The purpose of the accounts payable function is to capture and process all the financial data for an organisation’s vendors.
The first function to learn is establishing vendor accounts. The SAP transaction XK01 is used to create a vendor account within a company and purchasing organisation. The new account can be created by reference to an existing account to speed up the creation process. Once a vendor account is created it can be copied to other companies as required.
The first data to enter is the vendor’s name and address information. It is very important to get right as this information will appear on the vendor’s remittance advice and other communications with the vendor.
The next data to capture is the control data to establish how the vendor’s account posts to the reconciliation account in the general ledger. On this screen is recorded the vendor’s tax information and reference data.
Other important information includes bank account data, the terms of payment, payment transaction types, contact persons, accounting information, correspondence and withholding tax.
Bank account data is used to capture the bank key, bank account, swift code and any other information required to make an electronic funds transfer or direct bank transfer to the vendor’s bank account.
The accounting information screen captures the GL reconciliation account number and sort key for presenting the data. The system uses a standard sort sequence for displaying line items. Among other things, it sorts the items according to the content of the Allocation field. This field can be filled either manually or automatically (by the system) when a document line item is entered.
The next screen records payment terms and payment methods which are very important as no business wants to pay for goods or services before they really need to. There is a checking mechanism to double check the vendor’s invoice has not been entered for payment twice which is a common occurrence in large scale accounts payable processing operations.
Additional information captured is the correspondence contacts and withholding tax information so that the organisation can fulfil its taxation obligations.
The FB60 transaction is used to record vendor invoices for payment. Simply enter the invoice header data such as vendor number, invoice and posting dates, invoice total amount, currency and textual description. The payment terms can be altered from the standard terms as defined on the vendor master record. Next complete the transaction lines defining the products and services purchased. The invoice can be simulated before final posting to view the transaction that SAP will create when posted. The invoice document can also be parked before posting to allow a manager to review the invoice before final posting.
The SAP F-53 transaction is used to record payments to vendors against open payable items. The accounts payable clerk enters the date, company code, currency and reference fields in the header record. Enter the bank account to disburse the funds and the vendor account number. The Sap transaction displays all the open items on the vendor account and the accounts payable clerk can choose which items are required to be paid.
The SAP FK10N transaction is used to display the vendor account balance and transactions. Users can view purchase invoices, credit notes, payments and adjustments. The user can drill down to view the details of the posted transactions in the accounts payable ledger and the general ledger.
There are many useful reports in SAP accounts payable for viewing and managing creditors. Reports S_ALR_87012077 – Aged Creditors Report and S_ALR_87012082 – Vendor Balances in Local Currency are the most widely known.