External Accounting

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External Accounting

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

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R/3 and Accounting

• Internal Accounting
• profit center accounting/analysis
• management accounting
• see Chapter 10 and CO module
• Asset Management (chap 11 and AM module)
• External Accounting
• vendor/customer processing
• financial accounting (Chap 8 and FI module)

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External Accounting

• Vendor Processing (A/P)
• Customer Processing
• A/R, credit management, dunning
• OTA Vendor Processing (one-time accounts)
• Subsidiary/Head Office Accounting
• GL Processing
• Consolidation

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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

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Vendor Processing
Vendor Master Record Processing
Direct Capitalization
Handling Fixed Assets
Travel Management
Source Administration
Invoice from Vendor has Arrived
Creditor is created
Vendor invoice processing
Invoice posted and released for payment
Vendor invoice is posted
Overheads mgt with allocation cost
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Vendor Processing (cont.)
Down Payment Release
Bank sttment for payments has arrived
Payment deadline is reached
Down paymnt is released for auto payment
Manual Payment
Automatic Payment
Payment carrier is sent
Payment is posted
Complex Proc. For investmt measure
Simple Proc for Investmt Measure
Project-related maintenance proc.
Supplier proc.
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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 data
• individual RFQ, PO, and invoice verification data

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Vendor Processing
Vendor Master Record Processing
Direct Capitalization
Handling Fixed Assets
Travel Management
Source Administration
Invoice from Vendor has Arrived
Creditor is created
Vendor invoice processing
Invoice posted and released for payment
Vendor invoice is posted
Overheads mgt with allocation cost
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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

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Vendor Processing
Vendor Master Record Processing
Direct Capitalization
Handling Fixed Assets
Travel Management
Source Administration
Invoice from Vendor has Arrived
Creditor is created
Vendor invoice processing
Invoice posted and released for payment
Vendor invoice is posted
Overheads mgt with allocation cost
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Down Payment Release

• Generates down payments to vendors
• Stored as a separate document
• referred to at final settlement
• May include tax or not
• important for posting to G/L

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Vendor Processing (cont.)
Down Payment Release
Bank sttment for payments has arrived
Payment deadline is reached
Down paymnt is released for auto payment
Manual Payment
Automatic Payment
Payment carrier is sent
Payment is posted
Complex Proc. For investmt measure
Simple Proc for Investmt Measure
Project-related maintenance proc.
Supplier proc.
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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 list
• document changes in banks, etc.
• monitors due dates latest possible preferred
• post payments
• items cleared and linked to payments

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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

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Vendor Processing (cont.)
Down Payment Release
Bank sttment for payments has arrived
Payment deadline is reached
Down paymnt is released for auto payment
Manual Payment
Automatic Payment
Payment carrier is sent
Payment is posted
Complex Proc. For investmt measure
Simple Proc for Investmt Measure
Project-related maintenance proc.
Supplier proc.
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Customer payment processing

• Major FI scenario (see R/3 Customer Invoice and
  Payment Processing module)
• Provides data for credit management
• Supports traditional AR functions
• manual or automatic processing supported
• built in dunning procedures
• integrated with SD, MM and FI

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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

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Vendor Processing
Vendor Master Record Processing
Direct Capitalization
Handling Fixed Assets
Travel Management
Source Administration
Invoice from Vendor has Arrived
Creditor is created
Vendor invoice processing
Invoice posted and released for payment
Vendor invoice is posted
Overheads mgt with allocation cost
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Vendor Processing (cont.)
Down Payment Release
Bank sttment for payments has arrived
Payment deadline is reached
Down paymnt is released for auto payment
Manual Payment
Automatic Payment
Tax Calculator
Paybase
Payment carrier is sent
Payment is posted
Complex Proc. For investmt measure
Simple Proc for Investmt Measure
Project-related maintenance proc.
Supplier proc.
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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