A new hire requires assistance: By mistake, he has entered twice the same journal entry in the system, and he would like to delete one of them. But he cannot find the suppress button.
Jill is aware now that, due to requirements of the auditors, modifications to FI documents are very limited in the case that a posting needs to be corrected. Deleting FI documents in SAP S/4 HANA is also disallowed. Hence, she will review what the possibilities are to reverse an accounting document. She will outline the reversal procedure and the reporting options.
Sometimes journal entries are posted incorrectly into the system, either by a user mistake or due to a technical problem. As a result, the created FI documents contain incorrect information and need to be reversed with a correcting journal entry. Then, you can post a new FI document with the correct entries. This procedure ensures the perfect traceability of the accounting journal entries required by auditors.
Normal reversal posting generates an inverse posting by increasing the debit/credit accounts balances.
Negative posting, on the other hand, performs an inverse posting by resetting the account balances.
You can use negative posting to avoid an unnecessary increase in the debit/credit balance amounts. This function was developed to meet customer requirements and is optional. Let’s review the principles of document reversal.
Normal reversal posting causes SAP S/4HANA to post the incorrect debit as a credit and the incorrect credit as a debit. This type of posting causes an increase in the account balance figures.
Negative posting also posts the incorrect debit as a credit and the incorrect credit as a debit. With negative posting, the posted amount is not added to the account balance figures but is subtracted from the balance figures on the other side of the account. This sets the transaction figures back to what they were before the incorrect posting.
Both methods of journal entry reversal are equivalent from an accounting perspective. Which method is used depends on personal preferences or habits. In addition, it is also important to check with the auditors, as some countries disallow negative reversals.
Document Reversal Hints
- When you reverse a document, you have to enter a reversal reason to explain the reversal.
- The reversal reason triggers the normal reversal posting or the negative reversal, depending on its settings.
- The reversal reason might allow you to enter a reversal date different to the original posting date (useful if original period is closed).
- You cannot reverse documents that contain cleared items. You need to reset the document before reversing it.
Let's review the video on how to show a posted document, reverse it, and show the balance.