SAP S4-HANA ERP: Purchases, Inventories, Sales, Accounting
Before we can create a sales order to deliver the products to the client, we have to allocate the number of units for sale in the warehouse by using the Manage Stock option. Here we will allocate 10 units of product TG11 Led Light set. See figure 1.
Then we create a Sales Order using the Create Sales Order Fast Entry option. Enter the Sold to Party (Client number) ID 17100001, Silverstar Corp. On the detail enter Led Light product id TG11. The quantity order is ten units.
To deliver the products to the client, create an Outbound Delivery Order in Create Outbound delivery from the Sales Order option.
The outbound delivery creates a GI document to transport the products to the client’s location. Click on the Pick outbound delivery option to take out the products from the warehouse.
The Pick outbound delivery creates two journal entries to record the warehouse exit movement of the products.
In the credit column of the Inventory Trading good account, SAP S/4 records the cost of the products. This cost is the revaluated value after each Purchase Order. The revaluation depends on the chosen method:
-First In-First Out (FIFO)
-Last In-First Out
To balance the transaction, S4 records the cost of the product on the debit column of the Inventory Constptn Trade Goods account. Ten units of LED lights at 1.3 for an amount of 130.00.
Note the difference between the cost of the Led lights in this account which is 1.30 per unit, with the sale price of 1.70. This difference is the gross revenue of this product.
The next step is to create the Billing Documents in the Sales menu.
At this point we have the Sales process of the ten Led Light set to 17100001, Silverstar Corp in the process steps described in Figure x.
-Allocate the products in the Warehouse.
-Delivery. Creates two journal entries to reflect the exit of products at the cost of the goods calculated by Inventory revaluation.
-Create the Billing Documents. Up the Invoice to the client. This step creates three main journal entries: Account Receivable(including tax) in the Debit column, Products accounts without taxes in Credit columns, and taxes in the Credit column to balance the transaction.
The creation of Billing documents or Invoicing generates six entries in the accounting journal. The invoice is for 10 Led Light Set for a Total without tax of 175.50.
The first entry is in the Debit column of the Account Receivables of the total invoiced including taxes of 191.12.
The second entry is the Total without taxes in the Credit column. The amount is 175.50.
The third entry is a collection of taxes in the Credit column that sums a total of
With these entries the transaction is balanced.
To receive the payment from clients, go to Post Incoming Payments in Accounts Receivable menu options.
After filling the input data including the Client ID that will do the payment and our Bank account that will receive the funds, SAP S/4 presents us with a list of Accounts receivable.
Click CLEAR on the account that will receive the payment.
The payment amount is 100.
Input this amount in the G/L account option. Enter the same 100 amount in the Allocated option.
The balance of the transaction must be ZERO to operate the payment.
After reviewing and posting the payment, see the two accounting journal entries. The Bank account has 100 in the debit and the Receivables account has the same amount of 100 in the credit column.
Account Receivable updates the balance.
The Sales Process in SAP S/4 imposes a strict order to control products and cash flow. From the beginning is necessary to allocate the number of units to create the Sales Order. The delivery to the client of the products saves in the Accounting journals the exit of the products from the warehouse. The invoicing account journals save the account receivables. The payments from clients keep tracking of the debt and the bank account that received the payment.