In Japan, companies are required to carry out the process of ‘Shimeseikyu’; a company requests its customers to pay money for several A/R items (Customer Invoices) at one time. In order to remind its customers of the A/R items to be paid on the due date, the company sends Summarized Invoices to its customers. Although this is not a legal requirement, this process is unique to Japanese business practice and involves the following process steps:
- Invoicing – Creation of summary invoices
- Printing of summary invoices
- Clearing – Receipt of payment data, automatic identification of open items, clearing of open items
- Reporting – Status report of billed and non-billed items
The main features that could be utilized in the scope of Invoice Summary application are:
- Creation and maintenance of the closing date pattern and grouping unit
- Setting up of the invoice summary hierarchy
- Creation of the initial summarized invoice
- Creation of summarized invoices, tax recalculation on summary invoice and posting of tax differences.
- Printing, payment and reporting summarized invoices.
In this blog, you would be introduced to the previously delivered application and the pre-requisite processes to be carried out for successful maintenance of invoice summary master data and the generation of the initial summarized invoice in SAP Business ByDesign.
Prerequisites and Master Data Configuration
In SAP Business ByDesign, the Japanese invoice summary process would be accessible with the scoping of the said business feature in the Business Configuration. You can also choose to enable a new number range and to calculate and post the tax difference under the same business option. The new number range shall concatenate the year of generation to the Invoice Summary document number. Once you have scoped this feature, the activities for creating relevant closing date patterns and grouping units are enabled. Using these activities, you can define and maintain the closing date patterns, closing dates and grouping units
Once you have scoped the summary invoicing feature, you must ensure to maintain the common master data for invoice summary application. The rounding rule used for the tax difference calculation and the G/L account which is utilized during posting of net zero tax difference can be maintained here.
The business configuration activities should be completed before the migration of the Japanese accounts or creation of new Japanese corporate accounts in the system. Once the customer accounts are migrated, the invoice summary roles, hierarchy and the assignment of the closing date pattern, for the invoice summary payer, can be setup using the option Update Invoice Summary Data (Japan only) using the migration tool.
You must ensure to generate the payer first, followed by the recipient, and finally the customer, and maintain the following relationships between these three roles:
N Monthly Invoice (Invoice Summary) Recipient(s) : 1 Payer Invoice (Invoice Summary) Payer.
N (Invoice Summary) Customer(s) : 1 (Invoice Summary) Recipient.
If you don’t need to setup a hierarchy and its sufficient to create a summarized invoice per the highest level, the customer master data should be defined the role Invoice Summary Payer. In this case the monthly invoice as well as payer invoice will be created for the Invoice Summary Payer.
After the account master data is finalized, the migration of open item receivables or the creation of the due items can be initiated. The open item receivables shall be migrated and created in the system referring to the maintained invoice summary hierarchy for the accounts and cannot be changed post migration. Hence it is vital that you maintain the accurate invoice summary hierarchies and invoice summary master data before the migration of open items receivable.
The invoice summary payer and invoice summary recipient for each due item on the trade receivable payable register are determined utilizing the invoice summary hierarchy maintained. This register is further utilized to simulate and generate the summary invoices as per closing date and/or per grouping unit.
SAP Business ByDesign generates two types of summarized invoice for Japan.
- Payer Invoice – This is the accumulation of the monthly invoices that are summarized on a fixed date. It is typically sent to the payer.
- Monthly Invoice – This is the accumulation of the base transaction documents during the period from the last closing date to the current closing date. It is typically sent to the recipient.
Invoice Summary Initialization Run
The Invoice Summary Initialization run can be accessed in the Receivables work center and should be executed only once after the open items are migrated from legacy system into Business ByDesign.
The open items of legacy system are created as journal entries in SAP BusinessByDesign by means of migration. These journal entries are summarized into initial summary invoices to carry forward the account balance information in the subsequent summary invoices, thus maintaining the correct account balances in the summary invoices. The initial summarized invoices shall be created till the date provided in the invoice summary initialization run. Post the creation of the initial summary invoices, due items for the future closing dates should be generated.
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