SPECIAL G/L TRANSACTIONS

Introduction
1. Special G/L transactions are special transactions 2. (a.) in accounts receivable and accounts payable (b.) that are displayed separately in the general ledger and the sub ledger. This may be necessary for reporting or for internal purposes. 2. Special G/L transactions are already available in the standard system. It is possible to define special G/L transactions by the user. 3. Since Special G/L transactions are displayed separately in the general ledger & the sub ledger, the postings are made to alternative reconciliation accounts, instead of posting to the reconciliation accounts for receivables and payables. 4. Transactions in the sub ledgers are also posted on the reconciliation accounts in the general ledger. Objectives may be as follows: (a.) to make the values available in the general ledger in the form of totals for creation of Financial Statements (b.) to determine the payables & receivables, the balances of reconciliation accounts can be directly displayed instead of having to search for the values in the sub ledger. 5. The reconciliation account to be posted to is entered in each customer/vendor master record. 6. The Reconciliation Account field can be found in the company code segment of the customer or vendor master record. 7. The account number of the reconciliation account posted to appears on the FI document. 8. The transaction figures are updated on the reconciliation account in question. 9. If the sub ledger account assignments are made using a special G/L indicator, the postings are then performed on alternative reconciliation accounts (special G/L accounts) to allow these transactions to be able to be displayed separately.

Special G/L Classes

1. Transactions in connection with Down Payments (a.) the SAP system provides special preconfigured programs & entry screens for administration of requested, received & used down payments (b.) they can be used for AR or AP & can be called up from the respective standard menus (c.) the processing of down payments is integrated in the dunning & payment programs

2. Transactions in connection with Bills of Exchange (a.) Bills of Exchange are used to deal with country-specific particularities (b.) the SAP system provides special preconfigured programs & entry screens that utilize functions of special G/L transactions to meet these requirements (c.) options for processing bills of exchange are available in the standard menus for AR & AP

3. Other Transactions (a.) the functions of the special G/L transactions are used for many different kinds of b. transactions (b.) these transactions are controlled using Other option in the document entry menu in AR & AP *All these three types are classified on the business counterpart.

Special G/L Indicator

1. The special G/L indicator makes it possible to pass on document for individual items to a reconciliation account. 2. The indicator regulates the type of processing that is triggered for the business transaction.

Available Special G/L Transactions

1. Following are the available special G/L transactions: (a.) Down Payments & down payment requests (b.) Bills of Exchange Receivables & Bills of Exchange Payables & cheques/bills of exchange (c.) Bank Bills (d.) Payment Requests (e.) Guarantees (f.) Reserves for bad debts (g.) Security deposits 2. These special procedures are displayed separately from other receivables and payables on balance sheet either for legal reasons, such as with down payments, or for control reasons, such as with guarantees received. A separate special G/L account is created for each special G/L transaction.

Special G/L Types

On the technical side, 3 distinctions are made. The configuration of the special G/L indicator determines whether the posting is a free G/L account posting, a noted item or a posting with an automatic offsetting entry.

1. Statistical Postings (Postings with automatic/preset offsetting entries) (a.) these are transactions that are posted on the same offsetting account. (b.) to simplify the posting procedure, the number of the account for the offsetting entry is defined in Customizing (c.) the system makes offsetting entries automatically (d.) when open items in a respective account are cleared, then the respective items in the offsetting account are cleared automatically; the account is stored on the basis of a combination of the account type (customer/vendor) & the special G/L indicator used (e.) these transactions are called statistical postings since they are generally shown in the notes to FS

Guarantees of Payment Made (i) 1000 (ii) 1000

Guarantees of Payment Made Clearing Account (ii) 1000 (i) 1000

2. Noted Items (Postings without offsetting entries) (a.) are individual account assignments that are only used to remind the respective department of due payments to be made & are not intended to be displayed in the G/L (b.) only one line item is updated if a noted item is created (c.) no offsetting entry is made, consequently, no zero balance check is made (d.) noted items can be processed via a dunning or a payment program (e.) noted items are managed as open items in the AR/AP & the special G/L account (hence, line item display for these accounts must be activated) (f.) since no transaction figures are updated when entering noted items, these items can be found in the line item list, but do not affect the displayed balance of the customers. e.g. Down Payment request (a.) it is only a reminder, a statistical noted item that reminds of a down payment (b.) no transaction figures are updated (c.) there are customer & vendor down payment requests (i.) customer down payment requests allow down payments to be processed automatically by the payment program (ii) the down payment request entered in the system is supposed to allow one customer per system to be reminded about a down payment or to create a reminder for it (iii) vendor down payment requests are required to regulate down payments using the payment program

3. Postings with a freely-definable offsetting entry (a.) these special transactions create proper postings in the G/L (b.) the alternative reconciliation account is debited or credited automatically (c.) the G/L account for the offsetting entry must be entered by the user. (d.) these are usually a part of the financial statements (e.) postings are carried out with freely selectable offsetting account (f.) a down payment made by the customer prior to performance of a service is a payable & hence must not change the receivables reconciliation account (g.) the special G/L account for down payments made is displayed in the payables are in the FS. e.g. the customer responds to a down payment request with a payment of EUR 10000. (a.) incoming payment is registered in both, the alternative reconciliation account (received down payments) & the sub ledger account for the customer (b.) the bank balance sheet account acts as an offsetting account

Down Payment Procedures

1. Down Payment requests are noted items. They do not change account balances. 2. Received down payments are displayed as Payables. They do not change balances in the Receivables reconciliation account. Received down payments are administered in the Down Payments alternative reconciliation account. 3. Customer receives an invoice for the goods supplied or services performed. 4. If down payment posting is cleared with invoice, then the amount is no longer considered to be a down payment. The amount should be displayed as payment on normal reconciliation account. 5. Balance should be cleared off once the customer pays the remaining amount. In brief, the steps can be 1. The down payment request is received 2. The down payment made is entered 3. The vendor invoice is created 4. The down payment is cleared 5. The payment is cleared during the payment of the balance

Individual Value Adjustments (IVA) as Special G/L transactions

1. The special G/L procedure is suitable in case of IVA since the transaction is entered in (a.) the customer account (b.) a special G/L account i.e. Individual Value Adjustments for Receivables 2. Once the receivable is uncollectable, the final value adjustment is made & the Expenses for Uncollectable Receivables account is posted to. 3. No special G/L account is used since postings are made on a regular customer reconciliation account.

Bills of Exchange as Special G/L transactions

These transactions are automatically recorded in the sub ledger separately from other transactions & are posted to a special G/L account.

Basic Settings for Special G/L transactions: Posting Keys

1. Special G/L transactions are posted from the application side using special posting keys & special G/L indicators. 2. The special G/L transactions in the standard system are assigned posting keys 09, 19, 29 & 39. 3. The special G/L indicator indicates that the posting key is used to enter special G/L transactions. It should always be included in the entry. * The special G/L indicator defines the particular configuration of a special G/L transaction & the account type. The account type is relevant because customer & vendor down payments are configured separately. 4. Special G/L transactions are posted to an account defined in Customizing & not to the reconciliation account defined in the master record. 5. These accounts must be created in financial accounting as G/L accounts configured according to the requirements. 6. In contrast to normal reconciliation accounts (customers/vendors), the line item display is generally active for special G/L accounts. This means that a list of line items can be displayed.

Properties of Special G/L Indicators

Special G/L Indicator

Properties/Functions performed by selecting the Special G/L Indicator Special G/L transaction does not update any account balances

Noted Items

Relevance for credit limit check

Warning against commitments

Target special G/L indicator

Special G/L transaction class

Posting Key

Special G/L transactions are included in the credit limit check for customers. Noted items are generally Not taken into account. Define a warning message to notify the user of the existence of a special G/L transaction, if the user is erroneously posting to customer/vendor account Relevant only for Noted Items. Determines which target special G/L indicators are used while entering a payment request. Determines whether the transaction is a down payment, a bill of exchange or any other type of transaction Only these posting keys can be used with the respective special G/L indicators

The alternative special G/L account that is to be selected when special G/L indicators are used is saved separately in account determination for each chart of accounts.

Reconciliation Account in Customer/Vendor Master Record

system assigns

Special G/L account defined in the account determination during posting

Setting Up Your Own Special G/L Transactions-Statistical Items with Automatic offsetting entries
To set up a special G/L transaction with automatic offsetting entry, in addition to saving an alternative special G/L account (alternative reconciliation account) for the selected special G/L indicator, create a clearing account in the table for accounts for automatic (offsetting) postings . The offsetting account is entered manually during the transaction.

Other Important Aspects

1. In the standard system, down payments made are posted with posting key 29 which determines that the posting is made to the debit side of a vendor account. 2. The special G/L indicator determines the type of down payment. In the standard system, the special G/L indicator A is used for general down payments and I for down payments on intangible assets.

Posting Key 09 19 29 39

Description Outgoing debit posting Outgoing credit posting Incoming debit posting Incoming credit posting

Usage Payment of bill receivable Down payment received Down payment made Payment of bill payable

3. Special G/L transactions are already maintained in the standard system. Consequently, the need is to only carry out the steps described in the following sections if the following changes are required in the standard transactions: Different account numbers for the reconciliation accounts or the special G/L accounts Other posting keys or special G/L indicators for the individual transactions Other specifications for the automatic postings. These include the accounts to be posted to, the posting keys and the rules for account assignment with automatic postings.

4. The system requires a special G/L account for each special G/L transaction per chart of accounts. The account is defined dependent on the account type (customer or vendor), the special G/L indicator and the reconciliation account. 5. To make automatic postings, the system requires specifications on the accounts to post to and the posting keys to use. This information is also already defined in the standard system.