In SAP ERP the document splitting is the most powerful tool is widely and most commonly

used. With this function the document splits the line items based on the “Characteristics”
we define in system. Often this function is used to get the financial statements correctly
for segment reporting.

Back to the Basics –

Concept can be explained of document splitting with the help of one of the most basic
business transaction as “Vendor Invoice”. Suppose we have vendor invoice as below which
consists of two expense line items say 10,000 in total with 1,000 of tax component which
sums to 11,000.

1. Expense Item 1 for 8,000 where it is assigned to PC  – X

2. Expense Item 2 for 2,000 where it is assigned to PC  – Y
Account Amount Profit Centre
Vendor A/C -11,000
Expenses 1 8,000 PC – X
Expenses 2 2,000 PC – Y
Input Tax 1,000

If any person is responsible for PC – X wish to analyze the transactions performed for PC –
X, but unfortunately the user can’t – because of, if you look at the transaction the “Vendor
Balance” and “Input Tax” is cumulative and hence is not assigned to any of the profit center
either X or Y.

Now if you look at the transaction above it represents that the total expense is distributed
in the ratio of 80% and 20% and same of Profit Centre of X and Y. So base to this the
Vendor Balance and Input Tax should also have split according to 80%-20% rule.
As per the above image the system should have posted the document as per below financial
transaction entry in system –

Okay so the conclusion for whole exercise is, if the user can post the document as above,
the reporting will be pretty particuar and balanced and there won’t be a problem – issue is
re-solved.

Its easily said that issue will be solved but why any user will separate the line item as per
calculations and split its bases always on its ratio, especially when there are 100’s of line
items sometimes in any document ! And what if system takes care of this?

Well the answer is Yes, and that’s what the document splitting is all about!
Now we will understand the Document Splitting
elements and key concepts –

 Passive Splitting – This type of splitting is mostly occurs when the payment
transaction is posted for a vendor invoice. Now system splits the payment document
bases on how the vendor invoice was split in place already.
 Active Splitting – In Active Splitting the document is split according to mySAP ERP
predefined rules. SAP almost supports all the business process transactions but if it
doesn’t suit to any requirement the own splitting rules can be created.
 Zero Balancing Splitting – When the amounts within financial documents are not
able to balance out to Debit of Profit Centre and Credit of Profit Centre which does
not Net Off as its own, SAP then automatically generates new line item to balance
the document. We will see the example in following section of this scenario.

 Item Category – Item category categorizes the general ledger accounts for
document splitting. In the configuration each GL account is assigned to item
category. Just to name a few like 01000 – Balance Sheet Account, 02000 –
Customer, 03000 – Vendor and so on.
 Business Transaction – Business transaction is real scenario of business processes
happens in organization such as vendor invoice, customer invoice etc.
 Business Transaction Variant – In the SAP, financial postings are derives the item
category for individual line item. Business transaction variant always works in
conjunction with business transaction where business transaction restricts the
business processes to be posted to. System validates a check all postings against
the item category to validate if these postings are allowed by splitting rule if not
then understand this failed.
 Document Splitting Method – Document splitting method works in combination with
business transaction and business transaction variant it determines the document
splitting rule.
 Document Splitting Rule: Document splitting rule determines which item categories
will be split and from which item categories it will derive the account assignment.

Let us see the actual example from system of Document

Splitting for vendor invoice –
If we are posting an invoice from FB60 with two different expenses line item as below with two
different cost centers assigned now system has derived the profit center from its cost centers
mentioned in line item.

Simulate this document to see pre-posting view with line item and associated assignments.
Now press F3 or Back button and come to main screen. Now go to Menu Bar Document –>
Simulate with General Ledger  to see the ledger view of this document.

Once clicked on simulate with general ledger, document can be seen as below as “Document
Split” functionality.
Document Splitting – Zero Balancing

As discussed above when system is not able to balance out the transaction entry based on
its own it balances out by “zero balancing” account. System adds the zero balance account
at its own to make balance zero for transaction. We will see the example for this now –

We will post the transaction via FB50.

Now simulate this with General Ledger View as below

If you look at above and notice simulated “General Ledger View” system has automatically
generated the “Zero Balance Clearing A/C.”

Now let us look at the configuration of document splitting –

1. Classify GL Accounts for Document Splitting –

 SPRO –> SAP Reference IMG –> Financial Accounting (New) –> General Ledger
Accounting (New) –>  Business Transaction –> Document Splitting –> Classify G/L
Accounts for Document Splitting

Here in this step GL’s are classified according to item categories according to business
transaction nature. It is recommended that instead of assigned item category to each
individual general ledger account try maintaining the item categories for “Range of General
Ledger Accounts”.

2. Classify Document Types for Document Splitting –

SPRO –> SAP Reference IMG –> Financial Accounting (New) –> General Ledger
Accounting (New) –>  Business Transaction –> Document Splitting –> Classify Document
Type for Document Splitting

In this step the “Business Transaction” and “Business Transaction Variant” is assigned to
document types. Now almost every financial transaction in considered for document
splitting.
3. Define Zero Balance Clearing Account –

SPRO –> SAP Reference IMG –> Financial Accounting (New) –> General Ledger
Accounting (New) –>  Business Transaction –> Document Splitting –> Define Zero
Balance Clearing Account

In this step we have to define the zero balance clearing account which will be used to
generate and balance out financial entry when it is not possible to balance out at its own, as
we have seen this example earlier.
4. Define Document Splitting Characteristics for General Ledger Accounting –

SPRO –> SAP Reference IMG –> Financial Accounting (New) –> General Ledger
Accounting (New) –>  Business Transaction –> Document Splitting –>Define Document
Splitting Characteristics for General Ledger Accounting

This is one of the most important configurations step in document splitting. In this step we
have to define the splitting characteristics. Additionally you can define whether this should
be Zero Balance and

Mandatory.
5. Edit Constants for Non Assigned Processes –

SPRO –> SAP Reference IMG –> Financial Accounting (New) –> General Ledger Accounting
(New) –>  Business Transaction –> Document Splitting –>Edit Constants for Non Assigned
Processes

In this step the constants are defined which helps to assigned the default account
assignment when is not able to derive from any of the sources.
6. Activate Document Splitting

SPRO –> SAP Reference IMG –> Financial Accounting (New) –> General Ledger Accounting
(New) –>  Business Transaction –> Document Splitting –>Activate Document Splitting

Finally the step to activate document splitting with additional settings like “Inheritance”
and Activation of Document Splitting.

Select check box “Document Splitting” and apply appropriate method. SAP Standard pre-
delivered method is “0000000012”.

Selecting the Inheritance signifies the line items which do not have account assignment will
derive the account assignment from other line item.

Selecting Standard A/C Assgnmnt means system will set the standard account assignment
for non-assigned line items.  When this indicator is selected “Constant” needs to be
maintained.
Activate of Document Splitting happens at client level but it is always possible to control of
activation and deactivation at company code level.

Experts guidance and comments / suggestions will be very helpful on this.