SUMMARY UNIT 5

“ACCOUNTS PAYABLE”

Group 4 :
1. Pravasta Bagas (2017310163)
2. Nadia Rosa (2017310201)
3. Diah Eka Kurniawati (2017310409)
4. Novita Wardani (2017310414)
1. Vendor Master Records
As with G/L accounts, vendor accounts are made up of two areas:
 A vendor account is defined for all company codes at the client level. General data, such
as the vendor's name and address, is stored here.
 Postings cannot be made to the account for a company code until company code-specific
settings have been created.These settings refer only to the respective company code and
include details, such as the agreed payment conditions.

In the same way as G/L accounts, vendor accounts can be combined in various account
groups, so that they can be organized and managed more easily. However, the account group
controls the screen layout of all sections of the vendor master record, not just the company code
section, as is the case for G/L account groups.
The accounts in an account group usually have similar characteristics. For example, you
could have one account group for domestic vendors, one for vendors abroad, one for affiliated
vendors, and one for one-time accounts.
Number ranges are assigned to account groups. These number ranges are usually internal
where the system assigns you a number when you save the vendor master record. However, some
number ranges are external. With external number ranges, you fill in the vendor number manually
when creating the vendor master record.

2. Daily Accounting Transactions in Accounting Payable

Invoice/Credit Memo Entry
You can easily create and post a vendor invoices or credit memos using a one-screen
transaction. This type of invoice entered directly in A/P is a miscellaneous invoice, without
reference to a purchase order. The A/P entry screen is divided into the following areas:
 Work templates
Here, you can select screen variants, account assignment templates, or held documents as
references.
 Header and vendor data
Document header and vendor line item data is entered here.
 G/L account items
 The G/L line items for the document are entered here.
 Information area
The document balance and information about the vendor is displayed here.
This transaction can also be used to create documents in a foreign currency. The foreign
currency amount is translated into local currency using defined exchange rates.
When entering an expense item for an operating expense, you must also enterone real
Management Accounting object, such as a cost center or internal order. This means that when the
item is posted, a CO document and an FI document are created. A primary cost element must exist
for the G/L account in order for this to happen. The CO document posts the costs corresponding
to the expense to management Accounting object. In addition to the true CO object, you can also
enter additional statistical CO objects to which the costs are statistically posted for information
purposes (which means they are non-allocatable).
Elements of the Payment Transaction
The payment program was developed for the international payment transactions between
vendors and customers. This program can be used for incoming and outgoing payments. However,
it is more commonly used for outgoing payments. Automatic payment consists of several steps.
The first step is maintaining the parameters. You use the parameters to define which accounts and
items the payment program is to include in the automatic payment run.

3. Integration with Materials Management

Purchasing Data in the Vendor Master Record
In order for the procurement process to be used in Materials Management for a vendor, the
vendor master record of that vendor must have a third part: the purchasing data. The purchasing
data is specific to a single purchasing organization, just like the company code data of the master
record is specific to a single company code. In the same way that several Company Code segments
of the vendor master record can exist, there can be several purchase data segments of the vendor
master record. Every purchase data segment presents data, which are specific for exactly one
purchase organization.
Procurement Cycle
 Demand determination: The department responsible can register a requirement for
materials manually via a purchase order to Purchasing.
  Determining the source of supply: The purchaser responsible is supported by the system in
determining possible sources of supply. One possibility for determining the source of
supply is creating queries and subsequently entering the quotations. Furthermore, you can
access purchase orders and conditions that already exist in the system.
 Supplier selection: Comparing the prices in the different quotations makes selecting
suppliers easier. Letters of rejection can be sent automatically.
 Purchase order handling: When creating purchase orders, the system provides you in the
entry process.
 Purchase order monitoring: The purchaser can monitor the processing status of the
purchase order in the system.
 Goods receipt: The system checks the amount of goods received against the purchase order
quantity.
 Invoice verification: The vendor invoices are checked to see if the accounting and the
content are correct.
 Payment processing: The vendor payment is usually done in the Financial Accounting.

4. Closing Operations in Accounts Payable

Accounts Payable Closing Operations
Year-end closing can be divided into two main sections.
 Legal requirements (procedures required by the government authorities)
 Technical and organizational requirements (procedures that are technically required or
needed to support the accounting organization)
At the beginning of the fiscal year, the balance carry forward program is run, carrying forward
the balances of the vendor accounts to the next fiscal year.
The posting periods of the old fiscal year are blocked and the special periods forclosing
postings for fiscal year-end adjustments are opened.
Afterwards, the balances with selected vendors are confirmed, the foreign currency documents
are valuated, and the accounts payable are regrouped according to remaining life (required only in
certain countries).
Once complete, the special periods can be closed.
Balance Confirmations
The program for creating balance confirmations also creates reply requests for a freely
definable number of vendors, a reconciliation list, and a results table. The j balance confirmations
and reply requests are sent to the vendors; the lists are used as a control measure. For IDES, this
control is carried out by the internal audit department.
The vendors check the balance information they receive and send their replies to the control
center audit department, which compares the replies with the reconciliation list and enters the
results in the results table.
Foreign Currency Valuation
A foreign currency valuation is necessary if vendor accounts contains open items in a foreign
currency. The amounts of these open items were translated into the local currency at the time they
were entered using the exchange rate whichwas valid on the posting date. The exchange rate is
probably different at the time of closing, and open items need to be valuated again. A program
valuates the open items using the new exchange rate and enters the valuation difference in the
valuated line items. It also creates the valuation postings:
 Debit: Expense from foreign currency valuation; Credit: Balance sheet adjustment account
 Debit: Balance sheet adjustment account; Credit: Revenue from foreign currency valuation
A valuation cannot be made by posting to the payable account, since reconciliation accounts
cannot be directly posted to. For this reason, the amount is posted to an adjustment account, which
appears near the reconciliation account on the balance sheet.
A valuation method determines how the individual line items are valuated. This has to be set
up in conjunction with the country-specific valuation regulations. It defines, for example, whether
the lowest value principle, the strict lowest value principle, or a general principle (also with
revenue from the valuation) is to be used for valuation.
Regrouping Account Payable
Vendors and customers have to be listed separately in the balance sheet. Since it is possible
for some vendors to have a debit balance, these accounts need to be changed to vendors with a
debit balance prior to creating the financial statements. In many countries it is also necessary to
group vendors in the balance sheet based on their remaining life. Both regroupings are carried out
using a special program. At the same time, these regroupings are removed on the first day of the
next period, since regroupings are not necessary for daily processing.