Use Ledger-Specific Clearing Functionality to Improve Parallel Ledger Accounting Processes

  • by Chirag Chokshi, Solution Architect, SAP Financials
  • March 26, 2013
From SAP ERP 5.0, SAP offers a parallel ledger solution to enable you to comply with multiple accounting standards. However, there was one inherent limitation: You could not post journal entries for open item managed GL accounts to any specific ledger. With SAP ERP 6.0 enhancement package 3, SAP has provided Clearing Specific to Ledger Groups to overcome this issue. Learn how to use this new clearing functionality with the SAP General Ledger for parallel accounting.
Key Concept

Clearing Specific to Ledger Groups is functionality provided in SAP ERP 6.0 enhancement package 3 that enables you to match offsetting credit and debit postings to the SAP General Ledger (GL) accounts, vendors, and customers.

SAP ERP provides a functionality called open item management and clearing of open items. To help you understand these functionalities, I describe one simple scenario of a vendor invoice, a subsequent payment made against this vendor invoice and matching, and offsetting (known as clearing) a payment document with a related vendor invoice document.

In this scenario, I post a vendor invoice for $1,000 in SAP Accounts Payable. When I make a payment of $1,000 against this invoice, the clearing process enables me to match and align a vendor payment made against this invoice. The clearing process can be used for vendors, customers, and GL accounts. Vendor and customer accounts are subject to clearing by default, but the clearing process is not required for all GL accounts. The clearing process cannot be used for GL accounts unless the GL account is set up as open item managed. In my example, vendor invoice and vendor payment documents are called open items. After the vendor invoice is matched and offset with payment documents with the clearing process, those documents are called cleared documents.

To use the clearing process for a GL account, I select an indicator called Open Item Management while setting up the GL account master data. The clearing process for an open-item-managed GL account enables you to match and offset one line item posted to that GL account with other offsetting line items. Line items of the GL accounts matched and offset through the clearing process are called cleared items. Line items that are not yet cleared are called open items. The total of all the open items involved in the clearing transaction must be zero. Therefore, the balance of the GL account is equal to the total balance of all open items posted to that GL account. Generally, open item management is used for bank clearing accounts or goods receipt (GR), invoice receipt (IR), or clearing accounts.

Beginning with SAP ERP Central Component (SAP ECC) 5.0, SAP offers a ledger solution for complying with multiple accounting principles. This functionality enables you to create and assign multiple ledgers with company codes. It also enables you to create one leading ledger (0L) and several non-leading ledgers to meet the requirements of parallel accounting. 

Chirag Chokshi

Chirag Chokshi is a solution architect for SAP Financials. He has worked on SAP Financials since 2001 and specializes in implementing the Financial Accounting (FI) and Controlling (CO) modules along with their integrated areas for companies in industries such as consumer products, the chemical process industry, pharmaceuticals, the public sector, industrial machinery, and component manufacturing. He has worked on various complex projects, including global rollouts, greenfield implementations, and SAP system upgrades. In addition, he has developed various preconfigured solutions with a focus on SAP Financials. 


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