Every document contains a document type in its header. This document type is defaulted when you are entering the document; if you do not agree with the default document type you can enter one yourself.

The standard system includes the following document types:

• Customer invoice
• Customer payment
• Customer credit memo
• Vendor invoice
• Vendor payment
• Vendor document
• Vendor credit memo
• General document
• G/L account document
• Cash voucher

The document type has the following functions:

• Differentiating between business transactions. The document type tells you instantly what sort of a business transaction is in question. This is useful, for example, when displaying line items for an account.
• Controlling the posting to account types (vendor, customer, or G/L accounts). The document type determines which account types that particular document can be posted to.
• Issuing document numbers. Every document type has a number range allocated to it from which the numbers for the SAP documents you create are taken. The original documents from one number range should be stored together. In this way, the document type controls document storage.

The document type can also specify that the document should be posted using the net posting procedure. This means that any discount and the net amount are calculated (and posted) when the invoice is posted. For more information, see FI Accounts Payable and Accounts Receivable.

The following figure illustrates the significance of the document type: