RISE With SAP

PARIVARTAN 4.0

Business Blue Print

SAP S/4HANA Cloud
Implementation
Accounts Payable
Functional Consultant –
Mr. Tushar Sharma
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 Document Information
Prepared By Mr. Tushar Sharma
Reviewed By Mr. Sanjiv
Project Manager Mawai Mr. Sagar Saroha
Delivery Head Mawai Mr. Sagar Saroha
Project Manager GPPPL Mr. Rajesh Yadav
Process Owner GPPPL Ms. Vandna Gupta
Submission Date 24.04.2023

Revision Date Revision Made By Description of Changes Version No.

24.04.2023 Mr. Tushar Sharma First Draft V.01

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 Accounts Payable - Review and Sign off
Name Role Date Comments Signature

Mr. Sumit Kashyap Core User

Ms. Vandna Gupta Process Owner

Mr. Arun Goel Director Commercial

Mr. Rajesh Kumar Yadav Project Manager

Mr. Rajesh Agarwal CFO

Mr. Puneet Aggarwal Director IT

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Table of contents
1. Introduction
2. Accounts Payable
2.1. Master data
2.1.1. Supplier Account Group
2.1.2. Supplier Master data
2.2. Transaction Data
2.2.1. Incoming Invoice
2.2.2. Debit/Credit Memo
2.2.3. Handling Multiple Branches of Supplier
2.2.4. Handling Supplier Account which is Customer Also
2.2.5. TDS & TCS Withholding Tax
2.2.6 Indirect Tax (GST & RCM)
2.2.7. Supplier Payment
2.2.8. Security Deposit
2.2.9. Employee Payment
2.3. Period End/Year End Activity
2.4. WRICEF
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1.1 Introduction - Preface
This document states all of the conceptual results of the project Parivartan. These project results were devised and decided on by
the project team and the department experts from GPPPL during the Business Blueprint project phase. This is the main concept
document of the project.
It is supplemented by separate specifications for custom developments.

The content of this document forms the basis and the guidelines for the subsequent realization phase.

This document aims to describe the future business solution based on SAP software. Both IT subjects and organizational issues that
are required to understand the situation are described in it.

Any additional explanations that are only relevant when the project is in progress are given in the various project management plan
documents, which the project management team will provide on request.

The Business Blueprint Document is result of process map, based on the exchange of AS-IS documents, workshops and discussions.
These documents have been submitted by GPPPL and will be used as reference in finalization this BBP documents.

Index
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Process Flow Legends

6
2. Accounts Payable – Process Description

Accounts Payable

Master Data Period

Transaction Data WRICEF
End/Year End
Activities
The Supplier master data is to Following are applicable We need to perform some period In Addition to Standard report we
ensure
that all the necessary details about the transactions pertaining to end activities like: may have some custom
Supplier are captured, to facilitate: Account Payable: • Open Item Clearing development below.
• Smooth transactions • Opening and • Custom Reports
pertaining to  PO Based Invoice closing posting • Conversion
Financial Accounting  Non-PO Based Invoice periods • Forms
• Avoiding data redundancy and  Supplier Credit/Debit Memo • Balance carry forward
data Inaccuracy  Supplier Advance etc.
 Supplier Payment
 Employee Vendor
 Withholding Tax
 Indirect Tax

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2. Introduction to Accounts Payable

Role of Accounts Payable ? Scope of Accounts Payable ?

The role of the Accounts Payable involves Accounts Payable is a sub module of SAP FI
providing financial, administrative and used to manage and record Accounting
What Is Accounts Payable ? clerical support to the organization. Their data for all the Suppliers. It handles
role is to complete payments and control Supplier invoices, credit/Debit memo,
Accounts payable is money owed by a payments and other GPP activities.
expenses by receiving payments, plus
business to its suppliers shown as a
processing, verifying and reconciling Any postings made in Accounts Payable is
liability on a company's balance sheet.
invoices. A typical Accounts Payable job updated in General Ledger as well. The
description also highlights the day-to-day Accounts Payable sub module has
management of all payment cycle multiple reports to track Supplier
activities in a timely and efficient manner. outstanding and payments.

Index
8
2. Introduction to Accounts Payable
 The Accounts Payable application component records and manages accounting data for all Suppliers. System automatically
triggers postings in response to the operative transactions like:
– Goods Receipt
– Invoicing
– Credit/Debit Memos
– Advance Payment/Final Payments etc.

 Payables are paid with the payment program. The payment program supports all standard payment methods (such as
Cheques, RTGS, NEFT, Transfers, Account to Account Transfer, etc.

 Postings made in Accounts Payable are simultaneously recorded in the General Ledger, where different G/L accounts are
updated based on the transaction involved e.g. Payables and Down Payments.

 The system contains due date Forecasts and other standard reports that we can use to monitor open items.

 There are some specific reports/forms also developed by Mawai Infotech Ltd to meet day to day correspondence and
reporting requirements.

Index
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2.1. Master Data – Process Description

Supplier Master Data

Account Group

Index
10
2.1.1. Supplier Master Data – Process Description
Master Data are information repository in SAP which are created once and used repeatedly over a long period of time. After a time period or as per
requirement some of the data are updated. There are different types of master data that will be used in GPPPL business processes.
In SAP S/4HANA, Business Partner is the leading object and single point of entry to maintain Business Partner, Customer, and Vendor data.
Supplier Master Data is maintained under three different heads. Below are important data maintained at these three levels

Accounts Payable
Company Purchase Data Index
General Data
Code 11

• Supplier full name • Data

GL Account (Reconciliation A/C) • Purchase organization
• Head Office • Payment Term for PO
• Address
• Sort Key • Inco Terms
• Bank Details
• Account Group • Minority Indicator • GR/SR based IV etc.
• GSTIN No • Payment terms
• PAN NO. • Payment Methods
• Customer Code (If same • Check Double Invoice
party is • Clearing between Customer
Customer & Supplier both) etc. Supplier
• Business Partner Type • Payment Block
• Alternate Payee
• Previous Account number
• Withholding tax information etc.
2.1.1. Supplier Master Data - Process Description

Business Partner – Supplier

• Supplier are business partners whom the organization does Purchase related transactions. It is the central unit in the overall procurement
cycle and can denote internal users, external Supplier. It is advisable to maintain data centrally in order to avoid duplicates and exercise
effective control over master records. Supplier master will be created as per the data provided by the Purchasing team in the specified
format Supplied by Mawai.

• The various data elements for Supplier master records pertain to general information like name, address, contact persons; accounting
information pertaining payment terms, Reconciliation G/L account, Supplier classification towards tax determination, payment methods, etc.
Any change to Supplier Master is recorded by SAP in a change record with details of change such as date, time, user, field, old value and new
value.

• ** As per the Business Partner concept, The Partner can perform the activities as customer and Vendor. For Details of activities allowed
for different type of partner, Please refer the Business Partner (Supplier) account group details.

Index
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2.1.1. Supplier Master Data - Process Description
Business Partner – Supplier: Supplier code will be opened first at client level. Later we can assign their respective company code and Purchase Area
to that code. Business related information on Supplier master is stored in the following structure as a part of supplier master and depicted below:

General Data
Company Code Data Purchasing Area Data
Defined at the client level and
Data relevant to one company This data is defined for a specific Purchase
independent of any financial or Purchase
area, combination of Purchase
functions. It includes company name, code and includes account organization, Payment Terms ,Currency,
address, telephone number, region, management data. Schema Group, etc.
Mail Address etc.

Index
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2.1.1. Supplier Master Data – Important Master Data Fields
General Data :-
• It is maintained at the client level because this data is common for all of the lower-level organizational units. Examples of general data
include vendor address, contact phone numbers, and so on.
Parameters Description
Supplier Name • Supplier Full Name

Search Terms 1/2

Address • Supplier’s address details

Bank Details • Supplier Bank Details

Account Group • Account group are defined to bifurcate Suppliers on the basis of their features to ease the transactions

GSTIN No • Supplier GSTIN Number

PAN No. • Supplier PAN Number

Customer Code • If same party is supplier or customer both

Business Partner Type • We can bifurcate business partner by their Nature like Raw material, Job worker, Transport, Services etc.

Index
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 2.1.1. Supplier Master Data – Important Master Data Fields
Company Code Data :-
• Company code data only applies to one company code. This data is only relevant to Financial Accounting, and includes:

Parameters Description
Reconciliation Account • The reconciliation account in G/L accounting is the account which is updated parallel to the sub ledger account for
normal postings (for example, invoice or payment).
Head Office • Specify this account number only for branch accounts. Items that you post using the branch account number are
automatically posted to the head office account. The system records the branch account number in the line items.
Sort Key • The system uses a standard sort sequence for displaying line items
• It sorts the items according to the content of the Allocation field.
Minority Indicator • This will be used to classify category of vendor’s Industry, for e.g. Small, Medium, Micro, Traders, Others, etc.

Payment Terms • Key for defining payment terms composed of cash discount percentages and payment periods.

Payment Method • Payment methods which may be used in automatic payment transactions with this customer/vendor

Check Double Invoice • The system checks whether there are FI documents that were posted or parked with the Logistics invoice verification or
with an FI invoice transaction. Depending on the entry in the Reference field, one of the following checks is performed:
• Company Code
• Vendor
• Currency
• Document Date
• Reference Number
Note: Validation of Supplier Invoice Duplicity will be implemented for GPPPL. It will be implemented as error message.

Index
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2.1.1. Supplier Master Data – Important Master Data Fields
Company Code Data :-
• Company code data only applies to one company code. This data is only relevant to Financial Accounting, and includes:

Parameters Description

Clearing between customer & • Indicates that during automatic payment transactions, clearing is made with the corresponding customer account.
Supplier

Payment Block • That is used to block an open item or an account to payment transactions.

Previous Account Number • We can store the previous master record number in this field for reference.

Withholding Tax Data • This tab is used for supplier withholding tax information as per below:
 Tax Type - This indicator is used to classify the different types of withholding tax.
 Tax Code - One or more "withholding tax codes" are assigned to each withholding tax type. One of the things
these codes determine is the various percentage rates for the withholding tax type.
 Type of Recipient - The type of recipient can be defined in the vendor master record .
 Exemption Certificate Number – Numbered assigned by the relevant authorities for exemption from withholding tax.

Index
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2.1.2. Supplier Master Data – Account Groups
Supplier Account Groups:
We must assign each account to an Account Group. The account group ensures that only the relevant screens and fields are displayed and ready for
input for each of the Supplier’s different partner functions.

In case of One Time Supplier/Customer there will be some important features like:
• No separate master data is required for those Suppliers with whom we deal very rarely.
• All important information like name, address, bank details etc. can be saved at document level itself for future reference.
The account group controls:
 Required fields for entering master data
 Number Range assignment, internal or external for master records
 Valid partner functions
 One time customer
To create a master record, you have to specify an account group. The account group cannot be changed once you have created the master record.
Your system administrator, however, can Change the above account group specifications.
It has been established that the numbering of supplier will be generated internally by the system. Supplier number is 10 digits in length (numerical).
Each account group shall have different 10 digits number sequence assignment.
There will be functionality in SAP for document upload in supplier master data for e.g.; Vendors documents like GST certificates , PAN Number,

Bank details, etc. Index

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2.1.2. Supplier Master Data - Account Groups
Supplier Account Group:- Creation of multiple Supplier Account Group allows to identifications of which fields in the master data are to be made
compulsory and identification of different type of supplier based on different number ranges assigned to different supplier account group. Below are
the identified Supplier account groups and number ranges for GPPPL.

Supplier Account Group

Vendor A/c Group Description NR From To
ZDMP Domestic Purchase 01 100001 199999

ZDMS Domestic Service 02 200001 299999

ZIMP Import Purchase 03 300001 399999

ZIMS Import Service 04 400001 499999

ZDCP Domestic Capex 05 500001 599999

ZICP Import Capex 06 600001 699999

ZINU Inter Unit 07 External No Range starts from “ P”

ZEMP Employee 08 External No Range starts from “ E”

Index
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2.1.2 Supplier Master Data - Process Flow Diagram

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2.2. Transaction Data – Process Description

Incoming Invoice Indirect Tax (GST & RCM)

Debit/Credit Memo
Supplier Payments
Handling Multiple Branches
of Supplier
Security Deposits
Handling Supplier Account
which is Customer Also

Employee Payments
TDS/TCS (Withholding) Tax

Index
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2.2.1. Incoming Invoice – Process Description

Domestic Invoice

Import Invoice

Service Invoice

Asset Procurement

Job Work

Job Work – Inter unit

Non-PO Invoice

Index
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2.2.1.A. Domestic Material Invoice – Process Description (1/5)

What is Domestic Procurement? Scope- Use-

The typical procurement cycle for a Procurement of
• Domestic Purchasing is the activity of material consists of the following
phases: • Right Product
contracting for goods that are • Right Quantity
delivered or manufactured within • Determination of Requirements
• Right Quality
the geographical boundary of • Source Determination
buyer's home country • Right Price
• Purchase Order Processing
• Right Source
• Goods Receipt with respect to PO
• Right Time
• Quality Inspection
• Right Place
• Invoice Verification

Index
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2.2.1.A. Domestic Material Invoice – Process Description (2/5)

Determination of Requirements
The material requirements are identified by the user departments or material planning & control .The requirement passed manually to
the purchasing department.
Source Determination
SAP source determination is a process that allows the buyer to discover the most suitable source of supply. This source of supply refers
to a vendor account. In SAP, RFQ will be created by user. Price would be maintained in system and price comparison sheet will be
prepared accordingly. System will itself suggest the Rating/Level based on Quotation Price.
Purchase Order Processing
A purchase order is a formal request or instruction from a purchasing organization to a vendor or a plant to supply or provide a
certain quantity of goods or services at or by a certain point in time at pre defined terms & conditions mentioned in Quotations. User
will also maintain the tolerance for Under-delivery & Over-delivery.

Index
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2.2.1.A. Domestic Material Invoice – Process Description (3/5)
In SAP, three way approach of invoice verification will be used as mentioned below.

Creation of PO:

• A PO will be raised which will pass through its approval process. Once it approval, Goods Receipt/Service Receipts (MIGO in SAP) will be done based upon the PO.

Goods Receipt

• During GR, system will pick up the price from the PO and multiply it with the GRN quantities and passed a material document along with an accounting document.

• While posting Gate-entry, user will enter all details like- Invoice Number, Invoice date, Vehicle Number, Transporter, LR Number, E-Way Bill, Vendor Code,
Plant, Invoice Qty etc.

• In case of Capex procurement there will be no accounting at the time of goods receipt. (Capex procurement will be discussed in detail in Asset BBP).

Invoice Receipt

• Invoice will be booked on the below mentioned Basis:

 Invoices with Purchase order reference - With PO based Invoice Verification, all the items of a purchase order can be settled together.

 Invoices with goods receipt reference – Partial deliveries are received and you want to do invoice verification separately for each delivery. This can be
done through invoice verification against delivery note.

Note : Check for Vendor Duplicate in the same fiscal year and Plant/Profit Centre while creation of MIRO/FB60/FB65 Documents. System will bypass reversal
documents (Point number 01 from 46 point MD checklist sheet).
Index
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2.2.1.A. Domestic Material Invoice – Process Description (4/5)
Planned Cost

• All planned Delivery cost like freight, Handling charges etc. can be maintained as conditions in PO.

• For Raw materials Freight at PO Level will be maintained on estimate basis (and can be rectified on actual basis), for all other it will be through direct
FI entry.

• During GRN system will automatically upload these cost on Materials.

• During Invoice Receipt, if there is any difference then

- if inventory is available then it will be loaded to Inventory

- otherwise will be posted to Profit & Loss account

Unplanned Cost

• Any cost on material recognized after GRN (but before Invoicing) can be posted as unplanned cost.

- if inventory is available then it will be loaded to Inventory

- otherwise will be posted to Profit & Loss account

• Any expenses for Inventory recognized after invoicing can not be loaded on inventory

• Any expense for Asset recognized after Invoicing can be capitalized on asset from its origin date, but only before closure of financial books.

Index
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 2.2.1.A. Domestic Material Invoice –Process Description (5/5)
GST/RCM Calculation:-
- GST will be calculated and posted automatically based upon tax code selected in PO or at the time of invoicing.

- Reverse charge will be applicable mainly for Transporter Invoice in case of domestic Invoices. In such case separate RCM Tax
codes will be assigned. Then system will automatically calculate the RCM entries.

- Separate ODN i.e. Official Document Number range will also be assigned to RCM invoices to meet legal compliances.

- In case of Unregistered vendors, we can print RCM Invoices

- RCM will be exempted whether Freight is less than INR 750 on services.

- In case GST amount as per vendor invoice is different from GST calculated as per system (Due to rounding differences), Then
GST amount can be manually updated as per vendor invoice.

Index
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2.2.1.A. Domestic Material Invoice - Process Flow Diagram

29
2.2.1.A. Domestic Material Invoice – Process Flow Step
Activity Department Applications
Activity Description T Code Detail Process Description
Number Involved Related

1 Create Manual PR for Material/ Services Concern Dept. SAP ME51N Auto PR will be created thru MRP Run Or User can create it manually

2 Release Purchase Requisition Dept HOD SAP/FIORI ME54N PR will be released as per approval matrix
3 Creates Request for Quotation Purchase SAP ME41 Purchase team will invite Quotations
4 Maintain Quotation Purchase SAP ME47 Price will be maintained as per Quotation
5 Quotation Comparison Purchase SAP ME49 PC sheet will be maintained automatically
6 Create Purchase Order Purchase SAP ME21N PO will be raised with reference to PR
Edit Purchase Order if Required it will create PO will be amended (if required). Version will be triggered
7 Purchase SAP ME22N
new version in PO (PO Amendment) accordingly
8 Release Purchase Order Purchase HOD SAP/FIORI ME29N PO will be released as per approval matrix
9 Gate Entry Security Official SAP ZGATEENTRY GE will be done wrt Vendor’s Invoice
10 Goods Receipt / Reverse GR at Plant Store SAP MIGO GRN will be done wrt GE Document
11 Auto Inspection Lot Quality SAP QA32 Inspection Lot will be created automatically
12 Result Recording of QC check Quality SAP QA32 Quality team will do inspection
13 Usage Decision Quality SAP QA32 QA will post Usage Decision
14 Park Vendor Invoice FI/Accounts SAP MIR7 FI team will do Invoice verification
15 Post Vendor Invoice FI/Accounts SAP MIRO FI team will post Vendor’s Invoice

Index
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2.2.1.B. Import Invoice – Process Description (1/4)

What is Import Procurement? Scope- Use-

• Imports procurement scenario • It incorporates the placement of an • Procurement of goods from

describes the procurement of Items foreign
Import purchase order, recording
like RM, Machine & equipment, vendors
of shipping details, foreign
Spares and Assets etc, which are of exchange rate, establishing CHA, • Currency exchange rate
foreign origin, items required to and Bill of Ladings. • CHA-Basic Custom Duty,
maintain and operate the Social Welfare Surcharges
equipment also need to be procured • Calculation of Actual Landed cost
from suppliers abroad.

Index
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2.2.1.B. Import Invoice – Process Description (2/4)
Import Procurement Process:-
Import purchase is almost similar to domestic Purchase, except few points mentioned below:

• In Import purchase, provision for booking other charges such as shipping, Clearing, freight, etc. is available in SAP.

• The charges like shipping line charges, clearance charges, Insurance, local freight, ocean freight, transport, basic custom duty
& social welfare charges etc. are taken care in PO with estimate value by Condition types assigned. It may be fixed,
percentage quantity, amount quantity and is accrued on material after GR.

• For import, Freight will be entered in PO at estimate basis.

• There is also a provision in SAP to book custom and social welfare charges before goods receipt (Custom MIRO in SAP)

• In this case, GPPPL is being advice to maintained these as conditions in the main PO (Material PO), if these charges are
to be included in the cost of inventory.

• If business does not know the above charges at the time of PO creation, such invoice can be entered directly in the system by
subsequent debit option or unplanned delivery cost at invoice verification (MIRO).

Index
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2.2.1.B. Import Invoice – Process Description (3/4)
Creation of Import Purchase Order:-
• Purchase Order will be created and Released wrt PR.

• Rate will be adopted in Purchase order based on Quotation/purchase info record/manually maintained in GPPPL.

• All pricing components for Imports like Duties, Local and Imports freight cost and other delivery Cost has to be mentioned in exact or approximate in PO itself

• All delivery cost component needs to be maintained in PO itself.

Custom Duty MIRO:-

• When the material is unloaded at the Port, Statutory duties like Customs Duty, Social welfare surcharge and IGST etc., are paid to clear the material
from Customs Authority.

• GST will be calculated on Assessable value while posting Custom MIRO.

• Invoice Verification for Customs Duty and CVD Payment will be done after receipt of the Bill of Entry Copies from the CHA/Import Vendor.

• During custom duty clearing invoice (MIRO) entry Will be generated:-

• Custom Miro will be done before GRN (MIGO).

Indicator Particular Amount (INR)

Debit Custom GR/IR Clearing Account 500

Credit Custom Payable (Vendor) Account 500

Index
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2.2.1.B. Import Invoice – Process Description (4/4)
Goods Receipt (MIGO):-
• After Invoice Verification for Customs Duty and CVD and upon physical arrival of the material at the Ordering Plant.

• Goods Receipt will be posted with reference to import PO.

• Entry will be posted of GRN (MIGO):

Indicator Particular Amount (INR)

Debit Inventory Account 7500
Credit GR/IR Clearing Account 7000
Credit Custom GR/IR Clearing Account 500

Invoice Receipt (MIRO):-

• Invoice Verification and posting is done for received goods with reference to PO.

• Entry will be posted of Import Supplier (MIRO):

Indicator Particular Amount (USD)

Debit GR/IR Clearing Account 100

Credit Import Supplier Account 100

Index
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2.2.1.B. Import Invoice – Process Flow Diagram

36
2.2.1.B. Import Invoice – Process Step
Activity Department Applications
Activity Description T Code Detail Process Description
Number Involved Related
Auto PR will be created thru MRP Run Or User can create it
1 Create Manual PR for Material Concern Dept. SAP ME51N
manually
2 Release Purchase Requisition Dept HOD SAP/FIORI ME54N PR will be released as per approval matrix
3 Creates Request for Quotation Purchase SAP ME41 Purchase team will invite Quotations
4 Maintain Quotation Purchase SAP ME47 Price will be maintained as per Quotation
5 Quotation Comparison Purchase SAP ME49 PC sheet will be maintained automatically
6 Create Purchase Order Purchase SAP ME21N PO will be raised with reference to PR
Edit Purchase Order if Required it will create PO will be amended (if required). Version will be triggered
7 Purchase SAP ME22N
new version in PO (PO Amendment) accordingly
8 Release Purchase Order Purchase HOD SAP/FIORI ME29N PO will be released as per approval matrix
9 Custom MIRO Logistics/FI SAP MIRO Will pay BCD, SWS as per Bill of Entry
10 Gate Entry Security Official SAP ZGATEENTRY GE will be done wrt Vendor’s Invoice
11 Goods Receipt / Reverse GR at Plant Store SAP MIGO GRN will be done post physical counting
12 Auto Inspection Lot Quality SAP QA32 Inspection Lot will be created automatically
13 Result Recording of QC check Quality SAP QA32 Quality team will do inspection
14 Usage Decision Quality SAP QA32 QA will post Usage Decision
15 Park Vendor Invoice FI/Accounts SAP MIR7 FI team will do Invoice verification
16 Post Vendor Invoice FI/Accounts SAP MIRO FI team will post Vendor’s Invoice

Index
37
2.2.1.C. Service Invoice – Process Description
• In SAP, External service procurement will be monitored with service purchasing Order, which will be created with reference to an Expense GL
and Cost Object.
• Confirmation of services would be maintained by service entry sheet (ML81N), similar to GRN at the time of material Invoice.

Indicator Description Amount

Debit Expense Account 1000
Credit GR/IR clearing Account 1000

• Subsequently on receipt of Invoice, accounts department follow the same process to book the invoice as it is being followed in Material
Invoicing with reference to PO.
Indicator Description PO Rate Amount
Debit GR/IR clearing account 1000 1000
Credit Vendor 1180 1180
Debit GST INPUT 18% 180

• No Accounting entry will be generated at the time of service entry sheet this will be generated at the time of MIRO.

As per discussion with business, for some services reverse charge and TDS both taxes are deducted, this can be achieved by maintaining
withholding tax details in Supplier master and choosing relevant RCM tax code at the time of PO or Invoice Booking.

There can be cases where Invoice contains both material cost and service cost (TDS & GST treatment will be separate on both amount).

Index
38
2.2.1.C. Service Invoice - Process Flow Diagram

43
2.2.1.C. Service Invoice – Process Flow Step

Activity Department Applications

Activity Description T Code Detail Process Description
Number Involved Related

1 Create Manual PR for Services Concern Dept. SAP ME51N User will create it manually

2 Release Purchase Requisition Dept HOD SAP/FIORI ME54N PR will be released as per approval matrix

3 Creates Request for Quotation Purchase SAP ME41 Purchase team will invite Quotations

4 Maintain Quotation Purchase SAP ME47 Price will be maintained as per Quotation

5 Quotation Comparison Purchase SAP ME49 PC sheet will be maintained automatically

6 Create Purchase Order Purchase SAP ME21N PO will be raised with reference to PR

7 Release Purchase Order Purchase HOD SAP/FIORI ME29N PO will be released as per approval matrix

8 Service Entry Sheet Concern Dept. SAP ML81N SES will be maintained for availed services

9 Goods Receipt / Reverse GR Concern Dept. SAP MIGO Will be posted automatically in background

10 Park Vendor Invoice FI/Accounts SAP MIR7 FI team will do Invoice verification

11 Post Vendor Invoice FI/Accounts SAP MIRO FI team will post Vendor’s Invoice

Index
44
2.2.1.D. Domestic Asset Purchase – Process Description (1/4)
In this case Asset Acquisition will be done through Purchase Order (PO).

In SAP we have two options to procure through PO :

• Create Asset/CWIP before PR/PO creation and capitalize values on Asset/CWIP

• Create Internal Order. Create PR/PO with reference to Internal Order and Profit & Loss GL account. In this case amount will be posted to Profit & Loss Account
along with Internal Order. Later on asset will be first transferred to CWIP and finally to Final Asset by F&A Department.

It’s recommended to use 2nd option, where Internal Order will be used.

Below are the steps for Asset Acquisition through this process:

1. Creation of Internal Order :

 Internal Order can be created Department wise (cost center wise) or nature of asset wise (types of machines, furniture etc.) or combination of
both. (refer master data creation process)

 At time of creation of Internal Order, CWIP/AUC asset is created automatically by system.

2. Budget Allocation (If Budget control is active) :

 There is option to active budget control on Internal Order.

 If budget is active then for every order we need to assign budget.

 And during PR creation system checks if budget is available or not.

 In case there is no/insufficient budget against Internal Order, system will not allow creating purchase requisition, until a supplementary budget is
given with concerns approvals.

 Budget approval process will remain outside SAP and approved budget can be entered into SAP. Index
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 2.2.1.D. Domestic Asset Purchase – Process Description (2/4)
3. Creation of PR/PO with reference to Profit & Loss Account & Internal Order :
 Purchase requisition will be raised by the respective departments for need of an asset with Internal Order, followed by approval from concern Department
and Finance.
 Purchase order will be created with respect to Purchase requisition and Quotation from vendor.
 Every asset PR/PO will be created with reference to Internal order and Profit & Loss G/L Account.

4. Goods Receipt/Invoice Receipt

 GRN will be done against Purchase order.
 Amount will be posted to Profit & Loss GL account along with Internal Order. All expenses such as non-recoverable taxes, freight, installation charges, etc.
are also posted in internal order for capitalization.
 Accounting entry at the time of GRN:-

Indicator Description Cost Object Amount

Debit Expenses/Internal Order (Asset) clearing Account Internal Order 1000

Credit GR/IR Clearing Account 1000

5. Invoice Receipt
 Invoice is being received by the F&A department and will be book accordingly.
 Accounting entry at the time of Invoice receipt:-

Indicator Description Amount

Debit GR/IR Clearing Account 1000

Credit Supplier Account 1000

Index
46
2.2.1.D. Domestic Asset Purchase – Process Description (3/4)
6. Expenses incurred internally
 Any types of expenses (including foreign Exchange Gain/Loss), which needs to be capitalized, can be transferred to Internal order through Journal Voucher.
 Accounting entry at the time of expenses capitalized:-

Indicator Description Cost Object Amount

Debit Internal Order (Asset) clearing Account Internal Order 1000

Credit Expenses Account Cost Center 1000

7. Settlement to CWIP/AUC
 Until we settle internal order, all amount will remain in Profit & Loss account. During settlement system will transfer all transactions posted on Internal
order to the CWIP/AUC (which was created automatically during Internal order creation)
 We can check Individual CWIP reports, however at Financial Statement level it will shown as one CWIP/AUC asset.
 No depreciation will be charged on CWIP/AUC assets
 Accounting entry at the time of Expenses Settlement to CWIP/AUC Asset:-

Phase Indicator Description Cost Object Amount

Debit CWIP Asset account 1000
Primary Settlement
Credit Expenses/Internal Order (Asset) clearing Account Internal Order 1000

8. Creation of Final Assets

 At the time of final capitalization, first of all asset masters are created (refer master data creation process).
Index
47
2.2.1.D. Domestic Asset Purchase – Process Description (4/4)
9. Settlement to Final Assets
 Final assets are assigned to Internal order.
 And then we can capitalize asset from CWIP/AUC to Final Asset
 There is option to transfer selected transactions posted on internal order to multiple profit center on basis of amount or quantity or percentage basis.
 Accounting entry at the time of settlement to Final Asset:-

Phase Indicator Description Amount

Debit Main Asset -1 account 500
Final Settlement Debit Main Asset -2 account 500
Credit CWIP Asset account 1000

10. If Put to use date is later than capitalization date

 Depreciation on assets will start from capitalization date or put to use date, whichever is later.
 In SAP system Ordinary Depreciation Start Date will be considered for depreciation calculation, which will be defaulted from capitalization date
 Put to use/Depreciation start date can be changed subsequently by user if Put to use date is different from capitalization date.
11. Post Capitalization Expenses/reduction
 Post capitalization expenses can be considered, only if books are not closed.
 These expenses/reduction will be booked on Internal order and then from Internal order it will be transferred to Assets as per procedure already explained.
 Depreciation on such values will be considered from the beginning of the asset.

Note: Please refer FI BBP Asset Accounting for details Index

48
2.2.1.D. Domestic Asset Purchase – Process Flow Diagram

42
2.2.1.D. Domestic Asset Purchase – Process Flow Step
Activity Department Applications
Activity Description T Code Detail Process Description
Number Involved Related

1 Create Manual PR using Short Text or Concern Dept. SAP ME51N User will create the PR manually
Non Valuated material code
2 Release Purchase Requisition Dept HOD SAP/FIORI ME54N PR will be released as per approval matrix
3 Creates Request for Quotation Purchase SAP ME41 Purchase team will invite Quotations
4 Maintain Quotation Purchase SAP ME47 Price will be maintained as per Quotation
5 Quotation Comparison Purchase SAP ME49 PC sheet will be maintained automatically
6 Create Purchase Order Purchase SAP ME21N PO will be raised with reference to PR.
Edit Purchase Order if Required it will
7 create new version in PO (PO Purchase SAP ME22N PO will be amended (if required). Version will be triggered accordingly
Amendment)
8 Release Purchase Order Purchase HOD SAP/FIORI ME29N PO will be released as per approval matrix
Security
9 SAP GE will be done wrt Vendor’s Invoice
Gate Entry Official ZGATEENTRY
10 Goods Receipt / Reverse GR at Plant Store SAP MIGO GRN will be done post physical counting
14 Park Vendor Invoice Finance SAP MIR7 FI team will do Invoice verification
15 Post Vendor Invoice Finance SAP MIRO FI team will post Vendor’s Invoice

Index
50
2.2.1.E. Job Work/ Sub Contracting - Process Description

What is Subcon. Procurement? Scope- Use-

• Subcontracting refers to the process • The Subcontracting process includes- • To get the external job work done
of entering a contractual agreement Job Work, Repair & • Subcontracting is often done to
with an outside person or company Maintenance, Components sent reduce costs, Lack of resources, etc.
to perform a certain amount of out for further processing, • To obtain
work. Testing, Chemical Composition, specialized
• The external person or company in Calibration etc. knowledge/skills
this arrangement is known as a
subcontractor.

Index
51
2.2.1.E. Job Work/ Sub Contracting - Process Description (1/3)
Job Work/Sub-Contracting Process:-
• Job work means processing or working on raw materials or semi-finished goods supplied by the principal manufacturer to the job worker.

The Process steps involved are:

Creation of Job Work Order:-
• Creation of subcontract purchase order for the end products.
• Item category ‘L’ is necessary to mention in the purchase order.
• Rate will be adopted in Purchase order based on purchase info record or manually.
Goods Issue to Supplier:-
• Issue of the components or raw material to the subcontracting vendor.
• When materials are issued to a subcontractor, it is required to keep track of the materials issued and the due date of return.
• In Inventory Management, the components are posted to the stock of material provided to vendor. The components are then supplied to the vendor.
• Creation of a subcontracting delivery challan on the basis of the transfer posting material document. The materials will be sent to the subcontractor,
along with a printout of the subcontracting challan.
Note: E-way bill will be mandatory for inter state job work and In case of Intra state, If Material value is above 50k of Job work
billing then E-Way bill mandatory.
Index
52
2.2.1.E. Job Work/ Sub Contracting - Process Description (2/3)
Goods Return from Job – Work Supplier:-
• The subcontractor processes the materials and returns the end products. When the goods are delivered back, the gate person does gate entry
and store person posts the goods receipt.

• Inspection lots will be created at GR. The QA user will record results of the quality check, give a usage decision and post the material to
unrestricted stock. Details of the Quality inspection process are described in detail in the Quality management BBP.

• Accounting entry will be generated at the time of MIGO

Stages Indicator Description Amount

Debit SFG Inventory A/c 350
SFG-Receipt
Credit Change in Stock A/c 350
Debit Job Work Charges A/c 100
Job-Work Charges
Credit GR/IR Clearing A/c 100
Debit RM Consumption A/c 250
Consumption of Issued Material
Credit RM Inventory A/c 250
Debit Scrap Inventory A/c 50
Scrap Product
Credit Process Scrap Consumption A/c 50

Index
53
2.2.1.E. Job Work/ Sub Contracting - Process Description (3/3)

Invoice Receipt (MIRO):-

• Post Invoice Receipt for Subcontracting Supplier for the service charges paid to the Subcontractor.

• Invoice will be booked on the below mentioned Basis:

 Invoices with Purchase order reference - With PO based Invoice Verification, all the items of a purchase order can be
settled together.

 Invoices with goods receipt reference – Partial deliveries are received and you want to do invoice verification separately for
each delivery. This can be done through invoice verification against delivery note.

Indicator Particular Amount

Debit GR/IR Clearing Account (Job Work charges) 100.00
Debit CGST/SGST Account 18.00
Credit To Supplier Account 108.00
Credit To TDS on Contract Account 10.00

Index
54
2.2.1.E. Job Work Job Work/ Sub Contracting - Process Flow Diagram

59
2.2.1.E. Job Work/ Sub Contracting - Process Flow Step
Activity Department Applications
Activity Description T Code Detail Process Description
Number Involved Related
Auto PR will be created thru MRP Run Or User can create it
1 Create Manual PR for Material Concern Dept. SAP ME51N
manually
2 Release Purchase Requisition Dept HOD SAP/FIORI ME54N PR will be released as per approval matrix
3 Creates Request for Quotation Purchase SAP ME41 Purchase team will invite Quotations
4 Maintain Quotation Purchase SAP ME47 Price will be maintained as per Quotation
5 Quotation Comparison Purchase SAP ME49 PC sheet will be maintained automatically
6 Create Purchase Order Purchase SAP ME21N PO will be raised with reference to PR
7 Release Purchase Order Purchase SAP ME22N PO will be released as per approval matrix
8 Transfer Posting Store SAP MIGO Store team will issue the Goods/Components to Vendor
9 Challan Creation Store SAP J1IGSUBCON Subcon challan will be created by user
10 Gate Entry Security Official SAP ZGATEENTRY GE will be done wrt Vendor’s Invoice
11 Goods Receipt / Reverse GR at Plant Store SAP MIGO GRN will be done post physical counting
12 Auto Inspection Lot Quality SAP QA32 Inspection Lot will be created automatically
13 Result Recording of QC check Quality SAP QA32 Quality team will do inspection
14 Usage Decision Quality SAP QA32 QA will post Usage Decision
15 Challan Reconciliation Store SAP J1IGRECON Subcon challan will be reconciled by StoreTeam
16 Post Vendor Invoice FI/Accounts SAP MIRO FI team will post Vendor’s Invoice post verification

Index
60
2.2.1.E. Job Work (Inter Unit) - Process Description

Material Material Material

Sent for Job Received & received after
Work Job work Done Job Work
By Plant A By Plant B By Plant A

Index
51
2.2.1.E. Job Work (Inter Unit) - Process Description (1/4)
Job Work Inter Unit :-
• Job work means processing or working on raw materials or semi-finished goods supplied by the principal manufacturer to the job worker.

NOTE : PLANT A ( PLANT SENDING MATERIAL FOR JOB WORK.)

PLANT B ( PLANT RECEIVING MATERIAL FOR JOB WORK.)

The Process steps involved are:

Creation of Job Work Order by Plant A :-
• Creation of subcontract purchase order for the end products.
• Item category ‘L’ is necessary to mention in the purchase order.
• Rate will be adopted in Purchase order based on purchase info record or manually.

Goods Issue to Supplier by Plant A:-

• Issue of the components or raw material to the subcontracting vendor.
• When materials are issued to a subcontractor, it is required to keep track of the materials issued and the due date of return.
• In Inventory Management, the components are posted to the stock of material provided to vendor. The components are then supplied to the vendor.
• Creation of a subcontracting delivery challan on the basis of the transfer posting material document. The materials will be sent to the subcontractor, along with a
printout of the subcontracting challan.
Note: E-way bill will be mandatory for inter state job work and In case of Intra state, If Material value is above 50k of Job work billing
then E-Way bill mandatory.
Index
52
2.2.1.E. Job Work (Inter Unit) - Process Description (2/4)
Creation of Customer Job Work Order by Plant B :-
• Creation of Customer Job work purchase order for the Non valuated products.
• Item category ‘J’ is necessary to mention in the purchase order.

Goods Received by Plant B:-

• Gate entry will be done by plant B through transaction ZGATEENTRY on the basis of Customer Job work Purchase order.
• GRN will be done by plant B through transaction MIGO on the basis of Gate entry number. (Only Quantity update in system, there will be no financial
impact).
PP/QM Goods issuance against Production Order :-
• Material Issuance to Shop floor for Job Work against Production order.
• After order confirmation, Material goes for Quality inspection. If it is found Ok then user will create sales invoice (Job work sale/Service).

Indicator Particular Amount

Debit SFG INV A/C 350.00
Credit To COGM SFG A/C 350.00

Index
52
2.2.1.E. Job Work (Inter Unit) - Process Description (2/4)
Sales Order creation by Plant B :-
• Sale order creation with Job worked material & Receiving plant as customer.
• Delivery of material by receiving plant & Sale Invoice creation.

Accounting Entry at the time of PGI –

Indicator Particular Amount

Debit COGS A/C 350
Credit To SFG INV A/C 350

Accounting Entry at the time of Billing/Customer Invoice -

Indicator Particular Amount

Debit Customer (Plant A) A/c 100.00
Credit To Job Work Charges A/c 100.00

Index
52
2.2.1.E. Job Work (Inter Unit) - Process Description (3/4)
Goods Return from Job – Work Supplier:-
• Plant B processes the materials and returns the end products. When the goods are delivered back, the gate person does gate entry and store
person posts the goods receipt.

• Inspection lots will be created at GR. The QA user will record results of the quality check, give a usage decision and post the material to
unrestricted stock. Details of the Quality inspection process are described in detail in the Quality management BBP.

• Accounting entry will be generated at the time of MIGO

Stages Indicator Description Amount

Debit SFG Inventory A/c 350
SFG-Receipt
Credit Change in Stock A/c 350
Debit Job Work Charges A/c 100
Job-Work Charges
Credit GR/IR Clearing A/c 100
Debit RM Consumption A/c 250
Consumption of Issued Material
Credit RM Inventory A/c 250

Index
53
2.2.1.E. Job Work (Inter Unit) - Process Description (4/4)

Invoice Receipt (MIRO):-

• Post Invoice Receipt for Subcontracting Supplier for the service charges paid to the Subcontractor.

• Invoice will be booked on the below mentioned Basis:

 Invoices with Purchase order reference - With PO based Invoice Verification, all the items of a purchase order can be
settled together.

 Invoices with goods receipt reference – Partial deliveries are received and you want to do invoice verification separately for
each delivery. This can be done through invoice verification against delivery note.

Indicator Particular Amount

Debit GR/IR Clearing Account (Job Work charges) 100.00
Debit CGST/SGST Account 18.00
Credit To Supplier Account (Plant B) 108.00
Credit To TDS on Contract Account 10.00

Index
54
2.2.1.E. Job Work (Inter Unit) - Process Flow Diagram

59
2.2.1.E. Job Work (Inter Unit) - Process Flow Step for Plant A
Activity Department Applications
Activity Description T Code Detail Process Description
Number Involved Related
Auto PR will be created thru MRP Run Or User can create it
1 Create Manual PR for Material Concern Dept. SAP ME51N
manually
2 Release Purchase Requisition Dept HOD SAP/FIORI ME54N PR will be released as per approval matrix
3 Creates Request for Quotation Purchase SAP ME41 Purchase team will invite Quotations
4 Maintain Quotation Purchase SAP ME47 Price will be maintained as per Quotation
5 Quotation Comparison Purchase SAP ME49 PC sheet will be maintained automatically
6 Create Purchase Order Purchase SAP ME21N PO will be raised with reference to PR
7 Release Purchase Order Purchase SAP ME22N PO will be released as per approval matrix
8 Transfer Posting Store SAP MIGO Store team will issue the Goods/Components to Vendor
9 Challan Creation Store SAP J1IGSUBCON Subcon challan will be created by user
10 Gate Entry Security Official SAP ZGATEENTRY GE will be done wrt Vendor’s Invoice
11 Goods Receipt / Reverse GR at Plant Store SAP MIGO GRN will be done post physical counting
12 Auto Inspection Lot Quality SAP QA32 Inspection Lot will be created automatically
13 Result Recording of QC check Quality SAP QA32 Quality team will do inspection
14 Usage Decision Quality SAP QA32 QA will post Usage Decision
15 Challan Reconciliation Store SAP J1IGRECON Subcon challan will be reconciled by StoreTeam
16 Post Vendor Invoice FI/Accounts SAP MIRO FI team will post Vendor’s Invoice post verification

Index
60
2.2.1.E. Job Work (Inter Unit) - Process Flow Step for Plant B
Activity Department Applications
Activity Description T Code Detail Process Description
Number Involved Related
1 Create Purchase Order Purchase SAP ME21N Customer Job work PO will be raised by Plant B
2 Release Purchase Order Purchase SAP ME29N PO will be released as per approval matrix
3 Gate Entry Store SAP ZGATEENTRY GE will be done by Store person.
4 Goods receipt Store SAP MIGO Store team will receive the material against GE.
5 Gate Issuance against PO Store SAP MIGO Store person will issue the material on shop floor against PO
6 Production planning & confirmation Production SAP CO11N Production team will confirm the order.
7 Quality check Quality SAP QA32 Quality check by PP/QM team
8 Sales order creation Sales SAP VA01 Sales order creation wrt Job work PO to Plant A
9 Delivery Sales/ Dispatch SAP VL01N Delivery will be created against Sales order.
10 Post Goods issue Sales/ Dispatch SAP VL02N Goods issuance against Sales order.
11 Billing /Customer Invoice Sales/FI SAP VF01 Billing against delivery will be created with FI accounting.

Index
60
 Freight Inward – Process Description
• In case of Inward Freight, Purchase order Initiator will maintain the freight during Purchase order creation.
Here user can maintain multiple delivery cost in different condition types like Pack & Forward, Insurance
charges and Freight in percentage or on value basis as per the requirement and same cost will be uploaded
to Inventory as a part of purchase with Delivery charges.

• Here provision will be given to maintain multiple vendors as per the conditions in single purchase order.

• In case if freight value is not fixed for the delivery then user can maintain approximate cost in purchase
order and Finance dept. user will book the freight invoice with actual value during Invoice verification in
MIRO transaction code.

• Once material arrived at Gate entry, user will create gate entry number for the same.

• On the basis of Gate entry number, store user will do the GRN and maintain the bilty number or invoice
number in bill of lading field of GRN screen and after that Finance user will do the Invoice verification on the
basis of vendor invoice (With checks and validation - mentioned in next slide) .
Index
108
 Freight Inward – Process Description
• A customized chart master will be prepared for Freight, which will be used during Freight Invoice Processing
or bill booking to check and verify Freight price as per the Freight master. If any difference found with
reference to Freight master then system will not allow to post Freight Bill booking.

• If Freight Bill value matches with Freight master then system will allow to post Freight Bill in MIRO
transaction code.

• Note – For outward freight Process (Billing/STO etc.) : Refer SD BBP

Index
108
 Freight Inward – Process Description

Invoice Receipt (MIRO):-

Post Invoice Receipt for freight invoices with reference to Bill of landing/Purchase order number/Delivery note number. Invoice will
be booked on the below mentioned Basis:
 Invoices with Purchase order reference - With PO based Invoice Verification, all the items of a purchase order can be settled together.
 Invoices with Goods receipt reference – Partial deliveries are received and you want to do invoice verification separately for each
delivery. This can be done through invoice verification against delivery note.
 Invoices with Bill of landing reference – Multiple deliveries are received and you want to do invoice verification jointly for each bill of
landing. This can be done through invoice verification against Bill of landing.

Indicator Particular Amount

Debit Freight Clearing Account (Delivery charges) 100.00
Debit CGST/SGST Account (RCM) 18.00
Credit CGST/SGST Account (RCM) 18.00
Credit To Supplier Account (Freight Supplier) 100.00

Index
108
 Freight Inward – Process Description
• Validations / Developments in process

• Customized Freight master for Inward Freight.

• Check and Validation during Freight bill booking in MIRO transaction code.

Index
108
Freight Inward – Process Description

Index
108
2.2.1.F. Non-PO Invoice – Process Description
• This type of Invoice is created for those Vendor invoices where PO process is not followed.

• In such case Invoices can be directly created from Finance.

• It is possible to charge GST, RCM, TDS etc.

• However it is recommended that this practice should be kept to minimum.

• In case of Non-PO transactions, Invoice will be booked against expense GL and cost object.

• GPP Finance & GPP Purchase department will decide transactions which will be posted through Non PO Invoice route.

• Invoice raised by Vendor for TCS on Payments as per Section 206C(1H), will be posted as Non-PO Invoice and one report will
be created for TCS recoverable under this section.

Index
108
2.2.1.F. Non-PO Based Invoice - Process Flow Diagram

110
2.2.1.F. Non-PO Based Invoice - Process Steps

Activity Department
Activity Description Application T Code Detail Description
No. Involved
Need for a User Felt a need for a service/Material to
1 User Dept N/A N/A
Service/Material arise procure.
Approved by the
2 User Dept N/A N/A The authorized person will approve request.
authorized person
Receipt and An acknowledgement of receipt of
3 User Dept N/A N/A
acknowledgement Material/Services given by User Department.
Invoice forward to the Invoice is being received and forward to the
4 User Dept N/A N/A
account department F&A department.
Park Vendor Invoice being done basis offline
5 Park Vendor Invoice Accounts Dept SAP FV60
approval on Invoice or formal mail.
Post Vendor Invoice being done basis offline
6 Post Vendor Invoice Accounts Dept SAP FBV0
approval on Invoice or formal mail.
Post Vendor Payment The net amount is being paid to the Supplier
7 Accounts Dept SAP F110/F-58
Against Invoice against Invoices

Index
111
2.2.2. Debit/Credit Notes – Process Description

Goods Return

Subsequent Debit/Credit Notes

Commercial Debit/Credit Notes

Index
115
2.2.2. Debit/Credit Notes – Process Description
On the Basis of discussion being held with business, it has been observed that there can be below cases wherein business will be
received Debit/Credit Note from Supplier and same will be posted.

 Goods Return Process (Line Rejection)

 Subsequent Debit/Credit Notes (Price Difference)

 Commercial Debit/Credit Notes (Short Material)

Index
116
 2.2.2.A. Goods Return – Process Description
Goods Return Process against Line Rejection
Below process is followed:
 Purchase Return Order Will be created.
 Return Delivery & Return Invoice will be created.
 For Return Invoice number series for GST reporting will be different.
 Printout will come same as Invoice. Separate reporting will be provided to classify these transactions
 Entries will be directly posted to Vendor Account & GST Receivable account. No Manual transfers will be required.

GL Account Indicator Amount

Inventory – RM/PM etc Cr 100
GR/IR Dr 100

GL Account Indicator Amount

GR/IR Cr 100
Vendor Dr 118
GST Receivable Cr 18

Index
118
2.2.2.A. Goods Return - Process Flow Diagram
Start

Create
Purchase
Requisitio
Purchasing

Create
Purchas
e Order

Goods
Receipt
Quality Rejection

Invoic
Quality Accept
e
Poste
d

Reject

Delivery Note
Return
by Return
Sale Invoice Return PO
PO
Print
Mov. Type 122

Return
Return Delivery
Vendor Return

Deliver with 161

y Mov.
Type

Receipt of
Credit Note End Sale
from Vendor & Invoice
Posting of same Print
119
 2.2.2.B. Subsequent Debit/Credit Notes by Supplier (Price Difference)
Supplier can issue Subsequent Credit Note/Debit Note during the year. Below process will be followed:-

 Invoice will be booked with full value. However purchase department have option to block this invoice for payment.

 When Credit Note/Debit Note is issued by Supplier then same is posted using Subsequent Debit/Credit Note functionality

 During posting if Inventory exist then value will be posted to Inventory, otherwise it will be charged to Price Difference account

 However If Partial inventory exist, then proportionate amount will be transferred to Inventory and rest will be transferred to Price
Difference Account.

Subsequent Credit Subsequent Debit

Note By Supplier Note By Supplier
GL Account Indicator Amount GL Account Indicator Amount
Vendor Dr 100 Inventory – RM/PM etc Dr 90
Inventory – RM/PM etc Cr 90 Price Difference Account Dr 10
Price Difference Account Cr 10 Vendor Cr 100

Index
121
2.2.2.B. Subsequent Debit/Credit Notes by Supplier (Price difference)

GRN is posted as per Invoice Qty. Once physical counting is done, debit/credit note will be raised accordingly. Virtual return will
be done, if qty received is less than Invoice Qty. Email should be auto triggered to Purchase Team, Indenter & FI Team in case of
Short/Excess Qty received. Print out will be available for movement types- 122, 161 and Debit Note.
In case of short receipt, MIRO will be booked for full qty as per invoice and a subsequent credit memo (Debit Note) will be
raised by supplier for differential QTY.
Over Shipment means vendor has supplied more quantity than the quantity mentioned in Purchase Order. GE/GRN will be done
as per tolerance.
After GRN, Store team found the difference between Physical Quantity and GRN/Invoice quantity.
Store Team will notify the concern department. If they would like to accept the excess quantity, then PR will be raised by them.
Post approval of PR, Purchase team will create the PO wrt PR.
If excess Qty is within PO tolerance qty then new PR is not required. System will allow to post GRN for excess Qty as well.
System will auto close the PO, if PO qty equals to GRN Qty. It will not allow to post further GRN, even if there’s any
tolerance maintained in PO.

Index
122
2.2.2.B. Subsequent Debit/Credit Notes by Supplier
Following is example and subsequent accounting entries:

When Physical counting is done before GRN-

TCODE Description QTY Rate Amount Accounting

ME21N Creation 100 10 1000
MIGO GRN Done 90 10 900
MIRO-Invoice Invoicing 100 10 10001
MIRO-Credit memo Debit Note 10 10 1002

Ref 1 (Invoice)
Indicator Description QTY Rate Amount
Debit GR/IR clearing account 100 10 1000
Credit Vendor 100 10 1180
Debit INPUT 18% 180

Ref 2 (Credit Memo)

Indicator Description QTY Rate Amount
Credit GR/IR clearing account 10 10 100
Debit Vendor 10 10 118
Credit GST INPUT 18% 18

Index
123
2.2.2.B. Subsequent Debit/Credit Notes by Supplier – Process Flow Diagram

125
2.2.2.B. Subsequent Debit/Credit Notes by Supplier – Process Step

Activity Department
Activity Description Application T. Code Detail Description
No. Involved
Accounts
1. Debit/Credit Note by Supplier NA NA Debit/Credit note received from supplier.
Department

Debit/Credit Note during financial Year

Create Subsequent If Debit/Credit note is issued by supplier during the year
Accounts
2. Debit/Credit against PO SAP MIRO then same will be posted against PO no using subsequent
Department
Number Debit/Credit Note functionality.
Debit/Credit Note after end of financial Year

If Debit/Credit note for the year is issued by supplier after

Post Manual Entry Accounts
3. SAP FV60/FBV0 end of financial year then same will be posted through
at the year end Department
manual entry at the end of the year.

Reverse Impact of Manual

Accounts Impact of manual entry will be reversed in the begging of
4. entry in begging of next SAP FV60/FBV0
Department next financial year.
Financial Year

Index
128
2.2.2.C. Commercial Debit/Credit Notes - Process Description
• Commercial debit / credit notes can not be issued by buyer against any invoice where GST has been levied .
• Commercial debit /Credit note can only be issued only against invoices where GST credit has not been taken .

In SAP, these case will be routed via Manual Debit/Credit Notes , where in Business will pass a JV document via debiting supplier
and crediting miscellaneous income or the specific GLs.

Following accounting entry will be triggered in this case:

GL Account Indicator Amount

Vendor Dr 100
Profit & Loss account (Income/Exp) Cr 100

Index
131
2.2.2.C. Commercial Debit/Credit Notes - Process Flow Diagram

132
2.2.2.C. Commercial Debit/Credit Notes - Process Step

Activity Department
Activity Description Application T. Code Detail Description
No. Involved

Park Commercial User will Manually Park Debit/Credit Note in the

1. Accounts Deptt. SAP FV65
Debit/Credit Note System.

Post Commercial User will Post Parked Commercial Debit/Credit

2. Accounts Deptt. SAP FBV0
Debit/Credit Note Note.

User can Take Print out of Debit/Credit Note

3. Print Debit/Credit Note Accounts Deptt. SAP Custom
from Custom program.

Send Debit/Credit Note

4. Accounts Deptt. NA NA User need to send Debit/Credit Note by mail.
to Supplier

Index
133
2.2.3. Handling Multiple Branches of Supplier
Link between Branch Accounts and Head Office Account:-

 Whenever we have multiple branches of same Supplier then we need to create one Vendor account as head office and other supplier account as
branches.

 To link branch accounts to a head office account, you must enter the number of the head office account in the Head office field in the branch account
master record.

 The head office account can be any Supplier account except one-time accounts or branch accounts themselves.

 Branch accounts and head office accounts must belong to the same company code.

Centralized or Decentralized Process

 The Purchase orders are managed in the branch account, however we can check outstanding balance for Supplier group together.

 Further we have option whether to select centralized payment or decentralized payment for the Supplier different branches

 Once we select centralized process, then purchase and transaction figures posted in branch offices are automatically posted to the head office account.

 Payments are cleared centrally by the head office, meaning that outgoing payments can be made for several branches in one step, using the head office
account.

 In Decentralized process, open line items and outgoing payments will be managed separately in each branch account.

Index
134
 2.2.4. Handling Supplier Account which is Customer Also
Link between Supplier Account and Customer Account:-
 Whenever one business partner (person/Firm/Organization) is both Supplier and Customer, then we have to create Separate
Supplier and customer master records for same.

 We have to specify Customer account in the supplier master record and supplier number in customer master record.

 When ever you open any account, system will show the both balances.

 In case of Supplier balance display FBL1N, we have to select Customer items.

 In case of Customer balance display FBL5N, we have to select Supplier Items.

 Now if we want clearing of line items for customer and supplier with each other , then we have to activate in the both
master records - Clearing with Customer in supplier master record, clearing with supplier balances in customer
master record.

Index
135
 2.2.5. Withholding Tax (TDS/TCS on Scrap) - Process Description (1/4)
In India, Tax is required to be deducted at source either at the time of payment or at the time of invoice booking whichever is earlier. In SAP TDS is deducted at
Section Code level. Below is the details of Business Place, Section code and TAN NO.

Company Code Business PlaceDescription Section Code Income Tax TAN

1000 1001 DELG01083F
Pradesh
1000 1002 DELG01083F
Uttarakhand
1000 1003 DELG01083F
Andhra Pradesh

Index
136
2.2.5. Withholding Tax (TDS/TCS on Scrap) - Process Description (1/4)
 In SAP, TDS/TCS calculations are done on basis of Withholding Tax Keys. Below is the list of applicable withholding tax Keys for GPPPL.

Withholding Tax Key Description

194A Interest other than Securities
194C Payment to Contractors
194H Commission/Brokerage
194I Rent On Plant and Machinery/ Land and Building
194IA Purchase of Immovable Property
194J Professional/Technical Services
194N TDS on Cash withdrawal
194Q TDS on Purchase of Goods
195 Foreign Payment
206CE TCS on Scrap
192B TDS on Salary

 Within these Keys there will be separate Withholding tax codes on basis of percentage of deduction, Threshold limit & PAN/Non PAN.
 Separate GL Account will be assigned to each Withholding tax key.
 These codes are assigned in the Supplier master. Whenever an invoice is posted or Advance payment is made, TDS is deducted on basis of selected TDS code.
 In Order to deduct TDS on expenses Payable , Expense Payable account should be opened as vendor reconciliation account.
 TCS on scrap will be deducted at time of scrap sale.

Index
136
2.2.5. Withholding Tax (TDS/TCS on Scrap) - Process Description (2/4)
TDS Challan (J1INCHLN)

 In SAP we can create remittance challan and system automatically identifies withholding tax items which need to be remitted.
 In GPPPL Remittance Challan will be created per Business Place for each Withholding Tax section as per Income Tax Act.

Update bank Challan (J1INBANK):-

 When the bank sends you a bank challan, you enter the bank challan in the system. The system stores the bank challan number in all remitted
withholding tax items by way of proof that you have remitted the tax.

Reports (ZREPORT/J1INEMIS):-
 In SAP we can generate report with TDS Code, Section Code, Monthly, Quarterly etc. as per TDS Standard format and same will be extracted in excel
format file which can be uploaded in TDS/NSDL Portal Direct.

Index
138
2.2.5. Withholding Tax (TDS/TCS on Scrap) - Process Flow Diagram (3/4)

139
2.2.5. Withholding Tax (TDS/TCS on Scrap) – Process Step (4/4)
Activity Department
Activity Description Application T. Code Detail Description
No. Involved
Down payments are being made to the Supplier and
1 Down Payment to Supplier Accounts Dept SAP F-48/ME2DP
TDS is being deducted on it.
MIRO/ Supplier invoice is being posted in the system and TDS
2 Post Supplier Invoice Accounts Dept SAP
FV60(FBV0) deducted on entire invoice amount.
The F&A department will clear the advance against
Clearing Down Payment
3 Accounts Dept SAP F-54 the invoice thereby netting the TDS with that
against Invoice
deducted on invoice amount. (F-54).
Generate the The F&A department will generate the remittance
4 Accounts Dept SAP J1INCHLN
remittance challan as and when required.
challan
The F&A department will update the bank Challan
5 Enter Bank challan in SAP Accounts Dept SAP J1INBANK
number in the system.
Download TDS Report The F&A department will download TDS report in
6 Accounts Dept NA NA
in excel Sheet excel sheet.

7 Check & update TDS Report Accounts Dept NA NA The F& A department will check & update TDS report.

J1INEMIS/ The F&A department will generate the quarterly

8 Quarterly Return Accounts Dept SAP
Custom return

Index
140
2.2.6. Indirect Tax (GST & RCM) - Process Description
 To segregate the GST, According to implication, separate GLs will be created for CGST, SGST,UGST & IGST. State Wise GST transaction will be
recorded at Business Place level.
 Considering Organization structure for GPPPL Business Places are proposed to be created:

Please Refer Finance KDS for Business Place List.

 All the transaction for GST will be triggered from a two digit tax code, which will be decided at the time of making purchase Invoicing from FI. Tax
codes to be opened in SAP to address the GST implications
NOTE: SAP standard system, has capability to calculate the GST, either in decimals or Rounding off. Industry and SAP best practice to
keep it in exact decimals only.

In below cases GST will be posted manually and same will be included in GST reports:
- GST credit on Bank Charges
- Reversal of GST Credit on basis of utilization of items.

Please refer “Finance_KDS” for Tax Code list.

Note : Standard ledger report & purchase register report will be available to check the RCM liability (Point number 07 from 46 point MD checklist
sheet). 142
2.2.7. Supplier Payments – Process Description

Domestic Payment
Terms

Import Payment
Terms

Advance Payment

Manual Partial/Residual Payment

Automatic Payment

Index
146
2.2.7.A. Domestic Supplier Payment Terms - Process Description
Terms of Payments: Terms of Payment will be defined and updated in the Supplier Master for each Supplier. It can also be updated at the invoice Line item
level. Terms of payment will define the due date from, credit period and cash discount, if applicable. The due date Will be calculated from a Baseline date, which
will be either of the following dates: •Document Date, • Posting Date, • Entry Date,• No Default.

For GPPPL, For Domestic supplier Payment term will be calculated on as per below attachment:-

* Please check Finance KDS for Payment Terms Details.

Index
147
2.2.7.B. Import Supplier Payment Terms - Process Description
Terms of Payments: Terms of Payment will be defined and updated in the Supplier Master for each Supplier. It can also be updated at the invoice
Line item level. Terms of payment will define the due date from, credit period and cash discount, if applicable. The due date Will be calculated from a
Baseline date, which will be either of the following dates: •Document Date, • Posting Date, • Entry Date, •No Default.

For GPPPL, Import payment terms are calculated basis on as per below terms:- from Date of Shipment.

* Please check Finance KDS for Payment Terms Details.

Index
148
2.2.7.C. Supplier Advance Payment - Process Description
In SAP, Advance payments are special G/L transactions. Special G/L transactions are transactions in accounts payable that are displayed separately in the
general ledger (to report separately in financial Statements) and the sub ledger (Supplier account). This is achieved by posting to alternative reconciliation
accounts, instead of posting directly to the reconciliation accounts for payables.

An Advance payment transaction is carried out by using a Special G/L indicator.

As per requirement of GPPPL, Following Special G/L indicators are proposed to be used by business :

SPL GL Indicator Description

F Supplier Down Payment Request (Noted Item)
A Supplier Down Payment – Non Capex
B Supplier Down Payment – Capex
E Employee Advance

Note: Please refer KDS_Accounts Payable for Details

Payment request can be generated through PO (T.Code ME2DP). Then finance can create advance with reference to such payment request which will
have reference of PO. And there is also possibility for creation of advance without reference to PO (T.code F-48).

Note: When Advance is without reference of Purchase order and later on purchase order is issued then user can update PO No in Text field of Advance
Document.

Note : No Advance will be booked without reference to Purchase order. ( Point number 04 & 05 from 46 points MD checklist sheet )
Index
149
2.2.7.C. Supplier Advance Payment - Process Flow Diagram

150
2.2.7.C. Supplier Advance Payment - Process Steps

Activity Department
Activity Description Application T Code Detail Description
No. Involved

PO Based Post Advance Purchase department will post vendor advance

1 Purchase Department SAP ME2DP
Payment Request payment request to accounts department.

The Accounts department will post the advance

Post Advance Payment with payment, if approved. Otherwise, will send back to
2 Accounts Department SAP F-48
reference of Request No the procurement department. An accounting
document will generate updating the AP ledger

When Advance is without reference of Purchase order

Non-PO Based Vendor
3 Accounts Department SAP F-48 and later on purchase order is issued then user can
Advance Payment
update PO No in Text field of Advance Document.

Advance payment clear After booking of Invoice , Accounts department will

4 Accounts Department SAP F-54
with Invoice clear Advance against Invoice.

Index
151
2.2.7.D. Manual Partial/Residual Payment - Process Description
Payment Method for Supplier Payment:-
Pmt Payment Method Clearing Process
SN Method Type Output Remarks
Mthd Description
Cheque/Payment Cheque
1 C Cheque Output Based
Advice/Cheque Details
Cheque/Payment Cheque
2 R RTGS/NEFT Output Based UTR Number Will be updated through Bank Statement
Advice/Bank Letter/Cheque Details
Bulk Online Transfer File/Payment Sequence No. UTR Number Will be updated through Bank Statement.
4 T Output Based
Transfer Advice/Bank Letter For Bulk payment separate bank account is used
Manual Online UTR Number This method is used for Statutory payments and adhoc payment to
5 Manual
Transfer Parties. Entry is posted after payment and we have UTR number

6 Debit/Credit Card Manual 4 banks are there details in separate chart

7 Cash Method Manual Cash journal should have facility to make payment to Vendor
FOTT Number
8 Wire Transfer Manual Entry is posted after payment and we have FOTT number

Bank to bank
9 Online & Cheque
Transfer

Index
153
2.2.7.D. Manual Partial/Residual Payment - Process Description
Block Description
Reason
Void Reason Code Description
•• Currently
Using the Cheque
paymentis block
majorreason,
paymentyoumethod, but business
can differentiate whymay Code Free for Payment
plan to replace cheques with NEFT/RTGS for majority
invoices are to be blocked for payment. Blocking of invoice of payments
will
in future. maker and checker significance. 01 * SkipTest Printout
Account
establish
Payment Block •• Beside this business
Post releasing also require
of invoice payment
from block, paymentadvice
willand Supplier For
be feasible.
statement. 02 A Locked for Payment
Page Overflow
Cheque Void GPPPL, the The advicepayment
standard will contain
blockdetails
reasonsof the
will line items
be used:
(Invoices) paid by Cheque or RTGS/NEFT. B Blocked for Payment
Reason • Check printing facility would be available for one or more of the 04 Ripped during printing
R Invoice Verification
banks that has accounts with.
• In case of cheque reprinting, the original cheque will be marked
05 Printed incorrectly
void. Below mentioned reason code will have to be entered at
the time of marking the cheque as void. This list is not exhaustive 06 Destroyed/unusable
and may change during realization phase.
07 Stolen

154
2.2.7.D. Manual Partial/Residual Payment - Process Description (1/2)
Manual Payment with Output (T.Code F-58):

 Manual Outgoing Payment with Output (F-58): Under this process the user will manually select the invoices against which the payment will be cleared, will generate the check
entry manually and thereafter take print out of the same.
 Partial Payments and Residual Payment (F-58):There are instances, where the terms of the purchase allow payment to be made to the Supplier over a period of time. In these
cases the outgoing payments made to the Supplier may not settle the invoice in full, but only partially. The amount to be paid in parts by the Finance Department to the
concerned Supplier will be based on the Terms of Payment and after that user will take printout of cheque.

The effect of Partial Payment is that both the payment as well as the invoice items is open in the Supplier account.

 In case of Residual Payment, still a part payment is made but the difference is that both the original invoice as well as the payment got cleared and a new open item will be
created for the difference amount.

Manual Payment without Output (T.Code F-53):

 Manual Outgoing Payment without Output (F-53): Under this process the user will manually select the invoices against which the payment will be cleared only.
 Partial Payments and Residual Payment (F-53/F-58):There are instances, where the terms of the purchase allow payment to be made to the Supplier over a period of time. In
these cases the outgoing payments made to the Supplier may not settle the invoice in full, but only partially. The amount to be paid in parts by the Finance Department to the
concerned Supplier will be based on the Terms of Payment.

The effect of Partial Payment is that both the payment as well as the invoice items is open in the Supplier account.

 In case of Residual Payment, still a part payment is made but the difference is that both the original invoice as well as the payment got cleared and a new open item will be
created for the difference amount.

Note : Auto Alerts for overdue payments will be delivered to concern authorities along with list of overdue payments (Point number 03 from 46Points MD Checklist sheet) Index
155
2.2.7.D. Manual Partial/Residual Payment - Process Description (2/2)
Manual Forex Payment:-
Manual Outgoing Payment (F-53/F-58): - User will maintain exchange rate in SAP (OB08) and all Invoices will be booked on the rate defined in the
system. Although there is option of changing exchange rate at the time of posting invoice.

At the time of payment system will automatically pick the exchange rate from system which can be manually change and the difference due to rate
change will automatically reflect in Forex Gain/Loss GL. There will be separate GL account for realized & unrealized forex Gain/Loss.

For Instance, if Invoice is booked for $100 with the exchange rate of 1 USD=70 INR and at the time of payment the rate raised to 1 USD= 71 INR.

At the time of Invoicing:

Indicator Description Amount (USD) Amount (INR)

Debit Expense A/C 100 7000
Credit Import Supplier A/C 100 7000

At the time of payment:

Indicator Description Amount (USD) Amount (INR)

Debit Import Supplier A/C 100 7000
Debit Forex Gain/Loss A/C 0 100
Credit Outgoing Bank Account 100 7100
Index
156
2.2.7.E. Automatic Supplier Payment - Process Description
Automatic Outgoing Payment (F110):
• Under this process, the user will prepare a payment proposal specifying the payment run date, next payment run date, the company to whom the
payment is made, the bank through which the payment will be made, the payment method as well as payment media.
• Based upon the parameters entered, system will generate a payment proposal. Once the payment proposal is ready, this proposal will be
run periodically according to the business requirement making necessary changes.
• Business wants, a payment proposal print invoice wise detail, before executing final clearing. Here Business want to take the call as, which invoice
to be paid or to be exclude from current payment plan.
• Once the final proposal is ready, a payment run will be executed. At this stage, a payment document will be generated clearing the invoice items with
the payment item.
• Cheques will be printed from the system.
The following accounting entry will be generated:

Indicator Description Amount

Debit Supplier A/C 1000
Credit Outgoing Bank Account 1000

GPPPL is recommended to run bulk payment program on daily or weekly basis and same cheques generated can be printed from system.

Index
157
2.2.7. Automatic & Manual Vendor Payment - Process Flow Diagram

158
2.2.7. Automatic & Manual Vendor Payment - Process Steps (1/2)
Activity Department
Activity Description Application T Code Detail Description
No. Involved
Automatic Vendor Payment
Accounts When the invoices and credit memo become due and
1 Automatic Vendor Payment N/A N/A
Department needed to be paid
Accounts The User will execute the payment program and will
2 Enter parameters SAP F110
Department enter the parameter
Accounts The user will execute the proposal. System will
3 Run proposal SAP F110
Department generate a proposal list along with exception list
Accounts
4 Edit Proposal SAP F110 If required proposal can be edited.
Department
Generate of Accounts System will generate the payment document and will
5 SAP F110
Payment Document Department clear the open items against the payment.
Output based on Accounts User will select the print media. Basis that Cheque/
6 SAP F110
Cheque/RTGS/NEFT/DD Department RTGS /NEFT/DD will get generated
Output based on bulk online Accounts User will generate excel file for upload on bank
7 SAP F110
Transfer Department portal/output (payment Advice/Bank Letter).

Index
159
2.2.7. Automatic & Manual Vendor Payment - Process Steps(2/2)
Activity Department
Activity Description Application T Code Detail Description
No. Involved
Manual Vendor Payment without Output
Accounts User can make vendor payment manually without
1 Manual Payment SAP F-53
Department cheque print out.
Select open item and post Accounts System will prompt the open items, select the open
2 SAP F-53
Payment Accounting Department items and post the entry.
Manual Vendor Payment with Output
Accounts User can make vendor payment manually with
1 Manual Payment SAP F-58
Department cheque
print out.
User can make the payment manually by selecting the
Select House Bank, Payment Accounts
2 SAP F-58 House Bank, Payment Method, cheque lot and
Method and Cheque Lot Department
amount to be paid
System will clear the open lines of supplier and
Select open item and post Accounts
3 SAP F-58 generate a clearing document.
Payment Accounting Department
Simultaneously Cheque register will get updated
Bank to Bank Transfer
Accounts
1 Post Manual Journal Voucher Department SAP FV50/FBV0 User will post manual JV for bank to bank transaction
Assign Cheque Number in Accounts
2 SAP FCH5 User need to assign cheque number with posted JV.
Manual Journal Voucher Department
Accounts User can take cheque print out by SAP custom
3 Cheque Print Out SAP Custom
Department program .
160
2.2.8. Supplier Security Deposit - Process Description
In SAP, Supplier Security Deposit will be covered through special G/L transactions.

Special G/L transactions are transactions in accounts payable that are displayed separately in the general ledger (to report separately in financial
Statements) and the sub ledger (Supplier account). This is achieved by posting to alternative reconciliation accounts, instead of posting directly to the
reconciliation accounts for payables.

Security Deposit transaction is carried out by using a Special G/L indicator.

As per requirement of GPPPL Following Special G/L indicators is proposed to be used by business :

SPL GL Indicator Description

H Supplier Security Deposit Given

Note: Please refer KDS_Accounts Payable for Details

– Accounting Entry of security Deposit would be:-

Posting Indicator Particular Amount

Debit Supplier Security Deposit (SPL. G/L Indicator “H”) 1500
Credit Bank Account 1500

Index
162
2.2.8. Supplier Security Deposit - Process Flow Diagram

163
2.2.8. Supplier Security Deposit - Process Steps

Activity Department
Activity Description Application T Code Detail Description
No. Involved

Accounts
1. Supplier Security Deposit SAP F-48 User will Post Supplier security deposit document
Department

Security Amount Return Accounts

2. SAP F-52 User will post security amount return from supplier
from Supplier Department

Index
164
2.2.9. Employee Payment - Process Description
Salary Payment to Employee:-

Apart from salary, Other Employee related transactions can be processed through SAP, we will create each employee under “ZEMP- Employee Supplier”
Account Group. Salary will be processed outside the system and only final salary payable entries will generate from system.

Loan & Advance:-

 It will be managed in HR module and only summarized accounting entry will be posted in SAP:

 Advance can be posted both in INR & Foreign currency

Imprest Payment to Employee:-

 Permanent Imprest & Travelling Imprest will be posted on Employee vendors using different special GL indicator.

 At the time of settlement Imprest will be settled in employee vendor account

Below Special GL Indicators will be used to post Employee Imprest related transactions.

Special GL Indicator Description

E Employee Imprest- Permanent

Index
165
2.2.9. Employee Payment - Process Flow Diagram

166
2.2.9. Employee Payment - Process Steps

Activity Department
Activity Description Application T Code Detail Description
No. Involved

Accounts User can Post employee Imprest document by cash

1. Imprest to Employee SAP F-48/FBCJ
Department journal or direct F-48.

Imprest Return Accounts User can post Imprest return amount from Employee
2. SAP F-52/FBCJ
from Employee Department Vendor.
Vendor

Index
167
2.3. Period End/Year End Activities - Process Description
Period End Activities:
• Account clearing is a method of clearing the open items of the Supplier account balances. Account clearing can be a manual clearing or automatic
clearing and GPPPL will be clear on month basis. .
• Partial Clearing is a method where a partial payment is made for an open item. In case of Partial Clearing, the system will post a line item in debit
for the payment made. The system however, will not clear the invoice till the entire invoice amount is paid. Until all the payments are made against such
invoice the line items are shown as open items only.
• Residual Clearing is a method that clears the open items in case of residual or balance payment on the invoice received. In residual clearing the
system will clear the open line item to the extent of which the payment is made and generate a new line item for the balance payable as an open item.
• Now Prepaid expenses will be posted every month & reversed in 1st day of next month.

AUTOMATIC CLEARING:-
Under this method, the system automatically identifies the open item according to the due date of the invoices and makes the payment accordingly. In
this we can define the ranking order of the banks through which the payment has to be made. Then a payment proposal is created and automatically the
payment is made through using the defined payment method in the system. The same details of allowed payment methods have to be maintained in the
Supplier master record also.

Note : Vendor Reconciliation will be done though Vendor Portal and this point is parked at management level and will be done after GO Live. (Point
Number 02, 11 & 17 from 46points MD checklist sheet). Index
170
2.3. Period End/Year End Activities - Process Description
Year End Activities:
• All Period End Activities
• Foreign Currency revaluation.
• Parked Document to be posted
• Supplier Balance Carry Forward: Balance carry forward involves carrying forward account balances into the new fiscal year. The balance to be
carried forward is shown in the account balance display. To carry forward balances, you can use a program for G/L accounts and another program
for customer and Supplier accounts.

Index
171
2.4. WRICEF List

• Note: Please refer GL BBP (WRICEF List) for WRICEF details.

Index
172
 Thank You

SAP
Inputs Outputs

SAP FI AP BBP

Mawai GPPPL

Feedback
For any query , please feel free to reach us at

Index
173