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 enters 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 doesn’t 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 Meaning Functionality

Code
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 Meaning Functionality

Code
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 Meaning Functionality

Code
F.13 Automatic Automatic clearing allows you to clear
clearing 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

Note : You can clear a G/L account item only if the G/L accounts is Open item managed.

SAP FI –OPEN ITEM MANAGEMENT Flag

Friends, earlier I discussed about Line item display flag in G/L account customizing.
There is another flag called ‘Open item management’ just above Line item display in the
customizing of G/L accounts. At times, this flag can be a source of confusion in terms of
what will happen if this flag is checked or unchecked.

Transaction to display G/L account’s customizing

FS03 is the transaction through which we can view the customizing settings of a G/L
account. The ‘Control’ tab in FS03 will display the status of ‘Open item management’
flag. The screen shot is shot is shown below:

Transaction to display Customer’s and Vendor’s account’s customizing

Similarly, transactions FD03 and FK03 are used to display the customizing of customer
and vendor accounts. You can yourself try to find ‘Open item management’ flag in these
in transactions. Well, you will not be able to find the flag. Even I cannot find it. In fact no
once can!!! Because the flag doesn’t exists for customers and vendors accounts . The
catch is, customer and vendor accounts are Open item managed by default. Obviously
because customers are your receivables and vendors are payables i.e you either have to
pay (in case of customers) or receive(in case of vendors) and then perform clearing.

Effect of checking Line item display flag

If Open item management flag is checked for a particular G/L account then the line item
containing that G/L account can be cleared. Remember that customer and vendor
accounts are open item managed by default therefore customer and vendors line items are
clearable by default.

F-04 transaction steps F-04 - GL Post with Clearing Background SAP System
offers the following methods to clear accounts with open item management: •
Posting with clearing Using the posting with clearing function, you enter
document line items and then select the open items to be cleared. Once you
have fulfilled all the prerequisites for clearing, the system clears the open items.
The system generates one or more offsetting postings for the open items to be
cleared • Account clearing In this clearing procedure, you select open items that
balance to zero from an account. The system then marks these items as cleared.
It enters a clearing document number and the clearing date in the document
items. The clearing date can be the current date or a date that you enter
manually. The clearing document number is the number of the most recent
document involved in the clearing transaction. • Automatic Clearing You can use
the Automatic clearing program to clear open items from customer, vendor, and
G/L accounts. This program uses predefined criteria to group together open
items per account. If the balance of the group of open items equals zero in local,
foreign, and where applicable, the parallel currency, the items are marked as
cleared. Scenario In this scenario we performed post with clearing using
transaction code F-04 (Manual clearing) with Partial clearing function. You can
perform the same →clearing for GL Account without posting using F-03. Menu
Path Accounting F-04 - Post with→ Document Entry → General Ledger
→Financial Accounting Clearing Transaction Code F-04 2. Update the following
required and optional fields on the screen accordingly: *Field Name Description
Values* Document date Example: 08.06.2002 Company code Enter here
required company code number Example: 5200 Period Number identifying a
fiscal month Example: 06 Currency/rate Code identifying the currency used in the
transaction Example: USD PstKy Description of the PstKy. Example: 40 Account
Code identifying the General Ledger, Vendor, or Customer account Example:
114000 Click Enter Button to confirm your entries 3. Now enter the amount in the
screen. 4. Click Process open items Button 5. Update the following required and
optional fields: *Field Name Description Values* Comp Code Example: 5200
Account Code identifying the General Ledger, Vendor, or Customer account
Example: 119210 Account type Example: S Check box activate for -Normal OI 6.
Click Process open items Button Note: All open items are selected. You need to
deselect them first: and select what all ur trying to clear.. 8. Click Select all F7
Button 9. Click Items Button . Deactivate Items 10. Click the line To be Cleared
11. Click Select Button ( in the left corner button with a pointer facing up) now if it
is a partial amount 12. Click Partial pmt Note: With manual clearing only there
are 3 way of clearing an open item (full , partial , residual) . A residual item
results when a payment is made for less than the actual amount outstanding.
You clear the original open item, and the system posts a new open item. This
new open item is for the same amount as the original open item minus the
amount paid A partial payment is a payment that is posted to an account without
any open items being cleared. You assign this partial payment to an open item.
When you post the partial payment, the system marks the document number of
the original open item in the line item for the partial payment. The original open
item and the partial payment remain open. For automatic clearing there are 2
transaction codes : • F.13 - Without Specification of Clearing Currency • F13E -
With Clearing Currency Specified. 13. Update the following required and optional
fields: Field Name Description Values Payment amount Description of the
Payment amount. Example: 100 14. Click Enter Button to confirm your entries.
15. Simulate. Note: The line 002 is highlighted in blue – some→Select Document
additional data must be entered. Double click on this line and enter the required
information. Click Save Button. to post your document

Posting with clearing means in a simple passing a rectification entry by clearing the wrongly
posted entry.

Example

pk glacc amount barea

40 15000 10000.00 1000
50 16000 10000.00 1000

the above is entry posted after i posted this entry i realized that gl account 15000 is wrong one.
So to rectify that one has to reverse this entry and pass new entry. instead of this activity you can
pass one entry through F-51 with posting with clearing posting option. When we are passing this
entry we have to give like 40 150001 10000.00 1000 after specified all the details choose
document number in process items so that system will rectify that particular line item as you given
and system passes automatic reverse entry with clearing.

To pass post with clearing the document should not be a clearing document.