Induction Manual

SAP FI Induction Manual
Induction Manual
FINANCIALS (FI)
Version 1.0
Date: 24/03/2008

SAP FI Induction Manual
DOCUMENT RELEASE NOTICE
Notice No.:
Client: GMR group
Project: GMR SAP Training And Support
Document details:
Name Version No. Description
Induction Manual for SAP
FI Module at GMR SAP
Training and Support
project
1.0 Induction Manual for SAP-FI

The documents or revised pages are subject to document control.
Please keep them up-to-date, using the release notice from the distributor of the document.
These are confidential documents. Unauthorized access or copying is prohibited.

Approved by : Madan,Pramod,Nagesh,Srinivas &Chandra Date: 24 March 2008

Authorized by : Rahul Kamtikar Date: 24 March 2008
Comment [MSOffice1]:

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DOCUMENT REVISION LIST
Client : GMR Group
Project : GMR SAP Training and Support
Document Name : Induction Manual for SAP-FI Module @ GMR Training and support project

Release Notice Reference (for release): 1.0

Rev.
No.
Revision
Date
Revision
Descripti
on
Page
No.
Previous
Page No.
Action
Taken
Addenda/
New Page
Release
Notice Ref.

0 24-March-08 First
Release
- - - - -

Comment [MSOffice2]: Mention the SAP
module for which this induction manual is being
prepared

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Table of Contents
1.BUSINESS INTRODUCTION.5
2.SCOPE OF SAP (FI) AT GMR..6,7
3.SYSTEM LANDSCAPE..8
4.SYSTEM LANDSCAPE PICTORIAL PRESENTATION9
5.FI-ORGANIZATIONAL STRUCTURE.10

6.COMPANY CODE DEFINITION & LOGIC-SECTOR WISE11

7.AIRPORTS

7.1 LOGIC.12

7.2 ARCHITECTURE-CO.CODES12

8.ENERGY

8.1 LOGIC.13

8.2 ARCHITECTURE-CO.CODES13

9. ROADS

9.1 LOGIC..14

9.2 ARCHITECTURE-CO.CODES..14

10. AGRO

10.1 LOGIC.15


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11.INVESTMENT

11.1 LOGIC.17

11.2 ARCHITECTURE-CO.CODES.17

12. SERVICES & EDUCATION

12.1 LOGIC18


13.FOUNDER COMPANIES

13.1 LOGIC..19

13.2 ARCHITECTURE-CO.CODES.19

14.CHART OF ACCOUNTS

14.1 DEFINITION & PURPOSE..20

15. PROFIT CENTER ACCOUNTING SECTORWISE


16.ENERGY

16.1 CONFIGURATION LOGIC..22

16.2 PICTORIAL REPRESENTATION..22

17. ROADS



18. AGRO



19. PROPERTY



20. INVESTMENTS


20.2PICTORIAL REPRESENTATION27

21. AVIATION

21.1 CONFIGURATION LOGIC.28

21.2 PICTORIAL REPRESENTATION.28

22. GMRVF

22.1 CONFIGURATION LOGIC.29

22.2 PICTORIAL REPRESENTATION.29

23. CHART OF DEPRECIATION


23.2 ASSETS - ORGANIZATIONAL ELEMENTS31

24. PATHS FOR ALL THE DOCUMENTATIONS...32,32

25. BUSINESS PROCESS SPECIFIC TO AGRO

25.1 CMS (Cane management System)34,35

25.2 Diesel upload35

26. BUSINESS PROCESS SPECIFIC TO GMRVF

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26.1 BUSINESS REQUIREMENT36

26.2 PROCESS DESCRIPTION..37,38,39,40,41
27. GENERAL LEDGER:

27.1 GENERAL LEDGER POSTING..42,43
27.2 RECURRING ENTRIES..44,45
27.3 MISCELLANEOUS INCOME ACCOUNTING.46
27.4 REVERSAL & RESETTING47
28. STAFF PAYMENTS....48,49,50
29. BANK RECONCILIATION STATEMENTS....51,52,53
30. INTER COMPANY TRANSACTIONS54
31. CARRY FORWD BALANCES OF GL, VEN & CUST.55,56
32. MANUAL OPEN ITEM CLEARING57
33. AUTOMATIC CLEARING58
34. FOREIGN EXCHANGE REVALUATION59,60,61
35.INSURANCE & AMC PAYMENTS.62
36. PERIOD END CLOSING63,64
37. C.CODE GLOBAL PARAMETERES65,66
38. CASH RECEIPTS & PAYMENTS67,68,69
39. TAX
SCENARIOS

39.1 SERVICE TAX..70,75
40. STATUTORY PAYMENTS.76,77,78
41. FRINGE BENEFIT TAX.79
42. TDS80,81,82,83,84,85
43. TCS..86
44. WORK CONTRACT TAX.87,88,89

FROM PAGE 90 TO 128 AP

FROM PAGE 129 TO 148 AR

FROM PAGE 149 TO 176 AA

FROM PAGE 177 TO 179 MM INTEGRATION

FROM PAGE 180 TO 184 PS
INTEGRATION

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1. Business Introduction
GMR Group is a Bangalore headquartered global infrastructure major with interests in the
Airports, Energy, Highways and Urban infrastructure. In addition, the manufacturing sector,
spanning the Agri-business includes Sugar and Ferro alloys. The Group is also actively engaged in
the areas of Education, Health, Hygiene and Sanitation, Empowerment & Livelihoods and
Community-Based Programmes under its Foundation wing, GMR Varalakshmi Foundation.
1.1 Agro Sector
GMR Industires Limited (GIDL), the Agri business division of GMR group, is a distinguished and
rapidly expanding sugar producer in India. GIDLs products include M-30 and S-30 grades of sugar
along with Co-generated power, distillery products such as Ethanol, ENA, Rectified Spirit and Bio-
Fertilizer. Its manufacturing facilities are located at Sankili, in rural Andhra Pradesh and at Haliyal in
Karnataka.
1.2 Energy Sector
GILs Energy business consists of three operating facilities aggregating to 808.5 MW at Mangalore,
Chennai and Vemagiri. Another five projects are under development. GMRs strategy is to create an
attractive portfolio of assets based on a mixture of fuels like Naphtha, Gas, Coal, Hydro etc. They are:
1. GMR Energy Limited, Mangalore
2. GMR Power Corporation Pvt. Ltd. , Chennai
3. Vemagiri Power Generation Limited
4. GMR (Badrinath) Hydro Power Generation Pvt. Ltd
5. GMR Orissa Power Project
6. Talong Power Project
7. Bajoli Power Project
8. Chhattisgarh Power Project
1.3 Roads Sector
The Company is a leader in the Highways business through six projects evenly divided amongst
annuity and toll-based operations. While, the annuity based projects, Tambaram-Tindivanam (93 kms)
and Tuni-Anakapalli (59 kms) are operational it is simultaneously developing 4 other projects
Ambala Chandigarh (35 kms), Jadcherla (46 kms) and Ulundurpet (73 kms) toll based and the
Pochanpalli (86 kms) annuity based project. All the four projects have achieved financial closure on
time.
1.4 Raxa
RAXA is engaged into business of service providing in the area of deploying the security man power.
Currently they are providing the manpower to the GMR group companies.
1.5 Property
Property is engaged into business of infrastructure development, construction, leasing the building
space and furniture. Currently they are providing the manpower to the GMR group companies.

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2.Scope of SAP-FI module at GMR
Below table shows the scope of SAP(FI) implementation across different sectors of GMR group.
C.Code Description Search
terms
ENERGY
2000 GMR Energy Limited GEL
2100 GMR Power Corporation Private Limited GPCPL
2150 Vemagiri Power Generation Limited VPGL
2199 GMR Badirinath Hydro Power Generation Private Limited GBHPL
2250 GMR Mining & Energy Pvt. Ltd. GMEPL
ROADS
3110
GMR Tambaram Tinidivanam Expressways Private
Limited GTTEPL
3120 GMR Tuni Anakapalli Expressways Private Limited GTAEPL
3130 GMR Pochanpalli Expressways Private Limited GPEPL
3210 GMR Ambala Chandigarh Expressways Private Limited GACEPL
3220 GMR Jadcherla Expressways Private Limited GJEPL
3230 GMR Ulundurpet Expressways Private Limited GUEPL
3310 GMR Projects Private Limited GPPL
AGRO
4000 GMR Industries Limited GIDL
PROPERTY
5010 GMR Properties Private Limited GMRPPL
INVESTMENTS/FINANCIAL
6000 GMR Holdings Private Limited GHPL
6100 GMR Infrastructure Limited GIL
6110 GVL Investments Pvt. Ltd. GVLIP
6120 Gateways for India Airports Pvt Ltd GFIAL
6600 GMR Corporate Center Limited GCCL
SHARED SERVICES
8000 Raxa Security Services Private Limited RSSL
8100 GMR Aviation Private Limited GAPL
EDUCATION & CHARITY
8600 GMR Varalakshmi Foundation GMRVF
8700 Varalakshmi Mallikarjuna Rao Charitable Trust VMCT
FOUNDER COMPANIES
INDIVIDUALS

9901 G Mallikarjuna Rao GMR
9902 G Varalakshmi GVL
9903 Srinivas Bommidala BS
9904 B Ramadevi BRD
9905 B Susroni BSR
9906 B Manisantosh BMS

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9907 GBS Raju GBS
9908 G Smitha Raju GS
9909 GM Ritesh RIT
9911 Kiran Kumar Grandhi GKK
9912 G Ragini GR
9913 G M Ruchir RUC
HUFs

9951 G Mallikarjuna Rao HUF GMRH
9952 Srinivas Bommidala HUF BSH
9953 GBS Raju HUF GBSH
9954 Kiran Kumar Grandhi HUF GKKH

3.System landscape scenario
During the start of implementation it had only 100, 200, 220, 300 in development, 400 in quality and
500 in production.
Later on during master data upload , cutover and training to end users, more clients were added.
Below is the picture explaining the system landscape. It should be noted that the transport requests
can created only in 220 and 300 client. It has to be copied to 200 for unit testing by the functional
consultant. Later has to be transported to quality for testing by end users and business process
owners. Based on feedback, finally the transport request has to be transported to production 500 from
development.
For training to the new people joining GMR, training client will be maintained by regular client copy of
production and thus ensuring the real time data will be made available to the end users.
Client 430 was created to test the mock cutover activity prior to go live. This client may not be
available later.
Client 510 was proposed for pre-production for testing and imparting training to end users post go
live. This client may not be available later.

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4.SYSTEM LANDSCAPE PICTORIAL PRESENTATION:

5.FI-Organization Structure

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FI Org. Structure: The below chart gives a overall picture on how the
Organizational Structure of GMR is composed in SAP in terms of Chart of Accounts,
Controlling Area, Chart of Depreciation with Company codes, in the business lines
they are into.

6.Comp.Code Number logic across Sectors:

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7. COMPANY CODE NUMBER LOGIC & ARCHITECTURE-AIRPORTS:

COMPANY CODE NUMBER LOGIC & ARCHITECTURE-ENERGY:
Airports
HIAL
____
DIAL
____
GFIAL
1900

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Energy
Generation

GEL
2000
GPCPL
2100
VPGL
2150
GBHPL
2200
Trans-
mission
Distribution Trading

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9. COMPANY CODE NUMBER LOGIC & ARCHITECTURE-ROADS:

Roads
Annuity
GTTEPL
3110
GTAEPL
3120
GPEPL
3130
Toll
GACEPL
3210
GJEPL
3220
GUEPL
3230
EPC
GPPL
3310

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Agro
GIDL
4000

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COMPANY CODE NUMBER LOGIC & ARCHITECTURE-PROPERTIES:

Property
GMRPPL
5010
DAPL
5020

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11. COMPANY CODE NUMBER LOGIC & ARCHITECTURE-
INVESTMENTS:

Investment
GHPL
6000
GIL
6100
GVL
6110
GCCL
6600

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12. COMPANY CODE NUMBER LOGIC & ARCHITECTURE-SERVICES &
EDUCATION:

Education &
Charitable Foundation
GMRVF
8600
VMCT
8700

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13. COMPANY CODE NUMBER LOGIC & ARCHITECTURE-FOUNDER
COMPANIES:

Founder Companies - HUF

Founder
Companies
Individual
GMR
9901
G
Varalakshmii
9902
Srinivas
Bommidala
9903
B
Ramadevi
9904
B
Susroni
9905
B
Manisantosh
9906
GBS Raju
9907
G
Smitha Raju
9908
G M
Ritesh
9909
K K
Grandhi
9911
G
Ragini
9912
G M Ruchir
9913
Founder
Companies
HUF
GMR
9951
Srinivas
Bommidala
9952
GBS Raju
9953
K K
Grandhi
9954

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14.) Chart of Accounts:
1. Repository of GL Accounts required for External and Internal reporting
2. G/L Account Master Records Required in One or Several Company
Codes
3. Postings are made to these Accounts
4. Maximum of a 10 Digit Code
5. A company code must be Linked to One Operating Chart of Accounts
6. An Operating Chart of Accounts can be Linked to Many company codes
7. Only one Chart of Accounts is proposed for all legal entities. At a later
point of time if there is a need to add new companies the same can be
assigned to the existing Chart of Accounts.

1000
1000
1900
2000
2010
2020
2030
2040
2050
2060
3110
3120
3130
3210
3220
3230 3310
4000
5010
5020
6000
6100
6110
6600
8000
8100
8600
8700
Inds.
HUFs

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Energy
2000
Generation
20000
Thermal
20100
Hydro
20200
Nuclear
20300
Non-Conventional
20400
GEL
2010000
GPCPL
2010010
VPGL
2010020
Transmission
27000
Distribution
28000
Trading
29000
GBHPL
2020000
GEL
2020010
Mangalore
20100100
Chennai
20110100
Vemagiri
20120100
Alkananda
20200100
Talong
20210100
Energy
Kamlanga
20100200
Bajoli Holi
20210200

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Sector
(1
st

Char)
Line of
Business
(2nd
Char)
Company
Code
3rd
&
4th
Char
Sub-
Sectors
5th
&
6th
Cha
r
7th &
8th
Char
Profit
Center
Roads
# 3
Annuity
#1 GTTEPL 10

GTAEPL 20

GPEPL 30

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Toll #2 GACEPL 10

GJEPL 20

GUEPL 30

EPC # 3 GPPL 10 Highways 10 00 33101000

Structure
s 20 00 33102000

Tollbooth 30 00 33103000

O & M 40 00 33104000

Crushing 50 00 33105000

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It is a directory of depreciation areas
All depreciation areas having similar rules of a country need to be
included under one Chart of Depreciation
Only one Chart of Depreciation is proposed for GMR since establishments
are set up only in India
Additional Chart of Depreciation can be created on a future date for
Turkey Airport

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1.PATH FOR BBPs OF ALL THE FI SCENARIOS:
\\172.1.1.11\Project_Shield\Phase_1_ERP_Implementation\20 ASAP
Deliverables\022 - Blueprint\010 - Financials\ 013 - Business Blueprint
2.PATH FOR FUNCTIONAL SPECs OF THE FI SCENARIOS:
Deliverables\023 - Realization\010-Financials\ 014 - Functional
Specifications for Developments\FI\
3.PATH FOR FI-INTERFACEs OF THE FI SCENARIOS:
Deliverables\023 - Realization\010-Financials\ 014 - Functional
Specifications for Developments\FI\ 2 Interface
4.PATH FOR UNIT TEST SCRIPTS OF THE FI SCENARIOS:
Deliverables\023 - Realization\010-Financials\012 - Unit Testing\UT - Base
line Test Scripts\UT - FI Test Scripts
5.PATH FOR CONFIG DOCS OF THE FI SCENARIOS:
Yet to be received
6.PATH FOR GAPS OF THE FI SCENARIOS:
\\172.1.1.11\SAP_Bangalore_Instance\Project_Shield\Phase_1_ERP_Implementation\20 ASAP
Deliverables\Gaps / Development list - 022 - Blueprint\010 - Financials\018 Gaps
7.PATH FOR KDS(keydata structure) OF THE FI SCENARIOS:
Deliverables\Key Data structure - 022 - Blueprint\010 - Financials\019K - KDS\FI
8.PATH FOR GAPS OF THE FI SCENARIOS:
Deliverables\Integration Test scripts - 023 - Realization\010-Financials\016 - Integration testing\IT -
Final Integration Test Scripts

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9.PATH FOR INTEGRATION TESTING OF FI SCENARIOS:
Integration Test scripts - 023 - Realization\010-Financials\016 - Integration testing\IT - Final
Integration Test Scripts

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Business Process Specific to Sectors

A. Agro- Specific Business Process:
CMS(Cane Management system)-Interface:
Introduction:
Cane Management system (CMS) assists for Managing the Sugarcane growers who are primarily
VENDORS to the Company. Since the Sugar plant should secure the Raw-Material which is Sugar Cane, it
needs to develop the area surrounding the factory and the Company is under obligation to assist Sugar
Cane Growers monetarily and non-monetarily for cultivating and supplying the Cane produce to the Sugar
Plant.
For Managing the operational functions from cultivation till harvesting and financial accounting from the
assistance provided till growers supplies to factory concluding with their billing and payments the CMS
Manages these functions.
CMS is an In-house developed Software with Power builder front end screens connected to Oracle
Database at Back end and is used to manage around 20,000 growers at Sankili Plant and 5000 growers at
Haliyal presently and for future expansions as well.

B. Requirement basis:
The Financial Accounting package is presently integarated with CMS. With SAP being put in place of
present Financial Accounting System, the need for the Integration of CMS with SAP emerged.
Accordingly the development of CMS interface with SAP need to made for capturing the Financial
Accounting transactions of Sugarcane Growers (Vendors) initiated from CMS on Realtime basis and entries
shall be posted to Growers and other vendors accounts line item wise in SAP.

C. About CMS-Accounting System:
It holds Growers accounts & Harvesting Labour accounts and operates like SUBLEDGER. These accounts
shall be mapped in SAP as SAP Vendors. The following are one or more Control accounts for the above
a/cs in CMS:
Sugar Cane Growers Control A/c For Advances/Loans in cash or kind provided by Company to
them and its accounting. [Sub A/cs: Grower Ledger codes]-Access in SAP thru SPL.GL-L
Growers Payables Control A/c The Payables amounts to Growers after Sugar Cane is supplied by
them- Processed in batch billing. [Sub A/cs: Grower Ledger codes]
Seed & other Supplies payable Control A/c- The Payables amounts after Cane Seed supply by
growers to other Growers- Processed in batch billing. [Sub A/cs: Grower Ledger codes] -Access in
SAP thru SPL.GL-S
Harvesting Labour Adv Control A/c-For advances granted for initating work. Subsequently the
accounting of the payables after harvesting fields of Growers-Processed in Batch billing. . [Sub
A/cs: Harvestor Banta Ledger codes]
The Transporters shall be SAP direct vendors. Only credits shall be processed thru CMS directly to
such accounts.
Other Accounts:

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Sugar Cane Transport Expense A/c- The billing the Transporters who are in SAP as vendor
accounts, this is an interim a/c for billing & crediting for their services thru CMS.
Harvesting Labour Expenses A/c- The billing the Harvestors who are in CMS as vendor accounts,
this is an interim a/c for billing & crediting for their services in CMS, later updated in SAP.

A. Agro- Specific Business Process: Diesel Upload
Process Logic : The detailed Process Logic is given in Annexure

1) To make a copy of the existing T.code: ZFITC_OPEN_BAL (Program: ZFI_OPEN_BALANCES)
2) The Excel template will be similar to that of the previous template used for cutover. Pl. find
attached the same.
Diesel upload
Template.xls

3) Pl. amend with the additional validations / changes as proposed below.
The first Vendor Column must always have Value V
The second column company code must always have value 4000
The third column Document type must always have KA
Vendor Posting Key must always be 24 *Earlier the derivation was based on the other
Posting key 50 / 40 & Spl GL indicator combination. Now that automatic derivation must
be removed]
Alternate Posting key must always be 50
Alternate GL account must always be 1030402400
Special GL indicator must always be blank
Credit Control area column field must always be blank
Document date / Posting date will be taken from the entry screen.
Pl. always keep the session as Foreground session and display results. To this effect, pl.
remove the options given in the front end screen currently.
Pl. provide one more field in the entry field for Document date. This must be mapped to
BKPF_BLDAT
Pl. combine 10 line items per document. That means 10 debits of Vendor line items (with
posting Key 24) and one line item of 1030402400 (with posting key 50)

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B.GMRVF Specific Process: (Interface)
Section II: (a) Business Requirement (Please use this section for describing the business
requirement in detial preferably with flow diagram)
I. General Definition :
Fee and Caution Deposit collections are currently accounted in EZ school software. The data is required to be
downloaded into Excel as per the prescribed format and to be uploaded into SAP
II. Integrative
III. Prerequisites/ master data
IV. Processes, process-steps and flows
V. Other Business related requirements
VI. Reporting
VII. User Interface
VIII. Others
IX. Other requirements
X. Data security requirements
XI. Performance requirements
XII. Environmental requirements
XIII. Architectural requirements
XIV. Authorization requirements [Authorization by the Transaction code, Company Code, Plant,
Movement type, should be provided]
Custom Developed Transaction code for the purpose of upload of Excel, to be provided to
authorized staff of GMRVF [Company code: 8600]
Graphical representation (detailed flow chart)

(b) Detailed Functional Description Concept Operational Requirements (describe in
detail)
The following will be different type of receipts which will be handled in EZSchool software.
For this interface purposes, a specific transaction code is expected to be assigned for each
nature of receipt. If this cannot be provided by EZSchool software, it has to be updated in
the Excel upload file, before actual upload into SAP.
CDE Caution Deposit
BDE Book Deposit
FER Receipt of Fees Receivable
JIF JNTU Infrastructure Fee
SSF Soft Skill Fee

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PEN Penalties
SPF Special Fee
TUF Tuition Fee
BUF Bus fee

The following will not be handled by EZschool software. This has to be manually updated
in the respective templates before upload into SAP
ARR Fees Receivable from Students
SCR SC Scholarship Receipt
STR ST Scholarship Receipt
BCR BC Scholarship Receipt
GSR General Scholarship Receipt
SCP SC Scholarship Payment
STP ST Scholarship Payment
BCP BC Scholarship Payment
GSP General Scholarship Payment

1) Fee/Deposits Collections: - We are collecting the following fees/Deposits
from students.
Nature of Fees:-
1) Tuition Fee
2) Special Fee
3) Soft skill Fee
Nature of Deposits:-
1) Caution Deposit
2) Books Deposit
The above fees are collected from the students for every academic year. After the
completion of the admissions we need to bifurcate the fee for the Financial Year wise.
Because we have collected the fee from students Academic year wise.

The above fee/Deposit collections are done in our EZ school software then it will be
converted in to excel format and the same to be uploaded in to SAP. The format is as
attached.
0 CD_Fee Collection
Data structure.xls

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EZ School software will maintain student wise fee collections hence there is no need to
maintain the same data in SAP. But the deposit details are required student name wise,
Branch wise, Admission No. wise, JNTU roll No. wise, academic year wise. (like debtors
and creditors controlling accounts)

The entry should be
Cash / Bank Dr
To Caution Deposit / Book Deposit (student wise) Cr

2) JNTU infrastructure Fee: - This Amount is collected from students at the time of
admission through our Ez school software. After completion of the admission process we
have to pay the amount to JNTU. It is not required to maintain student name wise.

The entry should be
Cash / Bank Dr
To JNTU Infrastructure FeeCr

3) Bus Fee: This Amount is collected from students for his transport purpose at the time of
admission through our EZ school software. This will be treated as Income in the books of
Accounts. It is not required to maintain student name wise.

The entry should be
Cash / Bank Dr
To Misc. Income - Establishment Collections-Bus FeeCr

4) Fine: - Fine will be collected from students for delay in payments this will be treated as
Income in the books of Accounts. This amount is collected through Ez School software at

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the time of collection of Fee.

The entry should be
Cash / Bank Dr
To Penalties Collected - Late FeeCr

5) Fee Receivable: If any students have not paid the Fees, we transfer the outstanding fee
amount to fee receivable account. It is required to be maintained student name wise,
Branch wise, Admission No. wise, JNTU roll No. wise, academic year wise (like debtors and
creditors controlling accounts). This fees receivable has to be accounted in SAP directly
for each student. This information will not flow from EZSchool software.

The following entry is required to be passed at the time of finalizing the balance sheet or
admissions closing in SAP.
Fee Receivable (student wise) Dr
To Fee in Advance Cr
Attached is the format to account these Fees receivables.
1 Fees Receivable
Data structure.xls

6) Receipt of Fee arrears: The fee arrears accounted in the year end will be received in the
next few months. After the fee arrears are received from students, it will be entered in
EZschool software and downloaded in excel format along with other types of receipts
(covered in 1-4).

The downloaded receipt information needs to create the following entry while uploading
into SAP.

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Cash/Bank Dr
To Fee Receivable (Student wise) Cr.

7) Receipt of Scholarships from Govt:
SC/ST/BC/General scholarships are being received from Government.
The template is as attached.
Scholarship Receipt
Structure.xls

The following entry is required to be passed at the time of receipt of Scholarships in SAP.
Bank A/c Dr
To SC Scholarship a/c (student wise) Cr
To ST Scholarship a/c (student wise) Cr
To BC Scholarship a/c (student wise) Cr
To General Scholarship a/c (student wise) Cr

8) Payment of Scholarships to Student/GMRIT (different Bank a/c):

In the scholarships received, Tuition fee and student maintenance & examination fee are
also included. Out of this amount, certain amount (tuition fee) will be transferred to
GMRIT by separate Cheque and the balance amount paid to student by separate Cheque.
The template is attached.
Scholarship Payment
Structure.xls

For both the checks issued (to GMRIT & Student) the following entry will be passed.

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SC Scholarship a/c (student wise) Dr
ST Scholarship a/c (student wise) Dr
BC Scholarship a/c (student wise) Dr
General Scholarship a/c (student wise) Dr
To Bank A/c Cr

[Note: The checks issued to GMRIT (to a different Bank a/c) will be accounted in EZSchool
software as Fees received as discussed under Scenario 1+

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27.1) General Ledger :

General ledger postings need to be performed wherever Sub ledger accounting is not
done. Normal Business transactions are performed through General Ledger entries, ie.,
Journal Vouchers.

Normally Journal Vouchers are used for the following purposes; the following is only
inclusive list, and not construed to be exhaustive.

1 Adjustment / rectification entries: Any entry wrongly entered can be corrected by way of
adjustment / rectification entries. These should be clearly identified with the original
entries. Only those entries passed in GL should be rectified / adjusted in the GL.
Transfer of Expenditure incurred on new projects to New Company should be included
here.

2 Provisional / Accrual entries: Recurring entries can be made use for provisional entries.
These are generally month end / period end entries. These can be provision for debt,
Admin expenses, contract payment, consultancy, service related expenses, employee
benefits like leave encashment etc. These represent liability which accrues but not due.
These can either be reversed or continued in the subsequent month.

3 Miscellaneous Cash receipts: Miscellaneous cash receipt includes sale of
miscellaneous items, refund from employees for telephone expenses etc.,

4 Fringe Benefit taxes and other statutory entries: Payment of Advance payment of FBT,
Set off of Service tax input, Output tax.

5 Year end / period end / month end entries: Year end entries like audit fee, commission
payable to directors etc

6 Revaluation entries : Entries like revaluation of Investments - Revaluation of
investments will be taken up in CFM

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7 Forex Restatement entries: Foreign exchange fluctuation entries in case of FCTL,
Vendors etc Revaluation of vendors in AP, and Term loans in CFM.

8 Entries from Bank Reconciliation: Like Bank charges, LC Charges, BG Commission,
DD Charges
9 Interest on term loans / working capital / other loans: Includes interest on term loans,
working capital, suppliers credit, other unsecured loans
10 Issue of share capital / debentures / preference shares etc. Authorization for these GL
accounts should be restricted.
11 Transfer to General reserve / special reserves: this will be a year end exercise.
Authorization should be restricted. Should be entered only in Special periods.
12 Dividend entries along with Dividend distribution taxes. These taxes need to be paid /
deposited within 7 days from the date of payment of dividend or date of declaration
whichever is earlier.
13 Employee payments (Leave encashment, and other employee related provisions)
14 Prior period adjustments: Prior period adjustments includes expenditure/income related
to earlier years.
15 Interest accrued on income but not due. These will be applicable for long term loans,
where interest is payable on periodic basis.
16 Write offs / revaluation / diminution of assets / investments Self explanatory These
will be in Assets Accounting and CFM
17 Deferred Tax liability / MAT / Income Tax provision entries Year end entries.
Calculation will be in line with Income Tax requirement. Calculation of Deferred Tax
liability, Minimum alternative tax as well as tax under normal provisions should be done
by SAP, and based on user input, should be accounted for in the system.
18 Lease rental income: Lease Incomes in case of Property Sector accounted through
JVs. Accrual entries can be used for the same.

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27.2) RECURRING ENTRIES

1. Recurring entries are business transactions that are repeated regularly, such as
rent etc.
Recurring entry document is a reference document in which contains data necessary for
posting accounting documents, such as the amount, account number, and posting key.
Control information such as Day of the first run, day of the last run, and scheduling dates
are contained as part of the reference document. Using this document we can create the
same entry at regular intervals as specified at the time of creating the entry

Minimum data normally required to post a G/L document are:

Document header information e.g. posting date, posting period, document date etc.
G/L account number
Cost object assignment (for profit and loss elements)
Amount

1. Since sometimes not all the required data are immediately available, SAP also
provides an option to temporarily keep the posting as statistical entry. Upon
completion of all required data, the entries can be posted. This functionality is
termed as Parking Document.

2. Subledger postings have to be made through respective modules. Month end
closing JVs and Year end closing JVs will be entered through General Ledger.

3. No direct posting is allowed for reconcilation accounts. Validation can be set for
taking reports beyond a certain amount.

4. Posting for Deferred Tax Liability/MAT and provision for taxation can be done by
entering JVs in SAP and no calculation is possible through system.

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5. Separate document type will be maintained for GL postings.

6. Dividend entries along with Dividend Distribution Taxes (Sec.115O):- Dividend
Distribution Tax need to be calculated manually and GL posting will be made in the
system. (FB50).

7. Prior Period adjustment will be posted as JV by entering GL posting (FB50)

8. Preliminary/Pre-operative expenses :- JV is passed by entering GL posting (FB50).

9. Standard reports will take care of business requirements. Bills inward/outward
register is discussed in AP process.

10. Journals can be printed in SAP standard forms

11. Cash accounts should not allow negative values Standard Configuration

12. The system should mandatorily take narration for all transactions. SAP Text field
can be used.

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27.3 Miscellaneous Income Accounting

The following incomes need to be accounted for through GL Receipts. (This is only an
inclusive list)

a. Interest income from bank / Financial institutions, not being investment income
b. Commission received
c. Sale of scrap goods, not accounted through invoices
d. Provisional income
e. Refunds of taxes

f. Miscellaneous receipts (Sale of news papers, collection of fines etc.)
g. insurance claims.
h. Subsidies/grants from government bodies.
i. donations received
j. Amounts received from any funds established within the company
k. Other HR receipts routed like foreclosure of loans etc. through clearing account.
l. Agriculture income
m. Rental Income (founders accounts)

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27.4 Reversal & Resetting:

1. .Reversal shall be done by a separate document type SA
2. Reversal of FI documents for payments / collections & other journal entries(T.Code
F-08)
3. Reason for making the reset / reversal should be mandatory for entering the
document
4. Cleared Documents should be reset as open items & then it can be reversed
(T.Code FBRA)
5. Cash transaction not to be reversed
6. Statutory vendor documents like TDS/TCS shall not be reversed where the
amounts have been deducted and paid
7. Payment documents where cheques have already been updated, can be reversed
for cheque voiding. Cheques can be voided before or after issue / updation (
T.Code FCH8 & FCH9)

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28. STAFF PAYMENTS

The following are different types of Staff Payments:

CTC Payments:
Monthly Salary payments Basic, HRA, Special Allowance, Stipend etc.,
Receipt of approved advice (hard copy) from HR
Manual verification to check, whether loan amounts, cost centre break up.
Pass an entry in the AP module
Hand over a single check to HR for direct deposit to bank

Medical Reimbursements, LTA, Leave Encashment
Employee directly submits claim form with medical bills to HR
Frequency of claim is not fixed
HR will check the eligibility and accuracy of the bills and pass over to accounts
Accts will check few medical bills and pass an entry in the AP module
Accts will do a batch payment every Wednesday and transfer the funds to directly
individual bank accounts

Gratuity, Superannuation, Provident fund
Gratuity & Superannuation : HR will send an approved manual advice indicating amount
needs to be payable to LIC on periodical basis. Based on advice, entry will be passed in
AP module, and cheque would be handed over to HR
Provident Fund: Based on advice from HR, entry will be passed in AP and cheque will be
handed over to HR for further onward submission to PF office.

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Notice Pay / Receivable
Based on decision agreed during recruitment process, HR determines, amount of notice
pay needs to be payable to employee to his previous employer. Based on approved
request from HR, accounts will accordingly pays directly to employee.
In case of immediate termination of employee from the services, HR will decide to pay
notice period amount to employee. Based on advice from HR, accounts will accordingly
pays directly to employee.
Receivable: Based on employee employment letter & Resignation letter, HR determines,
amount needs to be collected on Notice pay from the employee, and accordingly final
settlement letter would be prepared and passed to accounts for further accounting.

HR Policy Payments:
Overtime
Relocation Expenses
Travel Expenses
Once the employee completes their tour they need to submit the expense report within
stipulated time(as specified in HR Policy) to his reporting Manager/HOD. If the expense
report within the HR Policy, The Manager can approve the same otherwise the same has
to be forwarded to HOD for approval.
Expense report along with necessary bills which are approved by the Manager/HOD
comes to accounts Department for settlement. FI Department verifies the bills and adjusts
advances if any. If no advances exist, balance will be credited to employees Bank account
by processing batch payment on every Wednesday.
Travel Advance & Others
Advance requisition approved by Manager/HOD will be submitted by the employee to FI
Department. Cashier/Accountant make the necessary entry in AP module by debiting
Employees advance account and payment will be release by way of Cash/Cheque.
Recruitment Expenses:
Recruitment expenses will be incurred by HR / Administration department. HR will be
having a record of expenses incurred, with respect to each level of recruitment.

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Finance will be involved in recording these expenses in the books of accounts. Details of
expenses incurred for this purpose will be obtained from the HR / Admin department.
Based on these information, the expenses will be recorded.
Late Sitting Expenses This will be handled through FI. These are applicable to certain
category of employees. These will be paid based on claims raised by employees for late
sitting. These are governed by HR policies. This is subject to approval by respective
department in charge.
Loans & Recoveries Salary, House advance, others. These will be handled through HR
module.

Note: All IOUs will be given as Employee Advance account with Special GL indicator and
the advance will be accounted with reference to the Employee No.

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29. Bank Reconciliation statements
Bank Reconciliation:
Bank statement is received from all banks on daily, weekly fortnightly, or periodic basis.
These statements received can be made available in electronic as well as manual formats
by the banks.

1. The data would then be converted into standard SAP format for BRS by attaching
business transactions against each unique nature of transactions. Some of the
standard business transactions would be maintained for :
a) Bank Charges
b) Payments Incoming - Customers
c) Payments Outgoing - Vendors
d) Interest Received
e) DD Charges / Payment Charges
Bank Reconciliation:
Bank statement is received from all banks on daily, weekly fortnightly, or periodic basis.
These statements received can be made available in electronic as well as manual formats
by the banks.

2. The data would then be converted into standard SAP format for BRS by attaching
business transactions against each unique nature of transactions. Some of the
standard business transactions would be maintained for :
f) Bank Charges
g) Payments Incoming - Customers
h) Payments Outgoing - Vendors
i) Interest Received
j) DD Charges / Payment Charges

Automatic Bank Reconciliation

3. Procedure for uploading bank statement soft copy and subsequent procedures
needs to be followed to complete automated BRS

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For automatic bank reconciliation external transaction codes will be mapped to
the transaction types defined in the system, which is mapped to posting rules.
The mapping of the external transaction codes to the transaction types can be
many-to-one.
The accounting entries for bank reconciliation will be based on the posting rules
as linked to the different transaction codes contained in the file.
The posting date for the entries shall be the date as contained in the transaction
detail file.
A batch file is to be created for the accounting entries that are to be passed.
On execution of the session, the accounting entries are required to be posted in
the system per the manual bank reconciliation process.
In case bank statement does not give details of any transaction which can enable
SAP to take the entry to the correct GL, it will go to an Error file. Then via SM37
transaction, the file will be opened & for the entries with either blank/error
matching field & the correct reference (matching) field will be entered and the
bank statement will be re uploaded.
Manual Bank Reconciliation using SAP

4. In case of manual BRS, the bank statement data has to be converted into standard
SAP format by attaching business transactions against each unique nature of
transactions based on the hard copy of the bank statement. Rest of the process will
continue to be the same as in case of Automatic BRS.

Other Solutions to the above stated requirements:

5. In case Multi Cash format (MT 940) is not available from Bank, a Customized
Format will be developed which will enable the upload of bank statement.
6. Stale cheques should be identified. The same should be voided immediately on
expiry & will be transferred to a Stale Cheque Account as Special GL indicator
attached to Vendor accounts. No further payment should be done from system for
such vendor except authorised by higher authority. Information on stale cheques
needs to flow either from the soft copy or the manual bank statement for the system
to identify and pass automatic entries. If these indications are not available, then
manual entries need to be passed.
7. Payment against stale cheque is to be done manually. Payments against such
Stale dated cheques will be released as per the advice of user dept
8. At the year end, items remaining for more than 3 years or as per company policy, in
such Special GL indicator will be transferred to Miscellaneous Income account after
appropriate approval.
9. Cash flow should reflect the cheques issued not encashed for emergency usage
and cheques deposited not collected as separate items - This will be addressed in
Cash Management.

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10. System should facilitate calculation of interests based on value dates. - This has
been addressed in the Interest Calculation process in FIN_GL_BBP_008 Bank
Interest Calculation document.
11. Reconciliation for Term Loans, short term loans, working capital loans needs to be
manually handled since the volume of transactions in each account will be relatively
low.
12. Bank Reconciliations are basically done with reference to previous periods.
13. Items appearing in Bank reconciliation statement for more than 3 months have to
be indicated as over-due items --- The pending items will be reflected in BRS with
the dates.

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30. Intercompany Transactions :- In SAP, one company code can post expenses to another
company code. In order to balance debits and credits within these documents, the system
generates automatic line items which are posted to clearing accounts, for payable or receivables.

The documents which belong to one cross company code transaction are linked by a common
cross-company code transaction number. Cross Company code transactions possible through
SAP standard but GMR do not prefer to go for cross company posting.

Sl.No. Process Description and Solution SAP Module
1 Transfer of admin expenses - Standard debit note
to be prepared and sent.

FI Tcode FB65
2 Allocation of expenses by Shared Services
Invoicing/ Standard debit note to be prepared and
sent.
FI Tcode FB70/ FB65
3 Inter-company Loans or Investments will be
dealt in CFM or FI
CFM, or thro FI Tcode FB50
4 Sale of output or purchase of input to another
company Recording as Sales of one Company
and Purchase of another company.
Thro SD and MM module.
5 Transfer of Inter Division transactions will be
handled using STO (Stock Transport orders)
between the plants.
Thro MM module
6 Quarterly reconciliation and confirmation of inter
company transactions.
FBL3N,FD10N, FK10N
7 In case of Corporate expenditure, which comes as
a separate invoice on each of the company, will be
entered by separate set of persons who will
access the respective company books and Post
the transactions, also make the payments.
Proper authorization to be
provided for those persons
responsible to post
transactions / make
payments on behalf of
different companies, in those
companies books.
Controlled thru Authorization.

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31. Carry Forward Balances of GL, Vendors & Cusotmes:

This process involves carrying forward the balances of General Ledger accounts from old fiscal
year into the next fiscal year. The balance to be carried forward is shown in the account
balance display.

1. To carry forward balances, use Transaction-code F.16 for GL accounts and Transaction-
code F.07 for customer and vendor accounts.
2. Once all the preliminary activities (Mentioned in Section No.3) scheduled prior to carry
forward of the balances have been completed, then the programs for carry forward of
balances need to be run. All the closing balances in the balance sheet accounts get carried
forward into the new fiscal year. The carry forward Profit and loss accounts are carried
forward to retained earnings accounts. The balances of the profit and loss accounts are set
to 0. The carry forward of balances is an yearly affair and is done only to transfer the
balances to the new fiscal year.

3. Prior to running Year End tasks, we ensure that all related systems have finished
processing for the year (for example, invoices have been entered and checks have been
applied in Accounts Receivable); and all periodic processing has occurred. We need to run
the carry forward program once. All the entries passed subsequent to the carry forward of
balances will automatically get added to the opening balance of the GL accounts in the new
fiscal year.

4. Document number ranges may not necessarily be different for every new fiscal year. However,
specific document numbers for old fiscal years can be easily identified filtering the standard reports
based on Fiscal years.

5. Restatement figures for Customers/Vendors with foreign currency balances will not be reversed, but
will be carried forward in the balances.

6. Depreciation will be discussed detail in the Depreciation document.

7. For Project Companies, all the P & L balances pertaining to on going projects will be settled to the
Capital Work in Progress account at each year end. Specific requirement in Companies Act for
providing the detailed break up of Capital Work in Progress over the life of the project can be met
through either Standard SAP report FBL3N using the WBS Element as a parameter and running
the report for project duration. No reversals will be passed during each financial year to accumulate
the balance since the details will be readily available through the standard reports. Also, detailed
breakup of Capital Work in progress on a yearly basis can be available through the PS module.

8. F-02 General Posting will be used for Prior year adjustments will be posted in the special periods as
per DOP.

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9. F-02 General Posting will be used for any appropriation adjustment entries in General reserve
account, before the balance is carried forward to the next year.

10. In SAP, all the master records are created at the client level one time and have the same
characteristics for ever, except for any change. There is no concept of carry forward of master data.

11. All the statistical items, noted items, Special General Ledger indicators should be carried forward to
the next year - This will be covered in AP Carry forward BBP document.

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32. Manual Open Item Clearing

GL Manual Open item clearing is done through SAP Tcode F-03. Such GL accounts will be
configured with Open Item Management.

This transaction clears open items on a single account. A transaction is cleared when a clearing
posting has been carried out for an item or a group of items, so that the resulting balance of the
items is zero. Documents with open items cannot be archived and stay in the system until all
open items are cleared. A clearing transaction always creates a clearing document. The
following are sample GL accounts which are subject to Open Item Management.

GR / IR Clearing a/c
SR / IR Clearing a/c
Bank Clearing a/c
Advances a/c Ex. Business advances to Staff
Freight Clearing / Customs duty clearing a/c
Tax clearing a/c

Debits and credits of equal amount can be cleared by the transaction. If the total amount of
selected open items does not equal the amount of the clearing document, the system allows you to
post the difference in P& L account. Tolerance limits can also be set for charging the differences
in open items.

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58. Automatic Clearing

The program in SAP F.13 clears open items from customer, vendor and G/L accounts (in particular, GR/IR
clearing accounts) automatically. It selects all accounts specified in the value sets that have debit and credit
postings. The following items are not cleared:

Noted items
Statistical postings and special G/L transactions of the type bill of exchange
Items with withholding tax postings
Down payments can only be cleared if down payment clearing for the same amount has
been posted

All open items in GL will be automatically cleared upon execution of F.13 Automatic Clearing
program.
With reference to assignment field the system will clear all open items upon execution of said above
program.
FBL3N provides list of uncleared line items for review
User uses Account clearing F-03 to clear the uncleared items.
Authorization restricts the user not to reset the automatically cleared items.
In SAP the above said program can is scheduled on weekly basis in back ground.
FBL3N provides list of uncleared items and can be manually cleared by executing F-03

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34. FOREIGN EXCHANGE REVALUATION

Currency and Exchange Rate
A currency key must be assigned to every currency used. Most currencies are already defined in
SAP system with standard international currency keys. Each currency can have a validity date.
For every combination of two currencies, you can maintain different exchange rates which are
distinguished by an exchange rate type. These different exchange rates can be used for various
purposes such as valuation, conversion, translation and planning. A base currency can be
assigned to an Exchange rate type. Then maintain exchange rates for all other currencies into this
base currency. Exchange rates are maintained centrally across all company codes.

In the legacy systems, there are transactions being entered in USD, GBP and HKG. If we take the
case of one currency: USD, in the SAP system, the currency key for USD is already defined as a
standard. An exchange rate type is maintained under which exchange rates are defined in the
system. You can use the exchange rate type to define a bank buying and selling rate and an
average rate for the translation of foreign currency amounts. Eg: Exchange rate type M-Standard
translation at average rate is one of the standard exchange rate keys provided in the system.

Under the translation ratios, we will maintain the ratios between two currencies in the following
manner:

Ex.
rate
From To Valid from Ratio
(from)
Ratio (To)
M USD INR 01.01.2007 1 1

Under the exchange rates, we will maintain the actual exchange rates between the two currencies
in the following manner:

Ex.
rate
Valid
from
Ratio
(from
)
From Direct
Quot.
Ratio (to) To

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M 01.01.200
7
1 USD 40.02 1 INR

Foreign Exchange Valuation

At month end, you have to carry out a foreign currency valuation. This process valuates all
transactions posted in foreign currency. To perform the valuation you should enter an exchange
rate for the end of the month.

This valuation by SAP Tcode FAGL_FC_VAL covers the following accounts and items:

Foreign currency balance sheet accounts
Open items posted in foreign currency (Vendors and customers)

You have the following options for the foreign currency valuation:
You can carry out the valuation in local currency, (company code currency),

The posting of valuation is done by a batch input session. It is recommended that you run each
valuation separately, for e.g. you will create a separate batch input for customer open items, then
another one for vendors and another one for GL.

At every period end closing (where balance sheet and profit & loss account is reported) you need
to perform a foreign currency valuation for GL, customer and vendor open items.

Solution for the requirements mentioned in (1) above are explained below :-

1. Foreign Exchange Revaluation can be carried on all foreign currency transactions on
the reporting date, where carrying values of assets & liabilities are remaining
outstanding in the books of accounts. (SAP Tcode FAGL_FC_VAL)

2. It is a part of the closing process and the exchange rate will be maintained at the
Exchange Rate Table, centrally. No alerts will be provided to the user.

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3. Local currency assets / liabilities will not be included in this process.

4. Forex rate along with validity giving the dates are maintained centrally in Exchange
Rate centrally, and any comparison can be made from the table. System will not
generate an alert if the rate beween two reporting periods is varied by more than 5
percent.

5. History of Forex rates applied for each GL account is available and can be viewed from
the account balances.

6. Revaluation will not be reversed at the beginning of next period / year. If need to be
made, reversal date should be specified in the program

7. Revaluation will be based on the rates maintained centrally. If for some contractual
reason, revaluation has to be made on different rate, the account has to be revalued
separately by adopting different document type and exchange rate type in the system.

8. Periodic Interest payments computed on USD amount outstanding can be handled at
the time of document entry for actual payment giving the actual rates as per lenders
agreement.

9. In case of project based companies, the account assignments will be set up in the
specific way to meet the requirement of exchange differences affecting the Loan A/c.
and the forex fluctuations adding to the required account.

10. Advances given in foreign currency will be recorded at the rupee value for the foreign
currency converted at the purchase price. Utilized foreign currency will get recorded as
expenses at a value converted based on the purchase price. Any amount surrendered
by the employee from the original advance taken will be sold and the difference
between the prevalent selling rate and the purchase price will be debited / credited to
the Forex Fluctuation account.

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35.Insurance & Annual Maintenance Contract (AMC) Payments

1. Insurance and AMC payments can be made through FI-GL Tcode FB50 or through Periodic
processing FI Tcode F.14, for recording recurring entries.

Recurring entries are business transactions that are repeated regularly, such as insurance,
maintenance, rents etc. Recurring entry document is a reference document in which contains data
necessary for posting accounting documents, such as the amount, account number, and posting
key. Control information such as Day of the first run, day of the last run, and scheduling dates are
contained as part of the reference document. Using this document we can create the same entry
at regular intervals as specified at the time of creating the entry. This can be used for making
Prepayments or Provision entries.

Solution to the above requirements is detailed below:-

2. Through periodic processing, system will post periodically the amount if the start and end date and
frequency are given. Alert for insurance renewal cannot be made through system.
3. Insurance claim can be recognized only upon receipt of the same and can be done through FI Tcode
FB50, by giving credit to expense account or recognizing the insurance claim as income
4. Insurance claims tracking will not be monitored through SAP.
5. Insurance pertaining to employees will be covered in HCM module.
6. Reporting requirements are not SAP standard reports.

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36. Period End Closing

Period end activities are broadly classified into

Month end closing activities
Year end closing activities

1. Following activities are included in month end activities in SAP related to GL:

1.1 Open and close posting periods (T code: OB52)
1.2 Accrual and deferral posting (T code: FBS1)
1.3 Automatic Clearing of Accounts (Covered in FIN_GL_BBP_012 Automatic Clearing)
1.4 Interest Calculations (Covered in FIN_GL_BBP_008 Bank Interest Calculations )
1.5 Revaluation of Foreign currency transactions (Covered in FIN_GL_BBP_013
Foreign currency revaluations)
1.6 Depreciation Run (Covered in FIN_AA_BBP Period end Closing )

2 Year end activities pertaining to GL consist of :

Open new posting period and close previous posting period
Balance carry forward (Covered FIN_GL_BBP Carry forward Balances )
Open new fiscal year (T code: OB52)
You can open and close these posting periods for posting. As many periods as you require
can be open for posting simultaneously. Usually, only the current posting period is open for
posting, all other posting periods are closed. At the end of this posting period, the period is
closed, and the next posting period is opened. Special periods can be open for closing
postings during the period-end closing. (Use T.Code:OB52)
3 Posting period can be opened for:
Account Type
You can differentiate the opening and closing of posting periods by account type. This
means that for a specific posting period, postings can be permitted to customer accounts,
but not to vendor accounts.
Account Interval

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You can differentiate the opening and closing of posting periods by account
intervals. This means that you only open a posting period for posting to a specific
account. Account intervals always apply to G/L accounts. Based on the
authorization the users can be restricted.

Solution to the requirements mentioned above is detailed below :-

4 Open and close period will be made through authorizations.
5 Valid for all Account Types can be selected for opening of GL period. This will enable
opening of all sub ledgers.
6 Valid for all Account Types can be selected for closing of GL period. This will enable closing
of all sub ledgers.
7 List of parked documents can be verified before closing the period.
8 Opening and closing of period will be restricted to Power Users only. Period closed can be
opened for posting except MM periods.
9 List of Open periods is available in Tcode OB52, which can be viewed by CCC team to monitor
and advise users.
10 System can carry forward the closing balances from previous financial year to next financial
year by executing the Tcode F.16.
11 Once the period is closed, it will not allow posting to the closed accounting type.
12 Debit balances in P&L indicating accumulated losses over the years will be regrouped on the
asset side under Profit and Loss Account and credit balances in P&L indicating accumulated
surplus over the years will be correctly regrouped on the liability side under Reserves and
Surplus, using Financial Statement Versions.
13 New document number ranges can be maintained for each financial year based on specific
requirements.
14 For companies having expenditure towards Project the following solution is being provided to
handle the period end closing activities.
-The expenses can be booked against a WBS element"
- During Period End closing, it can be settled against the CWIP assets a/c.
- To maintain the uniqueness of the expenses (Like Salaries, Admin expenses etc.,) at
CWIP level, we can use multiple assets mapped to different GL accounts [Like CWIP
Salaries a/c, CWIP Admin Expenses A/c etc.] and accumulate the settled amount using
WBS element.
- This requires maintenance of additional Asset classes uniquely representing those
CWIP accounts.
- With this solution, the amount need not be reversed back to the original expenses a/c
beginning of next year.
- By end of the project, it can be settled against the main asset.

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37. Company Code Global Parameters

The required values of Company code global parameters will be based on standard configurations
in addition to company specific settings.

For the purpose of Extended Fiscal period & other key elements, the following solutions have been
proposed.

Sl.No. Process Description and Solution SAP Module
1 Fiscal Year Variant

One FYV will be maintained
for the period April-March.
This will suit the existing
organization structure of only
one Controlling area for all
the company codes.
2 Consolidated reports for the period of more than
12 months

Financial Statement
Versions can be provided for
alternate periods. (More than
one fiscal year).
[T.code F.01]

Books of accounts can also
be provided in detail for the
required period.
[T.code FBL3N]

In case of more specific
requirements, we can make
use of other SAP reporting
tools like Report Painter.
3 Posting Period Variant The PPV will be similar to

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the company code.
4 Field Status Variant For Standardization
purposes, one common FSV
is proposed to be used for all
company codes.
5 Exchange rate deviation It has been proposed &
agreed to maintain 5% as
the maximum exchange rate
deviation

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38. Cash Receipts & Payments

Cash Book is maintained for all locations:
Corporate Office
Sankili etc Add all locations Cash books

Cash Payments:

If the employee gets the approval of the competent authority for cash payment for Travel
advances, Local conveyances, Contingent staff welfare expenses, Guest house maintenance
expenses, vehicle maintenance expenses, Harvesting advance payments, Other pretty expenses
the same would be submitted to Cashier.
Cashier would initiate a transaction (F-65) for cash payments. The G/L code of the claims and the
Cash GL will be entered in the transaction.

Cashier will receive the signatures of the payee on the cash payment, receipt and affix revenue
stamp, if applicable.

Accounting entry for the Cash Payment:

Dr. Employees Advance /Exp.A/c
Cr. Cash in Hand
The authorised person for cash would approve the cash payment document and post the same.
Physical cash balance along with the balance of revenue stamps is tallied with the cash bookl at
the end of the day.
If cashier at the end of the day finds that cash balance lying in cash chest is exceeding the cash
insured limits, the excess cash would be deposited in bank the next working day. The cashier
would prepare the cash journal payment document in cash journal to that effect.
Cashier would periodically execute automatic clearing through F.13 for all employee vendors. This
program would clear the matching Dr/Cr items in the vendor account.

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Cash payment for Cane Growers this will be covered in Cane management interface BBP
document.

Cash Receipts:
Cash Withdrawal from Bank:
Daily cash requirement (for the period till the next banking hour) is ascertained by
Cashier on the basis of cash balance available in hand, estimate of cash expenses
based on past experience or any special anticipated withdrawals / payments and
minimum cash balance norms required to be maintained. This has to be ensured that
cash in hand remains with in the cash insurance limits.
After approval for cash withdrawal, a payment request for cash withdrawal would be
prepared by the cashier for the ascertained amount (as per above point). This payment
request would be released by the C&B in-charge.
The following entry would be passed for the purpose :
Dr. Cash Request Clearing A/c
Cr. Paying bank A/c
Based on above mentioned posted document, a bearer cheque in favour of cashier
would be prepared and signatures as per authorization will be obtained on the cheque.
Cashier would receive the signed-bearer cheque and sign on copy of posted document
as acknowledgement of cheque received for cash withdrawal.
Cash would be withdrawn from relevant bank by cashier and the same to be deposited
in cash chest.
Cashier would then prepare and post a document for cash received to record the cash
receipt in the cash journal.
The following entry would be passed :
Dr. Cash In Hand A/c
Cr. Cash Request Clearing A/c
Automatic Clearing for Cash Request clearing account has to be made through the field
Cheque No., as per the requirement.

Financial Statements-IFRS

Parallel Ledger will be created for the company code 2100-GPCPL in Energy sector.
Separate Depreciation area will also be created in Chart of Depreciation to capture IFRS
depreciation rates.

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Postings will be made in Leading Ledger (0L) and in Parallel Ledger created. Ledger
Groups will be created in the system to facilitate posting exclusively to Leading Ledger or
Parallel Ledger. Transaction FB01L and FB50L will enable posting to a particular Ledger
Group.

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39. TAX SCENARIOS:
1.SERVICE TAX:
Explanation of the process:
Accounting of service tax is done at two levels, one at Payables, the other at
Receivables. So, to enable this accounting we need to maintain the GLs the
below way.
1. ) GLs for ST Payable
2. ) GLs for ST Receivable
Examples for both the scenarios:
1.) GLs for ST Payable

Customer A/c Dr.
To Service Tax Payable A/c
To ESS Payable A/c
To SHE Payable A/c
To Sales A/c
2.) GLs for ST Receivable:
Expense A/c Dr.
Service Tax Receivable A/c Dr.
ESS Receivable A/c Dr.
SHE Receivable A/c Dr.
To Vendor A/c
GL Requirements for this process:

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The below set of 15 GL Accounts are required for the complete cycle of
Service Tax:
1. Service Tax Payable A/c
2. ESS Payable A/c
3. SHE Payable A/c
4. Service Tax Payable Realized A/c
5. ESS Payable Realized A/c
6. SHE Payable Realized A/c
7. Service Tax Receivable A/c
8. ESS Receivable A/c
9. SHE Receivable A/c
10. Service Tax Receivable Realized A/c
11. ESS Receivable Realized A/c
12. SHE Receivable Realized A/c
13. Service Tax Availed A/c
14. ESS Availed A/c
15. SHE Availed A/c

In GMR, the tax codes in Service Tax context are defined based on the location
parameter. So, the below tax code structure is identified in this case:
Tax Codes Description
S1 -- Input Service Tax
S2 -- ,, Input Service Tax Codes
S3 -- ,,
Z1 -- Input Service Tax
Z2 -- ,, Target Tax Codes

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Z3 -- ,,

D1 -- Output Service Tax Code
D2 -- ,, Output Service Tax Codes
D3 -- ,,
B1 -- Service Tax
B2 -- ,, Target Tax Codes
B3 -- ,,

The below location specific Service Tax Codes for Down Payments are
maintained separately, as at the time of Down Payments only the Service tax
will be realized. When these tax codes are used, there wont be any posting to
the Payables/Receivables Accounts. The tax amounts will be directly posted to
the Payables/Receivables Realized Accounts and from there gets posted to
Availed Accounts where the net balances can be seen.
F1 -- For Customer-others
F2 -- For Customer-Sankili
P1 -- For Vendors-others
P2 -- For Vendors-Sankili

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The below is the explanation on the care to be taken while configuring of GL
Accounts for these tax codes:

Define new balance sheet G/L accounts for deferred taxes, e.g. using transaction
FS00,with the following characteristics. In the tab account control:

- do not flag the indicator Balances in local currency only;
- assign tax category ">"(output tax) or "<" (input tax);
- mark the checkbox Open item management;
- mark the checkbox Line item display.
Define new balance sheet G/L accounts for target taxes
- do not flag the indicator Balances in local currency only;
- assign tax category ">"(output tax) or "<" (input tax);
- mark the checkbox Line item display.

In releases higher than ERP2005 it is necessary to check that the following BTEs are
active

00001025 CREATE_DEFTAX_ITEM
00001030 SET_DEFTAX_ITEM
00001040 CREATE_DEFTAX_ITEM_REVERS
00001050 CREATE_DEFTAX_ITEM_MR1M
You can use for example the following tranasaction:
FIBF->Settings->Process Modules-> ... of a customer
These BTEs require the following customizing:
1. You have to create Deferred tax rule. This rule defines
country specific behavior of the report.
Run transaction SM30 and maintain view J_1IT007DT .
Default settings of deferred tax rule for India is
TPLEV = '01'
EXRAT = space
BANKO = space
VEND = 'X'
CUST = space
2. You have to assign this rule to your company code . Run transaction SM30 and
maintain view J_1IT001

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Step 3:
Create special deferred tax codes for input and output service taxes.
Use IMG: Financial Accounting - Financial Accounting Global Settings - Tax on
Sales/Purchases - Calculation - Define Tax Codes for Sales and Purchases
For deferred tax code it is necessary to enter target tax code on the tab properties
in the field target tax code. Use the same percentage and condition type for deferred
and target tax code. Assign appropriate tax accounts to these tax codes on the tab
Accounts.
See also the attachment "TaxAccountDetermination.zip".
Service tax processing
o Post an invoice using deferred tax code.
o Post a payment for the invoice using posting key with active check box
"Payment transaction"

o Run report RFUMSV50 with the following parameters:

- G/L account - deferred tax accounts (recommended for performance
improvement)
- Open items at key date - end of fiscal period date.
Important: this date restricts both tax transfer documents and invoices.
- Clearing date - fiscal period
- Indicator No credit indexes should be active. Only fully paid invoices are
acceptable for processing.
- Indicator No debit indexes should be deactive. Partly paid and fully paid
invoices are acceptable for processing.
- If option P_XCUST is active the report processes only full paide customer
invoices. If the field J_1IT007DT-CUST for deferred tax rule is marked, but
the field P_XCUST on the selection screen is empty the report generates
warning message. The customer could decide if to continue this run or to
cancel it.
- If option P_XVEND is active the report processes only full paid customer
invoices. If the field J_1IT007DT-VEND for deferred tax rule is marked, but
the field P_XCUST on the selection screen is empty the report generates
warning message. The customer could decide if to continue this run or to
cancel it.
o The report J_1I_RFUMSV50 creates so-called tax transfer documents. This
document has two line items. The document posts tax amount from deferred tax
account to target tax account. The tax transfer document has reference to the
original invoice in the header field Reference and reference to the payment in
the second line item in the field Assignment.

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Only balance on target tax account should be used for settlements with the budget.
You
can use report RFUMSV00 to do automatic posting to settlement with the budget
account.
The Process is in detail explained in the below attachment.

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40. Statutory Payments:
In GMR, VAT is tracked location wise with the help of Business Place.
3. Explanations of Functions and Events:
Excise Duty payment When manufacturing invoice raised to customer

Service tax payment When payment received from customer
When payment to Service provider on Import of service
When payment made to Goods transport agencies
When payment made for Sponsor ship services
When payment made to Vendor
When advance money is received from customer (For import services)

VAT Payment When goods sold to customer
When Sale of Scrap

Through General Ledger all statutory payments will be done for Excise, Service
Tax, VAT. Below are the few points that needs to be considered for better
comprehension of the client requirements:

Selection of open items to be made available at the time of payment.
Service Tax payable is due only upon receipt of Service tax from the customer.
Systems to give alert messages before due dates.
Cenvat credit availed on Inputs, Capital goods; Service tax cr. & VAT input
credit registers are to be made available for set off of statutory payment. This
has to be in accordance with prevailing laws.
Tax returns to be generated through system at the time of filing returns. (Refer
to Excel template below)
Solution manager through OSS for all necessary changes in taxation law.
Party wise accounts against Service Tax & VAT paid /payable and realized with
Cess & Secondary Higher Education Cess.
Invoice format to be created as per current taxation law Format to be given.
This is for cases where SD invoices are not done.
Service orders should be generated in SAP.
Excise duty accounting in SAP. Specific rates applicable to different sectors
such as sugar to be considered. In the case of Sugar Sector, duty will be paid
on the excisable and non-excisable products manufactured from molasses, since
no separate identification is possible.

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VAT credit account for different states should be available. This is specifically
required in case of Ambala - Chandigarh Road project, which covers two states.
Excise duty payment through e-payment should be facilitated in SAP Mode of
making E-Payment will be provided.
Various kinds of tax accounts can be opened under TXDP group (Taxes and
Duties Payment).
Cenvat credit availed on capital goods can be viewed through Asset register.
In case of Capital Assets procured, only 50% of the duty should be utilized
during the year and balance need to be carried forward to the next year, and
should be utilized. System should facilitate this requirement.
Excise Registers (RG 23 A/C and PLA) should be maintained in the system
automatically based on transactions entered by users.
Service tax credit should be made available for utilization in Excise duty
payables.
Customs duty cannot be offset against any other credit. System should be
configured accordingly.
However CVD can be utilized. SAP should be configured accordingly.
Interest is payable in case of delay in payment of taxes. These should be
calculated by System and accounted for in appropriate account.
2. General Explanations (For Masters and Enterprise structure include Naming
Convention)
Taxes are payable within due date on liability accounted in G.L. as prescribed in
various tax laws
Taxes in case of service tax is payable on reverse charge mechanism in few cases
Taxes on Roads & Airport project is exempted at present scenario [only service tax]
Taxes also payable on scraps at Energy, Sugar, Roads & Air port sectors
Taxes in case of Service tax Input credit can be distribute with in entity.
Customs duty rebates in case of import of material classified under General
exemption to be notified
All Services not to be accounted for payment of service tax, without consult of
indirect taxation department i.e. only manual payment is applicable for payment of
service tax

Taxes accounted when Invoice raised on Services provided on behalf of other
legal entity
Taxes accounted when Invoice raised for shared services
Taxes accounted on VAT on Input
Taxes accounted on Import of Goods from CUSTOMS

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Taxes accounted on Recipient of SERVICES
Taxes accounted on Input of goods for production
Taxes on reverse charge mechanism
Taxes on sale of Scrap
Taxes to be deducted at the time of payment and to be deducted from supplier
[Ex. VTDS]

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41. Fringe Benefit tax:

As per Section 115WB of the Income Tax Act, 1961, it is required to calculate Fringe Benefit Tax on
any privilege, service, facility or amenity, directly or indirectly, provided by an employer, whether by
way of reimbursement or otherwise, to his employees, any free or concessional ticket provided by
the employer for private journeys of his employees or their family members, any contributi on by the
employer to an approved superannuation fund for employees, any specified security or sweat
equity shares allotted or transferred, directly or indirectly, by the employer free of cost or at
concessional rate to his employees - Act

Calculation of FBT will be done on the basis of data directly obtained from the system based on the
percentages specified in the Income Tax Act, 1961 including surcharge and education cess.

A. Fringe Benefit tax:
Advance Fringe Benefit is payable in the following installments:
Due date of installment Amount payable
On or before June 15 Not less than 15% of FBT.
On or before September 15 Not less than 45% of FBT. [Inclusive of first installment]
On or before December 15 Not less than 75% of FBT. [Inclusive of earlier two installments]
On or before March 15 the whole amount of FBT. [Inclusive of earlier installment(s)]

Accounting process - Advance Fringe Benefit tax account is debited and bank account is
credited.

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42. Tax deduction at Source:

Permanent Account Number should be mandatory while creating vendor Master based on Vendor
Groups.

TDS is to be calculated and deducted as per the provisions of Section 192, 193, 194, 194A, 194C,
194H, 194I, 194J & 195 of the Income Tax Act, 1961 read with rules, circulars or any notifications.

As per Section 192, 193, 194, 194A, 194C, 194H, 194I, 194J & 195 of the Income Tax Act, 1961,
system has to calculate TDS either at the time of Invoice Posting or payment posting whichever is
earlier.

System should take care of the minimum amount specified under the above sections for calculation
of TDS.

System should facilitate to manually enter the taxable amount.

Once the tax is calculated, it should be posted to the respective account TDS payable a/c
automatically.

B. Tax deduction at Source:-
TDS deducted under various sections during the month is to be remitted to the government account
on or before the 7 of the following month. Rates of taxes and sur-charges as applicable will be
provided.

Dividend - 14 days from the date of declaration or date of disbursement whichever is earlier
In case of TDS for March, , and others TDS deducted 7
th
of next month, and for TDS provided for
31
st
March will be on or before 31
st
of May will be last date.

In case of deduction for Non-Residents, payment has to be made within 7 days from date of
deduction.

Separate GL accounts will be used for capturing the data which is liable to FBT. At the time of
depositing the FBT, report shall be generated from system for calculation of FBT amount to be
deposited.

(B) Tax Deducted at Source-Process followed at GMR :

TDS will be covered as :

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TDS on salary of employees
TDS on others

1. TDS on salary to employees will be covered in HR payroll and deduction will be
done at the end of each month. TDS on salary will be posted to a separate GL account
as required. Payment to Government will be made by Finance deptt. Every month on
the due date.

Accounting entry on the payroll run:
Dr. Employee vendor a/c
Cr. TDS on Salary payable

Deposit of TDS:
Dr TDS on Salary payable
Cr Bank account

Form 16 for tax deducted from salary of employees shall be generated from HR.
Similarly Tax return for Salary will also be generated from HR.

Other TDS will be categorized as per the following sections under Income Tax Act.
2. Official Withholding tax key :

The deduction of TDS takes place under various sections of the Income Tax Act. These sections
are defined as Withholding Tax keys in the system and mapped to the sections of the Income Tax
Act under which TDS is to be deducted. Based on the above the following official Withholding Tax
codes shall be created in the system:

Section-193 TDS on Interest on Securities
Section-194 TDS on Dividends
Section-194A TDS on Interest other than Interest on securities
Section-194C TDS on payment to Contractors and sub contractors
Section-194H TDS on Commission and Brokerage

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Section-194I TDS on Rent
Section-194J TDS for Professional and Technical services
Section-195 TDS on payments for Foreign services

3. Recipient type:
The vendors from whom TDS is deducted need to be classified as
Company and Others. Recipient type enables categorization of the vendors. This
categorization is required for creation of separate challans and printing the TDS
certificates

4. Withholding Tax types:
Withholding tax types are defined at client level to represent the various types of
withholding taxes for eg 194C, 194D etc. Withholding tax types are also used to
determine whether the deduction of TDS will take place at the time of invoice
verification or at the time of payment. These withholding tax types can be used once
these are linked to the Company codes. Withholding tax types shall be configured
as per GMR requirement. For each withholding tax type minimum and maximum
amounts shall be maintained.

5. Withholding Tax Codes:
The various sections of the Income tax Act prescribe the rate at which the Tax is to
be deducted. Withholding tax codes are used to define the rate at which tax is to be
deducted and the base amount on which the tax is to be calculated. The rate will
also include rate of surcharge and Education Cess if any is applicable. SAP
suggests to go with one tax code which is inclusive of basic tax rate, surcharge and
Education cess.Surcharge and Education cess rates shall be maintained separately
in tables and printed on the Vendor TDS certificate. In system we can have 99
inherent tax codes only due to this we should not go for exclusive method. For
each withholding taxcode, minimum and maximum amounts shall be maintained.

6. Vendor master:
WHT type /codes shall be maintained in the Vendor master as applicable to the
vendor. Tax computation will be done by the system based on the WHT type/code
maintained in the vendor master at the time of invoice entry and also advance
payments. Withholding Tax Type and Withholding Tax code are maintained at the
Invoice Entry level and

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PAN# will be made as a part of Vendor Master.

Only tax type is maintained at the Payment level. This will ensure tax will not be
deducted both at the time of invoice and payment. In the case of Advance
payment, tax type will be maintained and user need to select the tax code. If
multiple TDS sections are applicable to a particular vendor, then all the tax types
and tax codes for invoice s applicable for those TDS sections must be maintained in
the vendor master. However at the time of invoice entry the user has to select the
correct tax type and code and exclude those which are not applicable.

7. SAP suggested to go for one withholding tax code which is inclusive of basic
rate, surcharge and education cess. Surcharge and Education cess rates shall be
maintained in separate table and printed on Vendor TDS certificate. In system we
can have 99 inherent tax codes only due to this we should not go for exclusive
method

8. System should facilitate manually enter the taxable amount :- At the
time of posting user shall amend the base amount.

9. Once the tax is calculated, it should be posted to the respective
account Tax Payable A/c automatically is a standard functionality. TDS Payable
Account will be maintained section wise.

10. Exemptions rates will be maintained at the Vendor Master level for
deducting tax to vendors.

11. Accounting entry at the time of Invoice entry:

Dr Expense a/c
Cr Vendor
Cr TDS Payable

Separate GL accounts shall be created section wise like
TDS payable - Contractors

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TDS payable - Professional fee. etc.
12. Accounting entry for advance payment to vendors:

Dr. Vendor Advance a/c
Cr. Bank a/c
Cr. TDS Payable
13. TDS remittance: Remittance will be made through the system by
standard T-code J1INCHLN. Challans will be updated for each section
wise, corporate and Non corporate separately. Due dates will be
defined in the configuration for each section wise.

Dr TDS Payable
Cr Bank a/c

14. Bank Challan updation: Bank challan number will be updated in the
system through standard T code J1INBANK. This will link the
remittance challans with the external bank scroll number. No
accounting entry will be generated.

15. TDS certificate: Certificates for the vendors can be generated by T
Code- J1INCERT
Certificates can not be generated more than once. However duplicate certificate
can be issued.

16. Quarterly E-Returns: E-Returns for TDS shall be generated from the
system by T code J1INQEFILE. The return shall be converted into
required excel file and can be validated for filing.

17. TDS deducted by Customers:

A separate set of WT tax code & tax type shall have to be created for
customers. Following accounting entry shall be generated at the time of
receiving the payment:

Dr. Bank a/c
Dr. TDS deducted by customer a/c

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Cr. Customer a/c

The system will propose the TDS amount and the user can overwrite the
amount, if required.
After receiving the TDS certificate from the customer, J1INCUST transaction
shall be run and following accounting entry shall be generated:

Dr. Advance Tax Paid A/c
Cr. TDS deducted by customer a/c

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43. Tax Collected at source (TCS)

TCS is applicable on sale of Scrap to customers. Tax has to be collected at the
time of billing to customers and to be grossed up.

TCS will be covered by creating a separate condition type in Sales and
Distribution module and system will calculate TCS at the time of sale of scrap.
TCS amount will be posted to TCS payable GL account in FI. Payment for the
same will be from FI by T-Code F-07.

Accounting entry on billing:

Dr. Customer
Cr. Revenue a/c
Cr. TCS Payable
Cr. Other taxes

Deposit of TCS into Govt.:

Dr. TCS payable
Cr. Bank a/c

System should facilitate reports by way of Tax Deduction No, Section,
Consolidated statement:- A standard functionality in SAP.

18. Dividend Distribution Taxes (Sec.115O): This has to be manually
calculated and entered in the system by passing JV (Txn.FB50 or F-
02).

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44. Works Contract Tax

At present GMR is executing Works contract in Road projects, Civil Construction, Sugar etc.

There are two ways of calculation of Works contract tax.
1. Composition Scheme(Material with labour contract ): In this case, if the composite order placed
to the contractor with material and labour, the WCT calculation will be 4% (or as applicable, for
each state) of the order value (Gross), including TDS and Service Taxes. Flexibility should be
available wherein base amount excludes TDS and Service taxes also, since it is applicable in
certain states.
2. Regular Assessment Method: In this case, input tax credit can be availed and set off against
output taxes. No taxes on labour portion of the contract. Rate of taxes will be as per VAT
Schedule. however we need to maintain, detailed purchase register, along with the following
records & details:
a. Input tax register(rate wise),
b. Purchases from unregistered dealers / inter-state dealers,
c. Tax invoices from sub-contractors,
d. TIN(Tax Identification Number for VAT) and PAN Numbers of vendor
e. Service Tax registration number of the vendor.
f. Stock registers to be maintained
g. WCT certificates to be generated
h. Labour charges bills from subcontractors
i. Additional expenditure details incurred on labour and material.

1. Work contract Tax is deducted from the contractors for composite and regular contracts
(i.e. for services and supplies) rendered both at the time of advance payment and invoice
booking. WCT will be treated similarly as TDS. WCT codes and rates will be covered by
creating separate set of With Holding Tax (WHT) types and WHT codes. However WCT
certificate shall be developed as per the format prescribed by the respective states.

2. For composite method of WCT, different tax codes will be maintained.

3. WCT is applicable to all the States. The rates of WCT can be different for different states.
Hence multiple WCT codes shall be created in the system as per the rates applicable. The
WCT tax codes shall be configured based on the input rates. However in Karnataka, GMR
will not deduct WCT for Vendors from Karnataka at the time of booking the liability and
thereafter. [As mentioned in requirements]

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4. The WCT tax types and codes shall be maintained in the vendor master who is subject to
WCT. However if one vendor is operating in multiple states and different rates of WCT is
applicable, then all the WCT codes should be maintained in the Vendor master. At the time
of invoice entry or advance payment, the user has to choose the appropriate tax code and
post the document.

5. Regular Assessment Method (set off of input tax credit) shall be covered in regular
procurement cycle using different Tax codes.

6. The VAT payable will be availed against Output taxes. Purchases from Unregistered
dealers shall be covered through purchase tax. This will be taken care in MM module.

7. Exemptions rates will be maintained at the Vendor Master level for deducting tax to
vendors.

8. Accounting entry at the time of Invoice entry by FI: ( TransactionCodeF-43/MIRO )

Dr Expense a/c
Cr Vendor
Cr TDS Payable
Cr WCT Payable

9. Accounting entry at the time of advance payment: (T.Code :F-48/F110 )

Dr. Vendor advance a/c
Cr. TDS Payable a/c.
Cr. WCT payable a/c
Cr. Bank a/c

10. Deposit of WCT through the TDS challan transaction:

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TDS remittance: Remittance will be made through the system by standard T-code
J1INCHLN. Challans will be updated for each state wise separately. Due dates will
be defined in the configuration for each section wise.

Dr. WCT payable a/c
Cr. Bank a/c

Bank Challan updation: Bank challan number will be updated in the system
through standard T code J1INBANK. This will link the remittance challans with
the external bank scroll number. No accounting entry will be generated.

11. Purchases from unregistered dealers will have purchase tax on invoice posting. For each
rate of Tax shall be created as separate purchase tax codes. At the time of invoice posting
separate tax line item shall be created.
12. Section wise reporting monthly/quarterly/annually returns will be facilitated.
13. Due Dates can be configured in SAP for the tax codes.
14. Interest calculation to be handled thru Interest Calculation Indicator attached to the GL
accounts. [T.code: F.52]

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ACCOUNTS PAYABLE

Introduction to AP:

The Accounts Payable application component records and manages accounting data for all
vendors. It is also an integral part of the purchasing system: Deliveries and invoices are
managed according to vendors. The system automatically triggers postings in response to the
operative transactions. In the same way, the system supplies the Cash Management application
component with figures from invoices in order to optimize liquidity planning.
Payables are paid with the payment program. The payment program supports all standard
payment methods (such as checks and transfers) in printed form as well as in electronic form
(data medium exchange on disk and electronic data interchange). This program also covers
country-specific payment methods.
If necessary, dunning notices can be created for outstanding receivables (for example, to receive
payment for a credit memo). The dunning program supports this function.
Postings made in Accounts Payable are simultaneously recorded in the General Ledger where
different G/L accounts are updated based on the transaction involved (payables and down
payments, for example). The system contains due date forecasts and other standard reports that
you can use to help you monitor open items.
You can design balance confirmations, account statements, and other forms of reports to suit
your requirements in business correspondence with vendors. There are balance lists, journals,
balance audit trails, and other internal evaluations available for documenting transactions in
Accounts Payable.

Reconciliation Account:

When you post items to a subsidiary ledger, the SAP system automatically posts the same data
to the general ledger at the same time. Each subsidiary ledger has one or more reconciliation
accounts in the general ledger. These reconciliation accounts ensure that the balance of G/L
accounts is always zero. This means that you can draw up financial statements at any time
without having to transfer totals from the subledgers to the general ledger.

This process is applicable for all invoices received without any PO/Service/Work Order (i.e. items not
covered through Material Management Module) and for issuance of Credit Notes

All invoices received without PO/Service/Work Order are required to be recorded and directly
accounted in FI along with VAT, TDS or any other taxes wherever applicable, through Invoice
verification process.
There are few cases where FI credit notes/Invoices are required to be raised.
o Wherever invoices cannot be accounted through Invoice Verification process
o Reversal of excess recoveries made earlier, through debit note.
o Admin/Management related expenses payable to suppliers.
System should alert in case of same invoice/bill number for same vendor repeat in different
Company Codes and also within same company. (or) Report showing same invoice
number across company codes should be available from System
Case sensitiveness of Invoice should be checked.

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Solution:

Accounting entries: Sample accounting entries is as follows:
Dr Purchases / Expenses a/c
Cr Vendor A/c

Srl.No. Business requirements SAP solution
1 Preparation of Vendor credit notes/invoices (received without
PO/Service/Work Order are handled in FI along with VAT, TDS or
any other taxes wherever applicable)
F-43, FB60
2 System to give alert in case if the same invoice/bill number is
entered again, where the original invoice was entered in the
same company.
Standard
3 Case sensitiveness of Invoice should be checked Vendor Bill
number/Invoice
number entered in the
system will be
converted to CAPS
irrespective of the
upper/lower case
entered.

Recurring Transactions like Rent Payment etc.,:
its a standard feature where in a Recurring entry document will first be created and stored (T Code
FBD1)
The stored documents can be viewed (T Code F.15)
Periodically posting documents will be created from recurring documents (T Code F.14) and a
Batch input file being generated.
Executing the Batch input file the entries will get posted.(T Code SM35)

Manual Outgoing Payments:

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Manual Outgoing payment is a process of accounting vendor clearing of open items by selecting and
clearing manually
User to define which vendors and which banks should be covered for manual payment.
Cheques / document cancellation in exceptional cases will be done.
System shall not allow the manual payment unless liability exists in the books except in
case of advances or a special GL (deposit).
System shall allow use of only one document type for all payments from various banks.
System should be able to make partial payment against a specific invoice clearing the
open item to the extent of payment made
System should be capable of making payment to one time vendor also.
System to generate a printable list containing the following fields :-
o Vendor Name
o Vendor Code
o Bill No.
o Amount paid
o Cheque No.
o Cheque date
o Bank Name
o TDS deductions
o Other Deductions
System should not allow making payments, if the total amount of payment exceeds the clear
balance in the bank a/c / overdraft limit, unless it is authorized by a higher authority.
System should automatically update the cheque number in cheque register in the case of manually
written cheques.

These vendor accounts are integrated to the General Ledger through a reconciliation a/c. Postings made in
Accounts Payable are simultaneously recorded in the General Ledger. Separate G/L accounts are updated
based on the type of transaction involved (for e.g down payments). After entry of the document details but
before posting, the system carries out consistency checks before saving the data. When the debits equal the
credits, and the data is complete, the system posts the document. If errors exist, the data is not saved, and
the system proposes adjustments.

Payment Voucher can be printed in t-code ZFITC_PAYMENT_01
Manual Updation of Check will be done in FCH5
Manual Outgoing payment will be used on need basis. Those vendors who are not covered for payment, as
part of Automatic Payment Program will be made payment through Manual outgoing payment.
Vendors are generally paid based on the invoices, as per agreed terms of payment. In some cases, payment
is made on account basis.

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These amounts are payable, on due dates, or upon clearance for payment. Approvals should have been
obtained prior to making the outgoing payment. The order of events is as follows:

1 Receipt of Bill from Vendor
2 Invoice raised based on approvals
3 Amount of invoice is credited to Vendor / Supplier
4 Applicable taxes and duties are considered.
5 Due date of transaction is considered for payment.
6 Approval for payment is obtained.
7 Based on approvals, payment for vendors is processed.
8 Payment voucher is generated and Cheque is printed.
9 Cheque signatories are identified.
10 Signature is obtained based on Cheque amounts
11 Cheque is dispatched to the vendors.

Manual payment option will be opted in case of urgency in the nature of payment to be made like statutory
payments and other payments where decision has been taken by the responsible officer for payment
Once the Invoice verification has been done and based on the respective approvals and also based on the
decision taken to make manual payment and payment amount, full payment or partial payment has to be
made against a particular invoice and cheque printing will be done for individual invoices.

The concept of Manual payment will be carried out at across all sectors in the GMR group.
Payments are required to be released to various agencies.
Payment document will be posted using manual payment functionality
Mode of payments will be Cheque, Bank transfer, DD, Bank for payment against
documents, E-payment, or through LC (letter of credit).
Following payments will be made
o Vendor Payments (Down payment, Normal items, release of Retention
money)
o Customer Refunds if any
o Staff payments
o Fresh Issue of Cheque in lieu of Cheque getting cancelled/lost.
o Interest / Misc. Expenses Payments
o Additional / Special Commission payments
o Lease Rent to Lessors
o Incentive Payment to marketing staff
o On LIV etc., bills/advice will be given to cashier
Payment will be by PMT/cashier/Accountant as per above advice
Payment voucher will be printed along with payment advice
Reimbursements to staff will be against payment vouchers
Customer Refund/payment if any will be exceptional in nature & will be made only on
specific request/advice from Marketing

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All statutory payments except Excise/service tax collected/TDS will be through Vendor
payments
Excise /service tax collected/ TDS payments will be through GL.
Cheques will be printed on pre-printed Bank Cheque Stationery (pre-printed as a
crossed a/c payee or Not over Rs.) For cash withdrawals (i.e. for self) the
pre-printed a/c payee crossing will be manually cancelled.
Payment list & Cheque Register will be printed & signed by Cash officer.
Cheque register will be available from the system. Payment vouchers will be signed by
PMT/Cashier & Payee wherever received directly
Cheque register duly signed by authorized signatories will be kept with cashier.
Cheque/payment document reversals/cancellations are done in exceptional cases.
Signed cheques are handed over /despatched to Vendors /Staff etc
System should automatically select the cheque lot series which was already defined in
the system. In case of payment through RTGS/Letter transfer, a separate cheque lot
should be created.
Updating of cheque lot series will be with authorization only

The following activities should be considered for performing these activities:

1. Invoice should have been booked in the Vendors account
2. It should be verified if there are any advances lying against the vendor for the same transaction.
3. There should be no payment block against the Vendor for making payment.
4. Bank balances should be considered so that they are sufficient for making the payment.

SAP Organizational structure:
All company codes
Vendor Accounts & Customer Accounts
House Bank & Payment Methods
4.1.Accounting entries: Following entries would be generated for the Manual
outgoing payment:
Vendor Dr.
Cheques Outgoing Clearing A/c Cr.

Step # Department User Role Process Description SAP
Module
1 Procurement /
User dept. /
Accounts
dept.
Applicable
user
LIV is done as per approved terms &
conditions. Correct Payment terms
are used in Purchase order/Service
order, which are then defaulted in
transactions.
MM
Formatted: Bullets and Numbering

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2 Accounts Accountant Also, correct House Bank, Tax code,
Pmt method are used in LIV for
correct deduction & payment to
Vendor. In case of advance
payments, Down payment requests
are generated. Bill passing details like
gross amount less deduction net
payment will be recorded on bills with
SAP LIV/FI document number as per
LIV BP Process.
MM

F-48
3 Accounts Accountant Cheque lots for the House Bank will
be updated.
FCHI
4 Accounts Accountant PMT/Cashier, as per the bill/advice
received will make manual Outgoing
Payment. Open items will be selected
correctly to ensure correct payment.
Voucher will be printed. Vendor
account will be debited & Bank
account will be credited.
F-58
5 Accounts Accountant Cheques will be prepared manually or
wherever specified, cheques will be
printed in the preprinted Bank
stationery. In case of bank transfers,
Letter to bank will be printed
depending on payment method used
in the transaction.
In case of partial payments, the
invoice partially paid is not cleared.
The partial payment is posted to the
account and a link to the related
invoice is created in the line item.
In case of residual items, the remaining
balance amount is to be posted during the
clearing of the original item. The residual
item represents a new receivable or
payable.
In case of Charge off, the difference
between Invoice amount and the
payment amount will be charged off to
F-58/F-53

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P & L based on the tolerances limit
preconfigured.
Incase if the cheque is written
manually update the cheque
information in the system.

FCH5
6 Accounts Accountant Authorized signatories will sign
Payment voucher & cheques. In case
of bank transfers, Bank advice/letter
will be signed. These cheques will be
given to MM Users for further dispatch
to Vendors.
Non SAP
7 MM MM Users Cheques will be handed
over/dispatched to Vendors/Staff etc.
In case of physical handing over,
signature of recipient will be taken on
Cheque register and official receipt
obtained
Non SAP
8 Accounts Accountant Cheque / documents will be cancelled
in exceptional cases after defacing the
instrument /voucher
FCHF/FCH
E,FB08
9 Accounts Accountant Cheque register will be printed at the
Day end
FCHN

Automatic Payment Program

Automatic Outgoing payment is a process of accounting vendor clearing of open items.

User to define which vendors and which banks should be covered for Automatic
payment.
Cheques / document cancellation in exceptional cases will be done.
User should be able to decide the amount limit for which Automatic payment run should
be done, say minimum 100 to maximum up to Rs.10,000,000 (Being taken care during
transaction)
System shall not allow the automatic payment unless liability exists in the books except
in case of advances or a special GL (deposit).

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System shall allow use of only one document type for all payments from various banks.
System should be capable of making payment to one time vendor also.
System to generate a printable list containing the following fields :-
o Vendor Name
o Vendor Code
o Bill No.
o Amount paid
o Cheque No.
o Cheque date
o Bank Name
o TDS deductions
o Other Deductions

These vendor accounts are integrated to the General Ledger through a reconciliation a/c. Postings made in
Accounts Payable are simultaneously recorded in the General Ledger. Separate G/L accounts are updated
based on the type of transaction involved (for e.g down payments). After entry of the document details but
before posting, the system carries out consistency checks before saving the data. When the debits equal the
credits, and the data is complete, the system posts the document. If errors exist, the data is not saved, and
the system proposes adjustments.

The Batch payment process is being used for processing all employee related payments in batch
mode. All employees related invoices accounted during a week are released for payment once in a
week.
All the open items that are due for payment based on the specific due dates are chosen for further
processing.
1.1. Accounting entries: Following entries would be generated for the Manual outgoing
payment:
Vendor Dr.
Cheques Outgoing Clearing A/c Cr.

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Step
#
Department User Role Process Description SAP
Module
1 Procurement /
User dept./
Accounts dept.
MM Users LIV is done as per approved
terms & conditions. Correct
Payment terms are used in
Purchase order, which are
then defaulted in
transactions.

MM/FI
2 MM MM Users Correct House Bank, Tax
code, Pmt method are used
in LIV for correct deduction &
payment to Vendor.
In case of advance
payments, Down payment
requests are generated.
Bill passing details like gross
amount less deductions
net payment will be recorded
on bills with SAP LIV/FI
document number as per LIV
BP Process.
MM

F-47
3 Accounts System Supervisor Cheque lots for the House
Bank will be updated.
FCHI
4 Accounts Accountant Automatic Payment run will
be done for combination of
Company code, Pmt method
& due dates with additional
selection criteria of Line
item/ House bank, Vendor,
Customer or Document.
Frequency & process for
different type of
vendors/customers will be
user defined.
F110
5 Accounts Accountant Proposal & Exception list will FI

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be verified by Finance &
changes can be made if
required.
6 Accounts Accountant Payment run will be made
which will post payment
document & clear open
items in sub ledger as
applicable. This will also
update cheque register.
Accounting document
debiting Vendor / Customer
& crediting Bank Outgoing
cheques account will be
posted.
F110
7 Accounts Accountant Wherever specified, cheques
will be printed in the pre
printed Bank stationery. In
case of bank transfers,
Letter to bank will be printed
depending on payment
method used in the
transaction.
FI
8 Accounts Accountant Payment list & Cheque
register will be printed.
FI
9 Accounts Accountant Authorised signatories will
sign cheque register,
cheques and voucher. In
case of bank transfers, Bank
advice/letter will be signed.
Non SAP
10 Accounts Accountant Cheques will be handed
over/ dispatched to
Vendors/Staff etc.
In case of physical handing
over, signature of recipient
will be taken on payment
voucher.
Non SAP

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11 Accounts Accountant Cheques / documents will be
cancelled in exceptional
cases after defacing the
instrument.
FI
12 Accounts Accountant Exception List generated
during payment run will be
circulated to User dept at
regular intervals for their
analysis & comments. (Eg.
During errors in payment
programme run)
FI
13 Accounts Accountant Staff Payments : Automatic
email to be sent to employee
on making the payment
HCM
Workflow

Receipt & Refund of EMD, SD from Vendors:
This process is for Receipt & Refund of EMD, Security Deposit from Vendors and Release of Retention
Money

a. For receipt of Earnest Money Deposit (EMD) no separate vendor ledger a/c are required to be
opened. However vendor wise details are required from the system.
b. Receipt of EMD & Security deposit shall be recorded as Special GL transactions and posted to
vendors ledger.
c. Earnest Money Deposit is converted into Initial Security Deposit/ for the successful bidders.
d. Earnest Money Deposit / Security Deposit will be displayed separately in Balance Sheet under
Security Deposits from vendors.
e. Vendor account items/balances should display items pertaining to EMD/Security Deposit
separately.
f. Vendor a/c report should show Earnest Money Deposit & Security deposit to respective contracts
against work orders released.

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g. Retention money need to be identified and accounted at the time of invoice verification
automatically
h. System should allow refunding the Security deposit only after finishing of contract is completed in
SAP system and in case of Retention money unless authorized on completion of defect liability
period (DLP)/Warranty.
i. Bank (BG) guarantees need to be tracked and the validity of BG needs to be tracked with DLP.
j. Drop down menu for selection should not contain Corporate Guarantee or a dialog box cautioning
corporate guarantee not accepted.

Contract works: Earnest Money Deposit /Security deposit/Retention money:
Tenders shall be called. The amount of cheques/DD/Cash collected shall be held by purchase
committee without accounting until opening of the Boxes in the evening.
Once the tender box is opened the lowest 3 tender participants EMD amounts shall be accounted
in books and amount will be deposited in banks.
On finalizing the tender allocation the work order is released the balance 2 tender participants
money is returned.
The EMD shall be adjusted against the security deposit required as per the Works Contract clauses.
In case the Security deposit is not received, the amount shall be collected at the time of release of
first bill.
The Security deposit shall be returned after the contract is completed as per contract terms.
From every running bill certain percentage of amount is collected as retention money.
Retention money is kept until warranty period, on satisfactory completion of period the user dept
shall certify the release of the same, which shall be refunded by accounts dept..
In case the vendor opts for Performance Bank guarantee favoring the company from scheduled
banks and the BG shall be confirmed by the Authorized executive of GIDL from bank, the retention
amount shall be paid back to vendor.
All the above EMD/Security deposit/Retention money shall be routed though Sub-ledgers in our
Account books.
Earnest Money Deposit / Security Deposit from Vendors are required to be forfeited if certain
contract conditions are not fulfilled by the Vendors. The Forfeited amount shall be treated as other
income in the books of accounts.

Earnest Money Deposit: (SAP Tcode is F-43/FF67)
EMDs are received by MM / FI Dept along with Tenders/Bids. The receiving department (MM/Contracts/FI )
shall fill the following details in system for each EMD & park the document :
Reference No.
Vendor name
Vendor address
EMD Amount
Cheque/DD No. & date
Name of the Bank
EMD instruments are then immediately sent to Accounts for deposit (Manual Work flow) (if received by
MM/Contracts). Accounts Dept. shall verify with the Bank and post the EMD amount in the system. EMD
are shown separately in Balance Sheet.

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EMD can be transferred to Security Deposit using transaction F-51.
Accounting Entry:-
Dr. Bank A/c
Cr. Vendor A/C (Special GL EMD) E

Refund of EMD :-
Advice will be given to FI for releasing EMD with SAP Details i.e. Vendor no/document number/amt details
etc which is a Non-SAP process.

Accounting Entry:-
Dr. Vendor A/C (Special GL EMD) E
Cr. Bank A/c

Forfeiture of EMD:-
Earnest Money Deposit of those parties who do not fulfill certain terms & conditions of the
Tender/contract are forfeited as advised for forfeiture by User Dept. The EMD thus becomes non-
refundable on account of forfeiture. Based on advice from User Dept., Finance dept. transfers the EMD to
income account.
Transfer posting with clearing will be done from EMD/SD to miscellaneous income a/c
Accounting Entry:-
Dr.Vendor A/c (Special GL EMD E)
Cr. Miscellaneous Income

Retention Money:

Certain contracts entered into with the Vendors, provide for retaining certain amounts from the bills
payable to the Vendors. Such amount is withheld and released at a later point of time as per the terms of
the Contract.

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After the invoice verification of such Vendor invoice, the amount to be retained can be split based on
specially configured payment term and the retention money will be blocked with configured payment block
R. However the posting will be made to the regular reconciliation account only. Subsequently a manual
posting has to be made to the retention money reconciliation account.

Accounting Entry:-
Dr. Vendor A/c (Normal)
Cr. Vendor A/C (Special GL Retention R )

Automatic posting of Retention money to separate Spl GL account is not possible.

Release of retention money
When a written request is received from the Vendor for release of such Retention money (after completion
of Defect Liability Period and approved by the respective Project Management Head for release), an entry
is passed transferring the amount from the special GL back to the Vendor a/c. Once the voucher is
approved, the voucher will be paid as per the payment process
Accounting Entry:-
Dr. Vendor A/C (Special GL Retention R )
Cr. Vendor A/c (Normal)

Dr. Vendor A/c (Normal)
Cr. Bank A/c

Security Deposits:

The company has to pay the security deposits (which may bear interest) to avail telephone facility,
electricity facility, water facility etc. This is a deposit amount, which will be refunded to the Company at the
time of closure of the above facility. These deposits will also be recorded as special GL transactions so that

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they can also be tracked separately. On approval for payment, an entry will be passed debiting Vendor
special GL and crediting Vendor A/c. The payment will be included in the normal payment run.

On the closure of the facility the deposit amount is refunded. This is recorded as collection received in the
sub ledger, which then needs to be adjusted with the balance lying in the special GL of the sub ledger.

Accounting Entry for Security Deposits paid by GMR

Dr. Vendor A/C (Special GL Security Deposits) D
Cr. Bank A/c

Accounting Entry for receipt of refund of Security Deposits

Dr. Bank A/c
Cr. Vendor A/C (Special GL Security Deposits) D

Accounting Entry for Security Deposits received by GMR

Dr. Bank A/c
Cr. Vendor A/c (Special GL Security Deposits) H

Transferring EMD to Security Deposits

Dr. Vendor A/c (Special GL EMD) E
Cr. Vendor A/c (Special GL Security Deposits) H

Accounting Entry for repayment of Security Deposits

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Dr. Vendor A/C (Special GL Security Deposits) D
Cr. Bank A/c

Vendor A/c showing EMD/Deposit against Contracts/Work Orders :- EMD should be assigned a Purchase
Order/Work Order, from there tracking of EMD with Work Order is enabled.

Refunding the Security Deposit only after finishing of contract :- System should be in place that upon receipt of MM /
Project departments Service Completion Certificate , FI dept should release the deposit. In the case of Retention
Money, payment block can be made in the system till DLP period and will be released only upon completion of DLP
period.

Drop down selection of Spl. GL indicator G will be indicated with a description Only for banks.

Bank (BG) guarantees is a separate process will be covered in Bank (BG) guarantees Process
documentation.
Scrap and sugar sales EMD will be covered in AR Process.
Report: Standard Reports and FBL1N report will be used for getting details on Special GL indicators.

Vendor Debit Note Process Purchase Returns :

Once the goods are received at the location, they are subject to check against the PO and supplier
invoice.

After the accounting process is initiated, for goods which are not accepted for the following
reasons, a debit note will be raised.
Quality check
Quantity
Specifications
Delay in delivery
Early delivery
Price variation

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The following scenarios need to be considered for solutions
1. Goods accepted and accounted for, subsequently rejected at the time of production issues
2. Goods received at the factory, rejected at the time of inspection
3. Goods received at site
4. Returns in case of services (cancellation of air tickets)
5. Partial acceptance of goods
6. Materials issued to subcontractors on chargeable basis

Presently all the above scenarios may not be applicable in all sectors. However, these need to be
configured considering future needs. Communication will be received from the production/stores,
through the Material Return Note for the material to be returned to the supplier.
Separate internal number range needs to be defined for all debit notes.

Vendor Debit Note Process Price Adjustments :

There could be a situation in which a difference is observed between the unit price in the invoice
received from the vendor and the unit price as per the purchase order.

Debit note is expected to be raised for the difference in the price, if the full Invoice amount is
accounted separately at the invoiced price.

[The above situation wont happen, if the original PO itself is amended and the vendor invoice is
accounted for the correct PO price itself]

Vendor Debit Note Process Rendering of Services
If any services are not performed by Contractor but fulfilled by a third party the same cost will be
recovered from contractor by way of debit note.

Vendor Debit Note Process Liquidated Damages :
Whenever there is delay in the completion of project / work order, as identified and documented by
Independent Engineer (Roads) / Engineering Dept (Sugar), a debit note is raised for the delayed
period as per the contractual agreement.

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Vendor Debit Note Process - recovery of value of shortages, contamination, damages,
penalties, etc
On information from Projects/Project site and upon determination of value of
shortages/contamination/damages/penalties, debit notes will be raised to the vendor.

Vendor Debit Note Process Recovery of Insurance Premium/freight

When insurance premium/freight supposed to be payable by the vendor, borne by GMR will be
recovered from the vendor by raising a debit note.

Vendor Debit Note Process Interest on Advances / Loans

Loan given to subcontractors and the interest component of the loan is recovered from
subcontractors by issue of debit note.

Vendor Debit Note Process Recovery of Expenses

On report of expenses incurred on behalf of the vendor, debit notes will be raised to recover the
expenses.

Payment Terms for debit notes will be defaulted from the payment terms of invoice.

Vendor Open Item Clearing:

1 When payments are made to vendors, the invoices against which payments are made need to
be cleared. The clearing should be generally a regular exercise, wherein the user who enters
the payment clears the invoice corresponding to the payment.

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2 In case on account payment is made, the user should be able to select the invoices against
which on account payment is made, and these items should be cleared. Also, while clearing on
account payment, residual invoices should be clearly identified, and should be cleared to that
extent.

3 There should be system driven alerts to drive the users to clear open items in the vendor
accounts, while entering outgoing payments.

4 In case there are advances existing in the vendor account, and invoices are booked against the
particular vendor, then, system should alert the advances to the user, so that the invoice can
be cleared off against the advance payment made.

5 List of open item should be made available, based on which clearing / other activity can be
conducted by the users. Automatic programs should be made available for clearing the open
items in the vendor accounts.

6 Residual adjustments as well as part payments should be considered while clearing the open
items.

7 In case of foreign currencies open items clearing, foreign exchange fluctuation to be
automatically taken care. Foreign exchange fluctuation shall also be taken care in case of part
payments at the time of payment entry.

8 In case the vendor also happens to be customer, then balances lying in the respective
accounts need to be cleared.

9 In case final settlement is made to the vendor for a transaction, the differential amount should
be taken automatically to Profit & Loss Account. The user should also have option to enter the
General Ledger account.

10 Tolerance limits for clearing differences

Pre-requisites:
1. Clearing of open items in Vendor accounts should be facilitated.
2. Flexibility for partial payments and residual payments should be made available. Also,
differential amount should be taken to Profit & Loss account, with flexibility of entering the
General Ledger account, while processing of final settlement is done. While doing so,
tolerance levels should be configured based on business needs.
3. System should facilitate automatic clearing of vendor balances while making payment.

The following activities trigger the Open Item Clearing process:
1 Supplier has made delivery of goods / services

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2 Goods Receipt entry has been made, resulting in a line item in GR/IR clearing account.
3 Supplier has sent the invoice.
4 Line item in GR/IR clearing account is transferred to respective Vendor Accounts in Accounts Payable
Sub-ledger.
5 Payments are made to vendor against open invoices

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Step
#
Depart
ment
User
Role
Process Description SAP Module
1 MM MM/FI
Users
Logistics Invoice Verifications are posted in
Vendor account on receipt/passing of bills. FI
user will be clearing the GR/IR account
periodically.
F.13
2 Accoun
t
Account
ant
While making payments through cheque to
Vendors, open item will get cleared. In case
of payment by cash, it needs to be manually
cleared.
F53/F-58/F110
3 MM MM/FI
Users
If LIV is reversed, same does not clear open
invoice automatically. FI user will have to
manually clear the open item.
MM/FI
4 Accoun
t
Account
ant
Open item clearing will be done from the
Vendor account. When clearing open items
in a foreign currency, exchange rate occurs
due to fluctuations in exchange rates. The
system posts the exchange rate differences
automatically as realized gains or losses.
F-44 Manual
Account clearing,
F.13 Automatic
clearing
5 Accoun
t
Account
ant
In case the vendor also happens to be
customer, then balances lying in the
respective accounts will be cleared by
activating both the master records customer
as vendor and vendor as customer fields.
FK02 /FD02
6 Accoun
t
Account
ant
The vendor open invoice and the specific
payment made against the same needs to be
chosen and cleared.
In case of partial payments, the invoice
partially paid is not cleared. The partial
payment is posted to the account and a link
to the related invoice is created in the line
item.
In case of residual items, the remaining balance
amount is to be posted during the clearing of the
original item. The residual item represents a new
payable.
F-44 Manual
Account Clearing

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Reports:
Ageing of open items. (Standard SAP report: S_ALR_87012078)
Comparison of Advances given to Suppliers against GRIR balance for the same transactions.
Two Scenarios applicable :-
1. Advances made against P.O - Information available in PO History ME23N or Query can be
developed based on entries in Table EKBE
2. Advances made without P.O Non-standard report.
Vendor wise open item report. Incorporating normal as well as special GL transaction. (Standard
SAP report : FBL1N)

INVOICE VERIFICATION:
There are basically two methods of purchasing for which Invoices or credit notes needs to be accounted for.
o Purchase order related: Invoice processing by purchase order, Goods receipt and delivery
note.
o Without a purchase order: These can primarily be classified as financial entries. Normally no
purchases are involved.

Logistics Invoice Verification will be done at Accounting Centre to post the document. The relevant
FI related data and Books of Accounts would get updated automatically.

The requirement that the entries need to flow into the FI-GL module through an integration
process. In Addition to this there is a requirement to input miscellaneous purchase invoices directly
into FI Module.

PO release strategy needs to be carried out as per DOP, with intervention of MM / Legal / FI departments as
applicable.
While clearing the vendor open items, if there
is any difference between the invoice amount
and the payment amount and if the difference
falls within the tolerance limits set for
vendors, the difference will be automatically
charged off to expense account
preconfigured for such purposes.
By choosing the applicable special G/L
indicator, existing advances can also be
cleared against an open invoice accordingly.

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This process needs to address the accounting of following transactions:

Supplier invoice - MM interface through PO/GRN
Supplier invoice imported materials
Contractors Invoice Based on contract or work order
Service invoice - MM interface through SO/Service completion certificate
Supplier and Service provider expenses not interfaced with other modules
Employee expenses - HR, Travel Management
Employee expenses - Salary advice and other CTC related expenses
Employee expenses Direct accounting in FI for expenses not interfaced with other
modules
Advance payment to suppliers, service providers, and employees
Statutory deductions like TDS under Income Tax Act, WCT under Sales Tax Act & VAT
Statutory payments like TDS, Advance Income Tax and FBT, Service tax, PF, and PT
Banking transactions like receipt and payment entries, inter a/c transfer entries, generation
of RTGS forms for fund transfer.
Recurring transactions like establishment cost like rental to property, vehicles, retainers
fee, etc.
Investment transactions like purchase and sale of investment instruments, Income on
Investments
Finance charges like commission on BG, LC, upfront fee, processing fee, and other bank
charges
Loan amount Receipt and payment
Interest on term loan and working capital loan
Other expenses Insurance premium, Donation, Membership fee, etc.
Depreciation on fixed assets
Period closure entries like provision for outstanding expenses including HR provisions,
prepaid expenses, forex fluctuation on foreign currency loans and other liabilities
denominated in foreign currency.
Generation of monthly TDS payment challan
Generation of TDS certificate, TDS & FBT quarterly return
Computation of Fringe benefit tax liability
Generation of C Form, ER1, VAT 100, VAT 159,ST1 & ST3 and necessary statutory
returns
Requirement for Material receipts, as of now is for MM document to park MIRO and posting
by FI.
Requirement for Service receipts:
Service Entry sheet will be entered by user and Parked. FI will account the
Expenses.
LIV for services, will be directly done by FI dept (with required approvals).
In case invoices for service receipts have not been received before the TDS due
date, provisional liability need to be created. This must be reversed after doing the
LIV process

Invoice verification Process - Supplier invoice - MM interface through PO/GRN

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Receipt of whole set of document at accounts dept (payment approval, suppliers invoice,
MRN, inspection report (all original copies) purchase order copy).
Pass an entry in Bills Inward Register and issue acknowledgement copy.
Verification of bill to ensure payment advice (created based on GRN) and supplier invoice
are in line with P.O terms
In case of any mismatch during verification process, raise an entry in defective bill register
quoting bill details, date of rejection with the reasons thereon and return the bill to the
commercial or stores dept, along with defective bill advice
A debit note or credit note would be raised for price or quantity variance (P.O vs actual bill)
by authorized person (sugar sector)
On completion of invoice verification process, pass a entry in the system
In case of inter state purchases, record in the C-Form register to issue C-Form under sales
tax act.
Input Vat credit availability is to be selected at time of data entry
In case of excise related transactions, necessary excise records like RG-23a,b,c, daily
stock account etc needs to be updated
Excise duty amount will be kept under hold, till the receipt of transporters copy of Excise
Invoice
Executive / Asst Manager will validate the document in the system
After validation in the system, the document is available for payment
Freight payment for the above supply of materials Sugar Sector
These payments shall be made on bills duly approved by Stores dept. The respective
MRIR details shall also be stated. The PO shall be verified whether the transportation
costs are to be borne by us, if yes the bill shall be forwarded to AGM for approval and the
JV/CPV shall be passed for payments.
Further AM shall pass the Freight bill adjustment to stock ledger voucher with reference to
JV and MRIR shall be entered in the Stores screens to give effect to the Inventory value
item wise. to be discussed with MM

Supplier Invoice Imported materials
Advice from commercial dept for the payment of customs duty based on bill of entry
Receipt of document at bank, in case of LC payment against document
Receipt of materials at plant / project site
Receipt of Original Invoice, MRN, Inspection report at accounts dept for material
accounting
Receipt of bill from clearing agent along with material bill or as a separate document on a
later date, which is supported by service order
Receipt of transporter bill for goods transfer from port to the plant / project site
Pass an entry in Bills Inward Register and issue acknowledgement copy
Verification of bill to ensure payment advice and supplier invoice are in line with po terms
In case of any mismatch during verification process, raise a entry in defective bill register
commercial or stores dept, along with defective bill advice.
Executive / Ass Manager will validate the document in the system
After validation in the system, the document is available for payment in case of non
payment or else will be adjusted against earlier advance payment

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Contractors Invoice Based on contract or work order

Receipt of contractors / Running bills along with certification
Pass an entry in Bills Inward Register and issue acknowledgement copy
Verification of bill to ensure payment advice and supplier invoice are in line with PO terms
In case of any mismatch during verification process, raise an entry in defective bill register
commercial or stores dept, along with defective bill advice.
Deduct Statutory deduction like TDS,WCT, deductions under labor laws, (PF, ESI, etc.,)
any other applicable taxes
Deduct Retention or any other deduction as per PO terms, and adjust advances (like
Mobilization Adv etc.)
After validation in the system, the document is available for payment in case of non
payment or else will be adjusted against earlier advance payment

Part certification & part payment when full invoice is accounted Road & property
sector
Contractors Invoice is received for Full Value, The Project Manager will certify Part of the
Invoice say 80% of the Invoice for payment & balance 20% is kept on hold for issues
relating to quality, compliance & other WO related terms.
As soon as the issues are sorted by the contractor the balance 20% is certified by PM for
release of payment.
If the Contractor gives a Invoice for Full Value
Can part Certified Invoice say 80% be accounted & balance 20% of the same invoice can
be accounted at a later date on completing the necessary compliances as required by
Projects.
Crushing Activity Invoice Verification
A quarry is taken on lease from the Govt.
For crushing of boulders, the company enters into an agreement with a vendor
Mobilization advance is paid to the vendor
The vendor crushes the boulders, and provides the aggregates to the subcontractors as
per our instructions
Vendor submits proof of Way Bill to the EPC with the statement from the subcontractors
Necessary accounting entry is passed in the book of account
Payment is made to the vendor based on the tonnage of dispatches

Service invoice - MM interface through SO/Service completion certificate

Receipt of whole set of document at accounts dept (payment approval, service provider
invoice, service completion certificate (all original copies) service order copy)
Pass an entry in Bills Inward Register
Verification of bill to ensure payment advice and service provider invoice are in line with so
terms

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commercial dept, along with defective bill advice
On completion of invoice verification process, pass entry in the system
Deduct necessary statutory deductions like TDS under income tax act and WCT under
sales tax act, and other deductions applicable as per so terms.

Supplier and Service provider expenses not interfaced with other modules

Receipt of whole set of document at accounts dept
Pass an entry in Bills Inward Register
Rest of the process is same as above mentioned for suppliers and service provider invoice

Employee expenses - HR, Travel Management interface

Receipt of Travel Statement from Employee
Download Travel Statement transaction from I-Expense Module, after necessary approval
Pass an entry in Bill Inward Register
Verification of bill to ensure in line with HR Policy
employee
On completion of bill verification process, pass entry in the system

Employee expenses - Salary advice and other CTC related expenses

Receipt of Detailed Salary advice from HR Dept (Salary details with cost centre break-up,
PF details, PT details, employee salary advance deduction details, TDS details)
Verification of Salary advice
In case of defective, inform HR for corrections

Employee expenses - Direct accounting in FI for expenses not interfaced with other
modules

Receipt of Expense Statement from Employee

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Expenses statement is for mobile and residence telephone expenses, reimbursement of
professional bodies membership fee, club fee, etc.,
Verification of bill to ensure in line with HR Policy
employee

Statutory deductions like TDS under Income Tax Act, WCT under sales tax act, & VAT

Open vendors master and attach TDS rate tag together with PAN number of service
provider.
Attach TDS tag at time of passing entry in the system
Ensure necessary TDS entry gets auto created in the system, to create a credit memo in
the vendor a/c and TDS liability in the Income tax authority vendor.
Similar procedure like above 2 points, for WCT deduction

Statutory payments like TDS, Advance Income Tax and FBT, Service tax,PF, and PT

TDS - Take a report from AP module and cross check the report with TDS analysis report
generated from discoverer tool and also with General Ledger report and Trial Balance, to
ensure all TDS deduction, Reversal of TDS deduction on prepayment advance application
on invoice is properly processed in the system
Computation of Advance Tax, FBT Manual exercise and identify the liability Pass a
manual invoice entry in AP module to create a document for payment
PF & PT Create a manual Invoice entry in AP module, based on salary advice submitted
by HR to create a document for payment

Banking transactions like receipt and payment entries, inter a/c transfer entries,
generation of RTGS forms for fund transfer

Inter Bank transfer entries: Create a manual invoice & credit memo entry in AP module to
create a document for payment and refund entries
Physical preparation of RTGS form for fund transfer of fund from company bank a/c to
external suppliers, service providers, and for investment transactions

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Recurring transactions like establishment cost like rental to property, vehicles, retainers
fee, etc.,

Based on agreement details pass a manual entry on monthly basis to create document in
AP module for payment.

Investment transactions like purchase and sale of investment instruments, Income
on Investments

Mail to Treasury dept, on availability or requirement of fund
Treasury will advice accts dept on mode of investment or type of investment needs to be
utilized for the requirement of fund
Based on advice from Treasury, For Investment pass a manual entry in AP module to
create investment in different securities. (in case of mutual fund and investment in stock
market, entry for advance payment will be passed, and the same would be adjusted against
regular entry for investment on receipt of necessary details on investment transactions)
For Sale of Investment Similar process as above
Income on investment Based on advice on Investment, pass a manual entry in AP
module

Finance charges like commission on BG, LC, upfront fee, processing fee, and other
bank charges

Collect Bank Advice from Bank
Get the necessary approval for payment
Pass an manual entry in AP Module

Loan amount Receipt and payment

On receipt of disbursement, pass a manual entry in AP Module
On Repayment of disbursement, pass a manual entry in AP module

Interest on term loan and working capital loan

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Manual computation of interest on Ms-excel sheet
Obtain the approval for interest payment
Pass a manual entry in the AP module for interest payment

1. Business Processes

Invoice Verification generally happens at the end of the material procurement process. The vendor
presents an invoice for a delivery made on the basis of a purchase order.

In SAP, the goods receipt and invoice receipt are managed via a GR/IR clearing account. When a goods
receipt is entered, an open item is created in the GR/IR clearing account. The posting of invoice clears
the GR/IR clearing account. If there are price differences between the purchase order and the invoice,
the account movements vary depending on the sequence of goods receipt and invoice receipt.

The stock account is posted with the receipt value based on the purchase order price.

The purchase order price is different to the moving average price: At the time of posting the
moving average price changes.

Invoice Verification clears the GR/IR clearing account on the basis of the purchase order price.
The offsetting entry is posted to the vendor account based on the invoice price.
If the invoice price is different to the purchase order price, the variance between the purchase
order value and the invoice value is posted to the stock account only for the actual stock at
hand at the time of Invoice verification.
The variance, to the extent of stock already consumed is posted to price difference account.
The system corrects the value in the material master record, so the moving average price
changes.

1.1. Accounting entries: Following entries would be generated for the entire Procurement
process at various stages:

1.1.1. CREATION OF PURCHASE ORDER: No Accounting Entry would be generated.

1.1.2. CREATION OF GRN (GOODS RECEIPT NOTE): Following Entry would be
generated

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1.1.2.1.1. Inventory Related:

Inventory Raw Material/Pkg. Material/Stores ............Dr.
GR/IR Account (Clearing Account)....................Cr.

1.1.3. POSTING OF VENDOR INVOICE: Following Entry would be generated

1.1.3.1.1. Inventory Related:

GR/IR Account (Clearing Account).....................Dr
Vendor Account ..........Cr.

1.1.4. ACCOUNTING FOR Service Entry: Following Entry would be generated
1.1.4.1.1. Services Related:

Expense Account ...........Dr.
SR/IR Account (Clearing Account).................Cr.

1.1.5. POSTING OF VENDOR INVOICE: Following Entry would be generated
1.1.5.1.1. Services Related:

SR/IR Account (Clearing Account).....................Dr
Vendor Account .........Cr.
TDS Payable Account (in case of TDS liability) Cr

1.1.6. In case invoices for service receipts have not been received before the TDS due
date, provisional liability need to be created. This must be reversed after doing the
LIV process
1.1.6.1.1. TDS Provision

TDS Offset A/c ...........Dr.
TDS Payable a/c...................Cr.

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1.1.6.1.2. TDS Payment

TDS Payable A/c ...........Dr.
Cash / Bank a/c...................Cr.

1.1.6.1.3. Services Related LIV:

SR/IR Account (Clearing Account).....................Dr
Vendor Account .........Cr.
TDS Payable Account (in case of TDS liability)Cr.

1.1.6.1.4. TDS Offset a/c reversal

TDS Payable A/c ...........Dr.
TDS offset a/c...................Cr.

All accounting entries will be for a company code with appropriate profit centre assignment.

Business Process Scenarios: Various scenarios involved in the Invoice Verification
process is discussed hereinafter:

Purchase Order related, GR (Goods Receipt)-based Invoice verification
Process Domestic Purchases: System matches the Invoice with the Goods
receipt document and the Purchase Order before posting. Variances encountered in
the matching process are controlled by the used of Tolerance limits (As per contract
terms) set for each company code.

o SAP standard Invoice verification transaction will be used for manual Invoice
booking after the goods have cleared quality inspection.

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o Pricing conditions will be maintained in the Purchase Order for other planned
delivery costs.
o These conditions can have different vendor than the material supplying vendor.
o Separate Invoice verification documents can be posted for separate vendors for
material and delivery costs.
o All relevant parameters relating to vendor payment terms and method,
withholding tax etc. will be defaulted from the Vendor Master record.
o Invoice document will be posted with reference to a Goods Receipt document
posted for a Purchase Order. Invoice will be blocked for payment if the Invoice
value exceeds the tolerance limits set for the Company Code. SAP standard
Workflow for payment block release will be used for release of payment block.
o A manual payment block will be created for providing an option of blocking an
invoice for payment.

Purchase Order based Invoice Verification Process Import Purchases:
Manual Invoice verification procedure will be adopted for Import Purchases.
Purchase Order currency is defaulted into the invoice verification document.
Separate conditions for customs duty, freight etc. will be maintained in the Purchase
Order with different vendors, as applicable.

In case of imported purchases payment of customs duty, freight, etc., will be paid to
different suppliers, cost of all these expenses needs to be captured against the same
imported material value. (MM Module)

Scheme of Entries for Import Material :

Payment made to release the document from bank

Dr Vendor (Supplier of Goods) with special GL Indicator
Cr Bank Clearing Account

Advance paid to Customs Authority

Dr Vendor (Customs Authority)

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Cr Bank Clearing Account

Invoice verification for customs

Dr Customs clearing a/c
Cr Vendor (Customs)

On Invoice verification of Main vendor

Dr GR IR clearing a/c
Cr Vendor

On Goods receipt (at Invoice verification values)
Dr AuC / Stock Account
Cr Customs Clearing
Cr GR/IR
Advance clearing against Invoice amount
Dr Vendor
Cr Vendor With special GL Indicator

Non-Purchase Order/Service Order based Accounting of Miscellaneous Vendor
Invoices :
These Invoices are for miscellaneous procurement expenses that do not warrant creation of
Purchase Orders and thus no inventory is maintained in the system.
Accounting Department (FI) will post other miscellaneous expense items like
electricity bills, telephone bills etc which is covered in AP-Vendor Invoice Credit Note
BBP.

In case of Company electricity bills, telephone bills, etc., no credit note will be raised,
direct document will be prepared for payment.

Purchase Order based Accounting for Services :

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o SAP Standard Functionality of creation and approval of Service Entry Sheets for
services received will be used.
o Purchase Orders will be raised and Service Entry sheets will be created once
services are rendered. SAP standard Workflow functionality will be used for
approval of service entry sheets. Service Completion has to be ensured before
verifying invoice and posting, as vendor liability will be created upon posting txn
MIRO.
o TDS entries need to be created appropriately.

Vendor specific payment terms / tax considerations:
Accounting documents will be posted with vendor related payment terms, Taxes ( Excise
duty, Service tax and VAT), withholding taxes etc. as defined in the vendor master record for
the company code and the relevant purchasing organization, if not defined in the purchase
order.

Excise duty, service tax, VAT, should be attached to Service order, not to masters. (MM
Module Condition records)

Credit and Debit Notes, Returns:
Debit and Credit notes are accounted for as subsequent debit or credit transactions in case of
purchase order related invoice verification transactions. For non-purchase order related
transactions, a pure finance debit / credit note transaction is posted at the accounting centre
based on the physical document.

Vendor Account Analysis:
The following tools are available in SAP for Vendor Account Analysis.
o Line item Display.
o Balance Display.
o Various reports based on Vendor Accounts (Vendor Evaluations)
All kind of Vendor Account Analysis as provided by standard SAP solution will be
available. Various standard reports based upon periodic comparison, structured list of
vendor Accounts can be used for the Analysis.

Vendor Line item Analysis:
Vendor Line Item Display is provided for all vendor accounts. Since Posting entries
will come both from FI as well as other SAP modules, the drill down facility would
also be possible whereby a user will be able to drill down to the original document.
All the Vendor Accounts are by default Line Item as well as open item managed.

Vendor Balance Analysis:
SAP Standard Vendor Balance Analysis will be available for all Vendor Accounts.
The summary of Postings made during a posting period can be analyzed using this
functionality.

The account balance displays the following:
o The opening balance (the balance carried forward from the previous year)

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o The total of all transactions for each posting period, broken down into debit and
credit postings (transaction figures)
o From these figures the system also calculates the following for the account
balance display:
o The balance per posting period
o The accumulated account balance
o Account Balance of Special GL transactions.

Vendor Evaluations: Vendor evaluation can be done through MM Module
ME6H.

Reports:
Vendor Account Analysis FBL1N
Vendor Line item Analysis FBL1N
Vendor Balance Analysis FBL1N
Invoice Print out Non-Standard. (All vouchers)
List of Invoices entered during the period, List of payment effected during the period FBL1N
Vendor payment due list FBL1N
Vendor total transaction detail for a given period FBL1N

DOWNPAYMENT REQUEST:

The following are the different kinds of down payments:
1. Capital advance for mobilization / material
2. Regular advance for supplies / service providers.
3. Advances for Bank Guarantees
4. The down payments should be clearly shown as Revenue/Capital advance and should be
displayed separately.
5. It should be given against only valid PO/WO/LR from Banks (Sugar)
6. In case advance need to be provided without PO / WO, the request should be approved by
suitable authority
7. TDS. WCT, as well as other taxes should be deducted as applicable.
8. Documents through Bank Supplier invoice and LR are collected from the Banker, against
which payment is made. On presentation of LR to the transporter, delivery of goods is
taken.
9. Mobilization advances will be recovered against RA bills as per payment terms
automatically
10. Material advances will be recovered based on the certification from Project Manager
against invoice / RA bills and as per payment terms.

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11. Vendor wise report will be required for advances made / to be made.
12. Past performance of the vendor to be tracked and system should stop issue / warn the user
of fresh purchase order / making fresh advance payment to such vendor unless authorised
by a higher authority. Also advance payments within the order should be restricted based
on authorisations.
13. Calculation / recovery of Interest on advance if applicable to be made through system.
14. Advances to various vendor with age wise report.
15. Unadjusted material advance with the third party report required specifically for Roads, this is
required.
16. Duplication of bill number to be controlled (RA Bill no) consider this at client level also.
17. The down payment made to the vendor should be cleared, when invoice verification against that
particular PO/WO/Request for advance has been performed.
18. System should ensure that payment is not made against those invoices for which advance payment
is made to the extent of advance paid.
19. Employee advance, medi-claim advance and air travel advance to be dealt with, and tracked
20. System should not allow advances to one time vendors.
21. System should restrict any negative values in advances
22. Due date for settlement need to be tracked. Automatic e-mail to be sent to accounts and the
concerned person who approved the down payment request on due-date
23. Down Payment Request must be captured in Bills Inward Register (as specified in Vendor Invoice,
Credit Note Process)
24. The input documents must be scanned and attached with online payment request
(Document Management System)
25. Workflow for request for advances should be configured.

Downpayment Request:

The approved down payment request will come from commercial / purchase / project for
release
If the contract stipulates BG to be collected from the vendors, the same will be done by the
user dept
The payment request will be authorized for release by the finance dept. After suitable
relevant tax deductions if applicable, the advance would be released.

Also, Corporate / Bank Guarantee are taken for making Down-payments. The same needs to be
considered. Sugar

When a vendor request for a down payment, approval from concerned authority is required (F-47).
Upon approval, Vendor account is determined and down payment is posted against the vendor (F-
48). Subsequently, payment is arranged and cheque is printed. On behalf of Vendor, payment
can be arranged to other parties by creating alternate payee account. Payments made to alternate
payee can be tracked under the same vendor account
For Advance payment to Vendor, the following entry will be passed:
Vendor (Spl. GL Indicator A)Dr.

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To Bank
Sl.No. Solution in SAP SAP Module
1 Capital advances for mobilization/material can be made
using F-47 & F-48.

F-47, F-48
2 Regular advance for supplies / service providers can be
made using F-47 & F-48.

F-47, F-48
3 Advances can be given for obtaining Bank Guarantee
from Vendors. Advance given is a special GL item and
Bank Guarantee is a noted item. Bank Guarantees are
covered as a separate process in Noted Items.

SAP
Standard
configuration
4 Revenue/Capital advances can be shown separately by
giving 2 Special GL indicators and assigning one control
account.

SAP
Standard
configuration
5 Advances will be given against only valid PO/WO/LR
from Banks

Non-SAP
6 In case, where advance is to be provided without PO /
WO, the request will be approved by a suitable authority

Non-SAP
7 TDS/WCT will be deducted as per the rates maintained
in the vendor master at the time of making the advance
payment.

Standard
SAP
Configuration
8 Documents through bank and payment arranged will be
taken as Advance with Spl. GL indicator.

Standard
SAP
Configuration

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9 Mobilization advances will be recovered against RA bills
by clearing Vendor Down Payment

F-54
10 Material advances will be recovered based on the
certification from Project Manager against invoice / RA
bills and as per payment terms. (Process related)

F-54
11 Standard SAP reports for Vendor wise analysis of
advances made can be obtained.

Standard
SAP Report
12 Past performance of Vendor can be evaluated by
Vendor Evaluation Analysis.

MM-ME6H
FI-
S_ALR_8701
2077
13 Calculation of Interest on advance is possible.

F.44, F.4A
14 Advances to various vendor and age-wise analysis are
available through the standard SAP report.

Standard
Reports
15 Report for Unadjusted material advance with the third
party would be available using the standard reports.

Standard
Reports
16 Invoice/Bill entry is made at Company Code level.
Therefore, any duplicate entry of Bill/Invoice No. can be
controlled at Company Code level and not at client level.
System will give warning message upon entering
duplicate bill no, in the company code in which original
bill was entered
Standard
SAP
17 Advance payment will be cleared against the invoice
document.

F-54
18 The down payments need to be cleared against the
open item on a regular basis so that only the balance will
F-54

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be available for payment.

Reports:

1. List of Advance given; advance adjusted, advance pending to be adjusted for capital
items & revenue items separately. (Standard SAP Report : FBL1N)
2. List of Advance bifurcating into Interest bearing Advance & Interest free advance
interest indicator will be activated. (Standard SAP Report : FBL1N)
3. Report on TDS and other taxes deducted on Advance Amount to be provided.
(Standard SAP Report : J1INMIS)
4. Age wise of list of advances pending with the vendor.(Standard SAP Report :
S_ALR_87012078)
5. Vendor wise / employee wise advance reports.(Standard SAP Report : FBL1N)
6. Advances given different categories need to be reported.(Standard SAP Report :
FBL1N)
7. Advances with no matching invoices / Request for advances need to be reported.
(Standard SAP Report : FBL1N)
8. Open request for advances. (Standard SAP Report : FBL1N)
9. Report for non-performing advances, based on due date of performance in Advances
based on vendor evaluation in MM. (Standard SAP Report : S_ALR_87012105)
10. Trigger for over-due advances on a monthly basis Consider mails / alerts for the same
No Alerts/Mails would be triggered through the Standard SAP system.
11. Due date for settlement need to be tracked. To be settled on booking the
invoice (Standard SAP report : FBL1N)

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ACCOUNTS RECEIVABLE:

Introduction:

The Accounts Receivable application component records and manages accounting data of all
customers. It is also an integral part of sales management. 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). The
system contains a range of tools that you can use to monitor open items, such as account
analyses, alarm reports, due date lists, and a flexible dunning program. The correspondence linked
to these tools can be individually formulated to suit your requirements. This is also the case for
payment notices, balance confirmations, account
statements, and interest calculations. Incoming payments can be assigned to due receivables
using user-friendly screen functions or by electronic means, such as EDI.The payment program
can automatically carry out direct debiting and down payments.

There are a range of tools available for documenting the transactions that occur in Accounts
Receivable, including balance lists, journals, balance audit trails, and other standard reports.
When drawing up financial statements, the items in foreign currency are revalued, customers
who are also vendors are listed, and the balances on the accounts are sorted by remaining life.
Accounts Receivable is not merely one of the branches of accounting that forms the basis of
adequate and orderly accounting. It also provides the data required for effective credit
management, (as a result of its close integration with the Sales and Distribution component), as
well as important information for the optimization of liquidity planning, (through its link to Cash
Management).
Reconciliation Account:
When you post items to a subsidiary ledger, the SAP system automatically posts the same data
to the general ledger at the same time. Each subsidiary ledger has one or more reconciliation
accounts in the general ledger. These reconciliation accounts ensure that the balance of G/L
accounts is always zero. This means that you can draw up financial statements at any time

Introduction: Customer Debit Note/Invoice is a transaction that increases the amount receivable
from customer or customer-cum-vendor because of various requirements. When things do not
conform to the standard process, this forms part of the transaction.

Standard Process:
Customer Invoice should always be from SD module only.
FI-Customer Invoice: In case if in any company where SD module is not implemented then this
mode should be used.
FI-Customer Invoice: In case where SD module is existing in a company but the transactions does
not involve Material Master or Services through SD then this option may be used.
FI-Customer Debit Note: In case of any adjustments (Except Invoicing/Billing) arising when
transacting with customers this Mode should be used.

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Debit notes with reference to our Invoices should always be handled thru SD module only

Standard Requirements:

Customer Debit Note/Invoice will be initiated/ raised by Sales department or and data in the
Books of Accounts would get updated automatically. The requirement being that the entries
need to flow into the FI-GL module through an integrated process.

In case the adjustments or debits to be raised which does not involve Material Masters or
Regular customer masters used by SD module, then Finance department may use the FI-
Debit note for such transactions to all Companies. .

Enabling (Without Excel) debit note/Invoice process with clear segregation of duties and
control {Solution thru authorization control}

Separate strategies for different business scenarios like
Price adjustments
Rendering of services
Liquidated damages due to non-performance of terms of contract by customer(LD)
if any thru FI
Recovery of insurance premium if borne by company
Interest on amounts receivable after due date of invoices.
Recovery of expenses, this can include bill to bill recovery or recovery based on
allocation
Recovery of Insurance/Freight or other charges etc.

All Debits relating to Sales/services will be through SD//PS
Separate document type for debit note and Invoice for documents generating from each
module.
For Service tax calculation and collection with Invoice/Debit note- Refer Service tax BBP
document.
All VAT compliances should be accommodated in case of FI-Invoice/FI-Debit notes.
All Excise and other tax compliances should be accommodated in case of FI-Invoice/FI-
Debit notes.-Excise only through SD.

The above mentioned business scenarios will need to be processed for:
1. Automatic mode for recurring entries-For Rent etc.

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2. Manual mode
3. Third parties/
4. Group companies

This process needs to address the following-Company wise:

Sugar:
Billing through SD module.
Other Standard Process apply.

Energy: -IF SD not implemented
Preparation of Invoice as per power purchase agreement (PPA) as per format approved by
customers

Preparation of Invoice for scrap sales

System should be integrated for capturing technical data like number of unit generated,
gross or lower calorific value of fuel, actual heat rate on daily basis, actual quantity & price
of fuel supplied, Plant load factor (PLF) SBI TT Selling rate.

System should also capture data like fixed cost per unit as per power purchase agreement
(PPA), principal cost of term loan as per PPA, interest thereon, interest on working capital,
depreciation, return on equity, operation & maintenance cost, insurance cost, forex
adjustment arising from USD payment

System should also calculate incentives computation as per PPA

To track amount of income tax paid, income tax liability as assessed by IT department, and
amount of income tax claim forwarded to customer.

System should give various analysis reports pertaining to customer invoice each income
line item against actual expenses spent. (Eg: fuel cost claimed from the customer against
fuel cost paid to fuel supplier)

Cost per unit billed to customer segregated into variable and fixed cost should be available
for any given period

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RAXA: In case SD not implemented

Reimbursement of expenses incurred by Security guards: Reimbursement will be made
end customers. No mark up involved. Service tax should be included. Account assignment
should be different from operating expenses.
In case of RAXA close Integration with HCM should be established for billing which should
be based on CTC of the employee along with mark-up on the same as decided by
management.
Log sheet of Manpower deployment required for each location of the user company
(customer) should be taken into consideration for billing.
Details in the billing required each level wise (Ex: Marshals, Supervisors etc.)
Service tax, Education cess and Higher education cess separate break up required.
Billing number should be sequentially generated through system.
In case of recoverable expenditure from user Company FI-Invoice should be generated
automatically within the above required sequential billing along with service taxes.
Also recoverable expenditure should not form part of operating income though raised and
collected through FI-Invoice.
Out of the total billing service tax should not be treated as Income.
Numbering of the Invoice should have additional field for separation of class of service as
indicated below: Ex: RSSL/12345/SER
-Manpower deployment (SER)
-Recovery of Expense (RECEXP)
-Technical consultancy (TECCON)
-Employee emergency Management centre (EEMC)
As per service tax act, class of service like Security Agency Services or Technical
Consultancy Services or Business Support Services or Placement Services or
Operating Services etc. and all service tax registration numbers and PAN numbers to be
also indicated on the invoice.
Amount in words also should be printed.

GCCL:

FI-Debit Notes only should be allowed.
Service tax compatibility and output requirements in line with RAXA.
Other Standard process applicable.
Recurring Invoices for common expenses recovery is required with Standard/flexible
apportionment to respective user companies. Details for this to be given by GMR.

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GMR Varalakshmi Foundation:
Revenue for GMR Varalakshmi foundation is only by way of School / College receipts, which are
controlled in College software. Invoicing is not applicable here.

All the process should be in compliance with the following requirement:
Paperless processes
Information captured once only at source
Optical imaging/Scanning and storing of documents like customer debit notes and
communication (through document mgmt system)
Automatic update of AR and GL related accounts
Matching / corrective action against Sales order and receipt
No need for re-entering the data (Customer, quantity, price, amount is on the SO)

The Customer debit note includes the proportionate tax and duties, which form part of the original
invoice.

Energy Billing
Roads Billing
Scarp sale and other Services etc.
RAXA

Details:
Energy: Business process:

Preparation of Tariff Invoice to customer as per PPA Billing period please see the above
attached file

Receipt of certificate on units generated, auxiliary consumption (certified by customer and
plant head)
Receipt of certificate from SBI on usd rate on the date of billing date
Receipt of certificate from fuel supplier on gross or lower calorific value of the fuel
Fuel invoices raised by the fuel supplier for the billing period (primary and secondary fuel)

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In case of invoice during beginning of the financial year, necessary evidence for claiming
various income streams of fixed cost.
Receipt of certificate from the lenders for claiming principal amount and interest claim on
term loans.
Prepare invoice in a approved format in the MS-Excel
Take copies and submit to customer
Customer invoices will be accounted in the financials with following break up: (crediting to
the below general ledger accounts)

Variable cost

1. Fuel cost
2. Lube cost

Fixed cost

1. Dollar denominated charges
2. Rupee denominated charges
3. Forex adjustment
4. Interest on debt
5. Depreciation
6. Return on equity
7. O& M and Insurance
8. Interest on working capital
9. Incentive

Preparation of Invoice for Scrap Sale

A sales order will be prepared in the Ms-Excel, once scrap reaches saleable quantity lot
Raise a Invoice in Ms-Excel
Add necessary Sales Tax
Dispose the Scrap from the plant.

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SUGAR:

All Sales through SD module only.
On Information from sales or user department and on authorization debit note shall be raised in
MS-Excel for recovery of expenses on behalf of Customer/Party if not possible through SD
module.

ROADS:

Billing process for GTAE & GTTE Annuity
Annuity is payable to the projects every six months, May 9 and Nov 9
As per the Concession agreement, the invoice claiming the amount should reach the
independent engineer one month prior to annuity date
Usually the invoice should also include non-lane availability during the annuity period
(i.e.six months period) for which proportionate abatement will be imposed.
The Invoice is prepared by Technical Department at Head Office, and comes to Accounts
Department for verification.
Accounts department verifies the bill as regards the amount in figures, amount in words,
PAN Number, etc.
The Bill goes to site office for signature of the Project manager.
Thereafter submitted to Independent Engineer, and IE verifies the bill, gives his comments,
recommends for deduction if any non-lane availability is there.
The bill, after signature of Independent Engineer, should reach NHAI, Delhi at least one
week before the scheduled annuity date.
One annuity date the NHAI-Delhi releases the cheques which shall be collected by our
Public Relations Office at Delhi and deposited in respective TRA Accounts
Billing process: GPPL to SPV
Site office prepares the Invoice & the Bill of Qty and approved by the Project Manager.
Invoice verified by the Commercial Contract dept.
Submitted to Lenders Engineer for approval
Submitted to Accounts dept for verification
Submitted to SPV for payment.
Toll Based Projects
As far as Toll based projects are concerned, the project company shall be eligible to book revenue
from toll collections immediately from the date of Commercial Operations Date and it should be
integrated with the HTMS (Highways Toll Management System)

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Credit Note:

A Credit note is a process by which a refund, benefit or compensation is passed to the Customer.

All Customer Credit notes should be initiated by Sales Department In case in Companies
where SD module is not IMPLEMENTED, FI Credit notes may be allowed.
Close integration with Sales and Finance modules, to post amounts to GL accounts directly
for credit notes raised through SD.
Invoice/Bill/Sale order reference is mandatory for credit notes through SD .
In case the amount is not for regular customer(Other than SD) FI Credit note should be
allowed.
Strict authorizations required for passing as per DOP.
o There are few cases where FI credit notes/Invoices are required to be raised.
o Expenses reimbursement to customers.
o Quality compensation.
o Shortage compensation.
o Reversal of excess recoveries made earlier, through debit note.
o Differences in Invoicing if any.
Excise or VAT refunds portion through credit notes should not be allowed in case of sales
returns within the time limits as per Excise or VAT acts.-Excise only through SD module.
(No time limit for Excise VAT to be checked).
Separate number range and document types required.
In case of Group Companies vendor and customer should be cross linked.

Reports:

1. List of credit notes created for a period. (SAP T.code: FBL5N)
2. List of credit notes through FI and SD in combined report. (SAP T.code: FBL5N)
3. List of outstanding credit notes for a period. (SAP T.code: FBL5N)
4. Credit notes created for Group Companies. (SAP T.code: FBL5N)
5. Ageing analysis of Credit notes. (SAP T.code: S_ALR_87012168)
6. List of credit notes pending approval. (SAP T.code: FBL5N Parked documents)
7. Customer specific credit notes. (SAP T.code: FBL5N)
Credit notes issued with reference to an Invoice or Customer report. (SAP T.code: FBL5N
FI documents based on SD Billing Doc#)

CUSTOMER OPEN ITEM CLEARING:

11 When payments are received from Customer, the invoices against which payments is received
need to be cleared. The clearing should be generally a regular exercise, wherein the user who
enters the receipts clears the invoice corresponding to the receipt.

12 In case on account payment is received from Customer, the user should be able to select the
invoices against which on account payment is received, and these items should be cleared.
Also, while clearing on account payment, residual invoices should be clearly identified, and
should be cleared to that extent.

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13 In case there are advances existing in the Customer account, and invoices are booked against
the particular Customer, then, system should alert the advances to the user, so that the invoice
can be cleared off against the advance payment received.

14 List of open item should be made available, based on which clearing / other activity can be
conducted by the users. Automatic programs should be made available for clearing the open
items in the Customer accounts.

15 Residual adjustments as well as part payments received from Customer should be considered
while clearing the open items.

16 In case of foreign currencies open items clearing, foreign exchange fluctuation to be
automatically taken care. Foreign exchange fluctuation shall also be taken care in case of part
payments from Customer at the time of receipt entry.

17 In case the Customer also happens to be Vendor, then balances lying in the respective
accounts need to be cleared.

18 In case final settlement is made by the Customer for a transaction, the differential amount
should be taken automatically to Profit & Loss Account as per the tolerance limits. The user
should also have option to enter the General Ledger account.

19 Tolerance limits for clearing differences.

Pre-requisites:

4. Clearing of open items in Customer accounts should be facilitated.
5. Flexibility for partial payments received from Customer and residual Incoming payments
should be made available. Also, differential amount should be taken to Profit & Loss
account, with flexibility of entering the General Ledger account, while processing of final
settlement is done. While doing so, tolerance levels should be configured based on
business needs.
6. System should facilitate automatic clearing of Customer balances while receipt entry.

Steps:

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Standard Reports:

Ageing of open items. (SAP T.code: S_ALR_87012168)
Customer wise open item report. Incorporating normal as well as special GL transaction. (SAP
T.code: FBL5N)

Customer Bank Guarantee:

Step
#
Process Description SAP Module
1 While receiving payments through cheques from
customers, open item will get cleared. In case of receipt
by cash, it needs to be manually cleared.
F-28 / F-30
2 In other scenarios, Open item clearing need to be done
for Customer accounts. When clearing open items in a
foreign currency, exchange rate occurs due to
fluctuations in exchange rates. The system posts the
exchange rate differences automatically as realized
gains or losses.
F-32 Manual
Account clearing,
F.13 Automatic
clearing
3 In case the customer also happens to be vendor, then
balances lying in the respective accounts will be cleared
by activating both the master records customer as
vendor and vendor as customer fields.
FK02 /FD02

4 While clearing the Customer open items if there are any
difference found can be charged off to expense account.
F-32 Manual
Account Clearing
5 Tolerance Limits as required, for clearing differences Standard
configuration

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Letters of Credit (L/Cs) / Bank Guarantees are received from Customers as a form of security
towards guaranteeing payment on the due date against Services Provided / Supplies of Goods to
the customers as per Contract of Sale.

All L/Cs & Customers Bank Guarantees received & verified by the Commercial dept., & on
acceptance of the same these have to be recorded against Customers & respective Sales
Order / sale contract.
Expiry date of L/Cs & Guarantee & other bank details need to be captured Customer wise,
BG wise, Bank wise etc.
Monitor the value and the validity of the of the Bank Guarantee instrument wise while doing
the billing System to issue alerts with respect to the near expiry BGs / LCs.
List of Bank Guarantees/ LCs Customer wise should be available
Bank Guarantees to be accepted from scheduled banks
System should alert one month before the expiry of the Guarantee in order to get it
renewed by the Customer.
All future supplies to a customer for a particular sales order should be stopped on expiry of
L/Cs / Guarantee attached to that Sales order. After extension of the L/c / Guarantee, the
order can be processed.
If the Customer has failed to pay any amount receivable (covered by a Bank Guarantee)
against an earlier Invoice on the due date, all supplies to the customer should be stopped.
There could be a situation where all supplies related to a particular Sales order alone to be
stopped.
Such transaction should be cleared once Bank Guarantees are returned to Customers
This is only information recording & it should not impact financial books
Credit limit if applicable to customers has to be increased / decreased by the system to the
extent of BG/LC value.
Encashment of Guarantee/LC should be provided for if the customer fails to make the
payment on the due date as per the terms of sales contract.
Claim period details to be captured

Road Sector Requirement:

Guarantee given to NHAI
At the time of bidding, along with the other bidding documents, a Bank Guarantee of
approx 5% of Total Project Cost is submitted.
If the bid is not won, the Bank Guarantee is returned immediately.
If the bid is won, the Bank Guarantee will continue to remain with the NHAI.
After achieving of Financial Closure, the Bank Guarantee is reduced to 3% of the Total
Project Cost and it is now termed as Performance Guarantee.

Guarantee (L/Cs) received from NHAI

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1. For Annuity Projects, these SPVs receive from NHAI within 1 Month of
Commercial Operations date a Confirmed revolving L/C for an amount equal to
One Annuity Billing, valid for the entire period as per Contract signed between
NHAI & the SPV.

2. If the NHAI fails to pay the Annuity Invoice (once in Six Months) then the
company has a right to encash the L/C as per terms of the Contract entered with
NHAI.

3. If the Original L/C is encashed, then a new L/C will be issued by NHAI in favour
of the SPV for an amount equal to One Annuity Billing, valid till the end date of
the Agreement.

Steps:

Srl# Business Requirement & SAP comments Additional Info
1 Different Types of Securities offered by Customers:
Bank Guarantee received
Letter of Credit received
Escrow a/c
Corporate Guarantee received

Securities offered to Customers:
Bank Guarantee given
T.code: F-38 / F-49

To be controlled
thru Separate
Special GL
Indicators

T.code: VX11N (to
monitor L/Cs/
Guarantees
received against
Customer S/o)

2 Details of Security # / Bank Name Thru Reference field
of FI document
relevant to those
transactions
(Manual input)
3 Blocking of Sales order processing for customers based on
expiry of L/Cs / Guarantee until extension.

Block @ Sales
order level. Trigger
based on entries in
T.code: VX11N.
[SD Module]
4 BG transaction should be cleared once Bank Guarantees are
returned to Customers
Reversal T.code: F-
19
5 Encashment of Guarantee/LC should be provided for if the
customer fails to make the payment on the due date
F-19, F-28.
6 Change in Bank Guarantee amount, after financial closure Reversal / Removal
of previous posting
& Creation of new
entry for the new
amount.

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T.code F-38 / F-49 /
F-19

Customer Incoming Payments:

Incoming payments is a process of accounting cash / bank receipts from customers on account of
the following transactions viz:

Receipts from customers against sales and services.
Receipts from customers against sale of scrap
Advance receipt from customers
Receipts from sale of fixed assets
Refund of Loans / Advances
Maturity of Fixed Deposits placed with Banks
Redemption of Mutual Fund Units
Sale of Investments
Refund of Security Deposits
Scholarships recd from Government for distributing to Students
Deposit received from Students towards books
Caution deposit from students
Fee collections from Students To be Interfaced from EZ School Software

System should facilitate the accounting of receipts and provide for closing of open items at
the time of receipt entry.
In case of TDS deducted by customers Explore the possibility of automatic accounting of
the same at the time of receipt entry. ( viz Invoice Amount is Rs. 100/- the receipt amount
is for Rs. 95/- and the balance of Rs. 5/- deducted by the customer towards TDS )
System should track the TDS Certificates receivable from customers.
In case of the same customer be the creditor, option should be available for clearing the
open items in both vendor and customer Accounts.
System should provide the automatic printing of bank deposit slip with system generated
numbering after the receipt entry. We request the bank to mention this number in bank
statement, so that the automatic reconciliation for credits becomes easier.
Separate document type Misc Receipts is required for accounting miscellaneous receipts
( i.e sale of news paper for which no sale invoice is prepared)

Scholarships:- In the case of Education Sector, Government will distribute funds towards
scholarship and the same has to be distributed to students.
The following entries were passed in our legacy system for accounting the Govt Grant towards
scholarships:

Bank Account Dr
Scholarships Control A/c Cr
- Sub Account: Academic Year, Branch
- Sub Account: Student Name, JNTU Roll No.

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System should provide tracking of the grants received in respect of students name, JNTU roll no,
Academic year and branch wise, so that the outstanding balance payable towards each student
can be tracked immediately.

Deposit from students for Books Scheme:- GMRIT collecting deposit of Rs. 3,000/- from the
students towards books scheme at the time of admission. We are providing books to students on
returnable basis in every academic year. After completion of degree course ( i.e four year course)
college will give books to the worth of Rs. 2,000/- to each student who has given the deposit. (the
value of books is to be finalized because depreciated rate or book cost).
College will procure the books and capitalize the same and Depreciation will be provided.

Advance Fee Collections:- In the case of Education Sector the following fee will be collected
from students for an academic year ( July to May ) and accounted as fee receipt in advance.
a. Tuition Fee
b. Development Fee
c. Special Fee
d. Soft skill Fee
The following entries are passed at the time of Fee Collections.
Cash/Bank Dr
To Fee In Advance Cr

Fee in Advance account will be transferred to revenue account in the next fiscal year on monthly
basis. System should support transfer of these fee entries by using sample document feature.

Fee Receivable:- Fee outstanding amounts are transferred to Fee receivable account. This is for
scholarships receivable from Government.

The following entry passed in our legacy system:-

GL Account: Fee Receivable Dr
Sub Account: Student Name, JNTU Roll No.

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To Fee in Advance A/c Cr
(Will be taken to GL Closing)
Business requirement is addressed below as a solution in SAP:

Sl.No.

Requirement Solution

SAP
Module
1 Receipts from the Customers against open invoices will be
accounted in the system using the standard transaction (T code: F-
28) and there is a facility to clear the open items at the time of
booking the receipt entry.
If the deposit entry for the cheques is done using FF68, the
accounting entries for the receipts will be generated in the system,
however, clearing of these entries would not possible at the same
time.
Automatic clearing feature can be used here to clear customer
open item on a daily basis through scheduled programs.
F-28,FF68,
F.13
2 If the information about the TDS to be deducted by the Customer is
available, then the withholding tax types and the tax codes will
have to be maintained in the Customer master record.
In case the information is not available, it will be dealt with
manually
Configuration will be maintained in the system for TDS at the time
of posting the payment. This will enable to post the incoming
payment along with TDS as well as clearing the open item
F-28
3 There is a provision to record the TDS certificates received from
the customers. Using this report along with the analysis of the TDS
receivable A/c. will throw out the cases of TDS certificates not yet
received
FBL3N,
J1INCUST
4 If the customer is also a vendor from the companys perspective,
then the customer account needs to be maintained in the vendor
master record and likewise, the vendor account needs to be
maintained in the customer master record. Doing this will facilitate
clearing of open items for the customer as well as vendor since
both are linked through the master records.
F-28
5 Generation of bank deposit slip through the system will call for
development. The SAP document number generated for the
F-28, FF68

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receipt entry can be printed on the deposit slip and thereafter be
intimated to the Bank for the purposes of capturing in the bank
statement.
The document number can then be used for the purposes of Bank
reconciliation in case of cheque deposits.
6 Separate document type for specific nature of transaction Eg:
Miscellaneous receipts, where there is a need to track such
transactions can be achieved by using separate document type.
This document type needs to chosen at the time of document entry
for such transactions.
Standard
SAP
Configuratio
n
7 Scholarships are received from the government which are either
directly paid to the students or are accepted as fees income on
behalf of the students.
In both the cases, the amount will have to be directly accounted
against each student created as a customer using special G/L
indicator.
At the time of document entry, details like students name, JNTU
roll no., academic year, branch etc. needs to be captured so that
the same can be extracted using standard sap reports.
F-28,
FBL5N
8 Students will be created as customers in the system. The details
like students name, JNTU roll no., academic year, branch etc. will
be maintained in the customer master and can be tracked
separately.
Caution Deposits and Book deposit will be captured in the system
using separate special GL indicators in the customer accounts.
The difference between the depreciated value of the books given
back to the student and the sales value received from the student
will be treated as profit from the sale of books. The
F-29, F-92
9 Fees received in advance from the students will be accounted in a
separate GL account. Detailed break-up of the amounts student-
wise will be extracted from the EZ School Software system.
Fixed Amounts can be recognized to revenue using the sample
document or the recurring document features.
Entries for fees receivable from the specific customers will have to
be passed debiting each customer account with a special GL
indicator and crediting the Fees received in advance A/c.
F-28, F-01,
FBD1,
FB70

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Reports:

The above reports will be available. (Standard SAP report : FBL5N)
List of Customer wise receipts for a specific period and bank wise (Standard SAP report
: FBL5N, FBL3N)
List of TDS Certificates due from the customers (Can be identified using FBL3N for TDS
receivable A/c and T code J1INCUST)
Ageing Reports (Standard SAP report : S_ALR_87012178)
List of TDS Certificates received customer wise, income wise, financial year wise etc (T code :
J1INCUST)

Customer EMD,SD & RM:

k. In case of Sugar EMD is received from customers and to be adjusted to Sales receivables.
l. Earnest Money Deposit / Security Deposit will be displayed separately in Balance Sheet
under Current Liabilities.
m. Customer account items/balances should display items pertaining to EMD/Security
Deposit/Mobilization advance received and Rental Deposit separately.
n. Customer a/c report should show Earnest Money Deposit & Security deposit Mobilization
advance and Rental Deposit to respective contracts/Sales orders.
o. Retention money if any need to be identified and accounted at the time of invoice raising
automatically.

EMD/Security Deposits - payments to Customers:

a. Earnest Money Deposit/Security deposit given is to be recorded given for bidding
b. It is to be converted into Initial Security Deposit (If conditions exist) in case of successful
bid of contract.
c. If Contract is not successful refund to be received.
d. Customer a/c report should show Earnest Money Deposit & Security deposit to respective
contracts/Sales orders.
e. Retention money to be accounted for the deductions made from every RA Bill.
Ex: Retention money NHAI a/c.

Caution Deposits received / Loans disbursed from / to Students / others of GMRVF:

a. Receipt of Caution deposits from Students

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b. Education Loans to Students
c. Other loans to community people

Advance Rental deposit from Customers:
Amount is collected in advance along with Rental/lease contract agreement.
No interest is presently payable
It should normally not be adjusted against monthly rents receipts.
Amount may be adjusted in last/future installments as per authorizations as per DOP.

Earnest Money Deposit /Security deposit paid to customer:
Amount is paid when bidding for a contract.
In case contract is received the amount may be adjusted for Security deposit payable in
terms of contract.
If contract is not received the amount of refund is received.

Mobilisation Advance Accepted from Customer in Contracts:-Road Sector
Amount received from SPV as Mobilization Advance on percentage basis of contract value
(approx 2.5 % to 10%)
Amount is received in stages.
This mobilization advance is recovered by customer between 20 to 80 % of the completion
of contract.
Bank Guarantee in certain cases for securing the Mobilization advance.

Scrap sale: EMD Through AR :

Tenders shall be called. The amount of cheques/DD/Cash collected shall be held by
purchase committee without accounting until opening of the Boxes in the evening.
Once the tender box is opened the HIGHEST 3 tender participants EMD amounts shall be
accounted in books and amount will be deposited in banks.
On finalizing the tender allocation the work order is released the balance 2 tender
participants money is returned.
The EMD shall be adjusted for the proceeds receivable from customer in case of last load
lifting of the scrap.
The Forfeited amount shall be treated as other income in the books of accounts.

Rake Sales: EMD
Customer /Agent will deposit the EMD amount in the Bank & Branch specified by GIDL and
fax deposit slip to GIDL

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Accounts Dept. shall verify the receipt of the proceeds with Bank by fax or online and credit
the EMD account of the Agent.
Once the rake is dispatched and received by the customer we shall collect the net amount
after adjusting the EMD. The EMD from Agent will be transferred to respective customers
accounts.
In case a second rake starts before concluding the sale by first rake the EMD shall be
continued to be held in Agent account. Full amount would be received against First rake.
In case the Sugar is not lifted against the commitment/sale order, the EMD would be
forfeited to the extent of non-lifting.
The Forfeited amount shall be treated as other income in the books of accounts.

GMR VF Requirement:

1) Caution Deposit:- We have collected the caution deposit from students at the time of
admission . These deposit maintained till the courses are completed. This is maintained
Academic Year wise, Branch/Class wise, Year wise, Student Name, Roll No., Wise.
These deposits are refunded at the time of completion of the course and some amount
adjusted towards Allumini Association Membership fee and the some amount deducted in
case of any breakages or damages in colleges or hostel property
In our legacy systems the following entries are passed at the time of collection of Deposits:
1. Bank/Cash Dr Rs.5000/-
To GL Account : Caution Deposit Cr Rs.5,000/-
To Sub Account : For the Academic Year, Brach
To Sub Sub Account : Student Name, JNTU Roll No.
2. At the time of payment the above entries are reversed

2) Education Loans:- We have given loans to students for his/her education purpose. As
per our Terms and conditions Repayment will start after getting job.
The following entry have been passed in our legacy system:-

GL Account: Education Loans Dr
Sub Account: Student Name & Address
To Bank Cr

3) Loans- Others:- We have given loans to small business people and other community
development people for develop their business.
The following entry have been passed in our legacy system:-

GL Account: Loans-Others-individuals Dr

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Sub Account: Beneficiary Name & Address
To Bank Cr

Steps:

Srl# Business Requirement & SAP comments Additional Info
1 EMD received from Customers
SD received from Customers
Mobilization advance from Customers
Rental deposits from Customers
EMD paid to Customers
SD deposited with Customers
Retention money with Customers
Caution deposit from Students
Education Loans to Students (of GMRVF / outside students)
Loans to community people
T.code: FB01

To be controlled
thru Separate
Special GL
Indicators
2 Deposit reference to Customer contract / Sales order Thru Reference field
of FI document
relevant to those
deposits (Manual
input)
3 Capturing information of Bank Guarantee given to customers
for Mobilization advance
Thru Reference field
of FI document
relevant to
Mobilization
advance (Manual
input)
4 Automatic Retention money posting to a separate Recon a/c
at the time of SD Billing
It has to be posted
to a separate Recon
a/c manually, with
the Spl GL Indicator.
5 Forfeiture of deposits and accounting as Income FB01
6 Monitoring of individual transactions with students / other
community people of GMRVF
To be handled thru
a separate
Customer Account
group [SD module].
7 Converesion of EMD to SD Manual transfer
posting

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Assets Accounting

Organizational Structure:

Company Code--- Chart of Depreciation ---Asset Class

Assets Acquisitions including low value: A Low value items refers to assets, where acquisition
cost of each quantity of asset is less than Rs.5, 000/-.
In that case, Low value assets have to be created under separate Asset Class: 9400
Class of assets shall have following segregation of Asset Class
Land further break up of freehold and leasehold
Buildings further break up of factory building and office building
Plant & Machinery further break up as specified
Office Equipments further break up as electrical fittings, computers, telephones, etc.,
Furniture & Fittings
Vehicles
Capital work in progress

Asset masters will be maintained by the following transaction codes:
AS01 Create Asset
AS21 Create Group Asset
AS11 Create Sub-Asset
AS02 Change Asset
AS22 Change Group Asset
AS03 Display Asset
AS23 Display Group Asset
AS05 Lock Asset
AS25 Lock Group Asset

Asset Class Description
Asset Account

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Class Determination
FA-GBV-Tangible-Land Leasehold 1100 1100
FA-GBV-Tangible-Land Freehold 1200 1200
FA-GBV-Tangible-Factory Building 2100 2100
FA-GBV-Tangible-Office Building 2200 2200
FA-GBV-Tangible-Other Buildings 2300 2300
FA-GBV-Buildings (House Property) 2400 2400
FA-GBV-SEZ (Buildings) 2500 2500
FA-GBV-Hotels 2600 2600
FA-GBV-Commercial Shopping Complexes, Malls 2700 2700
FA-GBV-Buildings-Residential 2800 2800
FA-GBV-Tangible-Temporary Structure 2900 2900
FA-GBV-Highways, Structures and Toll Plaza 3100 3100
FA-GBV-Tangible-Improvement to Leasehold
Buildings 3200 3200
FA-GBV-Aircrafts 4100 4100
FA-GBV-Tangible-Plant and Machinery 4200 4200
FA-GBV-Tangible-Plant and Machinery-Main Plant 4300 4300
FA-GBV-Tangible-Plant and Machinery-STP Plant 4400 4400
FA-GBV-Tangible-Plant and Machinery-Weighing
Equipment 4500 4500
FA-GBV-Tangible-Plant and Machinery-Shopfloor
Equipment 4600 4600
FA-GBV-Tangible-Plant and Machinery-Shopfloor
Equipment 4600 4600
FA-GBV-Tangible-Plant and Machinery-Onshore 4700 4700
FA-GBV-Tangible-Plant and Machinery-Offshore 4800 4800

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FA-GBV-Tangible-Computer Equipment 5100 5100
FA-GBV-Software 5200 5200
FA-GBV-Tangible-Office Equipment 5300 5300
FA-GBV-Tangible-Safety Equipment 5400 5400
FA-GBV-Tangible-Lab Equipment 5500 5500
FA-GBV-Tangible-Health/Fitness Equipment 5600 5600
FA-GBV-Tangible-Furniture & Fittings 6100 6100
FA-GBV-Tangible-Furniture 6200 6200
FA-GBV-Tangible-Fittings 6300 6300
FA-GBV-Tangible-Soft Furnishings 6400 6400
FA-GBV-Tangible-Electrical Appliances and
Equipments 6500 6500
FA-GBV-Tangible-Electrical Fittings 6600 6600
FA-GBV-Tangible-Vehicles 7100 7100
FA-GBV-Tangible-Vehicles-Cars 7200 7200
FA-GBV-Tangible-Vehicles-2 Wheelers 7300 7300
FA-GBV-Commercial Vehicles 7400 7400
FA-GBV- Imported Vehicles 7500 7500
FA-GBV-Livestock 8100 8100
FA-GBV-Intangibles 8200 8200
FA-Trademark, Copyright & Patent 8300 8300
FA-Research & Development Cost 8400 8400
AUC - For Value adjustment 9100 9100
AUC - Investment measure 9200 9200
Income tax - Group Assets 9300 9300

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Capitalization of Projects under Construction:

1) Project structure would be created in PS which will be informed to finance through
workflow/mail for validation with respect to following : (Creation of WBS will be done in the
PS module)
Project Structure alignment with respect to AuC classes wherever required.
Operative indicators for WBS elements (account assigned)
2) Purchase Requisition would be raised with relevant WBS element as the account
assignment.(Creation of Purchase requisition shall be by MM )
3) Purchase requisition is approved by appropriate authority, based on authority limit (we
need to fix the limit of authority) for purchasing of assets. Thereafter the FI department will
check whether capital budget is available for the purchase of same. If the Capital Budget is
not available then a request for special approval is made to higher authority at appropriate
level as per authority limit.(Budget monitoring shall be covered in IO, WBS and if
Implemented FM )
4) FI department will check the relevant WBS element as account assignment in the purchase
requisition. In case FI department identifies that the relevant cost needs to be booked
under different WBS element (below the WBS element originally assigned) & the same
WBS element doest not exist then FI department would raise a request to create the
relevant WBS element to PS team.
5) Purchase Order would be created with reference to the purchase requisition. FI department
will validate the purchase order.
6) At the time of receipt of goods the GR/IR would be carried out by MM & cost would be
booked as consumption at relevant WBS element through following accounting document
Accounting entry
Material Consumed (Project P & L GL) A/c Dr.
GR/IR Clearing Account Cr.

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7) In case of assets which need to be procured directly as assets like land, leasehold
buildings, Construction equipments etc. asset master will be created first with relevant WBS
element as & cost will be directly capitalized to the relevant asset.
8) Periodically (at month end) WBS would be settled to the AuC (preliminary settlement)
attached to the WBS element. Since AuC will be created at the time of release of account
assigned WBS elements there will not be any need to create settlement rule for this
preliminary settlement but in case if any cost booked to the relevant WBS elements needs
to be expensed off then distribution rule need to defined accordingly either at the WBS
element level or at the relevant line item level. Periodic settlement activity would be carried
out every month till the time project is under construction stage.
In case of operating companies, expenses incurred on new project following entry will be
passed.
Accounting entry for WBS settlement to AuC:
Dr. Capital WIP A/c
Cr. Project P& L GL A/c
9) In case of assets which are required to be capitalized directly a final settlement would be
carried out to the asset & not to the AuC & no periodic settlement would be required in that
case.
10) In case of CWIP assets final settlement of WBS element to the final asset would be a line
item settlement which means FI Department has to define a distribution rule for each line
item. FI department would create the asset master record before the final settlement.
Accounting entry for Capital WIP A/c to Final Asset:
Dr. Asset Account
Cr. Capital WIP Account
11) WBS element is a model of project that organize project tasks into a hierarchy. It is the
functional basis for further planning steps in a project, for example, for process planning,
cost planning, scheduling, capacity planning or costing, as well as project control.
12) Preliminary settlement is a settlement which is not a final settlement. Here WBS element is
first settled to AuC & then finally to asset.
13) Distribution rule contains the details with respect to the receiver, % of the cost to be
distributed or absolute amount & the period for which distribution rule is valid.
14) For Project companies, construction details of the asset like direct asset, allocable cost of
preoperative expenses / indirect expenses with complete break up of each expense head
will be available in the PS system (Year-wise for each project). S_ALR_8701353-
Costs/Expenditures and CJI3 Actual Costs / Revenues.

15) Fixed asset will have transaction type wise costs like cost of acquisition, taxes, freight,
installation cost, & other admin cost incurred towards bringing the asset to the present
working condition. Details shall be available in Internal Oder /PS WBS element.

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Capitalization of Assets through FI and Controlling:
1) Purchase Requisition would be created with account assignment category A and the asset
number as the account assignment. FI department at the time of validation/concurrence of
PR will check the account assignment category & the account assignment. (Creation of
Purchase requisition shall be covered in MM BBP)
2) Purchase requisition is approved by appropriate authority, based on authority limit for
purchasing of assets. Thereafter the FI department will check whether capital budget is
available for the purchase of same. If the Capital Budget is not available then a request for
special approval is made to higher authority at appropriate level as per authority limit.
(Budget can be monitored through internal orders and if implemented FM covered BBP )
3) FI department at the time of finance concurrence/validation will change the account
assignment of asset number with the AuC number created specifically for the purchase
order line item.
Accounting entry
Dr. Capital procurement A/c (with Internal order)
Cr. GR/IR Account
4) At the time of invoice verification the difference between the GR/IR value & Invoice value
would be posted on the AuC. FI department will execute the settlement again (no need to
define the distribution rule again) & the same would be capitalized again on the assets
capitalized earlier.

5) In the case of assets procured under capital grants from the government the asset would
be capitalized under asset class Assets of Government & no depreciation would be
charged on the asset. Accounting of grants received & utilized would be done through FI
JV.
(OR)
6) Assets acquired under capital grants from government Show grant as liability and physical
asset value as asset. Calculate depreciation every year and make a FI JV to debit the grant
liability and credit the Depreciation account.

Accounting entry for IO settlement to AuC:
Dr. Capital WIP A/c
Cr. Capital Procurment P& L GL A/c

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Accounting entry for Capital WIP A/c to Final Asset:
Dr. Asset Account
Cr. Capital WIP Account
Segregation of Assets within Asset Class:

By using Asset Supernumber in the Asset Master record, several assets can be assigned
to one Supernumber and data relating to the assets in an asset super number can be
analyzed together (in reporting). Master record for the asset super number can be created
and all general master data common to all the assets can be handled at this level.
This Asset Supernumber can be used for classifying imported assets as well.
Register of Charges : is one of the requirement wherein details of charges on assets need to be
reported which is a non-standard. However, if any of the assets is charged, this can be maintained
in the asset master record as one of the evaluation group, by which assets charged can be
tracked.

IMP: All asset balance will be migrated from legacy system to SAP system using T.Code
AS91 & AS81.

Retirement of Assets:

Intercompany group transfers shall be treated as sales from one company to another
company. Intercompany shall be treated as customer sales.( F-92/ ABAON).

Retirement based on sale of assets:
(a) Sale of Assets:

An asset retirement is the removal of an asset or part of an asset from the asset portfolio. This
removal of a fixed asset from the asset portfolio is known as an asset retirement. In Asset
Accounting, the removal of an asset by sale, as well as any resulting revenue, can be posted in a
single step. At the same time, you can choose to post to Accounts Receivable (through integration
with Financial Accounting) or to a reconciliation account. The commercial department will identify
the customer and the plant in charge shall approve. The SD team will create the sale order against
the identified customer. The debit note/sales invoice will be created for posting of retirement
entries. The assets will be delivered/ handed over physically to customer. The payment may be
received in advance or after sale depending upon terms and condition of sale.

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Software licenses shall be treated as intangible assets and standard SAP process shall be
followed for the retirement. ( F-92 / ABAON)

After physical verification which are not found during the physical verification shall be
written off. (T.Code ABAVN)

After physical verification which are not found during the physical verification shall be
written off (T.Code:ABAVN)

On retirement of asset, excise duty and VAT credit against the specific asset needs to be
identified manually and JV need to be passed.(FB50).

Over adjustment /Under adjustment:
The process of dealing with over/under capitalization in the system has been explained iwith the
help of examples as well as the specific accounting entries passed:-
Step # Department User Role Process Description SAP Module
A MM MM Users Purchase Contract
E.g. Purchase Contract raised for Rs.500
MM
B MM MM Users Service Entry Sheet
Accounting Entry:
Assets/Capital WIP A/c - Dr 500
G/R I/R Clearing A/c - Cr 500
Invoice for Rs.550 but accepted by
company Rs.500
Accounting Entry:
GR/IR Clearing A/c - Dr 500
Vendor A/c. - Cr 500
MM
C MM MM Users Finally agreed with party Rs.525 MM

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Step # Department User Role Process Description SAP Module
E.g. PO Price Rs.500
Agreed Amount Rs.525
Invoice amount Rs.550
Accounting Entry for Adjustments:
Assets / Capital WIP A/c - Dr 25
Clearing Invoice reduction - Dr 25
Vendor A/c - Cr 50
Accounting Entry for Debit Memo
Vendor A/c Dr 25
Clearing Invoice Reduction Cr 25

Alternate Entries for the requirement
mentioned:
Assets / Capital WIP A/c - Dr 25
Vendor A/c - Cr 25

D Accounts Accountants Report for prior period depreciation will be
available from the system. Accounting
entries for Prior year adjustments in case
the adjustments are w.r.t. earlier years
and already taken in depreciation run
process will be required to be passed
manually.
FI

1. Assets for over value adjustment can be made through SAP T.code F-90.
2. Assets for under value adjustment can be made through SAP T.code F-41.

1. In case of transfer of assets between companies, it will be treated as a normal sale
transaction by the company from which the asset is being transferred and as additions in
the books of the other company. Inter-company code transactions provided in the system
will not be used for these purposes. This point to be covered in Retirement of Assets

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2. In case of transfers within the same company i.e. Intra Company transactions, the new location need
to be updated in the location field in the asset master record using AS02. The different locations
wherein the asset was located at different time intervals can be viewed in the asset master record.
3. In case of transfers from one cost center to another, the same needs to be updated in the cost
center field in the asset master record using AS02. The different cost centers wherein the asset was
located at different time intervals can be viewed in the asset master record.
4. In case of postings to a wrong asset class, transfers can be made through the system (T.code:
ABUMN) in order to transfer the assets to its correct asset class.
5. All the above transfers i.e. from one location to another, from one cost center to another, from one
employee to another can be tracked through the standard reports available in the system. In case of
any change in cost centers in the asset master record, depreciation will get charged to the
respective cost centers based on specific time intervals for which they were held by each cost
center. In case the location change happens for the earlier period, the revised cost centre wise
depreciation will not be updated for the previous period.
6. In case of transfers between different company codes, the entries for reversal of cenvat
and VAT credit need to be passed manually in the books. This point to be covered in
Retirement of Assets

Impairment of Assets:

Impairment of Assets refers to carrying value of the assets. Value of the assets
cannot be more than recoverable amount and value in use of the asset depending
on circumstances. (value in use is estimated on the basis of future cash flows,
Including its terminal value, after applying an appropriate discount rate).

Asset needs to be classified between cash generating unit (CGU) & corporate assets. This
classification is necessary, wherever recoverable amount of an individual asset cannot be
estimated. (eg: railway siding, quality control testing equipment used in production line) In such
cases, cash flow of an income generating unit to which the asset belongs, should be considered.

Cash generating unit (CGU) means the smallest identifiable group of assets that generates cash
inflows from continuing use that are likely independent of the cash inflows from other assets or
group of assets
Corporate assets, represents other than goodwill that contribute to cash generating units. Eg:
corporate buildings, research centre etc.

1. On each Balance Sheet date the enterprise should assess whether there is any indication
of impairment of an asset. An asset is said to be impaired when carrying amount of the
asset is more than recoverable amount. If yes, the enterprise should estimate the
recoverable amount and amount of impairment loss will be carrying amount less
recoverable amount.
2. If an asset is carried at a historical cost, impairment loss will be charged to P & L A/c and if
an asset is carried at Revalued amount, impairment loss will first be set off against

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revaluation reserve and for any excess over revaluation reserve will be charged to P & L
A/c.
Accounting Entries: (Example)

In the case of assets carried at Historical Cost

Impairment Loss A/c Dr. 9500
To Cumulative impairment Loss A/c 9500

P & L A/c Dr. 9500
To Impairment Loss A/c 9500

Cumulative Impairment Loss A/c Dr 9500
To Asset A/c 9500

In the case of assets carried at Revalued Amount

To Cumulative impairment Loss A/c 9500

Revaluation Reserve A/c Dr. 8000
P & L A/c Dr. 1500
(TO RR to the extent earlier credited to RR say 8000, & for any excess over RR, to the P &
L A/c.)

Cumulative Impairment Loss A/c Dr 9500

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To Asset A/c 9500

3. If there is any indication that asset may be impaired and remaining useful life or residual
value of assets needs adjustment, the depreciation / amortization charge should also be
reviewed and after recognizing impairment loss, depreciation / amortization charge for the
asset should be adjusted for revised carrying amount to be allocated over the remaining
useful life of the asset.
4. An enterprise should assess on each balance sheet date if impairment loss charged in prior
years is no longer in existence or impairment loss charged earlier has decreased on the
basis of indications from external or internal sources & estimate recoverable amount. If
there are any such indications, impairment loss should be reversed and treated as income
in P & L A/c in the case of asset amount carrying at historical cost and Revaluation
Reserve / P & L A/c in the case of asset carrying at Re-valued amount.
Accounting Entries:

In the case of assets carried at Historical Cost (
Cumulative impairment Loss A/c Dr. 9500

To P & L A/c 9500

Asset A/c Dr 9500
To Cumulative Impairment Loss A/c 9500

In the case of assets carried at Revalued Amount

Cumulative impairment Loss A/c Dr. 9500

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To P & L A/c 1500
To Revaluation Reserve A/c 8000

Asset A/c Dr 9500
To Cumulative Impairment Loss A/c 9500

5. After Reversal, increased carrying amount of an asset should not exceed the original
carrying amount assuming that no impairment has occurred. Depreciation / Amortization
should also be adjusted.

Impairment can be made through SAP T.code: ABAW and entries passed in SAP T.code: F-02

INCOME TAX DEPRECIATION:

Depreciation rates are already recorded in the Asset Master Data for Income tax purposes (Ref:
BP_FICO_0003 AM Master Data) and which will be taken for calculation of Income tax.

Tax Depreciation Area: All the existing Groups (Blocks) as defined for Income Tax will be created as
Group Assets, under a separate class Group Asset Class, and the tax Depreciation Area would be
activated for them.

Please run T.Code: AFAB for posting Depreciation for various Depreciation Areas.

Purchase of intangible Assets
1. User raises the purchase requisition for purchase of intangible assets.
2. Purchase requisition is approved by appropriate authority, based on authority limit for
purchasing of assets.
3. Accounts department will check whether capital budget is available for the purchase of
same. If the Capital Budget is not available then a request for special approval is made to
higher authority at appropriate level as per authority limit. This can be tracked through IO or
for project requirements, through WBS elements.
4. Once the capital budget is approved for purchasing of intangible assets, generally
computer software or some advertising or development expenditures which can be treated

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as Intangible assets on fulfillment of required conditions, purchase /service order is raised
against vendor.
5. Assets, if any, will be received by User department. Payment will be released
simultaneously or afterwards to the vendor after the invoice verification.
Accounting entries
Normal Purchase
Goods Receipt
Capital WIP A/c / Asset A/c. - Dr xxx
To G/R I/R Clearing A/c. xxx
Invoice Verification
G/R I/R Clearing A/c - Dr xxx
Vendor A/c. xxx
For Work Orders
On Certification of Work Executed
Capital WIP A/c - Dr xxx
To Provision A/c. xxx
Invoice Verification
Provision - Dr xxx
To Vendor A/c. xxx
Capitalization
Asset A/c. - Dr xxx
To Capital WIP A/c A/c. xxx
6. In case of an internally generated intangible asset, all the expenditures directly attributing to
making the asset ready to use will make up to the cost of the intangible asset.
7. Any expenditure on intangible item initially recognized as expense in the previous financial
statements shall not, at any later date, be recognized as part of the cost of the asset Non
SAP.
8. Any subsequent expenditure incurred on an existing intangible asset will get added to the
intangible asset as applicable to other assets.
9. Asset will be amortized on the basis of best estimates or license agreement as the case
may be. However, the period will not exceed more than 10 years. In case of longer period,

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it will be authorized by appropriate authority. Amortization method will also be determined.
Generally, Straight Line Method is followed.
10. At the end of each financial year, amortization method will be reviewed and if the expected
useful life of intangible assets or pattern of future economic benefit has significantly
changed, the amortization method should be changed accordingly.
11. At each Balance Sheet date, once intangible asset is capitalized, it is assessed and
recoverable amount is determined. If carrying amount is more than recoverable amount,
the impairment loss will have to be calculated. If the intangible asset is subject to charge,
this can be maintained through Evaluation Group and charged assets can be tracked
separately.
12. Commitments for the acquisition of intangible assets can be made through Internal Order.
13. The disclosure requirements with respect to useful lives, depreciation rates, amortization
methods, gross carrying amount, additions, retirement/disposals, impairment losses,
amortization charge, other changes, accumulated amortization can be met through the
standard SAP reports.

Assets Closing Activities including Depreciation:

Preliminary settlement of WBS element to AuC for CWIP assets & final settlement of WBS element
to asset in case of direct capitalization (relevant only in case where project is under construction).
Review of AuC assets Report having list of all the assets under AuC asset class needs to be taken
from the system & should be reviewed from the capitalization perspective.
Review of Planned depreciation for the period (through Asset accounting report).
Review of Fixed Asset Register after depreciation posting by core team.

--Revaluation of assets shall be done through T.Code: ( ABAW/ABAWN)

Reporting Requirements:

--Report to facilitate for physical verification of fixed assets (name of the fixed asset, quantity,
location, employee, asset nos, custodian of fixed assets, physical quantity recorded during
verification process, variance, reason for variance) (Standard SAP reports:
S_ALR_87011979, S_ALR_87011980, S_ALR_87011981, S_ALR_87011982)
-- Fixed asset schedule employee wise / location wise / project wise (Standard SAP reports:
S_ALR_87011963 to 70)
-- Register of charges (Charged assets to be tracked through evaluation group) (Standard SAP
reports: S_ALR_87011963)
-- Standard SAP shall automatically calculate profit & Loss on sale of assets and the
accumulated depreciation till the time of retirement and to the extent of retirement asset

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value will be reduced. If the asset is disposed off completely, the asset will not be taken
into account for any further depreciation run.( F-92/ABAON).
-- In the case of retired asset (pending for sale), . Net realisable value will be determined
outside SAP. This value then needs to be compared with the net book value of the retired asset. If
the net realisable value is lower than the book value, revaluation can be used to write down the
book value to the net realisable value. (T.Code:AR29).

-- After physical verification which are not found during the physical verification shall be written off
-- Profit & loss on the sale of assets (Transaction Code: FS10N)

-- Reports containing assets verified but not found during the physical verification
(S_ALR_87011979 - by Cost Center S_ALR_87011980 - by Location, S_ALR_87011981 - by
Asset Class , S_ALR_87011982 - by Plant )

-- Reports containing assets written off completely as per law(fully depreciated asset), but having
nominal value in the Books (Rs1) to physically monitor the custody of the assets AR01

-- Discrepancy report on Physical verification of assets S_ALR_87011979 - by Cost Center ,
S_ALR_87011980 - by Location, S_ALR_87011981 - by Asset Class , S_ALR_87011982 - by
Plant )

-- Report on Prior Period Depreciation items (Standard SAP report : S_ALR_87012058)
--Report of over / under valuation adjustments (Standard SAP report : S_ALR_87012058)
--Report of Fixed assets register before & after Over-Under adjustment. (Standard SAP report :
S_ALR_87011963)
--Report of Net depreciation effect before & after Over-under adjustment. (Standard SAP report:
S_ALR_87012058
-- Report containing change in location of assets within the same legal entity Intra company
asset transfer report. (Standard SAP report name:S_ALR_87012054)

--Report containing wrong classification of assets now rectified with correct assets class-Intra
company asset transfer report. (Standard SAP report name:S_ALR_87012054)
--Reports containing assets transferred from one employee to another employees / change in
location of the asset. (Standard SAP report name:S_ALR_87012054)
--Asset History sheet (Standard SAP report name:S_ALR_87012054)
-- Report on impairment loss recognized for each class of asset (Standard SAP Report :
S_ALR_87010173)
-- Report on reversal of impairment loss recognized for each class of asset (Standard SAP Report :
S_ALR_87010173)
--Report on loss or reversal, in case of revalued assets (Standard SAP Report :
S_ALR_87010173)
-- Simulation of Depreciation is possible through Asset Explorer (Tcode AW01N)
-- Net book value will be carried forward to the next financial Year (AJAB; AJRW)

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-- Capital gain/loss will be calculated by the system for incometax purposes. In the case of old assets where
individual income tax value is maintained asset wise, capital(J1IQ).

-- Advance Tax liability Depreciation. Planned Depreciation report (Forecast) can be run.(
S_ALR_87012936; S_ALR_87012026)
-- Tax Depreciation for future years can be done by running the report (S_ALR_87012936).

-- Depreciation shall be posted automatically by the system when the program is executed. System
shall calculate depreciation for each and every individual asset and a consolidated entry shall be
posted up on execution of the program. ( AFAB)
Depreciation Run Accounting Entry:
Dr. Depreciation A/c
Cr. Accumulated Depreciation A/c
-- Assets balance carry forward will happen upon the execution of Year end closing(AJAB).

-- Foreign Exchange Variation
Run Foreign currency Valuation program. Ascertain amount of Foreign
-- Variation that shall be posted to P & L Account( F.05 / FAGL_FC_VAL)
-- Assets which are used for project purpose will have WBS element in the asset master data to
capture the Depreciation expense and the WBS will be settled to Capital WIP A/c and to be carry
forward to the next year(AS02 / CJ88)

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Asset Class:

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Depreciation Key Description
Depreciation
Key Relevance

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0% - SLM Book Depreciation ZC00
1.63% - SLM Book Depreciation ZC01
4.75% - SLM Book Depreciation ZC03 ALL SECTORS
100% - SLM Book Depreciation ZC09
Useful Life (SLM - No. of Years) ZSLM
7.69% - SLM Elec Act Depreciation ZE01
8.24% - SLM Elec Act Depreciation ZE03 ENERGY SECTOR ONLY
4.76% - SLM IFRS Depreciation ZI01 IFRS COM. CODE 2100

Tax Depreciation - 0% - India (WDV) IN0
Tax Depreciation - 15% - India (WDV) IN3 ALL SECTORS

Tax Depreciation - SLM 3.02% India INS0
Tax Depreciation - SLM 1.95% India INS4 AGRO SECTOR REQ.

Sec 25 Depreciation - 5% - India ZT1
Sec 25 Depreciation - 13.91% - India ZT2

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Sec 25 Depreciation - 25.89% - India ZT4 FOUNDATION - TRUST

Sec 25 Depreciation - 10% - India IN2
Sec 25 Depreciation - 60% - India IN8 FOUNDATION - SOCIETY
Sec 25 Depreciation - 30% - India IN10
0% No Depreciation 0000 Founder Companies (Ind/HUF)

Deprcn Key Description
Depreciation
Key
Base
Method
Declining
Balance
Method
Multi Level
Method Period Control Method Status

0% - SLM Book Depreciation ZC00 ZSL0 001 Z00/Base03
ZGM-Z1/Z2 To the
Day Done
1.63% - SLM Book Depreciation ZC01 ZSL0 001 Z01/Base03
ZGM-Z1/Z2 To the
Day Done
ZGM-Z1/Z2 To the
Day Done
ZGM-Z1/Z2 To the
Day Done
ZGM-Z1/Z2 To the
Day Done
ZGM-Z1/Z2 To the
Day Done
ZGM-Z1/Z2 To the
Day Done
ZGM-Z1/Z2 To the
Day Done
ZGM-Z1/Z2 To the
Day Done
100% - SLM Book Depreciation ZC09 0017 001 ZL0/Base03
ZGM-Z1/Z2 To the
Day Done
ZGM-Z1/Z2 To the
Day Done
ZGM-Z1/Z2 To the
Day Done
ZGM-Z1/Z2 To the
Day Done
ZGM-Z1/Z2 To the
Day Done
7.69% - SLM Elec Act Depreciation ZE01 ZSL0 001 Z10/Base03
ZGM-Z1/Z2 To the
Day Done
ZGM-Z1/Z2 To the
Day Done
ZGM-Z1/Z2 To the
Day Done
ZGM-Z1/Z2 To the
Day Done
ZGM-Z1/Z2 To the
Day Done
ZGM-Z1/Z2 To the
Day Done

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4.76% - SLM IFRS Depreciation ZI01 ZSL0 001 Z16/Base03
ZGM-Z1/Z2 To the
Day Done
Useful Life (SLM - No. of Years) ZSLM ZSLM 001 ZSL/Base24
ZGM-Z1/Z2 To the
Day Done

Tax Depreciation - 0% - India IN0 IND1 I00 M0/Base24 IN1 Done
Tax Depreciation - 100% - India IN9 IND1 I09 M9/ Base24 IN1 Done

Tax Depreciation - SLM 3.02% India INS0 IND1 001 S10/Base3 IN1 Done

Sec 25 Depreciation - 5% - India ZT1 ZN25 I01 M1/Base24 Z25 Done
Sec 25 Depreciation - 13.91% - India ZT2 ZN25 I12 M12/Base24 Z25 Done

Revaluation - Transaction Type

X80 Asset Revaluation (To be used for Revaluation Up)
X81 Asset Revaluation (To be used for Impairment)

Investment Support

01 Investment Support from Government

Investment Support - Transaction Type

I01 Investments in State sponsored area (liab. side)

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Asset Super No. Name

ANTIQ/PAINT Other Assets - Antiques/Paintings
BLDG - COMM Buildings - Commercial Buildings
BLDG - RES Buildings - Residential Buildings
BLDG-TENCOM Buildings - Tenented Commercial Buildings
BLR - OTHERS Bangalore - Others
BLR-COR-MUS Bangalore-Corporate Office-Museum Road
BLR-KGSTROFF Bangalore - King Street Office - 1
BOOKS Books
CHARGED ASSE Assets subject to Charge
DEL - ADMIN Delhi Admin Office - Jantar Mantar Road
DEL - OTHERS Delhi Others
DEL-DEF COL Delhi Defence Colony
DEPENDABLE Dependable Assets
DIAMONDS Other Assets - Diamonds
ELECT.EQUIP Electrical Equipment
EXCHANGE ASS Exchanged Assets
FURN & FIX Furniture & Fixtures
GOLD Other Assets - Gold
HYD - OTHERS Hyderabad - Others
IMP. ASSETS Imported Assets
INSURED ASSE Insured Assets
JEWELLERY Other Assets - Jewellery
LAB EQUIP Lab Equipment
LANDS-AGRI Lands - Agricultural Lands
LANDS-COMM Lands - Commercial Lands
LANDS-VACANT Lands - Vacant sites
LEASE/HIRED Lease/Hired Assets
LETOUT BLDGS Buildings Let outs
MERGER ASSET Assets Acquired Thro' Merger
MOB. SPARES Mobilisation Spares
MUM - OTHERS Mumbai Others
OTHERS Other Assets - Others
PLATINUM Other Assets - Platinum
SAMPLE ASSET Sample Assets
SILVER Other Assets - Silver
VEHICLES Vehicles
WATCHES Other Assets - Watches

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INTEGRATION WITH MM
Procurement Scenarios of GMR -

The steps involved are
Creation of Goods receipt document against a valid Purchase Order on receipt of a
consignment with supporting excise documents. (When excisable goods are
procured externally, each delivery will be accompanied by the Vendors invoice.
This document is mandatory as proof of the excise duty paid. The duty paid can be
offset against the excise duty that is levied on outputs. )
The GR will show the excise duty element values at line item level
The total values for each excise duty element (BED, AED etc) for all line items for a
particular GR will be available at the header level
The values for excise duty elements will be shown as per the details given in PO.
While placement of the Purchase Orders the concerned purchasing officer must
ensure that the excisable amount is separated from the basic value of the ordered
materials. The Vendors should be discouraged from quoting rates inclusive of all
taxes and duties.
If materials are received from dealer or trader then the Vendor must submit dealer
invoice clearly mentioning the excisable amount. CENVAT can be claimed based
on the dealer invoice.
The excise duty element values if found different in the Vendor invoice, it can be
edited at the time of GR.
Capture the excise duty in GR.
Immediately on saving the GR, the Part 1 entry will be made in respective registers
(RG23A in case of Raw materials and RG 23C in case of Capital goods. In case of
RG23C, 50% for the year of receipt and balance 50% will be on hold for availing
next year or after commissioning whichever is later).
The system:
Creates a material document to record the goods receipt.
Creates an accounting document to debit the inventory account and credit the
GR/IR clearing account.

Account Debit Credit
Inventory
GR/IR Clearing
10000
10000

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Account

The part II (both RG23A and RG23C entries will not be created at this point of time
(Two step procedures will be used).
The excise department will scrutinize the excise documents and if found ok will
post the Vendor excise invoice in system.
The system automatically debits the excise duty to the excise duty accounts and
credits the CENVAT clearing account.

Basic Excise Duty
Special Excise Duty
CENVAT Clearing Account
1600
100

1700

System then creates a Part II entry in register RG 23A or 23C to record this posting
The Excise duty amount can be changed before posting Excise invoice. If the
excise person has reduced the amount of excise duty that is to be credited to the
CENVAT account, the system adds the difference to the material price.
In case of non availment of Cenvat credit, the system adds the excise duty to
material price.
The system also creates an accounting document. The document contains debit
postings to clear the clearing accounts for goods receipts and CENVAT; and a
credit posting to create an open item on the Vendor's account:

CENVAT Clearing Account
GR/IR Clearing Account
Accounts Payable
1700
10000

11700
Payments to Vendors:
While making payments to Vendor, the below entry will be accounted.

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Accounts Payable
Bank A/c
11700

11700

Page 179 of 189

INTEGRATION WITH PS

PS-FI/CO Integration Process Document

1. Pre-bid Phase

1.1. Project Structure
A single project will be created to maintain to handle all the opportunities during pre-bid
phase. This project will be referred to as First Project.
Each new opportunity will be represented by Level 2 WBS element and Finance will have
to decide if the WBS needs to be expanded into further details.
T-Code: CJ20N Module: PS

Note - The pre-bid phase is starting from identification of an opportunity till the BD team
seeks in-principle approval from management to go ahead for bid.

1.2. Cost Booking to Project
All the expenses incurred during this phase will be posted directly through manual FI entry.
Example T-Code: FB50 Module: FI

Note - The expense account (P&L Account) will be debited with CO Account Assignment
as WBS element corresponding to the opportunity and the vendor / cash / bank account
will get credited.

1.3. Settlement
1.3.1. Settlement may be carried out either after the managements decision on in-
principle approval or at the end of a financial year, whichever occurs earlier. It is
a recommended practice to carry out the settlement at the end of every period
(month-end) to ensure updated CWIP Accounts.
1.3.2. Settlement receiver will always be CWIP Accounts irrespective of managements
decision on in-principle approval of the opportunity. The FI team will maintain as
many settlement rules as number of CWIP Accounts created in the system. The
settlement rule is to be maintained in opportunity WBS element (Level 2) in the
First Project, which has to be settled.
1.3.3. Settlement transaction has to be carried out by user (a person who is trained in
FI module irrespective of his business function) on the sender object (in this case,
Level 2 or Opportunity WBS Element).
T-Code: CJ88 Module: PS

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Note If the management does not grant in-principle approval for the opportunity, the pre-
bid expenses settled from Opportunity WBS to CWIP Accounts need to be settled to BD
Expenses Account.

1.4. Closure of Opportunity
Once the opportunity is concluded and cost of pre-bid expenses of an opportunity is
settled to relevant CWIP Accounts, Finance must close the opportunity by changing the
system status of opportunity WBS element to CLSD.

1.5. Reports
If anybody wants to see pre-bid cost data pertaining to an opportunity, any cost report can
be run for the particular Level 2 WBS element.
Example T-Code: S_ALR_87013533, CJI3

2. Bid Phase
An opportunity enters into Bid Phase, if the management grants in-principle approval for the
same.

In order to capture cost of bid of an in-principally approved opportunity, a new project is
opened in the system. This project will be referred to as Second Project.
The BD team will structure the project as per their requirements.
There is no provision in this project to provide data on cost incurred during pre-bid phase
of the opportunity.

There can be the following 2 ways to get actual cost booked to bid project

2.2.1. Cost can be directly booked to project (relevant WBS element) through manual FI
entry.
The expense account (P&L Account) will be debited with CO Account
Assignment as relevant WBS element and the vendor /cash / bank account will
get credited.

2.2.2. Cost of procurement can be booked to the project through MM route as well i.e.
WBS element will be Account Assignment in the PO and the actual cost will flow
when either Goods Receipt or Service Entry Sheet is posted.

2.3. Settlement

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2.3.1. Settlement may be carried out either at the end of the opportunity bid or at the
end of a financial year, whichever occurs earlier. It is a recommended practice to
carry out the settlement at the end of every period (month-end) to ensure updated
CWIP Accounts.
2.3.2. Settlement receiver will always be CWIP Accounts irrespective of the bid result.
The Finance team will maintain as many settlement rules as number of CWIP
Accounts created in the system. The settlement rule is to be maintained in
Root WBS element (Level 1) in the Second Project, which has to be settled.
2.3.3. The settlement rule maintained in the root WBS needs to be copied to all the
WBS elements in the Second Project. A transaction is required to be run to
generate settlement rules (copy rule from superior WBS element) for lower level
WBS elements.
T-Code: CJB2 Module: PS
2.3.4. Settlement transaction has to be carried out by FI user on the sender object (in
this case, Level 1 or Root WBS Element).

Note If the bid is lost for the opportunity, the bid expenses settled from Second Project
WBS elements to CWIP Accounts need to be settled to BD Expenses Account.

2.4. Project Closure
Once the bid result is declared and cost of the project is settled to relevant CWIP
Accounts, Finance must close the Second Project by changing the system status of
Project Definition to CLSD.

2.5. Reports
If anybody wants to see bid cost data pertaining to an opportunity, any cost report can be
run for the Second Project.
If anybody wants to see cost of pre-bid and bid expenses together, a cost report is
required to be run for the Second Project Root WBS element and Level 2 WBS element
(corresponding to the opportunity in First Project) together.
Example T-Code: S_ALR_87013533, CJI3

3. Execution Phase
A project enters into Execution Phase, if the bid is won or MoU route is adopted.

In order to capture cost of execution of the project, a new project is opened in the system.
If this project is created under same Company Code as of Second Project, then this
project will be referred to as Third Project. Otherwise, this project created under SPV
Company Code is referred to as Fourth Project under SPV.

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The project is structured to ensure that there is at least 1 WBS element to represent an
equipment to be capitalized (fixed asset on COD).
There is no provision in this project to provide data on cost incurred during pre-bid and bid
phases of the project.
There can be the following 2 ways to get actual cost booked to project

3.2.1. Cost can be directly booked to project (relevant WBS element) through manual FI
entry.
The expense account (P&L Account) will be debited with CO Account
Assignment as relevant WBS element and the cash account will get credited.

3.2.2. Cost of procurement can be booked to the project through MM route i.e. WBS
element will be Account Assignment in the PO and the actual cost will flow when
either Goods Receipt or Service Entry Sheet is posted.

3.2.3. In case the Execution Project is created in SPV Company Code (referred to as
Fourth Project under SPV), the cost of pre-bid and bid expenses incurred by
Sponsoring (Holding) Company against this project will be transferred to the
Fourth Project under SPV through the following process

3.2.3.1. The SPV Company is created as Customer in the Sponsoring (Holding)
Company Code.
3.2.3.2. The Sponsoring (Holding) Company is created as Vendor in SPV Company
Code.
3.2.3.3. A Credit Note is raised in Sponsoring (Holding) Company Code debiting
the SPV Company (created as Customer) and crediting the CWIP Accounts
for amounts corresponding to pre-bid and bid expenses of the project. The total
value of the Credit Note must be equal to sum of total cost of Second Project
and cost of Opportunity WBS Element of First Project. This completes
transactions under Sponsoring (Holding) Company books.
3.2.3.4. A Debit Note is raised in SPV Company Code crediting the Sponsoring
(Holding) Company (created as Vendor) and debiting the Bidding Expenses
Account with Pre-bid and Bid WBS Element in the Fourth Project as CO
Account Assignment. This completes transactions under SPV Company
books.

3.3. Settlement
3.3.1. Settlement may be carried out at the end of every financial year until the project
execution continues. It is a recommended practice to carry out the settlement at
the end of every period (month-end) to ensure updated CWIP Accounts.
3.3.2. Settlement receiver will always be CWIP Accounts. The FI team will maintain as
many settlement rules as number of CWIP Accounts created in the system. The

Page 183 of 189

settlement rule is to be maintained in Root WBS element (Level 1) in the Third or
Fourth Project, which has to be settled.
3.3.3. The settlement rule maintained in the root WBS needs to be copied to all the
WBS elements in the Third / Fourth Project. A transaction is required to be run to
generate settlement rules (copy rule from superior WBS element) for lower level
WBS elements.
T-Code: CJB2 Module: PS
3.3.4. Settlement transaction has to be carried out by FI user on the sender object (in
this case, Level 1 or Root WBS Element).
3.3.5. At the end of the project (before COD), the cost settled to CWIP Account needs to
bring back to relevant WBS Elements. This will be done by passing manual FI
entries while crediting the CWIP Accounts and debiting the relevant Expense
Accounts with CO Account Assignment as relevant WBS element representing
equipment or fixed asset.
3.3.6. Define settlement rule in each WBS element to be capitalized by maintaining
corresponding Fixed Asset as settlement receiver.

Note The indirect cost captured in WBS elements (which are not being capitalized) need
to be apportioned over the WBS elements to be capitalized through settlement transaction.
In this case, a settlement rule is to be defined in each of such WBS elements (holding
indirect cost) by maintaining WBS elements to be capitalized as receivers.

3.4. Closure of Project
At the end of the project, once the entire cost of the project is settled to relevant Fixed
Assets, Finance must close the Project (or part of project, which is capitalized) by
changing the system status of Project Definition (or capitalized WBS Elements) to CLSD.

Note The following pre-requisites need to be fulfilled before a project can be closed:
3.4.1. Balance of the project or WBS element to be closed must be zero. This takes
place after final settlement of the WBS elements.
Functional Responsibility Finance / Accounts Team
3.4.2. All the open commitments for the project must be flushed out. This can be
achieved through open PO amendments to nullify the open quantities or by
accepting open PO items (hence, corresponding cost) into the project.
Functional Responsibility Procurement / Project Execution Team
3.4.3. All the activities under the project (or WBS element) must be Finally Confirmed.
Functional Responsibility Project Execution Team.

Page 184 of 189

FI-DATA MIGRATION PROCESS AT GMR

Data migration from legacy to SAP at GMR is done through any of the following procedures:
1. LSMW
2. BDC
3. BAPI

A. For GL data:
For migration of the GL open item balances from legacy to SAP the below T-code is used in the
BAPI
T-Code: ZFITC_GL_BAL

STEPS:
1. Receive the file from the Core Team in the format specified (stored in the shared
location) and save it in the Received Folder.
2. Validate the file totals in terms of fields specifications, posting keys, mandatory
fields etc. and then store the same file in the Validated Folder.
3. Depending on the number of files provided by the Core Team for each Migration
Account, the totals should be matched accordingly. For ex: If two files (one for Bank
GLs and one for Other GLs) are given then the total of these two files should be
equal to the total of the GL Migration Account.
4. While executing the above T-Code ( ZFITC_GL_BAL) select the path of this
Validated file(else this file can also be kept on Desktop and later save it to the
Validated Folder) in the File Field.
5. Start Row field should have the beginning row of the data in the Validated file.
6. End Row field should have the last row of the data in the Validated file where data
ends.
7. Posting Date should be the date for which we are taking the balances.
8. Always select the Foreground processing only to enable to save the output file.
9. Once executed the system will through the result. Error line items will be highlighted
in Red colour and the same can be reloaded in the same way by giving the Row
numbers of the error line items.
10. The successful data (with document numbers) should be saved in Excel format in
another folder by name Uploaded.
Note: Any Foreign Currency line items needs to be manually uploaded in T-code F-02.

Page 185 of 189

B. For Vendor Data upload:
For migration of the Vendor open item balances from legacy to SAP the below T-code is used in
the BAPI
T-Code: ZFITC_OPEN_BAL

STEPS:
1. Receive the file from the Core Team in the format specified (stored in the shared
2. Validate the file totals in terms fields specifications, posting keys, mandatory fields
etc. and then store the same file in the Validated Folder.
3. Depending on the number of files provided by the Core Team for each Migration
Account, the totals should be matched accordingly. For ex: If two files (one for
Normal Vendor items and one for Emp. Vendor Advances) are given then the total
of these two files should be equal to the total of the Vendor Migration Account.
4. While executing the above T-Code ( ZFITC_OPEN_BAL) select the path of this
Validated Foleder) in the File Field.
5. Start Row field should have the beginning row of the data in the Validated file.
6. End Row field should have the last row of the data in the Validated file where data
ends.
7. Posting Date should be the date for which we are taking the balances.
8. Always select the Foreground processing only to enable to save the output file.
9. Once executed the system will through the result. Error line items will be highlighted
numbers of the error line intems.
10. The successful data (with document numbers) should be saved in Excel format in
C. Note: Any Foreign Currency line items needs to be manually uploaded in T-code F-43.

Page 186 of 189

C.For Customer Data upload:
For migration of the Vendor open item balances from legacy to SAP the below T-code is used in
the BAPI
T-Code: ZFITC_OPEN_BAL

STEPS:
a. Receive the file from the Core Team in the format specified (stored in the shared
b. Validate the file totals in terms fields specifications, posting keys, mandatory fields
etc. and then store the same file in the Validated Folder.
c. Depending on the number of files provided by the Core Team for each Migration
Account, the totals should be matched accordingly. For ex: If two files (one for
Normal Customer items and one for Customer Advances) are given then the total of
these two files should be equal to the total of the Vendor Migration Account.
d. While executing the above T-Code ( ZFITC_OPEN_BAL) select the path of this
Validated Foleder) in the File Field.
e. Start Row field should have the beginning row of the data in the Validated file.
f. End Row field should have the last row of the data in the Validated file where data
ends.
g. Posting Date should be the date for which we are taking the balances.
h. Always select the Foreground processing only to enable to save the output file.
i. Once executed the system will through the result. Error line items will be highlighted
numbers of the error line intems.
j. The successful data (with document numbers) should be saved in Excel format in
The path for the latest upload templates for all the sectors is as below for the:
a. Received Templates (Format in which business has to provide data for upload)
b. Validated Templates (After validation saved in this folder)
c. Upload Templates (Successful uploaded files along with manual uploads also
available in this folder).

Path: \\blr-dc-02\Project_Shield\Phase_1_ERP_Implementation\20 ASAP
Deliverables\024 - Final Preparation\010-Financials\014 - Data Migration\0143 -
Sectors

Page 187 of 189

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