Recently, I was asked on two occasions not to split specific line items where standard document splitting was configured. The items that the business did not want to split were tax at the time of vendor invoice and bank at the time of payment. For the tax line item, the client explained that tax is a corporate responsibility, and for this reason the tax line should not split, but be assigned to a corporate profit center. Similarly, banking was also considered a corporate responsibility, and for this reason, the cash or bank line items needed to be assigned to the corporate profit center.

The ability to prevent certain line items from splitting has been available since SAP ERP Central Component (SAP ECC) 6.0. I will show you how to set up this functionality in detail using the vendor invoice demo in the example of the tax line item scenario that I just described. I then make a payment for the invoice to demonstrate the corporate profit center assignment on the bank accounting line. I start with an overview of the standard document splitting configuration, which is already well documented, and then show what to change to prevent some items from splitting. After I show you the required changes, I execute the same transaction again so that you can see the differences.

Standard Document Splitting

Figure 1 shows a vendor invoice entry view, and Figure 2 shows the result of standard document splitting configuration. The trade payable and tax line items are split. The business wanted to split the payables, but prevent the split for the tax line item. For a tax line item, the business needed to post to the corporate profit center rather than derive the profit center from the offsetting line.

Figure 1

Entry view of a vendor invoice

Figure 2

General Ledger view of a vendor invoice

Configuration Steps

Next, I modify a part of the document splitting configuration and configure FAGL3KEH to accomplish the business requirement of not splitting the tax line item (GL account 154001).

Step 1. Classify GL accounts for document splitting. Based on the standard settings for document splitting configuration, tax accounts that require splitting are assigned to item category 05100 - Taxes on Sales/Purchases (Figure 3). For any automatically generated tax line items, the system automatically determines 05100 as the item category based on the setting in the internal table T8G16.

Figure 3

Classify GL accounts for document splitting (standard configuration)

For tax line items that should not be split, follow menu path IMG > Financial Accounting (New) > General Ledger Accounting (New) > Business Transactions > Document Splitting > Classify G/L Accounts for Document Splitting. The tax account must be assigned to item category 01000 - Balance Sheet Account. You also must check the Overrd. (Override) check box (Figure 4).

Figure 4

Classify GL accounts for document splitting (modified configuration)

Step 2. Configure transaction FAGL3KEH. Execute transaction FAGL3KEH. The system prompts you to enter the company code for which the configuration has to be performed (Figure 5). You then see the screen General Ledger: Default Profit Center. Enter the General Ledger account and the corresponding default profit center for the company code (Figure 6).

Figure 5

Enter the company code

Figure 6

FAGL3KEH: Default profit center P000 for the tax account

After you make the aforementioned configuration changes, the system is now configured to meet the business requirement of preventing a split of the identified tax general ledger account. The vendor invoice is posted again to demonstrate the results of the change in configuration. You can see the general ledger view of the vendor invoice document posted in Figure 7. Note that the tax line for general ledger account 154001 is not split, but is assigned to profit center P0000. This profit center was derived based on the FAGL3KEH configuration. The payable line is split into three lines based on three offsetting profit centers.

Figure 7

General ledger view of the document after change in configuration

To review document splitting simulation in expert mode for an already posted document, execute transaction FAGL_MIG_SIM_SPL. In Figure 8 for the line number 6 (the last line) you see that the item category for the tax account is now 01000 and the accounts payable line item 1 uses line item 6 (tax line) as the base.

Figure 8

Document splitting simulation: expert mode

In the preceding section I showed the configuration required to meet the requirements of the corporate profit center assignment on the tax line item, which is our first scenario. Now, I would like to demonstrate the second scenario about the corporate profit center assignment on the bank accounting line item. In this example, the bank accounting line item is created at the time of making vendor payments. According to the standard document splitting configuration, the bank line item is split based on the profit center on the vendor lines for which the payment is being made. Figure 9 shows the general ledger view of the accounting document posted at the time of payment of vendor invoice. It can be seen that the bank line is split into three profit centers, all of which are based on the original invoice for which the payment is being made.

Figure 9

General ledger view of the outgoing payment document (before changes)

To prevent a split on the bank line item and post to a default corporate profit center, make the FAGL3KEH updates shown in Figure 10. Item category assignment to the bank general ledger account will remain 04000- Cash Account. Now let us review the payment document posted after these changes in Figure 11. Here you can see that for bank line item the profit center P000 was derived from the FAGL3KEH configuration.

Figure 10

FAGL3KEH update to default profit center P000 for the bank general ledger account

Figure 11

General ledger display of the payment document (after changes)

Additionally, to balance the document by profit center, line items with the zero balancing account (194500) were created based on the zero balancing configuration.You can extend the FAGL3KEH configuration to meet other similar requirements. You might have to review line item category assignments to the relevant general ledger account.

Manish Dharnidharka

Manish Dharnidharka has an MBA in finance and information systems and more than 16 years of experience in financial and management accounting. For the last 12 years, he has been working on SAP systems and has led several implementations in FI and CO, including New General Ledger Migrations and implementation. He is currently a Director at PwC.

 

 

You may contact the author at manish.s.dharnidharka@us.pwc.com.

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