6/5/2023 Contract Accounting Generated on: 2023-06-05 13:20:02 GMT+0000 SAP S/4HANA Cloud | 2302.3 PUBLIC Original content: https://help.sap.com/docs/SAP_S4HANA_CLOUD/cdccca8e03d74101a0135863bc522b49?locale=enUS&state=PRODUCTION&version=2302.503 Warning This document has been generated from the SAP Help Portal and is an incomplete version of the official SAP product documentation. The information included in custom documentation may not re ect the arrangement of topics in the SAP Help Portal, and may be missing important aspects and/or correlations to other topics. For this reason, it is not for productive use. For more information, please visit the https://help.sap.com/docs/disclaimer. This is custom documentation. For more information, please visit the SAP Help Portal 1 6/5/2023 Interest Calculation You can determine and post interest receivables for open items. Item Interest Calculation You can calculate interest on debit items and credit items automatically. In the item interest calculation, the individual items and the underlying business transactions are taken into account so that you can control whether and how interest is calculated on an item. The system basically calculates interest only on those items for which it is able to determine an interest key. The interest key controls interest calculation. It can be assigned to the contract accounts, a security, individual line items or dunning levels. Interest can be calculated on the following items: Open or cleared debit items Installment plans Credit items such as credit memos or cash security deposits You can use the following functions to calculate interest on debit items: Processing individual line items If this is the case, interest is calculated on the items for a business partner or a contract account. Mass processing in the dunning run for the line items to be dunned or as an interest run In the dunning run, interest can be displayed on the dunning notice. You can use the following functions to calculate interest on credit items: Processing individual line items Mass processing To determine the interest calculation, you can: Choose interest calculation methods by which a given interest period is determined for the days for which interest is to be calculated De ne Interest rates based on date and amount in the system con guration Use reference interest rates (such as discount rates) In the interest run, the system calculates and posts interest and the necessary data available in the correspondence function. By an amount limit check, you can prevent small amounts charged to the business partner. With interest locks you can exclude items from interest calculation. It is also possible to exclude certain business transactions (such as reversal postings or additional receivables for interest calculation). Interest can be posted as relevant for the general ledger; debit interest can be posted statistically (that is, not relevant for GL). This is custom documentation. For more information, please visit the SAP Help Portal 2 6/5/2023 The interest supplement records for each interest item how the interest amount was calculated (source item, interest period and interest rate). In this way, you can also determine the interest at a later point in time. The interest history records the interest calculation period for each item on which interest has been calculated. When calculate interest, the selected items and the interest history are taken into account together. This ensures that items are only calculated once within a certain period. Interest Calculation Rule You de ne interest calculation rules in the system con guration. Using interest calculation rules, the system determines all the factors that in uence interest calculation. You assign interest calculation rules to interest keys. Interest rules can refer to a reference interest rate. Structure You de ne interest calculation rules in con guration activity De ne Interest Calculation Rules. You de ne date-dependent and/or amount-dependent interest rates for an interest calculation rule. You can also calculate interest on the basis of whole months. Or interest calculation rules can refer to a reference interest rate. Other in uencing factors are: Interest calculation method The interest calculation method is de ned by the DAYS/DAILY BASIS quotients and as a factor of the percentage calculation leads to an interval-based percentage calculation. For example, you can de ne a year with 360 days (banking calendar) or 365/366 days (Gregorian calendar) as a daily basis. The days relevant to the interest calculation would then be determined according to the banking calendar (30 days in each month) or the current calendar (the actual number of days). Graduated interest calculation You can calculate interest on a scale. Interest interval The de ned interest rate is a yearly, monthly, weekly, or daily interest rate. Rounding for interest calculations You can round the amount to be used for calculating interest before the actual interest calculation. You de ne rounding rules in the interest conditions for interest calculation rules. Interest Key The interest key determines all factors that in uence interest calculation and interest posting. You assign interest keys at item level or at contract account level. The interest key refers to a valid interest calculation rule to which other in uencing factors for the interest calculation are stored. De ne interest keys in the con guration activity De ne Interest Keys. The system only calculates interest on those items for which it is able to determine an interest key. You can assign contract accounts, items or dunning levels to an interest key. You can de ne whether a special interest key is to be used for additional receivables, in the associated subtransaction. The interest key refers to an interest calculation rule by means of which the system determines the valid interest rate in terms of date and amount. The system determines the calculation type some of the factors that in uence interest calculation. The system determines the following factors in uencing the interest calculation directly using the interest key: This is custom documentation. For more information, please visit the SAP Help Portal 3 6/5/2023 In uencing factor Description Tolerance days Tolerance days are granted to the customer in the case of overdue items. Interest is not calculated on debit items provided that the tolerance days have not expired. If the tolerance days have expired, the system calculates interest from the original due date. If clearing takes place within the tolerance period, overdue interest cannot be calculated. Transfer days Transfer days take the time needed for a payment method into account. Interest is calculated from the date: Due date + tolerance days Transfer and tolerance days If an item transfer and the tolerance days have been entered, they are taken separately into account. Example If one transfer day and ve tolerance days are granted, and expire ve days after the due date, the interval from the due date + transfer days (exclusively) is taken into account. If clearing takes place within ve days, no interest can be posted. Interest calculation frequency The interest frequency prevents an item from being calculated again after a short period. As the requirement of interest (such as sending an interest noti cation) is time-consuming and involves costs, there is no further interest calculation as long as the interest period determined by the interest frequency has not expired. The interest frequency consists of a number eld and a time unit. Recommendation We recommend that for interest calculation, items that the system rounds before the interest calculation (for example, rounding to the nearest 100,-), and summarizing subitems before the interest calculation. To do so, in the interest key set the Summarize Subitems before Interest Calculation indicator. If you also set the Consider All Subitems for Interest Calculation indicator, the system additionally selects the missing subitems automatically when calculating interest on subitems. This ensures that even where receivables are split for technical reasons, interest is calculated on the whole amount. Interest Document When you post interest an interest document (FI-CA document) is created. An interest document includes the document header, line items, G/L line items, and information about the basis for interest posting. This information is contained in the interest supplement. This information supplement shows items with the amount and period for which interest was calculated. The interest key is also recorded in the interest supplement. This enables you to see which factors were valid for interest calculation and posting. Caution If you subsequently adjust the system con guration, you can no longer track interest calculation in the interest supplement. Display interest supplement This is custom documentation. For more information, please visit the SAP Help Portal 4 6/5/2023 You can display the interest supplement from the account or line item display. To do this, choose the Display Account Balance app and Display Document. To display an interest supplement in the account balance, place the cursor on the required document and choose Environment Document Interest Supplement More in the menu. Note This is only possible if the line layout variant is a line item variant and not a totals variant, so that the underlying document item can be identi ed. In the document display, go to the display of the interest supplement by choosing More Extras Interest Supplement . Post Debit and Credit Interest Manually In addition to the automatic posting of interest in business transactions, such as dunning, you can manually post debit and credit interest on overdue items. You can display the result of the interest calculation and create an interest noti cation for the business partner (see Printing Interest Noti cations ). Prerequisites The system con guration is complete, that is, you have de ned the interest key determination and amount limit check. Process Flow 1. Select the business partner and / or contract account for which you want to post interest. 2. The system uses the selection criteria to determine the associated items where interest is due. 3. Post the interest document. Here you can post all or selected items associated with the items. Note For a more detailed procedure, see Processing Items Due for Interest . Interest cannot be calculated on an item for the following reasons: The item is locked for interest calculation. An interest lock reason has been entered in the items. No interest key can be determined for the item. An interest key can be entered in the contract account, in the item or in the system settings for the dunning level of a dunning procedure. If no interest key can be determined, the item is locked for interest calculation. An item is not yet due. Therefore, the calculation of interest on arrears cannot be carried out. An item is not ready for interest calculation. Using the interest key, the transfer days, tolerance days and interest frequency are determined. Depending on the setting interest cannot yet be calculated on an item. An item was already calculated in the current period. This is custom documentation. For more information, please visit the SAP Help Portal 5 6/5/2023 Repeated interest calculation is not permitted. As an additional receivable or items that cannot have interest calculated on them, due to their statistical key. These do not appear in the item selection for interest calculation. Editing Items Due for Interest You post interest in the Post Interest by proceeding as follows: 1. Enter the required selection criteria for the item selection (see also: Calculating Interest Only on Open / Only on Cleared Items ). Note You cannot use this function to calculate interest for items included in an installment plan. 2. With the Post Directly function, you can now start interest calculation and posting. In this case, an interest document is posted in which the interest amount takes into account all items that correspond to the selection criteria and are permitted for interest calculation. The number of the interest document is displayed in the status line. 3. To select individual items for interest calculation, choose Line items. This takes you to the selection of items and the system displays a list of all the selections of items that are due for interest. The second column of the item selection table shows whether interest can be calculated on an item. If an item is locked, by clicking on the corresponding lock icon you receive the information about why interest cannot be calculated on the item. 4. Select the items on which you want to calculate interest and perform one of the following actions: Choose Display Interest to display interest history for a selected item. Choose More Calculate Interest for interest calculation on the basis of the current line item selection. Choose Post to post the interest document. In the menu choose More Interest Post Cleared Documents to post statistical interest documents that are cleared when they are posted. The interest items (statistic indicator G ) are cleared when they are posted. Neither receivables nor payables arise from the posting. The posting is updated in the interest history, whereby the interest supplement displays the interest key and interest rate; the amount is 0. SAP recommends posting statistical interest documents, for example, if a claim handler agrees with a customer that the interest for outstanding receivables no longer applies if the customer pays an agreed amount within a timeframe. This agreement is recorded in the interest history by means of the statistic interest posting. If the customer does not ful ll the agreement, you can calculate interest on the open receivables as usual once the period speci ed has expired. Click Display Interest to view the details of the interest calculation. The overview screen for interest calculation appears. This shows you how interest was calculated (interest parameters) and which items were posted. You can print out an interest noti cation. In the menu, choose More Interest Print letter . The interest document is posted and a print request is created. Automatically Post Debit Interest This is custom documentation. For more information, please visit the SAP Help Portal 6 6/5/2023 You can calculate interest on debit items in the dunning run, or in a separate interest run. Interest Run The system either automatically posts interest during certain processes, such as in the dunning run, or you can also post debit interest on overdue items in a separate mass run with the Interest Run app and FI-CA Interest Run job template. Prerequisites The same prerequisites apply as for manual posting of interest. Features The interest run posts interest documents, and creates an interest noti cation when necessary. You can use all the options as for posting interest online. You can: Debit interest and credit items separately or together Restrict the selection to open or cleared items only Post the interest statistically or relevant to the general ledger The issue date is the date on which the interest run is to be executed. It is used as the document date for the interest document. Additionally, the Calculate Interest Until date is checked against the issue date. Interest calculation at a time in the future is not allowed. The selection of the items for which interest is to be calculated is carried out for each business partner (parallel processing object). All documents of a business partner are analyzed together. The interest is calculated together for all documents. For each business partner the system posts one interest document; interest noti cations can only be created per business partner. You can create interest noti cation for the business partner. To do this, set the Create Correspondence indicator. Use the simulation run to test the completeness of the system con guration or to determine interest amounts without posting them. To do this, use the detail log. SAP Fiori Implementation Information For information about implementation, see SAP Fiori Apps Reference Library for the Interest Run app. Post Interest on Arrears in the Dunning Run The dunning run can determine and post interest on arrears, for example, and specify these in the dunning letter. Prerequisites For the dunning levels of a dunning procedure, the necessary interest keys have been de ned. Process Flow This is custom documentation. For more information, please visit the SAP Help Portal 7 6/5/2023 When you execute the dunning activity run, the system determines the interest and posts these to the relevant contract accounts. In this way the logic used for calculating interest on open items only is behind this. (See also: Calculating Interest on Only Open / Only Cleared Items). Related Information Dunning Activity Runs Con gure Dunning Process Flows Interest Control Settings by Means of the Interest Key The system basically calculates interest only on those items for which it is able to determine an interest key. The interest key can be assigned to contract accounts, items or dunning levels. The system determines the interest key as follows: If the interest key is entered in an item, the system checks if the a interest key entry is available. If an interest key has not been de ned in both places, interest cannot be calculated on the item. This means that the item is regarded as blocked for interest calculation, even if these is no interest block. If a reminder has been issued for debit item and a interest key has not been entered, the interest key is to be determined by means of the dunning level. If an interest key has not been maintained here, the contract account is used here. Amount Limit Checks in the Interest Calculation Since interest, and in particular, debit interest are only to be posted and requested when the expense is justi ed, the system performs a check against minimum and maximum amounts. The amount limit check is integrated in the process of determining and posting interest and thereby into all other business transactions in which interest is posted. You de ne the amount limits in the system con guration in the con guration activity Maintain Amount Limits for Debit/Credit Interest. If you de ne an amount limit, the amount is the total of all interest items for a company code is compared with the amount limit de ned in the system settings. Interest is only posted if the amount of all the interest items exceeds the amount limit. The check is carried out in accordance with the company code. Calculation of Interest on Installment Plans To clear a delayed incoming payment made through installment payment, you can collect installment interest. The installment interest can be based on the installments or on the items included in the installment plan. The installment plan is integrated in the process ow when creating an installment plan. You can calculate interest on an installment plan as follows (see graphic): You can calculate interest on the installment plan over its entire runtime. If individual installment payments are late, you can charge interest on the overdue installments. This is custom documentation. For more information, please visit the SAP Help Portal 8 6/5/2023 In the event of noncompliance, you can also deactivate the installment plan manually. This means that the original open receivables are opened again for the old due dates. You can reverse posted and not cleared interest documents that are integrated in an installment plan when the installment plan is deactivated. In the interest calculation, the system updates an interest history for the installment plan. Installment Plan Interest versus Interest on Overdue Items When creating an installment plan, the system indicates the interest documents posted with a separate transaction. These interest documents refer to the term of the installment plan and therefore valuate the period from the start date of the installment plan – or an alternative earlier start date – up to and including the due date for net payment of the installments (see graphic). Interest on overdue installments is charged when the customer does not comply with the installment plan payment agreement. This additional interest document (requested subsequently) is posted with the usual interest transaction. Interest on overdue installments is based exclusively on the period from the due date of the installments (see graphic). Related Information Deferrals and Installment Plans Interest and Charges for Installment Plans You can calculate interest for original items and installment plan items, as well as levy charges on installment plans. You calculate interest on installment plans when creating or changing an installment plan. Con guration This is custom documentation. For more information, please visit the SAP Help Portal 9 6/5/2023 Interest for Installment Plan Items In the con guration step De ne Default Values for Interest on Installment Plans, you control how the system handles interest by using the Only int. on arrears and Never int. on arrears indicators: To calculate interest only for installment payments that are received late To calculate interest both for installment payments that are received late and those received early To calculate interest regardless of the receipt date of the installment payments Using a separate transaction, you can post interest due as part of installment plan processing, either statistically or for the general ledger. By means of the statistics indicator it is possible to decide whether installment plan interest is to be posted statistically or actually in the maintenance of company code-dependent transactional data (see con guration activity De ne and Parameterize External Transactions). Interest for Original Items During clearing, the system can check the installment plan items and, if necessary, calculate interest on the original items that it assigns to the cleared installments based on the settings in clearing control. To do so, in the con guration activity Additional Functions for Interest Calculation, set the Int. Inst. Plan indicator. By setting this indicator, you deactivate all interest calculation functions in installment plan processing. In that case, the system then calculates interest solely for the original receivables that are included in the installment plan. Alternatively, you can control the calculation of interest on original items in the Int.fm Orig.Itm eld in con guration activity De ne Default Values for Interest on Installment Plans as follows: Choosing SPACE (Interest Not Calculated from Original Items) allows you to overwrite the proposed interest start date, which is also the installment plan start date, when processing the installment plan. Choosing X (Interest Calculated from Original Items) means that the system calculates interest on the original items that the system assigned to the cleared installments based on the settings in clearing control. Choosing Y (Original Interest Calculation or Original Interest Calculation from Start Date) means that, if the start date is initial, you can calculate interest for the original items in installment plan processing, or you can choose a date of your own for the start of interest calculation. If a start date is entered, depending on the settings you made in the De ne Categories for Installment Plan con guration step, the system can also calculate additional interest on original items up to the start date. In the De ne Categories for the Installment Plan con guration step, you specify that you do not want to calculate interest for original items, or if you want to start the interest calculation for items automatically or manually before the start of the interest calculation. Interest when the installment plan is (partially) deactivated You can control how the system calculates interest if the installment plan is deactivated or partially deactivated in the Interest on Arrears eld in the De ne Default Values for Installment Plan con guration step. See the documentation about the eld. In the con guration step De ne Deactivation Reasons for Installment Planyou can also specify how you want the system to handle the interest calculated. You can choose to have the interest credited or refunded, either partially or fully. Or you can specify that the interest posting remains despite the deactivation. Activities In the Maintain Installment Plan app, you calculate interest on an installment plan proposal with Interest Calc.. Enter a dialog box appears in which the interest parameters and save the installment plan. For an existing installment plan select interest update during the processing of the installment plan. You can use the following options to calculate interest retroactively: This is custom documentation. For more information, please visit the SAP Help Portal 10 6/5/2023 Only overdue installments are taken into account in other words, only installments that have been paid too late. The interest on the installment plan is recalculated. In this case, the interest calculation takes account of individual installments that were paid too early (before the due date), as well as installments that were paid too late. Recalculation may result in an interest credit or an interest receivable. Cancel Installment Interest Documents When you deactivate an installment plan, you can automatically reverse the installment interest documents that were posted during the installment plan creation. You can reverse the installment plan interest document when you deactivate the installment plan if the installment plan has not been paid or was paid in part. If you want to cancel interest document for a paid or partially paid installment plan, you must rst reverse the payments on the installment plan and then deactivate the installment plan. When you deactivate the installment plan, you then have the option of reversing the installment plan interest document. Reverse installment interest documents as follows: 1. In the App Maintain Installment Plan , you enter the number of the desired installment plan and choose Continue. 2. From the menu, choose More Deactivate Installment Plan and in the following dialog, choose Interest Document. 3. Choose Continue. The installment plan interest document is then reversed automatically. Determining Periods for Interest Calculation In the interest calculation, the system determines for each item a time interval for which interest is calculated. This interval extends from the due date to the current date (for open items) or from the due date to clearing (for cleared items). If an item is not cleared over a longer period, can be calculated on multiple time intervals. Instead of calculating interest up to the current date, you can also restrict the calculation to a date in the past (including interest calculation up to the limit). Base date for interest calculation (beginning of the interest interval) is the net due date. This date is not included in the interest calculation period. Possible deferral of an item is not taken into account. Example If an item is due on 01.04, there is no interest period on 01.04 because the due item can still be paid on this date. An interest posting would not be justi ed. On 02.04 the item is one day overdue and you can calculate interest for this day. If the item still has not been cleared by 10.04, interest can be calculated for the period from 01.04. to 10.04 (9 days). The item is cleared by 11.04, interest can be demanded for 10 days. If interest has already been calculated on an item up to a date in the past, a new interest calculation is carried out only from this date (exclusive). This ensures that an item is calculated only once for a period. The period on which an interest posting is based also depends on transfer days, tolerance days and the interest frequency of the interest period. De ne these in the con guration activity De ne Interest Keys. Only Open or Only Cleared Items, Interest Calculation If you only open or only want to calculate interest for cleared items, select this in the Post Interest app or if you want to schedule an interest run with the Interest Run app select the indicator Only Open Items or Cleared Items Only in the interest parameters. This is custom documentation. For more information, please visit the SAP Help Portal 11 6/5/2023 The dunning run only processes open items. Therefore the interest calculation is always carried out with the option Only Calculate Interest on Open Items. By choosing the Open Items Only option, you can deliberately waive overdue interest for debit items that have already been cleared at the time of interest calculation. This variant is particularly useful if interest is calculated on a regular basis, for example, in a monthly dunning run. Items that have been split by a partial payment are treated as follows: The cleared part is not considered for the interest calculation. The open portion is calculated according to the criteria described. By choosing the Cleared items only option, you can de ne that overdue interest charges are only calculated once an item has been cleared completely. This ensures that one source item posts only one interest item and creates one interest noti cation. Items that have been split by a partial payment are treated as follows: The subitems are always considered together. Interest is only calculated if all items have been cleared at the time of the interest calculation. The system checks whether the clearing date for all subitems is before the Calculate Interest To date Example In an account there is an open receivable for 100 due on January 01. On January 10, an incoming payment of 50 is posted. There are now two items in the account: Account Document number Subitem Amount Due date Clearing 4711 0001 50 1:01 AM -(item open) 4711 0002 50 1:01 AM 10:01 AM On 11.01, interest calculation is executed with the Open Items Only option. For subitem 0002 no interest is calculated. For item 0001, interest is determined for the period from 01.01 to 11.01. On 11.01, interest calculation is executed with the Calculate Interest Only on Cleared Items option. For both subitems no interest is determined as the item has not been cleared completely yet. Print Interest Noti cations In the case of manual interest calculation, you can create interest noti cations for business partners. You request the printing of an interest noti cation in the Post Interest app choosing the following when interest is calculated for the items the menu More Interest Print letter . You then schedule a job for the correspondence type Interest Letter in the Print Correspondence app. Related Information Output Correspondence This is custom documentation. For more information, please visit the SAP Help Portal 12 6/5/2023 Display Interest Calculations With this app, you can analyze the interest amount for a speci c interest document. Key Features Use the lter options to search for the interest documents you would like to analyze. By selecting a line in the overview, you can display the items of a given interest document. In the detail view, you can then display the calculation for each item. By clicking on a document number, you can, for example, display, change, or reverse the document. Or you can display document changes and navigate to the app where you manage business partner items. By clicking on a business partner, you can display or change the business partner data. By clicking on a contract account, you can display or change the data, or you can navigate to the business partner's account balance. SAP Fiori Implementation Information In the SAP Fiori Apps Reference Library, see the details for the Display Interest Calculations app. This is custom documentation. For more information, please visit the SAP Help Portal 13
