Hello SAP Finance Folks,

Hope everything is going well and that everyone is safe. As we begin to recover from the COVID-19 pandemic and resume our regular lives, I thought it could be helpful to share a feature of SAP Financials that many of us may not be aware of.

A necessary step in the month-end closing process is the automatic clearing of client open items. Simply enough, an accountant manually reconciles customer receipts with bills using F-32 or another clearing T code. When the volume of receipts and invoices is very great, this might turn into a tedious and time-consuming task.

To give an example from previous employers where I worked, clearing more than 100,000 receipt papers that came from multiple sources, such as direct booking in SAP, uploading of receipts, and client payments made through KIOSK, took a significant amount of time. It was a difficult task that took 3–4 man days to finish. We were forced to rely on bespoke automatic clearing, which groups several grouping criteria and the FIFO approach to clear customer invoices and receipts. It is crucial to remember that prompt clearing of open customer accounts is crucial, especially when it comes to FINT (interest calculation on open A/R items).

F.13 is SAP’s basic option for automatic clearing, and it allows for the clearing of open items for customers, vendors, and GL, but it has some restrictions.

Limitations of F.13:

  1. It does not allow clearing based on FIFO method i-e oldest invoices should be considered first for the clearing
  2. It does not allow partial clearing of the customer receipts against invoices e.g., Invoice value is 1000 USD and payment received is 650 USD, F.13 does not clear such receipts.
  3. F.13 is not exclusively for the customer clearing as it can be used for the supplier/GL clearing as well.

Given the above limitations in standard automatic clearing program, most of the companies have to rely on the custom programs to do the automatic clearing of customer receivables and their receipts which takes lots of efforts and time.

SAP has offered an automatic clearing program J3RCALD for customers which is a country specific functionality. With very little customization SAP consultants can enable J3RCALD execution.

J3RCALD can be found in below SAP Menu path.

J3RCALD SAP Menu Path

This program has multitude of functions which can help companies perform automatic clearing of receivables against customer receipts.

What does J3RCALD offer?
  1. It offers First in first (FIFO) out based clearing of invoices against receipts. This means that invoice will oldest posting date will be cleared first against the receipt document. This feature will be explained in more details in the later part of this blog.
  2. J3RCALD program allows partial clearing of open items. A customer containing one invoice valuing 1000 USD and also a receipt of 700 USD. J3RCALD program will do the clearing for this customer and generate residual item line in customer ledger for remaining 300 USD.
  3. J3RCALD program offers a compact interface which is exclusively for customers and selection of customer open items is possible based on key date selection.
  4. Invoices of customers can be selected for a given range of posting/document date and currency selection is mandatory.
  5. Payments/collection from customer can be filtered by providing input dates for posting/document date.
  6. J3RCALD program also offers various ways of generating clearing document by letting you choose from various option like one invoice and one payment , multiple invoices and multiple payments (one clearing document will be generated of all) etc.
  7. You can also choose to clear open items which contains different control accounts using different GL Accounts only option
Solution Walkthrough:

Solution walkthrough includes configuration overview and detailed explanation of J3RCALD execution.

Configuration:

To run this software, as I already indicated, very little setting is required. To configure the additional clearing rule in OB74, the following setup is necessary as a preliminary step. To aggregate open customer goods, I’ve utilised VERTN (Contract number). To categorise customer open items, many businesses employ the ZUONR assignment number field. As needed, additional clearing rules can be inserted.

OB74 Additional Clearing Rules

There is one more configuration which must be done to define sorting rules for the clearing of customer open items. As per SAP Note 2471260, settings need to be done in O7F6 for Account type D. The sort fields must contain below field in any order:

BUDAT (Posting date)

BLDAT (Document date)

BUZEI (Document item)

BELNR (Document number)

You can navigate as shown below to add above fields

O7F6 Sorting Rules IMG Path

O7F6 Configuration

In above screenshot it can be seen that sorting fields as required by SAP have been added.

Important Note:

Please take note that the Invoice and Payment that are anticipated to be cleared should have the identical values in the fields kept in OB74 in order for clearing to occur, as per the aforementioned settings in OB74. My postings for client invoices and receipts in the example to follow are based on the Contract number field BSEG-VERTN.

We’ll use a real-world customer as our illustration. Two contracts have been created for this customer, and invoicing has been completed for each. Looking at the snapshot below, we can see that this client has two contracts, 11000002 and 1100003, both of which have uploaded invoices and receipts.

FBL5N Overview

We will analyze open items of contract 11000002 as under

FBL5N Open Items Explained

J3RCALD Program:

Below screenshot contains J3RCALD input parameters which have been explained in detail.

J3RCALD Selection Screen

Second part of J3RCALD selection screen is explained as under

J3RCALD Second Section

J3RCALD Output:

By choosing Invoice number 7100000012, the system will now carry out FIFO-based clearing of Receipt 1400000007. Once we are happy with the clearing output, we will execute the programme in Call transaction mode. Initially, we will run the programme in Test Mode.

You can choose to run the call transaction programme as batch input, in which case the system will build a batch that can be processed in SM35. This option will publish the clearing instantly.

J3RCALD Output

Given that 7100000021 was submitted in January 2022 and that the other two invoices were issued after January 2022, it is clear from the screenshot above that J3RCALD chose to display the oldest invoice first. Program execution will now be done in call transaction mode.

J3RCALD Posting Run Selection

The output after clearance posting is complete is shown below. A clearing document was posted that satisfied the FIFO-based criterion of clearing customer open items by clearing the oldest invoice in the customer ledger for the specified contract against the oldest recorded receipt.

J3RCALD Posting Run Output

Partial Clearing:

Now let’s look at an illustration of a partial receipt versus an invoice. The earliest invoice for contract number 11000003 and client 60000001 is 7100000025. Two open payments, 1400000008 and 1400000009, are present. According to posting date criteria, the oldest recorded receipt is 1400000009.

We’ll go with the “One Invoice and One Payment” option. Receipt document number 1400000009 is worth 160,000 SAR.

FBL5N Partial Clearing Open Items Overview

We will now look at the output of J3RCALD in test mode.

J3RCALD Output -Partial Payment

J3RCALD program has picked up oldest invoice 7100000025 out of three available invoices and oldest receipt. It has also created a 20,000 SAR residual balance.

We will now execute program in call transaction mode.

J3RCALD Posting Output-Partial Clearing

J3RCALD has generated residual balance in customer ledger for 20,000 SAR after clearing invoice and payment.

Clearing Document FB03 View After Partial Clearing

Conclusion:

The J3RCALD software is really helpful and helps speed up the month-end closing procedure in businesses. It can make life easier for company users who spend hours picking up open things from clients.

There’s always space for improvement, so if you see any errors in this information, please let me know:). Your comments on the document will help me make it even better, so please provide them to me.

THANK YOU