Explaining Document Types in Financial Accounting

In SAP S/4HANA Private Cloud, posting control is a key part of handling financial transactions. Think of Posting Control as a set of rules and methods used to manage how financial entries are entered and checked in the system. It allows users to set default values for fields whose values do not change often, such as company code and currency fields. When you execute a transaction, the default values automatically appear in their corresponding fields. This helps by displaying predefined values instead of manually entering them, you can prevent input errors, keeping the financial data accurate and trustworthy, ensuring that only right and approved entries make it into the company's records.

Setting up posting control means organizing who can do what with financial transactions. In SAP S/4HANA, this involves giving specific roles and permissions to people, deciding who can create, edit, approve, or post transactions.

Posting control is especially helpful for companies dealing with lots of financial data daily. With so many transactions happening, the chance for mistakes or unauthorized entries grows.

Posting control acts like a safety net, ensuring every transaction is properly checked and approved before it affects the company's finances.

This is particularly valuable during audits because it provides a clear record of who reviewed and approved each transaction. By streamlining the approval steps, posting control also helps staff focus on more important work, leading to better and more reliable management of the company's finances.

As previously mentioned, it has been decided to create a new document type for posting travel expenses in SAP S/4HANA. In order to complete this scenario, there are three areas of configuration that need to be discussed.

• Defining the number range for the document type
• Defining the document type
• Classifying the document type for document splitting

Lastly, it is necessary to test the configuration completed in the system to be able to confirm that the settings deliver the results that are expected.

Let's take a look at each of these individually.

The document number range defines the intervals of numbers utilized in document numbering. It is crucial to ensure that these number ranges don't overlap. Document number ranges are configured at the company code level.

SAP S/4HANA allows for two types of number assignments:

• Internal Number Assignment: Under this system, SAP S/4HANA keeps a record of the last document number generated by the customized number range in the Current Number field. The system then assigns the number succeeding the current number as the subsequent document number.

• External Number Assignment: This numbering method allows the user to manually input the original document number, or it can be transferred from another system. As the numbers aren't allotted in a sequence, SAP S/4HANA does not preserve a current number. It's important to note that the numbering can be alphanumeric.

Lastly, each document number range must be associated with the last year of its validity.

Defining internal document number ranges in SAP S/4HANA can be based on two options:

• Annual Basis: SAP S/4HANA resets to the first number in the range at the start of every new fiscal year. This process guarantees that there are always enough numbers in the range to accommodate the year's transactions. The annual entries need to exist in the number range table before the new fiscal year is posted to. These can be entered many years in advance if desired.

• Continual Basis: With the beginning of a new fiscal year, SAP S/4HANA continues the numbering from where it had left off from the previous fiscal year (the current number) for the next sequence. So, it doesn't restart from the beginning of the number range at each fiscal year change.

It is possible to have all three scenarios in the document numbering configuration:

• External Numbering
• Internal Numbering Continual
• Internal Numbering Annual

The new number range has been configured, and we can now move on to creating a new document type.

In customizing, you can create additional document types according to the needs of the company. This is configured at the Client level, which means that the document types are available for multiple company codes. The first item to configure is the document type ID. This ID is two digits in length and is alpha-numeric.

Once the ID is entered, we can proceed to complete the configuration. In the Properties section, first item is the number range. You may have created a new number range for a new document type or you can use an existing number range according to your needs. You can use the Number range information button to view the number ranges configured.

If the document can be reversed, select which document type would be used for the reversal document. To reverse a document, you would display the document, and then use Reverse Journal Entry to execute the reversal. The system will use the original entry as template and assign the document type for the reversal according to this field. The reversal document type would have it's own settings and would need to be configured accordingly.

The last setting in the Properties section is Authorization Group. With this setting, you can define that only specific users with appropriate security can post with this document type. Leaving the field blank allows any user to post this document type.

The section for Account types allowed determines the types of accounts that can be entered when using this document type. Account types is a system attribute of the type of account. The account types are:

• Assets (A)
• Customer (D)
• Supplier (K)
• Material (M)
• G/L Account / Secondary Costs (S)

For example, you want to create a document type that is to only be used for supplier entries. You would choose Supplier (K) and G/L Account (S) so that you can enter the accounts payable portion of the document and then the g/l account (S) to post the expense for the purchase. Since, in this example, this is only for supplier, you would not select Customers (D) type and the system will not allow a customer account number to be added to the account.

In the section for Special usage, the setting for BI Only (Batch Input) is used to restrict the document creation to only be during batch input into the system.

The next section to be considered is which header fields would be required when entering this document type. Two field are controlled here:

• Reference Number
• Document Header Text

In our example of creating a supplier document type, we may want to require the Reference Number field to be required so that we always enter the supplier's invoice number in this field.

In the Control data section, you can dictate how the document will function during posting.

• Net document type - The system will automatically deduct cash discounts from accounts payable invoices. Note, this is not supported for accounts receivable.
• Cust/vend Check - This restricts the document to having only one customer or supplier entered into the document. There can be multiple lines for the same customer or supplier.
• Negative Postings Permitted - This allows a single line item in the document to be set as a negative posting entry. In the standard GUI transactions, you enter a positive value in the amount and check the box for Negative entry. In a Fiori application, this will allow for a negative number to be entered for amount.
• Inter-Company - This allows the document to allow account assignment to multiple trading partners.
• Enter Trading Partner - This allows the ability to enter the partner company manually during posting. This is used in special cases and works in conjunction with the Inter-Company setting.

In the Default values section you can set the default exchange rate for foreign currency documents based on this document type.

The last section, Joint venture, will determine the recovery indicator used for the debits or credits of the document.

Once the new document type is configured, the last configuration step would be to classify the document type for document splitting.

As you create a new document type the Classify FI Document Type for Document Splitting table is automatically updated to include your new document type.

In order to correctly identify how the system should split the document, you need to classify the document type to a type of transaction. SAP delivers the transactions to use, for example, Vendor Invoice (0300), Customer Invoice (0200), and Payments (1000). In addition to the transaction type, a variant type must also be entered. Variants are used when there are differences in how the system performs the document splitting for the same transaction type. Each document type will only be classified with one transaction type and one variant type.

In our scenario, we are creating a Travel Expense supplier invoice with no special items that need to be addressed. We will classify this document type as Vendor Invoice (0300) and Standard (Variant) (0001).

We have just covered the three configuration tasks that need to be completed to create a new document type in the SAP S/4HANA system. Let's take a look at how to complete the actual configuration.