This documentation covers the details of Vendor Invoice Verification Accounting Entries FICO Account PostingVENDOR INVOICE VERIFICATIONThe detail process related to invoice verification is documented in Materials Management Document. On receipt of vendor bill the following entry will be passed:GR/IR Account DR Freight Clearing Account DR Cenvat Clearing Account DR Vendor Account CRInvoice Verification for Foreign Vendor On receipt of vendor bill the following entry will be passed:GR/IR Account DR Vendor Account CRInvoice Verification for Custom vendor On receipt of Vendor bill the follo wing entry will be passed: 1) RG 23A/RG 23C Part 2 A/c (CVD) A/c DR Cenvat Clearing A/c CR 2) G/R I/R A/c DR Cenvat Clearing A/c DR Vendor A/c CR 3) Cost of Material A/c DR Vendor A/c (Customs) CRInvoice Verification for Freight / Clearing Agent Cost of Material A/c DR Vendor A/c (Clearing Agent) CRInvoice Verification for Octroi Expenses Cost of Material DR Vendor A/c (Octroi) CRTDS (Work Contract Tax) for Service Orders shall be calculated and deducted accordingly. The following entry will be passed on bill passing:Expenses Account DR Vendor Account CR TDS Account CRThe material shall be returned to the vendor using the Return to vendor movement type in SAP Creating a Return POThese transactions will be processed in the MM module. The accounting entries will be :Returns after GRN GR/IR A/c Dr Stock A/c CrThe accounting in respect of debit / credit memos for FI vendors, the process will be similar to that of invoice processing. The accounting entries will be: On issue of debit note Vendor Account DR Expenses Account CRIn respect of import vendor – capital goods exchange differences are to be accounted manually through a Journal Voucher for capitalization. Exchange rate differences will be accounted at HO. An example of the accounting entry in this case shall be: Invoice entry @ 40 INR: 1 USDAsset / Expense A/c DR 100 Vendor A/c CR 100Payment Entry @ 41 INR: 1 USD Vendor A/c DR 100 Bank A/c CR 110 Exchange rate loss Capital A/c DR 10Asset A/c DR 10 Exchange rate loss Capital A/c CR 10A new G/L account shall be created for the special G/L transactions. The accounting entry for making the down payment shall be: Advance to supplier account Debit Bank A/c CreditWhen the invoice is booked the following entry is passed GR/IR account Debit Vendor account Credit Clearing of Invoice against Down Payment Vendor A/c Debit Vendor down payment account CreditWherever, TDS is applicable, the TDS will be deducted at the time of down-payment to the vendor. Down Payment for Capital (tangible) AssetsDown payment to vendors for capital acquisitions is to be reported separately in the Balance Sheet under the head Capital Work in Progress. Hence down payment for capital goods would be tracked through a separate special general ledger indicator.The procedure to be followed is: Definition of alternative reconciliation accounts for Accounts Payable for posting down payments made for Capital assets Clearing the down payment in Accounts Payable with the closing invoice. A new G/L account shall be created for the special G/L transactions. The accounting entry for making the down payment shall be:Vendor Advance for Capital Goods Account Debit Bank A/c Credit When the invoice is booked the following entry is passed Asset A/c / Asset WIP Debit Vendor A/c Credit Clearing of Invoice against Down Payment Vendor A/c Debit Vendor Advance for Capital Goods Account CreditThe Following are the TDS Rates (to be confirmed with the recent changes) Particulars Tax Rate Surcharge Rate Total Contractors – 194 C 2% 5% 2.10% Advertising – 194 C 1% 5% 1.05% Prof. Fees – 194 J 5% 5% 5.25% Rent – Others – 194 I 15% 5% 15.75% Rent – Company – 194 I 20% 5% 21% Commission – 194H 5% 5% 5.25% Interest – Others – 194 A 10% 5% 10.50% Interest – Company – 194 A 20% 5% 21% Special Concessional Tax Works Contract TaxSECURITY DEPOSITS /EARNEST MONEY DEPOSIT RECEIVED FROM VENDORS Bank A/c DR Security Deposit Vendor CREMD to give the age so as to enable the same to be transferred to unclaimed EMD account. PAYMENT OF TOUR ADVANCE DOMESTIC TOURSEmployee Advances will be paid by the Accounts Department unit wise based on the requisition or recommendation of the respective departmental head. Employee Travel Advance A/c DR Cash / Bank Account CRTRAINING NOTES & TIPSWe can archive & load the historical financial accounting module data. Archiving old & currently not in use data helps to save the storage & increase the program performance. We cannot archive all FI data like which contains open items; archivable data should meet certain parameters. The archived data can be accessed & reloaded in future. Some of the archivable SAP FI data areAccounting documentsPayment requestsCustomer master dataVendor master dataBank master dataPayment program in SAP financial accounting module is used to do the international payment transfers. This helps to make the transactions with vendors & customers easily & by following all country specific rules. The FI subcomponents which are mainly using the payment program areAccounts ReceivableAccounts PayableTreasuryBank AccountingEach data posting in Financial Accounting is known as a document.