Identifying Vendor Transactions in the Payables Management and in the General Ledger

Objectives
After completing this lesson, you will be able to:

After completing this lesson, you will be able to:

  • Remember the connection between payables management and the general ledger
  • Recall the most important reporting and analysis tools of payables management

General Ledger and Payables Management

José realized that each supplier receives its own account within the system. Now he wants to navigate to the postings he made. This is where he realizes that the outstanding posted invoices can be analyzed on each separate supplier account within the payables management work area. However, he remembers that each supplier transaction also needs to be represented within the General Ledger, because General Ledger is an overview of all company’s financial operations. He dives into the system and realizes that Payables Management and General Ledger are connected via reconciliation accounts.

Payable Values in Financial Statements

After learning about reconciliation accounts and their role in connecting Payables Management and General Ledger, José would like to discover where can he find its supplier transactions in the Bike Company’s financial statements, like balance sheet and profit and loss statement. He needs to do that to make sure that Bike Company’s external reporting is consistent.

Supplier Items KPIs

Working with many supplier invoices every day you might want to have a Big Picture view on you company’s supplier operations. So does José too. After processing multiple supplier invoices, he would like to generate a few reports with the most important supplier-related key performance indicators (KPIs). Luckily SAP provides functionality that José is looking for.

Vendor Items Analysis in the Payables Subledger

SAP provides several valuable apps with embedded analytics functionality that deliver important insights on the company’s operations.

In the Payables Management there is a central app that showcases all important payables management KPIs – Accounts Payable Overview. With this analytical overview app, you can monitor important accounts payable indicators and access further accounts payable analytical apps. This is a central entry point for the payables management accountant or a payables management manager to get a holistic big picture overview on one screen.

From this app you may navigate to further analytical apps for more detailed information. App like:

  • Days Payable Outstanding: The representation of an average amount of days your company takes to pay its invoices to the suppliers
  • Payable Aging (Aging Analysis)
    • The representation your outstanding invoice’s lifetime since the posting date
    • Can be represented as an overdue or not yet due report
  • Due Invoices Free for Payment: The representation of your posted invoices released for payment

There are also many more analytical apps not included in the accounts payable overview. One worth to mention would be the Overdue Payables app. With this app you can check the overdue payable amount to your vendors by vendor company code, vendor group, vendor, and reason for payment block. You can monitor the status of the overdue payments for critical vendors in your area of responsibility. You can also find out about the potential risks and notify the responsible persons to take action.

José learned a lot of fundamentals about Payables Management. He is able to describe all main functions of this work are including supplier master data creation and invoice posting. However, this is just the beginning. José will continue exploring Payables Management to expand his skills and knowledge. But already now he is ready to tackle new challenges as a payables management accountant.

Overdue Payables

Practice yourself using the interactive simulation to view the Overdue Payables for your Supplier using the Fiori app Overdue Payables.

Aging Analysis

Practice yourself using the interactive simulation to display the aging information of your supplier by using the SAP Fiori app Aging Analysisand check the payable amount.

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