The semantics in the document splitting process
Blogs on Document Splitting
In my series of blogs on document splitting, I intend to explain and elaborate the concepts behind Document Splitting and highlight using examples how document splitting can be achieved for various complex business processes. I use Profit Centre as a “scenario” to explain the functionalities; however all processes that apply to Profit Centre also apply to the other scenarios (Segment, Business Area).
To identify the series of blog, I have categorised the blogs under SAP > Document Splitting. If you have questions/ comments/ suggestions, please send me your comments in the form below. Sharing your questions and experience using comment box below will help other readers to gain additional knowledge involved in this functionality.
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The Document Splitting process in newGL in SAP uses a conundrum of terms that sound synonymous to terms already used in other tables in SAP. It is important to understand these terms and what they mean within the overall context of document splitting.
Item category classifies the G/L accounts for Document Splitting. In the configuration of Document Splitting, each G/L account or a group of G/L accounts are assigned to an Item Category. With this assignment, SAP derives the Item Category for each financial posting.
The following is a list of pre-defined item categories – you cannot define custom item categories.
|01000||Balance Sheet Account|
|01001||Zero balance posting (free balancing units)|
|01100||Company code clearing|
|01300||Cash discount clearing|
|02100||Customer special general ledger transaction|
|03100||Vendor special general ledger transaction|
|05100||Tax on sales and purchases|
|40100||Cash discount (expenses/revenue/loss)|
|40200||Exchange Rate Difference|
|80000||Customer-specific item category|
You must assign the following accounts in Customizing to the item categories:
- Balance sheet accounts — item category Balance Sheet Account (01000)
- Bank accounts (cash fund) — item category Cash Account (04000)
- Expense accounts — item category Expense (20000)
- Revenue accounts — item category Expense (30000)
The assignment of all other accounts is predefined by the system in table Allocation: Internal Key – Item Category (SAP) (T8G16). You can override the assignment of these accounts (for example, to assign the special G/L accounts for customers or vendors to the detailed item categories 02100 or 03100). To do this, use the Override Internal Item Category Derivation indicator.
A Business Transaction describes the structure of a business process for each document type. A Business Transaction groups similar business processes. In conjunction with Business Transaction Variant, it will determine the splitting rule for that business process.
SAP delivers 10 Business Transactions. You are not allowed to create your own Business Transaction. Below is an extract from SAP documentation.
|Business Transaction||Description||Business Process|
|0400||Bank Account Statement||
|0500||Advance tax return (regular tax burden)||
|0600||Goods receipt for purchase orders||
|1010||Clearing transactions (account maintenance)||
|0100||Transfer Posting from P&L Account to B/S Account||
Business Transaction Variant
SAP Financial postings derive Item Category for each individual line item. Business Transaction Variant in conjunction with Business Transaction restricts the item categories that can be posted in a business process. The system performs a check against Item Category to see if posting against the Item Category is permitted by the splitting rules defined by Business Transaction and Business Transaction Variant. If it is not permitted, then the system will fail that posting.
An example of SAP delivered Business Transaction variant rules for Vendor Posting (Business Transaction 0300) is as below. In the cells where the entry is blank, SAP allows you to forbid or require or single use the item category in this business transaction. If you decide to change the SAP delivered rules, you should copy ALL SAP delivered rules and then modify the rules to suit your business requirements.
|Item Category||Item Category Description||Forbidden to use in this Bus Tran||Required in this Bus Tran||Only one use in this Bus Tran|
|01000||Balance Sheet Account||Cannot forbid|
|01100||Company Code Clearing||Cannot forbid|
|01300||Cash Discount Clearing||Cannot forbid|
|03100||Vendor: Special GL Transaction|
|05100||Taxes in Sales/ Purchases||Cannot forbid|
|05200||Withholding Tax||Cannot forbid|
|40200||Exchange Rate Difference|
|80000||Customer-specific Item Category|
Document Splitting Method
Document Splitting Method is assigned to the client-level activation of Document Splitting. In conjunction with Business Transaction and Business Transaction Variant, it determines the Document Splitting rule.
Document Splitting Method, by itself, does not contain any rules or assignments. Standard SAP Document Splitting Method is 0000000012. If you want to customise the SAP delivered pre-configured rules, it is suggested you copy the SAP delivered method to a custom Method (example Z000000012 as shown below).
Document Splitting Rule
Document Splitting Rule defines which item categories the system splits and from which item categories the system derives the account assignments (base categories) for the Document Splitting. Document Splitting rules are defined as a combination of Document Splitting Method, Business Transaction and Business Transaction Variant. Hence, different rules can be defined for each combination.
SAP help documentation states:
“The system processes the document splitting rules as follows:
- The list of item categories to be processed from bottom to top
- The list of basis item categories for the current item category to be processed from bottom to top
As soon as the system can determine the account assignments for an item category to be processed from one of the basis item categories, it continues with the next item category to be processed until all of the item categories to be processed have been processed.”
Let us see how the Vendor Invoice Document Splitting rule is defined in SAP delivered configuration.
The Splitting Rule is defined as a combination of:
- Splitting Method Z000000012 that was activated for the client
- SAP delivered Business Transaction 0300 and
- Business Transaction Variant 0001 which defined the item categories that can be posted against this combination
In the next step on the navigation, you can define the Item Categories to be edited:
All postings to Item Category 03000 Vendor can be split using certain pre-defined base item categories. SAP delivered rules of Base Item Categories for Vendor Item Category are as shown below.
For a combination of Splitting Method Z000000012, Business Transaction 0300 (Vendor Invoice Transaction) and Business Transaction Variant 0001, all Vendor line items (Item Category 03000) should be split by the offsetting Revenue line items (Item category 30000). If there is no line item posting for Item Category 30000, then the system will use Item Category 20000 (Expense) as the base to split the Vendor line, and so on from bottom to top.
Zero-balancing or Self-balancing
We have looked at this in a previous blog. We will understand self balancing with the below illustrated example. Without the clearing posting lines, the Profit Centre would have a balance at the end of the posting. With the clearing line, the document is now balanced by Profit Centre. I have activated population of partner Profit Centre as well. Hence, Profit Centre Manager for Profit Centre 1200 also knows that he/ she owes Profit Centre 1000 $600. Similarly, Profit Centre Manager for Profit Centre 1000 knows that he is owed $600 by Profit Centre 1200 and $400 by Profit Centre 1300.
Though the Document Splitting processes uses many terms that are synonymous, it is important to understand what each term means and its importance in driving the process of splitting the financial document.
I hope this blog has helped you understand the configuration behind document splitting. Please do leave your comments below whether this article was helpful; and whether you have any suggestions/ comments; or if you would like to share your experience with document splitting.
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View my presentation on Slideshare
Index of my blogs on Document Splitting in new GL in SAP ECC
Rajesh has implemented new GL and Document Splitting for several customers. Rajesh has 12 years experience implementing SAP / IT / BPM Finance solutions for several customers globally; he also has 7 years experience working in the business in Finance and Accounting functions. His business process knowledge combined with his IT expertise enables him to provide his customers with best-of-breed advice on business process / IT implementations.