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Open item

Hi

Can any one explain me the concept of Open item management, how it function in background

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  • author's profile photo Former Member
    Former Member
    Posted on Apr 11, 2008 at 11:46 AM

    Hi,

    Open item accounts are maintained for tracking incompleted transactions. For eg. GRN. After that invoice verification is there. at the time of GRN vendor is not credited instead it is credited to GR IR account. so it should be maintained as an open item managed accounts.

    for reconciliation accounts it is not advisable considering the volume of transactions

    Basically open item managed accounts are intermediary accounts

    regs

    sunoj

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  • author's profile photo Former Member
    Former Member
    Posted on Apr 11, 2008 at 11:48 AM

    hi

    Defining "Open Item Management"

    If you set the "Open item management" indicator in the master record for an account, the line items in this account is marked as open or cleared.

    The balance of an account with open item management is equal to the balance of the open items. General ledger accounts are kept with open item management if you need to check whether there is an offsetting posting for a given business transaction.

    You should use open item management for bank clearing accounts, clearing accounts for goods receipt/invoice receipt, and salary clearing accounts.

    Bank accounts, however, do not use open item management.

    If you subsequently define open item management for a G/L account, this entry only applies to the items which are posted afterwards. At the date of the change, the account must display a zero balance.

    Also, when canceling this indicator, the balance must be zero. You therefore have to clear the remaining open items before making the change in the master record.

    for settings:

    http://help.sap.com/erp2005_ehp_03/helpdata/EN/43/fe0707c5da4c61e10000000a155369/frameset.htm

    nagesh

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  • author's profile photo Former Member
    Former Member
    Posted on Apr 11, 2008 at 11:50 AM

    Hi,

    It is very simple concept.

    Take an example of misc. purchases.

    When you purchase from vendor you pass the following entry.

    Dr. Material / Expenses A/c.

    Cr. Vendor account (if it is credit purchase)

    Now the vendor account is showing credit balance till you make payment to the vendor. This in SAP they call is open item.

    While making payment

    Dr. Vendor account

    Cr. Cash / Bank account

    If once you make the payment to vendor, while making the payment to the vendor, you need to link the payment with lying open item of above purchase. System automatically changes the status of above open item (red colour ball) to cleared item (green colour ball) in the vendor account.

    I think this will clear your doubt, assign points if useful.

    Regards

    Sarma BH

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