Improvement of Mun & Landlord

[Audio] Proposal: Improvement of Municipality and Landlord General Ledger Accounts Management.

[Audio] Contents Proposal: Improvement of Municipality and Landlord General Ledger Accounts Management 1. Objectives for Municipality General Ledger Account 160002 2. Objectives for Landlord General Ledger Account 160004 3. Current Process What is a Down Payment or Advance Payment 4. Down Payment Process on SAP 5. Municipality General Ledger Account 160002 Errors Identified within the Municipality Control Account 6. Landlord General Ledger Account 160004 Identified Errors within the Landlord Control Account 7. Recommendations Municipality Down Payment Process Correction Landlord Control Account Recommendations 8. Conclusion.

[Audio] Objectives for Municipality General Ledger Account 160002 The primary objective of the Municipality Creditors Control Account (Account 160002) is to monitor and manage amounts owed to municipalities. This is achieved through: Aggregating Outstanding Balances: Centralizing all outstanding balances owed to municipalities for a comprehensive view of liabilities. Tracking Transactions: Recording transactions such as purchases, invoices received, and payments made, ensuring real-time visibility of liabilities. Facilitating Financial Management: Supporting cash flow management, budgeting, and financial planning by accurately recording obligations. Supporting Reconciliation and Compliance: Aiding in reconciliation processes, identifying discrepancies or errors, and ensuring compliance with payment terms..

[Audio] 2. Objectives for Landlord General Ledger Account 160004 The Landlord Creditors Control Account (Account 160004) aims to manage amounts owed to landlords for leased properties, including: Consolidating Balances: Centralizing outstanding balances owed to landlords. Tracking Transactions: Monitoring rental agreements, lease renewals, amendments, and payments. Facilitating Financial Management: Supporting accurate financial reporting, budgeting, and cash flow management..

[Audio] 3. Current Process What is a Down Payment or Advance Payment A down payment or advance payment is an initial, partial payment made at the beginning of a transaction for goods or services. This pa yment is typically a portion of the total cost and serves as a commitment to follow through with the transaction. Key aspects include: Characteristics: Initial Payment: Paid at the start of the transaction. Partial Amount: Represents a percentage of the total purchase price. Commitment: Indicates the buyer's intention to complete the purchase. Non-refundable: Often non-refundable if the buyer backs out, compensating the seller. Reduces Final Payment: Deducted from the total cost. Purpose: Mitigates Risk: Provides assurance to the seller. Financial Planning: Helps both parties manage cash flow. Secures Transaction: Especially in competitive markets or limited resources. Examples: Real Estate: Down payment on property purchases or rentals. Automobiles: Down payment on car purchases. Custom Orders: Advance payments for manufacturing or custom-made goods..

[Audio] 4. Down Payment Process on SAP Down payment transactions involve several steps to manage and track advance payments: Create a Down Payment Request Monitor and Track Down Payments Apply Down Payment to Invoice This process ensures systematic recording, tracking, and application of down payments in SAP, providing accurate financial reporting and transparency..

[Audio] 5. Municipality General Ledger Account 160002 The Municipality Creditors Control Account is essential for monitoring and managing amounts owed to municipalities. It: Serves as a centralized ledger for outstanding balances. Tracks transactions such as purchases, invoices received, and payments made. Plays a crucial role in cash flow management, budgeting, and financial planning. Facilitates reconciliation processes, identifies discrepancies, and supports compliance with payment terms. Errors Identified within the Municipality Control Account In FY 2022/2023, transactions were processed incorrectly. These should have been processed by the Commercial department using SAP transaction code F-48 (Vendor Down Payment) to reflect as a Special G/L Transaction..

[Audio] 6. Landlord General Ledger Account 160004 The Landlord Creditors Control Account tracks and manages amounts owed to landlords for leased properties. It: Consolidates all outstanding balances owed to landlords. Monitors transactions such as rental agreements, lease renewals, amendments, and payments. Facilitates accurate financial reporting, budgeting, and cash flow management. Identified Errors within the Landlord Control Account Upon investigation, the following issues were found: Landlord Accounts Payable reconciled with debit balances. Looted stores. REPP journals posted but not reversed for closed stores. Deposit for closed stores mistakenly allocated to the water and electricity account. Withholding tax for Botswana processed incorrectly, resulting in a necessary write-off..

[Audio] 7. Recommendations Municipality Down Payment Process Correction To address incorrect processing of down payments in FY 2022/2023: Reset and Reverse Transactions: Reset clearing items and reverse transactions within Document Number range (17*). Select the option to "Reset and Reverse." Specify the reversal reason as "Posting in closed period/year." Use the current date as your Posting Date..

[Audio] Re-process Entries: a Debit and Credit Downpayment Posting through transaction FB01 - The Important thing is to Use the Correct Posting key 29 or 39 and make sure to Use Doc Type KZ and when complete the Info at Bottom when selecting Posting Key to select Special GL – A – This will then give required outcome as per screen prints below. Ensure Correct Posting: Verify entries are accurately posted to the down payment general ledger account (142605). Consult Resources: Refer to the training manual and the updated Cashbuild Way for guidance..

[Audio] Landlord Control Account Recommendations Landlord Control Account Review: Ensure the account always reflects a credit balance to represent liabilities accurately. Investigate deviations immediately to prevent financial misstatements. Address any debit balances swiftly. Handling of Stores Affected by Looting: Write off looted amounts to reflect losses accurately. Process creditor adjustments as advised by Finance. Clear the balance on the vendor account to maintain accurate records. REPP Journal Reversal and Balancing: Reverse REPP journals in the subsequent period to avoid duplication. Ensure account balances are zero before uploading new statements. Vendor Payment Processing: Use SAP transaction FB05 for efficient payment handling. Apply clearing via transaction code F-44 once the balance is zero. Monitoring Withholding Tax for Botswana Vendor Accounts: Ensure compliance with Botswana’s withholding tax requirements. Promptly address discrepancies for accurate financial reporting. Maintain vendor trust through correct execution of withholding tax payments..

[Audio] 8. Conclusion By implementing the above action plan, we aim to streamline our financial processes and ensure the accuracy and integrity of our records. This proactive approach will enhance financial transparency and compliance with regulatory requirements, supporting better financial management and planning..