ACCOUNTS PAYABLE

Accounts payable is subjected ledger of financial accounting and deals with

Vendors (Suppliers) Vendors are called as sub ledgers. All Business transactions of the
Vendors will be handled through these sub ledgers. For Financial Reporting each and every
vendor master or sub ledger we must assign respective GL accounts. The GL accounts
assign to subjected ledgers are called as Reconciliation Accounts.
No transactions can be directly posted to these reconciliation accounts. These
accounts will get updated transactions posted to subsidiary accounts.
Reconciliation Accounts: Reconciliation Account is a GL Account. which will be assign to
subsidiary ledgers. In detailed itemized report can be extracted through subsidiary ledgers
and accumulated balances of these ledgers will be reported through Reconciliation
Accounts.
Vendor Business Transactions:
1. Purchase Invoices
a. Non PO base Purchase (Purchase invoice posting using FI-AP module)
b. PO based Purchases (MM-FI Integration) Procurement to Payment Cycle (P to P
Cycle)

In case of MM module is in scope all inventory procurements will be handled through

PO based invoice level or PO based Purchases. AP module is used for
i. Validate the invoice and post it to financial accounting
ii. Check Vendor open items for due date analysis
iii. Outgoing payments to Vendors on due dates
iv. Validating the tax calculations
v. Bank Reconciliation statements
vi. Statements to Vendors periodically with the list of transactions handled and
information on due amounts.
2. Goods Returns
3. Out Going Payments: Payments can be handled in SAP as below
i. By Cash
ii. By Bank
a. Manual Payments
b. Automatic payments (by Cheque, bank transfers, DD)
4. Calculation of cash discounts based on the terms agreed with the vendor
5. Interest Calculations: On Overdue items penalty interest will be calculated and to be
paid
6. Taxation: tax on Sales and Purchases
i. Excise Duties
ii. VAT
iii. CST
iv. Services taxes
 v. Custom Duties
vi. TDS.
Configuration Steps
Create GL Accounts (FS00)
GL Account: 100700
Account Group: Sundry Creditors
Select Balance Sheet Account
Text: Domestic payables
Currency: INR
Do not select Only Balances in Local Currency
Reconciliation Account for Account Type: Vendors
Select Line Item Display
Sort Key: 012 (Vendor Number)
Field Status Group: G067 (Reconciliation A/C)
Save it.

Create With Template

GL A/C: 100701
Reference GL A/C: 100700
Co. Code:
Text: Foreign Payables
Save it.

Create with Template

GL A/C: 100702
Text: Affiliated Payables
Save it.
Create with Template
GL A/C: 100703
Text: Employee Payables Save it.
Create with Template
GL A/C: 100704
Text: Service Payables
Save it.

Create with Template

GL A/C: 100705
Text: One time Vendor Payables
Save it.

GL A/C: 400100
Group: Payroll Expenses
Select P&L Account
Text: Professional Service Charges
Select Line Item Display
Sort Key: 001
Field Status Group: G001
Save it.

Configuration Steps
Define Vendor Account Groups (OBD3)
SPROFA (NEW)A/C RECEIVABEL & A/C PAYABLEVENDOR
ACCOUNTSMASTER DATAPREPARATIONS FOR CREATING VENDOR MASTER
DATA DEFINE A/C GROUPS WITH SCREEN LAYOUT (VENDORS)  New Entries
Account Group:
Name: Domestic Vendor Group
Field Status
Double Click on Company Code Data
Double Click on A/C Management
Select Reconciliation A/C as Required Entry
While Creation of Vendor Master Reconciliation A/C will be the Mandatory Entry.
Save it. Create Request AP Configuration Settings.
Next Entry button
A/C Group: 9511
Name: Foreign Vendor Group
Maintain Reconciliation A/C has Required Field.
Save it.
Next Entry Button
A/C Group: 9512
Name: Affiliated Vendor Group
Save it.
Next Entry Button
A/C Group: 9513
Name: Employee Vendor Group
Save it
Next Entry Button
A/C Group: 9514
Name: Service Vendor Group
Save it.
Next Entry Button
A/C Group: 9515
Name: One Time Vendor Group
Select One Time Account
Reconciliation Account as Required Entry
Save it.
Create Number Ranges for Vendor A/C (XKN1)
Note: Vendor Master Number Ranges will be maintain at Client Level. Which indicates same
Vendor Master can be used in Multiple Company Codes

Change Intervals
Insert intervals DOMESTIC PAYABLE
No From No To No

T1 20611 20619

nsert Button
Insert Intervals FOREIGN PAYABLE
No From No To No

T2 20620 20629

Insert Intervals
No From No To No

T3 20630 20639
Insert Intervals
No From No To No

T4 20640 20649

Insert Intervals
No From No To No

T5 20650 20659

Insert Intervals ONE TIME PAYABLE

No From No To No

T6 20660 20669

Save it.
Ignore the message & press Enter

Assign Number Ranges to Vendor A/C Groups (OBAS)

Position
A/C Group:
Group Name Number Range

Domestic vendor Group T1

9511 Foreign Vendor Group T2

9512 Affiliated Vendor Group T3

9513 Employee Vendor Group T4

9514 Service Vendor Group T5

9515 One Time Vendor Group T6

Save it.
Define Sensitive Field for Dual Control (Vendors)
In this step we maintain the field changes in the Vendor Master are critical subjected
to Configuration of changes by authorized users.
Any changes to these fields in this material masters are subjected to confirmation till
the changes were confirmed by authorized user. No payment can be processed against to
the Vendor.
Same patht2
New Entries
Field Name Field Label

LFA1-LNRZA Alternative Payee

LFB1-ZTERM Terms of Payment

Save it.
Class 39
Define Tolerance for Customer and Vendors OBA3
Path: SPRO  FA (NEW)AR & AP  BUSINESS TRANSACTIONS OUTGOING
PAYMENT MANUAL OUTGOING PAYMENTS DEFINE TOLERANCE (VENDORS)
New Entries
Co. Code:
Tolerance Group: APPLE Group Tolerance
Permitted Payment Differences
Amount Percent
Gain 10 1% EX 10000 9990
Loss 10 1%
Save it.

Define Document Types & Number Ranges for Vendor Transactions (OBA7)
Document Type Description Number Range

KA Transfers and Reserves 17

KG Vendor Credit Memo 19

KR Vendor Invoice 17

KZ Vendor Payment 15

Define Number Range interval for above Number Ranges (FBN1)

Co. Code Number Range Year From Number To Number

17 2014 1700000 1799999

15 2014 1500000 1599999

19 2014 1900000 1999999

Save it.
Posting keys (OB41)
Posting key Name DR/CR Account Type

31 Invoice Credit Vendor

21 Credit Memo Debit Vendor

25 Outgoing payment Debit Vendor

24 Other Payment Credit Vendor

26 Payment difference Debit Vendor

36 Payment difference Credit Vendor

29 Special GL Debit Debit Vendor

39 Special GL Credit Credit Vendor

Credit Vendor Master Data

Vendor Master consists of all the important information of the Vendor like
 1.
Address & communication information
2.
Taxation Information
3.
Vendor Bank details & alternative payee information
4.
Reconciliation account, payment details, vendor statement information, purchase
organisation details etc...
Vendor master data consists of following 3 views
a. General DATA (Client Level)
 Address
 Control
 Payment Transaction
b. Company code Data (at each co. Code this information can be changed)
 Accounting info
 Payment transaction
 Correspondence
 With Holding Tax
c. Purchasing Organisation Data
This information will be maintained if materials are procured through MM Cycle

Create Vendor Master (FK01 or XK01)

A/C  FA  AP  MASTER RECORDS  FK01 CREATE (or)
 MAINTAIN CENTRALLY CREATE - XK01
Co. Code:
A/C Group: 9513 (Employee Vendor Group)
Screen 1 Address
Name
Title: Mr.
Name: Salman Khan
Search Terms
Search Terms: Salman
Street/Address
Country: IN
Select Next Screen
Screen2 Control
Account Control
Tax information will be maintained
Select Next Screen
Screen 3 Payment Transactions
Country Bank Key Bank A/C A/C Holder

IN ICICI 000123456 Salman

Bank key is the unique identity for any Bank which holds the Bank Address details
Click on Bank Data
Bank Name: ICICI
Region: 10
Bank Branch: JP Nagar, Bangalore
Press Enter
Next Screen
Screen 4 Account Information
Reconciliation Account: 100703 Employee Payables
Sort Key: 001
Cash Management Group: A5 (Personal Cost)
Select Next Screen
Screen 5 Payment Transactions
Select Check Double Invoice Button
If any invoice posted with the same reference key system will through warning
message.
Select Next Screen
Screen 6 Correspondence
Save it.
Vendor No. 400700 was created in Co. Code

Post Transactional Data

Post Vendor Salaries Payable Transaction
A/C  FA  AP  DOCUMENT ENTRY INVOICE GENERAL – F-43

Date: 27.05.2013
Doc Type: KR
Co. Code:
Posting key: 31
Account: 400700
Press Enter
GL Account: 100703
Amount: 50,000/-
Text: Salary Payable
Posting Key: 40
Account: 400101
Press Enter
Amount: *
Text: + 400
Document  Simulate
Save it.
Doc No. 1900000
GL Account creation
GL Account: 400101
Group: Payroll Expense
Select P&L Account
Text: Salaries Account
Select Line Item Display
Sort Key: 001
FSTG: G001
Save it.

Class 40
View GL A/C Balances (FS10N)
Accounting  Financial Accounts  Accounts Payable  Accounts  Display
Balances
GL Account: 100703
Co. Code:
Execute
Credit balance of 50,000/- updated to GL A/C
Create Vendor Master (XK01)
Co. Code:
A/C Group: 9513
Address Screen
Title: Mr.
Name: Somayajulu K
Search Term: Somk
Country: IN
Region: 10
Payment Transactions
Country: IN
Bank Key: HDFC
Bank A/C: 00098765
A/C Holder: Somayajulu
Click on Bank Data
Bank Name: HDFC
Bank Branch: Bangalore
Accounting Information Accounting Screen
Recon A/C: 100703
Cash Management Group: A5
Select Check Double Invoice
Save it. Vendor No. 400705.
Post Salary Payable of 35,000/- against Vendor No. 400705 (F-43)
Doc Date: 28.05.2013 Type: KR
Posting Key: 31
Account: 400705
Press Enter
GL A/C: 100703
Amount: 35000
Text: Salary Payable
Posting Key: 40
Account: 400101
Amount: *
Text: +
Document  Simulate
Save it
Doc No. 1900001.
Display GL Balances (FS10N)
GL A/C: 100703
Co. Code:
Execute
The GL A/C credit Balance is 85,000/-
Double click on Balance Amount Field
The assignment field got updated with vendor number (The Sort Key for GL A/C 100703
maintained with Value 012 Vendor Number)
View Vendor Line Item Display (FBL1N)
A/CFAAPACCOUNTFFBL1N- DISPLAY/CHANGE LINE ITEMS
Vendor A/C: 400705
Co. Code:
Select open items
Open at key date: 28.05.2013 Execute
One line item Displayed with the status open (Red Colour)
Net Due date symbol is DUE
Payable amount of 35,000/-
Outgoing Payment of 35000/- against to the Vendor 400705 (F-53)
A/CFAAPDOCUMENT ENTRYOUTGOING PAYMENT F-53-POST
Doc Dt: 28.05.2013
Type: KZ co. Code:
Bank Data
Account: 200400
Amount: 35,000/-
Text: Outgoing Payment
Open Item Selection
Account: 400705
Click on Process Open Items
Activate (Blue colour) the Vendor line item which the Business wants to clear by
selection
Activate Items
Amount Entered: 35,000/-
Assigned: 35,000/-
Not Assigned: 0
Document  Simulate
Save it, Doc No. 1500000.
Vendor GL Balance (Recon A/C) (FS10N)
GL A/C: 100703
Co. Code:
Execute
Dr Credit Balance
35,000 85,000 50,000
Double click on Balance Amount
View Vendor Line Item Display (FBL1N)
Vendor A/C: 400705
Co. Code:
Select Cleared Items
Execute
The Invoice & Payment Documents displayed with the Status cleared (Green Colour)
Class 41
Payment Terms
Payment Terms are used to identify or calculate Net Due Date of the Invoices.
Net Due Date is used for
1. Identifying of Payment Due Date
2. Calculation of Cash Discounts
3. Interest Calculations on Items
4. Reminders to customers and vendors on their overdue line items
5. Automatic payment of Vendor Open Line Items etc...
Standard SAP has delivered n no. of payment terms according to the Business
Requirement we can create additional terms.
The payment terms will be assigned to the Vendor Master as per the agreement had
with the vendor.
Note: If Required we can assign the payment terms while posting of Business Transactions
Define Payment Terms (OBB8)
SPROFA (NEW) AR & AP BUSINESS TRANSACTIONS OUTGOIG INVOICES OR
CREDIT MEMOS MAINTAIN TERMS OF PAYMENT
Base Line Date: The date from which system will Payment Terms
The Base Line Date can be a posting date, document date or defaulted to fixed day
or a month.
Create a Payment Term with 15 days due net from the date of posting date.
New Entries
Payment Terms: TR10
Account Type
Select Customer
Select Vendor
Default for Baseline Date
Select posting Date
Payment Terms
Term no. of days
1 15
Save it.

Post Vendor Invoice using Payment Term TR10 (F-43)

Doc Dt: 29.05.2013 Type: KR
Posting Key: 31 A/C: 400700
Press Enter
Amount: 10,000/-
Payment Terms: TR10 Days: 15
Base Line Date: 29.05.2013
Text: Testing of Payment Terms
Posting Key: 40 A/C: 400101
Press Enter
Amount: *
Text: +
Document  Simulate
Save it. Doc No. 1900002.
View Vendor Line Item Display (FBL1N)
Vendor A/C: 400700
Select Open Items
Key Date: 29.05.2013
Execute
Click on Change Layout Button
From the Hidden Fields select Net Due Date field from the Shown Fields Click on Document
Date Click on the Button Show selected Fields.
Click on Copy
Against 1000/- invoice Due date symbols is Not Due. Net Due Date is 13.06.2013.
Click on Save Layout Button
Layout:/Z
Save it.

Create Payment Terms with below Specifications (OBB8)

 Base line date 1st of Next Month
 Within 10 Days 3% Cash Discounts
 20 Days 1% Cash Discount
 30 Days is Due Net
New Entries
Payment Term: 9501
Base Line Date
Fixed Date:1
Additional Months: 1
Default Base Line Date
Select Posting Date
Payment Terms
Term Percentage No. of Days
1 3% 10
2 1% 20
3 30
Save it.

Post Vendor Invoice (F-43)

Doc Dt: 29.05.2013 Type: KR
Posting Key: 31 A/C: 400700
Press Enter
Amount: 2000/-
Payment Terms: 9501
Base Line Date: 01.06.2013
Posting Key: 40 A/C: 400101
Amount: *
Text: + save it.
View Line Item Display (FBL1N)
Vendor A/C: 400700
Select Open Items
Execute
Click on Select Layout Button, Select Your Layout
The Net Due Date is 01.07.2013.
Create Instalment Payment Terms with below Specifications ((OBB8)
 40% immediate Payment
 Rest of the Amount is Two Equal instalments
 Payable Every Month of
New Entries
Payment Term: Z950
Select Instalment Payment
Next Entry Button
Term: Z951
Default for Base Line Date
Select Posting date
Next Entry
Term: Z952
Select Base Line Posting date
Payment Terms
Fixed Date Additional Month
5 1
Next Entry
Term: Z953
Base Line Data
Select Posting Date
Payment Term
Fixed Date Additional Months
5 2
Save it.
Define Terms of Payment for Instalment Payment (OBB9
Same Path
New Entries
Terms of Payment Instalment Percent Payment Term

Z950 1 40% Z951

Z950 2 30% Z952

Z950 3 30% Z953

Save it.
Post Invoice (F-43)
Doc Dt: 29.05.2013 Type: KR
Posting key: 31 A/C: 400700
Press Enter
Amount: 10,000/-
Payment Term: Z950
Posting Key: 40 A/C:400101
Press Enter
Amount: *
Text: +
Simulate
Vendor Invoice Splitted according to the payment terms
Item1: 4000/-, Item2: 3,000/-, Item3: 3,000/-
Save it. Doc no. 1900004.
View Line Item Display (FBL1N)
Layout: /Z
4,000/- Due Date is 29.05.2013
3,000/- Due Date is 05.06.2013
3,000/- Due Date is 05.07.2013