Purchase Order Accruals - Execution with SAP S/4HANA

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Why accrual

One of the prime month-end activities for financial accountants is to correct the estimation and posting of liabilities accrued to the third parties who have not charged to profit-loss accounting. It is necessary to ensure the accounted expenses for that period of financial statements.

As a result, an important period-end activity for financial accountants is to review all open account assigned purchase orders and estimate and record the expenses that should be attributed to the same. It has become an essential task since the expenses are not booked in the system until the receipt of the actual goods takes place,

The SAP S/4HANA Accrual Engine, Accruals Accounting offers flexible configuration options like,

• Calculation and posting of the accruals


• Option to review process for the monthly accrual amounts


• Supports monitoring and the approval of accruals

POAC Introduction

The Purchase Order Accruals application enables you to calculate and post accruals in General Ledger Accounting automatically.

The relevant data is transferred from the Materials Management component to the accrual engine and automatically converted from purchase order items into accrual items. The system calculates the amount to accrue for each purchase order item based on the above data. You can also simulate these amounts.

The functions in Purchase Order Accruals support parallel Accounting. This means that you can calculate and post accruals simultaneously according to different ledger groups. You can start an accrual run, which posts all accruals for the various business transactions.

From a technical standpoint, the Purchase Order Accruals application is built on the accrual engine. The purchase order items to be accrued are managed in Purchase Order Accruals. The processes for calculating and posting accruals, on the other hand, are managed in the Accrual Engine.

To post-purchase order accruals, perform the following steps:

• In the MM component, create a purchase order


• The purchase order is then transferred to the Accrual Engine offline or online, and monthly accrual amounts are calculated and displayed in the Accrual Engine


• (Optional) Review and approve, or just approve the monthly accrual amounts


• Post the accrual amounts.

In the previous blog post, we have discussed in detail the POAC configuration part https://blogs.sap.com/?p=1508525?source=email-global-notification-bp-new-in-tag-followed, in this part, we will discuss in detail the Purchase order accruals execution in Fiori.

Accruals Process

The purchase order accruals process involves the following job templates and apps in Fiori:

• The Propose Periodic Accruals job template in the Schedule Accruals Jobs app


• Review Purchase Order Accruals - My Inbox or


• Review Purchase Order Accruals - for Cost Accountant


• The Post Periodic Accruals job template in the Schedule Accruals Jobs app


• Analyse Accruals Posting


• Display Purchase Order Accruals

Integration

In Financial Accounting, you can also post accruals with the recurring entries function. In contrast to recurring entries, the functions in Purchase Order Accruals offer you the following benefits:

• Automatic accrual calculation based on purchase order data;


• Availability to a review and approve the accrual amounts before posting them


• Depiction of complex calculation rules

 

Purchase Order Accruals: Design

  

Purchase Order Accruals Design

Main Steps

Creation of a purchase order in application component Purchasing MM-PUR, for example using transaction “Create Purchase Order” (ME21N).

 

Each purchase order is automatically transferred into the Accrual Engine. This happens by Customizing settings and controlling whether and how accruals will be posted. In the Accrual Engine, an accrual object is created for each purchase order.

 

While implementing the application component Purchase Order Accruals, you have to transfer your existing purchase orders once into the Accrual Engine of your production system. You can do these using accrual activities “Transfer Purchase Orders to Accrual Engine” with schedule accruals jobs app ID F3778.

Display Accrual Objects:

For each purchase order, you can display the monthly accrual amounts the system calculates using app “Display Accrual Objects items” app ID F4899.

 

Schedule Accruals Jobs:

 

This app enables you to schedule accruals jobs using the templates provided. For example, you can perform periodic posting runs and propose periodic accrual amounts.

 

You can use the scheduling options to carry out the following periodic accrual activities:

• Perform Periodic Posting Runs


• Propose Period Amounts


• Transfer Purchase Orders to Accrual Engine

The templates are available only when you've registered them in customizing view APJ_C_SCOPE . Follow the steps to register for the three templates:

1. Run t-code SM30.


2. Enter APJ_C_SCOPE for Table/View, and click Maintain.


3. Add the following new entries:
   
   
   
   • SAP_FIN_GL_ACE_POSTING_RUN
   
   
   • SAP_FIN_GL_ACE_PROPOSAL_RUN
   
   
   • SAP_FIN_GL_POAC_MMPO2ACE_TRANS
   
   
   
   


4. Save your changes.

 

Schedule Accruals Jobs

 

Template Selection

 

Optional: Review and approval process at the end of each fiscal period:

 

• At the end of each fiscal period, a reviewer can adjust the accrual amounts (or planned costs) that the system proposes for the current fiscal period.

 

• As a prerequisite, the proposal amounts must be generated for the given fiscal period using Accrual Engine for POs - Propose Period Amounts under schedule accruals jobs.

 

• The review can be performed using the app “Review Purchase Order Accruals for Cost Accountant” app ID F3552. The review includes the possibility to manually adjust the accrual amounts that the system proposes.

 

• As an alternative or in addition to the review, approval can be performed using the transaction “Approve Periodic Accruals”.

 

• The difference between review and approval is that in case only review is active, then the system will post the proposed accrual amounts even if no review was done. But if approval is active, then only those accrual amounts are posted which have been approved.

 

 

Post accruals at the end of each fiscal period:

 

The accrual amounts are posted using accrual activities “Periodic Posting Run” with schedule accruals jobs app ID F3778.

 

Analyze Accrual Postings:

 

With this feature you can display an overview of accrual postings, you can filter the postings by various criteria and navigate to a specific posting in related apps to investigate. (App ID F3732)

 

Analyze Accrual Postings

 

Display Accrual Objects

• An accrual object contains all data that the system needs to calculate and post accruals for this business transaction.


• Optional: Reviewing and Approving Periodic Accruals


• You can set up a review and approval procedure for the accrual amounts calculated and proposed by the system.

Customizing Purchase Order Accruals

• Before you can use the functions in Purchase Order Accruals, you must make extensive Customizing settings.


• The settings control, for example, the purchase orders or purchase order items to be accrued, the algorithms to be used for a particular purchase order item, and the accounts to be used for accruals posting.


• If you want to take the optional step of manually checking and approving accrual amounts, you must also make the corresponding Customizing settings here.


• Additionally, some settings are available to you with which you can adjust the functions according to your needs. For example, you can add user-defined fields (or parameters) for use in the functions.

 

Posting Data of an Accrual Object

For each accrual object, the item data is saved in the journal.

Prerequisites:

You have made the necessary settings in Customizing for accrual posting, that is, you have, for example, defined accrual item categories, posting schemas, and account determination. You find these settings in Customizing for Accrual Management.

Closing Notes:

Details of the Purchase order Accruals process can be obtained under Scope item 2VB in SAP Best Practices Explorer. The applicable country version should be selected.  Thank you for reading the POAC document. PO Accrual functionality is a full-blown solution, and it is impossible to cover all the circumstances in one document especially occasions which occur during the life cycle of Purchase Order has a huge effect on PO Accrual creation. I would appreciate your feedback on the document, which will help me to enhance further.