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  • What Is The Difference Between Open Item and Open Item Management ?

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    surendra
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    Open item management in SAP allows tracking of unpaid invoices and payments in vendor, customer, and general ledger accounts. Open items appear in red and are cleared to green once fully paid. Partial payments create a new open item for the residual amount rather than closing the original invoice. Open item accounts include clearing, bank, payroll, and discount accounts.

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    open Item Managemnt

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    Open item management in SAP allows tracking of unpaid invoices and payments in vendor, customer, and general ledger accounts. Open items appear in red and are cleared to green once fully paid. Partial payments create a new open item for the residual amount rather than closing the original invoice. Open item accounts include clearing, bank, payroll, and discount accounts.

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    146 views11 pages

    What Is The Difference Between Open Item and Open Item Management ?

    Uploaded by

    surendra
    Open item management in SAP allows tracking of unpaid invoices and payments in vendor, customer, and general ledger accounts. Open items appear in red and are cleared to green once fully paid. Partial payments create a new open item for the residual amount rather than closing the original invoice. Open item accounts include clearing, bank, payroll, and discount accounts.

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    of 11

    What is the difference between open item and open item

    management ?
    Open item: open item is an item which has to be cleared with
    another line item.

    Open item management: how you want to manage all the open item
    in particular GL A/C.

    Open item management is the setting which allows the setting to


    maintain the open items for the particular GL account.

    Use of open item : Processing open items involves choosing and then
    activating the open items. Processing is the last step before posting a
    clearing document.  When posting clearing documents, the system
    takes tolerances into account. Tolerances are acceptable payment
    differences.

    While GL creation we have to tick boxes which say open item


    Managed and line item display.

    If you tick open item managed, then when you view the ledger of
    this particular GL accounts, all items which are opened (not cleared)
    will appear in red and those which are cleared will appear in green

    Partial Payment Scenario

    Let’s assume your company offers services to a customer X and


    produced an outgoing invoice of $500. Now, when the customer is
    making a payment, the payment is not made in full. The customer is
    paying only $200. This transaction, when a customer is not making
    payment for the full invoice amount, is what we call a partial
    payment. When a partial payment of $200 is done, it does not
    cancel the initial invoice of $500 but the system adds a new line
    item of $200 which will reduce the amount the customer owes
    the company to $300.

    Residual Payment Scenario

    Let’s assume your company offers services to a customer Y and


    produced an outgoing invoice of $500. Now when the customer is
    making a payment, the payment is not made in full. The customer is
    paying only $200. When the customer is making a payment of $200
    and the residual payment method is used, the system will cancel
    the original line item of $500 and create a new invoice line item
    of $300 which is the residual after the payment of $200

    SAP partial and residual payments are useful methods of processing


    partial incoming payments and partial outgoing payments. These
    methods have the same effect to the balances of vendor or customer
    accounts but they have different effects on line items in financial
    documents. For a partial payment, the initial invoice and the
    payment items remain on the account. On the other hand, a residual
    payment results in new document with a reference to the original
    document.
    Take an example of misc. purchases FOR OPEN ITEM
    MANAGEMENT

    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.

    AP  AR

    What
    Invoice posting against a Invoice issued to a
    generates the
    Vendor account Customer
    open item
    What will
    drive the close Payment made to the Payment received from the
    of the open Vendor Customer
    item

    How the open Invoice is cleared with Invoice is cleared with


    item will be payment resulting 0 payment received
    closed in SAP balance; resulting 0 balance;

         

    Open Item Management and Account Types

    For general payables and receivables, open item management is


    performed in the Accounts Receivable and Accounts Payable
    subledgers. You can therefore only apply open item management to
    the following account types:

     Other Assets

     Other Liabilities

     Equity

    Accounts that are managed on an open item basis include:

     Clearing accounts
     Bank clearing account
     Payroll clearing account
     Cash discount clearing account
     GR/IR clearing account
    Accounts that are not managed on an open item basis

     Bank account
     Tax accounts
     Raw material accounts

    When the line item(s) you enter and the open item(s) you process
    have been cleared, you can post a clearing document. 

    For example, if you enter a vendor payment for $1000, you must
    choose and process vendor open items that equal $1000. If your
    system permits a 1% tolerance, then you can clear open items with a
    value from $990 to $1010.

    When you process open items, you can:

    - Activate or deactivate open items 


    - Activate or deactivate cash discount 
    - Maintain cash discount amounts 
    - Enter partial payments or residual items

    Open Item:
    Clearing Item

    SAP Open Items in Accounts Payable


    To view open items for accounts payable, navigate to the following path in SAP menu:

    Financial Accounting -> General Ledger -> Account -> Display/Change Line Items

    Or directly start the transaction FBL1N from the command field. Enter Vendor


    account number and Company code. And then, select Open items to view open items.
    Input the key date for open items view.
    SAP Vendor Open Items Display
    The transaction is displaying the Open Items marked with red in the Status column. There
    is no Clearing document for the moment, because this document will be cleared as per the
    date from Net due date column when the invoice will be paid.
    SAP Vendor Open Items (Example)

    SAP Open Items in Accounts Receivables


    To view open items for accounts receivables, navigate to the following path in SAP menu:

    Financial Accounting -> General Ledger -> Account -> Display/Change Line Items

    Or directly start the transaction FBL5N from the command field. Enter the Customer


    account number and Company code. Then, select Open items to view open items. Input
    the key date for open items view.
    SAP Customer Open Items Display
    The transaction is displaying the Open Items marked with red in the Status column. There
    is no Clearing document for the moment because this document will be cleared as per the
    date from Net due date column when the payment from the customer will be received.
    SAP Customer Open Items (Example)

    SAP Open Items in General Ledger


    To view open items for General Ledger (G/L), navigate to the following path in SAP menu:

    Financial Accounting -> General Ledger -> Account -> Display/Change Line Items

    Or directly start the transaction FBL3N from the command field. Enter the G/L


    Account number and Company code. And then, select Open items to view open items.
    Input the key date for open items view.
    SAP General Ledger Open Items Display

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