Accounts Payable Transaction Processing

1. Accounts Payable Transaction Processing AP Transaction Processing

2. Course Objectives • Describe new SAP Accounts Payable terms (pg 4-9) • Give an overview of the AP process and invoice processing (pg 10-32) • Enter an incoming invoice – MIRO (pg 35-36) • Display invoice documents - MIR4/MIR6 (pg 37) • Park incoming invoices/credit memos – FV60/FV65 (pg 38) • Display parked documents/changes – FBV3/FBV5 (pg 39) AP Transaction Processing

3. Course Overview Accounts Payable Transaction Processing Overview Enter an incoming invoice Display an invoice document View a list of invoice documents Park incoming invoices Park incoming credit memos Display parked documents AP Transaction Processing

4. New Terms • Vendor Master Record – contains information needed to service a vendor account and is divided into general, company code, and purchasing organization data. • Park a document – You can use document parking to enter and store (park) incomplete documents in the SAP System without carrying out extensive entry checks. Parked documents can be completed, checked, and then posted at a later date. When documents are parked, data is not updated. • Save (Park) as completed – After entering the document you can Save as completed. SAP will make sure all of the appropriate fields are filled in and that the document can be posted but the document will still be parked. The difference between Parking only and Save as complete is Save as complete will hit funds management(only posting will update the G/L). AP Transaction Processing

5. New Terms • Header - Contains data that applies to the whole document such as vendor, document date, document type, document number, company code, and posting date. • Line Item - Contains the individual entries or postings (either debit or credit) made to each account. It includes an amount, an account number, the assignment to debits or credits and additional information depending on the transaction to be posted. • Posting Key - A two-digit numeric key that determines the way line items are posted. This key determines several factors including the: • Account type • Type of posting (debit or credit) AP Transaction Processing

6. New Terms • Goods Receipt - a document that acknowledges the receipt of a material from a supplier. It is another of three documents in the three-way match that must be recognized in order for a vendor to be paid (along with purchase order and vendor’s invoice). • Service Entry Sheet - a document that acknowledges the receipt of a service from a supplier. It is another of three documents in the three-way match that must be recognized in order for a vendor to be paid (along with purchase order and vendor’s invoice). AP Transaction Processing

7. New Terms • Purchase Order - a request from the purchasing organization to a vendor to provide a specified quantity of goods or services within a specified time. It provides the vendor with a reference document to link to the shipping (goods receipt) and invoicing (invoice verification) processes. • Blanket Purchase Order - This type of purchase order does NOT require a goods receipt/service entry sheet against it. It is normally issued for a specified value to be used against incoming invoices for a period of time. Invoices processed against a blanket purchase order will require a signature from the department to authorize payment. AP Transaction Processing

8. New Terms • Invoice - A document (bill) prepared by the seller for services or to inform the buyer of the charge for product purchased and shipped by the seller. It includes content, price and quantity of goods. • Invoice Verification (3-way Match) - Invoice verification is the entry and checking of incoming vendor invoices. Vendor invoices are compared with the purchase order and the goods receipt, and are checked for content, price, and quantity. AP Transaction Processing

9. AP Process Changes: • The Vendor master will be centrally maintained by the auditors office. • Employee advances and reimbursements will defaultto HR address. • Documents will be Parked as complete for non PO processed invoices and posted but blocked for payment for PO processed invoices regardless of where entered. • Invoices will be entered at source and parked as complete or posted with a payment block until the Accounts Payable auditors review for completeness, correctness, and posts or releases payment block to allow payment to be made. AP Transaction Processing

10. General Ledger The “Top” book of financial records FI FI FI CO FI Accounts Payable Manages vendor invoices Manages customer billing Accounts Receivable Asset Accounting Manages fixed assets and depreciation Manages responsibility accounting Controlling Components of FI & CO AP Transaction Processing

11. ASSETS ACCOUNTS RECEIVABLE FUNDS MANAGEMENT CONTROLLING GRANTS MANAGEMENT ACCOUNTS PAYABLE What Goes Where Other Financial Modules HR/Materials Management Modules FI Module PAYROLL PURCHASING INVENTORY MANAGEMENT AP Transaction Processing

12. 2000 1999 1998 What is Master Data? G/L Accounts Customer Master Vendor Master Bank Master Asset Master Cost Centers Internal Orders • Is shared across functional areas • A “Template” for transactional data Master Records AP Transaction Processing

13. Vendor Master Record General data Company code data Purchasing org. data Vendor Name Vendor Address Purchasing data Accounting info. Payment terms AP Transaction Processing

14. Vendor Master Record -G/L reconciliation account -Withholding tax -Reference data -Default data for tax reports Vendor Contact Info Vendor Master Record Accounting Info • Record invoices • Manage payables • Create purchase orders • Manage purchase orders Vendor Address Accounting/Purchasing Process AP Transaction Processing

15. Accounts Payable Cycle(Invoices processed against a PO) 1. Obtain Goods/Services. 2. Enter Invoice Document referencing the PO. 10. Payment generated. 9. Invoice is released and available for payment. 3. 3 way match (invoice verification). Match Fails Successful Match 8. Audit reviews the listing of blocked documents. 4. Document is parked. (Control Point) 5. Parked documents are reviewed with assistance of buyer and requisitioner. 7. Post the invoice document with a payment block to AP Audit for review. (Control Point) 6. Corrections are made to the invoice document or to the purchase order. AP Transaction Processing

16. Process Accounts Payable -Business Process Overview Accounts Payable • The Accounts Payable (A/P) application component records and manages accounting data for all vendors. • It is tightly integrated with the procurement, delivery and processing of vendor invoices. • For PO based billing, the transaction flow of a vendor relationship starts with the purchase requisition and purchase order, followed by goods receipt and subsequent invoice receipt, and ends with the payment of the vendor invoice. AP Transaction Processing

17. Purchase Order Purchase Order Goods Receipt Invoice Receipt Goods Receipt (GR) • 3-way • match: • Purchase order • Goods receipt/ Service Entry Sheet • Invoice Accounts Payable Invoice Receipt (IR) Payment Process Flow - Invoice Verification ? (Control Point) Invoice Verification process occurs within MIRO. AP Transaction Processing

18. Purchasing Group Purchase Order 2-way Match Invoice Receipt (IR) Purchase Order Invoice Receipt PAYMENT Accounts Payable Invoice Payment: 2-Way Match(For Blanket Purchase Orders) ? Note: All 2-way match invoices require a physical signature on them prior to payment being made. AP Transaction Processing

19. Process Accounts Payable -Business Process Overview Accounts Payable • When the invoice is entered against a vendor sub-ledger account, it has a corresponding impact in the general ledger. It is also matched against both the purchase order and the goods receipt to confirm the quantity and value. • If the invoice is incorrect, it is parked pending resolution of problem. If it matches the expected quantity and amount, it is posted with payment block pending AP Audit review. AP Transaction Processing

20. Process Accounts Payable -Business Process Overview Accounts Payable • Balance lists, journals, balance audit trails, and other internal evaluations are available for documenting transactions in A/P. • Business transactions include entries such as general ledger journals, customer invoices, and vendor payments. In A/P, the emphasis is on vendor transactions. Each transaction will create a document with a unique number and will provide a complete audit trail. AP Transaction Processing

21. Definitions Accounts Payable -Business Process Overview Accounts Payable • A document generally consists of a document header and at least two line items. While a document may have multiple line items, it must have a balanced entry. • The document header contains data that identifies a document and applies to the entire document. For example, vendor, document date, document type, document number, company code, posting date, period, etc. AP Transaction Processing

22. Definitions Accounts Payable -Business Process Overview Accounts Payable • The line items generally include an amount, an account number, credit or debit assignment, and additional details specific to the transaction being posted. • There are two types of documents:Original documents – for example, receipts, invoices, checks, bank statements.Processing documents – accounting documents, sample documents, recurring entry documents, which are primarily used to simplify document entry. AP Transaction Processing

23. Document Types A document typerepresents a key that is used to classify accounting documents and distinguishes between business transactions to be posted. The document type is entered in the document header and applies to the whole document. (Customer View) AP Transaction Processing

24. Definitions Document Types Accounts Payable • Document types help manage accounting documents and are located on the header portion of every document. • The document type is used to distinguish between different business transactions and to control document number assignment. • Some transactions will automatically default to a document type. For other transactions, you will be required to enter a document type. AP Transaction Processing

25. Description Doc Type Start Doc # Range End Doc # Range Asset posting AA 0100000000 0199999999 Customer document reversal DA 0700000000 0799999999 Customer credit memo DG 1600000000 1699999999 Customer invoice DR 1800000000 1899999999 Vendor document reversal KA 800000000 899999999 Vendor credit memo KG 1700000000 1799999999 Vendor invoice KR 1900000000 1999999999 Vendor payment (Payment through F-58) KZ 1500000000 1599999999 Invoice - gross RE 5100000000 5199999999 Goods receipt WE 5000000000 5099999999 Recurring Customer Invoice ZI 2100000000 2199999999 Recurring Vendor Invoice ZL 2600000000 2699999999 Payment Posting ZP 2000000000 2099999999 AP/AR Document Types/Ranges AP Transaction Processing

26. Vendor Invoice Information You will enter some invoice data, while other information is copied from the purchase order, purchase order history, and tax configuration. Acme Brick 39 Second St. Fort Worth, TX 76102 ABC Corporation Invoice # 9567 672 Lancaster Ave. Dallas, TX 19010 05/03/04 Concerning your purchase order 45000895 of04/06/04, we delivered the following goods: VGE-raw 1 10,000 pcs. $ 2,500 VGE-sem 1 300 lbs. $ 1,500 _________ $ 4,000 plus 8.75% TAX $ 560 _________ $ 4,560__ Payable within a period of 20 days from date of invoice.2% cash discount for payment within 10 days.Account no. 11223344 Nord Lb (code 300 210 55). AW Vendor Reference(Invoice Number) Document date Purchase order Amount per item Invoice items Material Tax amount Quantities Invoiced amount Unit of measure Tax rate Terms of payment Bank data AP Transaction Processing

27. Invoice Processing • When invoices have been received from a vendor referencing a Purchase Order number, those invoices are to be entered against that Purchase Order. • A 3-way match between the Purchase Order values and quantities and the Goods Receipt quantities is made with the invoice quantities/values. AP Transaction Processing

28. Invoice Processing (cont) • Documents are to be completed (posted) within a reasonable time frame to ensure that the vendor account activity is accurately maintained. • When credit memos are received referencing a Purchase Order, the same 3-way-match procedure is followed. However the match is between the Purchase Order and the quantities/values invoiced to date with those on the credit Memo. AP Transaction Processing

29. Posting an Invoice Invoice (relating to purchase order) When an invoice is posted, an accounting document is created. Appropriate transactions are posted to the general ledger. Post A B XX XX Material Master Record Moving average priceValue Purch. order history Goods receipts Invoices Doc. No. 5105600xxxVendor 100 -GR/IR 100 + The material master record and purchase order history are updated when the invoice is posted. AP Transaction Processing

30. Process to Park & Post Park as Complete for review and FM posting Complete parked document Control Point Post parked documents (individually or in mass) to make available for payment processing and hit the GL Accounting personnel Park incomplete invoice/credit memo Accounts Payable Manager or Auditor Accounting personnel AP Transaction Processing

31. Document Parking • You can use document parking to enter and store (park) incomplete documents in the SAP System without carrying out extensive entry checks. • Parked documents can be completed, checked, and then posted at a later date. Parked documents receive a document number. When documents are parked, data is not updated. AP Transaction Processing

32. Document Parking (cont.) • You can display parked documents in the document journal or in the line item display. • Data in parked documents is deleted when posted. When documents are posted to an account, the system automatically updates the account balance. AP Transaction Processing

33. Document Parking (cont.) • Save (Park) as completed – After entering the document you can Save as completed. SAP will make sure all of the appropriate fields are filled in and that the document can be posted but the document will still be parked. • The difference between Parking only and Save as complete is Save as complete will hit funds management(only posting will update the G/L). • Only when the parked document is posted will a financial document be created. Audit will review and post documents making the document available for payment. AP Transaction Processing

34. Parked Document Transactions You can do the following to Parked documents: Post FBV0 Post (used by AP Audit as anothermethod to Post invoices after review) ZRNAP827 Display FBV3 Display Changes FBV5 AP Transaction Processing

35. Enter Invoice (MIRO) MIRO is used to enter an invoice or credit memo. It is used for invoices with a PO. Select invoice or credit memo. Click here to enter multiple purchase orders. Enter the Purchase Order Number to the right of “Purchase Order/Scheduling Agreement”. AP Transaction Processing

36. Enter Invoice (MIRO) (cont) The indicator will turn green when the document is complete and a balance between the debits and credits is achieved. The Balance field will also show $0.00. Select the line items and individual goods Receipts on the Purchase Order that relate to the invoice items. Information will be entered on the Basic data and Payment tabs. Review the data on the contacts and Note tabs. AP Transaction Processing

37. Display Invoice Document (MIR4) MIR4 may be used to display or change an invoice/credit memo posted in Logistics Invoice Verification. A review of the invoice may be needed to ensure the accuracy of documents or to resolve variances in quantity or price. (MIR6 may be used to list invoice documents.) AP Transaction Processing

38. Park Vendor Invoice (FV60) FV60 is used to Park/Save as complete an incoming invoice. Vendor invoices will normally be entered “Save as complete”. FV60 is used for invoices without a PO. The Park Vendor Invoice screen is divided into 2 sections: Vendor Data - The tabs at the top are for vendor related input. General Ledger Data - The bottom of the screen is for input to G/L accounts. FV65 is similar to FV60, except it is used to park incoming credit memos. AP Transaction Processing

39. Display Parked Document (FBV3) FBV3 may be used to display a parked document. Click on the Document Header button to view fields in the document header. Double-click on a line to display the details for the line item. FBV5 is used to display changes made to a parked document. AP Transaction Processing

40. Process Triggers and Outputs AP Transaction Processing

41. Process Triggers and Outputs (cont.) AP Transaction Processing

42. Summary You should now be able to: • Describe new SAP Accounts Payable terms • Give an overview of the AP process and invoice processing • Describe the following processes: • Enter an incoming invoice • Display an invoice document • View a list of invoice documents • Park incoming invoices • Park incoming credit memos • Display parked documents AP Transaction Processing

43. Accessing Training Materials • All TITAN training materials for Phase II are stored on the Tarrant County website • This website is accessed through your Internet Explorer from any computer that has internet access; you do not have to be on the Tarrant County network. The URL for direct link to the Training Materials website is: http://www.tarrantcounty.com/titan/lib/titan/training/index.asp • Set up this website as a favorite in your web browser for quick future access • Enter the URL above in the address field in your browser • When you reach the website, go to Favorites>Add to Favorites in the Browser menu • A pop-up window will be displayed with a default name for the site. Click OK. • To access this site in the future, just click on the Favorites item in the menu and highlight the name for the website. You will go directly to the website. AP Transaction Processing

44. Accessing Training Materials (cont’d) • Review the instruction page to see how to use the website • Click on the Courseware link at the top of the Instruction page • A Listing of Courses will be displayed • Click on the Course Title to see a general description of the content of the course or • Click on one of the buttons beside the Course Title to go directly to either the Overview, Quick Reference Cards, or Tutorials • These training materials will be available for your use and reference at any time AP Transaction Processing

45. Running Tutorials • An additional learning tool is being provided with the Phase II SAP implementation -- Tutorials • Tutorials are simulations of the SAP system that take you through a transaction step-by-step in a mock SAP environment. • These can be viewed in two ways: • As a movie that takes you through the transaction in a demonstration, or • As an interactive, hands-on practice session that stops on each screen and directs you to make entries in fields or take actions per instructions provided by the wizard and in the bubbles • Tutorials are provided with each course in the Finance and Purchasing training • A list of the tutorials is provided at the end of each course. • Go to the Training Materials website to access and run these tutorials. Detailed instructions are provided on the website Happy Tutoring!! AP Transaction Processing

46. Training Sandbox • An SAP environment (Training Sandbox) where you can practice your skills in a real instance of SAP will be available after June 18 • The sandbox can be accessed through the standard logon process discussed in Lesson 2 of the SAP Basic Navigation course • The only differences are: • Highlight the Training environment on the Logon pad(TRN) • Enter 520 in the Client field • Click logon • Enter the same User Id and Password you are assigned for Production Feel free to practice any of the tasks in the basic navigation course and any of the transactions included in other courses you take. Use the Quick Reference Cards to walk you through the transactions. AP Transaction Processing

47. Additional Help 1 Review the on-line help in SAP Review your training materials and notes. 2 Ask your peers or super user for assistance. 3 AP Transaction Processing

48. Tarrant County Help Problems with running tutorials? • Training Mailbox – titansaptraining@tarrantcounty.com • After utilizing the various methods of help on the previous page, if you still have questions or problems or • If you have problems at any time with accessing SAP, printing, computer or network problems, etc. Contact the Tarrant County IT Help Desk at 817-884-3507 AP Transaction Processing

49. Accounts Payable Transaction Processing • CONGRATULATIONS! You have completed the course review. • Now you are ready to view the SAP Tutorials and use the Quick Reference Cards for the related transactions. • Tutorials for this course include: • Enter an incoming invoice (MIRO) • Park incoming invoices (FV60) AP Transaction Processing