In the digital economy, there is a rush of payment methods. Electronic payments, credit card processing, PayPal, Apple Pay and Google Pay are some of the payment methods being used. SAP can be configured to work with these payment methods. Once the transactions flow in, it is easy to reconcile the settlement for easy accounting.
In this article, we can see the accounting differences between a normal order (Cash order) and credit card order in SAP. The following points will be discussed in this article.
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- Non-credit card order creation & accounting entries
- Configurations for a credit card order
- Credit card orders accounting entries
Non-credit card order Creation & accounting entries
Let us look at how a normal sales order can be created and the accounting entries which are posted once the respective invoice is released to accounting.
- Goto VA01, enter order details and save it.
- Once invoice is created for order navigate to accounting documents (Which is shown in below screenshot)
- See the accounting document flow. In normal order involves the following.In the document, we can see the three entries against the order which involves the following.
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- Customer receivable account: In this order total amount of entry posted. In our example, $2090.75 is posted to customer 1050.
- Sales: In this actual revenue of the order entry posted. In our example, $1818.04 is posted to G/L account 800000.
- Tax: In these actual taxes of order posted. In our example, $272.71 is posted to output tax G/L account 175000.
Once the customer makes the payment against the order, the customer receivable account is cleared and sales revenue account (in this case domestic) is posted to.
Once the incoming payment is posted, in the document flow of the order and we can see the invoice is cleared.
Video demonstration
The video demonstrates accounting differences between Normal order and Credit card orders
Configurations for a credit card order
Having seen the normal sales order, let us look at how the credit card order behave. But first, let us look at the configuration required for making it to work.
SAP IMG Reference -> Sales and Distribution -> Billing -> Payment Cards (which is shown in below screenshot)
- Maintain the card types
- SAP supports multiple card types like VISA, MasterCard, AMEX and others. These card types should be maintained and SAP providing some standard function modules for card checking ( shown in screenshot below).
- Determine card categories and assign the cards to respected categories, Assign the card to a respected category. In our example, we have only two types of cards.
- Assign the payment card to a Sales document type
- Based on the business requirement we have multiple document types. We need to assign which document types are allowed for credit card payments. In our example we are using the ZA order type and which is shown in below screenshot
- Assign the G/L account.
- To receive the credit card authorization amount it should be assigned to a respected account. Based on the card types we can maintain the different receivable accounts. Which is shown in the below screenshot.
- Maintain the Merchant Id. This is usually provided by your payment gateway provider.
- We are using the different card types and having different merchants so we need to maintain the merchant id’s in SAP which is shown in the below screenshot
- Assign merchant ids to the respected receivable accounts. This is shown in below screenshot.
Credit card orders accounting entries within SAP
- Once the configuration is completed, we can place the orders using a credit card.
- Goto VA01 and Enter all the order details and navigates to Payment Cards tab and enter details like card number, valid to date and CVV. This is shown in the below screenshot.
- Once we save the order, it will do the authorization based on the configuration and stores the response back in the order. Which we can see in the below screenshot. We are using the tokenized card number as it is sensitive data. If you are new the credit card processing within SAP, read this article which explains SAP credit card processing in a step by step manner.
- Once Invoice is created for order navigate to accounting documents. See the accounting document flow which is shown in below screenshot
- A credit card order involves the following
- Customer – Who has purchased goods or services
- Merchant – Who provides goods or services
- Clearinghouse – Service provider’s bank or any third party service bank
- In the accounting document, we can see the five entries against the order which involves the following
- Customer receivable account: In this order total amount of entry posted. In our example, $3136.12 is posted to customer 1050.
- Sales: In this actual revenue of the order entry posted. In our example, $2727.06 is posted to 800000
- Tax: In these actual taxes of order posted. In our example, $409.06 is posted to 175000
- Customer receivable account: In this entry payment is made against the order and posted to the customer. In our example, $3136.12 is cleared.
- Credit card receivable account: In this order total amount of entry posted. In our example, $3136.12 is posted to the credit card account 146500.
Below is the document flow of the order and we can see the accounting document is cleared.
We sincerely hope that this was useful and any comment of feedback will be very helpful.
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