Document Splitting in New General Ledger
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.
Earlier for generating Financial Statement below company code level required manual effort and usually done
as month end activity. With New GL, SAP provide a feature name Document Splitting, document splitting
provides balance line value for given characteristics (e.g. Profit Center or Segment)
It is also required as Requirement of International Accounting Standards (IAS)
IAS mandate to provide financial Statement Segment wise as in report financial information by lines of
business or geographic area.
Example :-
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
Journal Entry :-
Expense 1 A/c Dr. 8,000 PC-X
Expense 2 A/c Dr. 2,000 PC-Y
Input Tax A/c Dr. 1,000
To Vendor A/c 11,000
If any person is responsible for PC – X wish to analyse 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 –
Journal Entry after Spliting :-
Expense 1 A/c Dr. 8,000 PC-X
Input Tax A/c Dr. 800 PC-X
To Vendor A/c 8,800 PC-X
Expense 2 A/c Dr. 2,000 PC-Y
Input Tax A/c Dr. 200 PC-Y
To Vendor A/c 2,200 PC-Y
Note:- Okay so the conclusion for whole exercise is, if the user can post the document as above, the reporting will be pretty particular and
balanced and there won’t be a problem – issue is re-solved.
Type of Documents Splitting :-
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 my SAP 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.
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
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
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
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
5. Activate Document Splitting –
SPRO –> SAP Reference IMG –> Financial Accounting (New) –> General Ledger Accounting (New) –
> Business Transaction –> Document Splitting –> Activate Document Splitting
