Posting Guarantees Made

Guarantees made are a significant aspect of Special G/L transactions in SAP S/4HANA Cloud that deal with financial guarantees provided by a business. A guarantee made refers to a declaration by a company to another party that it will meet specific obligations such as payment of a debt or delivery of a service. For example, if Company A invoices Company B for services and Company B fails to pay, Company A may call upon the guarantee offered by a third party like a bank (the guarantor).

Managing these guarantees in the financial accounting system is critical for organizations as they represent a liability. If not handled correctly, it might lead to inaccuracies in financial reporting and the balance sheet.

Below is a comprehensive step-by-step guide for creating, posting, and clearing guarantees made:

1. Creating a guarantee made
   • On the SAP Fiori launchpad find and select the Post Outgoing Payments app.
   • Enter all the necessary fields like company code, customer, document date, etc.
   • Select the tab Post on Account and enter the required data.
   • To create a guarantee, select Special G/L and choose Guarantee Made.
   • Once all information is entered, check the correctness using the Simulate option. If all looks good, select Post.
2. Posting a guarantee made
   • Start by selecting the Post Incoming Payments app on the SAP Fiori launchpad.
   • Fill in the details such as company code, G/L Account, and document date.
   • Then navigate to the Post on Account section and choose Special G/L.
   • Select Guarantee Made.
   • Select Post to confirm the payment entry.
3. Clearing a guarantee made
   • Now if the guarantee is fulfilled (meaning, the payment has been received or the liability has expired), the guarantee should be cleared.
   • Navigate to the Manage Customer Line Items app on the SAP Fiori launchpad.
   • Find the guarantee made earlier using filters, if necessary.
   • Choose the guarantee made line item, then select Clear from the menu.
   • Confirm that all information is correct and click Save.

The figure shows the following transactions:

• Posting transaction (1) shows the posting of the guarantee made by debiting the customer on the customer subledger and the alternative reconciliation account Guarantees Made in the general ledger. The credit is posted to the Clearing of Guarantees Made account.
• Posting transaction (2) shows the cancellation of the guarantee made by crediting the customer on the customer subledger and the alternative reconciliation account Guarantees Made in the general ledger. The debit is posted to the Clearing of Guarantees Made G/L account.

The above type of entry is referred to as an automatic offsetting entry (statistical) in SAP S/4HANA Cloud. The transaction is automatically generated by the system based on pre-defined conditions. The purpose of this type of transaction is to provide statistical information that can support the management and monitoring of special financial transactions.

This type of transaction is referred to as "statistical" because it balances out with automatically with a clearing entry. However, the transaction is recorded in a separate, alternative reconciliation account.

For example, when a company issues a guarantee to a customer, an Automatic Offsetting Entry transaction may be used. This transaction is recorded in a separate account, not in the standard accounts payable or receivable reconciliation account. The issuance of the guarantee does not represent an actual cash flow, but it does represent a financial commitment. Therefore, the company will want to track this in their financial system. The statistical posting allows the company to record the guarantee without affecting the accounts receivable or payable balances.

The entry provides valuable data and insight into the unique financial transactions. It offers companies a means to track and manage these special transactions separately from their standard financial transactions, enhancing their financial analysis capabilities and ensuring they maintain a detailed and accurate financial record. Moreover, these types of transactions usually require specific treatment in terms of business and legal requirements as well as how they might appear in financial statements.