Integrating PSM with Contract Accounting

Contract Accounting (FI-CA) is an accounting subledger designed and built for high-volume business. The integration of Contract Accounting with Public Sector Management (PSM) enables public sector organizations to receive and manage large numbers of documents and to upload these postings (total records) to the general ledger (GL). Typical use cases are tax and fee collections.

While the calculation of taxes / fees are done outside FI-CA, the focus here is on automated revenue collection processes. Typical functions such as posting, payment processing, dunning, and interest calculation for multiple business partners are supported.

Documents within contract accounting are updated without PSM-specific data. PSM account assignments like fund, functional area and grant can neither be entered nor displayed in FI-CA documents.

Basic derivation and validations involving PSM account assignments are performed during postings within contract accounting to ensure that the data transferred to the general ledger (FI-GL) will include the required PSM-specific data.

The complete PSM derivation and validation is performed during the data transfer from FI-CA (totals table DFKKSUM) to the general ledger (table ACDOCA) where PSM-specific account assignments and attributes are also added to the related journal entries.

As is also the case for other financial transactions like customer invoices in accounts receivable (FI-AR), lines transferred from contract accounting are classified using the G/L account (budget account) regarding their relevance for Public Sector Management. For details on the classification see Unit 4, Lesson 1, Recording Commitments and Actuals.

In non-contract accounting financial transactions, lines with the budget consumption types 54 (liabilities), 55 (receivables), 57 (payments) and 01 (not relevant) typically receive the balancing PSM account assignments (fund, grant, cash origin account -RE_ACCOUNT) from general ledger document splitting. Since document splitting is not executed for documents transferred from contract accounting, these PSM account assignments need to be derived using a GL substitution rule. To do this, a contract accounting-specific business context is provided.

The contract accounting-specific business context Public Sector - FICA is available using the BPC EXPERT role in the Manage Substitution and Validation Rules app (F4406).

Take note that if the treasury fund is active, lines with the budget consumption types 57 (payments) are automatically provided with the values defined as the constants (0CASH) for the fund, grant, and cash origin account.

Cash origin account and treasury fund / pool cash are functions specific to Fund Accounting. For more details, see the related training course.

The complete standard PSM derivation rules are executed for lines with budget consumption type 99 (revenue / expenditure) - for example, derivation of PSM account assignments from the cost center master data and derivation of the budget period from the fund and posting date. For details on account assignment derivation, see Unit 2, Lesson 2, Explaining Account Assignment Derivation.

Therefore, for lines with budget consumption type 99 you can decide, if you want to derive fund, grant, and cash origin account from a contract accounting-specific substitution rule or using different sources.

To avoid or limit the creation of zero-balance clearing lines, SAP recommends keeping the number of balancing entities (funds, grants, cash origin account, and segments) used for the FI-CA integration to a minimum.

The following table provides an overview of the determination of account assignments:

Derived in the case means using a substitution rule with Business Context Public Sector - FICA.

In the following example, two receivables (one with 100 USD, one with 200 USD) are posted within contract accounting using the same reconciliation key. This is done using the role APR_ACCOUNTANT_FICA and the Post document app (FPE1).

These FI-CA documents include within the GL item (revenue) a cost center but no PSM account assignments. The cost center is the same for both documents.

The reconciliation key including both documents is closed and transferred to General Ledger. This is done using the RECONC_SPEC_APR_FICA role and the following apps: Delete and Close Reconciliation Key (FPG4) and Transfer Total Records to G/L (FPG1).

You can directly navigate from the transfer result to the G/L document.

The resulting journal entry includes the complete PSM information (account assignments and attributes). The balancing entities fund, grant and cash origin account are derived for all lines using a substitution rule (business context Public Sector-FI-CA).

Budget period is derived from fund and posting date.

Functional area is derived from the cost center master.