what are month end provisions in sap fico

Month end provisions:

Option 1:                                                  Option 2

Accrual / Deferral document                Open item management

Option 1: Accrual Deferral document

31.10.2008 Salary provision

                  Salaries Dr                                        100000

                              To out standing                    100000

01.11.2008 reversal next month 1^st

                  Outstanding Dr                                 100000

                  To Salaries                                        100000

05.11.2008 Payment of salaries

                        Salaries         Dr                                105000

                                    To Bank                                 105000

Salaries A/c

31.10.2008                                      100000

05.11.2008                    105000           01.11.2008                100000

                                 

Outstanding Expenses A/c

                                                                        31.10.2008                100000

01.11.2008                            100000

Profitability effect::

For October                                       100000

For November because October   5000

Option 2: open item management

31.10.2008      Salaries provision

Salaries         Dr                                100000

            To out standing                    100000

05.11.2008 Salaries payment

            Out standing Dr                                100000

            Salaries         Dr                                5000

                        To Bank                                 105000

Salaries A/c

31.10.2008                                      100000

05.11.2008                                      5000

Outstanding Expenses A/c

31.10.2008                      100000

01/11/2008                            100000

Profitability effect

For October                                                   100000

For Nov. because of October salaries      5000

Companies follow 1^st option (other than year end)

In case of option 2 – the person who makes the provision is accountant and the person who is making the payment and clearing is Cashier   - Cashier has to track the provision and clear against the provision.

Option 1: Accrual / Deferral document :

Steps

1.Creation of reversal reason and  reversal reason should allow us to reverse on any day.

2. Enter accrual / Deferral documents

A) Rent Provision                            08.10.2008

B) Salary provision                          31.10.2008

3.Reversal of accrual / deferral documents in one step

1.Creation of reversal reason and reversal reason should any day.

Path : SPRO- Financial accounting –General ledger accounting-Business transactions –Adjustment posting / Reversal - Define reason for reversal

Select new entries button

Reason                      :11

Text                             : Real / Deferral Reversal reason for AML

Select neg. posting check box

Select alternative position date check box         

Select save button or Ctrl+S

Save in your request

If we do not select alternative posting date check box

31.10.2008

Salaries Dr                           

            To out standing

System will allow you to reverses only 31.10.2008

We want to reverse next month 1^st select alternative posting date check box

Rent provision:

Path : Accounting – Financial Accounting – General ledger –Periodic processing – Closing – Valuate- Enter Accrual / Deferral Document  (Tr.Code is FBS1)

Document date                     : Today date

Type                                       :SA

Company code                     : AML

Reversal /n/nf-02

reason                        : Select 11

Reversal date                       :1.11.2008 (next months)

Posting key                           :40

Amount                                  :400300 (Rent A/c)

Enter

Amount                                  :50000

Business area                      :AMLH

Text                                         : Rent provision for October

Posting key                           :50

Account no.                          :100500 (out standing exp)

Enter

Amount                                  : *(star)

Business area                      : AMLH

Text                                         :+

From the menu select document –>Simulate and save

Salaries provision:

Tr.Code is FBS1

Document date                     :3110.2008

Posting date                          :31.10.2008

Type                                       :SA

Company code                     :AML

Reversal reason                   :11

Reversal date                       :01.11.2008

Posting key                           :40

Account                                 :400100 (Salaries A/c)

Enter

Ignore the warning message press enter

Give the amount                  100000

Business area                      AMLH

Text                                         :Salaries provision for the month of October

Posting key                           50

Account                                 :100500 (outstanding exp.)

Enter

Amount                                  : *

Business area                      :AMLH

Text                                         :+

From the menu select document –> Simulate and save

Reversal accrual / Deferral document :

Path : Accounting – Financial Accounting – General Ledger – Periodic processing – Closing –Valuate – Reverse accrual / Deferral Document (Tr.Code is F.81)

Give the company code                              : AML

Reverse posting date                                  :01.11.2008

Select text run check box

Execute (F8)

Select reversal documents button

Select back arrow

OPTION 2 : Open Item Management

 This is used vendors customers / Balance Sheet items where clearing is required. We have to select open item management check box

While crating the GL accounts

            Out standing Expenses

                        Salaries A/c               500000

                        Wagers A/c                300000

Bank 25000  Rent a/c                    25000

We can see the account in 3 ways                                                          

1.    Open items: Payable – Salaries and wages

2.    cleared items : Paid rent and bank

3.    All items : Payable + paid

3. Scenarios

1^st Scenario                                       2^nd Scenario                          3^rd Scenario

Full Clearing                                                 Partial clearing                     Residual items method

Provisional and payment –

Same amounts

A) Rent Provision –(Transaction code F-02)

Document Date & posting date                 :13.10.2008

Type                                                               : SA

Company code                                             : AML

Posting key                                                   :40

Account no.                                                  :400300 (Rent A/c.)

Enter

Give the amount                                          :15000

Business area                                              :AMLH

Text                                                                 : Rent provision

Posting key                                                   :50

Account no.                                                  :100500 (outstanding exp)

Enter

Amount                                                          :* (enter star)

Business area                                              :AMLH

Text                                                                 :+

From the menu select Document –> Simulate and save

B) How to view open item managed account transactions:

Path : Accounting – Financial Accounting – General Ledger- Account –   Document - Display / Change line items (Tr. Code is FBL3N)

Give the GL Account                       :100500 (outstanding exp)

Company code                                 : AML

Select open items radio button

Select normal items check box

Execute (F8)

OUT GONG PAYMENT WITH CLEARING:

Path : Accounting – Financial Accounting – General Ledger - Posting – Out going payments (F-07)

Give the document date                 : Today’s date

Type                                                   : SA

Company code                                 : AML

Clearing text                                                 : outgoing payment

Account Under bank data              :200100 (Cash A/c.)

Business Area                                  :AMLH

Amount                                              : 15000

Text                                                     : Outgoing payment

Account under open item selection :100500 (out standing expenses)

Amount type                                     : S(S is default)  (S: Stands for GL Accounts)

Select process open items button

Reversed documents will not appear for clearing:

Double click on payable amount 15000

Document – > Simulate and save

Go and see open item account transactions Tr.Code is FBL3N

Give the GL Account no     :.100500 (outstand expenses)

Company code                     :AML

Select cleared items radio button

Clearing data                        : Today’s date

Select normal items check box

Execute (F8)

Select back arrow

Select open  item radio button

Execute

(-*- This symbol  is open item(document no. below))

2^nd Scenario                                                             3^rd Scenario

Partial Clearing                                                       Residual items method

When we make part payment we can use either partial clearing or residual items method.

Out standing exp.                                        Outstanding Exp.

OI                                                                                OI

Rent               40000 Cr                                Rent               30000             28000 Cr

Cash              5000   Dr

                        -------                                                               -------

                        35000 Cr                                                        28000 Cr

                        =====                                                             =======

                                                                        CI :

                                                                        Rent 30000 Cr

                                                                        Rent 30000 Cr

                                                                               --------------                                                                                                                                                0

                                                                                    =====

A) Rent Provision                                        A) Rent Provision

        Rent                               Dr 40000                    Rent A/c         Dr        30000

            To Outstanding             40000                    Outstanding              30000

B) Part payment                                           B) Payment               Rs.2000

Out standing  Dr  5000                                Outstanding              Dr 30000 cleared

            To Cash    5000                                            To Cash               2000

                                                                                    To Outstanding   28000

Residual: Balance payable

Note :  OI  means Open Items

CI Means Cleared Items

           

Companies follow 1^st method

We test how to view bill wise outstanding:

Rent Provision F-02

Document date                     : Today date

Type                                       : SA

Company code                     : AML

Reference                             :3456

Posting key                           :40

Account No.                          :400300 (Rent a/c)

Enter

Amount                                  : 40000

Business Area                      : AMLH

Text                                         : Rent provision

Posting key                           : 50

Account No.                          :100500 (Outstanding exp.)

Enter

Amount                                  : * (enter star)

Text :+

From the menu select Document –Simulate and save

Out going payment using partial clearing method: ( Tr. Code F-07)

Document Date              : Today’s Date

Type                                 : SA

Company code               : AML

Reference                       : 3456

Clearing text                   :Outgoing payment

Account under bank data: 200100 (Cash a/c)

Business area                : AMLH

Account                           : 5000

Text                                   : Outgoing payment

Account under open item selections 100500 (outstanding exp)

Select process open items button

Keep the cursor on the amount filed of line item against which we want to adjust.

Select partial payment tab

Creates payment amount column

Double click amount 40000

Double click on payment amount 40000

From the menu select Document – >Simulate

Gives a message correct the marked Line items

Double click on blue font line items

Text enter                        :+

Select save button or Ctrl +S

Go and see open item account transactions

The Transaction is  code is FBL3N

Give the GL account                 :100500 (outstanding Exp.)

Company code                           : AML

Select open items radio button.

Select normal items check box

Select execute button

To view bill wise outstanding

Select change layout button (Ctrl+F8)

From the hidden fields column

Select reference field

Select amount in local currency under column contain.

Select left arrow or show selected fields button

Select copy button

Keep the cursor on reference

Select sub total button

To make balance payment of 35000 and cleared provision and part payment (F-07)

Give the document date           : Todays date

Type                                             : SA

Company code                           : AML

Reference                                   :3456

Clearing Text                              : Out going payment

Amount under bank date         :200100 (Cash A/c)

Business Area                            :AMLH

Amount                                        :35000

Text                                               : Outgoing payment

Account                                       : Under open item selection 100500(out standing exp)

Account type                               : S

Select process open item button

Double click on provision 40000

Double click on part payment 5000

From the menu select document –> Simulate and save

Go and see open item managed account transactions (FBL3N)

Give the GL Account o.             :100500(out standing exp)

Company code                           : AML

Select cleared items radio button

Select normal items check box

Execute

Residual items method:

Rent provision F-02

Give the document date     : Todays date

Type                                       : SA

Company code                     : AML

Posting key                           : 40

Account no.                          :400300 (Rent account)

Enter

Amount                                  :30000

Business area                      :AMLH

Text                                         : Rent provision

Posting key                           :50

Account no.                          :100500 ( outstanding exp)

Enter

Amount                                  : *

Business area                      : AMLH

Text                                         : +

From the menu select Document ->Simulate and save

Out Going  Payment Using Residual Items Method: (F-07)

Give the document date                 : To days date

Type                                                   : SA

Company code                                 : AML

Clearing Text                                                : out going payment

Account under bank date               : 200100 (Cash a/c)

Business area                                  : AMLH

Amount                                              :2000

Text                                                     : out going payment

Account type                                     :S (default comes)

Select process open item button

Account                     : Under open item selection 100500 (out standing exp)

Keep the cursor on the amount filed of the line item against which we want adjust.

Select residual items tab

It creates residual items column

Double click on next amount 30000

Double click on residual items amount

From the menu select Document –> Simulate

It gives the message correct the marked line items.

Double click on blue font line item.

Text enter                              : +

Save

Go and see the open item managed account transactions (FBL3N):

Give the GL Account no.                :100500 (out standing exp.)

Company code                                 : AML

Select open items radio button

Select normal items check box

Execute