Vendor Account Groups

The account group controls the number range and the field that need to be captured at the time of creation of master records. It determines which fields have to be or can be filled when creating the master record. Following are the vendor account group for Al-Nukaly:

Creation of Vendor Master

Creation of vendor master is discussed under the following heads:

MM Vendor: In respect of vendor related to procurement of Material ( Ordinary& service) vendor master creation will be done by the Purchase Department.

FI Vendor: Maintain Vendor related Information for FI-Vendors for non-order related like employee and Banks loan.

Payable Special Indicator

Special GL indicator used to separately track the balance from the normal balance. This procedure involves defining of alternative reconciliation accounts for each GL indicator. Following are the payable Special indicator for Al-Nukaly:

A = Advance (Vendor or employee) 

L = Letter of Credit

E = advance for expense

S = advance for salesmen

O = employee sales commission

L = employee Loan

Employee Vendor

Employees Master Records will also be created as Vendor Master Records in SAP. Creation of new employee master records in the pay roll systems will require creating a new vendor master record for such employees in SAP. Employee vendor will have the employee vendor code same as the personal number.

Following are the various payments booked through employee vendor for payment to employee.

  Salary Advance,

Advance for expense (if any),

Salesmen advance (if any),

Loans (if any),

Sales commission (if any)

Vendor Invoice Processing

The vendor invoices will be processed by the head office location and branches location too.

The processing of domestic invoices is discussed under the following heads

Goods Receipt: Based on the Purchase order and the Quantity actually received, Goods Receipts (GR) will be done at the respective location.

Invoice Verification: Vendor Invoice Verification will have to be done at the concerned location. This will be based on the Goods Receipt or P.O processing done by the costing Department and PO Raised by the purchase Department.

Vendor Payment – General

Generally the payments to Vendors are decentralized. The general issues related to vendor payment are discussed under the following heads:

- Terms of Payment

- Method / Media of Payment

- Partial Payment

- Residual Payment

- Exchange rate difference

- Check Management

5.10 Terms of Payment

Terms of Payment will be defined by the Company, which will be updated in the Vendor Master for each vendor or can be entered and changed in the document at the time of invoice booking. Due dates will be determine by the system based on the baseline date of the document.

Method/ Media of Payment will be as under:

  C = Check   

  D = Cash against document

  T = Bank Transfer

Check printing facility along with advice printing will be provided. The advice will contain details of the line items paid by the check.

5.11 Partial Payment& Residual payment

There are instances of terms of the purchase that allow payment to be made to the vendor in instalments over a period of time. In these cases the outgoing payments made to the vendor may not settle the invoice in full but only partially.

Partial Clearing will be used where a part payment is made for a vendor open item. If the Partial Clearing is used, system will post a line item in debit for the payment made. The system however, will not clear the invoice till the entire invoice amount is cleared and all such line items are shown as open items till the time is fully cleared.

Vendor Advance Payment

Advance payments shall be made in cases where the terms of payments with the vendor involve a percentage of the total amount to be paid prior to the delivery of goods or services.

The advance payments made to the vendor shall be tracked as distinct from the normal payments made to the vendor. This procedure involves defining of alternative reconciliation accounts for vendor’s down payments. The posting for down payments shall be carried out to a Special G/L account other than the standard General Ledger account for the vendor.