Explaining the Usage of Document Types, Document Numbering and Posting Keys

Global Inc. is subject to stringent standards of the financial regulator. Jill is going to learn how the correct use of document types is a prerequisite for providing correct classification, analysis, and reporting of financial data. She will also review how SAP handles the numbering of financial documents, which is a basic requirement for both external and internal reporting.

Jill has looked at the daily posting tasks of a colleague and has observed that the posted financial documents were mostly automatically supplied with a document number. She noticed that the document numbers sometimes had different leading digits and different lengths. She is somewhat confused and would like to understand the basic systematic here.

An accountant working in the finance department in day-to-day business does not need to know every possible setting in the SAP Financial Accounting system configuration. However, it is helpful to know the basic logic and check routines that can be set in the system. This facilitates the correct entry of information and helps in reacting to system messages.

Back to the business user in financial accounting. First, it is important to understand that there are different elements in the financial accounting documents that control the concrete posting.

These elements are usually created and maintained in system configuration either by SAP directly or by the project team at the customer site. SAP mostly delivers basic system settings, but for some system configuration objects each company can decide within a defined framework which settings are the most suitable for the company and its processes.

First, let's have a closer look at the financial document header. The most important control element in the financial document header is the so-called journal entry type (also called document type).

Every day, hundreds of financial documents are created in a company. The auditors prefer that all documents are stored in different categories according to the business transactions (such as customer credit memo, vendor invoices, authorized expenses, and so on). The technique to achieve this goal is to use unique journal entry types for specific business processes.

It’s very helpful for the accountants to identify the same kind of documents by a unique journal entry type.

Here are some examples for journal entry types:

• SA – G/L Account Document
• KR – Vendor Invoice
• DG – Customer Credit Memo

The payment program uses the journal entry type ZP (Payment Posting) for most of its automatic postings.

Let's take a closer look at the journal entry type SA.

You’re right, it doesn’t make sense because the journal entry type SA should be reserved for G/L postings to G/L accounts. It is very helpful that a journal entry type also contains information about which accounts can be posted to (account types allowed for postings). These are, for example, assets, customer, vendor, G/L account, and so on.

Various business transactions require different types of data within a document. Some data is mandatory for specific postings. During posting, mandatory fields are sometimes shown on the screen. A posting cannot be made until all required entry fields have been filled.

The journal entry type contains information about which fields in the document header are mandatory fields. For example, when posting accruals, the accountant should enter a text in the document header that explains the circumstances for which this accrual is required.

Another requirement of the auditors is that similar documents can be found in the same number range. The document entry type is therefore also responsible for the document number used. It is possible to assign a separate number interval to each journal entry type.

Using internal numbering, postings with the same journal entry type are then posted with the next number of the assigned number interval.

• The SAP system is delivered with journal entry types that can be changed or copied. All the settings of the journal entry type, number ranges, or internal/external numbering are part of the configuration. Therefore, these settings can differ from company to company.

• Journal entry types can be valid for all company codes. However, the number intervals used can be different for different company codes.

In the system configuration, settings for each journal entry number / number range, the customer can decide for the beginning of the new fiscal year:

• To continue numbering using the number after the current number
• To restart with the first number of the number range

In this video you find out how internal numbering works in SAP and how you can create a list of FI documents with the same journal entry type:

Now, let's have a closer look at the document line items. An important control element in the document line items is the so-called posting key.

Line items in financial documents always include a posting key. Jill will discover that the posting key is mainly used to represent debits and credits in the system, but it also drives some additional functions.

The posting key is an object that is not visible to the accountant when posting G/L documents and usually does not have to be entered manually in the system. During posting, information has to be entered about which amounts are to be posted on the debit side of a certain account and which on the credit side of an account.

For G/L postings, the accounts posted to are always G/L accounts. However, we also have postings to vendor accounts and customer accounts.

To manage the posting data internally in the system, the information about debit/credit and which type of account was posted to is translated into a posting key element. This happens automatically. No input from the user is required. However, the user can display this object in the system when displaying documents. Sometimes, this object is also useful because it can be used to identify more precisely which type of posting transaction is involved.

In most of the apps, you no longer need to enter the posting key. However, it is good to know the postings keys for G/L documents.

There are only two:

• for debit (d) postings on G/L accounts: posting key 40
• for credit (c) postings on G/L accounts: posting key 50

Normally, the posting key is not displayed in the document overview, but you can show it using the settings.

In the SAP system, there are many standard posting keys (G/L accounts, vendor postings, customer postings). In our next topic, we will explore the importance of working with financial posting periods and the use of dates in postings.