SAP New GL #10 Document Splitting in Cross company code vendor payment Overview

In this document , I explore the effect of Document splitting on cross company code vendor payment (with the same currency). When a vendor payment is made across company codes (eg. group bank account from a company code pays all vendors across it group company codes), multiple documents are generated each for every company code posted to. All the line items in both documents are generally balance sheet accounts; hence, identifying a base item category to split could be difficult. However, SAP pre-configured document splitting rules perform the split in a logical way. It is a good idea to read my previous document on cross-company vendor invoice split before you read this document.

The configuration for document splitting characteristics for General Ledger for this document is as below. Financial Accounting (New) > General Ledger Accounting (New) > Business Transactions > Document Splitting > Define Document Splitting Characteristics for General Ledger

What am I demonstrating? In this document, I intend to demonstrate the impact of document splitting process on cross company code payment. Initially, I will make a cross company code payment against the background of SAP delivered document splitting configuration rules. The payment document is split based on the split in the previous transaction (vendor invoice). We will analyse what pre-configured rules caused the document to split. Then, I will demonstrate how the document splitting can be manipulated using Constants in SAP Extended Document splitting. Cross company code payment of vendor invoice I processed a bank payment in a company code (#V001) against a vendor (Vendor # 75003) that had 1 invoice outstanding in a different company code (#V005). I used SAP delivered pre-configured document splitting rules to achieve this. Profit Centres 1000, 1300, and 5001 are assigned to company code V001 and company code V005. Inter company code Vendor (IV_V001) and Customer (I_V005) accounts have been configured. The FI cross company document is as below.

Vendor Payment using pre-configured SAP newGL

The FI document is split as below. In company code V005, the profit centre against Vendor line item is derived from the preceding document (Vendor Invoice document). Hence, the vendor lines are split between 2 profit centres. The offsetting Intercompany Payable line is split using Vendor line as the base.

The FI document in company code V001 is as below. The Intercompany Receivable is split based on the Intercompany Payable in company code V005. That split is used as the basis of split in the bank account line item.

We will see how this document split was achieved using SAP pre-configured rules.
Use pre-configured document splitting rules to split a cross company code payment

SAP ECC is delivered with pre-configured splitting rule for cross company payments. Let us understand the components of the splitting rule that perform the split during the posting. I will take the example of a cross company code vendor payment Business Transaction 1000 Variant 0001 (where the vendor payment is made from a different company code to where the liability resides). In the document splitting rule configuration, the leading item category for cross company posting is 04000 (Cash). Configuration can be done in IMG Path Financial Accounting (New) > General Ledger Accounting (New) > Business Transactions > Document Splitting > Extended Document Splitting > Define Document Splitting Rule.

This (leading) item category is marked as required in the Business Transaction configuration. That ensures that the leading item category always exists in a cross company posting. Configuration can be done in IMG Path Financial Accounting (New) > General Ledger Accounting (New) > Business Transactions > Document Splitting > Extended Document Splitting > Define Business Transaction Variants.

In the document splitting rule, you configure the item categories under Vendor payment. Item Category 01100 CC <> CC of leading item (Dependence on leading item = 2): This rule influences the line items not belonging to the company code of the cash line item. In the previous example, the company code of the leading (cash) line item (GL 114000) is V001. Hence, the line item from the other company code (V005) will be processed for document splitting first. Financial Accounting (New) > General Ledger Accounting (New) > Business Transactions > Document Splitting > Extended Document Splitting > Define Document Splitting Rule.

Item Category 01100 CC = CC of leading item (Dependence on leading item = 1): This rule influences the line items belonging to the company code of the cash line item. The line item from the partner company code (V005) will be processed first. The profit centre (1300, 5001) will be carried over from the Intercompany line item in the partner company code (CC V005). The document splitting will proceed based on that. Financial Accounting (New) > General Ledger Accounting (New) > Business Transactions > Document Splitting > Extended Document Splitting > Define Document Splitting Rule.

As you can see, the SAP delivered pre-configured Document Splitting rules perform the document splitting for cross company vendor payment. To enable this configuration to work, in the above example, the profit centre 1300 (owned by V001) and 5001 (owned by V005) should be assigned to both V001 and V005. This is because SAP uses the same profit centre in the offsetting posting in the leading item company code document. Given this requirement, the profit centre design should ensure that all possible profit centres should be assigned to all company codes. As a general rule, I prefer to assign any given profit centre to a single company code (the reasoning of this is not part of this document). SAP delivered pre-configured rules pose a problem to this design. Another limitation with the SAP delivered rules is that the bank account is split across profit centres. Typically, bank account is owned centrally by treasury and it does not make much sense to split these across profit centres. You can get around this requirement by configuring a constant profit centre for all cross company code postings.
Use SAP Extended Document splitting to split cross company code document

SAP pre-configured rules for document splitting implicitly requires you to assign profit centre to all company codes. You can get around this requirement by defining a constant profit centre to which all cross company code split documents will post. For a detailed explanation of constants, read Use Constants for Non-assigned Processes in SAP new GL. The limitation is that you can define only one constant per controlling area. You cannot define, for example, a separate constant profit centre for cross company payment transaction or for bank accounts or even by company code. For our demonstration, we will define a constant Profit Centre 1000. This profit centre is assigned to company code V001 and V005. This obviates the requirement to assign all possible profit centres to all company codes. This constant rule is assigned to document splitting rule with dependency on leading item = 1 (CC = CC of leading item) and =2 (CC <> CC of leading item). The profit centre 1300 is assigned to company code V001 only and profit centre 5001 is assigned to company code V005 only. Financial Accounting (New) > General Ledger Accounting (New) > Business Transactions > Document Splitting > Extended Document Splitting > Define Document Splitting Rule.

I processed a vendor invoice document using transaction FB60 with the configured Extended Document Splitting rule. The profit centre derived against Vendor line item is 1000 instead of 1300.

When this Invoice was paid, the payment cross-company document was generated as below.

The General Ledger split document in company code V005 is as below. The vendor line item split is carried over from the previous (vendor invoice) document. The Intercompany Receivable is now assigned a constant profit centre 1000 because of the configured document splitting rule.

The profit centre 1000 from the Inter company payable line in V005 is carried over to the Inter company receivable line in V001. The profit centre derived on the bank account line is also 1000. With the configured splitting rule, all lines of the bank account remain in one profit centre 1000.

If you decide to use this approach, I recommend configuring both Vendor Invoice Business Transaction 0300 and Vendor Payment Business Transaction 1000 for constant profit centre. This will ensure consistency in derivation of profit centre on the vendor invoice document and subsequent documents like vendor payment. Change the Processing category on both item categories 01100 (CC=CC of leading item & CC <> CC of leading item). Conclusion SAP delivered pre-configured document splitting rule performs a document split on vendor payment document. The limitation is that it splits the bank account and it assumes all profit centres and assigned to all company codes. Configuring a constant profit centre in the document splitting rule for vendor invoice and vendor payments delivers some added benefits over pre-configured document splitting rule. The option you choose should strongly depend on the requirements of business reporting.