FOREIGN CURRENCIES

Foreign Currency Transactions:

There three types of Exchange rates defined by SAP,

• Bank Buying Rate Exports Purpose             – G Type
• Bank Selling Rate Import/Expenditure     –B Type
• Average Rate MM/SD Users only                 –M Type

Path: SAP⇒SAP Netweaver⇒General Settings⇒Currencies⇒Check Exchange

• Once we follow one conversion factor, follow continuously  for all the Years.Don’t change in between,it gives wrong Results

• Conversion Factor are given at Client level but not at Company code level.

Exchange Rates entry End user Area:  S_BSE_68000174

Path : SAP Menu ⇒ Accounting ⇒ Financial Accounting ⇒ General Ledger ⇒ Environment ⇒ Current Settings ⇒ Enter Transaction Rates

You carry out accounting for a company code in the country currency (local
currency) of the company code. Therefore, you must specify the local currency
in the system for each company code. All other currencies used are indicated as
foreign from the point of view of the company code. There are several situations
in which you need foreign currencies:

• to post and save receivables and payables in foreign currency
• to make payments in foreign currency
• to manage accounts in foreign currency (foreign currency balance sheet accounts)
• to carry out consolidation and prepare corporate group reports.

These are the following configuration steps for foreign currencies:

1. Check Currency Codes (SPRO) : SAP solutions come with standard currency codes for the ISO company codes. Sometimes circumstances arise in which you have to define new currency. You can do so through this step.
2. Set Decimal Places for Currencies (OY04) :In this step, you will define the number of decimal places for the currency.
3. Check Exchange Rate Types (SPRO) : In this step, you will define exchange rate types, which you will use later on for various transactions.

4. Define Valuation Methods (OB59) : To valuate foreign currencies, you need at least one valuation method. With the valuation methods, you will define how to handle foreign currency valuation methods and the exchange rate types you are going to use. In a high-level valuation method, you will hold various parameters for foreign currency valuations.
5. Prepare Automatic Postings for Foreign Currency Valuation
(OBA1): In this step, you will assign various G/L accounts to record foreign valuation
differences.These are the following application steps for foreign currencies:
6. Enter Exchange Rates (SPRO):
In this step, you will enter exchange rates to convert one currency to another.
7. Foreign Currency Valuation (F.05):This transaction code is used to valuate foreign currencies. Foreign currencyincome and expenses will be recorded in the respective account defined through transaction code OBA1.

Balancing Field ‘Segment’ in Line Item 001 Not Filled

If anyone get problem while posting document under /NF-02
follow the bellow IMG path

click on “Define document splitting characteristics for general ledger accounting”

find the tick mark of Segment under Mandatory Field.

remove tick mark from check box .

Save it now.

CIN Accounting Entries

Accounting entry in procurement

~ For Domestic Procurement of Raw Material

  During GR

            Material Stock            Dr.

           GR/IR clearing                        Cr.

 During Excise Invoice Credit            

            Cenvat Account          Dr.

            Cenvat Clearing                     Cr.

  During Invoice Verification

             Cenvat Clearing         Dr.

            GR/IR Clearing           Dr.

            Vendor Payable                      Cr. 

For Domestic proceurement of Capital Goods

  During GR

             Material Stock            Dr.

            GR/IR clearing                        Cr.

  During Excise Invoice Credit            

              Cenvat Account          Dr.       (50%)

              Cenvat On-hold          Dr.       (50%)

              Cenvat Clearing                     Cr.

During Invoice Verification

               Cenvat Clearing         Dr.

                GR/IR Clearing           Dr.

                Vendor Payable                      Cr

Subsequent of Capital Goods

                 Cenvat Account          Dr.       (50%)

                Cenvat On-hold                      Cr.       (50%) 

For Import Procurement of Raw Material
                       

   During Customs Duty Clearing invoice

              Custom Clearing         Dr.

              Custom Payable                      Cr.

   During GR

                Material Stock            Dr.

                 GR/IR clearing                        Cr.

   During Excise Invoice Credit            

                Cenvat Account          Dr.      

                Custom Clearing                   

During Invoice Verification

                GR/IR Clearing           Dr.

                Vendor Payable                      Cr.

 For Excise Duty Credit of Raw Material without PO
                       

               Cenvat Account          Dr.      

              Cenvat Clearing                     Cr. 

 For Excise Duty Reversal through Excise JV
                       

              Cenvat Clearing         Dr.      

              Cenvat Account                      Cr.

Accounting entry when the goods are issued through MM and Excise invoice is Credited(J1IS &J1IV)

During Excise Invoice Creation

             Cenvat Suspense Account       Dr.

             Cenvat payable                                   Cr.

 For TR6C Challan

PLA Account               Dr.

PLA on hold Account              Cr.

 During Fortnightly  Utilization

Cenvat payable           Dr.

Cenvat Account                       Cr.

PLA Account                           Cr. 
Note: Cenvat Suspense Account should be cleared apprpiately using FI JV’s.

Accounting Entry in subcontracting reversal/Recredit

For Subcontracting Challan Reversal
     Cenvat Reversal          Dr.

     Cenvat Account                      Cr.

For Subcontracting Challan Recredit

      Cenvat Account          Dr.

      Cenvat Reversal                      Cr.

Accounting Entry in SD

For  Factory Sale During Billing Document

      Customer Account                  Dr.

      Sales Account                                      Cr.

       Cenvat Suspense Account                   Cr.

 During Excise Invoice Creation

       Cenvat Suspense Account       Dr.

       Cenvat payable                                   Cr.

 For TR6C Challan

PLA Account               Dr.

PLA on hold Account              Cr.

 During Fortnightly  Utilization

Cenvat payable           Dr.

Cenvat Account                       Cr.

PLA Account                           Cr. 

For  Stock Transfer through SD

No Accounting entries for Performa Billing Document
 During Excise Invoice Creation

    Cenvat Suspense Account       Dr.

    Cenvat payable                                   Cr.

 For TR6C Challan

PLA Account               Dr.

PLA on hold Account              Cr.

 During Fortnightly  Utilization

Cenvat payable           Dr.

Cenvat Account                       Cr.

PLA Account                           Cr. 
Note: Cenvat Suspense Account should be cleared appropriately using FI JV’s.

Letter of Credit -SAP

This site describes the LC configuration and how to create a financial document.

Configuration

IMG Path: Sales & Distribution >> Foreign Trade / Customs >> Documentary Payments >> Basic Settings 

1. Define Financial Document Type

The financial document type identifies, for example, the different types of documentary letters of credit. These include:

• Document against payment

• Document against acceptance

By default, 01 will be Letter of Credit

2. Define Bank Functions

The below functional will be available by default –

A Notifying bank
B Confirming bank
N Negotiating bank
O Opening bank
U Institute for guarantee

3. Define Texts for Financial documents

This is purely based on the requirement

4. Define Documents to be presented

A Export Billing Document
B Export packing list
C Certificate of origin

5. Define Reasons for change

1 Typing error
2 Amendment
3 Legal change

6. Define Indicators for Financial Documents

Configure as – 01 Letters of credit

7. Define Bank Indicators

1 Banks for confirmed letters of credit
2 Banks for unconfirmed letters of credit

End user Manual

Purpose:

Financial document should be generated for attaching the Letter of Credit (LC) with the sales order. This creates a document in Finance but does not do any postings in the ledger. This is purely used for the purpose of tracking and monitoring the letter of credit and does not affect the payments / collections.  This is attached to the sales order to ensure that the sales order value does not go above the LC value.

Transaction Code: VX11N

Path: SAP Easy Access à Logistics à Sales & Distribution à Foreign Trade / Customs à Payment Guarantee à Documentary Payments à Financial Document à Create

1. Start the transaction using the menu path or transaction code
   Financial doc. cat.: R; Financial doc. type: 01; company Code: XXXX
2. Press ‘Enter’ to create Financial document

Enter Customer, Ship-to party, Bank Country, Bank Key, Ext. FD number, Financial doc. value(this is imp), Lett.-of-credit crcy, Allowed overdraft %

3. Date/Delilvery Tab: Enter Request date, Date of receipt, Latest shipping date, Validity end date, Opening date, Last date ocean BOL, Presentation date, Number of days, Incoterms (Get it from SD team)

4. Documents tab: List of documents configured will be displayed.  Enter the number of originals & copies sent and mark the status as ‘Completed’

5. Banks & Text  tab: No mandatory information is required

6. Click the Correction Instruction icon.  If any correction instruction is required, it will be displayed.  If any, double click on the item and check its maintenance.

7. Click Save – Status A will be set

The Letter of Credit document generated will be used in SD module for linking into a Sales order.  Transaction code VX12N is for changing the Financial Document and VX13N for display.

How is the due date of a document calculated?

The due date is determined through default payment terms entered in the business

partner’s master data and setting a baseline date for payment terms. Payment terms can be configured through T-codes OBB8 and OBB9.

What journal entries are passed in the system from the time of good receipt until payment is made to the vendor?

In a simple business scenario, you will pass the following accounting entries from
the time of goods receipt until payment to vendor.

1. Transaction code MIGO
Material Account       debit
GR/IR Account           credit

2. Transaction code MIRO
GR/IR Account          Debit
Vendor Account       Credit

3. Transaction code F-28
Vendor Account debit
Bank Account credit

What is the difference between withholding taxes and extended withholding taxes?

The differences between the classic withholding tax and extended withholding tax
are

What are segments in the vendor master?

A vendor master contains three segments, which control different fi elds for a vendor.
These are:
■ General data segment: This segment holds a common set of data applicable
for all company code.
■ Company code segment: These are company code specifi c data that can’t be
shared with other company code.
■ Purchase organization segment: Like company code data, this segment contains
specifi c purchase organization data.

What are the steps for linking customers and vendors?

When the customer is also a vendor, or the vendor is also a customer, you need to
follow these steps:
1. Create the customer master and vendor master records.
2. Assign a customer account number in the vendor master record and a vendor
account number in the customer master record.
3. In the customer master record in the company code data segment, select the
Payment Transactions tab, and then select the check box labeled Clearing with
Vendor.
4. In the vendor master record in the company code data segment, select
the Payment Transactions tab, and then select the check box labeled Clrg
with Cust.
5. Now when you try to clear using T-codes F-28 or F-53, it will show all of the
transactions related to vendor and customer. You can just pay the balance
amount after net off transaction between vendor and customer.

How do you make an advance payment to a vendor through the APP?

You need to use a down payment request to a vendor. This will create a noted item
in the vendor, which you need to include with the APP. This will post the advance
to the vendor as a special G/L transaction.
There are two steps to make an advance payment to a vendor:
1. Create a down payment request through T-code F-47.
2. Post the down payment through T-code F110 (APP).

The system will pay for all down payment requests by check or bank transfer.

You can clear two general ledgers through transaction code F-04 (posting with
clearing), provided both general accounts are open item managed accounts.