After a discussion with the internal audit department, Jill finds out that certain internal procedures of Global Inc. require internal verifications through several levels of approvers to ensure that the journal entries are error free and compliant. This might result in a financial document that is not immediately posted to accounting after its creation. This type of document must be submitted for approval and undergo a validation workflow.
Designated users will then be responsible for the validation of the document that will trigger its posting to accounting. Eventually, they will demand modifications to the document before the validation and posting can be made. Jill will discover the possibilities of document validation in SAP S/4HANA to support this business case and how to process and report accounting documents using this functionality.
The SAP S/4HANA functionality to Verify General Ledger Journal Entries enables the flexible setup and operation of a verification process in which each company can configure the conditions that require verification and authorizations for approval of journal entries. After the configuration by the configuration expert, business users in the accounting team, depending on their authorizations, can view the apps and participate in different steps in the verification process. In addition, users can receive notifications generated by the apps when there are any status changes to the submitted journal entries.
The standard workflow for verifying general journal entries is as follows:
- When a requester creates a journal entry, the journal entry has Initial status.
- If the requester submits the journal entry for approval, the journal entry has Submitted status.
- When the processor sees the submitted journal entry in the inbox, the journal entry status can vary depending on the processor's actions:
- If the processor rejects the journal entry, its status is Rejected, and the requester has to edit and submit it again.
- If the processor suspends the journal entry, it is given Waiting status until a certain time that is scheduled by the processor, and then the journal entry is given Submitted status again for approval.
- If the processor verifies and approves the journal entry, it is given Posted status. It could be that the posting action fails when some errors occur. In this case, the journal entry is given Failed status, and the requester has to edit and submit it again.
It is very important to note that when a journal entry is submitted for validation, it is saved, and its final document number is assigned to it. However, this journal entry also has a specific status: Submitted – Parked. While the journal entry is being validated, it keeps this status. Thus, it will not update the account balances and it will be reported separately from the standard journal entries, which can be misleading. This is why one of the period closing tasks consists in checking that all journal entries submitted for validation have been processed before closing the accounting period and no journal entry with this status remains in SAP S/4HANA.