This blog is intended for project members responsible for setting up the Cash Based Ledger functionality in S4 Hana Finance. It explains the Standard options for Cash Based Ledger Configuration and Transaction Posting.
In cash Ledger we have Green Field Implementation and Subsequent Implementation .I tried to cover the Green Field Implementation part only and also covered some Frequently used Scenarios .
What Is Cash Based Ledger:
we have generally two types of Accounting one is Accrual based accounting and other is Cash-Basis Accounting. Cash Based ledger comprises a complete, balanced set of accounts required by and maintained for Cash based Accounting. Cash based Ledger realizes expenses and revenue only at the time cash is paid or received. We must create separate ledger in the new General Ledger for cash-based Accounting.
It also covers inventory, Fixed assets (Deprecation), other liabilities, cash in hand, Short term Deposits on top of Expenses and Revenue.
Prerequisites:
Cash-Basis Ledger Configuration
1-Creation of Separate Ledger for Cash basis Accounting in Define Settings for Ledgers and Currency Types.
2- Define Ledger Group
3- Define Document Splitting Characteristics for General Ledger Accounting
4- Classify Payment-Relevant G/L Accounts
you can enter all the accounts that the system should interpret as cash relevant. Only enter G/L accounts that are relevant for cash flow.
Public Sector Management- Fund Accounting- General Ledger Accounting (New)- Cash-Basis Accounting and Cash Flow Reporting- Cash-Basis Accounting
5- Define Assignment Between Balance Sheet Accts and Profit and Loss Accounts
Only expense or revenue-related financial transactions can be updated in cash ledgers. To guarantee this, cash ledger documents are only updated to expense and revenue accounts
Cash-Basis Ledger Transaction Posting:
In this Blog I covered 4 Major Frequently used Scenarios
Vendor payment with Invoice Reference
Vendor Payment w/o Invoice Reference (Payment on Account)
Bank Reconciliation
Cash ledger view
Vendor Invoice:
Post Payment:
GL Clearing:
Cash Ledger:
Same Process will applicable for AR process
Special Instruction
Cost Center will not flow to cash based Ledger Documents .
Important Notes for Cash Based ledger
Conclusion:
This blog is very useful for all the customers and Consultants who are planning to implement Cash Based Ledger in the S4 system .it Covers the Consideration of Understand the supported various business scenarios in activation cash ledger .
In cash Ledger we have Green Field Implementation and Subsequent Implementation .I tried to cover the Green Field Implementation part only and also covered some Frequently used Scenarios .
What Is Cash Based Ledger:
we have generally two types of Accounting one is Accrual based accounting and other is Cash-Basis Accounting. Cash Based ledger comprises a complete, balanced set of accounts required by and maintained for Cash based Accounting. Cash based Ledger realizes expenses and revenue only at the time cash is paid or received. We must create separate ledger in the new General Ledger for cash-based Accounting.
It also covers inventory, Fixed assets (Deprecation), other liabilities, cash in hand, Short term Deposits on top of Expenses and Revenue.
Prerequisites:
- New GL Accounting must be active in the system with document splitting.
- Business function EA_PS and PSM_FA_CASH must be activated.
Cash-Basis Ledger Configuration
1-Creation of Separate Ledger for Cash basis Accounting in Define Settings for Ledgers and Currency Types.
2- Define Ledger Group
3- Define Document Splitting Characteristics for General Ledger Accounting
4- Classify Payment-Relevant G/L Accounts
you can enter all the accounts that the system should interpret as cash relevant. Only enter G/L accounts that are relevant for cash flow.
Public Sector Management- Fund Accounting- General Ledger Accounting (New)- Cash-Basis Accounting and Cash Flow Reporting- Cash-Basis Accounting
5- Define Assignment Between Balance Sheet Accts and Profit and Loss Accounts
Only expense or revenue-related financial transactions can be updated in cash ledgers. To guarantee this, cash ledger documents are only updated to expense and revenue accounts
Cash-Basis Ledger Transaction Posting:
In this Blog I covered 4 Major Frequently used Scenarios
- Vendor payment with Invoice Reference
- Vendor Payment w/o Invoice Reference (Payment on Account)
- Customer payment with Invoice Reference
- Customer Payment w/o Invoice Reference (Payment on Account)
Vendor payment with Invoice Reference
| Accrual based | Cash based | |
| Vendor Invoice | Exp. A/C DR Vendor AC CR | NO Accounting entries |
| Vendor Payment | Vendor AC DR Bank outgoing AC CR | NO Accounting entries |
| Bank Reconciliation | Bank outgoing AC DR Main Bank AC CR | Exp.A/C DR Main Bank AC CR |
Vendor Invoice
Vendor Payment
Bank Reconciliation (Accrual Based)
Cash Ledger View Accounting document
Vendor Payment w/o Invoice Reference (Payment on Account)
| Accrual based | Cash based | |
| Bank Reconciliation (Through DMEE) | Bank outgoing AC DR Main Bank AC CR | Cash Ledger PACC DR Main Bank AC CR |
| Vendor Invoice | Exp. A/C DR Vendor AC CR | NO Accounting entries |
| Vendor Payment | Vendor AC DR Bank outgoing AC CR | NO Accounting entries |
| Bank Outgoing GL Clearing | Bank outgoing AC DR Bank outgoing AC CR | Expenses AC DR Cash Ledger PACC CR Main Bank DR Main Bank DR |
Bank Reconciliation
Cash ledger view
Vendor Invoice:
Post Payment:
GL Clearing:
Cash Ledger:
Same Process will applicable for AR process
Special Instruction
Cost Center will not flow to cash based Ledger Documents .
Important Notes for Cash Based ledger
| 2457643 - Cash ledger and PSCD |
| 2001953 - Check for cash ledger activation |
| 1672033 - Update RE_ACCOUNT for adv. return for tax on sales/purchases |
Conclusion:
This blog is very useful for all the customers and Consultants who are planning to implement Cash Based Ledger in the S4 system .it Covers the Consideration of Understand the supported various business scenarios in activation cash ledger .
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