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Head Office and Branch Accounts

In some industries,branches of a company sell their goods independently but the accounting for these sales is performed centrally (at the head office). You can represent this type of organizational structure in the R/3 System by using head office and branch accounts.

First you need to create head office and branch accounts. The sales orders are managed in the branchaccount. The sales and transaction figures, however, are not posted to this account but rather automatically to the head office account. Payments are cleared centrally by the head office, meaning that outgoing payments can be made for several branches in one step, using the head office account.

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Link between Branch Accounts and Head Office Account

To link branch accounts to a head office account, you must enter the number of the head office account in the Head office field in the branch account master record. This field is contained in the company code area of the master record.

The head office account can be any vendor account except one-time accounts or branch accounts themselves. Branch accounts and head office accounts must belong to the same company code.

VENDORS :

Headoffice

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Branch

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Line Item Display

When you are entering the parameters for line item display, you should note the following: for head office accounts, enter the key 004 in the field Sort key. This instructs the system to display the line items for the head office account sorted by branch. This key is defined in the table for allocation rules.

Invoice posting to branch vendor

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Document gets posted in the head office with branch in assignment field

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FBL1n shows in head office account

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FBL1n for branch account gives below message

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Clearing

FBL1n for all branches under the headoffice

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Payment run

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FBL1N after payments

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Correspondence

You can set up your system to cater for written correspondence with vendors a) for the head office, broken down per branch or b) for each branch individually. If you want to create correspondence (such as dunning notices and account statements) for the individual branches instead of the head office, you have to select the Local processing field in the vendor master record of the head office on the Create Customer: Correspondence screen.

You can also define payment methods in the master records of the branches and head offices. For example, if you want to have certain payment methods for particular branches, enter these in the master records of the branches concerned and do not enter any payment method in the head office master record. If you enter payment methods in both head office and branch master records, all payment methods are possible.

CUSTOMERS :

Head office customer

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Branch office

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Invoice posting to branch customer

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Posted successfully to the headoffice customers with branch details

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Dunning run for headoffice customer

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Headoffice customer successfully dunned

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Important Notes :

> At Branch accounts system will not allow you to check clearing with customers or vendors. This has to be done at headoffice level

> All the dunning notices related to the branch go to the head office account and the payments (both incoming & outgoing) are made by the headoffice. However if you want the make the dunning and payment programs use the branch account instead, you need to select  “decentralized processing” field in
“correspondence” tab in the head office master data.

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9 Comments

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  1. Prashant Govind Rane

    Very nice and well documented – Thanks for sharing!

    Adding:

    I thought to use this functionality, but the client also wanted to generate customer statement by branches separately to follow-up. (We use program RFKORD10 to generate statements) Since we cannot achieve this requirement we did not use this functionality. if anything you find then send me via email.

    (0) 
  2. vaishnavi Rajendran

    Hi Jyoti

    Thanks for document and well explained. This was the one I was actually looking for.

    Can we use Head office concept in duplication of vendors for right payments ?

    Example:

    Vendor 1 : 152369558 (Duplicate of vendor 2: 152659562 ( Not blocked in SAP for old invoice payments)

    Vendor 2 : 152659562

    In this case, can I make vendor 1: 152369558 Head office as vendor 2 : 152659562 ( which is the correct vendor for payment in future). Hence, payment will happen to vendor 2 : 152659562, even if any invoice is posted in Vendor 1:  152369558 .

    Please help me with this case.

    Thanks,

    Vaishnavi Rajendran 

    (0) 

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