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Thursday, March 15, 2018

Charging interest on overdue items from customers

On this post, I would like to share my experience with a request came from my current client regarding the solution in SAP to calculate and charge interest on customer overdue items. The business requirement was to charge interest on overdue items from selected customers with the rational that this would encourage the customers to pay the invoices on time.

The following configurations were done on a S4Hana 1709 system for the purpose of this post and the customer demo that I have done but the solution is similar on older versions of SAP except  that the customer master is created through business partner functionality in 1709.

Step 1 - Define Interest Calculation Types

In this step, we define the interest indicator that will be maintained on customer master data for the customers who are in the scope. Interest calculation type "P" indicates that the interest is calculated per customer open items.

Financial Accounting à Accounts Receivable and Accounts Payable  à Business Transactions  à Interest Calculation  à Interest Calculation Global Settings  à Define Interest Calculation Types


Step 2 - Prepare Item Interest Calculation

In this step, we define various parameters used in the interest calculation and posting. For example, the reference date to be used when the due date is determined for the interest calculation (Select "4" to use the payment baseline date), whether the calculated interest should be posted (Select "Post interest" tick box), the payment term to be used for the interest receivable and whether do we want to post the interest with reference to the original invoice (Select "Postings with invoice Ref").

Financial Accounting à Accounts Receivable and Accounts Payable  à Business Transactions  à Interest Calculation  à Interest Calculation Global Settings  à Prepare Item Interest Calculation


Step 3 - Define Reference Interest Rates

In this step, we define the reference interest rates against which the interest rate percentages will be maintained in later configuration steps.

Financial Accounting à Accounts Receivable and Accounts Payable  à Business Transactions  à Interest Calculation  à Interest Calculation  à Define Reference Interest Rates

Step 4 - Enter Interest Values

In this step, we maintain the interest rate percentage for the reference interest rates maintained in previous configuration step. Rate can be maintained with validity periods.

Financial Accounting  à Accounts Receivable and Accounts Payable  à Business Transactions  à Interest Calculation  à Interest Calculation  à Enter Interest Values

Step 5 - Define Time-Based Terms
In this step, various control parameters such as the amount from which the specific interest rate to be applied "Amount from") or any premium that needs to be applied above the standard interest rate in cases such as high overdue amounts ("Premium") will be configured against the interest indicator. And also select the term as "Debit interest: arrears interest calc".
Financial Accounting  à Accounts Receivable and Accounts Payable  à Business Transactions  à Interest Calculation  à Interest Calculation  à Define Time-Based Terms
Step 6 - A/R: Calculation of Interest on Arrears
GL Accounts are mapped against the account symbols on this step. AR reconciliation account is mapped against account symbol 1000 but the customer sub ledger account will be debited during interest posting.

Financial Accounting  à Accounts Receivable and Accounts Payable  à Business Transactions  à Interest Calculation  à Interest Posting  à A/R: Calculation of Interest on Arrears



Above steps complete the required configurations needed for the AR interest calculation function in SAP. The interest indicator configured above should be maintained on the business partner (Customer master on old versions of SAP) master data. This allows the company to pick and choose the customers who should be part of interest calculation. 


Once the interest indicator is maintain on master data, Transaction FINT will be used to calculate and post the interest for customer over due items.




Hope this post helps you to understand the interest calculation process in SAP for customer over due items. 


Wednesday, January 10, 2018

Journal entry upload in S4Hana using Fiori app.

One of the common requirements that we come across in projects is the requirement to upload journal entries using excel templates. We normally propose third party tools such as ZOption, Winshuttle or a custom development to satisfy this requirement. Each of these third party tools come with their own strengths and weaknesses and importantly license fees to use them. A custom development comes with the cost related to design, development and maintenance.

With S4Hana, SAP has given a standard solution to upload journal entries using Fiori apps. I'm going to talk about this standard solution in S4Hana on this post. There is no need for any customizations except the installation of the Fiori app to make use of this standard functionality.

Please click on the images to enlarge them.

Step 1

We need to install the app F2548 - Upload journal entries. 




Step 2

Once the app is installed launch it using the Fiori launch pad.




Step 3

Click on the "Download Template" link on the lower right corner of the app. This will give the option to download the journal entry template using Excel or CSV formats. I have selected the excel format for the purpose of this post. Save the template on the desired location.



Step 4

Once the template is downloaded, we can populate it with the required journal entry or entries. Following options are provided with the solution.

1. Data elements are validated when the entry is posted. This solution doesn't provide field drop downs on excel template for input fields like some third party tools such as ZOption do.

2. Multiple journal entries can be loaded by adding multiple header records on the same upload file.

3. Ledger specific postings can be loaded by populating the ledger group on header.




Step 5

Once the file is prepared, load it using the upload option available on the Fiori app. Selecting the file will load it into the staging area but the entry is not posted as part of this step.



Step 6

Click on "Post" option located on the bottom right corner of the app. System will display the accounting document numbers once posted.


Any data errors will be displayed using the posting log. Log can be seen by clicking on "Show Log" option located on bottom right corner of the app. We can fix the errors on upload template and reload it by updating the "Batch ID" field on the upload file with the "Batch ID" provided as part of the original load.






I hope this post is helpful to you guys. Please do let me know your feedback.