Use

Cash-Basis Accounting (CBA) is a solution based on a separate ledger in the new General Ledger (G/L). This is called the cash ledger (CL) and it comprises a complete, balanced set of accounts required by and maintained forCBA. It realizes expenses and revenue only at the time cash is paid or received. Most of the postings are simply cash against expense/revenue postings. A cash ledger does not include any liability, inventory, assets or other accrual accounts such as depreciation.

In this context, cash is defined as cash on hand, demand deposits and cash equivalents (short term highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of change in value). Bank borrowings are also considered cash.

Integration

The cash ledger is an integral part of the new G/L. It is not available in the previous version of the G/L.

Prerequisites

To useCBA, you need to have the new G/L with active document split installed, configured, and running in your system.

See the new G/L documentation for more information.

Carry out the following steps in Customizing under Financial Accounting (New) ® Financial Accounting Global Settings (New) → Ledgers

In the step Ledger ® Define Ledgers for General Ledger Accounting , define a ledger for use as a cash ledger. This must be a non-leading ledger in the new G/L environment and be generally based on the Public Sector totals table PSGLFLEXT.

Additionally, you can also use the total tables FAGLFLEXT or FMGLFLEXT. In this case, however, you need to extend these table templates with the additional fields ZZRE_ACCOUNT and ZZRE_BUKRS in the step Fields → Customer Fields → Include Fields → Include Fields in Totals Table.

In the step Ledger ® Assign Scenarios and Customer Field to Ledgers , assign the scenario PSM_CL to the defined ledger in order to ensure the update the G/L entity RE_ACCOUNT and RE_BUKRS when processing data. If you decide to user the alternative table templates (FAGLFLEXT or FMGLFLEXT), you must assign the corresponding field ZZRE_ACCOUNT and ZZRE_BUKRS to the defined ledger.

In the step Ledger → Define and Activate Non-Leading Ledgers , activate the company codes you want to assign to the cash ledger.

Carry out the following Customizing steps under Public Sector Management ® Fund Accounting ® General Ledger Accounting (New) ® Cash-Basis Accounting and Cash Flow Reporting ® Cash-Basis Accounting

Define Cash Ledger

Use this step to define the ledgers you want to use as cash ledgers in G/L accounting. The view lists all the ledgers available except for the leading ledger.

To enableCBAon the basis of the revenues and expenditures, a document by document split by the split characteristic RE_ACCOUNT is required. The corresponding configuration of the document split (definition of the RE_ACCOUNT as a split characteristic with zero balancing and generation of the programs) takes place automatically in the background when the CL definition is saved.

You can check this in Customizing under Financial Accounting (New) ® General Ledger Accounting (New) ® Business Transactions ® Document Splitting ® Define Document Splitting Characteristics for General Ledger Accounting

Note also the following when you define a cash ledger:

All cash ledgers assigned to the same company code must be related to the same totals table and to the same ledger group.

Ledger groups for cash ledgers must contain only cash ledgers.

In the case of cross-company-code postings, all company codes must be assigned to the same cash ledgers.

Classify Cash-Relevant G/L Accounts

In this step, you enter all the G/L accounts you want the system to recognize as cash-relevant accounts. This is necessary to enable the system to identify all the documents relevant for the cash ledger and to handle the line items appropriately.

Cash-relevant accounts must not be G/L accounts with open item management.

Define Assignment Between Balance Sheet Accts and Profit and Loss Accounts

In the case ofmaterial inventory acquisitionsin stock or fixed assets the balance sheet accounts are used for postings instead of expense accounts. In the cash ledger, however, the payments of the corresponding invoices in mentioned cases have to be related to expense accounts.To meet this requirement, use this step to make the necessary assignments between theasset balance sheet and the material stock accounts and default revenue/expense accounts.

Note that neither FI reconciliation accounts nor accounts flagged as Relevant to Cash Flow can be chosen as the “from” or “to” balance sheet accounts .

Since down payments, by definition, are not related to an invoice, they must be posted to the cash ledger in advance. To ensure this process the special G/L accounts involved have also to be assigned to a defaultrevenue/expenseaccount under this configuration point. Additionally, to enable the inheritance of the default revenue/expense account into the cash line item make the following settingsin Customizing under Financial Accounting (New) ® General Ledger Accounting (New) ® Business Transactions ® Document Splitting ® Classify G/L Accounts for Document Splitting:

Classify the special G/L accounts by assigning them the item categories Customer: Special G/L Transaction (02100) or Vendor: Special G/L Transaction (03100) correspondingly.

Set the Override indicator for the classified special G/L accounts.

Edit Constants for Unassigned Processes

Use this step to define a G/L account to be used as an advance revenue/expense account in the case of unassigned processes, such as payments on account (except for down payments) in the cash ledger. This account must be a P&L account with no open item management.

Assign Standard G/L Account for HCM Processes

For technical and business reasons, it is impossible to derive the corresponding real expense accounts forHCMPayroll documents and to use them for updating in the Cash Ledger. Therefore, the FI documents generated byHCMPayroll are provided with a default revenue/expense account (HCM-RE-Account) that defined in Customizing on a company code basis. Using this solution, allHCMPayroll documents are finally updated in the cash ledger as cash Accounts against theHCM-RE-Account.

Use this step to define a G/L account to be used as a default revenue/expense account (HCM-RE-Account) in the cash ledger in case ofHCMprocesses.

The above steps all include online documentation, to which you should refer for more details.

All G/L accounts configured in the steps listed above must be defined in all the company codes involved.

All existing G/L account assignments, not just those included in the PSM_CL cash ledger scenario, can be updated in the cash ledger. If you want to use some of them, you must assign the appropriate G/L scenario or your own field to the cash ledger.

TheCBAfunction as described in this documentation is based on the document split configuration and operating mode delivered bySAP. If you modify the document split feature, this may adversely affectCBAbehavior.

See also:

A Note on the Use of Cash-Basis Accounting

Activities

Balance Carryforward

The following examples illustrate the use ofCBA

CBA Example: Payment with Invoice Reference

CBA Example: Payment w/o Invoice Reference (Payment on Account)

Subsequent Implementation of Cash-Basis Accounting

If you implementCBAat a date later than your implementation of the new G/L, this is called a “subsequent implementation”. Some additional customizing work is required in such cases. Use the link for information on how this is done.