manage different inventory accounts for each warehouse the
company owns.
 Whenever you add a document that posts a journal entry, an A/R Invoice for example, the
system looks at each item in the document to determine the level set for that item and then
finds the associated G/L accounts to use from the default accounts.
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 Let us review the set-up of the traditional solution for G/L Account Determination (prior to
version 9.0).
 The company default accounts under the G/L Account Determination window default to all 3
levels (warehouse level, item group level, and item level).
 Then, you define the accounts at each required level. In the presented example, we defined
the accounts for each item group (this is step 1 in the graphic). This means that when an item
using the item group level is chosen in a document, the system will automatically retrieve the
accounts from the definition of the item group to which the item belongs.
 Where are these default accounts set?
 For the item group level, the default accounts are set in the definition of each item group.
The place to define an item group is found in the inventory setup area of the Administration
module. Default accounts are maintained on the Accounting tab for the item group.
 Similarly, for the warehouse level, default accounts are set on the Accounting tab in the
definition of each warehouse. Defining a warehouse is also done in the inventory setup
area.
 If you set an item to be controlled at the item level, you set the G/L accounts directly in the
item master.
 Once you have set the default accounts, you should also choose the default G/L method for
new items in the General Settings on the Inventory tab. On the sub-tab for items, you will find
the Set G/L Accounts By field. (This is step 2 in the graphic).
 In our example, the default G/L method for new items was set to item group. Therefore, the
default in any new item is the Item Group Level (as presented in step 3) and the accounts
assigned to the item master data derive from the item group defined for this item (step 4).
 The end result is that in the Item Master Data you define the G/L accounts to be involved in the
monetary transactions according to one defined level. And, the accounts are retrieved from
that level.
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 These are the three options presented from the item point of view. The accounts will be used in
the monetary transactions for items.
 Each item can have one method defined for it.
 In the warehouse and item group levels the accounts are derived from the warehouse or the
item group and the user cannot change them.
 In the item level the user enters the accounts manually into the item master.
 Note that although you specify one default G/L method for new items, you can manage
different items with different methods if this scenario is necessary in your company. Just
change the default level in the item master as needed.
 Note! After the warehouse or the item group level is defined in an item, you can switch to the
item level method and assign different G/L Accounts to be used in the monetary transactions.
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 With the advanced solution, the G/L Account Determination window is used to define G/L
accounts in the company level.
 The advanced solution provides centralized matrix to determine rules for assigning G/L
accounts in journal entries according to a predefined (closed) list of criteria.
 Therefore, the solution is more flexible and consistent with accounting.
 Currently, for a new company and for an upgraded company, the advanced solution is not the
default option. This is due to compatibility considerations.
 For upgraded companies, partners should check if the new solution definitions will affect their
add-ons and decide about the suitable point to adjust the system.
 To activate the new solution go to the Basic Initialization tab in the Company Details
window. Select the Enable Advanced G/L Account Determination checkbox.
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 So, you use the G/L Account Determination window for defining the company level accounts
in one place.
 Many companies will find the company level accounts sufficient.
 For tailored business scenarios you have the option to define rules for assigning G/L accounts
in journal entries.
 Those rules support:
 G/L Account determination for Item Code, Item Group, Warehouse Code, Ship-to Country,
Ship-to State, Federal Tax ID and Business Partner Group.
 As well as multi determination criteria. That is, a combination of the criteria.
 Any rule you define in the advanced form will have a higher priority (than the G/L Account
Determination window) in determining which account is assigned in journal entries.
 So, in our example, OEC Computers can define a separate revenue account for each item
group per country (for example, revenues from printers in Canada, Brazil and US).
 When they choose an item in a marketing document, for example an A/R Invoice, the system
checks the accounts required for the transaction. In our example, the system checks the
inventory and the revenue accounts.
 Then, the system checks if there are any rules defined for these accounts.
 If there are rules defined for the necessary accounts, the system looks for the appropriate rule
and picks the rule with the highest priority.
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 Let us review the setup of the advanced solution for G/L Account Determination.
 The current G/L Account Determination form will be used to define G/L accounts in the
company level (go to the Administration module, choose Setup, Financials, G/L Account
Determination and again G/L Account Determination.
 Using the Advanced button you open the Advanced G/L Account Determination Rules window.
 The Advanced Rules column will indicate if a rule exists:
 Once the user defines an advanced rule for a specific account, the Advanced Rules column
of this account will be updated in the G/L Account Determination window with a number of
rules defined for the account and a link to the advanced form.
 While choosing the link arrow, the advanced form opens (in editable mode), filtered, and
displays only the advanced rules related to this account.
 The form will be opened in Edit mode and the user can update it.
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 When you enable the advanced solution, the Determination Criteria window appears under the
G/L Account Determination menu item in the Financials Setup area in the Administration
module.
 The Determination Criteria window provides a predefined (closed) list of criteria:
 In this window, the user will be able to:
 Activate all or some of the criteria depending on the business need.
 If an active determination criterion is not in use by any of the advanced rules, you can
uncheck it to make it inactive.
 You can define or change the criteria priority using the Up and Down buttons.
 Note!
 Once you activate the new solution the system checks the criteria in this window according
to the values (Warehouse, Item Group, Item Level) defined in the Set G/L Account By field
in the Item Master Data under the Inventory Data tab.
 When you choose the Item Code criterion, the Item Group criterion will be automatically
selected too. This is due to the fact that in the item master data, item group is a mandatory
field.
 The priority (that is the rows’ order) in the Determination Criteria window sets the priorities in
the Advanced G/L Account Determination Rules window. This is reflected in two ways:
 The columns names and order - the first row in the Determination Criteria window sets
the highest priority for each rule. And so on for the rest of the rows.
 The rows order – the first row in the Determination Criteria window sets the rule with the
highest priority in the Advanced G/L Account Determination Rules table. And so on for
the rest of the rows.
 Note that inactive determination criteria in the Determination Criteria window are not
displayed in the Advanced G/L Account Determination Rules window.
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 In the Advanced G/L Account Determination Rules form you define rules for assigning G/L accounts in
journal entries:
 The advanced form deals with item-related accounts only.
 The accounts that can be defined in the rules are the same accounts that you define in the Item
Master Data in the traditional solution (that is, the regular G/L Account Determination, prior to 9.0).
 When creating a new posting period, rules from the last period will be copied to the new period.
 Only rules that are valid for the selected period will be listed in the form.
 For each rule you should define at least one criterion and one account.
 As explained in the previous slides, the rules priority will be determined based on the priority in the
Determination Criteria window.
 Once you define a new advanced rule (or change the rule criteria) and update the form, the system will
automatically prioritize the rules according to the determination criteria. The priority of all rules will be
updated accordingly (that is, the system will place the rule according to its priority).
 Once you change the determination criteria priorities, the advanced rules priorities will be automatically
updated accordingly the next time you open the form.
 Note!
 Entering a specific value has a higher priority than the value All.
 Let us look at the example shown: the 3 rules in the Advanced G/L Account Determination Rules
window have specific values.
 In the first 2 rules an item group is specified and in the third rule a warehouse is specified.
 The first 2 rules have higher priority since Item Group is ranked higher than Warehouse Code in the
Determination criteria window.
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 After activating the new solution, all items will be set automatically to Advanced Rule Type:
General.
 The Advanced Rule Type field in the item determines which rule will be used to choose the
inventory G/L accounts in the journal entry created by the document for this item.
 The Advanced Rule Type is the first criterion for automatically picking of the Advanced G/L
Account Determination Rule.
 We recommend to keep the General advanced rule type in all items and rules.
 A different advanced rule type will be set automatically by the system in special scenarios of
migration from the traditional solution to the advanced solution.
 Use the Warehouse Code and the Item Group criterions in the Advanced G/L Account
Determination Rule definition instead of using the Warehouse and Item Group advanced rule
types.
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 You have 3 options for defining a chart of accounts. You can select a pre-defined chart of
accounts template. You can import the chart of accounts data from a legacy system. Or you
can define your own chart of accounts.
 We distinguish between two types of accounts: balance sheet accounts and income statement
accounts. Income statement accounts are also called Profit and Loss accounts.
 We have two windows for maintaining the chart of accounts: the Chart of Accounts window and
the Edit Chart of Accounts window. In each of them we can perform different tasks.
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 The different financial reports run on the account balances relevant to a selected date range
and present them according to their drawer, level and type.
 In the G/L Account Determination window, you define the default G/L accounts to be used in
transactions.
 There are 2 options for account determination in transactions involving items: the traditional
solution of setting a default G/L method for an item or the advanced G/L account determination
solution. Both options are based on the accounts defined in the G/L Account Determination
window.
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 Welcome to the course on posting a journal entry.
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 In this course, we discuss the ways to post journal entries in SAP Business One: entering a
manual journal entry, creating a journal entry from a journal voucher, using a posting template
and setting up recurring postings.
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 Imagine that you are implementing SAP Business One at a new customer.
 The company accountant asks how she can record business transactions that do not have a
document in SAP Business One.
 You list the options available for entering manual journal entries and ask which type of
transactions she is looking for.
 She states that for very small expenses she prefers using manual journal entries rather than
using the A/P invoice and the Outgoing Payment documents.
 She also tells you about rent payments that the company pays on a monthly basis.
 In addition, she says that at the end of the year she records the annual bonus amount for
company employees.
 You suggest the journal entry function and show her the different posting tools that can help
her in entering those entries correctly.
 Moreover, you help her to define several templates that will enable her to record the manual
journal entries accurately.
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 Let us start by discussing the journal entry file. We will look at the journal entry form and how to
reverse manual transactions.
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 In SAP Business One, a journal entry is automatically posted from many documents, such as
A/R and A/P invoices.
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 Additionally, you can manually post a journal entry directly to a G/L account or to a business
partner sub-ledger account.
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 All journal entries are posted to one file in SAP Business One – the Journal Entries file.
 You can set various defaults for journal entries.
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 You can also change some document settings for an individual journal entry.
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 All journal entries refer to the type and number of the origin document since frequently journal
entries are created automatically from another document.
 For example, IN is used for customer invoices.
 The origin documents of manual journal entries are the journal entries themselves. For this
reason, they refer to themselves and are of type JE (which is standard for journal entry).
 Most journal entries refer to other document types (for example PU for AP invoices).
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 The Journal Entry window is found in the Financials module.
 The window for entering journal entries is divided into three areas: document header data,
expanded editing mode for an item, and the items table.
 You can show or hide the expanded editing mode. The mode always refers to the row that is
currently selected and displays all the item fields for you to enter the relevant data.
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 Using Form Settings, you can define which columns display in the line items table.
 You can enter multiple lines with debit or credit amounts. In every line you add SAP Business
One will recommend a balancing amount which you can update.
 When entering manual journal entries, in each line, place the cursor in the G/L Acct/BP Code
field and press Tab to display the accounts list, or CTL + Tab to display the Business
Partners Master Data list.
 Alternatively, you can search for an account or a business partner using the G/L Acct/BP Name
field.
 If you know the first character of the customer code or name, specify it, followed by an asterisk.
Then, press CTL + Tab to produce a list of all customer codes starting with this character.
 If you know a partial customer code or name, placing it between asterisks (*) and pressing CTL
+ Tab will display a list of all records that fall within this range.
 The same goes for an account but with pressing Tab to display the accounts list.
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 Users can make input errors. As a result, the journal entry created may contain incorrect
information. To provide an audit of the correction, the user must first reverse the journal entry in
error, and then capture the document correctly.
 You can specify whether reversal transactions are performed:
 As standard reverse transactions, or
 As reverse transactions with negative amounts
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 The standard reverse transaction causes the system to post the debit in error as a credit and
the credit in error as a debit. This corrects the balance of the accounts. However, the standard
reverse transaction causes an additional increase in the totals on the debit and credit sides,
which might be misleading.
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 The reverse transaction with negative amounts causes the system to post the debit in error as
a negative debit and the credit in error as a negative credit. This not only corrects the balance
of the accounts but also the totals.
 It depends on the country whether standard reverse transactions or reverse transactions with
negative amounts are required.
 You can set which type of reversal is used in the Company Details window in the System
Initialization menu area of the Administration module. On the Basic Initialization tab, you can
select the Allow Negative Amounts for Reversal Transaction Posting field to switch on the
reverse transaction with negative amounts. Otherwise, the system will use the standard
reverse transaction.
 This setting is relevant for both automatic and manual journal entries.
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 You do not always need to create a manual journal entry to correct input errors. In the sales
and purchasing processes, most documents have a canceling document which will
automatically create the reversing journal entry.
 For example, you issue an A/R Credit Memo to cancel an A/R Invoice. This document will
create a canceling transaction automatically.
 You can also just cancel a document like Goods Receipt PO, Delivery or an Invoice as well as
using documents like Goods Return, Return, and a Credit Memo.
 For manual journal entries, you locate the journal entry you wish to cancel and choose Cancel
from the Data menu.
 Note! In this session, we do not demo canceling documents. This topic is covered in the
purchasing and sales processes.
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 When entering a manual journal entry, you can choose the Reverse checkbox. This enables
you to create a reversal transaction for the current journal entry and define the date on which
the reversal transaction should be created.
 An example for using this option could be in cases where the company needs to issue a period
reporting and have some revenue deferrals.
 When the reverse date of the transaction arrives, the Reverse Transactions window appears
on log-in.
 Alternatively, you can open the Reverse Transactions window from the Financial module.
 You execute the reverse transaction by choosing the Execute button.
 As a result, new transaction is created. The Remarks field of this transaction displays the text
(Reversal) and the number of the original transaction. The Reverse option is disabled.
 In the original transaction, the Reverse option is not visible, and the word Cancelled indicates
that the transaction was cancelled.
Note!
 Reverse transactions can be posted only if the reverse date has already arrived, and
 You can reverse each journal entry only once.
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 Next, we will go through the posting tools that allow efficiency in entering manual journal
entries.
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 You can post a manual Journal Entry by:
 Entering a manual journal entry like we have just seen in the previous slides.
 By Using a posting template,
 By setting up a recurring posting, or
 By posting a journal voucher.
 In the next slides we will review two template types for posting a journal entry: Template with
Percentages and Recurring Postings.
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 You can create posting templates for journal entries that have a very similar structure.
 To define a percentage template type, use the Posting Templates window in the Financials
module.
 These templates can contain account numbers but you can also just specify an account
description in a line item if you do not yet know which exact account will be used for this line
item.
 Instead of fixed amounts, only percentages are entered here. These percentages indicate how
the total amount is distributed among the line items.
 The illustration shows an example of how you can allocate a utility expense, like the electric
bill, to its component expenses at a specific percentage rate.
 The posting template is stored under a code and with a description.
 Then, when you enter a journal entry manually, you can choose the Percentage template type
and the relevant template, enter an amount in one of the line items and the template will
allocate the amounts to the other lines based on the percentage rate you have defined.
 Use the Cancel Template option to enter amounts without the auto calculation.
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 SAP Business One features a recurring postings function for similar, fixed amount journal
entries created on a regular basis.
 Recurring postings use a template that is stored with a code and a description. In this template,
you define, among other things, the frequency in which the journal entry is supposed to be
created and a validity date until when the recurring posting is valid.
 To define a recurring posting template type, use the Recurring Postings window in the
Financials module.
 The system duplicates the original recurring posting (instance 0) every time the execution date
arrives, and presents a report recommending you post the transactions that are due. Once you
use this instance and add it to the system, it will be deleted.
 You can set the system to display all the recurring transactions available for processing on
today’s date when you log in. This setting is made in the General Settings window under
System Initialization in the Administration module. On the Services tab, select the Display
Recurring Postings on Execution checkbox.
 Note that you can add recurring postings to the cash flow, which appear in green in the report.
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 You have a few options when you set up a recurring posting.
 You can set the frequency for how often the posting will occur.
 You can choose a frequency from a frequency list.
 You can also set a validity date for the posting which specifies the last possible date a posting
can be made.
 If you do not wish to post on a regular basis, you also have an option to set up a recurring
posting as a template to be used as needed.
 You can create these recurring postings in advance. Set the status to “Not executed yet” until
you need to begin the postings. This status can also be used to turn off a recurring posting.
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 Let us look at a business example of how journal vouchers are used.
 A student intern helps the accountant in recording manual journal entries to the accounting
system.
 The accountant tells you she really appreciates the help, but she wants to be able to review the
journal entries the student is entering before they are registered permanently to the journal
entries file.
 You tell the accountant about the option of using Journal Vouchers.
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 SAP Business One offers a two-stage procedure for creating journal entries. You can create
the journal entries as drafts first, correct and post them later.
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 A user creates entries in a journal voucher. The journal voucher is basically a folder for
storing several journal entry drafts.
 You can save unbalanced journal entries in a journal voucher as long as the journal voucher is
in the draft mode.
 This is useful when you have entries with many lines that you want to save during the process,
before the journal entry is complete and balanced.
 Since manual journal entries are not included in the approval process, you can use the journal
voucher process to enable reviewing and editing journal entries by another user.
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 You can change journal vouchers as long as they have not been posted yet. You can access
the journal voucher, make any necessary corrections, and post the journal voucher.
 You can remove a journal voucher or delete an entry from a journal voucher, as long as they
have not been posted yet.
 To start working with journal vouchers go to: Financials  Journal Vouchers.
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 After creating entries in a journal voucher you have two options to post them to the journal
entry file:
 From the Journal Voucher window. Or,
 From the Journal Voucher Report. Go to Financials  Journal Voucher Report.
 The Journal Voucher Report displays the journal vouchers according to selected criteria.
 The Gr-No. column presents the journal voucher number and the specific entry in the journal
voucher.
 From the list of journal vouchers you can review and update a journal voucher details using the
linking arrow.
 You can specify a certain journal transaction number out of a voucher and register only this
entry. This action will leave the journal voucher status open and the relevant entry closed. You
can then post the other entries.
 Note! The option of posting selected entries out of a journal voucher is available from this
report and not from the Journal Voucher window.
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 All journal entries are posted to the Journal Entries file. Including automatic journal entries
posted from documents, such as A/R and A/P invoices and manually posted journal entries.
 When entering manual journal entries, in the G/L Acct/BP Code field press Tab to display the
accounts list. Or CTL + Tab to display the Business Partners Master Data list.
 Depending on your country standards, you can specify whether reversal transactions are
performed as standard reverse transactions or as reverse transactions with negative amounts
 You can post a manual journal entry using 4 options: by entering the journal entry manually, by
using a posting template, by executing a recurring posting, or by posting to a journal voucher
first.
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 You create a posting template with percentages for journal entries that have a very similar
structure. You can then choose this posting template in a journal entry you enter manually.
 You create a recurring posting for similar, fixed amount journal entries created on a regular
basis. You can set the frequency for how often the posting will occur. The system Presents a
report recommending you to post the transactions that are due when you logon to the system.
 You work with journal vouchers when you need a two-stage procedure for creating journal
entries and in order to create the journal entries as drafts first, correct and post them later.
 In the Journal Voucher Report you can post selected entries out of a journal voucher.
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Exercises
Unit: Financials
Topic: Manage the Chart of Accounts

 Create, change, and delete general ledger accounts
 Create an advanced G/L account determination rule.
Your company has a new house bank and you need to create a
balance sheet account for it in your chart of accounts.
Your company has upgraded its Internet service. The Accounting
department wants to post the costs for Internet service to a new
expense account.
Your company wants to allocate revenues from selling a certain
item group to a dedicated account.
1-1 Transactions
Which function do you use to change the properties for a G/L account?
___________________________________________________________
Which function do you use to remove an account from your chart of accounts?
___________________________________________________________
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1-2 Create a balance sheet title and an active account.
Your company has opened a new account at the National Bank. This means
that the Accounting department has to add this information to your existing
chart of accounts.
1-2-1 Create a new title.
Choose the appropriate drawer in the chart of accounts.
Add a new title account in the section of the drawer that contains bank
assets. Provide a suitable account number and the name National
Bank.
1-2-2 Define the bank G/L account.
Under the new National Bank title, create an active account for the
National Bank (Domestic) with a suitable account number. Manage
the account in your local currency.
Your local currency is the currency defined in the Local

Currency field on the Basic Initialization tab under
Administration  System Initialization  Company
Details.
1-3 Create an expense account.

The Accounting department wants to record the cost of accessing and using the
Internet in a separate expense account.
Define an Internet expense account with the account name Internet. Choose
the operating expenses (costs) drawer and add the account under a suitable
expenditure title. Manage the account in your local currency. Make sure that
you specify the correct account type.
1-4 Delete an account.

Select an existing asset account that has no postings. Remove the account.
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1-5 Create an advanced G/L account determination rule.
1-5-1 Create an advanced rule.
The company CEO wants to know the exact revenue amount coming
from selling items belonging to the J.B. Printers item group when
selling from warehouse 01 (the general warehouse).
Go to the Advanced G/L Account Determination Rules window in
Administration  Setup  Financials  G/L Account
Determination  G/L Account Determination and choose the
Advanced button.
Make sure you have a rule that contains the J.B. Printers item group
and Warehouse 01. Verify that the rule type is set to General.
Also verify that the rule has a revenue account defined for it.
If not define the rule and choose a dedicated revenue account.
1-5-2 Allocate the revenue amount to the dedicated account.
Issue an A/R invoice including an item belonging to the J.B. Printers
item group and is issued from Warehouse 01.
Verify that the Advanced Rule Type field in the selected item is set to
General.
Check the automatically created journal entry and make sure that the
revenue account defined in the advanced rule was credited.
1-5-3 Definitions.
Under which conditions this account will be always involved in
transactions including items belonging to the J.B. Printers item group?
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Solutions
Unit: Financials
Topic: Manage the Chart of Accounts
1-1 Transactions
Which function do you use to change the properties for a G/L account?
Financials  Chart of Accounts
Which function do you use to remove an account from your chart of accounts?
Financials  Edit Chart of Accounts
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1-2 Create a balance sheet title and an active account.
1-2-1 Create a new title.
Choose Financials  Edit Chart of Accounts.
Choose the Assets Drawer and choose OK.
Select an existing Level 4 account in the Assets section and choose Add
Same-Level Account.
Make sure the Title radio button is selected.
Enter the account details.
G/L Account <Type a suitable number>
Account Name National Bank
G/L Account Location <You can choose from the dropdown list, or
leave the existing definition>
Choose Update to save the title.

1-2-2 Define the bank G/L account.
Choose Financials  Chart of Accounts
Highlight the new National Bank title.
Choose Data  Add.
Enter the following data.
Name National Bank (Domestic)
Currency <Your local currency>
Choose Add.
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1-3 Create an expense account.
Choose Financials  Chart of Accounts.
Choose the Operating Costs drawer.
Select a suitable expenditure title under which you want to create the account.
Choose Data  Add.
Select Active Account.
Name Internet
External Code leave blank
Currency <your local currency>
Account Type Expenditure
Choose Add.
1-4 Delete an account.

Choose Financials  Edit Chart of Accounts.
Select Assets.
Choose OK.
Choose an active account and right-mouse click to see the context menu.
Choose Advanced then Delete Account.
Choose Update.
Note: Prerequisites for deleting G/L accounts
 No transactions have been posted to the account, including the opening
balance.
 The account is not:
- Defined as a control account
- Included in G/L Account Determination
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1-5 Create an advanced G/L account determination rule.
1-5-1 Create an advanced rule.
Go to the Advanced G/L Account Determination Rules window in
Administration  Setup  Financials  G/L Account
Determination  G/L Account Determination and choose the
Advanced button.
Check the existing rules and verify that in the Item Group column the
J.B. Printers item group is defined for one of the rules. Also check
that Warehouse 01 is selected for this rule and the rule type is set to
General. Verify that the rule has a revenue account defined for it.
Write down the account code.
If the rule is not defined, define it and choose a dedicated revenue
account:
Code <Type a suitable code>
Type General
Item Group <Choose J.B. Printers from the

dropdown list>
Warehouse Code 01
Description Sales Rev. JB from WH 01
Active Checked
Revenue Account <Using the Choose from List option

select a sales type account - revenues
from printers, or define a new account
using the New button>
Choose Update and OK.

In the G/L Account Determination window verify that the account
defined in the rule is different than the revenue account defined in the
company level.
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1-5-2 Allocate the revenue amount to the dedicated account.
Go to Sales – A/R  A/R Invoice.
Choose a local customer. In the Business Partner Master Data, under
the Addresses tab check that the Ship to Country is the same country
defined under Administration  System Initialization  Company
Details  General.
Choose an item belonging to the J.B. Printers item group.
From the toolbar, choose the Form Settings icon. Choose the Document
tab and then the Table sub-tab. Ensure that the General Warehouse
(Warehouse 01) is selected.
Choose OK.
Choose the linking arrow in the Item No. field. Verify that in the
selected item, under the General tab, the Advanced Rule Type field is
set to General.
Choose OK.
Add the invoice.
Then, check the automatically created journal entry.
Browse back to the last added invoice. Under the Accounting tab
choose the linking arrow in the Journal Remark field.
Make sure that the revenue account defined in the advanced rule was
credited.
1-5-3 Definitions.
If Item Group is defined as the first criterion in Administration 
Setup  Financials  G/L Account Determination 
Determination Criteria then rules with a specific item group defined
for them will have the highest priority.
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Exercises
Unit: Financials
Topic: Enter Manual Journal Entries

 Post manual journal entries
 Reverse a posted journal entry

Most transactions recorded in the general ledger are generated
directly from SAP Business One documents. Additionally, the
accounting department can use journal entries to make manual
adjustments in the general ledger.
2-1 Post a journal entry.

You want to transfer money from a different bank account to your new account
at the National Bank.
Post a bank transfer with a value of 10,000 to the National Bank (Domestic)
G/L account that you created. Use an existing bank account as an offsetting
account.
Enter Bank Transfer as the Reference or Remarks.
2-2 Check whether the posting has been made correctly.

2-3-1 Check the balance of the National Bank (Domestic) account.
2-3-2 Starting from the balance display for the National Bank account,
navigate to the journal entry.
2-3 Reverse a journal entry.

Reverse the journal entry you made (in step 2-1) and then check what effect this
reversal has.
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Solutions
Unit: Financials
Topic: Enter Manual Journal Entries
2-1 Post a journal entry.

Choose Financials  Journal Entry.
Due Date <Today's date>
Doc. Date <Today's date>
Remarks Bank Transfer
First Item
G/L Acct/BP Name National Bank (Domestic)
Debit 10,000
Second Item
G/L Acct/BP Code <any other bank account>
Credit 10,000
Choose Add to post the document.
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2-2 Check postings.
2-2-1 Display balance.
Choose Financials  Chart of Accounts.
Select the National Bank (Domestic). The system displays the balance
in the Balance field.
2-2-2 Display the journal entry.
From the chart of accounts display, choose the orange navigation arrow
to the left of the Balance amount. The system displays all transactions
posted to the account. Choose the orange navigation arrow to display
the original journal entry.
2-3 Reverse a journal entry.

Using the Previous Record icon in the menu bar, display the journal entry you
posted in step 2-1. You can also search for Bank Transfer in the Remarks field.
From the menu bar, choose Data  Cancel. Or right-click and choose Cancel.
Choose Yes in the Create Reversal for this Transaction? dialog box.
The reversal journal entry is displayed in the Journal Entry screen.
Choose Add.
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Exercises
Unit: Financials
Topic: Posting Tools

 Create a journal voucher and post as journal entries
 Create and use posting templates
 Create and execute recurring postings
Posting tools allow the Accounting department to:
 Review a journal voucher before posting
 Easily create journal entries from templates
 Automatically post repetitive journal entries
3-1 Create a journal voucher.

Create a new journal voucher and enter two journal entries of your choice.
Save the journal voucher.
3-2 Change and post the saved journal voucher.

Choose the journal voucher you just created and select one of the journal
entries.
Make a change to the amount in the journal entry.
Add another entry to the journal voucher.
Post the two journal entries.
Check whether the system entered the journal entries in the general ledger.
3-3 True or False?

3-3-1 You can add a journal entry to a journal voucher only if the items on
the credit and debit sides balance.
___________________________
3-3-2 You cannot post individual journal entries from a journal voucher to
the general ledger.
___________________________
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3-4 Use posting templates.
You want to pay your employees an annual bonus of 15%.
3-4-1 Create a posting template that posts:
 115% of the employee’s salary to the employee’s account (liabilities)
 100% of the employee’s salary to the appropriate salaries expense
account
 15% of the employee’s salary to the appropriate expenses account
for bonuses
In the liabilities line (first row), leave the field G/L Account/BP No
empty. Enter the description “Employee account” in the G/L
Account/BP Name field.
3-4-2 Use the posting template you just created to post a journal entry to pay
a bonus to your employee. Your employee has a vendor master data
record. Use an existing vendor or create a new one.
3-5 Execute recurring postings.

Every month, your company pays a flat-rate charge of 200 excluding VAT to
vendor V20000 for maintaining your homepage.
3-5-1 Create a recurring posting which monthly posts the payables to the
vendor account. In the Ref 1 field, enter the contract number 08400.
The first execution date is today's date. The expenditure is recorded in
the Internet account. Choose a suitable VAT code.
3-5-2 Execute the recurring posting.
Tip: Activate the Display Recurring Postings on Execution

indicator under Administration  System Initialization 
General Settings on the Services tab page to display these
postings automatically when you log on.
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Solutions
Unit: Financials
Topic: Posting Tools
3-1 Create a journal voucher.

Choose Financials  Journal Vouchers.
Choose Add Entry to New Voucher.
Enter a journal entry of your choice. For example, you can post a debit for an
expense to an expenses account, and credit the same amount to your bank
account.
Choose Add to voucher.
Enter a second journal entry of your choice. Choose Add to voucher. Close the
window.
Update the Journal Vouchers screen.
3-2 Change and post the saved journal voucher.

Choose Financials  Journal Vouchers.
 Highlight the journal voucher you just created.
 Double-click one of the transactions and change the data in the journal
voucher entry.
 Choose Update. Choose OK.
In the Journal Vouchers window choose the Add Entry to Existing Voucher
button.
 Enter a journal entry.
 Choose Add to voucher. Close the window.
In the Journal Vouchers window, choose Post Voucher.
 Choose Yes to the system message.
Check whether the postings have been made in the general ledger.
 Choose Financials  Journal Entry.
 Choose Previous Record to display the second entry you posted to the
Journal Voucher. Choose Previous Record once more to display the first
entry you posted to the Journal Voucher.
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3-3 True or False?
3-3-1 You can add a journal entry to a journal voucher only if the items on
the credit and debit sides balance.
___________________________
False. You can also add journal entries to a journal voucher even if the
credit and debit sides do not balance. You do not have to balance the
journal entries until you post the journal voucher to the general ledger.
3-3-2 You cannot post individual journal entries from a journal voucher to
the general ledger.
___________________________
False. You can use the Journal Voucher Report to post selected entries
out of a journal voucher.
3-4 Use posting templates.

3-4-1 Create a posting template.
Choose Financials  Posting Templates.
Code Bonus (or other code)
Template Description Annual Bonus
First G/L account row
G/L Account/BP Code. <Leave blank>
G/L Account/BP Name Employee account
Credit % 115
Second G/L account row
G/L Account/BP No. <choose an expense account for salaries

and wages>
Debit % 100
Third G/L account row
G/L Account/BP No. <Choose an expense account for

employee bonuses>
Debit % 15
Choose Add.
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3-4-2 Use the posting template.
Template Type Percentage
Template Bonus (your posting template)

Tip: Press Tab to see the list of available
templates.
First line
G/L Acct/BP Code. Choose vendor or create a new one
Credit <from template>
Second line
G/L Acc./BP No. <from template>
Debit <type any amount>
Third line
G/L Acc./BP No. <from template>
Debit <from template>
When you enter the Debit amount on the second line in place of the
100%, the system automatically calculates the amounts of the other line
items.
Choose Add to post the entry.
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3-5 Execute recurring postings.
3-5-1 Create recurring posting.
Choose Financials  Recurring Postings.
Code Homepage
Description Homepage maintenance
Ref 1 08400
First line (expense account):
G/L Account/BP Code <choose the Internet expense account

you created earlier in the Chart of
Accounts unit>
Debit 200
Tax Group V2 (or other standard input tax group)

Note that the system automatically adds
the tax line to the journal entry.
Vendor item:
G/L Account/BP Code V20000 (press Ctrl+Tab to see the list of

business partners)
Credit <entered automatically when you click in

this field then press Tab>
Frequency Monthly + On <today's date>
Next Execution <Today's date>
Choose Add to save the data record.

3-5-2 Execute the recurring posting.
Choose Financials  Recurring Postings.
Choose Confirmation List to display the postings for execution.
Select the recurring posting you just created.
Choose Execute to post the entry.
Choose Add to the system message.
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 Welcome to the course on the posting periods process.
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After completing this topic, you will be able to state how to define and manage Posting Periods.
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 You are implementing SAP Business One at a new customer, OEC Computers.
 You explain to Maria, the accountant, that a mandatory step in creating the company
database is defining the company Posting Periods:
 You define the Main Posting Period - the Fiscal Year, which usually corresponds to the
calendar year.
 And then the Sub-Periods in the fiscal year.
 Together you discuss the financial processes in OEC Computers. The company creates
the annual financial statement once a year. However, they need twelve posting periods for
their internal controlling.
 You create a new company database and define the Fiscal Year as the calendar year and
the sub-periods as Months.
 Maria asks what she needs to do in order to record a certain document or a journal entry to
a posting period or sub-period.
 You tell her that SAP Business One automatically determines which posting period the
transaction belongs to based on the transaction’s posting date.
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 Here, you can see an overview of the Posting Periods Process.
 There are three stages in the posting periods process. In this course we will focus on the
Settings and the Operational steps, the first two stages of the process.
 In the first stage, we define settings for posting periods. First we define the main posting period
for the Fiscal Year. Then we define the sub-periods in the fiscal year: Year, Quarters, Months,
or Days.
 The second stage is the Operational stage. In everyday work, we enter documents and manual
journal entries with a posting date that will be registered automatically to the appropriate sub-
period. Sub-periods allow the user to control posting into them. That way, postings to each
month can be controlled.
 The third stage is Period End Closing where you move all profit and loss (P&L) account
balances to the Retained Earnings account and zero out the P&L accounts. We will discuss
the period end closing process in a different topic.
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 When you create a new company database, you create the posting periods for the first fiscal
year. Sub-Periods are created automatically by SAP Business One in the fiscal year based on
your selected type of sub-period. The four available sub-periods are: year, quarter, month and
day.
 You define the sub-periods based on the company business need:
 A Year has one sub-period.
 Quarters have four sub-periods.
 Months contain twelve sub-periods.
 And Days can have any number of sub-periods.
 Using your selection, the system automatically creates the corresponding number of posting
periods. You can change these periods, if necessary.
 A reason for defining sub-periods will be the ability to lock a past period so that no additional
postings can be made by any user.
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When creating new posting periods, bear in mind the following important caveats:
 The beginning of the fiscal year can only be the first day of a month. The start of the fiscal year
is set automatically on the first day of the month that was entered in the “Posting Date from”
field.
 We recommend creating the posting periods from the earliest period onward. Consider the
oldest data you would like to migrate to determine the first period.
 You cannot have overlapping posting periods.
 By default, the “From date” is the day after the end date of the latest existing posting period,
and the “To date” is one year later.
 G/L account determination is saved by period and is copied from the previous period to the
next. Therefore it is recommended to create the oldest period, make your primary account
selection, and then create additional periods. You can change the G/L account determination
before starting to work with a new period.
 Although you could change it mid-period, we do not recommend this because account
determination influences the financial reports.
 You need to make decisions together with the client accountant. Together you should consider
topics like legal reporting and business consolidation.
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 When you create posting periods, you define the main posting period, that is the fiscal year,
which usually corresponds to the calendar year. You also define the Sub-Periods in the fiscal
year (Year, Quarters, Months, or Days).
 SAP Business One determines automatically which sub-period the transaction belongs to
based on the transaction’s posting date.
 When creating a new posting period take into consideration the important caveats mentioned
in the course.
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 Welcome to the internal reconciliation topic.
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 In this topic, we discuss how to utilize the process of internal reconciliation, both system and
user reconciliations, in G/L accounts and business partners.
 You will learn how to review automatic and semi-automatic system reconciliations, and how to
perform internal reconciliation manually.
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 We will present the internal reconciliation topic by looking at the reconciliation process of a
business partner master data.
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 Imagine that you are implementing SAP Business One at a new customer, OEC Computers.
 Maria, the accountant of OEC Computers, asks you more about the Internal Reconciliation
Process. She remembers you told her previously, that among other processes, it relates to
Period-End Closing.
 Maria is happy to hear that most internal reconciliations are performed automatically by SAP
Business One. These are the System Reconciliations.
 Automatic system reconciliations can be full or partial.
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 You give Maria two examples of full automatic reconciliations:
 First, in the Business Partners Master Data accounts when an Incoming Payment is based
on an A/R Invoice (or a Credit Memo on an A/R Invoice).
 And secondly, in clearing G/L Accounts when you deposit a check received by an Incoming
Payment.
 You tell Maria that SAP Business One also performs Partial System Reconciliations if, for
example, a customer partially pays an A/R Invoice.
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 However, there will be cases where Maria will perform internal reconciliations herself – these
are the User Reconciliations.
 For example, when OEC Computers pays a vendor in advance and receives the A/P Invoice
later on, Maria will have to internally reconcile the Vendor Master Data and match the Payment
with the A/P Invoice transactions.
 Maria can perform user reconciliation using one of the three reconciliation types:
 Manual
 Automatic
 Semi-automatic
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 Just like with System Reconciliations, user reconciliations can be full or partial.
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 Let us consider the case we have just discussed, where OEC Computers pays a vendor in
advance and receives the A/P Invoice later on.
 When Maria looks at the vendor’s account balance, it reflects the advanced Outgoing Payment
and the A/P Invoice transactions.
 Then why is it important for Maria to reconcile the vendor master data internally?
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 The reason is that if reconciliation is not done, the A/P invoice will appear as open when
creating a new Outgoing Payment for the vendor.
 Another reason is the effect on reports, such as Aging and Doubtful debts. The A/P Invoice
will appear as open in those reports if Maria does not reconcile it with the Outgoing Payment
transaction.
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 We start with system reconciliation that occur during everyday work.
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 The term, Internal reconciliation, refers to the matching and clearing of open credit items to
open debit items within an account (therefore internal). This is necessary for accounts where a
business process is not regarded as fully complete until each credit amount has a
corresponding debit amount:
 For customer accounts, a receivable (debit) must be followed by an incoming payment
(credit).
 For vendor accounts, a liability (credit) must be followed by an outgoing payment (debit).
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 First let us talk about system reconciliation.
 System reconciliation takes place automatically. Let us discuss a few examples:
 When you apply a payment to an invoice, create a credit memo for an invoice or cancel a
document, the original journal entry is reconciled with the reversal.
 When you deposit a check, the payment journal entry is reconciled with the deposits for the
clearing account row.
 This means for the most part, you do not have to maintain and conduct internal reconciliations
in the system.
 As we mentioned before, the system can reconcile transactions either fully or partially.
 We will take a look at each.
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 The system will attempt to automatically perform full reconciliation when you post a payment
for a customer or vendor.
 The system matches the business row in the journal entry of the payment with the invoice or
invoices that you have selected and closes the transactions.
 It will also close any selected credit memos and other transactions that were selected in the
payment.
 In the graphic we show how full system reconciliation occurs with an outgoing payment to a
vendor. On the left we show the A/P invoice with its journal entry. On the right we see the
outgoing payment for the invoice. When the invoice is paid, the system automatically performs
internal reconciliation in the vendor master record.
 In this example, we show only one invoice, but the payment could have paid 2 or more invoices
and the automatic reconciliation would still have been performed.
 For payments made with the Payment Wizard or Bank Statement Processing, the system
automatically proposes (and sometimes automatically matches) payments with invoices or
credit memos based on criteria that you supply, such as due date and amount.
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 It is also possible to partially reconcile transactions when issuing incoming or outgoing
payments.
 Partial reconciliation is done when a payment amount does not match the amount of the
selected transactions.
 For example, a customer may pay a partial amount due. When a partial payment is made, the
system adjusts the Balance Due appropriately and partially reconciles the invoice.
 When the remaining balance on the invoice is paid the invoice will be fully reconciled and the
Balance Due will become zero.
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 SAP Business One automatically reconciles the following interim accounts:
 Allocation Account, Expense Clearing Account, and Stock in Transit Account.
 The Work In Process Inventory Account.
 In some localizations, the Deferred Tax Account (this is relevant for: Austria, Costa Rica,
France, Guatemala, Italy, Mexico, South Africa, and Spain)
 The Down Payment Interim Account and Down Payment Clearing Account.
 Let us look at the allocation account example:

 If your company uses the perpetual inventory system you usually reconcile the Allocation
account. Remember, an allocation account is credited when you issue a Goods Receipt PO
and debited in an A/P Invoice. The system performs this reconciliation for you in this interim
account.
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 Next, let us present how the user can manage the reconciliation process.
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 Let us look at circumstances where you would perform a user reconciliation:
 A customer pays you but you forget to select the invoice when processing the payment. In that
case, a payment is made on account rather than against a particular invoice.
 If the payment was posted as a Payment on Account, because no invoices were selected, the
payment and the invoices stay open (and therefore unreconciled).
 Another example of a payment on account might be where you have an agreement for a
customer to pay a set amount each month regardless of the actual invoice amounts. Once
again, because no invoices are selected, the invoices are unreconciled.
 In these cases you need to reconcile the business partner account with the Reconciliation
function – as a User Reconciliation.
 To perform an internal reconciliation for a business partner, choose the Reconciliation option
under the Internal Reconciliation area of the Business Partners module.
 You can also perform user reconciliation in a G/L account. For example, on special scenarios
of opening balances and when working with deferral accounts. The Reconciliation window for
G/L accounts is found under the Internal Reconciliation area in the Financials module.
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 You can perform user reconciliation using one of the three reconciliation types: Manual,
Automatic, and Semi-automatic.
 Manual is useful when working with a small number of transactions or cases where partial
reconciliations are required or where transactions are posted to more than one business
partner.
 Automatic is used to reconcile a large amount of transactions, or a range of business partners,
based on user defined parameters and priorities.
 Semi-Automatic is used to manually reconcile transactions, based on recommendations
provided by SAP Business One.
 The Multiple BPs option appears only when the Manual reconciliation type is selected. This
option enables the transactions of more than one business partner to be reconciled.
 For example, in some localizations, if a specific business partner is a customer as well as a
vendor and therefore has two business partner master data records, you can reconcile the
transactions created against both business partner master data records.
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 An internal reconciliation is performed in one currency – the account currency.
 This is relevant for both system and user reconciliation and for business partners as well as
G/L accounts.
 If the currency of the specified business partner is set to local currency or all currencies, the
reconciliation currency is the local currency. If one of the foreign currencies was specified
for the business partner, the reconciliation currency is this foreign currency.
 In the presented example the local currency of the company is British Pound and Maxi-Teq is
a local customer with British Pound defined as the business partner currency. Therefore, the
reconciliation currency is the local currency that is British Pound.
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 SAP Business One can handle accounting in two parallel currencies: the local currency and the
system currency.
 The Local Currency is the currency in which the company is legally required to keep its books. In
our example, British Pound.
 The System Currency may be a different currency than the local currency and is especially useful
for subsidiaries of global companies whose head office uses a different currency than the
subsidiaries (for example British Pound in the subsidiary and US Dollars in the head office).
 All amount columns in the Internal Reconciliation window display the updated amount in both the
local currency and the system currency. You can then set the amount to reconcile.
 All internal reconciliations (system and user) need to balance in system currency and local
currency.
 If they are not balanced in either of them, the system creates a balancing transaction which allows
the internal reconciliation to balance in local currency and system currency.
 The balancing transaction for local currency is called the exchange rate difference transaction.
 And the balancing transaction for system currency is called the conversion rate difference
transaction.
 In the example shown, the reconciliation between the invoice and the incoming payment balance in
local currency. It is 500 British Pounds in debit and credit and the balance is zero. However, there
is a balance of 10 US Dollars in the system currency due to rate differences between the invoice
and the payment dates.
 The system automatically created a conversion rate difference transaction to balance the system
currency.
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 You must define realized exchange and conversion difference accounts on the Sales,
Purchasing, and General tabs of the G/L Account Determination window.
 You can add unreconciled conversion rate difference transactions to the Internal Reconciliation
window by choosing the Display SC-Only Transactions option.
 Selecting this checkbox will add any additional transaction that has a balance due in system
currency only. This allows full presentation of the system currency open balance in the Internal
Reconciliation window.
 We will discuss more issues regarding local and system currency in the Currencies topic.
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 The system assigns a unique reconciliation number to each completed internal user
reconciliation (whether it is manual, automatic, or semi-automatic).
 The system also saves and assigns a unique number to system reconciliations, for example,
reconciliations during payment processing.
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 The Manage Previous Reconciliations function allows you to review or cancel a user
reconciliation.
 This function does not allow you to reverse reconciliation postings. The postings still exist even
though the reconciliation has been canceled. If you want to reverse these postings, you must
reverse them in the general ledger in the usual way by choosing Data  Cancel in the journal
entry display.
 To cancel user reconciliations for business partners or G/L accounts, choose the Manage
Previous Reconciliations option under the Internal Reconciliations area of either the
Business Partners or Financials module.
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 The term, Internal Reconciliation, refers to the matching and clearing of open credit items to
open debit items internally within an account.
 For vendor accounts, a liability (credit) is reconciled with an outgoing payment (debit). For
customer accounts, a receivable (debit) is reconciled with an incoming payment (credit).
 Internal reconciliation can be system reconciliation or user reconciliation.
 There are two statuses for both the system reconciliation and the user reconciliation: full and
partial.
 There are three user reconciliation types: manual, automatic and semi-automatic. The manual
type includes an option for reconciling multiple business partners with each other.
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 An internal reconciliation is performed in one currency. The one currency can be either local
currency or a foreign currency. The local currency is used if the business partner account is set
as the local currency or set to all currencies. If the business partner is set to a foreign currency,
then that currency is used for reconciliation.
 SAP Business One can handle accounting in two parallel currencies: the local currency and
the system currency.
 All internal reconciliations, whether system or user reconciliations, need to balance in both the
local currency and the system currency.
 The system assigns a unique reconciliation number to each internal reconciliation for both
system reconciliations and user reconciliations.
 The Manage Previous Reconciliations function allows you to review or cancel a user
reconciliation.
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 Welcome to the period end closing topic.
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 In this course we will discuss how to prepare for and perform period-end closing.
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 Imagine that your company creates an annual financial statement once a year.
 They need twelve posting periods for their internal controlling.
 Therefore, you have already created a new company database and defined the Fiscal Year as
the calendar year and the sub-periods as Months.
 They will not run the Period-End Closing process at the end of each month, they will do it at the
end of the main Posting Period - the Fiscal Year.
 Even so, there are many period-end tasks they do at month end. For example, each month
they do internal reconciliation and send debtor statements for outstanding debts.
 There is a lot of preparation needed for the period-end. The accountant follows a list of steps
for year-end closing.
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 Let us review the period end closing process. We will emphasize the different actions a user
should take in month end closing versus year end.
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 Here, you can see an overview of the Posting Periods Process. There are three stages in the
posting periods process. In this topic we will focus on Period End Closing, the last stage of the
process.
 First let us review each step.
 In the first stage, we define settings for posting periods. First we define the main posting period
for the Fiscal Year. Then we define the sub-periods in the fiscal year: Year, Quarters, Months,
or Days.
 The second stage is the Operational stage. In everyday work, we enter documents and manual
journal entries with a posting date that will be registered automatically to the appropriate sub-
period. Sub-periods allows the user to control posting into them, that way, postings to each
month can be controlled.
 The third stage is what we will focus on: the Period End Closing process.
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 There are four tasks in period end closing.
 First you change the posting period status to Closing Period. This status will limit who can post
to the period.
 Then you perform the year end tasks, such as reconciliation.
 Then you use the period end closing utility to close the period.
 This step will move all P&L account balances to the retained earnings account and zero the
P&L accounts.
 Finally you change the period status to Locked.
 The Period End Closing process is typically done at the end of a financial period that is a year
in length. You do that using the Period-End Closing window.
 You can, however, close a Sub-Period too.
 We will discuss Posting Period Statuses later on in this course.
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 Remember our business example. Your company’s main period is a year, but you also have
monthly sub-periods.
 You have decided not to close each sub-period, although you perform monthly period-end
tasks.
 This is because you use the sub-periods mainly for internal controlling.
 When your company does the year-end closing, at that point, your company closes all the sub-
periods.
 Other companies may choose to close each sub-period at the end of each sub-period.
 Since they have already closed Sub-Periods during the year, they close the last sub-period of
the fiscal year.
 In either case, to prevent users from creating documents for the previous fiscal year, you can
change the status of the period you are about to close to Closing Period. This means that only
authorized users can post data, documents, and transactions.
 The key purpose of the Period-End Closing is to prepare the accounts for submission to the
authorities and therefore involves the re-setting of the P&L account to zero so that the next
period can begin again collecting P&L data that is relevant to it.
 You then close or inactivate the Sub-Posting Periods in the fiscal year by locking them
using the Period Status field in the Posting Period window.
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 In a company that closes periods on a quarterly basis and runs perpetual inventory:
 A delivery note with a large amount of items was posted on March 31st.
 The A/R invoice for this delivery was issued on April 2nd.
 Would that be a problem in the Profit and Loss report for the first quarter?
 We need to consider the effects of this scenario on the periodic financial reports.
 Let us see the journal entries of the documents, including the involved accounts, that were
issued in different periods: the Delivery and the A/R Invoice based on that delivery.
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 First, in the delivery - the costs of the good sold causes a negative effect on profitability in
period 1.
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 In the A/R Invoice - the revenue is booked to period 2.
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 This reflects in the periodic Financial Reports. If the business is closing periods and reports on
a quarterly basis, it shows a ‘loss’ for period 1 and a ‘gain’ in period 2.
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 Therefore, one of the Period-End Tasks will be: to ensure you invoice all deliveries in the same
period.
 In the next slides we will discuss the tasks you need to take in order to prepare for period-end
and year-end closing.
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 Here are some examples for Period-End Tasks:
 Ensure that all period-end transactions were posted properly, including adjustments and
accruals.
 Post all open Journal Vouchers.
 Internally reconcile Expense Clearing Accounts. As a best practice, you should reconcile them
regularly at the end of each month; otherwise, you have a high number of transactions to
reconcile at the end of the year. To simplify the process, you can run automatic reconciliations.
 Print the reports:
 Trial Balance (a balance of each account and a current status).
 Vendor Liabilities Aging and Customer Receivables Aging reports to reconcile receivable
accounts with the G/L.
 Inventory Audit report to reconcile inventory with the G/L.
 And all Financial Statements.
 Review the open items list and close documents when possible.
 Lastly, make a backup of your database and put it in an off-site storage location.
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 Here are some examples for year-end tasks:
 Post any Doubtful Debts that you feel may not be recoverable.
 Post exchange rate differences and conversion differences.
 Post final transactions for the period in all modules and any final adjusting entries in the
general ledger.
 Close the last period of the fiscal year.
 Print any reports such as a final detailed Trial Balance and Financial Statements.
 Set up a new fiscal year (if you have not already done so).
 Once again, you should do a backup. This time to save the status of the previous fiscal year.
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 The next step in the period end closing process is to run the period end closing utility and then
change the posting period status.
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 After the period-end tasks are complete, we now are ready to run the period-end closing utility
to close the fiscal year.
 This action will zero all Profit and Loss account balances to the Retained Earnings account.
The retained earnings account is a Balance Sheet account in the Capital and Reserves
drawer. Capital and Reserves is called Equity in some localizations, such as the United States.
 After closing the period, the retained earnings account contains the total brought-forward
cumulated profit. The next period can then begin again collecting P&L data that is relevant to it.
 You then close or inactivate the sub-posting Periods in the fiscal year by locking them.
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 With the Period-End Closing utility, you can choose P&L accounts and periods, and specify a
retained earnings and period-end closing account. When you execute the period-end closing,
the system generates a list of proposals for closing entries. You can accept each proposal
individually.
 Here is an example for one account.
 When we run the period end-closing utility for the water expense account, we get a proposal
for a closing entry.
 The Period-End Closing utility is found in the Utilities area of the Administration module.
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 When you accept the proposal for the account, two transactions are created for each account
and two journal entries are automatically created to reflect those transactions. This way the
financial reports are correct in both periods.
 In the first journal entry, the system transfers the account balance from the Expense and the
Revenue accounts to the Period-End Closing account on the same day (the last day of the
period). This sets the accounts balances to zero.
 The Period-End Closing account is a temporary or clearing account which holds the balance
until the beginning of the new period.
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 The second journal entry is created at the same time as the first, however the second journal
entry is dated on the first day of the following posting period.
 On the first day of the following posting period, the system transfers the balance from the
Period-End Closing account to the Retained Earnings account.
 Now, the Retained Earnings account, which is a Balance Sheet account, contains the total
brought-forward cumulated profit.
 You can recognize Journal Entries posted by the Period-End Closing Utility, because they
have the origin “BC”. In the balance sheet report, you can later choose whether to include or
exclude these types of transactions by selecting the Add Closing Balances box.
 If you make postings after entering the balances carried forward, you need to repeat the
period-end closing routine to include these subsequent postings.
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 Let us review the statuses available for posting periods.
 The Posting Periods window is found under System Initialization in the Administration module.
 For example if we look at the graphic we see the current fiscal year. We are currently in sub period 3.
The current sub period is unlocked.
 In everyday work, when a posting period is Unlocked, anyone can post transactions with a posting date
that falls within the period start and end.
 At end of a posting period, after all business transactions belonging to that period have been posted to
the system, you can lock the period so that no additional postings can be made by any user.
 We click the link arrow for the period we want to lock. And change the period status from Unlocked to
Locked.
 If we look at the first sub period of the current fiscal year, we see it is locked as well as all the sub
periods in the previous year, except sub period 12.
 During the first periods of the new fiscal year you may need to make postings for the year-end closing of
the previous fiscal year. This is why the last period of the old year (sub period 12) has the status “Closing
Period”.
 As well as Unlocked and Locked, you can set the period status to:
 Unlocked Except Sales. If a period has this status, authorized users can post any document or
journal entry to the period except for documents from the Sales A/R menu.
 Closing Period. If a period has this status, only authorized people can post transactions to the
period.
The authorization “Period Status: Closing Period” is set using Administration  System Initialization
 Authorizations  General Authorizations.
You can have the system automatically change the status to Closing Period by selecting the checkbox
on the posting periods screen.
 Sub-period 12 of the previous fiscal year and sub-period 2 of the current year have the status Closing
Period.
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 You can run the Period-End Closing process at the end of each sub-period and the end of the
main posting period (the Fiscal Year) or you can wait to run Period-End Closing until the end of
the main posting period. This will close not only the main period but also all the sub-periods.
 There are four tasks in period-end closing: changing the posting period status to Closing
period, performing the year-end tasks, such as reconciliation, using the period-end closing
utility to close the period, and changing the period status to Locked.
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 The period-end closing utility will zero out the profit and loss account balances when they are
transferred to the retained earnings account. The retained earnings account is a balance sheet
account in the Capital and Reserves drawer.
 Two journal entries are automatically created for each account:
 First the system transfers the account balance from the Expense and Revenue accounts to
the Period-End Closing account on the last day of the period.
 Second the system transfers the balance from the Period-End Closing account to the
Retained Earnings account on the first day of the following posting period.
 You can set the period status to one of four statuses: Unlocked, Unlocked Except Sales,
Period Closing and Locked.
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Exercises
Unit: Posting Periods Process

Topic: Internal Reconciliations

 Internally reconcile G/L and business partner accounts using the
manual reconciliation type
 Undo and correct internal reconciliations
Many accounts are used during the end-to-end process of a business

transaction. If you have not completed a business transaction, these
accounts contain open items. In some cases, the accounts can still contain
open items even though you have completed the transaction. In this case,
you have to reconcile the account.
1-1 Questions
1-1-1 What is the difference between system reconciliation and user
reconciliation?
_______________________________________________________
_______________________________________________________
_______________________________________________________
1-1-2 When does the system perform an automatic partial
reconciliation?
_______________________________________________________
_______________________________________________________
_______________________________________________________
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1-2 Internally reconcile a business partner.
A customer pays you on account according to an agreement you have. You post
the invoice a month later when the actual deal happens.
Create a new customer record. Issue an incoming payment for this customer
from a month ago and an invoice from today.
Ensure that the payment terms defined for this customer are Cash Basic.
1-2-1 Use the manual reconciliation type.
Reconcile the two items on the business partner account using the
manual reconciliation type.
1-2-2 Reconcile transactions of more than one business partner.
This specific business partner is a customer as well as a vendor and
therefore has two business partner master data records.
Create a vendor master record with the same name and a different
code.
Create an A/R Invoice for the customer and an A/P Invoice for the
vendor on the same total amount.
Reconcile the transactions created against both business partner master
data records.
1-3 Cancel the reconciliations.

Cancel the first reconciliations using the Manage Previous Reconciliations
function.
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Solutions

Topic: Internal Reconciliations
1-1 Questions
1-1-1 What is the difference between system reconciliation and user
reconciliation?
System reconciliation is performed by the system when you assign a
payment to an invoice. User reconciliation is performed by the user
through the Reconciliation function.
1-1-2 When does the system perform an automatic partial reconciliation?
Partial reconciliation is done when a payment amount does not match
the amount of the selected transactions.
For example, a customer may pay a partial amount due. When a partial
payment is made, the system adjusts the Balance Due appropriately and
partially reconciles the invoice.
1-2 Internally reconcile a business partner.

1-2-1 Use the manual reconciliation type.
Define a new customer. In the customer master record under the
Payment Terms tab Ensure that the payment terms defined for this
customer are Cash Basic.
Create an incoming payment for the new customer from a month ago
and an invoice from today for the same amount.
Choose Business Partners  Internal Reconciliations 
Reconciliation.
Business Partner <Business partner code>
Select the Manual type.

Choose Reconcile.
Select matching debits and credits and Choose Reconcile.
Note: You can select multiple payments for an invoice, or vice versa.
You can also reconcile invoices and payments that include cash
discount. The Automatic and Semi-Automatic reconciliation types do
not recognize cash discount.
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1-2-2 Reconcile transactions of more than one business partner.
Create a vendor master record with the same name as the customer you
created in section 1-2-1 and use a different code.
Create an A/R Invoice for the customer and an A/P Invoice for the
vendor on the same total amount.
Now, you want to close both documents against each other in order to
document a barter deal.
Choose Business Partners  Internal Reconciliations 
Reconciliation.
Choose the Manual reconciliation type and the Multiple BPs option.
BP Code <In the column, choose the two

business partners for the customer
and the vendor>
Choose Reconcile.
Select the A/R Invoice in debit and the A/P Invoice in credit and
Choose Reconcile.
1-3 Cancel the reconciliations.

Choose Business Partners  Internal Reconciliations  Manage Previous
Reconciliations.
Previous Reconciliation for < Choose BP>
Date From … <Choose today’s date>
Date To … <Choose today’s date>

Note: If you do not enter any selection you
will see all reconciliations.
Choose OK.
The reconciliations are displayed in the upper part of the window.
Select one of manual reconciliations.
Choose Cancel Reconciliation.
These transactions will appear again in the Internal Reconciliation window open
to be reconciled again.
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Exercises

Topic: Period-End Closing

 Run the Period-End Closing utility
At the end of a posting period you need to clear the balances for the sales
and expenditure accounts. Balances are transferred to the retained
earnings account.
2-1 Close out the Profit and Loss Accounts

Use the Period-End Closing utility to close out the profit and loss accounts for
the current fiscal year, up to the end of the previous period.
2-2 Review the Posted Journal Entries.

Review the journal entries that were posted to the retained earnings account.
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Solutions

Topic: Period-End Closing
2-1 Close out the Profit and Loss Accounts

Choose Administration  Utilities  Period-End Closing.
Choose the fiscal year and the posting periods (up to the end of the previous
period).
Choose the Retained Earnings account and the Period-End Closing account
from the chart of accounts.
Choose Execute.
In the Period-End Closing screen, enter a Due Date and a Document Date, and
an optional reference number.
Select the accounts you want to close out (transfer balances to retained
earnings). You can select all accounts.
Choose Execute.
2-2 Review the Posted Journal Entries.

Choose the Previous Record icon from the top menu bar to page through the
journal entries.
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 Welcome to the financial reports topic.
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 We will explore the effect of standard processes in SAP Business One on Financial Reports:
such as the Balance Sheet, the Trial Balance, and the Profit and Loss report. We describe
when to use each report and how to interpret typical report data.
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 Imagine that you are reviewing the Financial Reports with Maria the company accountant of
OEC Computers:
 Maria mentions that you discussed the influence of Period-End Closing on the Balance Sheet
and Profit and Loss reports.
 This is because you usually issue the Financial Reports for the last day of each financial year
or period to get the financial status of the company.
 You demonstrate the financial reports in SAP Business One.
 Note that the company usually gets last year’s related documents after the end of the financial
year or period. Therefore, they also issue the reports for the closing period, during the
following period.
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 We start by talking about the strong connection between the chart of accounts structure and
the different financial reports.
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 At the end of the year you issue the Balance Sheet report.
 You present the report in a summarized form.
 For the Assets Drawer you see the following result.
 From a financial controller’s point of view where is most of the money invested?
 Are they assets that can be converted into liquid funds at short notice or property that a firm
owns and uses that is not expected to be consumed or converted into cash in the near future?
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 The correct answer is highlighted.
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 Let us go back and examine the Chart of Accounts Structure in association with Financial
Reports.
 This subject is discussed in the Manage the Chart of Accounts topic.
 Although the chart of accounts will vary according to a company’s localization, the structures
are very similar around the world.
 Remember how in the General Ledger you distinguish between Balance Sheet Accounts and
Income Statement Accounts, which are also called Profit and Loss Accounts.
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 The different reports run on the account balances relevant to a selected date or date range
and the reports present them according to their drawer, level and type.
 For example, the balance sheet report is based on the balance sheet accounts, and
similarly the profit and loss statement is based on profit and loss accounts. The trial
balance shows all the account types.
 All these reports are typically issued for the last day of each financial year or period.
 Let us look closely on each report:
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 All financial reports will appear in the Financials Reports menu which is found in the Financials
module
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 The Balance Sheet presents the financial position of a business, the company’s value.
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 You run the Balance Sheet up to a certain date, that is from the beginning of the company until
that date.
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 The Balance Sheet presents all Balance Sheet Accounts: Assets, liabilities, and owner’s equity
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 When you issue the report, the system runs the report on the account balances of the Balance
Sheet accounts and summarizes their values according to the formula: Total Assets equals
Total Liabilities plus Equity.
 In addition, the relative percentage of each balance in the company’s assets, liabilities, and
equity is presented.
 The equity section includes the profit period. This amount is calculated while the report is
being composed, to represent the summary of the profit and loss of the period.
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 Some examples of documents and their related accounts which affect the report are:
 Accounts receivables and the Sales tax accounts in an A/R Invoice.
 The bank account in an Outgoing Payment, and
 The Inventory account in a Goods Receipt PO.
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 The Trial Balance displays a summary of all accounts and/or business partner balances. The
report can comprise a particular cross section of accounts and business partners.
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 You can issue the report for a selected posting period or periods.
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 The Trial Balance presents all selected accounts (Balance Sheet and Profit and Loss) and
business partners master data.
 If you include business partners in the report, those will be shown at the end, after the list of
accounts. The total balance for customers and vendors is represented in the list of accounts,
through the control accounts’ balances.
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 When you issue the report, for each account the system presents the total debit and credit
amounts, and the ending balance which is calculated as the debit amount minus the credit
amount.
 For the entire report: if the trial balance includes all the accounts in a complete period, the
debit and credit side totals must be equal. That is, the total report balance should be zero.
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 Here is an example of a document and its related accounts which affect the trial balance
report:
 An A/P Invoice includes the Vendor, the Accounts Payable account, a clearing account or
an inventory account, and the Input Tax account.
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 The Profit and Loss Statement shows the profit (or loss) of your business for the fiscal year or
the selected period. It explains the change in the company’s value.
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 You run the report for a selected period.
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 The Profit and Loss Statement presents all the accounts located in the 5 Profit and Loss
drawers: Revenues, Cost of Sales, Expenses, Financing and the Other Revenues and
Expenses.
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 When you run the report, the system calculates the profit or the loss for the fiscal year or the
selected period according to this calculation: The balances of the Expense accounts will be
subtracted from the balances of the Revenue accounts.
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 And here are some examples of documents and their related accounts which affect the report:
 The income account in an A/R Invoice.
 And the expense account in an A/P Invoice.
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 Here is a question for those of you with accounting backgrounds:
 The Balance Sheet calculation is: Total Assets equals Total Liabilities plus Equity.
 How is the calculation balanced if the report considers only the Balance Sheet accounts?
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 The profit or loss accumulator is included in the Balance Sheet report and will either increase
or decrease the equity on the balance sheet.
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 The Statement of Cash Flow is a legal document that is required by many localizations – just
like the profit and loss and the balance sheet.
 You need to configure initial settings in the General Settings window and to set defaults for
assigning transactions to relevant items in the Statement of Cash Flow.
 For more details on how to configure the Statement of Cash Flow refer to the on-line help.
 Note that the Cash Flow is a different report than the Statement of Cash Flow. The Cash Flow
report is an internal management tool which is used to help the business manage its cash
reserves and to anticipate future periods when it may need to borrow to cover a cash deficit.
We will discuss the Cash Flow report in the Cash Management Reports topic.
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 In the General Ledger, you distinguish between Balance Sheet Accounts and Income
Statement Accounts, which are also called Profit and Loss Accounts.
 The different financial reports run on the account balances.
 The financial reports present the account balances according to a selected date or range and
their drawer, level and type.
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 The balance sheet report is based on the balance sheet accounts. It presents the company’s
value using the formula: Total Assets = Total Liabilities + Equity. The report displays the
relative percentage of each balance.
 The profit and loss statement is based on all profit and loss accounts. It presents the profit or
loss of your business. The profit or loss for the selected period equals the difference between
the balances of the revenue accounts and the balances of the expense accounts.
 The trial balance is based on all account types. This report presents a summary of all accounts
and/or business partner balances. For each account, the report shows the total debit and
credit amounts and the ending balance. If the trial balance includes all the accounts in a
complete period, the report balance will be zero.
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 Welcome to the Cash Management Reports topic.
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 In this topic we will discuss the effect of standard processes in SAP Business One on monetary
reports. We will describe when to use each report and how to interpret typical report data.
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 Imagine that you are implementing SAP Business One at a company:
 Maria, the accountant of the company, OEC Computers, tells you that controlling the customer
receivables status and minimizing payment time is crucial for their business.
 You tell Maria that SAP Business One provides her with the tools to manage customer
receivables.
 You introduce three tools to control customer receivables:
 First, the cash flow report that helps you forecast the monetary status of the company.
 Secondly, the customer receivables aging report so you can quickly identify late payments.
 Lastly, the dunning process that enables active tracking of open A/R Invoices.
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 Which report in SAP Business One provides you with a forecast of the company monetary
status?
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 Cash flow is a forecast report –
 You can find the Cash Flow report in the Financial Reports menu of the Financials module.
 The report provides information about the liquidity of your business that is beyond the scope of
a Profit and Loss Statement.
 It displays the Balance Sheet Accounts which reflect the monetary value of the company.
 The cash flow report in SAP Business One lists the totals and balances of both the accounts
that represent cash holdings and the accounts that expect a cash flow in the future (either
incoming or outgoing) for the interval you have requested.
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 The Cash Flow runs on:
 Open transactions – not reconciled (with the option to Display Fully Reconciled Postings).
 And on the transaction Due Date.
 The Cash Flow is displayed according to:
 The level of probability that the transaction will turn to cash (incoming and outgoing). The
probability that a cash flow can be expected varies considerably. For this reason, the
system assigns the balances to various security levels. Security here means the level of
certainty with which an account balance is relevant to the cash flow.
 The cash flow display also includes Time Intervals.
 In the Cash Flow Selection Criteria window, you can add to the cash flow:
 Recurring transactions, which appear in green in the report and,
 Open journal vouchers, which are displayed in blue in the report.
 You can also add approved blanket agreements to the report calculation.
 In the Include Projected Postings table specify future transactions that have not been recorded
yet in SAP Business One, such as the purchase of a new car for the business, designated to
be executed next month. The report displays the additional transactions in green.
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 The Sales process affects the cash status of the business.
 How can OEC Computers improve the Cash Flow Results?
 What kind of options does a company have to optimize their cash flow?
 Some background to this question: even when it is profitable, a company can go bankrupt
due to cash flow problems. Keeping a positive cash flow is crucial.
 And how can they ensure that a timely invoice is generated to enhance positive cash flow?
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 The company can improve the Cash Flow Results by:
 Defining the appropriate payment terms for each of your customers. Payment terms are set
for each business partner in the business partner master data on the Payment Terms tab.
 Payment terms influence sales documents’ due dates and expected payments. You can see
the effect of the payment terms in the Cash Flow, Aging report and Dunning.
 You can also set default payment terms for customers and vendors in System Initialization,
under General Settings on the BP tab. The default payment terms are used when you set up
a new customer, but you can adjust the payment terms in a customer master to reflect the
payment risk involved with that particular customer.
 Then monitor the credit-worthiness of your customers in the customer receivables aging
report. The Customer Receivables Aging report is the monetary controller of the Sales-A/R
module.
 So let us take a deeper look at what the customer receivables aging report shows us.
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 The customer receivables aging report shows all the money owed to a company and how long
it has been owed.
 This is a key report for managing the company’s cash flow as well as evaluating the credit
quality of customers.
 You can find the aging reports in the Financials module. From the Financial Reports menu
choose Accounting and then Aging.
 SAP Business One is shipped with two reports for monitoring the due dates for open customer
receivables and vendor liabilities:
 Customer Receivables Aging
 And Vendor Liabilities Aging
 Both reports allow you to restrict the information to certain business partner accounts.
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 You can specify an aging date after which the due dates are to be calculated. You can also
specify intervals in days, months or periods, for grouping receivables by how old they are.
 As you can see in the graphic, this report gives you a quick look at how overdue your invoices
are. The invoices are grouped by aging date. At the bottom of the report, you can see the
percentages of overdue invoices in each aging interval.
 You can specify by which date to calculate the age of the receivables: due date, posting date,
or document date of the document/journal entry.
 And you can choose the currency for displaying the report results.
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 What proactive steps can OEC Computers take to improve the Cash Flow Results?
 What kind of options does a company have to ensure timely payments?
 How can they prevent “bad debts”?
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 A complementary tool to enhance a positive cash flow will be to send debtor statements for
outstanding debts and to charge the customer for interest and dunning fees.
 Every time goods or services are sold, the liabilities of the respective customers to your
business are increased. From the moment an A/R invoice is created, incoming payments are
monitored to ensure that customer debts are paid on time. When they are not, the company
needs to activate a multilevel collection process, such as telephone or written reminders, for
the remiss customer.
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 SAP Business One provides a dunning wizard for producing reminder letters.
 The Dunning Wizard enables you to create and send letters to customers that have not paid
their open invoices within a given time range and reminds them of their overdue payments.
 Go to Sales A/R  Dunning Wizard.
 The dunning wizard runs through all the customers, checks all outstanding A/R invoices and
transactions that represent debt, and enables you to print and send reminder letters of different
levels of severity.
 In addition, service invoices are created automatically for interest and dunning fees during
the dunning wizard run.
 This way, dunning interest and fees are reflected in the business partner account balance.
 For this purpose you need to configure the Dunning System.
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 To configure the dunning system, go to the Administration module. In the Setup menu choose
the Business Partners sub-menu and then the Dunning Terms option.
 In each dunning term you can define multiple levels to be effective from the invoice’s due date.
For example 30, 60 and 90 days. This definition will set the automatic creation of dunning
letters.
 For each level you can define the fee per letter and whether to charge interest or not.
 When you select at least one interest option in one of the levels, the Bank Interest % section
appears at the bottom with the relevant fields for you to define.
 In the Annual Interest Rate field define the rate to be used in calculations in the dunning letter.
 In the Automatic Posting field, specify whether to automatically post interest and fee, interest
only, or fee only when creating a dunning letter for a customer. If you choose to automatically
post interest and/or fee, a service invoice is created in the dunning run that posts the interest
and/or fee.
 To enable this, accounts for posting interest and fee must be specified. The default accounts
are taken from the G/L account determination. However, you can change this setting by
choosing the Browse icon and specifying different accounts.
 You can also choose not to post any interest or fee.
 You can edit the default dunning letters in the Report and Layout Manager which is found in
the General Setup area of the Administration module.
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 Each customer must be assigned with a dunning term. It is possible to set up a default dunning
term for new customers on the BP tab in the General Settings.
 The dunning term will appear in the customer master data record on the Payment Terms tab.
 Once a dunning term is selected for the business partner, the Automatic Posting field appears.
The value in this field is taken from the definition in the Dunning Terms – Setup window.
 Now, you can run the Dunning Wizard to view delinquent customers and send dunning notices
as well as service invoices for interest and dunning fee.
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 Cash flow is a forecast report which reflects the monetary value of the company.
 The cash flow runs on open transactions (not reconciled) and the transactions’ due dates.
 The cash flow report displays balances of cash holdings (such as cash in the bank) and
expected cash flow in the future (such as future payments for open invoices).
 The system assigns the balances to various security levels based on the level of certainty. For
example, cash holdings belong to the first level (cash accounts) and future payments from
customers belong to the fourth level (customer liabilities).
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 The customer receivables aging report shows all the money owed to a company and how long
it has been owed.
 You can specify an aging date after which the due dates are to be calculated and intervals for
grouping overdue items. These intervals can be set in days, months, or periods and then used
to display overdue receivables of a similar age.
 The dunning wizard runs through all customers and checks all outstanding A/R invoices and
transactions that represent debt.
 The dunning wizard enables you to print and send reminder letters with different levels of
severity and automatically creates service invoices for interest and dunning fees.
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Exercises
Unit: Controlling Reports

Topic: Aging and Dunning

 Generate aging reports for vendor liabilities and customer
receivables
 Create reminder letters and service invoices on interest and fee
to customers using the Dunning Wizard
The accounting clerk regularly checks the open vendor liabilities
and customer receivables, and initiates the necessary payment
transactions.
1-1 Run the Customer Receivables Aging report.

Call up the Customer Receivables Aging report to display a list of all the
accounts receivable for today's date. To make sure that the list is complete, do
not enter any customer master records or time intervals. Let the system retrieve
the due date from the sales documents and structure the report in intervals of 10
days.
Note the name of a customer with open invoices, as well as the total open
amount.
Customer: _________________________________
Open receivables: _________________________________
1-2 Run the Vendor Liabilities Aging report.

Call up the Vendor Liabilities Aging report to display a list of all the open
invoices for today's date. To make sure that the list is complete, do not enter any
vendor master records or time intervals. Let the system retrieve the due date
from the sales documents and structure the report in intervals of 10 days.
Note the name of a vendor with open invoices, as well as the total open amount.
Vendor: _________________________________
Open payables: _________________________________
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1-3 Dunning
1-3-1 Create an A/R Invoice with past Due Date
Create an A/R invoice for any domestic customer whose due date is
one month past. You can post this invoice into the current posting
period and just manually change the due date. Ignore the warnings that
will come up.
1-3-2 Create a Dunning Term
Create a dunning term with two dunning levels. The first one is
effective after five days and the second one is effective after 15 days.
Include fee and interest in both dunning levels. In the Bank Interest
%fields define the relevant settings with annual interest rate of 5 and
automatic posting for interest and fee.
Enter this dunning term into the business partner to whom you posted
the A/R invoice.
1-3-3 Use the Dunning Wizard
Use the Dunning Wizard to create a dunning letter and a service A/R
invoice for the customer.
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Solutions
Unit: Controlling Reports

Topic: Aging and Dunning
1-1 Run the Customer Receivables Aging report.

Choose Reports  Financials  Accounting  Aging  Customer
Receivables Aging.
Aging Date <Today's date>
Interval/Days 10, 20, 30
Choose OK.
In the results window, select Age by Due Date.
Review the list of documents for the relevant customer account.
Note a customer and the customer's open balance.
1-2 Run the Vendor Liabilities Aging report.

Choose Reports  Financials  Accounting  Aging  Vendor Liabilities
Aging.
Aging Date <Today's date>
Interval/Days Choose your intervals
Choose OK.
In the results window, select Age by Due Date.
Review the list of documents for the relevant vendor account.
Note a vendor and the vendor's open balance.
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1-3 Dunning
1-3-1 Create an A/R Invoice with past Due Date
Posting Date <Past date>
Due Date <Today’s date minus 1 month>
Post this invoice to any customer with any item.
1-3-2 Create Dunning Terms
Choose Administration  Setup  Business Partners  Dunning
Terms.
Code <any, for example: Two
Levels>
Name <any, for example: Two
Levels>
Letter Layout
1 Dunning Letter 01
2 Dunning Letter 02
Effective After (Days)
1 5
2 15
For Dunning Letter 01 enter Fee 5
Per Letter
For Dunning Letter 02 enter Fee 8
Per Letter
For Dunning Letter 01 and Check the Interest box.
Dunning Letter 02
In the Bank Interest %fields:
Annual Interest Rate 5
Automatic Posting Interest and fee.
Browse icon Verify/ choose interest and
fee accounts.
Delete the additional rows.
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Set number of days in year and in month.
To save postal expense, in the Dunning Letter Method define One
Letter per Dunning Level.
Choose Add.
Enter this dunning term into the customer to whom you posted the A/R
invoice. Choose Business Partners  Business Partner Master Data
and select your customer. Choose the Payment Terms tab and select
your newly defined dunning term from the Dunning Term dropdown
list.
Choose Update.
1-3-3 Use the Dunning Wizard
Choose Sales – A/R  Dunning Wizard.
Choose Next.
Select the Start a Dunning Run indicator.
Choose Next.
Do not change the default values on the General Parameters form.
Choose Next.
Choose Add and select your business partner.
Choose Next.
Don’t change the default values on the Document Parameters form.
Choose Next.
The recommendation report should show your customer and the A/R
invoice that you just posted. The recommended dunning level is 1.
Review the interest and fee amounts. In the Automatic Posting column,
ensure that the Interest and Fee option is selected.
Choose Next.
Review the interest and fee amounts to be included in the automatic
service invoice that will be created. Choose the relevant tax codes.
Choose Next.
Select the Print Dunning Letters and Exit indicator.
Choose Finish.
Print the dunning letters to the default printer. Review the service
invoice.
Check the business partner master record. Verify that you see “1”
under the Accounting tab in the Dunning Level field as this was the
applied level. In the Dunning Date field, you should see today’s date.
Note: The level 2 dunning letter will become effective 15 days after the
level 1 dunning letter is generated.
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 Welcome to the course on Currencies.
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 In this topic, we will discuss how to define currencies in the implementation process. We will
explain the consequences of currency definition choices in your company on the financial
accounting process.
 We will give examples of some currency issues in SAP Business One.
 Decisions about these definitions should always be made together with the client accountant.
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 Imagine that you are implementing SAP Business One at a British customer, OEC Computers.
You discuss the currencies definition with Maria, the company accountant:
 Maria says that most of their customers are local customers, therefore located in the United
Kingdom.
 However a few customers and vendors they work with are located in another country,
specifically the US.
 You tell Maria about the working methods with currencies in SAP Business One.
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 We will review the currency definitions in the company. Starting at the company level, then the
account currency and finally the currencies setup in the pricelist.
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 OEC Computers is located in the UK, some of their customers are located in US.
 How can they price their foreign customers?
 What will be the currency of the A/R Invoice total amount?
 What will be the currency in the automatic journal entry created by the A/R Invoice?
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 Starting with the 9.0 release, it is possible to set an item’s price in each price list in up to three
different currencies – the primary currency and two additional currencies.
 This is useful where there is a need to define exact pricing for different countries instead of
using currency exchange rates.
 In the sales pricelist at OEC Computers, the primary currency remains the default therefore the
British Pound is used in documents for local customers.
 In the additional currency column in the sales pricelist they will enter prices in US Dollars.
 For the US customers, the document currency will be US Dollars and the price of the items will
be presented in the additional currency, that is in US Dollars.
 In automatic journal entries, the system converts the invoice total amount in foreign currency
into local currency and posts both values in parallel.
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 SAP Business One can handle accounting in two parallel currencies: the local currency and
the system currency.
 You define this on the Basic Initialization tab of the Company Details window in the System
Initialization menu under the Administration module.
 The Local Currency is the currency in which the company is legally required to keep its
books. In our example, British Pound.
 The System Currency may be a different currency than the local currency and is especially
useful for subsidiaries of global companies whose head office uses a different currency than
the subsidiaries (for example, Euros (€) in the subsidiary and US Dollars ($) in the head office).
 In this case, the system automatically calculates all postings in the local currency and manages
an additional account balance in the system currency in real time.
 This makes it easier to have aggregated reporting on all the subsidiaries and allows for better
integration with the system of the head office. For example, you could export the financial data
in system currency from the SAP Business One systems of the subsidiaries to the SAP
Business Suite or the SAP Business Information Warehouse of the head office.
 Alternatively, financial consolidation can be done with Microsoft Excel or any other product
based on the financial data in system currency.
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 In our example, OEC Computers is a local company and does not have a reporting
requirement in another currency. Therefore you set the system currency to the local
currency - the British Pound.
 It is important to remember that you cannot change the Local or the System Currency once
you have started to work with the database.
 In addition to the system currency, you have an option to present financial reports in any
foreign currency. Use the Revaluation option to choose the revaluation method and currency.
The system calculates all the balances in the selected currency, while running the report.
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 Each Business Partner Master Data record and each G/L Account needs to have an
account currency definition:
 The system sets the Local Currency as the default currency for all Business Partner
Master Data records.
 You can define a default currency for new G/L accounts using the Default Account Currency
field on the Basic Initialization tab under the Company Details window in the System
Initialization.
 In our example, the currency for most vendors and customers of OEC Computers will be
defined as British Pound (Local Currency). The vendors and customers from the US will be
defined in USD (Specific Foreign Currency). The company Bank Account will be defined as
All Currencies since it needs to register journal entries and documents in more than one
specific Foreign Currency (for example, bank transfers).
 The table in the slide details the options for entering Journal Entries and viewing the Account
Balance for each option of the Account Currency – Local, Foreign and All Currencies.
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 In the first row, we see that if the currency of the account is “local currency” then journal entries
are entered in the local currency, but the account balance is shown in both the local currency
and the system currency, assuming the system currency is different from the local currency.
 Remember, that in the Internal Reconciliation course we said that an internal reconciliation is
performed in one currency.
 This account is reconciled in local currency.
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 In the second row, the account currency has been set to a specific foreign currency. In that
case, you can enter journal entries in the local currency as well as the specified foreign
currency. You can display the account balance in the specified foreign currency as well as in
the local and system currencies.
 This account is reconciled in foreign currency.
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 In the last row, the account has been set to “all currencies”. In that case, you can enter journal
entries in any foreign currency that has been set up for the company, as well as in the local
currency. The account balance will display in the local currency and the system currency.
 This account is reconciled in local currency.
 You can, at any point, change an account currency to All-Currencies, but once you update the
account, you will not be able to change it back to either a local or specific foreign currency.
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 As was mentioned before, starting with the 9.0 release, it is possible to set an item’s price in up
to three different currencies – the primary currency and two additional currencies.
 In the presented example, in the sales pricelist the primary currency is the default currency
(that is the British Pound) to go into documents for local customers.
 In the additional currency in this pricelist, prices were entered in US Dollars.
 When you choose a US customer in an A/R Invoice, the document currency is set
automatically to US Dollars according to the BP Currency.
 Therefore, the unit price of the item will use the additional currency, that is US Dollars.
 In the automatic journal entry, created by this invoice, the system converts the invoice total
amount in foreign currency into local currency and posts both values in parallel.
 Note! You can set a default currency symbol for auto complete purposes when entering prices
in the price list. Choose the Price List option from the Price List menu in the Inventory module
to set a currency symbol in the primary and the additional currencies columns. For example, for
the base price list enter USD in the Additional Currency 1 column.
 When you will enter this price list and type a price in the Unit Price column in the Additional
Currency 1 section and choose TAB, the system will automatically add the USD symbol.
 This will enable you to easily type prices without any effect on imported prices or prices based
on another price list.
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 For other cases where the business partner currency is not identical to one of the price list
currencies. For example, when you want to price in a fixed currency to local customers.
 Then, you can enter a unit price in any foreign currency defined in the Currencies – Setup
window.
 When you enter a business partner into a marketing document, the business partner’s currency
and their pricelists automatically default into the document. Users do not need to worry about
the currency. SAP Business One will automatically convert the total row value and the total
document value to Local Currency, System Currency and BP Currency, depending on the
business partner’s currency.
 The initial exchange rate used is based on the posting date of the document.
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 Next, we handle the exchange rate differences from foreign currency and system currency to
local currency.
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 Exchange rate fluctuations can cause exchange rate differences when you pay invoices in
foreign currencies:
 The figure shows an A/P invoice which has been issued by a foreign vendor in foreign
currency. At the posting day of the invoice the exchange rate was 0.5. The system converts
the 10 units foreign currency into 20 units local currency and posts both values in parallel on
the credit side of the vendor account.
 At the time when you post the payment for this invoice the exchange rate has changed to
0.25. 10 units in foreign currency are now equal to 40 units in local currency.
 Note, that the amounts paid are the same in the foreign currency as they were in the A/P
Invoice. The vendor is paid in his local currency so he will not notice the difference. We will
see the rate difference in the conversion to local currency.
 In the foreign currency, the amount of the invoice and the payment are the same, that is 10
units.
 But, compared to the value at the time of the invoice there is an exchange rate difference of
20 units local currency. When you post the payment the system automatically posts this
exchange rate difference to an exchange rate difference account.
 The system posts the exchange rate differences as expense or revenue to the accounts that
you have entered in the G/L Account Determination window, under the Purchasing tab in the
Realized Exchange Diff. Gain field and the Realized Exchange Diff. Loss field.
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 Business partner accounts and general ledger accounts that you manage in a foreign currency
post an account balance in the respective foreign currency and an account balance in the local
currency.
 The balance in the local currency comprises the foreign currency items that were translated
using the exchange rate in the exchange rates table at the posting date or the tax date. In other
words, the balance is based on past exchange rates.
 At period-end closing, therefore, you have to valuate the foreign currency account balance with
the exchange rate on the closing key date.
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 For this purpose you have the Exchange Rate Differences option in the Financials module.
When you execute this function, the system generates a list of proposals for difference
postings. You can then accept or reject each proposal individually.
 In addition to the local currency, the system also manages your data in the system currency in
parallel. If your company's local currency is different from the system currency, exchange rate
differences can arise. The system can clear these differences automatically. This is carried out
using the Conversion Differences function under the Financials module the same way as the
exchange rate differences.
 Remember that in the internal reconciliation topic we said that all internal reconciliations
(system and user) need to balance in system currency and local currency.
 If they are not balanced in either of them, the system creates (during the reconciliation process)
a balancing transaction which allows the internal reconciliation to balance in local currency and
system currency.
 Using the same logic, the balancing transaction for local currency is called the exchange rate
difference transaction. And the balancing transaction for system currency is called the
conversion rate difference transaction.
 You must define realized exchange and conversion difference accounts on the Sales,
Purchasing, and General tabs of the G/L Account Determination window (under
Administration  Setup  Financials  G/L Account Determination).
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 SAP Business One can handle accounting in two parallel currencies: the local currency (in
which the company is legally required to keep its books) and the system currency (which can
be different for subsidiaries of global companies).
 When the system currency differs from the local currency, the system automatically calculates
all postings in the local currency and manages an additional account balance in the system
currency in real time.
 Each business partner master data record and each G/L account need to have an account
currency definition set to one of these three choices: local currency, a specific foreign currency
or all currencies.
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 It is possible to set an item’s price in up to three currencies in a price list: the primary currency
and two additional currencies.
 When you choose a foreign customer in a sales document, the document currency is
automatically set according to the BP currency. The unit price of the item is taken from the
assigned price list in the appropriate additional currency if one is defined. The automatic
journal entry on the invoice converts the total amount in foreign currency into local currency
and posts both values in parallel.
 When you pay invoices in foreign currencies, the amount of the invoice and the payment are
the same in the foreign currency. Exchange rate differences can occur due to rate differences
in the conversion to local currency. The system automatically posts any exchange rate
difference to an exchange rate difference account.
 The Exchange Rate Differences option allows you to automatically clear the difference
between the account balance in foreign currency and the account balance in the local
currency.
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 Welcome to the fixed assets topic.
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 After completing this topic, you will be able to:
 Explain the process of managing fixed asset items.
 Recognize key terms in the Fixed Assets solution.
 Identify the relevant sub-menu and windows in SAP Business One.
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 OEC Computers utilizes a small fleet of delivery trucks.
 Therefore, they own a few trucks.
 Bryce, the accountant, wants to have the option to manage and monitor the trucks’ value.
 You tell him about the Fixed Assets solution in SAP Business One.
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 Let us start by reviewing the sub-menu and windows in SAP Business One.
 To enable the fixed asset solution go to the Basic Initialization tab in Company Details window.
 Select the Enable Fixed Assets checkbox.
 Once the user checks the box, the Fixed Assets functionality will be activated and new
windows and fields will be available under Administration  Setup  Financials  Fixed
Assets.
 And under Financials  Fixed Assets.
 In this Fixed Assets sub-menu you can find the Asset Master Data window.
 This window is very similar to the Item Master Data window, but with the addition of the Fixed
Assets Item Type and the Fixed Assets tab.
 Once the solution is activated, you cannot deactivate it.
 Note that you need to make decisions about legal and industry requirements together with the
client accountant.
 Prior to version 9.0, the fixed assets solution was available as an add-on.
 Starting with 9.0, the solution is merged into the core of SAP Business one.
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 Let us review the life cycle of a fixed asset item in SAP Business One from purchasing through
capitalization, then depreciation and until zero net book value.
 This is the process at a glance. In the next slides, we will talk more about the different steps.
 The first step is set up a fixed asset in the Fixed Assets Master Data window. This window allows you to
define and manage all Fixed Assets item types. In our example, we will set up a fixed asset record for a
new truck that OEC Computers purchased at the beginning of the fiscal year.
 An Asset Master Data record is activated when the user purchases a fixed asset using an A/P Invoice.
The A/P Invoice automatically generates a Capitalization document.
 The Asset Value Date sets the Capitalization Date in the Asset Master Data record.
 When a user executes a depreciation run, the system carries out the depreciation planned up to the
specified date.
 Additional fixed assets documents support the need for adjustments, if necessary, during the life cycle
of a Fixed Assets item type: Fixed Asset Transfers, Revaluation, or Appreciation of an asset.
 In order to decide which of the adjustment documents to use, you need to verify, together with the client
accountant, what the legal and industry requirements are.
 And finally, the user can retire a fixed asset using an A/R invoice. The A/R Invoice automatically
generates a Retirement document.
 In order to retire the asset on an A/R invoice, the user should mark the Asset Master Data record as a
Sales Item.
 All transactions are registered to the fixed assets sub-ledger and can be followed in the various
dedicated reports.
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 Let us look at the life cycle of an asset master data with reference to standard accounting terminology.
The terminology is highlighted in blue in the slide.
 In our example, when we define the new truck that OEC Computers purchased, we define the asset’s
Useful Life. An asset’s useful life is the period during which an asset is expected to be usable for the
purpose for which it was acquired. Useful life may, or may not, correspond with the asset's actual
physical life, or economic life. Before the end of an asset’s useful life, the asset should be written off
completely. We define this truck’s useful life as 3 years.
 The Asset Master Data record is activated when the user purchases a fixed asset using an A/P Invoice.
The A/P Invoice automatically generates a Capitalization document.
 Capitalization is the process of recording an acquisition and production cost as a fixed asset. The
acquisition value of the truck is 6000.
 The Asset Value Date sets the Capitalization Date in the Asset Master Data.
 The asset value date can be different from the posting date and document date, but it must be within the
same period as the posting date. For the truck we enter the 1st of January.
 Each period the company calculates the Depreciation on the asset. Depreciation is the reduction in the
book value of an asset over its useful life for both tax and accounting purposes. Depreciation would be
included in the company expenses. The truck is planned to reduce its value by 2000 each year.
 During the asset’s useful life, the system calculates the item’s Net Book Value. The net book is the
calculated value of an asset using the historical cost of the asset minus any accumulated depreciation.
So in our case, after the first year the truck’s value will be 4000.
 Retirement is the removal of an asset or part of an asset from the asset portfolio.
 There are two ways to retire a fixed asset: by A/R invoice if you are selling the asset or by a Retirement
document if there is no customer involved and you need to write off the fixed asset. After the asset is
retired, its value in the asset balance sheet account, in the Fixed Assets Sub Ledger, will be registered
as zero.
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 Let us look at our example. We have the new truck that OEC Computers purchased at the
beginning of the fiscal year.
 First, we define this truck as an Asset Master Data.
 Then, we attach a set of definitions relevant to this kind of asset to the asset master data. In
our example we use the Heavy Vehicles set of definitions.
 The main definition in the Asset Master Data is the Asset Class which includes the
association to the other definitions: Depreciation Area, Account Determination and
Depreciation Type.
 Each fixed asset will be assigned to one asset class. In our example, the Truck belongs to the
Heavy Vehicles asset class.
 Each asset class includes the default definition of the other settings.
 The Depreciation Area is a financial dimension showing the valuation of the asset for a given
purpose, for example: book depreciation, tax depreciation, or depreciation for cost accounting.
 You need to define one depreciation area as the main area.
 In our example, the main area is GAAP that is, Local Generally Accepted Accounting
Principles
 The user can define an additional area if necessary. In our example, we define the IFRS as the
additional area that is, International Financial Reporting Standards.
 The main depreciation area (GAAP in our example) posts transactions to the system.
 The additional area (IFRS in our example) can be used for reports.
 The Account Determination definition enables the system to automatically select the relevant
G/L accounts for assets accounting.
 The Depreciation Type classifies the depreciation based on the reason for the value
adjustment. Including the option to define the method for the value calculation. In our example
we choose the Straight Line method.
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 Once you attach the Asset Class to the Asset Master Data window all related definitions will
apply to the selected asset.
 In the example shown, you can see that the Depreciation Areas and the Depreciation Types
defined for the Heavy Vehicles Asset Class apply to the Asset Master Data record displayed.
 You can follow the process of managing an asset by using the different sub-tabs in the Asset
Master Data. Besides the Overview tab, there are tabs for values, depreciation, cost
accounting and additional information.
© SAP AG 303 TB1100

 The user can purchase a fixed asset using an A/P Invoice. The A/P Invoice automatically
generates the Capitalization document.
 The user can choose whether to generate the Capitalization document directly, or to
automatically generate it from the A/P Invoice.
 In both options the Asset Master Data is activated.
 The graphic shows the automatic journal entries created during the process with the
associated accounts.
 If a vendor is not involved, then the user can generate a Capitalization document directly. In
this case, only the Capitalization journal entry will be created and therefore the clearing
account will appear as an obligation in the Balance Sheet.
 Remember that the accounts are derived from the definition in the Asset Master Data.
 Note that the Asset Value Date is set by default to be the same as the A/P Invoice Posting
Date. This date can be changed before adding the A/P Invoice to update the Capitalization
Asset Value Date.
© SAP AG 304 TB1100

 Depreciation is used to write off the cost of an asset over its useful lifetime.
 It represents the reduction in the book value of an asset for both tax and accounting purposes.
 Depreciation would be included within the company expenses.
 The system predicts the yearly expected depreciation rate according to the Asset Master Data
definitions (that is Asset Class, Depreciation Area, Account Determination and Depreciation
Type).
 You can view this information in the Asset Master Data and in the Asset Depreciation Forecast
Report.
© SAP AG 305 TB1100

 The user can execute the Depreciation Run option to update the asset’s value with the actual
depreciation.
 Only when you execute a depreciation run does the system carry out all depreciation planned
up to a specified date.
 In order to trigger the posting of a planned depreciation it is usually sufficient to start one
depreciation run for several posting periods. However, it is possible to execute several
depreciation runs for the same depreciation period.
 A depreciation run can be repeated as often as necessary, provided no depreciation run has
been executed for the following periods. A repeat depreciation run may be necessary, if the
asset values have changed once again after posting planned depreciation. When repeating a
depreciation run, only the value differences to the postings of the last depreciation run are
considered.
 Note!
 In the example shown, we use the direct posting method for depreciation. The system posts
the depreciation directly to the asset balance sheet account specified for the asset.
 In indirect depreciation, the system uses the accumulated depreciation account to post the
depreciation. The asset balance sheet account is affected only when the asset is purchased or
retired.
© SAP AG 306 TB1100

 There are two ways to retire a fixed asset: by A/R invoice if you are selling the asset or by a
Retirement document if there is no customer involved.
 In case the company sells the asset at the end of its useful life (or before), the user can retire
the item using an A/R invoice.
 The A/R Invoice automatically generates a Retirement document.
 A Retirement document can be issued directly in case a customer is not involved and you
need to write off the fixed asset.
 In this case, different accounts will be involved in the journal entry attached to the Retirement
document.
 If you use the A/R Invoice option, make sure you define the Assets Master Data as a Sales
Item.
 Now, the Net Book Value of the Asset Master Data is set to zero.
© SAP AG 307 TB1100

 The Asset History Sheet is the most important supplement to the balance sheet from the fixed
assets point of view.
 The report can be issued for all fixed assets.
 It displays all posted asset transactions in a fiscal year and presents the assets for each
Balance Sheet account.
© SAP AG 308 TB1100

 The main definition in the Asset Master Data is the Asset Class which includes the association
to the other definitions for Depreciation Area, Account Determination and Depreciation Type.
 The asset master data record is activated when a user purchases a fixed asset using an A/P
invoice. The A/P invoice automatically generates the Capitalization document. A user also has
the option to generate the Capitalization document directly.
 Depreciation is used to write off the cost of an asset over its useful life. Depreciation is included
as a company expense.
© SAP AG 309 TB1100

 The Depreciation Run option carries out all depreciation planned up to a specified date and
updates the asset master data value with the actual depreciation.
 A fixed asset is retired by either an A/R invoice if you are selling the asset or by a Retirement
document if there is no customer involved. If an A/R invoice is created, the invoice will
automatically generate a Retirement document.
 After retirement, the net book value of the asset is set to zero.
 The Asset History Sheet displays all posted asset transactions in a fiscal year and the assets
for each balance sheet account.
© SAP AG 310 TB1100

Exercises
Unit: Additional Financial Topics

Topic: Currencies

 Work with currencies in documents for foreign and local
business partners.
 Post an exchange rate difference transaction.
Most of OEC Computers’ vendors are local. They also work with
few foreign vendors.
1-1 Work with currencies in an A/P Invoice for a foreign business partner.
1-1-1 Review and update the setup.
Review the Currencies - Setup window.
Then review the Exchange Rates and Indexes window.
Enter exchange rate values in all existing currencies for today’s date.
1-1-2 Create a foreign currency vendor and update the price list.
Create a foreign currency vendor. Ensure that you define an account
currency that is different than the local currency. Write down the
account currency_________.
Ensure that you attach a Cash Basic payment terms to the vendor
record.
Check the pricelist defined for him in the payment terms__________.
For one of the items in this price list, in the Additional Currency 1 Unit
Price column, define a price in the same foreign currency.
1-1-3 Issue an A/P invoice for the foreign currency vendor.
Issue an A/P invoice for the foreign currency vendor you have just
defined. In the A/P invoice, choose the same item.
If the Exchange Rate and Indexes window appears, enter a valid
currency rate and update the window.
© SAP AG 311 TB1100

1-1-4 Review the currency data in the document.
Review the document currency.
Review the currency data in the Unit Price field, total row amount, and
the total document amount
1-1-5 Add the A/P invoice.
Add the A/P invoice. Review the calculation in the automatic journal
entry, and then review the vendor’s account balance in local currency,
system currency, and the specified foreign currency
1-2 Work with currencies in an A/P Invoice for a local business partner.
1-2-1 Issue an A/P invoice for a local vendor.
For the item/s in the invoice, enter the unit price in foreign currency.
Review the currency calculation in the Unit Price field, the total row
amount, and the total document amount.
Review the calculation in the automatic journal entry.
1-3 Post an Exchange Rate Difference transaction.

1-3-1 Issue an A/P invoice for a foreign currency vendor.
Issue an A/P invoice for the foreign currency vendor you have used
before with a past posting date.
Choose the item to which you entered a price in the foreign currency.
If the Exchange Rate and Indexes window appears enter a valid
currency rate that is different from the exchange rate you have entered
for today and update the window.
1-3-2 Create an outgoing payment for the invoice.
Create an outgoing payment for the invoice you have just issued.
Let us say that the exchange rate changed since the invoice was issued.
Ensure that in the Doc. Currency filed at the top of the payment the
exchange rate is different than the rate you entered for the invoice.
In the Payment Terms window, enter the payment details (for example
bank transfer).
Review the automatic journal entry created for the outgoing payment.
Note that the exchange rate difference was posted in the local currency
on a different row to a dedicated account.
© SAP AG 312 TB1100

Solutions

Topic: Currencies
1-1 Work with currencies in an A/P Invoice for a foreign business partner.
1-1-1 Review and update the setup.
Choose Administration  Setup  Financials  Currencies.
Review the Currencies - Setup window.
Then choose Administration  Exchange Rates and Indexes.
Enter exchange rate values in all existing currencies for today’s date.
1-1-2 Create a foreign currency vendor and update the price list.
Choose Business Partners  Business Partner Master Data. From
the Data menu  choose Add.
Code <Enter any code, for example

V90007 >
Customer/Vendor/Lead Vendor
Name <Enter any name>
Currency <Choose a currency that is different

from the local currency>
Write down the account currency_________.

Choose the Payment Terms tab and in the Payment Terms field select
he Cash Basic payment terms.
Write down the pricelist defined in the Price List field__________.
Choose Inventory  Price Lists  Price Lists
Double click the row number of the price list you have just written
down.
Choose the Form Settings icon.
© SAP AG 313 TB1100

Choose the Visible and possibly the Active checkboxes in the
Additional Currency 1 columns.
Choose OK.
For one of the items, in the Additional Currency 1 section:
Unit Price <any >

Note! With the price amount, enter the
currency symbol defined for the
vendor you have checked.
1-1-3 Issue an A/P invoice for the foreign currency vendor.

Choose Purchasing A/P  A/P Invoice.
Posting Date <Enter today’s date>
Vendor <Choose the foreign vendor>
Item <Choose the item to which you entered

a price in the foreign currency>

1-1-4 Review the currency data in the document.
In the BP Currency field at the top you can see the currency defined for
the vendor together with the exchange rate value you have entered.
The values in the Unit Price field, total row amount, and the total
document amount are all appearing in the BP currency.
© SAP AG 314 TB1100

Add the A/P invoice and browse back to the last invoice. Choose the
Accounting tab and then choose the linking arrow in the Journal
Remark field.
In the automatic journal entry, you can see that the amounts were
posted in foreign currency as well as in the local currency according to
the exchange rate that you entered.
In the row presenting the vendor’s details, choose the linking arrow in
the G/L Acct/BP Code field. On the header, at the field above the
Account Balance field, choose the 3 options in a row: Local
Currency/System Currency/BP Currency and check the account
balance in this currency.
If the balance in the local currency and the system currency is the same
then the local currency is defined for both currencies.
© SAP AG 315 TB1100

1-2 Work with currencies in an A/P Invoice for a local business partner.
1-2-1 Issue an A/P invoice for a local vendor.
Posting Date <Enter today’s date>
Vendor <Choose a local currency vendor>
Item <Choose any item>
Unit Price <Enter a price in one of the foreign

currencies to which you entered an
exchange rate>
Note! use the symbol defined in the
Currencies window, under:
Administration  Setup  Financials
 Currencies.

The total row amount and the total document amount are translated to
the local currency amount according to the exchange rate you entered.
Add the A/P invoice and browse back to the last invoice. Choose the
Accounting tab and then choose the linking arrow in the Journal
Remark field.
In the automatic journal entry, you can see that the amounts were
posted in the local currency only as this is a local business partner.
© SAP AG 316 TB1100

1-3 Post an Exchange Rate Difference transaction.
1-3-1 Issue an A/P invoice for a foreign currency vendor.
Vendor <Choose the foreign currency vendor

you have used before>
Posting Date <Enter a past date>
Item <Choose the item to which you entered

a price in the foreign currency>
If the Exchange Rate and Indexes window appears enter a valid

currency rate that is different from the exchange rate you entered for
today and update the window.
Add the A/P invoice.
1-3-2 Create an outgoing payment for the invoice.
Choose Banking  Outgoing Payments  Outgoing Payments.
Posting Date <Today’s date>
Vendor <Choose the foreign currency vendor

you have used before>
Selected column <Choose the Invoice you have just

created>
Let us say that the exchange rate changed since the invoice was issued.
Ensure that in the Doc. Currency filed at the top of the payment the
exchange rate is different than the rate you entered for the invoice.
Choose the Payment Terms icon. In the Payment Terms window, enter
the payment details (for example bank transfer).
Ensure that the account currency of the account selected in the G/L
Account field is defined to All Currencies.
Choose OK and add the payment.
Review the automatic journal entry created for the outgoing payment.
Note that the exchange rate difference was posted in the local currency
on different row to a dedicated account.
© SAP AG 317 TB1100

© SAP AG 318 TB1100
Exercises

Topic: Fixed Assets

 Define a fixed assets master data.
 Activate the fixed asset using an A/P Invoice
 Execute a Depreciation Run
 Retire the fixed asset using an A/R Invoice
OEC Computers purchased a new truck at the beginning of the
fiscal year. The company accountant defines the truck as an Asset
Master Data record.
2-1 Define a fixed assets master data record.

Create a fixed asset master data record for the truck. Enter the Item Number and
Description. Assign the Motor Vehicles asset class to the truck asset master
record and ensure that all related definitions are applied to this asset.
Add the new Asset Master Data record
2-2 Activate the fixed asset.

Purchase the truck using an A/P Invoice. In the Posting Date field Enter the 1st
of January this year. Verify that a Capitalization document was automatically
generated and that the Asset Master Data is activated.
Tip: in the asset master record, under the Overview sub-tab check the Status
Field.
© SAP AG 319 TB1100

2-3 Execute the Depreciation Run
Execute the depreciation run for the GAAP area. Include all periods from the
beginning of the fiscal period and until today. Then, review the journal entry
created by the depreciation run.
Review the depreciation information of the truck in the Asset Maser Data
window.
Note that the data is presented according to the selected Depreciation Area and
the selected Fiscal year.
2-4 Retire the fixed asset.
OEC Computers sells the truck. Define the truck Assets Master Data record as a
Sales Item. Issue an A/R Invoice. Review the journal entry created by the A/R
Invoice. Then, review the Retirement document that was automatically
generated by the A/R Invoice.
Check the Net Book Value of the Asset Master Data _____________
And check the asset status _____________
© SAP AG 320 TB1100

Solutions

Topic: Fixed Assets
2-1 Define a fixed assets master data record.

Choose Financials  Fixed Assets. Open the Asset Master Data window.
Choose Data  Add.
Item No. <any, for example: F00094 >
Description <any, for example: Truck>
In the Fixed Assets tab, under the Overview sub-tab, in the Asset Class field,
choose the Motor Vehicles asset class.
Review the Depreciation Parameters area.
Note that the Depreciation Areas, the Useful Life and the Depreciation Types
defined for the Motor Vehicles asset class apply to the truck asset master data
record.
Choose Add.
© SAP AG 321 TB1100

2-2 Activate the fixed asset.
Choose Purchasing - A/P  A/P Invoice.
Vendor <any>
Item No. Choose the truck asset maser data

record.
Posting Date 1st of January this year
Unit Price <any, for example: 6000 >
Tax Code Choose the exempt tax group
Choose Add.
Go to Financials  Fixed Assets  Capitalization.
Browse to the last record. Review the Capitalization document that was
automatically created.
Choose the Contents tab and choose the linking arrow in the Asset No. field. In
the asset master data window choose the Fixed Assets Tab. Under the Overview
sub-tab focus on the Status Field. The Asset Master Data is activated.
© SAP AG 322 TB1100

2-3 Execute the Depreciation Run
Choose Financials  Fixed Assets  Depreciation Run.
Depreciation Area GAAP
Depreciate To <the current period>
Choose the Preview button.

Review the data and then choose the Execute button.
Confirm the system message.
Choose the linking arrow in the Journal Entry column and review the journal
entry created by the depreciation run. Close the Journal Entry window.
Choose the linking arrow of the Truck asset. In the Asset Master Data window
choose the Fixed Assets tab and then the Depreciation sub-tab.
Depreciation Area GAAP
Fiscal Year <the current year>
Review the numbers according to this selection.
© SAP AG 323 TB1100

2-4 Retire the fixed asset.
Choose Financials  Fixed Assets. Open the Asset Master Data window.
Browse to the Truck asset and check the Sales Item box. Choose Update and
OK.
Choose Sales – A/R  A/R Invoice.
Customer <any>
Item No. Choose the truck asset maser data

record.
Posting Date Today’s date
Unit Price <any, for example: 1000 >
Tax Code Choose the exempt tax group
Choose Add.
Browse back to the invoice. Under the Accounting tab choose the linking arrow
in the Journal Remark field.
Close the Journal Entry window.
Go to Financials  Fixed Assets  Retirement.
Browse to the last retirement document. Review the retirement document that
was automatically generated by the A/R Invoice.
Under the Contents tab choose the linking arrow in the Asset No. field. In the
Asset Master Data window choose the Fixed Assets tab, choose the Values sub-
tab and focus on the Net Book Value column. The net book value of the asset
master data record is set to zero.
Under the Overview sub-tab focus on the Status Field. The asset status is set to
Inactive.
© SAP AG 324 TB1100

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 Version 96

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Unit: Accounting for Sales and Purchasing

At the conclusion of this exercise, you will be able to:

When you choose a pre-defined Chart of Accounts template, most of the

1-1 G/L Account Determination

Unit: Accounting for Sales and Purchasing

1-1 G/L Account Determination

Field Name or Data Type Values

Sales, Purchasing tabs The accounts under the

General, and Inventory tabs All accounts

1-1-2 Define a default G/L account.

Field Name or Data Type Values

Bank Charges Account <Press TAB in the Account

In the List of Accounts window, double click the Account Name

Field Name or Data Type Values

Domestic Accounts Receivable <Click the linking arrow to

Foreign Accounts Receivable <Click the linking arrow to

Choose the Purchasing tab. Under the General tab:

Field Name or Data Type Values

Domestic Accounts Payable <Click the linking arrow to

Foreign Accounts Payable <Click the linking arrow to

1-2-2 Check the account details.

Field Name or Data Type Values

Domestic Accounts Payable <Click the linking arrow in

Field Name or Data Type Values

Journal Remark <Choose the linking arrow>

Field Name or Data Type Values

Balance <Choose the linking arrow>

At the conclusion of this exercise, you will be able to:

1-1 Incoming Payment (using cash payment means)

1-3 Partial Incoming Payment (using cash payment means)

1-1 Incoming Payment (using cash payment means)

Field Name or Data Type Values

Posting Date <Today's date>

Due Date < Past date >

Post this invoice to any domestic customer with any item.

Field Name or Data Type Values

Code <Code of the customer you

Select the open invoice you posted in the previous step.

Field Name or Data Type Values

Posting Date <Today's date>

Select any item (from the Contents tab).

Field Name or Data Type Values

Code <Code of the customer you

Select the open invoice you posted in the previous step.

Field Name or Data Type Values

Posting Date <Today's date>

Due Date <Past date >

Post this invoice to any domestic customer with any item.

Field Name or Data Type Values

Code <Code of the customer you

Select the open invoice you posted in the previous step.

Field Name or Data Type Values

Code <Code of the customer you

At the conclusion of this exercise, you will be able to:

2-1 Post cash deposit.