R/3's Accrual Option: Same Setting, Different Functions in Sales Orders and Purchase Orders

  • by Kurt Goldsmith, Senior Business Consultant, Enowa Consulting
  • January 15, 2004
Freight costs are not easy to account for. The challenge comes from timing differences. You often might not know the real costs for a month or so. One functionality in R/3 that can help accountants with the timing issue is referred to as the "accrual" option in sales order and in purchase order (pricing) condition types. They may or may not be useful for you. To decide, you must first get past one confusing aspect of this field setting - it behaves differently in sales orders than it does in purchase orders. One setting. Two results. Not nice.

All companies incur transportation costs. Not necessarily for each and every outbound sales order shipment (sometimes the customer agrees to be billed directly). Not necessarily for every inbound purchase order goods receipt (sometimes the vendor agrees to be billed directly). However, freight costs — both inbound and outbound — are unavoidable.

They’re also not so easy to account for. The challenge comes from timing differences. On Tuesday, your company ships five units of product XYZ. Perhaps you have built the cost of shipping into the sales price per unit. Or perhaps you list a freight charge separately on the customer’s invoice. Either way, you often might not know the real cost for a month or so until the carrier’s invoice to you shows up in the mail.

This situation is often worse in purchasing. If you have agreed to receive billing for the transportation separate from billing for the goods, you might have to rely on what your vendor tells you the carrier’s freight charge is going to be so that you can do your accounting. However, your vendor is not the one sending you that bill. The carrier is.

One functionality in SAP R/3 that can potentially help accountants with the timing issue is referred to as the “accrual” option in sales order and in purchase order (pricing) condition types. This may or may not be useful for you. To decide, you must first get past one confusing aspect of this field setting — it behaves differently in sales orders than it does in purchase orders! One setting. Two results. Not nice.

I’ll use the remainder of this article to demonstrate via screenprints what kind of automatic accounting the “accrual” checkbox gives you. After that, you should be in a much better position to decide for yourself if it is worth the set-up and documentation effort to introduce at your site.

Kurt Goldsmith

Kurt Goldsmith is a senior business consultant for Enowa Consulting, specializing in the diagnosis and resolution of productivity-related integration issues between a company’s division of labor (end users, managers, executives) and SAP software (R/3, BW, APO, CRM). He also has a lifetime performance record of one win and two third-place finishes from five career starts as a thoroughbred racehorse trainer.

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