SAP R/3

Business Blueprint

Chapter 8
”External Accounting”

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 External Accounting
 Reflects the changing relationship
between companies and outside
vendors or suppliers

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 Issues for the
presentation
 Vendor handling
 Customer processing
 OTA vendor processing
 Creditor subsidiary/Head Office processing
 General ledger processing
 Special-purpose ledger handling
 Consolidation

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 Vendor handling
 The R/3 accounts payable manages the
accounting data of all of a company’s
vendors.
 A vendor is company’s business partner who
has outstanding payables for received goods
or services.
 Key areas of accounts payable are:
– Integration of information
– Cash management
– Payment procedures
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 Vendor handling - II
 Vendor Master Record Processing
 Vendor Invoice Processing

 Down Payment Release

 Automatic Payment

 Manual Payment

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 Vendor handling – III
Vendor master record processing

 The basic data object is the vendor master

record, and contains the link to the general
ledger, information on each vendor and the
purchasing and accounting functions in the
R/3 system
 The master record consist of:
– General data
– Company code data
– Purchasing organization data
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 Vendor handling – IV
Vendor master record processing
 General data
– Basic information such as company address, phone,
etc
 Company code data
– Individual account information concerning the
vendor
– The smallest org. unit for which a set of accounts
can be drawn up for reporting purposes
 Purchasing organization data
– Information on request for quotation, purchase
orders and invoice verification
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 Vendor handling – V
Vendor master record processing
 A new master record is made for each
individual account group
 Two types exist:
– Internal: Created by the system itself
– External: Determined by the user
 All information for master records is entered
through a customized UI
 A master record must be created in order to
process transactions

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 Vendor handling – VI
Vendor invoice processing

 Involves data entry

 Invoices may or may not have a

vendor master record

 If an invoice arrives from a vendor

without a master record, it must be

created before invoice data can be
entered.

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 Vendor handling – VII
Down payment release
 The payment program generates down
payments to vendors
 The first step is to generate a request for
down payment and a due date, stored as a
document
 The system automatically creates the actual
down payment, and pays the invoice amount
 The system also reports the amounts
accurately in a balance sheet.

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 Vendor handling – VIII
Automatic payment

 Automatic payment is carried out in three

steps:
– Create payment proposal
 Based on specifications in the customer master record
– Process payment proposal
 Editing, processing, triggering of payment
– Post payment documents
 Generation of payments with matching documents.
Payable items are cleared and linked to the payments

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 Vendor handling – IX
Manual payment

 An additional option for processing

payments
 The following information must always be
entered manually:
– The general ledger account number for the bank
– The payment amount
– Any charges/fee
– The document number

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 Customer processing
 Describes how financial transactions are
managed for standard customers
 Two general functions:
– Provides basic data for effective credit
management
– Supports all traditional accounts receivable
techniques
 The master record plays a central role here
as well
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Customer processing - II
 The master record has a three part
structure:
– General customer data
 Address, phone, etc
– Company code
 Form of payment, etc
– Sales data
 Shipping, etc

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Customer processing - III
 Companies want to get their money quickly,
customer processing is therefore considered
as a key process
 Faster payments lead to a more effective
process and greater savings
 Customer remainders may be sent (dunning)
 Customer processing is integrated with other
functions, such as sales logistics and
budgeting

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OTA vendor processing
 Some suppliers deliver goods or services
only once, and these are called one-time
accounts (OTA)
 They are treated differently, with a more
simplified approach to master data
processing
 They have a common master data record
 “One-step invoice processing”

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 Creditor subsidiary/
Head-office processing
 Designed for vendors with head offices
and subsidiaries who are customary
suppliers for services or goods
 Invoices made to the branch accounts
automatically update the head office
account
 A separate set of master data are
made but they are linked together
 Modifications can be made as needed
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 General ledger
processing
 A financial accounting ledger that
provides clear structures for the
organization and documentation of
accounting, and highly automated
processes for day-, month- and year-
end closings
 Consists of company code, business

area and a chart of accounts

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 General ledger
processing - II
 Company code
 Business area
– Is used to analyse balance sheet items and profit
and loss statements
 Chart of accounts
– A classification system and evaluation tool that
records values or value flows
– Has three functions:
 Corporate chart of accounts
 Local chart of accounts
 Operational chart of accounts

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 General ledger
processing - III
 The general ledger account postings
are well organized and integrated with
other areas
 It also contains a calendar that permits

fiscal year flexibility, such as year-

round closing capabilities

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Special purpose ledger
handling
 Provides an evaluation system for
more specific areas.
 Gives numerous options for analyses

and reports that supplement traditional

accounting applications
 Key areas are: Integration, planning

and reporting

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 Consolidation
 Is the process of collecting and
reconciling the financial statements of
companies into a single consolidated
financial statement that portrays the
financial circumstances as a whole

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 Consolidation - II
 Deals with the way companies summarize
financial information from different
subsidiaries and joint ventures in various
currencies and countries
 Especially applicable to diversified
multinational companies
 Supports a general understanding of how a
business is working

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