Recently, some of my customers inquired about the concept of negative postings in finance. In this blog, we will delve into the concept of negative postings, the prerequisites, and the diverse applications in journal entry management for SAP S/4HANA Cloud, public edition.
Understanding Negative Postings
What is a "negative postings" in finance?
Negative postings are a useful tool for handling journal entries in financial accounting. They help fix errors without changing the account balances. To do this, enter the incorrect amount with a negative sign to offset the mistake. The wrong entry and the negative posting will cancel each other out, making the correction without affecting the balance. This is called inversion. Negative postings help prevent errors from impacting transaction figures and are considered in standard reconciliation processes and reports.
However, negative postings may not be applicable everywhere, as their use depends on the accounting principles of different countries or regions.
Enabling Negative Postings
To enable negative postings, make sure the following configurations are set. Keep in mind that the settings at the company code level have priority over the settings for journal entry document types. For using negative postings, the company code associated with the journal entry being reversed must allow negative postings.
1. Allow negative postings for your company codes.
Company Code Master Data configuration step (ID 100066)
2. Enable negative postings for your journal entry types.
Define Document Types configuration step (ID 101522)
3. Establish appropriate reversal reasons and activate negative postings for each reason.
Define Reasons for Reversal configuration step (ID 101039)
Using Negative Postings
After enabling negative posting at the company code level and specifying the necessary reversal reasons, you can post journal entries using both reversal and negative posting concepts. Negative postings serve various purposes and are crucial for maintaining accurate financial records. They help monitor changes in account balances and guarantee that financial statements accurately represent the financial position of a business or individual. In this blog, I will provide an example to illustrate how negative posting operates in the reversal posting of Accrual/Deferral journal entries.
Post General Journal Entries for accrual journal entry
Post General Journal Entries with Auto-reverse
Display Line Items in General Ledger
Negative postings provide a vital method for managing journal entries, as they facilitate reversals and adjustments without affecting account balances. By understanding the requirements and applications of negative postings, finance professionals can more efficiently address and correct errors in their accounting records. For additional use cases, consider visiting thehelp portal.
More Information on SAP S/4HANA Cloud, Public Edition:
SAP S/4HANA Cloud, public edition, release info here
Latest SAP S/4HANA Cloud, public edition, release blog posts here and previous release highlights here