ACCOUNT RECEIVABLE
MEANING
o SAP FI Accounts Receivable component records and
manages accounting data of all customers. It is also an
integral part of sales management.
o It handles customer invoices, approvals, payments and other
allied activities.
o In Simple words, Accounts receivable refer to the money a
company’s customers owe for goods or services they have
received but not yet paid for.
o For example, when customers purchase products on credit,
the amount owed gets added to the accounts receivable. It’s
an obligation created through a business transaction.
o All postings in Accounts Receivable are also recorded directly
in the General Ledger. Different G/L accounts are updated
depending on the transaction involved (for example,
receivables, down payments, and bills of exchange).
O2C CYCLE
STEP 1 Inquiry: The user inquires about products and services
price. No account entry will be generated.
TCODE – VA11
STEP 2 Quotation for inquiry: Quotation is nothing but the price
given to the user. No accounting entry will be generated.
TCODE VA21
STEP 3 Sales order creation: Sales order can be created with
reference to quotation or without reference to quotation. No
accounting entry will be generated while creation of sales orders.
TCODE VA01
STEP 4 Delivery: Delivery follows the post-goods issue (PGI).
Delivery is the actual fulfilment of goods to the customer's shipping
address. At this stage, an accounting entry will be generated during
the PGI.
Cost of goods sold a/c Dr.
Inventory a/c Cr.
STEP 5 Invoice: At this stage, we send the bill to the customer for
the goods delivered. Its accounting entries will be generated.
Customer a/c Dr.
Sales a/c Cr.
Tax a/c Cr.
STEP 6 Payment from Customer: Lastly Customer will pay the
respective amount. Its accounting entry will be
Bank a/c Dr.
Customer a/c Cr.
Sales:
After inquiry and quotation, creating a sales order in the SAP SD module is
a straightforward process that can be done in a few steps. Sales orders
can be made with or without a quotation reference. In the Create Sales
Order screen, enter the Sold-to Party, Ship-to Party, and other relevant
details for the order. For creation of sales order, we use VA01 Transaction
code.
Fig 3. Sales Document
Post Goods Issue:
The Post Goods Issue step is completed when the warehouse has issued
the goods to the customer and the billing documents have been
generated. This step is important because it triggers the creation of the
billing documents, such as the invoice or credit memo, and helps to
ensure that the customer pays for the goods received. By completing this
step, the customer can be billed for the goods they have received and the
sale is documented.
Delivery:
The delivery step in SAP SD OTC process is an important part of the
overall order management process. It is the step in which the ordered
goods and services are physically delivered to the customer. The order
processing, picking, packing, and loading activities are all crucial parts of
this process and must be done correctly in order to ensure that the
customer receives their goods in the expected condition. For delivery we
use VL01N as a Transaction code.
Fig 4. Delivery
Billing:
Billing is an important step in the OTC process, which involves creating an
invoice for the customer and ensuring that it is paid. Once the payment is
received, the invoice is marked as paid and the billing process is
completed. For billing we use VF01 as a Transaction code.