Closing Operations in Accounts Receivable and Accounts Payable Accounting in FICO

Purpose

In this process you carry out year-end closing in Accounts Receivable and Accounts Payable.

You go through the following steps:

• Generation of account statements: To check posted documents within a period.
• Generation of balance confirmations: To check the number of receivables and payables.
• Individual value adjustments using the special general ledger technique.
• Valuation of open items in foreign currency including the posting of the gains or losses due to exchange rate fluctuations.
• Sorted lists of open items with regrouping of items for changed reconciliation account, vendors with a debit balance and customers with a credit balance according to remaining life.

For more information about this process, see .

Prerequisites

To avoid output errors, check your print settings before starting this process.

1. To do so, choose System
® User Profile ® Own data.
2. On the Defaults tab page, enter the following data:

Field	Data
OutputDevice	Name of printer you wish to use

3. Choose .

Process Flow

You can find the data for this process under .

Correspondence: Entering Invoices

Correspondence: Generating Account Statements

Correspondence: Generating Balance Confirmations

Individual Value Adjustments: Entering Invoices

Making Individual Value Adjustments for Doubtful Receivables

Individual Value Adjustments: Displaying Customer Line Items

Valuating Open Items in Foreign Currency: Entering Invoices in Foreign Currency

Valuating Open Items in Foreign Currency: Posting Exchange Rate Differences

Valuating Open Items in Foreign Currency: Displaying Documents

Allocation of Receivables and Payables According to Remaining Life: Entering Invoices

Allocation of Receivables and Payables According to remaining Life: Executing Programs

Allocation of Receivables and Payables According to Remaining Life: Generating Postings

Additional Process Information in FICO

Open items are required for most of these transactions. In order to ensure that there are open items available in the system, you should enter some simple invoices in Accounts Receivable or Accounts Payable before starting the closing program.

To carry out this process, you have to enter the following documents:

• Customer invoice in local currency for generating account statements and balance confirmations
• Customer invoice in local currency for the individual value adjustment
• Customer invoice in foreign currency for valuation in foreign currency
• Vendor invoice in foreign currency for valuation in foreign currency
• Invoice with a remaining life of more than one year for allocation of receivables and payables according to remaining life.

If other open items already exist in the system, they will also be evaluated and possibly transferred if they meet the selection criteria.

For the customer invoice, the system automatically defaults tax code AN (16%) for company code 1000 and tax code S1 for company code 3000.

For the vendor invoice, the system automatically defaults tax code VN for company code 1000 and tax code I1 for company code 3000.

In addition, the screen variants (transaction variants) are entered with business area and cost center. The relevant columns here are those for the G/L account, posting key, document currency amount, cost center, or business area.

Data Used During This Process FICO

Fields	Europe	North America	Description
Company code	1000	3000	Company code
Chart of accounts	INT	INT	Sample chart of accounts
Currency	EUR	USD	Local currency
Reporting year	2000	2000	Sample reporting year (fiscal year)
Comparison year	1999	1999	Previous year

Correspondence: Entering Invoices in FICO

Use

In this process, you post an invoice for a customer. You can then generate account statements in the next transaction.

You post the invoice directly in Financial Accounting, there is no integration with the Sales and Distribution application. This makes it easier to post backdated invoices.

Procedure

1. Call up the transaction as follows:

Menu Path	Accounting ® Financial Accounting ® Accounts Receivable ® Document Entry ® Invoice
Transaction	FB70, FBL5



Make sure that the correct company code is specified.

If the system displays the Enter company code dialog box, enter the following data:

Field	Europe	North America
Company code	1000	3000

Otherwise, choose Environment ® Set company code and confirm the dialog box Exit processing with Yes. In the dialog box, enter 1000 (Europe) or 3000 (North America).

2. Choose .
3. If the worklists are not displayed, choose Tree on.
4. On the Basic Data tab, enter the following data:

Field	Europe	North America
Customer	1000	3000
Invoice date	Today’s date -1 month	Today’s date -1 month
Posting date	Today’s date -1 month	Today’s date -1 month
Amount	12,000.00 (gross amount, including tax on sales/purchases)	12,000.00 (gross amount, including tax on sales/purchases)
Currency/rate	EUR	USD
Calculate tax	Select	Select
Tax code	AN	S1



If any warning messages appear, choose .

5. Choose Screen variants for items ® With business area.
6. Enter the following data:

Field	Europe	North America
G/L account	800200	800200
D/C (defaulted)	Credit	Credit
Amount in doc. curr.	12,000.00	12,000.00
Business area	1000	1000



To simplify this process, we have not defined a cost element for account 800200, which means that you do not need to assign a CO object, for example, an order number. You do not therefore need an additional account assignment. The system does not transfer the data to Profit Center Accounting.

7. Choose .

The system displays the address of the customer. In addition, you can display the open items for this customer by choosing OIs.

8. Choose Simulate.

The Document Overview screen appears and you can see your posting with the document items.

9. Choose .
10. Choose .
11. In the Exit Editing dialog box, choose Yes.

Correspondence: Generating Account Statements in FICO

Use

In this process, you generate account statements for IDES customers. The system only supplies account statements for those customers whose master data is maintained accordingly.

For more information about this process, see .

Procedure

1. Call up the transaction as follows:

Menu Path	Accounting ® Financial Accounting ® Accounts Receivable ® Periodic Processing ® Print Correspondence ® Periodic Account Statements
Transaction Code	F.27, SP01

2. Enter the following data:

Fields	Europe	North America
Company code	1000	3000
Indicator in master record	2	2
Key dates for acct statement	From the first day to the last day of the current period	From the first day to the last day of the current period
Correspondence	SAP06 (Template of an account statement)	SAP06 (Template of an account statement)
Delete if finished since	8 days	8 days
Log to printer	Your printer	Your printer

3. Choose .

The system creates a correspondence request for all customers where the field "Account statement" is filled in the customer’s master record, and matches the desired account statement (in our example it was a monthly account statement with indicator "2").

The system tells you that n periodic account statements were requested.

4. Choose .

The system tells you that n completed correspondence items were deleted.

5. Choose .

The system tells you that n correspondence requests were selected.

6. Choose Yes.

The system generates your print requests and displays the spool number under which they are stored.

7. To see and then print the generated account statements, choose System ® Services ® Output Controller.

The system defaults your user name and today’s date.

8. Choose .
9. On the Output Controller: List of Spool Requests screen, select the spool request that you generated in step 6 (Title "SAP06 .....").
10. Choose .

The first page of the generated account statement is formatted for viewing.

11. To display everything, choose Goto ® List Display.

The list contains all the invoices for that customer that were posted in the selected period. Payments made in the period are also listed. The balance is calculated at the end of the list.

12. Choose until you reach the Output Controller: List of Spool Requests screen again.
13. Choose .

The account statements are then output on your printer.

14. To update the status display, choose .

When printout is completed, the print file has the status Compl.

15. Choose until the overview tree appears.

Additional Information for Creating Account Statements

Programs used for correspondence between your accounting department and your customers and vendors as well as for purely internal communication all fall into the category of automatic correspondence.

While internal messages and payment notices for a customer are part of day-to-day activities, account statements and balance confirmations are typical examples of closing operations.

Correspondence: Generating Balance Confirmations in FICO

Use

You now create balance confirmations. The system will also automatically generate forms for entering a reply for a customer/vendor as well as forms for entering return flow to your company.

For more information about this process, see .

Procedure

1. Call up the transaction as follows:

Menu Path	Accounting ® Financial Accounting ® Accounts Receivable ® Periodic Processing ® Print Correspondence ® Balance Confirmation ® Print Letters
Transaction Code	F.17, SP01

2. Enter the following data:

Fields	Europe	North America
Customer	1000	3000
Company code	1000	3000
Reconciliation key date	Last day of current period	Last day of current period
Individual customers	Select	Select
Zero balances	Select	Select
Correspondence sorting	K2 (by account number)	K2 (by account number)
Line item sorting	P3 (by document date, document number)	P3 (by document date, document number)
Date of issue	05. of next period	05. of next period
Date for reply	30. of next period	30. of next period
Reply to	00001	00001
Print control	Enter your printer settings here	Enter your printer settings here

3. Choose .

The system creates a balance confirmation for exactly one customer as specified on the selection screen.

Although a balance confirmation is several pages long, only the first page is displayed.

4. To display the remaining pages, choose Goto ® List Display.

Along with the printout of this balance confirmation, you send your customer a list of their open items up to the key date and a reply form.

5. Choose .
6. Choose twice.

A checklist of accounts for which balance confirmations were generated is displayed.

7. Choose .
8. Choose .

To make the return flow to the balance confirmations you have generated more transparent, a summarized results table is also displayed at this point.

9. Choose .
10. Choose again.

On the Customer Balance Confirmation screen, the parameters you selected for the program are displayed.

11. Choose until the overview tree appears.
12. Choose System ® Services ® Output Controller.

The system defaults your user name and today’s date.

13. Choose .

The list that appears contains the spool requests that you have just generated.

14. Select the spool requests, then choose .
15. To update the status display, choose .

When printout is completed, the print file has the status Compl.

16. Choose until the overview tree appears.

You can create balance confirmations for vendors using the same procedure from the Accounts Payable menu.

Additional Information: Generating Balance Confirmations

Balance confirmations can be generated from the debit or from the credit side. In both cases, for the type of form layout, we make a distinction between balance notification (negative inquiry), balance request (open method, request procedure), and balance confirmation (positive inquiry).

For other situations that may arise, you can undertake a sample selection of customers/vendors who need to be informed in addition to selecting particular customers/vendors directly. You can define the scope of the sample to meet your requirements. You can cover the aspects of external auditing with reference to your samples.

ndividual Value Adjustments: Entering Invoices in FICO

Use

You now post overdue items for a customer so that you can make an individual value adjustment in the next transaction.

Procedure

1. Call up the transaction as follows:

Menu Path	Accounting ® Financial Accounting ® Accounts Receivable ® Document Entry ® Invoice
Transaction	FB70



Make sure that the correct company code is specified.

If the system displays the Enter company code dialog box, enter the following data:

Field	Europe	North America
Company code	1000	3000

Otherwise, choose Environment ® Set company code and confirm the dialog box Exit processing with Yes. In the dialog box, enter 1000 (Europe) or 3000 (North America).

Choose .

2. If the worklists are not displayed, choose Tree on.
3. On the Basic Data tab page, enter the following data:

Field	Europe	North America
Customer	1320	3140
Invoice date	Today’s date -6 months	Today’s date -6 months
Posting date	Today’s date -6 months	Today’s date -6 months
Amount	12,000.00 (gross amount, including tax on sales/purchases)	12,000.00 (gross amount, including tax on sales/purchases)
Currency/rate (defaulted)	EUR	USD
Calculate tax	Select	Select
Tax code (defaulted)	AN	S1



If any warning messages appear, choose .

4. Choose Screen variants for items ® With business area.
5. Enter the following data:

Field	Europe	North America
G/L account	800200	800200
D/C (defaulted)	Credit	Credit
Amount in doc. curr.	12,000.00	12,000.00
Business area	1000	1000

6. Choose .

The system displays the address of the customer.

7. Choose Simulate.

The Document Overview screen appears and you can see your posting with the document items.

8. Choose .
9. Choose .
10. In the Exit Editing dialog box, choose Yes.

Making Individual Value Adjustments for Doubtful Receivables

Use

In the previous transaction you posted a customer invoice. We assume that the customer has not paid the invoice by the end of the year. You doubt whether this receivable will ever be paid, so you make a transfer posting for the receivable to an account for individual value adjustments.

For more information about this process, see .

Procedure

1. Call up the transaction as follows:

Menu Path	Accounting ® Financial Accounting ® Accounts Receivable ® Document Entry ® Other ® Intern.transf.psting ® Without Clearing
Transaction Code	F-21

2. Enter the following data:

Field	Europe	North America
Document date	Last day of current period	Last day of current period
Company code	1000	3000
Posting date	Last day of current period	Last day of current period
Currency	EUR	USD
PstKy	19	19
Account (customer)	1320	3140
Sp.G/L	E (special G/L indicator for individual value adjustment)	E (special G/L indicator for individual value adjustment)

The E indicator tells the system that this is a special general ledger transaction. This means that the amount is not posted to the customer’s normal reconciliation account but to a special account instead.

The customer’s reconciliation account is 140000. The item you posted in the last transaction is also posted to this account. Using the individual value adjustment, you transfer the item from account 140000 (domestic customer receivables) to account 142000 (individual value adjustments to customer receivables.

3. Choose .

The system tells you that the document date is in the future.

4. Confirm the message with .
5. Enter the following data:

Field	Europe	North America
Amount	12,000.00	12,000.00
Due on	30. of the following month	30. of the following month
Text	Value adjustment	Value adjustment
PstKy (G/L account)	40 (Posting key)	40 (Posting key)
Account (G/L account)	210100 (Expense from individual value adjustment)	210100 (Expense from individual value adjustment)

6. Choose .
7. Enter the following data:

Field	Europe	North America
Amount	*	*
Tax code	A0 (no tax procedure)	S0 (no tax procedure)
Value date	Last day of current period	Last day of current period

8. Choose .
9. Make a note of the document number.
10. Choose .
11. In the Exit Editing dialog box, choose Yes.