Bank Guarantee (Work Around)

[sai_kumar1]

Hi,

Our client has a requirement related to Bank Guarantees, which I found falls under the licensed scope 2NZ.

Requirement Overview:

1. Initially, the client issues a Bank Guarantee to the customer. This should be reflected as a note to the accounts in the Financial Statement Version (FSV) because it is a contingent liability.

2. If the customer invokes the Bank Guarantee, it should then be recognized under liabilities as "Bank Guarantee Payable."

3. Subsequently, the client settles the payment against the Bank Guarantee.

Additional Notes:
1. Bank Guarantees may be issued in various forms, such as Performance Guarantees, Warranty Guarantees, etc.

Please provide work around process for BG

[Chuma]

Hello @sai_kumar1 

Thanks again for your question regarding the Bank Guarantee process in SAP S/4HANA Cloud Public Edition.

Since the standard Bank Guarantee Management falls under scope item 2NZ, which may not be active in your system, here's a practical workaround using standard features available in the core Finance scope:

Workaround for Bank Guarantees in S/4HANA Cloud Public Edition

Issuing the Bank Guarantee (Contingent Liability)

• Post a memo or statistical entry using a non-posting G/L account such as Contingent Liabilities – Bank Guarantee.
• This can be tracked via a statistical internal order or manually maintained for disclosure purposes in the Financial Statement Version (FSV).

When the Bank Guarantee Is Invoked

If the customer calls on the guarantee, the contingent liability needs to be reclassified as a real liability. At this point, you post an entry to reflect the change:

Debit: Contingent Liabilities – BG
Credit: Bank Guarantee Payable (liability G/L)

This shows the obligation has become a real financial liability on the books.

Settlement of the Bank Guarantee

Once the payment is made to the bank to settle the guarantee, record the transaction as follows:

Debit: Bank Guarantee Payable
Credit: Bank / Cash

This clears the liability from the books and reflects the cash outflow.

This approach ensures the liability is properly tracked, disclosed, and settled, even without activating the dedicated 2NZ scope.

SAP Community reference

Statistical Posting is not supported in Cloud, but it's already planned in the roadmap.

With kind regards

Chuma