Why accrual

The estimating and posting of liabilities owed to third parties who have not been charged to profit-loss accounting must be corrected, and this is one of the main tasks financial accountants have at month’s end. To guarantee that the recorded expenses for that reporting period are accurate.

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

You may automatically compute and submit accruals in General Ledger Accounting using the Purchase Order Accruals application.

The pertinent information is transmitted from the Materials Management component to the accrual engine and is automatically changed from purchase order items to accrual items. Based on the information mentioned above, the system determines the amount that must accumulate for each purchase order item. Additionally, these amounts can be simulated.

Parallel Accounting is supported by the functions in Purchase Order Accruals. This entails that accruals can be computed and posted simultaneously using several ledger groups. You can begin an accrual run, which posts all accruals for the various business transactions.

Technically speaking, the accrual engine is the foundation upon which the purchase order accruals application is created. In purchase order accruals, the goods that need to be accrued are controlled. However, the Accrual Engine is where the procedures for calculating and publishing accruals are controlled.

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.

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

The recurring entries feature in Financial Accounting also allows you to post accruals. The advantages of using the functions in Purchase Order Accruals over recurring entries are as follows:

  • 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).

Into the Accrual Engine is automatically transferred each purchase order. Setting custom options allows you to decide whether and how accruals will be posted, which achieves your goal. Each purchase order results in the creation of an accrual object in the accrual engine.

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:

  • The accrual amounts (or projected costs) that the system suggests for the current fiscal period may be changed at the conclusion of each fiscal period by a reviewer.

 

  • Accrual Engine for POs – Propose Period Amounts under schedule accruals jobs must be used to generate the proposal amounts for the specified fiscal period as a requirement.

 

  • The app “Review Purchase Order Accruals for Cost Accountant” app ID F3552 can be used to do the review. The system’s suggested accrual levels can be manually modified as part of the assessment.

 

  • A transaction called “Approve Periodic Accruals” can be used to approve payments instead of, or in addition to, reviewing them.

 

  • When only review is engaged, the system will post the suggested accrual amounts even if no review was performed. This is how review and approval differ from one another. The only accrual amounts that are shown, though, are those that have received approval if approval is active.

 

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:

For example, you have specified accrual item categories, posting schemas, and account determination. You have also performed the appropriate customizations in Customizing for accrual posting. These options are located in the Customizing for Accrual Management section.

 

Closing Notes:

Under Scope item 2VB in SAP Best Practices Explorer, specifics on the Purchase order Accruals procedure may be found. The version that corresponds to your country should be chosen. We are grateful that you read the POAC document. Since PO Accrual feature is a comprehensive solution, it is impossible to address every situation in a single document, particularly since events that take place throughout the PO’s life cycle have a significant impact on PO Accrual generation. Your comments on the document will help me make it better, therefore I would appreciate them.