Implementing Contract Accounts Receivable and Payable

Using the Functions of Contract Accounts Receivable and Payable

Objective

After completing this lesson, you will be able to use the functions of Contract Accounts Receivable and Payable.

Contract Accounts Receivable and Payable

Contract Accounting capability comprises the functions of Contract Accounts Receivable and Payable (application component FI-CA) used for subledger accounting, implementing typical functions of accounts receivable accounting such as posting, payments and dunning, and is set up to process large numbers of documents. You can integrate Contract Accounts Receivable and Payable as an integral part of Finance with capabilities in Finance and other solutions to accomplish additional business tasks.

FI-CA is suitable for a large number of contract account and documents:

  • Optimal use of storage space by means of a special document structure
  • Parallel processing of mass runs (such as payment run, dunning run)
  • Summarization of general ledger information (total records)

The FI-CA event concept is used to enable industries to enhance FI-CA processes to meet their industry requirements, and it also enables customers to enhance the processes to meet customer or jurisdictional requirements.

Overview of contract accounting master data, explaining that a business partner holds central identity and bank/contact details, a contract account contains payment and dunning control data and manages open item accounting often for a group of contracts, and that contracts plus documents/items complete the structure; further definitions are provided in the accompanying text.

The contract account object is required for posting in FI-CA. The contract is optional and is used for service-related posting.

Lifecycle diagram of contract accounts receivable showing how items created by invoicing move over time from not due to due to cleared via payments or returns, while processes such as dunning, installment plans, interest calculation, deferral, doubtful item valuation, collection agency handling, write‑off, and integration with the general ledger and archiving are applied; further details are provided in the accompanying text.

Archiving is only executed for cleared items. General ledger transfer occurs at regularly scheduled intervals – defined by the customer, typically daily at the end of the day.

The basis for Contract Accounts Receivable and Payable is the document with:

  • Document header: this contains the data that is valid for all line items, such as document date, posting date, reconciliation key.
  • Business partner items (receivables lines or reconciliation lines): these contain all data relevant for payment transactions or dunning and the receivables account or reconciliation account which is debited or credited.
  • G/L account item (revenue lines): this contains the data for the profit and loss statement, data for sales tax, as well as any additional account assignments for cost accounting. The reconciliation key for G/L accounting is a key, in which the summary records of Contract Accounts Receivable and Payable were written for transfer to downstream accounting. The key is entered as an external reference in the document header field "reference key" of the G/L account documents the summary records are transferred to the general ledger. This means that itemization of the totals posted in the general ledger is possible. You must assign the key for manual postings. For mass processing, the key is assigned by the program that executes processing (such as a payment run).

As with all SAP transactions and documents, the userid of the creator and the date/time of creation are stored.

The origin key is an internal identifier which designates the process which created the document.

Origin keys are provided by SAP and are not changeable.

If the document is reversed, the original document is updated.

Account Display

As open items are posted with the various SAP business processes, a means of viewing the items and their details is required. Users can view the individual postings, as well as navigate to the master data and to follow-up transactions if required.

The Business Partner Financial Overview in the Fiori app provides a 360-degree view of a business partner's financial data.

In the initial screen, you filter the desired business partner on the basis of the selection criteria. You can sort the results list.

To display details for the individual business partners, you navigate to the financial overview, which provides you with the following information:

  • The overview of the balances of the receivables and credits as well as the master data of the business partner and its contract accounts.
  • The overview of the following transaction documents for the business partner:
    • Invoicing documents for Convergent Invoicing
    • Payment documents
    • Returns
    • Dunning notices
    • Clarification cases
    • Installment plans
    • Promises to pay
    • Items from worklists that were created by means of the apps from the business role template Accounts Payable/Receivable Manager (FI-CA) (SAP_BR_APR_MANAGER_FICA).
    • Receivables submitted to collection agencies
    • Write-Offs
  • Overview of collections worklists and enforcement actions as part of debt collection management, if you use it

In the business partner’s financial overview, you can also access the list for the generation of worklists from the business partner list. This list is available for the generation of worklists in a few apps with the business role template Accounts Payable/Receivable Manager (FI-CA) (SAP_BR_APR_MANAGER_FICA).

Learning

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