Welcome to the Efficient eLearning S A P training series. This video is S A P
Accounts Payable - Transaction FB65 - Post Vendor Credit Memo.
And here's a list of our topics.
First up we'll confirm where transaction code FB65 fits in the procure-to-pay process
followed by an explanation of the difference between a non-PO credit memo
and a credit memo referencing a purchase order.
Then it's on to the practical component of
the video - posting a non-PO credit memo using transaction FB65 in S A P.
Once the credit memo is posted we'll then analyze the vendor line item display (Transaction FBL1N).
Let's begin with where transaction FB65 fits in the procure-to-pay process.
At this point it's probably useful to mention that a lot of organizations use the term "credit note"
rather than "credit memo". "Credit memo" is S A P's chosen term for this type of document.
However, the two terms are interchangeable - either one is acceptable.
In this video I'll make use of both terms. Now let's take a look at the procure-to-pay process.
Note that a non-PO credit memo does not reference a purchase order so the procurement steps in
the procure to pay process (create purchase requisition, approve purchase requisition,
convert requisition to purchase order and post goods receipt) are not relevant.
Transaction FB65 sits within the post vendor invoice step
and is completed by the accounts payable department.
Okay, so we've established where transaction FB65 fits in the procure-to-pay process.
Now let's discuss the difference between a non-PO
credit memo and a credit memo referencing a purchase order.
Here's the two documents side by side. Note the difference in colour
scheme between the invoice document (that has blue heading backgrounds)
and the credit note document (that has red heading backgrounds).
Some vendors use a different colour scheme on credit notes to ensure the document is
not accidentally posted as an invoice. But within the credit memo scenarios,
visually, the only real difference is the purchase order field.
As you would expect for a non-PO credit memo, this field is blank. Conversely, for a credit
memo referencing a purchase order, the field is populated with the relevant purchase order number.
So, why do some credit memos reference a purchase order and others don't?
Some organizations have a strict policy - all invoices and credit notes must reference a
purchase order or they cannot be processed. But, typically, most organizations will require the
majority of invoices and credit notes to reference a purchase order with some limited exceptions.
In this fictitious company example invoices and credit notes for mobile phone plan costs are
a permitted exception (that is, invoices and credit notes don't require a purchase order).
However, the purchase of mobile phone handsets still requires a purchase order.
In this video the focus is on posting a non-PO credit memo
so we can discard the credit note referencing a purchase order.
Now that we have our credit note we can process it in S A P using transaction FB65.
When processing accounts payable credit notes I tend to display the credit note to the left and
the S A P screen to the right. Before we start I'll explain the reason for the credit note.
The original invoice charged for 10 mobile phone plans.
However, this was an overcharge (it should have only been for eight mobile phone plans).
The vendor has sent a credit note for the excess plans to offset the value on the original invoice.
Let's now process the credit memo in S A P. If you're new to S A P it's worth
noting where transaction FB65 resides in the S A P standard menu. Start with the "Accounting" folder
then "Financial Accounting",
"Accounts Payable"
and "Document Entry".
Now you can simply double click on this entry to open the transaction. However, as I'm going
to be using this transaction frequently I'll create a favorite for the transaction.
To create the favorite right-click on the entry and choose "Add to Favorites".
I'm not happy with the standard description for the favorite so
i'll right-click on the entry and choose "Change Favorite".
I can now change the description. I'll rename the entry "Post Non-PO Credit Memo" and then click
"Continue".
I'm also not happy with the position of the favorite in the favorites folder
so I'm going to click and drag the favorite and release the mouse button on top
of the FB60 favorite (this will insert the favorite below FB60).
I can now double-click on this favorite to open the transaction.
Always make note of the company code. If the company code is not correct you
can switch company code using this button on the application toolbar.
In this example the company code is correct so there's no need to change it.
The first field we need to populate is the "Vendor" field. If you know the vendor code
you can simply type it in this field. If you don't know the vendor code you can search for
the vendor by clicking in the "Vendor" field and clicking the drop-down list to the right.
This displays the matchcodes or search helps for the "Vendor" field.
Note the vendor name from the credit note (XYZ Mobile).
Simply type XYZ asterisk in the "Name" field and click the "Start Search" button.
The desired vendor is listed in the search results.
Double-click on the relevant vendor code to select it.
Next up is the "Document Date" field - this is the date on the vendor credit note.
Click in the "Document Date" field and enter the date referenced on the credit note.
The "Reference" field is the vendor's credit note number.
Click in the "Reference" field and type in the credit note number.
The "Posting Date" is pre-populated with the current date. Normally this date
isn't changed unless you're given specific instructions by the accounting department.
For example, sometimes at month end an instruction is given to use the last date for the prior month
until the prior period is closed. In this example we'll simply leave it as the default.
The "Amount" field represents the gross amount of the credit note (so, the net amount plus tax).
Click in the "Amount" field and type in the total value from the credit note.
The "Tax Amount" field is the total tax value for the credit note.
Again, click in the "Tax Amount" field and type in the value from the credit note.
To the right of the "Tax Amount" field is the "Tax Code" field at credit memo header level.
If all of the lines on the credit note have the same tax code you can enter that tax code in
this field and it will default to this value on all of the credit memo line items below.
However, if not all of the line items have the same tax code it's best to leave this
tax code field at credit memo header level blank. In our example there's only one line
item so we can input the tax code in this field. Based on the values on the credit
note and experience of this type of purchase the tax code should be P1 (GST - 10 per cent).
Now press the key on the keyboard to validate the information entered.
Note the warning message at the bottom of the screen indicating the credit note is overdue.
Press the key again to bypass the warning message.
The credit memo header details are now complete. We can now move on to the credit memo line items
(this is where we enter the line item values and account assignment details - in this example a
cost center and a general ledger account). Click in the "G/L Account" field. Again, if you know
the G/L Account code you can simply enter it manually here. However, in this example we'll
assume we have to search for the codes. Click the drop-down list to the right of the field.
In the "G/L Long Text" field type T E L asterisk and then click the "Start Search" button.
Double-click on the G/L Account for "Telephone Rental".
Now click in the "Amount" field and enter the net amount for the line item (excluding tax). And,
finally, click in the "Cost Center" field and click the drop-down list to the right.
In the "Cost Center Short Text" field type admin asterisk and then click the "Start Search" button.
Double-click on the "Administration" cost center.
Now press the key on the keyboard to validate the entered values.
As the balance of the credit memo is zero, and there are no error messages displayed,
we can now click the "Post" button to post the vendor credit memo.
Note the internal S A P document number for the credit memo at the bottom of the screen.
Now the credit memo has been posted we can view it on the vendor line item display
(transaction FBL1N).
We can now use our favorite for transaction FBL1N.
Double-click on this favorite to open the transaction.
I know the company code so that's definitely correct. However, I don't know the vendor code.
Click the drop-down list to the right of the "Vendor" field,
click in the "Name" field and type XYZ asterisk then click the "Start Search"
button.
Double-click on the entry for "XYZ Mobile".
We can now choose the line item selection. There are three choices: "Open Items", "Cleared Items"
and "All items". I'd like to see both open items and cleared items so I'll choose "All Items".
Now we move down to the "Type" section. Both invoices and credit memos are normal
items which is the default selection so I'll leave this section as it is.
I can now click the "Execute" button to run the report.
This is the original invoice and this is the credit memo we just processed.
A couple of important things to note - invoices have a negative value in this
report representing a credit value to reflect the liability to the vendor. Credit memos offset
or reduce the total value owed so these have the opposite sign to reflect the debit value.
Additionally, note the credit memo has no payment terms.
This is standard behaviour to ensure the credit memo is immediately due and will
be included in the next payment run (as often the original invoice has already been paid).
That's all for this video. Remember to give it a "Like" and subscribe to the channel if you'd
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