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[S/4HANA Accruals Management] [Cloud version] Q1- What kind of Purchase Order Item is Accruals relevant?

Hello there! This series blogs about S/4HANA Cloud Accruals Management – Purchase Order Accruals, are created specially for you.

  • Business users who would like to know the features and logic
  • Functional Consultants who would like to know the features and logic, and in addition, design based on SSCUI capability
  • Technical Consultants who would like to know the features and logic , and in addition, extend default logic by leverage the SAP Cloud BAdI capability

This blog is specially for you who has gain basic understanding of S/4HANA Accruals Management. In case of not, feel free to familiar yourself it first. Otherwise you might lost in the details.

[S/4HANA Accruals Management] [Cloud version] Purchase Order Accruals one-stop-shop


Q1 – What kind of Purchase Order Item is Accruals relevant?

When you purchase products that are directly used, or services that are received during a period of time, you need to accrue expense for that.

in S/4H4NA Accruals Management, Purchase Order Accruals will accrue expense for the purchase order item that meet all of below criteria.

  1. To be invoiced
  2. ‘In Process’
  3. Expense occurs from consumption of goods or services

Let’s expand a bit of business scenarios and look into the system with default criteria. In later chapter, I will explain how you could influence the result.

1. What is purchase order item ‘To be invoiced’?

  • Purchase orders item is not an inter-company stock transfer.

When the supplying plant is different from the receiving plan, it is an inter-company stock transfer. Because there’s no external supplier involved, the PO item is not relevant for accruals.

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  • Purchase order item is not ‘Return item’.

When the stock is in poor quality, or if there is excess stock, you will send back the goods to supplier. Speaking in system language, the goods to be returned are marked as ‘Return Item’ in the purchase order. There will be no invoice issue for this return item, thus the PO item is not relevant for accruals

2. What is a ‘In Process’ purchase order item’?

  • Purchase order is not archived and deleted from system.

You could find it in the Manage Purchase orders app. In case the workflow is activated for purchase order, the purchase order should be approved.

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  • The purchase order item is not ‘marked as deleted’

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  • The purchase order item which valuated by Goods Receipt is not marked as ‘Deliv.Compl.’

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  • The purchase order item is not marked as ‘Final invoice’.

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3. What is purchase order item with ‘expense occurs from consumption of goods or services’ ?

  • Account assignment category ≠ <Blank>

This means, you put the purchased good on stock and plan selling to customers later.

Except for storage expense, no expense occurs. The PO item is not relevant for accruals.

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  •  Account assignment category ≠ ‘U-unknown’

This means that you don’t know what kind of account assignment category to put for purchase order item.

It’s not clear where to put the potential expense. The PO item is not relevant for accruals

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  • ‘Account assignment category ≠ ’Q – Project: make-to-order’.

This means the purchased good is for mainly for inventory account to allocation cost for production.

No expense, the PO item is not relevant for accruals.

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  •  *‘Account assignment category ≠ ‘A – Fixed Asset’

This means you are purchasing fixed asset. There will be depreciation postings later to recognize the cost.

No expense to be consumed, the PO item is not relevant for accruals.

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Hope so far hope you have the answers about ‘What kind of Purchase Order Item is Accruals relevant’. If so, get yourself ready for next chapter.

[S/4HANA Accruals Management] [Cloud version] Q2 – How is the Purchase Order Item converted into S/4HANA Accrual Engine?

[S/4HANA Accruals Management] [Cloud version] Q3 – How can I influence the way Purchase Order Item converted into S/4HANA Accrual Engine? (SSCUI + Cloud BAdI)

 

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