Martin Ullmann

Maximizing SAP ERP Financials

Accounts Payable

www.sap-press.com
Bonn Boston

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Contents at a Glance
1

Vendor Master Data . ...............................................................

23

Accounting Document Principles . ...........................................

83

Business Transactions in Accounts Payable .............................

93

Logistic Invoice Verification ..................................................... 145

Outgoing Payment Processing . .............................................. 221

Manual Payment Processing . ................................................. 243

Automatic Payment Processing .............................................. 257

Check Processing .................................................................... 295

Bank Transfer .......................................................................... 319

10 Withholding Tax Reporting . ................................................... 347

11 Use Taxes and VAT Taxes ........................................................ 371
12 Special GL Transactions in Accounts Payable ......................... 381
13 Document Reversals ................................................................ 393
14 Open Item Management . ........................................................ 405
15 Periodic Processing .................................................................. 423
16 Authorization Concept ............................................................ 433
17 Accounts Payable Reporting .................................................... 445
18 Tables, Function Modules, and BAPIs . ................................... 455
A

Implementing a User-Exit ....................................................... 461

Implementing a BTE . ............................................................... 467

Implementing a BAdI ............................................................... 471

D Implementing a Validation/Substitution in the

Financial Accounting Component (FI) with User-Exits . .......... 475
E

The Author ............................................................................... 483

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Contents
Acknowledgements ....................................................................................

21

1 Vendor Master Data .................................................................. 23

1.1

1.2

1.3

1.4

1.5

1.6

Organization of Vendor Master Data . ..........................................

1.1.1 Vendor Master Data and Organization Structure . ..............
1.1.2 Vendor Master Account Groups ........................................
General Data View . .....................................................................
1.2.1 Address ............................................................................
1.2.2 Control Screen . ................................................................
1.2.3 Payment Transactions ........................................................
1.2.4 Contact Persons . ..............................................................
Company Code Data View ...........................................................
1.3.1 Accounting Information . ...................................................
1.3.2 Payment Transaction . .......................................................
1.3.3 Correspondence ...............................................................
1.3.4 Withholding Tax ...............................................................
Purchasing Data View ..................................................................
1.4.1 Purchasing Data ................................................................
1.4.2 Partner Functions ..............................................................
Vendor Master Configuration Steps .............................................
1.5.1 Define Account Groups with Screen Layouts .....................
1.5.2 Define Account Layout per Company Code .......................
1.5.3 Define Screen Layout per Activity ......................................
1.5.4 Define Message Control for Vendor Master Data ...............
1.5.5 Create Number Ranges for Vendor Accounts .....................
1.5.6 Assign Number Ranges to Vendor Account Groups . ..........
1.5.7 Define Text IDs for Central Text (Vendors) .........................
1.5.8 Define Text IDs for Accounting Text (Vendors) . .................
1.5.9 Define Text IDs for Purchasing Organization Texts .............
Vendor Master Data Transactions . ...............................................
1.6.1 Creating, Changing, and Displaying Vendor Master Data ...
1.6.2 Display Vendor Account Changes ....................................
1.6.3 Vendor Block/Unblock . ....................................................
1.6.4 Confirmation of Changes .................................................

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1.6.5 Transfer Vendor Master Data .........................................

1.6.6 Change Vendor Account Group .........................................
1.7 Vendor Master Data Enhancements .............................................
1.7.1 Vendor Master Data Validation .........................................
1.7.2 Vendor Master Data Authorization Check Using
BTE 00001460 ..................................................................
1.7.3 Vendor Master Data User Defined Screen .....................
1.7.4 Vendor Master Substitution Using
BAdI VENDOR_ADD_DATA .............................................
1.7.5 Personnel Number Validation Using User-Exit HRPBAS01 .
1.7.6 Other Enhancements ........................................................
1.8 Vendor Master Data Search Helps . ..............................................
1.9 Vendor Master Data Table Structure ............................................
1.10 Deleting Vendor Master Data ......................................................
1.11 Vendor Master Data Reporting ....................................................
1.12 Summary .....................................................................................

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2 Accounting Document Principles .............................................. 83

2.1

Document Header ......................................................................

2.1.1 Document Type .................................................................
2.1.2 Document Number ...........................................................
2.1.3 Posting Date . ....................................................................
2.1.4 Document Date (Invoice Date) ..........................................
2.1.5 Invoice Receipt Date .........................................................
2.1.6 Reference ..........................................................................
2.2 Document Line Item ...................................................................
2.2.1 Posting Key .......................................................................
2.3 Summary .....................................................................................

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3 Business Transactions in Accounts Payable .............................. 93

3.1 Invoice/Credit Memo Processing . ................................................ 93
3.2 Invoice/Credit Memo Enjoy Transaction .................................... 94
3.2.1 Templates . ........................................................................ 95
3.2.2 Header and Vendor Data ................................................... 97
3.2.3 Information Area ............................................................... 101
3.2.4 GL Accounts Item Area . .................................................... 101

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Contents

3.3

3.4

3.5

3.6
3.7

3.8

3.9

3.10

3.11
3.12

3.13

3.2.5 Invoice Simulation ..........................................................

3.2.6 Simulate General Ledger .................................................
3.2.7 Invoice Posting . ..............................................................
Invoice/Credit Memo General ..................................................
3.3.1 Vendor Invoice: Header Data ..........................................
3.3.2 Vendor Invoice: Vendor Item ..........................................
3.3.3 Vendor Invoice: Correct GL Account Item .......................
3.3.4 Enjoy Transaction/General Transaction Comparison ........
Invoice/Credit Memo Fast Entry ...............................................
3.4.1 Fast Entry: Header Data ..................................................
3.4.2 Fast Entry: Enter Items ....................................................
Invoice Entry Configuration Steps ...............................................
3.5.1 Define Default Values for Enjoy Transactions ..................
3.5.2 Define Default Values for General Transactions . .............
3.5.3 Define Default Values for Fast Entry Transaction .............
Document Parking .......................................................................
Discount Methods ......................................................................
3.7.1 Gross Discount Method ..................................................
3.7.2 Net Discount Method .....................................................
3.7.3 Discount Method Differences . ........................................
Alternative Payees .......................................................................
3.8.1 Alternative Payee ............................................................
3.8.2 Alternative Payee in Document .......................................
3.8.3 Permitted Payee ..............................................................
3.8.4 Recommendation . ..........................................................
Recurring Entries .........................................................................
3.9.1 Recurring Entry Creation .................................................
3.9.2 Recurring Entry Execution ...............................................
3.9.3 Additional Recurring Transactions ...................................
Account Assignment Models .......................................................
3.10.1 Account Assignment Models Maintenance . ...................
3.10.2 Account Assignment Models with Amounts ....................
3.10.3 Account Assignment Models with Equivalence Numbers .
One-time Vendor Invoices ...........................................................
New GL and Document Splitting .................................................
3.12.1 The New GL ....................................................................
3.12.2 Document Splitting .........................................................
Enhancements .............................................................................

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3.13.1 One-Time Vendor Address Validation Using User-Exit

SAPLFCPD ......................................................................
3.13.2 Duplicate Invoice Check via Process BTE 00001110 ........
3.13.3 Exclude OK-codes in Enjoy Transactions via Public &
Subscribe BTE 00001140 ................................................
3.14 FI Substitutions and Validations ...................................................
3.14.1 Document Header Validation Call-Up Point 1 ...............
3.14.2 Document Line Item Validation Call-Up Point 2 ...........
3.14.3 Document Line Item Validation with User-Exit Call-Up
Point 2 ............................................................................
3.14.4 Complete Document Validation Call-Up Point 3 ...........
3.14.5 Substitutions ...................................................................
3.15 Summary .....................................................................................

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4 Logistic Invoice Verification ...................................................... 145

4.1

4.2
4.3
4.4

4.5

4.6
4.7

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Three-Way Match Invoice Verification .........................................

4.1.1 Accounting Entries During Three-Way Match ..................
4.1.2 Price Differences (Goods Receipt Document
Posted First) ....................................................................
4.1.3 Price Differences (Invoice Document Posted First) . .........
Two-Way Match Invoice Verification . ..........................................
4.2.1 Blanket Purchase Orders .................................................
Non-Valuated Goods Receipt ......................................................
GR-Based Invoice Verification ......................................................
4.4.1 Invoice Verification Examples ..........................................
4.4.2 GR-Based Invoice Verification Flag Set On . .....................
4.4.3 GR-Based Invoice Verification Flag Set Off ......................
4.4.4 GR-Based Invoice Verification Conclusion .......................
Invoice Entry Process with Transaction MIRO ..............................
4.5.1 Worklist/PO Structure .....................................................
4.5.2 Header and Vendor Data . ...............................................
4.5.3 Information Area . ...........................................................
4.5.4 Purchase Order Items Area . ............................................
4.5.5 Invoice Posting . ..............................................................
Invoice Parking ............................................................................
Incoming Invoice Configuration ...................................................

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Contents

4.7.1
4.7.2
4.7.3
4.7.4
4.7.5
4.7.6
4.7.7
4.7.8

4.8

4.9

4.10
4.11

4.12
4.13

Define Attributes of System Messages .............................

Define Tax Jurisdiction ....................................................
Automatic Account Assignment ......................................
Number Assignment .......................................................
Tax Treatment in Invoice Reduction . ..............................
Maintain Default Values for Tax Code . ...........................
Configure the Treatment of Exchange-Rate Differences ......
Determine Mail to Purchasing When Price Difference
Occur . ............................................................................
4.7.9 Define Vendor-Specific Tolerances ...................................
4.7.10 Maintain Bar Code Entry .................................................
4.7.11 Activate Direct Entry to GL Accounts and Material
Accounts . .......................................................................
4.7.12 Maintain List Variants .....................................................
4.7.13 Aggregation ....................................................................
4.7.14 Define Start Logo ............................................................
4.7.15 Set Check for Duplicate Invoices .....................................
Special Functions During Invoice Entry .......................................
4.8.1 Subsequent Debit/Credit ................................................
4.8.2 Purchase Order Text .......................................................
4.8.3 Invoice Reduction ..........................................................
4.8.4 Prepayment ....................................................................
4.8.5 PO History Categories .....................................................
4.8.6 Variance Types ................................................................
Delivery Costs . ............................................................................
4.9.1 Unplanned Delivery Costs ...............................................
4.9.2 Planned Delivery Costs . .................................................
Stochastically Block .....................................................................
Tolerances ...................................................................................
4.11.1 Tolerance Keys ................................................................
4.11.2 Invoice Block Configuration ...........................................
4.11.3 Activate Workflow Template ...........................................
4.11.4 Item Amount Check ........................................................
Release Blocked Invoices (MRBR) ................................................
Enhancements During Invoice Entry . ...........................................
4.13.1 Default Transaction Values with BAdI
MRM_TRANSACT_DEFAULT ...........................................
4.13.2 Default Header Fields: MRM_HEADER_DEFAULT . .........
4.13.3 Default Payment Terms: MRM_PAYMENT_TERMS .........

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4.14

4.15

4.16

4.17
4.18

4.19
4.20
4.21

4.13.4 Validate Document Header: MRM_HEADER_CHECK . .............

4.13.5 Complete Document Validation: INVOICE_UPDATE ...........
4.13.6 Additional BAdIs During Invoice Verification ...................
Evaluated Goods Receipt Settlement (ERS) ..................................
4.14.1 How to Avoid Pitfalls ......................................................
4.14.2 Configuration Steps .........................................................
4.14.3 Master Data Settings . .....................................................
4.14.4 ERS Execution .................................................................
4.14.5 Planned Delivery Cost Settlement ...................................
4.14.6 ERS Enhancements . ........................................................
Invoicing Plans ............................................................................
4.15.1 Configuration Steps .........................................................
4.15.2 Master Data Settings . .....................................................
4.15.3 Invoicing Plan Settlement Execution ...............................
4.15.4 Invoicing Plan Enhancements ..........................................
Consignment/Pipeline Stock Settlement . .....................................
4.16.1 Consignment Stock .........................................................
4.16.2 Pipeline Stock .................................................................
4.16.3 Enhancements for Consignment and Pipeline Settlement .
Invoicing Verification in the Background ......................................
GR/IR Account Maintenance ......................................................
4.18.1 GR/IR Clearing Configuration Steps .................................
4.18.2 Execution of Transaction MR11 .......................................
4.18.3 Transaction MR11SHOW ................................................
Invoice Overview .........................................................................
Invoice Display ...........................................................................
Summary .....................................................................................

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5 Outgoing Payment Processing ................................................. 221

5.1

Payment Method .........................................................................

5.1.1 Country-Specific Definitions for the Payment Method ....
5.1.2 Company Code Specific Definitions for the Payment
Method .........................................................................
5.2 Payment Method Supplements ....................................................
5.3 Payment Terms ............................................................................
5.3.1 Baseline Date and Net Due Date ..................................
5.3.2 Defaulting of Payment Term Values ...............................

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5.3.3 Payment Term Configuration ...........................................

5.4 Payment Grouping ......................................................................
5.5 Payment Block Reasons ...............................................................
5.6 Summary .....................................................................................

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6 Manual Payment Processing .................................................... 243

6.1

6.2

6.3
6.4
6.5

Post Outgoing Payments ..............................................................

6.1.1 Header Data .....................................................................
6.1.2 Select Open Items ...........................................................
Post Outgoing Payments + Print forms .........................................
6.2.1 Header Data .....................................................................
6.2.2 Header Document Data . ..................................................
Post Incoming Payments ..............................................................
Configuration Steps .....................................................................
6.4.1 Define Default Document Type .......................................
Summary .....................................................................................

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7 Automatic Payment Processing . .............................................. 257

7.1
7.2

7.3
7.4

7.5

Payment Program Process Flow . ..................................................

Executing the Payment Program (F110) .......................................
7.2.1 Creation of a Payment Run ...............................................
7.2.2 Planning and Parameter Specifications . .............................
7.2.3 Payment Proposal Run . ....................................................
Executing the Payment Program Periodically (F110S) ...................
Payment Program Configuration ..................................................
7.4.1 Set Up All Company Codes for Payment Transactions . .......
7.4.2 Set Up Paying Company Codes for Payment Transactions ...
7.4.3 Set Up Payment Methods per Country for Payment
Transactions .....................................................................
7.4.4 Set Up Payment Methods per Company Code for
Payment Transactions .......................................................
Set Up Bank Determination for Payment Transactions .................
7.5.1 House Banks . ...................................................................
7.5.2 Bank Accounts .................................................................
7.5.3 Bank Account Selection Logic . ..........................................
7.5.4 Configuration Steps for Bank Determination for
Payment Transactions ........................................................

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7.6

7.7

Enhancements ............................................................................
7.6.1 Payment Program: Item Selection with Process BTE
00001820 ........................................................................
7.6.2 Payment Program: Individual Bank Determination with
Process BTE 00001810 .....................................................
7.6.3 Payment Program: Edit Groups with Process BTE
00001830 ........................................................................
7.6.4 Payment Proposal: Maintenance Authorization Check with
Process BTE 00001860 .....................................................
Summary .....................................................................................

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8 Check Processing ...................................................................... 295

8.1

8.2

8.3

8.4
8.5

8.6

8.7
8.8

8.9
8.10
8.11
8.12

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Check Management Configuration ...............................................

8.1.1 Check Lot ..........................................................................
8.1.2 Void Reasons . ...................................................................
Check Printing Program ...............................................................
8.2.1 RFFOUS_C Print Program Sections . ...................................
8.2.2 Variants .............................................................................
8.2.3 MICR Printer .....................................................................
Check Form .................................................................................
8.3.1 Check Layout ....................................................................
8.3.2 Check Form Enhancements . ..............................................
Check Management Transactions .................................................
Display Check Information ...........................................................
8.5.1 Display Checks ..................................................................
8.5.2 Check Register ..................................................................
Change Check Information . .........................................................
8.6.1 Reprint Checks ..................................................................
8.6.2 Change Additional Information/Check Encashment ...........
8.6.3 Online Cashed Checks .......................................................
Manual Checks ............................................................................
Void Checks . ...............................................................................
8.8.1 Void Issued Checks . ........................................................
8.8.2 Cancel Payments .............................................................
Reset Check Data ......................................................................
External Data Transfer/Positive Pay ..............................................
Create Reference for Check ..........................................................
Summary .....................................................................................

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9 Bank Transfer ............................................................................ 319

9.1
9.2

9.3

9.4

9.5

9.6

ACH Payments .............................................................................

9.1.1 ACH Payment Types .........................................................
Bank Transfer Using the Classic Payment Medium Program ..........
9.2.1 RFFOUS_T Program Sections .............................................
9.2.2 Variants .............................................................................
9.2.3 Configuration Steps ...........................................................
9.2.4 Enhancements ...................................................................
Payment Medium Workbench (PMW) .........................................
9.3.1 Create Payment Medium Format .......................................
9.3.2 Create/Assign Payment Selection Variants . ........................
9.3.3 Adjust Note to Payee ........................................................
9.3.4 Assign Payment Medium Format .......................................
9.3.5 Enhancements ...................................................................
Execution of the Payment Program for Payment Medium
Formats .......................................................................................
9.4.1 Payment Advice ................................................................
9.4.2 Schedule Payment Run .....................................................
9.4.3 Data Medium Exchange Administration . ...........................
Prenotifications . ..........................................................................
9.5.1 Select Bank Details ............................................................
9.5.2 Create Prenotification File .................................................
9.5.3 Import Feedback ...............................................................
9.5.4 Display File .......................................................................
9.5.5 Change Memo Records .....................................................
Summary .....................................................................................

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10 Withholding Tax Reporting ...................................................... 347

10.1 Classic Withholding Versus Extended Withholding Tax
Reporting ....................................................................................
10.2 Migrating to Extended Withholding Tax Reporting . .....................
10.2.1 Migration Steps . .............................................................
10.3 1099-MISC Configuration Using Classic Withholding Tax .............
10.3.1 Maintain Tax Codes . .......................................................
10.3.2 Maintain Document Change Rules ..................................
10.4 1099-MISC Configuration Using Extended Withholding Tax . .......

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10.4.1 Define the Withholding Tax Type for Payment Posting . ...
10.4.2 Define Withholding Tax Codes ........................................
10.4.3 Assign Withholding Tax Types to the Company Code . .....
10.4.4 Assign Accounts for Withholding Tax to Be Paid Over .....
10.4.5 Document Change Rules .................................................
10.5 1099 Interest Configuration .........................................................
10.6 1099-G Configuration ..................................................................
10.7 1042-S Configuration . .................................................................
10.8 Vendor Master Data ...................................................................
10.8.1 Vendor Master Data for Classic Withholding Tax
Reporting . ......................................................................
10.8.2 Vendor Master Data for Extended Withholding Tax
Reporting . ......................................................................
10.9 Correction Programs ....................................................................
10.9.1 RFWT0010: Adjustment of Withholding Tax Code for
Open Items .....................................................................
10.9.2 RFWT0020: Adjust Withholding Tax Information in
Cleared Documents . ......................................................
10.10 Generic Withholding Tax Reporting Tool .....................................
10.11 Summary .....................................................................................

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11 Use Taxes and VAT Taxes .......................................................... 371

11.1 Use Tax within the United States . ................................................
11.1.1 Tax Procedures ................................................................
11.1.2 Use Tax Configuration .....................................................
11.1.3 Jurisdiction Code Maintenance in Master Data . ..............
11.1.4 Tax Code Maintenance in Master Data ............................
11.1.5 Tax Reporting for Use and Sales Tax . ...............................
11.2 VAT Taxes in Europe ....................................................................
11.2.1 Tax Procedures ................................................................
11.2.2 VAT Configuration . .........................................................
11.2.3 Tax Code Maintenance in Master Data ............................
11.3 Summary .....................................................................................

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Contents

12 Special GL Transactions in Accounts Payable . ......................... 381

12.1 Down Payments . ........................................................................
12.1.1 Entering a Down Payment Request ................................
12.1.2 Paying a Down Payment Request ...................................
12.1.3 Invoice Entry ...................................................................
12.1.4 Down Payment Clearing ..................................................
12.2 Down Payment Configuration Steps ............................................
12.2.1 Define the Alternative Reconciliation Account for Down
Payment . ........................................................................
12.2.2 Allow Automatic Payments for Special GL Indicators .......
12.3 Other Special GL Transactions ......................................................
12.3.1 Entering Special GL Transactions .....................................
12.3.2 Entering Noted Items ......................................................
12.4 Summary ....................................................................................

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13 Document Reversals .................................................................. 393

13.1 Negative Postings ........................................................................
13.1.1 Configuration Steps for Negative Postings .......................
13.2 Reversal Reasons ........................................................................
13.2.1 Best Practice Reversal Reasons ........................................
13.3 FB08: Individual Document Reversal ...........................................
13.4 F.80: Mass Document Reversal ....................................................
13.5 FBRA: Reset Cleared Items ..........................................................
13.6 MR8M: Cancel Invoice Document in LIV .....................................
13.7 Summary .....................................................................................

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14 Open Item Management ........................................................... 405

14.1 Manual Vendor Clearing ..............................................................
14.1.1 Manual Clearing Transition F-44 . ...................................
14.1.2 Select Open Items . ........................................................
14.1.3 Clearing Line Layout Configuration . ...............................
14.1.4 Editing Options ..............................................................
14.2 Transfer with Clearing ..................................................................
14.2.1 Post with Clearing Transaction F-51 . ..............................
14.2.2 Post with Clearing: Vendor Item . ....................................

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14.2.3 Post with Clearing: Select Open Items .............................

14.2.4 Post with Clearing: Process Open Items . .........................
14.3 Automatic Clearing .....................................................................
14.3.1 LIV Document Clearing with Reversal Documents ...........
14.3.2 GR/IR Account Clearing .................................................
14.3.3 Automatic Account Clearing Execution . ..........................
14.4 Summary .....................................................................................

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15 Periodic Processing . .................................................................. 423

15.1 Interest Calculation . ....................................................................
15.1.1 Calculation of Interest on Arrears ...................................
15.1.2 Interest Calculation Process . ..........................................
15.1.3 Interest Calculation Configuration ..................................
15.1.4 Vendor Master Data Fields for Interest Calculation .........
15.1.5 Exclude Line Items from the Interest Calculation .............
15.2 Foreign Currency Revaluation ......................................................
15.2.1 Configuration steps from the Classic GL . ........................
15.2.2 Configuration Steps from the New GL ............................
15.3 Balance Carry Forward .................................................................
15.4 Summary .....................................................................................

423
424
424
425
426
427
428
429
431
431
432

16 Authorization Concept ............................................................. 433

16.1 SAP Authorization Concept . .......................................................
16.1.1 User Roles . .....................................................................
16.1.2 Authorization Objects .....................................................
16.2 SAP Predefined User Roles . .........................................................
16.3 Authorization Objects in Accounts Payable ..................................
16.3.1 Vendor Master Maintenance ...........................................
16.3.2 Accounting Documents ...................................................
16.3.3 Logistic Invoice Verification . ...........................................
16.3.4 Payments ........................................................................
16.3.5 Check Management ........................................................
16.4 Line Layout Protection . ...............................................................
16.5 Summary .....................................................................................

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433
434
435
436
438
438
440
441
441
442
442
444

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 Contents

17 Accounts Payable Reporting . .................................................... 445

17.1 Information System . ...................................................................
17.2 Vendor Line Items (FBL1N) ..........................................................
17.2.1 Special Fields ..................................................................
17.2.2 User-Defined Fields via Process & Subscribe
BTE 00001650 ................................................................
17.2.3 Line Item Subtotals/Sorting .............................................
17.2.4 Vendor Line Item Layout Summary . ...............................
17.3 Summary .....................................................................................

445
446
448
450
452
453
453

18 Tables, Function Modules, and BAPIs ...................................... 455

18.1 Tables ..........................................................................................
18.1.1 Vendor Master Data Table Structure . ..............................
18.1.2 Transactional Data Tables ................................................
18.1.3 Logistic Invoice Verification Tables ..................................
18.2 Function Modules . ......................................................................
18.3 BAPIs . .........................................................................................
18.4 Summary .....................................................................................

455
455
456
456
457
457
457

Appendices........................................................................................ 459
A
B
C
D

Implementing a User-Exit .....................................................................

Implementing a BTE ..............................................................................
Implementing a BAdI ............................................................................
Implementing a Validation/Substitution in the Financial Accounting
Component (FI) with User-Exits . ...........................................................
E The Author ...........................................................................................

461
467
471
475
483

Index............................................................................................................ 485

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Tax requirements vary greatly by country. Even within the same country, different tax rates may apply by region or jurisdiction. This chapter
describes the main configuration steps for use tax in the United States and
VAT tax in Europe.

11

Use Taxes and VAT Taxes

Every organization is required to collect taxes or pay taxes on purchases and sales
regardless of the country, size, or type of organizations. However, great differences exist in the way the taxes are calculated, reported, and paid. Multinational
companies have to comply with these tax rules, if they are doing business in different countries.
The intention of this chapter isnt to give a detailed view of the tax configuration
details by country but rather to give a comprehensive overview of two common
tax concepts:
EE

Use tax in the United States

EE

VAT tax in Europe

11.1

Use Tax within the United States

The use tax calculation for jurisdictions is usually based on three components:
EE

The jurisdiction in which the buyer takes possession

EE

The use of the service or material

EE

The tax status of the legal entity that purchased the service or material

Within SAP software, use tax is calculated using a special tax calculation procedure. Within this procedure, different rates are defined by jurisdiction code and
tax code.

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11

Use Taxes and VAT Taxes

The tax jurisdiction code defines the location of the sender and receiver of the
goods purchased. This is important because the sender and receiver information is
needed to properly calculate use tax. The tax jurisdiction codes are usually assigned
to master data such as vendor or cost center.
The tax code defines whether goods are taxable or not. Within the tax calculation
procedure, the tax code is assigned to a rate by jurisdiction using the condition
technique.

11.1.1

Tax Procedures

The SAP software delivers three tax procedures for the United States:
EE

TAXUS: Sales/use tax in United States.

EE

TAXUSJ: Sales/use tax with jurisdiction.

EE

TAXUSX: Sales/use tax with jurisdiction in an external system.

In this chapter, well cover the TAXUSJ procedure, which is the most commonly
used procedure if no external tax calculation software is used. This procedure relies
on all information stored within the SAP software to calculate the correct tax rate.
This is practical for organizations that operate regionally and have simple tax calculation rules. For this procedure, the rate and conditions have to be maintained
on a regular basis within the SAP software.
For large organizations that operate in multiple states with multiple product lines
and procurement channels, the TAXUSX procedure is a better fit. This procedure is
also jurisdiction based but communicates with an external tax calculation system.
The rates and calculations are handled externally.
The third TAXUS procedure doesnt allow the calculation by jurisdiction, which
isnt common. This procedure is only feasible for organizations that operate within
one jurisdiction.
Figure 11.1 shows the tax calculation procedure TAXUSJ.
Each single calculation area, such as AP use tax, can have up to four different condition types that can represent different rates for state, county, or city.

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UseTaxwithintheUnitedStates

11.1

Figure 11.1 Tax Calculation Procedure TAXUSJ

11.1.2

Use Tax Configuration

The tax procedure is assigned to the country as shown in Figure 11.2 via Transaction OBBG or in the IMG via navigation path IMG Financial Accounting
Financial Accounting Global Settings Tax on Sales/Purchases Basic Settings
Assign Country to Calculation Procedure.

Figure 11.2 Tax Procedure Assignment to Country

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UseTaxesandVATTaxes

In the next step, the structure of the tax jurisdiction code needs to be defined. The
tax jurisdiction code is usually nine characters long. The structure can be defined
via Transaction OBCO or in the IMG via navigation path IMG Financial Accounting Financial Accounting Global Settings Tax on Sales/Purchases Basic Settings Specify Structure for Tax Jurisdiction Code. Figure 11.3 shows the IMG
configuration screen of the tax jurisdiction code structure.

Figure 11.3 Tax Jurisdiction Code Structure

If youre using the TAXUSJ procedure, all relevant tax jurisdiction codes need to be
defined for the sender as well as for the receiver jurisdictions. This task is done as
shown in Figure 11.4 in the IMG via navigation path IMG Financial Accounting
Financial Accounting Global Settings Tax on Sales/Purchases Basic Settings
Define Tax Jurisdictions.

Figure 11.4 Tax Jurisdiction Code Creation

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UseTaxwithintheUnitedStates

11.1

In the next step, the tax rates by tax code and jurisdiction need to be defined.
The SAP software delivers a set of predefined tax codes for the tax calculation
procedure TAXUSJ as shown in Figure 11.5. The tax rates can be maintain in the
IMG under navigation path IMG Financial Accounting Financial Accounting
Global Settings Tax on Sales/Purchases Calculation Define Tax Codes for
Sales and Purchases.

Figure 11.5 Predefined Tax Codes Provided in the SAP Software

You can adjust the description by clicking on the Properties button as shown in
Figure 11.6.
Depending on the jurisdiction code entered, such as state, county, or city jurisdiction code, different fields are available to maintain the tax rate. This is controlled
within the configuration of the condition type within the tax procedure.
Within this configuration step, the GL accounts need to be defined by transaction
key. This transaction key or account key is assigned in the definition of the tax calculation procedure as shown earlier in Figure 11.1. To assign a GL account, click
on the Tax accounts button.
The maintenance of the tax rate and GL account concludes the configuration for
U.S. use tax.

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UseTaxesandVATTaxes

Figure 11.6 Tax Rate Maintenance in Procedure TAXUSJ

11.1.3

Jurisdiction Code Maintenance in Master Data

To avoid manual input of the jurisdiction code in procurement or during invoice

entry, its recommended to enter the jurisdiction code in master data. That also
means that master data need to be set up based on jurisdiction rather then area
of responsibility.
For example, if the jurisdiction code is maintained in the cost center master data,
its defaulted automatically during invoice entry with Transaction FB60. In detail,
the jurisdiction code can be maintained in the following master data:
EE

Company code

EE

Plant

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VAT Taxes in Europe

EE

Storage location

EE

Cost center

EE

Internal order

EE

WBS-element

11.2

All of these master data items represent the receiver or ship-to jurisdiction codes.
In addition, the jurisdiction also has to be maintained in the vendor master data
as well to calculate the appropriate use tax rate based on the shipping address of
the vendor.

11.1.4

Tax Code Maintenance in Master Data

To determine which purchases are relevant for tax, the tax codes need to be maintained in the following master data:
EE

GL account

EE

Material master

11.1.5

Tax Reporting for Use and Sales Tax

SAP software provides a standard report RFATAX00 for use and sales tax reporting.
This report can be executed via Transaction S_ALR_87012394. All documents are
displayed per customer or vendor account and are totaled by tax code and jurisdiction with reference to the tax base and amount.

11.2

VAT Taxes in Europe

Value added tax (VAT) is an indirect tax levied on the added value that results from
each exchange of goods and materials. It differs from a sales tax because a sales tax
is levied on the total value of the exchange.

For this reason, VAT is neutral with respect to the number of passages between the
producer and the final consumer. Personal end-consumers of products and services
cant recover VAT on purchases, but businesses are able to recover VAT on the
materials and services that they buy to make further supplies or services directly
or indirectly sold to end users. In this way, the total tax levied at each stage in the
economic supply chain is a constant fraction of the value added by a business to

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UseTaxesandVATTaxes

its products, and businesses bear most of the cost of collecting the tax. VAT is the
common form of taxation in most European countries.

11.2.1

Tax Procedures

SAP software delivers VAT procedures for every European country. For example,
the following tax procedures are predefined:
EE

TAXD: Germany

EE

TAXF: France

EE

TAXES: Spain

EE

TAXIT: Italy

Well only cover the tax procedure for France TAXF here because all other European tax procedures work in a similar way. Usually, the tax rates are the same
within a country and dont vary by region. However, some countries such as Italy
and Spain require regional codes for reporting purposes. Figure 11.7 shows the tax
calculation procedure TAXF for France.
The tax calculation procedure is simpler than the U.S. tax calculation procedure
TAXUSJ because no tax rates need to be defined by region.

Figure 11.7 Tax Calculation Procedure TAXF

11.2.2

VAT Configuration

In the first step, the tax procedure is assigned to the country as shown earlier in
the TAXUSJ configuration in Figure 11.1 via Transaction OBBG or in the IMG via
navigation path IMG Financial Accounting Financial Accounting Global Set-

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VATTaxesinEurope

tings Tax on Sales/Purchases

Procedure.

Basic Settings

11.2

Assign Country to Calculation

Tax Rates

In the next step, the tax rates by tax code need to be defined. SAP software delivers a set of predefined tax codes for the tax calculation procedure TAXF as shown
in Figure 11.8. The tax rates can be maintained in the IMG under navigation path
IMG Financial Accounting Financial Accounting Global Settings Tax on
Sales/Purchases Calculation Define Tax Codes for Sales and Purchases.

Figure 11.8 Predefined Tax Codes by SAP Software

The description can be changed by clicking on the Properties button as shown

in Figure 11.9. Within this configuration step, the GL accounts also need to be
defined by transaction key. This transaction key or account key is assigned in the
definition of the tax calculation procedure as shown previously in Figure 11.7. To
assign a GL account, click on the Tax accounts button.

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UseTaxesandVATTaxes

Figure 11.9 Tax Rate Maintenance

The maintenance of the tax rate and GL account concludes the configuration for
VAT reporting.

11.2.3

Tax Code Maintenance in Master Data

To determine which purchases are relevant for tax, the tax codes need to be maintained in the following master data:
EE

GL account

EE

Material master

11.3

Summary

In this Chapter the most common forms of taxation in AP were described, Use tax
in the Unites States and VAT tax in Europe. The SAP software delivers tax procedures by tax types and country.
In the next Chapter, AP transactions with the Special GL Indicator are described.

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Index
C

1042 NRA 360

1099 Government 348
1099 Interest 348, 359
1099 Miscellaneous 347

A
Account assignment model 128
Account assignment templates 95
Account document authorization 440
Account Groups 25, 56, 61
Account ID 284
ACH payments 320
Aggregation 175
Alternative Payee 35, 36, 117
Alternative reconciliation account 381, 386
ALV 442
Amount split 100
Authorization 433
Authorization check 70, 294
Authorization object 435
Automatic account assignment 162
Automatic clearing 416

B
Balance carry forward 431
Bank account 284
Bank details 35, 225
Bank determination 281
Bank transfer 319
BAPIs 457
Blank check 295
Blanket purchase order 151
Business Add-In 67, 135, 471
Business Address Services 27
Business transaction event 67, 135, 290, 467

Cancel invoice 402

Check
Cancel 315
Change 312
Display 311
Reprint 312
Void 314
Check lot 296
Check management 296, 310
Check management authorization 442
Classic payment medium program 227, 277
Classic Withholding tax 348, 352, 361
Company Code 23
Consignment stock 211
Contact person 38
Correspondence 47
Credit memo 93

D
Discount 114, 117
Document parking 113
Document reversal 393
Document type 84, 112
Down payment 381
Down payment clearing 386
Duplicate invoice check 136, 175

E
Enhancements 67, 135, 195, 204, 290, 308,
329, 338, 461
Enjoy transaction 94, 108
Equivalence number 130
Evaluated receipt settlement 52, 202
Extended Withholding tax 349, 355

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Index

Fiscal address 32
Foreign currency evaluation 428
Function modules 457

LIV authorization 441

Logistic invoice verification 145, 441, 456

Manual checks 314

Mass reversal 399
Message control 60, 161
MICR code 295
MICR printer 306
Minority indicator 41
MIRO 156

General transaction 104, 108, 112

Generic withholding tax tool 366
Global layout 443
GR based invoice verification 152
GR/IR 213
GR/IR account maintenance 213
GR/IR clearing 215, 418
Gross discount 114

N
H

Negative posting 86, 393

Net discount 115
New GL 133, 431
Non-valuated goods receipt 151
Note to payee 336
Noted items 388, 390
Number assignment 167
Number range 60, 86, 168

Hold document 96, 157

House bank 42, 282

I
Incoming payment 254
Incoterms 49
Industry key 33
Information system 445
Interest calculation 41, 423, 425
Interest calculation 423
Interest indicator 426
Interest on arrears 424
Invoice block 191
Invoice date 89
Invoice entry 111, 156, 176, 195, 385
Invoice fast entry 109
Invoice overview 219
Invoice parking 160
Invoice receipt date 89
Invoice reduction 178
Invoice release 195
Invoice simulation 102
Invoicing plan 206

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O
One-time vendor 132
Open item management 405
Outgoing payment 243

P
Partial payments 249
Partner functions 53
Payee in document 118
Payment advice 232, 341

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Index

Payment authorization 441

Payment block 45, 240
Payment grouping 239
Payment medium 226
Payment medium form 231
Payment medium workbench 227, 266, 330
Payment method 221
Payment method 221
Payment method supplement 234
Payment program 257
Payment proposal 259, 267
Payment run 260, 272
Payment term 235
Payment terms 42, 49, 235
Permitted Payee 35, 37, 121
Personnel number 42, 79
Pipeline stock 212
Planned delivery 185
Positive pay 315
Posting date 88
Posting key 89, 104, 112
Prenotification 342
Prenumbered check 295
Prepayment 180
Price differences 148
Printout 266
Purchase order text 178
Purchasing data 48
Purchasing Organization 24

Q
Quantity differences 189, 213

R
Reconciliation account 39
Recurring entries 123
Release approval group 41
Reset cleared items 400
Reversal reason 396
RFFOUS_C 300
RFFOUS_T 321

S
Screen layout 56
Screen variants 95
Search help 80
Search terms 29
Sensitive fields 66
Sort key 40
Special fields 448
Special GL transaction 381
Standard Carrier Alpha Code 33
Stochastically block 186
Subsequent debit/credit 176
Substitution 78, 137, 475

T
Tables 455
Tax code 352, 356
Tax jurisdiction 162, 372, 374
Tax number 31
Tax procedure 372, 378
Tax type 355
Text ID 61
Three-way match 145
Tolerance group 43
Tolerances 172, 188
Transfer with clearing 411
Two-way match 150

U
Unplanned delivery 183
Use tax 371
User defined layout 11
User roles 434, 436
User-defined fields 450
User-exit 68, 79, 135, 139, 329, 471, 475

V
Validation 68, 79, 137, 475
VAT tax 377

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Index

Vendor address 37, 46

Vendor authorization 440
Vendor clearing 406
Vendor line items 446
Vendor master data 23
Block 65
Change 63
Configure 55
Create 63

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Display 63
Delete 81
Void reason 298

W
Withholding tax 41, 48, 347

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