Account and Partner Determination in SAP SD 

Introduction

Account and Partner Determination are critical processes in SAP Sales and Distribution (SD) that ensure accurate transaction posting and assignment of partners. Whether it's identifying the right accounts for revenue posting or assigning partners such as Sold-to-Party, Ship-to-Party, Bill-to-Party, and Payer, understanding these concepts is essential for smooth business operations.

What is Partner Determination?

Partner Determination is the process of assigning various partner functions in SAP SD to ensure seamless transactions and communication. It defines who is involved in a transaction and their respective roles.

Standard Partner Functions

  • Sold-to-Party: The primary entity placing the order.
  • Ship-to-Party: The entity receiving the goods.
  • Bill-to-Party: The entity receiving the invoice.
  • Payer: The entity responsible for making the payment.
When a Sold-to-Party is created, the other three functions are automatically created/copied. Changes can be made to these if required, such as:
  • Invoices being sent to a different entity (Bill-to-Party).
  • Shipments being split and sent to multiple locations (Ship-to-Party).
  • Payments coming from the headquarters or various payers depending on the order (Payer).

Creating Additional Partner Functions

If there are multiple Payers or Ship-to-Parties, additional partner functions must be created to manage responsibilities accurately.

What is Account Determination?

Account Determination is the process used by SAP to find the appropriate General Ledger (G/L) accounts where revenue and discounts are posted when a sale is recorded.

Purpose of Account Determination

When a sale is posted to accounting, SAP determines the appropriate account for posting revenue. This process follows a Condition Technique to find the relevant G/L account.

How Account Determination Works in SAP SD

1. Field Catalogue

  • Definition: A collection of parameters or fields used for account determination.
  • Purpose: Storing relevant parameters that can be combined based on the Account Determination procedure.
  • Application: Parameters are captured when creating a Condition Table. New parameters can be added if needed.

2. Condition Table Creation

  • Parameters chosen from the Field Catalogue are used to create Condition Tables.
  • These tables form the foundation for defining dependencies in Revenue Account Determination.

3. Maintain Access Sequence and Condition Types

  • Access Sequence: Mapping condition tables within the Access Sequence.
  • Condition Types: Including Access Sequences in the Condition Types.
  • Purpose: Ensures the correct account is identified under varying conditions.

4. Define Account Determination Procedure

  • A systematic process to establish dependencies for account determination.
  • Procedures are assigned to Document Types for accurate account postings.

5. Assign Document Types to Account Determination Procedure

  • Document types like Cash Sales, Invoices, Credit Memos, Debit Memos, Pro Forma Invoices are assigned to specific account determination procedures.

Why the Condition Technique is Essential

The Condition Technique is crucial because it allows different accounts to be used under varying conditions. For instance:
  • Sales of specific materials may be posted to distinct revenue accounts.
  • Export and local sales may be mapped to different accounts.
  • Revenue recognition methods can vary based on service duration or upfront payments.
By using the Condition Technique, SAP ensures the correct account is applied based on specific conditions, making the process highly flexible and accurate.

Dependencies for Account Determination

Account Determination is influenced by several dependencies:
  • Billing Document Type: Cash Sales, Credit Memo, Debit Memo, Pro Forma Invoices, etc.
  • Material Account Assignment Group: Trading Goods, Finished Goods, Services, External Fees, etc.
  • Customer Account Assignment Group: Domestic Revenues, Foreign Revenues, Affiliate Company Revenues, etc.

Important Fields for Account Determination

The following five fields are crucial for successful account determination:
1. Sales Organization: The entity responsible for processing sales.
2. Distribution Channel: The path through which goods and services are distributed.
3. Chart of Accounts: The structure defining various financial accounts in SAP.
4. Account Assignment Group for Customer and Material: Defines which account should be used for a particular transaction.
5. Account Keys (Type of Account): Specifies the type of account (Revenue Account, Reconciliation Account, etc.).

Revenue Recognition in Account Determination

Revenue recognition is a significant part of Account Determination, especially when dealing with services provided over a prolonged period. For instance:
  • A Service Contract lasting 12 months generates revenue upfront.
  • The revenue can be recognized at the end of each month as services are rendered.
  • The balance amount is held in a Deferred Revenue Account until recognized.

Conclusion

Account and Partner Determination are foundational processes in SAP SD, ensuring accurate revenue posting and assignment of roles. By understanding how Condition Tables, Access Sequences, and Account Determination Procedures work, businesses can efficiently manage financial transactions and ensure compliance with organizational requirements.

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