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Invoice and Credit Note Postings

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We touched briefly on invoices in the last section, we're looking at the whole purchase to pay flow. And now we're going to do deep dive into all the ways of posting invoices and credit notes, as well as some related functionality. Although most organizations will try to raise purchase orders for most, if not all purchases in order to ensure the purchases approved before it's made. In some circumstances, invoices may still be posted without raising a purchase order. So we'll show both methods in this section. We will explain the difference between held and parked invoices. If the invoice cannot be immediately posted due to query, and we'll also go through how to correct an invoice, once it has been posted, there's a new tool in SAP S four HANA. Which allows you to import invoices from a spreadsheet, but not those linked to purchase order. If you don't have complicated travel expenses and you just post the expenses to an employee vendor count, you could, for example, use this tool for that functionality that we briefly covered in this section, the tolerances cash discounts on time vendors. Uh, mass changes to line items as well as recurring journals. And of course we share a few records and some tips at the end, some sort of check would normally be performed on an invoice before you pay it. If the invoice relates to purchase order, then the price will already have been authorized when the purchase order was raised. If the quantity was checked, as long as the invoice matches the amount in the purchase order and the quantity in the goods receipt, the check will be done automatically by the system and the invoice can proceed for payment. If the invoice does not match the purchase order and goods receipt, in most cases, it can still be posted, but an automatic block will be placed on it by the system so that it can not be paid until it's been investigated. And either a correction has been made or the additional amount approved. Now, if the purchase order has goods, receipt based invoice verification, and you cannot post the invoice until the goods receipt has been posted. Well there, you can park it while you wait for the goods receipt. If there's no purchase order, you would normally need to check that the invoice is correct, that the organization has actually ordered and received the goods or services in the invoice, perhaps for utilities or very small purchases or where there are clear guidelines about the purchase accounts payable might be able to post the invoice straight away without further approval. Oh, if it's more material items that might take longer to check or get approval, the invoice may be parked while this is done. If the supplier and amount are entered, then the supplier and costs can be seen in reports. If part items are selected to supplier and amount are entered. Then the supplier in costs can be seen in certain reports. If part items are selected, this means that if the supplier rings up to chase payment, you can check whether you've already received the invoice. And if you've entered a comment on the parked invoice and you'll be able to find it easily, if it's been physically sent to somebody for approval. I'm now going to do a short demo to show you how to post a supplier invoice against the purchase order and a goods receipt. I'll be using the app if Sarah eight five nine, which is create supplier invoice. Although according to the fury app library, it seems to be called managed supplier invoices at the moment. Purchase ordering during the site has two separate nonstop line items each for quantity of five and all items have been good to see too. The first thing that I do when I go into the app is to check the transaction type, which usually defaults to the last transaction type used. It's fine if you only post invoices, but just remember if you do post a credit note to double-check the transaction type. After this, if you're posting a credit note, you need to choose a different transaction type, either a credit memo for quantity corrections or a subsequent credit for price correction. I'll go into more details on credits and corrections later in this section. You can then enter the company code. If it's not already defaulted as is the case here, you can enter the invoice amount at any time. The currency should default in. Once you enter the purchase order number, if it's different from the company code currency, I will enter a hundred. Is the amount. The invoice is usually the date that's given by the supplier on the invoice. Although I've left is today's date. Posting date is usually today's date. Unless for example, you're posting something deliberately into an earlier period. You would not normally do this if the period is closed, but if you're a fixed sample on the first day of a new period and the previous period is still open. You could use the last date of the previous period as the posting date, which will then put it into the physical reporting to the previous period, references the invoice number given by the supplier. If you want to enter any texts that applies to the whole invoice you can do. So by clicking on the, see more button to get to the head of text, you can enter the invoicing party, but if this is already on the purchase order, Then entering the purchase order number. We'll usually pull it in automatically along with the currency of the purchase order. Although you should check it, I have entered the purchase order number. And as you can see, it's pulled in both the currency and the invoicing party. If it's a simple purchase order, you can choose the purchase order number to select the data. But if there are many complicated deliveries, you may prefer to allocate invoice lines using the delivery note or bill of lading, you can also choose service entry sheets. Now that you can choose more than one of each. If for example, the invoice refers to more than one purchase order, et cetera, as this purchase order has a goods receipt. The system proposes the amount based on what is in the purchase order and the quantity based on what's already been good through seated. But if the invoice is different, you should change this so that it matches the invoice note that you're only changing this in the invoice. It will not change the actual purchase order or goods receipt. If you're unsure, if something, you monitor the line items, clicking on the blue view button in the purchase order history. We show the history of that line item. In other words, the quantity and amount ordered, received invoice and open. The reason that you also have a separate box for the subsequent debit credit is because potentially you could have an invoice with two line items, one where there is a quantity difference, which requires the credit memo functionality. And the second with the price difference, which requires the subsequent credit functionality. In this case, you would post the whole document using the credit memo functionality, but select the subsequent credit box for the line, with the price difference. As I scroll down, the next section is the GL account Titans. If I wanted to, I could add additional items here. For example, any unplanned costs such as delivery charges, the tax code usually default send from the purchase order. The tax amount is entered for the whole invoice, but the tax code is valid for each line item. As you may have different tax rates for different items in the purchase order. If you go to the tax tab, You can get the system to propose the tax amount for you, and then check that it matches what is on the invoice. You can also enter the tax amount manually from the invoice. In this case, I've chosen a tax exempt tax code. So there's no tax amount payment terms and any cash discount allowed, normally set in the vendor master will be copied to the purchase order and invoice automatically. It can be overwritten if necessary. Although normally the master data should be correct. If there's still a query and you want to check something before the invoice is paid, you can also enter a manual payment block here. If 20 additional charges in the unplanned delivery cost section. These are normally added automatically to the original GN accounts and cost objects. So the costs, however, if you want them to go to a separate account, you can go to the GL account section and click on the plus sign to enter the GL account and amount that you want to post them to. If you click on the arrow on the left, it opens up for further assignments for tax and cost objects, such as the cost center order or WBS elements specifically for the additional costs at the top. I can see the balance is both Ciero and green, meaning that the invoice matches the purchase order and goods receipt perfectly. Once you're happy with your selection. You can either click on check to check for any missing fields or simulate to double check the postings. You can also hold or pocket invoice, which I will explain in a later section, I'm going to click on check. And as you can see from the pop-up, there are no errors so I can simulate and check the general ledger postings. I can either post from this screen or go back to the previous screens post, you can say in the popup, two documents are created. One is the material document. And one is the finance document. If he only seen the material document in your system. Check the end of this section in the tips and tricks where I explain how to change the settings, to see the finance document as well. I can click on the blue finance document and a new screen is created with the finance document. It shows the general ledger postings. Get back to the popup. I can also click on the material document. But it shows the purchase order information, click on the purchase order history. You can see the quantity ordered quantity, invoiced quantity received as well as the amount invoice. In the section on purchase to pay flow, we discussed the different types of purchase order and goods receipt, and you saw the different ways that you can manage small miscellaneous purchases. If you didn't want to go through the whole purchase order creation approval and goods receipt process through each invoice. For example, by creating one blanket purchase order. If he still find that you wish to post an invoice without creating a purchase order, you can use the same map. In other words, to create supplier invoice app, instead of entering a purchase order number and pulling in the approved amount and quantities from the purchase order and goods receipt, you said plan to this prior account number invoicing party, manually app to GL account items. Note that a material document is still produced, even though there's no good juicy or purchase order so that the invoice can still appear in the supplier invoice list shown in the slide. And you can hold a Park's similar to posting with the purchase order. The supplier invoice is that you can see in the slide is an important transaction to see the status of invoices. For example, whether they're parked, held, posted reversed plot for pain and et cetera, then any approvals, it also allows you to edit the parts, invoices or reverse posted invoices directly from the app to create an invoice without purchase order. I'm going into the create supplier invoice SAP is before and I select invoices, a transaction type. I'm using a UK company code to show VAT exam. Cool. The company code and date fields are the same as before, but this time I need to enter the invoicing party, the amount inclusive of VAT, the currency will default to the company code currency. I enter the invoice number in the reference field as before. Next I scroll down to the GL account item section and click the plus sign to add each new item is required. I'm just going to choose the office supplies account. Is it simplest after I entered the GL account number and the net amount? I need to click on the arrow on the left to open up the additional fields for the tax code and cost objects. For example, the cost center. If I scroll down, you can see that the tax amount has been proposed. I checked to make sure that this is correct. And then I can click on check, although I can already see that I've agreed with zero balance at the top for this supplier. I have some down payments related to a different transaction, which I really ignore for this demo. I click on simulate and as I do not need to park or hold the document for any reason, I'm going to post the invoice. You can see that both in material or supply document that's been produced as well as the finance document or journal entry, she needs to add additional information to the HR in the create supplier invoice. For example, to, into head, to text or change the document type of exchange rate. You can click on the, see more button on the right hand side, just below the other headrights and S as in the side, in this slide, you can see the expanded section of the header for the create supplier invoice. Technically, you can still use the fury app based on the classic GUI transaction FP 60 code create incoming invoices. You may need to use it if you want to use the one-time vendor functionality, which currently does not work with the new create supplier invoice app. However, if you do not have one time vendors, there are many advantages to using the same app for both PO non PO invoices. Apart from just learning a single process. For example, creating an invoice using the FP 60 transaction does not produce material documents. So the invoice will not appear in the supplier invoice list and some other few reacts. Usually these invoices will have a different document type and a different number range as well. And of course we're not appearing in the accounts payable, display process flow app. There are many different types of discounts that can be given to a supplier. Many are already calculated in the purchase order and a fixed by the time invoice arrives in accounts payable. For example, if you get 5% discount and you would read quantity of 5,000 or more, and assuming that you would at least a quantity of 5,000. Then the amount that will be posted on the goods receipt and therefore proposed on the vendor invoice would already be less 5,000, regardless of when the invoice is paid, the type of discount shown in the side is a cash discount for paying early. In other words, the price on the purchase order is fixed. For example, at 1000, and you have 30 days to pay. But if you pay, for example, within the 10 days, you can then do that 3% discount in this case, if you miss the 10 day deadline, but still pay before 20 days are up, you can get a slightly lower discount at 2% discount. It's usually agreed by supplier and set in the supply master record terms, but it could also be given only on a specific order. In which case the payment terms in the purchase order or invoice would need to be updated. The key point about this discount is that you only get it. If you pay early, you don't get it automatically. Some countries have slightly different rules around where the tax or VAT is calculated before or after the discount has been deducted. And also whether the sales tax is contained in the basement for the discount calculation, this demo will be using a UK company code in the UK. The VAT is calculated on the full amount, and if a discount is taken, then the VAT is adjusted. When payment is made prior, there are two ways to post this based on document types. First I'll post an invoice using the ordinary document type with the app, create supplier invoice and using the standard document type R E per speed or post directly to Giana count without raising a purchase order. But the principal should be the same. I scroll down and that the GL account Titan and to the GL account amount. Tax code and cost center. Although not shown in the demo is prior, has the discount term shown earlier, in other words, 3% for paying early. But you can see that when I simulate there's no sign of any discount and the VAT is calculated as normal. No. Did she show you the difference in posting a gross in that document type? I will now post an identical voice, but using the net document type RN, I could also have use kn which is another net document type. And to everything in an identical manner, same accounts and tax codes, et cetera. I scroll down and now did GL account item enter the GL account amount tax code and cost center. But now when I simulate, you can see that the vendor VAT amounts are the same, but discount has been deducted from the cost and accrued in a clearing vendor discounts account. The discount will be held in a clearing account until the payment is made. At which point it can be deducted from the supplier. If the cash discount is not deducted, it goes back to the cost account. But if it is deducted, then it transfers from the clearing account, the discount account and the tax is adjusted. We'll see examples of the payment posting in the next slides. This slide shows the payment Brown for the first invoice from the demo. As you can see a cash discount of 36 has been deducted from the original invoice of 1,200 inclusive of tax. This slide shows the posting for the payment for the first invoice we saw in the demo. In other words, using the normal document type. The discount is simply deducted when the payment is made and the adjustment is made to the VA to account for the VA team related to the discount, this slide, those payment run for the second document, using the net document type, you can see the same amount of cash discount has been deducted from the vendor. In other words, 36, which is 3% of the original amount of 1,200, including tax. This slide shows the posting for the payment for the second invoice in the demo. In other words, using the NEC document time, as you can see the amount on the clearing vendor discount account is now transferred to the P and L account for discounts taken. There are various other permutations depending on the local legislation and regarding how the tax and discounts are calculated. But this slide is an example of using the net discount document type so that the discount is posted to clearing account. But in this case, the invoice was not paid on time. Instead of posting the discount back to the original cost account. He's posted to a lost cash discounts account instead. An invoice without purchase order may still need approval or confirmation that purchase took place. And that the price is correct. Given that as the invoice is here, it's a bit late to say the goods cannot be ordered. Maybe you can't post it straight away. Perhaps the accounts payable manager needs to check the GL account and cost assignment. Invoices should always be entered into the system. So there's a record that the invoice has been received, even if it cannot be paid straight away. Assuming the invoice is complete, you could post the invoice and block it for payment, but then if there's a mistake, it would have to be reversed out and re posted correctly. So in some cases, it may be better to put the invoice on hold or park it, both parks and held documents can be found in the supplier invoices list by selecting the relevant status in the filter bar, but a held invoice or parked invoice without an amount will not appear in other reports. For example, the supply line items report is neither will produce finance documents, although they both produce material documents. Poke or hold Holden invoice. You simply select the park or help button at the bottom, right? Instead of the post button, if it's a large invoice and you are, for example, not going to complete it before lunch, rather than leave it on the screen, you could put it on hold and then treat it. When you get back, how would invoices tend to be held for a short period and just for you to return to that in post. Where it's parked. Invoices are often posted by somebody else with a parked invoice. If you've entered an amount before parking a document, then a finance invoice will be produced and you'll be able to see the park documents in the managed supply line items. And some of the general ledger reports. If you include parked invoices in the selection criteria. Note that in some reports, the word verified is now used instead of the term parked, you can also set up a workflow. If you regularly have parked invoices that need checking or approving, this slide shows an invoice parked against a purchase order item. You can park a document with or without purchase order, but you must have a company code dates in this PI number. In order to get material document number. And if you enter an amount again, you'd also be able to get apart finance document number. Even if you've entered purchase order number, you not see the purchase order history. If you've not yet selected the line item or cannot because of a missing goods, you say once the item is selected, it will then appear in the flow. As in the side. You can also see a drill down into parked invoices in the accounts payable overview hap F two nine one seven, which we'll look at in more detail in section seven, the main reporting section of the tutorial, if you consists of a number of different cards, which are all part of one app and could be rearranged or hidden as required. Some objects, you can turn them down into, for example, a specific part invoice. You can also drill down into the apps behind some of the cards. For example, the cash discount utilization, where there's a drop down box. You can change the layout of the card itself. For example, you can display part invoices in entry date order, or by amount. And in some cases, when you change the dropdown, the chart changes as well. For example, from nine chart to bar chart. With credit notes, it's important to understand the type of credit note, whether it's a price or quantity correction in order to post it correctly, price adjustments do not touch the GRI, our account, but quantity adjustments do when you open the app, create supplier invoice. First field in the top left, refers to the transaction type. I used to the time it will default to the last use transaction, usually an invoice, but there are three other transaction types that you can use. The credit memo is the exact opposite of an invoice. In other words, if you post an invoice for a normal item with evaluated goods, receipt, updates, GRI, or account, then posting a credit memo would do exactly the same thing in reverse. The other two subsequent credit and subsequent debit do not update the GRI or account. So you would only use them for price corrections, no thing. The purchase order history and accounts payable, process flow, the subsequent credits and subsequent debits, but both referred to by the same name. So for example, in the side, the last document is a subsequent credit. And you can see that the amount is negative, even though the description States subs look fee. In the example, in the side, a goods receipt for purchase order for five expense items that 10 pounds is posted, which debits the cost account and credits the gr I our account with five times 10. Akos 50 pounds. Invoice arrives for five items at 12 pounds. The GRI, our count has to be cleared because the quantity matches. So ignoring taxes, the vendor will be credited with 60 pounds, but the JRI, our account will be credited with 50 pounds leaving a difference of 10 pounds, which is posted back to the original cost account. The supplier has then been chased for credit note for the difference, which needs to go to the original cost account and not the GRI, our account in the slide, the subsequent credit transaction type has been used to post the credit note. And as you can see, it's gone to the original cost account, leaving the GRI, our account untouched zero, and the total cost as 50 pounds as per the original purchase order. Which is correct. I mean, now have a balance of 50 pounds to pay to the supplier. The other to the subsequent credit and subsequent debit do not update the GRI our account. So you would only use them for price corrections. The invoice was originally blocked for payment before the credit note was received. But once the credit is posted in the three way, matching is refreshed. Payment block is removed automatically. If you use a credit memo for this and the credit will go to the gr IRA account, leaving a balance a 10 there permanently for at least until somebody spots it and writes it off. And the cost was show 60. When in fact you only paid 50 total. In addition, the invoice will remain blocked for posting because the system will see a price difference, stock invoices. The process is similar. Although the postings will depends on whether, for example, the stock is valued at standard price. In which case, any price differences, go to price, variance account. Or a moving average, because some put in the slide is a simulation of the postings for price correction, for an item of stock value. Standard price is this stock was originally updated at standard price. The correction has gone to the price differences or variances account. The tricky thing about moving average prices is that if there's very little or no, stop left, when you post a price credit. You don't want it to update the stock fatty because otherwise you might end up with negative Stokes Stokes rule. So problem, when it comes to quantities, if you've been invoiced for the wrong quantity, you can post a credit memo is normal, but if the sent back, because they were damaged doing incorrect, you may need to match the credit with returns, purchase order or goods issue rather than the original goods receipt, depending on the returns process. It's mentioned in section two, the one time vendor functionality is not currently working in the standard create supplier invoice app F zero eight five nine, but one time vendor functionality allows you to create one generic vendor account without an address or bank account in order to post one off invoices. In other words, generally small invoice from a vendor that you will never use again. And therefore don't want to go through the positive of creating a full business partner. You can create the vendor business partner with a special group. And when you enter the invoice and additional pop-up appears for you to enter the address bank details for each invoice. This functionality is currently not supported with the new create supplier invoice app. However, for those used to the one-time functionality, you can still use it with the app for the GUI transaction, FP 60 code create incoming invoices or the app create supplier invoice advanced, which works on the classic Curry transaction. Myra, the purchase order invoices. I will never demonstrate the one time functionality with the create incoming invoices, which is based on the classic GUI transaction F B 61st, I enter the generic one time vendor count. That's already been created. And I fill in the usual head of fields. For example, the amount, the invoice number, plus tax codes and taxes where benefits them in the line items. I need to enter the GL account amount tax code tax jurisdiction, if relevant and cost center. As soon as the system checks. Or if I press enter, okay. I pop up to fill in the address bank data of the time vendor. In this case, it was only when I started to fill it in the line items, but had I pressed enter immediately after entering the vendor number, it would have popped up then in state, I enter the name of the one time vendor, this and the address and bank information. Is there any held at the invoice level? Not at the master day two, therefore, so next time I sit at the one time vendor account. I will have to re enter the name, address, and bank data, which given the name one time vendor should any way be different. Each time I failed in the bank data. And I just go back and put in a few lines of addressed as well and click on the internet icon. So to finish off completing the tax and cost object data, some of the suggested fields to fill in are showing yellow. But when I press enter after competing or fields and the system for forms to check, it turns out that my tax jurisdiction code is too short. So I'll just add some more zeros. I click on simulate to check the postings and everything looks okay. So I'll click on post. We will cover a number of reports in the section seven of the tutorial, but I think it's worth showing a few briefly now that relevant to this section, the supplier invoices list, F1 zero six zero eight. It's often used as a starting point to find a specific invoice to display it. You first or delete draft invoices, but it can also be used for reporting purposes. The report can look quite different depending on what you choose in the settings. The columns are less flexible than some reports. For example, you can only sort by clicking on the column header, you cannot resize the column drag and drop it. But you can use the settings button to rearrange the columns. And so by multiple criteria, you can also use grouping. For example, the group invoices of different statuses together, such as posted part held or group invoices by supplier. And you can of course export them all to Microsoft XL. Another way to seam voices is using the supplier invoice items by account assignment app six three one. Here I have grouped by supplier sorted by status and filtered by date range, but there are a number of additional options to filter and group or add and rearrange the columns. We have already seen the managed supply line items report being used to display and edit line items, but it can also be used for reporting in the side. I have grouped the items first by company code and then by supplier and then my journal entry type using the group functionality in the settings button. Also in the settings button, I can do more advanced filtering. And add, remove or rearrange number of columns and they sack.