Handling of Security Deposit & Earnest Money Deposit (EMD)

[Former Member]

Vendors applying against client tender notification deposits EMD to client at the time of applying tender.  After finalization of vendor,  EMD is returned back  to all unsuccessfull vendors. Finalized vendor also submit security deposit to client. Sometimes the EMD deposited by successfull vendor is converted into security deposit.

After completion of work the security deposit is returned back to vendor.

How to handle all these transactions in SAP.

[Former Member · Accepted solution]

You should have posted this in the FI/CO forum as this is not related to MM at all.

Create 2 special GL indicators (say E - EMD and S - Security deposit)

During bid process (F-02)

Vendor account  - posting key 39 E - Debit

Cash in transit - posting key 40 - Credit

Returning the EMD (F-02)

Vendor account - posting key 29 E - Credit

Cash in transit outgoing - posting key 50 - Debit

Converting EMD to Security:(F-02)

Vendor account - posting key 29 E - Credit

Vendor account - posting key 39 S - Debit.