External Accounting

Chapter 8: See also the FI/CO R/3 Modules

R/3 and Accounting

Internal Accounting profit center accounting/analysis

management accountingsee Chapter 10 and CO moduleAsset Management (chap 11 and AM module)

External Accounting vendor/customer processing financial accounting (Chap 8 and FI

module)

External Accounting

Vendor Processing (A/P)Customer Processing

A/R, credit management, dunningOTA Vendor Processing (one-time

accounts)Subsidiary/Head Office AccountingGL ProcessingConsolidation

Vendor Handling

A vendor is a business partner that has an outstanding payable AP concerns integration of cash mgt,

payment procedures, G/L, forecasting Automatic vs. manual dunning procedure for credit

memo/returns vendor master data invoice processing/verification

Vendor Processing

XOR

XOR

^

^

DirectCapitalization

HandlingFixed Assets

TravelManagement

SourceAdministration

VendorMaster Record

Processing

Invoice fromVendor has

Arrived

Creditoris created

Invoice postedand releasedfor payment

Vendorinvoice

processing

Vendorinvoice is

posted

Overheadsmgt with

allocation cost

Vendor Processing (cont.)

^

^

^^

XOR

XOR

DownPaymentRelease

Bank sttmentfor paymentshas arrived

Payment deadline is

reached

Down paymntis released forauto payment

ManualPayment

AutomaticPayment

Payment is posted

Paymentcarrier is

sent

ComplexProc. For

investmt measure

Simple Procfor Investmt

Measure

Project-relatedmaintenance

proc.

Supplierproc.

Vendor Master Record Processing

Vendor master has link into G/L, purchasing and accounting function must generate internal or external account

#3-level structure of master record

general data company code data

correspondence, individual dunning, payment terms

purchasing organization dataindividual RFQ, PO, and invoice verification data

Vendor Processing

XOR

XOR

^

^

DirectCapitalization

HandlingFixed Assets

TravelManagement

SourceAdministration

VendorMaster Record

Processing

Invoice fromVendor has

Arrived

Creditoris created

Invoice postedand releasedfor payment

Vendorinvoice

processing

Vendorinvoice is

posted

Overheadsmgt with

allocation cost

Vendor Invoice Processing

Invoice can be sent in a variety of ways. Manual EDI Web-based EDI

This triggers invoice processing entered into system check vendor master tax checked and posted allocated to a CC

either fixed asset or current asset account

balance check

Vendor Processing

XOR

XOR

^

^

DirectCapitalization

HandlingFixed Assets

TravelManagement

SourceAdministration

VendorMaster Record

Processing

Invoice fromVendor has

Arrived

Creditoris created

Invoice postedand releasedfor payment

Vendorinvoice

processing

Vendorinvoice is

posted

Overheadsmgt with

allocation cost

Down Payment Release

Generates down payments to vendors

Stored as a separate documentreferred to at final settlementMay include tax or not

important for posting to G/L

Vendor Processing (cont.)

^

^

^^

XOR

XOR

DownPaymentRelease

Bank sttmentfor paymentshas arrived

Payment deadline is

reached

Down paymntis released forauto payment

ManualPayment

AutomaticPayment

Payment is posted

Paymentcarrier is

sent

ComplexProc. For

investmt measure

Simple Procfor Investmt

Measure

Project-relatedmaintenance

proc.

Supplierproc.

Automatic Payment

May take months and involve multiple currencies

3 Basic steps create payment proposal list

based on customer master and invoices

process payment proposal listdocument changes in banks, etc.monitors due dates; latest possible preferred

post paymentsitems cleared and linked to payments

Manual Payment

Many businesses still choose to make payments manually

Must enter following information G/L account no. for bank payment amount any charges or fees document number

Vendor Processing (cont.)

^

^

^^

XOR

XOR

DownPaymentRelease

Bank sttmentfor paymentshas arrived

Payment deadline is

reached

Down paymntis released forauto payment

ManualPayment

AutomaticPayment

Payment is posted

Paymentcarrier is

sent

ComplexProc. For

investmt measure

Simple Procfor Investmt

Measure

Project-relatedmaintenance

proc.

Supplierproc.

Customer payment processing

Major FI scenario (see R/3 Customer Invoice and Payment Processing module)

Provides data for credit managementSupports traditional AR functions

manual or automatic processing supported

built in dunning procedures integrated with SD, MM and FI

OTA Vendor Processing

Do not require individual master record simplifies master data processing one-time accounts created provides “one-step” invoice processing down payments not supported

Vendor Processing

XOR

XOR

^

^

DirectCapitalization

HandlingFixed Assets

TravelManagement

SourceAdministration

VendorMaster Record

Processing

Invoice fromVendor has

Arrived

Creditoris created

Invoice postedand releasedfor payment

Vendorinvoice

processing

Vendorinvoice is

posted

Overheadsmgt with

allocation cost

Vendor Processing (cont.)

^

^

^^

XOR

XOR

DownPaymentRelease

Bank sttmentfor paymentshas arrived

Payment deadline is

reached

Down paymntis released forauto payment

ManualPayment

AutomaticPayment

Payment is posted

Paymentcarrier is

sent

ComplexProc. For

investmt measure

Simple Procfor Investmt

Measure

Project-relatedmaintenance

proc.

Supplierproc.

Paybase

Tax Calculator

Summary of External Accounting

Scenarios Vendor Processing OTA vendor proc. Customer proc. OT customer proc. Consolidation G/L processing Special purpose

ledger processing

Core Processes G/L account proc. Vendor master Customer master invoice proc. clearing payment dunning closing