Prepayment

What is Prepayment?

Prepayment is a function in SAP ECC 6.0,where in one can pay the invoice that are held,parked or saved as complete before the actual postings are made.Vendor is able to receive the payment just after invoicing.System performs payment of invoice independent of the goods reciepts.

Application

Can be used with vendors ,with whom you have a long term business relationships and the vendor has a good repute.

Transaction for PrepaymentMIR7-Park Incoming InvoiceMIRA-Enter Invoice for Invoice Verification in Background

Process Flow and Status

In Customizing the Prepayment needs to be allowed at company code level IMG-MM-LIV-Incoming Invoices-Prepayment Config. Control of Prepayment at Company Code LevelPrepayment Indicator in Vendor Master RecordG/l Account for transaction PPX

Prerequisites

Customizing RequiredNeed to define a Business Place-CNPJ number.Assign the plant to the Business Place defined.The Co Cd,should be Brazilian to which the plant is assigned.Nota Fiscal Types.-Distinguishes between different business situations and controls filing of documents.Define NF Item TypesDefine NCM Codes and assign to material groups-To determine IPI tax rate`CFOP Codes-To describe the business transaction.Contains information regarding the origin of goods,sales,transfers .etc.

Retention

What is Retention?

Part of an invoice amount that is retained until a defined due date (for example, the end of the warranty period), to ensure the delivery of materials or the performance of services as defined in the contract.

UseIn Purchasing (MM-PUR) you can define a retention for a purchase order. The system transfers this data as default values to Logistics Invoice Verification (MM-IV-LIV).

Prerequisites

In Customizing,For material group specific you can set the due date.Define Tax handlingDefine Control Parameters for Company Code.

For Account Determination,A Special Transaction Key EGXNeed to assign the posting key to EGX-Tcode OBJXAssign a Special G/l Account-Reconcilition Account, to the Vendors Reconciliation Account-Tcode FBKPAlso need to mention the document type for Rentention for MIRO

Process

Create a PO In PO , you can define Retention at Header Level,Item Level and for a Bond (example:Warranty).Also Mention the percent for RetentionCreate a GR MIGOCreate and Invoice MIROHere a system message will be issued.Mention the Retention Due date ,if required

Process ContdOnce an Invoice is simulated, the accounting document will show you the revelant entries.Here the Retention Acc.will be Credited and the Vendor will be paid less the retention amountTwo accounting documents will be created once MIRO is posted.

EDIEDI Electronic Data InterchangeEDI is the process of using computers to exchange business documents between companies. Previously, fax machines or traditional mail was used to exchange documents. Mailing and faxing are still used in business, but EDI is a much quicker way to do the same thing.EDI is the technology which focuses on the delivery of electronic communication in businesses

Advantages and DisadvantagesAdvantages and Disadvantages:EDI is used by a huge number of businesses. Over 100,000 businesses have replaced the more traditional methods with EDI. This new system has a number of benefits; cost is one of them. Computer to computer exchange is much less expensive than traditional methods of document exchange. Processing a paper-based order can cost up 70 US dollars (USD), whereas using EDI costs 1 USD or less.

Advantages and Disadvantages

AdvantagesDisadvantagesCost Benefit .Drastic reduction in operating and processing costs and admin costs.Company dealing with their counter parts/parties should have a uniform method all across.Speed. Improves EfficiencyIf not then , the initial costs to get everyone on a common platform might prove to be expensive and also may be unnecessary workload increase.Less chances of human error,as it is completely computer processedStandardised format of data-SimplicityData Security :Data is secured, and less chances of losing data as compared via mail/hand deliveries.Authority oriented data security

Business Results

Faster buy-and-sell cycle-Reduced order lead cycle times.Reduced level of inventoryCan help in implementation of JITThe strategic value comes from the ability to communicate business data, accurately and quickly so it can be acted upon, not from the ability to support all of these costly file formats, standards and custom configurations. It is the business data, not the EDI message that is critical.

Business Process for EDI

Components of EDITrading Partners: Trading partners are the parties between whom the business and exchange of data related to business takes place.Business Documents: Business Documents are legal documents that defines the transaction between the business partners.The trading partners come under a legal obligation and need to follow the same.the documents follow ISO standards for formats.Examples:RFQs,Pos,Product Catalogs etc.

Language:X12 and EDIFACT help to read and format the information content of the messages.EDIFACT-(EDI for Administration ,Commerce and Transport)New standards made with X12 as the basis.The main objective of it was to meet the requirements of a global economy.

Software Tools called translators help the trading partners to communicate in a standard language.Application programs coupled with Internet help as a transmitting medium. EDI Messages: Are standardized formats of business documents, which allow a computer system to process, independent of the application used.

Inbound ProcessEDI Transmission Received

EDI Document is converted into IDoc(Carried out @ EDI sub-system level)IDoc is transferred to SAP(The IDoc is read by the system ,and one more Idoc is created for further processing)Application Document is createdApplication Document can be viewed

Outbound Process

Application Document is created

IDOC is generatedIDOC is transferred from SAP to Operating SystemIDOC is converted into EDI standards EDI document is transmitted to the business partnerThe Edi Subsystem report status to SAP

Evaluated Receipt Settlement(ERS)

What is ERS

SAP system will generate invoices for the selected vendorsInvoices are credit memos provided to vendors.Vendor is informed about the settlement by a message

Applicable in

Normal Procurement CycleVendor ConsignmentInvoicing PlansPlanned Delivery Costs

Advantages

Ordering Transaction are completed more quicklyEntry Errors are avoidedQuantity and Price Variances do not occur in ERS Reason: In ERS, the GR is posted with reference to a PO,so the amount = price * quantity received.

Prerequisites

Areas Required Prerequisites

Normal ProcurementIn Vendor Master Record,ERS indicator activated ,Terms of PaymentGR-Based IV.In PO,Payment Condition Key in Header DataTax Code In Purchase Info Record,No ERS should not be activated.Message Determination,In IMG-MM-LIV-Message Determination Vendor ConsignmentAccount Determination for Transaction KONMessage DeterminationMM-LIV-Message DeterminationPurchase Info Record Consignment Type, for price and tax Code.

Prerequisites .contd.

Areas Required Prerequisites

Invoicing PlansMessage DeterminationIMG-MM-LIV-Message Determination.No GR, Non Valuated GR. Planned Delivery CostsCan have different Freight Vendor,ERS not to be activated for this vendor.

Nota Fiscal

What is Nota Fiscal?

It is a term specific to Brazils taxation policies.It represents a legal document.In Brazil,taxes are levied on the goods movement and not on the the sales ,as in the other countries.Nota fiscal accompanies each delivery of goods.Also serves as a financial document,because customers make payment by referring to the Nota Fiscal

Image of Nota

Uses

Created during LIVEnter a goods movementsCreate a Sales order in Billing

A nota fiscal can be prepared manually by using a Nota Writer in the system

This is required for goods ,whose entries are not necessary to be entered in Invoices/Billing.

Only LIV supports , Nota Fiscal Update

A legal document that accompanies all goods deliveries in Brazil. It serves as the delivery note and as the invoice, against which the customer makes payment. In addition, it includes all tax-related information, which is later required for financial reporting to the tax authorities.

Customizing RequiredNeed to define a Business Place-CNPJ number.Assign the plant to the Business Place defined.The Co Cd,should be Brazilian to which the plant is assigned.Nota Fiscal Types.-Distinguishes between different business situations and controls filing of documents.Define NF Item TypesDefine NCM Codes and assign to material groups-To determine IPI tax rate`CFOP Codes-To describe the business transaction.Contains information regarding the origin of goods,sales,transfers .etc.