>GL or AR >Document Entry >Incoming Payment Posting with Clearing Accoumt 1 Inv 1000 Inv 4000 1000 < various selection possibilities> < various sort possibilities > < flexible line format > for Acct 1 (Inv)Invoice1,000 for Acct 2 (Inv) 6,000 for Acct 3 (Inv) 3,000 Account 2 Inv1000 6000 Processing Open Items (OI'S) OI1 1000 Cash D. 3% OI2 4000 Cash D. 3% OI3 6000 Cash D. 0% OI4 3000 Cash D. 3% OI5 1000 Cash D. 1% Account n Ten thousand 10,000 Inv 3000 Inv 1000 3000 Check xxxxxxxx xxxxxx Overpayment < various processing functions > Underpayment < limits for underpayments and overpayments > Payment on account < flexible definition of limits for underpayments> Partial Payment Assigned 10,000 Diff. 0 Clear >GL or AR >Document Entry >Incoming Payment Clearing is the process which marks the items which were previously open, as settled or cleared. You can clear open items, if you can offset them with an equal amount on the opposite side of the account. You can also post and clear with one function, for example, you can post an incoming payment and clear open items in customer invoices in one step.

Document Entry DocumentHeader Bank Data Selection ? Open Items - Selection ? - Processing Post When you post an incoming payment, you can clear the invoice(s) at the same time. You can also enter a partial payment or post an outstanding receivable (residual item).

Selecting Which Open Items to Process Posting Date Reference Doc. Document Type Currency : Open Item 1 Amount Cash Disc. Open Item 2 Amount Cash Disc. Open Item 3 Amount Cash Disc. Clearing Amount Cash Disc. Difference Selection Doc. Header Bank Data Open Items from Account Further Accounts Automatic Search Edit OI's You can select open items from one or more accounts on the editing screen ('X Other accounts'). You can limit the open item selection using the following functions: -Other Selections: The system displays fields which you can preallocate values for. You can define this field selection in advance. -Automatic search: The system selects the open item(s) which equal the amount entered in the bank posting. You can view the list of open items by selecting the function 'Edit OIs'.

Processing Open Items I Edit Options Line Layout Doc./Local Curr. Gross/Net Commands on/off - Line Item 1 Amount Cash D. % - Line Item 2 Amount Cash D. % - Line Item 3 Amount Cash D. % - Line Item 4 Amount Cash D. % + Line Item 5 Field 1 Field2 Field 3 Amount Cash D. % + - +* -* ++ -- 1 2 3 Difference Clear Amount Cash D. By selecting 'Settings', you can alter how the system displays open items, for example, you can select a certain line layout. While displaying open items, you can access the complete document for an individual line item (double-click with the mouse on the document number) or select more open items. If you set 'Commands on' (default options for processing line items), you are then able to process line items. You can then activate or deactivate line items or process cash discount terms. If the displayed difference is zero (or within the tolerances), you can clear the open items ('Post'). Post Doc. Find

Processing Open Items II Line Item 1 Field 1 Field 2 Field 3 Amount Cash D. % Line Item 2 Field 1 Field 2 Field 3 Amount Cash D. % Line Item 3 Field 1 Field 2 Field 3 Amount Cash D. % Line Item 4 Field 1 Field 2 Field 3 Amount Cash D. % Line Item 5 Field 1 Field 2 Field 3 Amount Cash D. % To process an item, you can also activate it by double-clicking with the mouse on the amount. If you put the cursor on the cash discount amount or the cash discount percentages using the mouse, you can edit these fields directly, for example, to enter another cash discount amount. The system then automatically recalculates the cash discount percentages. You can also process open items using commands. Post activate / deactivate process

Processing Open Items III Edit Select Select Item Line Item 1 Field 3 Amount Cash D. % Line Item 2 Field 3 Amount Cash D. % Line Item 3 Field 1 Field 2 Field 3 Amount Cash D. % Line Item 4 Field 1 Field 2 Field 3 Amount Cash D. % Line Item 5 Field 1 Field2 Field 3 Amount Cash D. % Select Beginning You can also process open items by activating the menu bars or by using the mouse. Defaults for open items activated upon entry can be changed in Editing Options. Selection Select Beginning

Display customer line items Account Clear Display customer line items Test Customer 19113 Philadelphia Allocation DT Doc. Date PK Curr. Amount Clr Cleared items 1400002054 DZ 06/03/YYYY 15 USD 1000- 1400002054 1710000655 DR 06/01/YYYY 01 USD 1000 1400002054 >AR >Account >Display line items >Environment >Clearing Procedures If you assign the corresponding invoice(s) to the incoming (outgoing) payment and complete the transaction with 'Post', the payment document is posted. The clearing date and the clearing document number are stored in the field 'Clearing' in the invoice(s) as well as in the payment. In the line item display, the last three figures of the clearing document number appear in the column 'Clr'.

Partial Payment Goto Standard screen Residual item screen Partial payment screen Amount entered 1500 Assigned 1970 Pmnt on acct Difference 470 Net amount Pmnt amount Item1 Partial 970.00 500.00 Item 2 1,000.00 1,000.00 Amount enterd 1500 Assigned 1500 Pmnt on Acct Difference 0 40 Bank 1.500,00 15 Customer 500,00 15 Customer 1.000,00 Document A partial payment can refer to one or more open items (see example above). In the example, open item 2 is cleared. You enter a partial payment for open item 1 but do not clear it. The system allocates the partial payment via the fields 'invoice reference' and 'allocation'.

Residual Item Goto Standard screen Residual item screen Partial payment screen Amount entered 485 Assigned 970 Pmnt on acct Difference 485 Net amount Residual item Item 1 Residual 970.00 500.00 Amount entered 485 Assigned 485 Pmnt on acct Difference 0 40 Bank 485.00 06 Customer 500.00 40 Customer cash discounts 1,000.00 15 Customer 1,000.00 - Document When you post an outstanding receivable, the system clears the original open item. It depends on the tolerance group of the business partner, as to whether the cash discount is only partly granted or in full and which payment terms apply to the outstanding receivable.

Clearing Open Items with an Exchange Rate Difference Invoice Payment Rate 0.95 Rate 0.97 2,105 USD 2,105 CAD 2,000 DEM 2,042 USD 42 USD Post Ex.Rate Diff. When you post and clear an invoice in foreign currency, the system automatically posts any exchange rate difference. However, you can also clear the invoice in local currency, but you must then enter the exchange rate difference manually.

Clearing in Foreign Currency Payment in FC2 120 Calculated Amount amount paid paid FC1 LC in FC2 in FC2 in LC 15.4. 1000 1400 700 690 1380 UD expense FC2 10 ERD expense LC UD expense LC 100 20 Invoice in FC1 FC1 LC 1.4. 1000 1500 Manual clearing can be carried out in any currency. The amount for all selected open items is translated into the clearing currency. The transaction is always carried out as follows: Currency > Local Currency > Currency for clearing By proceeding in this manner, no additional entries are required in the exchange rate table in order to carry out cross-currency clearing. Explanation of the example above 4/1 Invoice 1000 FC1 = 1500 LC [ Rate 1.5 ] 4/15 Invoice 1000 FC1 = 1400 LC = 700 FC2 [Rate 1.4] [Rate 2.0] Payment 690 FC2 = 1380 LC [Rate 2.0] Total difference 120 LC (ERD) Exchange rate difference 100 LC (UD) Unauthorized deductions 10 FC2 = 20 LC

Clearing with an Exchange Rate Difference Internal transfer posting with clearing Choose OI's Accounts Customer D Vendor K Goto Outstanding receivable A clearing transaction can include several customer and/or vendor accounts. An example of this would be clearing of vendor and customer items when a company is a customer as well as a vendor. In the case of online clearing, the vendor master record number does not have to be stored in the customer master record (and vice-versa). If required, you must post an outstanding receivable or overpayment. Post

Customer / Vendor Clearing 1 Customer Invoice 10,000 3% Cash Discount Vendor Invoice 4,000 2% Cash Discount Customer Payment 930 Clearing from to 2 3 4 1 3 Customer Vendor 1 4 4,000 4 5,000 9,070 4 4 150 80 4 10,000 930 3 4,000 2 Cash Disc. Granted Cash Disc. Taken You can clear customer and vendor open items from the same company together. The system can post the difference between two open items as a new open item. The system processes the cash discount according to the valid percentage rate in the open item. For example: 1.) Outgoing invoice for 10,000 - 3% cash discount - no tax. 2.) Incoming invoice for 4,000 - 2% cash discount - no taxes. 3.) Payment on account for 930.00. 4.) Clearing 1.) - 3.). Outstanding receivables amount to 5,000.

A/R Payment Fast Entry Specifications for the following incoming payments___________ Company code Posting date Bank acct Business area Special G/L ind. Doc. Type Posting period Default data for the following incoming payments_________ Currency Reference doc. Document date Value date Additional input Fields_________________________________ Possible selection by date Reference number Bank charges The specifications are valid for the following incoming payments, until they are deleted (menu option 'Delete') or overwritten, if necessary. You can overwrite the default data in the following screen templates. If you require additional entry fields, you have to put a cross next to the corresponding field. Via the menu option 'Enter payments', you can view the initial screen for the incoming payments. If the specifications have already been saved, the initial screen does not reappear. If you want to delete and/ or change the specifications, you can return to the initial screen via the symbol '<-' (F3).

Payment Fast Entry Payment Details_____________________________________ Customer Amount Document date Loc. curr. amt Value date : : Line Items Paid_________________________________________ Doc. / Reference Amount : : You enter data for the incoming payment. The items which fulfill the selection criteria, appear on the next screen, on the next open item processing screen, at the beginning and are activated. If there is no ambiguity with regard to clearing, you can post on this screen.

Tolerance Groups Payment Limits for Employees Payment Limits for business partners Upper Limits for posting procedures Details for clearing procedures Amount Grace period Cash Discount Display Cash Discount Term Allowed payment differences Permitted payment differences Revenue Adjustment to Revenue Adjustment to Expense Adjustment to Expense Adjustment to Residual items from paym.differences Payment Term Only grant partial cash discount The smaller value is valid ! IMG >Financial Accounting Global Settings > Document > Line Item > Control > Define Tolerance Groups for Employees You define tolerance groups for employees, as well as for business partners when clearing open items. You must assign tolerance groups for employees via a table and assign tolerance groups for business partners in the customer or vendor master record.

Tolerance Groups Payment Limits for Employees Payment Limits for business partners Upper Limits for posting procedures Details for clearing procedures Amount Grace period Cash Discount Display Cash Discount Term Allowed payment differences Permitted payment differences Revenue Adjustment to Revenue Adjustment to Expense Adjustment to Expense Adjustment to Residual items from paym.differences Payment Term Only grant partial cash discount The smaller value is valid ! You define tolerance groups for employees, as well as for business partners when clearing open items. You must assign tolerance groups for employees via a table and assign tolerance groups for business partners in the customer or vendor master record.

Tolerances Tolerances for users m Upper limits for posting procedures m Permitted payment differences Assign accounting clerk Tolerance group Tolerances for groups of business partners m Specifications for clearing procedures m Permitted payment differences m Specifications for posting residual items from payment differences Assign business partners Tolerance group You can assign each of your employees to an employee group. For each employee group, you specify maximum amounts for posting procedures and payment differences allowed. You use the master record field "Tolerance group", to assign every customer or vendor to a tolerance group. The system compares tolerances for employees with those for customers or vendors.

Automatic Cash Discount Adjustment Tolerances for bus. partners Tolerances for users Permitted payment differences Permitted payment differences Revenue 10 1.0% 2 Revenue 50 1.0% 2 Expense 5 1.0% 2 Expense 10 1.0% 2 Invoice(s) 1000 1000 1000 Cash Discount 30 30 30 Incoming Payment 969 967 960 Difference 1 3 10 SKT 31 30 / UBS / 3 / Using three examples, the illustration shows how the SAP System automatically adjusts the cash discount to process differences in payment. The system links the tolerance values of the employees and the tolerance values of the customers and vendors via a logical 'AND'. Employees that are not assigned to a user group have the tolerance group '__'. Customer and vendors that are not assigned to a tolerance group, have the tolerance specifications of the tolerance group '___'.

Manual Cash Discount Adjustment Tolerances for users Upper limits for posting procedures Cash discount per line item 5,000% Invoice 1000 1000 Cash Discount 30 30 Incoming Payment 960 940 Difference 10 30 SKT 40 / If the difference in payment is too large, the system cannot adjust the cash discount automatically. In this case, you can: adjust the cash discount manually post a residual item.

Classification of Payment Differences when Clearing Reason Code OR New Item Payment difference charged off on separate G/L account Each item on the payment advice can be classified with a reason code in case of underpayment. By each reason code it can be determined how the payment difference is handled. If the write off indicator is set for a reason code, the payment difference is charged off using a separate G/L account. The account and posting rules for each reason code are determined in customizing (chart of account dependent). Non-setting of the write off indicator triggers the generation of a new item for the outstanding receivable (residual item). The reason code also determines which correspondence type for the payment notice is sent to the customer. The disputed item indicator which can be set for each reason code controls the update of the credit limit. If the indicator is set, the credit amount used by the customer is not increased by the residual item.