What is Clearing ?

[Former Member]

Hello,

May be it a very simple question but, I am really confused with the terminology, What is Clearing ?

Is clearing mean pay off, for example if vendor has some outstanding payment, and when payment is done it move to clearing. so does that mean clearing is nothing but paying off for vendor scenario, receiving payment for Customer Scenario and for GR/IR ?

Please help

Moderator: If you know what is 'search the Web', you could also learn about 'clearing'. Please, avoid asking basic questions

[Former Member · Accepted solution]

hai

What is clearing

In very simple words, clearing is just linking of two FI documents.

Why to link two FI documents

Now, let us take an example of an organization which has SAP R/3 system to keep track of its business. Suppose the organization bought some goods from a vendor. Afterwards, the vendor sends an Invoice(or bill) for the purchased goods. On receiving the Invoice, the responsible person in the organization enter the invoice in SAP system. Now the time comes for the payment. The organization pays the Invoice amount to the vendor. This payment is also entered in SAP system in form of a document.

At this instant we have two documents in SAP system

1) Invoice

2) Payment

The payment has been given to the vendor but SAP system doesnu2019t know that which payment is for which invoice. So, what to do?

Well, just link the Invoice with respective payment and this is called as clearing. Clearing takes place at line item level i.e individual lines in an FI document are cleared via various standard transactions depending on the type of account in the line item (Vendor, Customer or G/L account).

Different types of clearing and how it is done

Vendor account clearing

Transaction Code Meaning Functionality

F.13 Automatic clearing Automatic clearing allows you to clear many vendor accounts in one transaction run.

F-44 Manual clearing You need to choose the items to be cleared manually.

Customer account clearing

Transaction Code Meaning Functionality

F.13 Automatic clearing Automatic clearing allows you to clear many customer accounts in one transaction run.

F-32 Manual clearing You need to choose the items to be cleared manually.

G/L account clearing

Transaction Code Meaning Functionality

F.13 Automatic clearing Automatic clearing allows you to clear many G/L accounts in one transaction run.

FB1S Manual clearing You need to choose the items to be cleared manually.

Using above transactions is very easy. Do give it a try and understand clearing more clearly

[Former Member]

hai

Open items are the incomplete transction such as invoice that has not been paid transction such as invoice that has not been paid.

Documents with open items Can be archived even it's not paid for long time can not be archived and stay in the system untill all items are cleared.

Basic transction you can use to clear open items Posting with clearing Account clearing.

Manually clearing an open item with related Credit memo and payment is the example of Posting with clearing Account clearing.

A clearing transaction always creates a clearing document Document.

You enter the clearing document amount and then select upon items that are to be cleared , is the function of Account clearing Post with clearing.

You can not carry out posting with clearing automatically True False.

If the total amount of selected upon items equals the amount of the clearing document, the system cleares the open item by clearing one or more clearing items True False.

If the total amount of selected upon does not equal the amount of the clearing document, the system allows you to post the differance True False.

Account with clearing, clearing date is always current date. True False.

The account clearing function only works for "sub-ledger A/C" managed with open item True False.

Automatic clearing program groups items from an account if they have same Reconciliation A/C number Currency Special GL indicator Five freely defined criteria from document header only Five freely defined criteria from document line item only Five freely defined criteria from document header or line item ex ref no, assignment field etc.

All account requring automatic clearing must be defined In Customizing when you create GL master data when you create customer or vendor master data.

Automatic clearing program does not clear Noted items items with withholding tax entries customer over due item overdue vendor item.

Automatic clearing program does not clear Statical posting and certain special G/L transction relating to bill of exchage down payment can only be cleared if down pmt clearing items of the same amount have already been posted Statical posting transction relating to bill of exchage down payment can only be cleared if down pmt clearing items of the amount have already been posted.

Assignment field can be a combination of Up to 4 field with a maximum of 16 characters Up to 4 field with a maximum of 18 characters Up to 4 field with a maximum of 8 characters.

the line item sorting and line item display and clearing functionis based on Assignment field Application field sort field.

When an invoice is posted in sales order managment An accounting document is created in financial. Does not have any effect in financial.

You can trace sales order management document by referance and assignment referance assignment.

Normally accounting document has a document number that is normally different to the number of sales order managment invoice. True False.

A clearing document must have at least two line item True False.

The automatic clearing program can not carry out automatic posting True False.

[Former Member]

Hi Mark,

Clearing can be categorized into two types "manual clearing" and post with clearing. In both these cases clearing results into converting open items into cleared items.

1. Post with clearing :-

Here we post accounting entry with a specific value which will clear one or more accounting entries. For eg: Posting a payment entry for an open invoice.

2. Manual clearing : -

Here select the entries to be cleared together (Mostly totals to "zero"). For eg: selecting an invoice and credit memo open for the same amount for a vendor and totals to zero.

Warm regards,

Murukan Arunachalam

[former_member188196]

hi

please refer to http://www.daypo.net/sap-fi-clearing.html

payment is just one kind of clearing.

BTW: I am afraid your thread will be locked by moderator. good luck

best regards, Lawrence