BOE & AR INT Calculations

8/3/2019 BOE & AR INT Calculations

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BILLS OF EXCHANGE TRAINING MATERIALSAP SCHOOL & SOLUTIONS LTD

BILLS OF EXCHANGE

Bills of Exchange: OverviewThe following types of bill of exchange can be managed in and posted to the Accounts Receivable (FI-AR) and Accounts Payable (FI-AP) application components:

Bills of Exchange Receivable

Bank Bills and Bills of Exchange Payment RequestsBills of Exchange PayableCheck/bill of exchange in Accounts Receivable (reverse bill of exchange)Check/bill of exchange in Accounts Payable (reverse bill of exchange)

Bills of exchange are handled as special G/L transactions in the SAP System. These transactions arethus maintained independently of other transactions in the subsidiary ledger and are posted to aspecial G/L account in the general ledger. This affords you an overview of bills of exchange receivableand bills of exchange payable at any stage. Transfer postings are not usually necessary to displaythese items on the balance sheet.

Bills of Exchange Process Flowa. Link between Sundry Debtors (Accounts Receivables) to Bills of Exchange Receivables A/Cb. Link between Bank Account to Sundry Debtors (AR) to Bills Discounting Accountingc. Sales invoice postingd. BOE Receivables Postinge. Bills Discounting Postingf. Reversal Bills Discountingg. Outstanding BOEs Listh. Bank Bills Discounting Charges (BDS)

The following types of bills of exchange can be managed in and posted to the accounts receivable andpayable application components.

Bills of Exchange Receivables

Bank Bills and Bills of Exchange Payment RequestBills of Exchange PayableCheck / Bills of Exchange in ARCheck / Bills of Exchange in AP

Bills of exchange are handled as Special GL transactions in the SAP System. These transactions aremaintained independently of other transactions in the subsidiary ledger and are posted to a special GLaccount in the GL.

BOE are a form of short term finance. If your customers pay by bills of exchange, he does not makepayment immediately but only on the period specified in the bills has expired. Bills of exchange can bepassed on to the third parties for refinancing.

A BOE can be discounted with a bank in advance of its due date (discounting). The bank buys the BOEfrom you. Since it does not receive the amount until the date recorded on the bill, it charges youinterest (discount) to cover the period between the recovery of BOE and its eventual payment. Someforms of handling charges are also levied. There are three events which are posted to financialaccounting.

Payment by Bills of ExchangeFirstly, the payment by bill of exchange is posted and used to clear the receivable against thecustomer.

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Bills of Exchange Receivables Account DrTo Customer Account Cr

Bills of exchange receivables are managed using the special G/L method in the SAP System. Whenposting a bill of exchange receivable, you normally clear open items or post the payment as apayment on account. The system posts a bill of exchange receivable to the customer account andreduces the receivables from goods and services on the reconciliation account. The bill of exchange

receivable is also automatically posted to the special G/L account for bills of exchange receivable in thegeneral ledger.You can monitor the existing bill of exchange receivable at any time via the customer account. Thespecial G/L account for bill of exchange receivables shows you the total amount of bill of exchangereceivables that exist for the customers represented in this account. Bills of exchange receivables arenot canceled until they have been cleared.Once you have presented the bill of exchange to a bank for financing, you post the bill of exchangeusage. You now have a bill of exchange liability since, as a drawer, the bank has liability to recourse ifyour customer fails to honor the bill. This potential liability is posted to a bank sub account and deletedonce it has expired. If you wish to pass on bills of exchange to a bank, the presentation list requiredcan be created automatically. If you like, you can also arrange for bill of exchange usage to be postedautomatically or for posting to be prepared. This only applies to bills of exchange posted before the duedate of the invoice, as is the case in Italy.

Once the bill of exchange is due for payment and any protest period has elapsed, you can cancel thebill of exchange receivable and the bill of exchange liability. You can define a country-specific bill ofexchange protest period in Customizing. Bill charges are normally passed on to the customer. Thesystem posts these amounts to the customer account and the corresponding revenue accounts.

Forbank bills and bill of exchange payment requests, there are certain special features that mustbe borne in mind when drawing-up and posting these items. Bank bills and bill of exchange paymentrequests are most common in Spain, France, and Italy.

Bills of exchange receivable are managed using the special G/L method in the SAP System.When posting a bill of exchange receivable, you normally clear open items or post the payment as apayment on account. The system posts a bill of exchange receivable to the customer account andreduces the receivables from goods and services on the reconciliation account. The bill of exchangereceivable is also automatically posted to the special G/L account for bills of exchange receivable in thegeneral ledger.You can monitor the existing bill of exchange receivable at any time via the customer account. Thespecial G/L account for bill of exchange receivables shows you the total amount of bill of exchangereceivables that exist for the customers represented in this account. Bills of exchange receivable arenot canceled until they have been cleared.

Once you have presented the bill of exchange to a bank for financing, you post the bill of exchange

usage. You now have a bill of exchange liability since, as a drawer, the bank has liability to recourse ifyour customer fails to honor the bill. This potential liability is posted to a bank sub account and deletedonce it has expired.

If you wish to pass on bills of exchange to a bank, the presentation list required can be createdautomatically. If you like, you can also arrange for bill of exchange usage to be posted automatically orfor posting to be prepared. This only applies to bills of exchange posted before the due date of theinvoice, as is the case in Italy.

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Once the bill of exchange is due for payment and any protest period has elapsed, you can cancel thebill of exchange receivable and the bill of exchange liability. You can define a country-specific bill ofexchange protest period in Customizing.

Bill charges are normally passed on to the customer. The system posts these amounts to thecustomer account and the corresponding revenue accounts.

Forbank bills and bill of exchange payment requests, there are certain special features that mustbe borne in mind when drawing-up and posting these items. Bank bills and bill of exchange paymentrequests are most common in Spain, France, and Italy.

Bills of Exchange of UsageIf the Bill of Exchange is used for refinancing and is passed on to a bank then the bills of exchangeusage must be posted.

Bank Account Dr Discounting Account Dr To Bills Discounting Accounting Cr

Create General Ledger Accounts (T. Code FS00)Menu Path >Accounting >Financial Accounting >General Ledger >Master Records >IndividualProcessing >Centrally >

Enter GL AccountNumber,Account Group, Selectbalance sheet accountradio button, Entershort text and long textandClick on control data

Select Customers(Recon. Acct type forAcct. Type)Select line item displaySort key 031

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And click on create / bank / interest

Click on create / bank / interestField status group G067Save

Cancel the BOE LiabilityOnce the due date of the BOE has elapsed, you can cancel the BOE receivable for your customer andthe Bills of Exchange Liability.

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To Post Bills of Exchange Receivable you require the Followinga) Special GL Account (Bills of Exchange)b) Creation of Creditors to be defined for the Special GL transactions, whether it is to be taken

into account in the credit limit check.c) Certain conditions to be specified for Bill Charges and Sales / Purchase Tax

Posting Keys, Accounts and Account Assignments for further Automatic Postings.

Bills Discounting Accounting (T. Code FS00)Menu Path >Accounting >Financial Accounting >General Ledger >Master Records >IndividualProcessing >Centrally >

Double Click on it

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Link Between Sundry Debtors and Bills of Exchange (T. Code OBYN)Menu Path >SPRO >Financial Accounting >Bank Accounting >Business Transactions >BOETransactions >BOE Receivables >Post BOE Receivables >Define Alternative Recon. Acct for Bills ofExchange Receivables >

Select D & W and double click on it

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Enter Chart of Accounts

In the Recon. Acct field (Enter Accounts Receivables Account)In the Special GL field (Enter BOE Receivables Account) and save

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Link between Bank C/A, Sundry Debtors Account & Bank Bills Discounting (T. Code OBYK)Menu Path >SPRO >Financial Accounting >Bank Accounting >Business Transactions >Bills ofExchange Transactions >BOE Receivable >Present Bills of Exchange Receivable at Bank >DefineBank Sub Accounts > Click on process button

Enter Chart of Accounts

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In the Bank Acct field (enter bank sub account)Usage (discounting)In the Special GL field (W)In the Customer Recon. Acct field (enter Accounts Receivables Account)In the bank sub account for liabilities field (Enter Bills discounting Account) AND SAVECustomer Sales Invoice (T. Code F-22)Menu Path >Accounting >Financial Accounting >Accounts Receivable >Document Entry >InvoiceGeneral >

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Bills of Exchange Receipt (T. Code F-36)Menu Path >Accounting >Financial Accounting >Accounts Receivable >Document Entry >Bills ofExchange Payment >Payment

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In this activity the following accounts are affected

Dr Bills Receivable AccountCr Accounts Receivable / Customer Account

Document Date, Posting Date, Doc. Type DZ, select incoming payment (Radio Button)Posting key will be 09 (automatically selected), Special GL CreditEnter customer account

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Amount, Due on (Current Date + 90 Days), Planning Usage (DDiscounting), Drawer(CompanyName), Drawee (Customer Name) Automatically displayed, Domicile (address of your bank), ChooseGreenTick ButtonChoose Process Open Item Button

In the special GL Indicator Field (W)Select automatic search check box

Click on process open items

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In fact here, we have entered insufficient amount to clear that is the reason the system has given theabove message, if you have noticed.

Simulate and then you will be able to see the line items of the BOE Payment

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By choosing the special GL account the system knows that a BOE is to be posted on a separate entryscreen. Simultaneously, the system posts automatically to the special GL determined by the specialgeneral characteristics.

Choose Green Tick Continue Button, to skip any warning message and choose button again

The number of discount days is calculated from the difference between issue date and due date.

Note that the cash discount has to be deactivated

Position your cursor on the gross amount and choose items (activate items)Choose Document > Simulate > Display overview screen appearsDouble Click on the first item > you can see the bill of exchange in detailChoose save buttonNote the document numberChoose the back buttonIn the edit dialog box choose YES

DISCOUNTINGThe bill of exchange will now be forwarded to bank for refinance (discounting). In the followingscenario, you post the bill of exchange usage (manually) as soon as the BOE amount is credited toyour account. The incoming money is posted to the account and the BOE. Charges are posted to the

respective expenses account. The revenue posting is alone done by the system automatically. Thisposting is made to BOE liability account (Bank Sub Account).

In this activity the following accounts will be affected.

Debited Bank AccountCredited Bills Discounting Account

Bills of Exchange Discounting (T. Code F-33)

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Menu Path >Accounting >Financial Accounting >Accounts Receivable >Document Entry >Bills ofExchange >Discounting

Double Click on it

Document Date, Company Code, Currency / Rate, Trading Partner, Usage (discounting), Value Date(Current Date), Bank Account (GL Bank Sub Account), Amount, Bank Charges (Charges + DiscountCharges)

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Enter the following DataDocument Number (document number of the BOE), Fiscal Year (Current Year), choose the overviewbutton (the system displays document overview), save and choose back button, in the dialog boxchoose YESChoose Select BOE and to skip any warning message choose Green Tick Button

Reverse Contingent Liability (Transaction Code F-20)Menu Path >Accounting >Financial Accounting >Accounts Receivable >Document Entry >Bills ofExchange >Reverse Contingent Liability >

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GL Account (Bills of Exchange), Usage (Discounting), Due by (End of the Due Period), DocumentNumber (Which BOE is not been paid), Customer account

Enter Document Header Data, Enter General Ledger, Enter the usage, Enter Due date for bills ofExchange

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Choose Edit LinesPosition cursor on the item you want to select, if the item is not activated choose on / offChoose document post / Choose back button and / In the dialog box choose YESThis is the date that has been given while entering bills of exchange receipt.Select Edit Line ItemsEnter + in the First Column

View Customer Wise / Due wise Bills of ExchangeMenu Path >Accounting >Financial Accounting >Accounts Receivable >Periodic Processing >Bills ofExchange Processing >Korea >S_ALR_87012213 >Bills of Exchange Management

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Enter chart of accounts, GL Account (BOE), Company code, Spl. GL Indicators (W), BOE usage (D)

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Bill Charges and Account Determination or Assignment (T. Code OBYH)Menu Path >SPRO >Financial Accounting >Bank Accounting >Business Transactions >Bill ofExchange Transactions >Bills of Exchange Receivable >Post Bill of Exchange Receivable >DefineAccounts for Bill of Exchange

Please make sure that you have created GL Accounts for Collection Charges, Discount Charges andassign these accounts to the relevant transaction keys.

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Go to menu bar item edit Copy RulesIn the Dialog BoxFrom = INTTo = Your Company Code

Select each item of description and assign General Ledger Account for each transaction key.Bank Discount Charges BDS / Bank Collection Charges BIKBank of BOE Tax BWS / Revenue from Discount Charges DSKRevenue from Collection Charges INK / Revenue from BOE Tax WST

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Enter GL Account Number (for the above account) and save

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Double Click on (Transaction Key - BIK)Enter GL Account Number

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Prepare BOE Charges Statement (T. Code OB73)Menu Path >SPRO >Financial Accounting >Bank Accounting >Business Transactions >Bills ofExchange Transactions >BOE Receivables >Prepare BOE Charges Statement >

Click on process button

Select new entries

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Enter Company CodeEnter Discount RateEnter Letter of Credit ChargesEnter Tax Code (if you have one)Enter Bills of Exchange Tax Code (if you have one) and save

AR Interest Calculations

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Prepare interest on arrears calculation (T. Code - 0B82)Menu Path >SPRO >Financial Accounting >AR & AP >Business Transactions >Interest Calculations >Interest Calculation Global Settings >Prepare Interest on Arrears Calculation >


Click on New Entries

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Enter interest indicator for arrears of interestEnter calendar type G and save

AR Arrears Interest Posting (T. Code OBV1)SPRO >Financial Accounting >AR & AP >Business Transactions >Interest Calculations >InterestPosting >AR Calculation of Interest on Arrears >

Click on Accounts button

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Enter Chart of Accounts then the screen will displayed

Click on Accounts and in the Acct Symbol columnGive 0001 (Interest Received) and in the currency field (GBP) and in the GL Account Column enterGeneral Ledger Account for (Interest Received / Receipt)

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Save

A/R Balance Interest Calculation (T. Code OBV3)Menu Path >SPRO >Financial Accounting >AR & AP >Business Transactions >Interest Calculations >Interest Posting >AR Balance Interest Calculation >


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Click on Accounts ButtonEnter Chart of AccountsPress enter key

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In the account symbol field enter 0001 (interest received) and in the currency Column GBP, in the GLAccount Field enter account for (Interest Received) and save

Assign forms for Interest IndicatorsSPRO >Financial Accounting >AR & AP >Business Transactions >Interest Calculation >InterestPosting >Assign forms for interest indicators >Click on process button

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Click on New Entries Button

Then enter Interest indicator (for Balance As well as for Arrears) and company code, in the form fieldEnter F_DUZI_01 and save.

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Interest Run (T. Code F.2A / F.2B / F.2C / F.24 / F.26)Easy Access >Accounting >Financial Accounting >Accounts Receivable >Periodic Processing>Interest Calculation >Arrears Interest >F.2A (without Open Items)

Double Click on itEnter customer accountCompany codeCalculation period from 01.04.2005 to 31.03.2006

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In the Interest indicator column (Arrears Interest indicator) has to be assigned

Click on execute button

In fact the system has to give you the report of interest calculations on the customer account youselected but in this screen it shows that the list is not generated. That means there are no itemsavailable on which the interest has to be calculated.

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BOE & AR INT Calculations

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