MM TM 23-Payment Certificate
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Transcript of MM TM 23-Payment Certificate
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Training Manual
Manual Payment Certificate Page 1 of 72
Client Name Al Turki Enterprises LLC
Project Name SAP Solution Enhancement in New Landscape
Document Name MM_TM_23-Payment Certificate
Prepared By (Author)
Prepared On
Type of Document Training Manual
Module MM
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Index
1.0 Payment Certificate ................................................................................................................................ 3
2.0 Create Payment Certificate ................................................................................................................. 10
3.0 Change payment certificate ................................................................................................................ 14
4.0 Print payment certificate ..................................................................................................................... 16
5.0 Delete payment certificate .................................................................................................................. 20
6.0 Scenario-1 Advance Payment to Contractor on Work Order .......................................................... 23
7.0 Scenario-2 Payment certificate for material on site ....................................................................... 35
8.0 Scenario 3: Creation of Payment Certificate for work executed .................................................. 43
9.0 Scenario 4: Certified Quantities and Material on site consumed .................................................. 55
10.0 Scenario 5: Creation of Payment Certificate with contra charges ............................................... 59
11.0 Release of Retention & Contra charges ............................................................................................. 71
12.0 Checks and Validation: ......................................................................................................................... 72
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1.0 Payment Certificate This document contains information about the process for Subcontract for all type of Civil and O&G
subcontracts which is given to nominated subcontractors or for third party services.
The main objective of this document is to describe the process of creation of payment certificate for
payment processing of subcontractor under different heads like booking the work executed, addition
work executed, retention on work executed and any advance payment requirement and recovery,
deduction of contra charges and release of retention and contra charges, wherever required.
For creation of payment certificate, a customized screen will be developed in which all the heads
which are required to generate the payment certificate will be available. In this screen, some fields
values will be derived automatically based on the various transactions during the period which will
not be allowed to change and some fields will be allowed to enter manually. This will show the
Cumulative Values till this Bill, Cumulative Values till Last Bill and Net Value this bill. The QS has to
enter the period for which payment certificate is required to generate. All the values posted for this
period will be automatically available in the payment certificate.
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S.No. Basis for Calculation Particulars %
tage Calculation for Payment Certificate
1 A Estimated Value of Work Done
During the Month Available from Posting of SES
2 B Estimated Value of Additional Work Executed
Available from Posting of SES
3 C Extra Work Deduction (will be used for deduction of extra work)
Manual Entry in Certificate
4 D = A + B C Total Value of Work Executed Auto Calculation
5 E Material on Site Manual Entry in Certificate
6 F = D + E Total Value Auto Calculation
7 G=E*% Retention Retention on Material on Site 10% Auto Calculated in Certificate, however changes allowed
8 H=D*% Retention Retention on Work Executed 10% Auto Calculated in Certificate, however changes allowed
9 H1=F*% Retention Additional Retention in Lieu of Performance Bond
Manual Entry in Certificate
10 I = G + H + H1 Total Retention Auto Calculation
11 J Advance Payment on PO value Available from Posting of Advance Payment Request
12 K = %of E Recovery of Advance Payment on Material on Site
10% % Tage available from the PO, Auto Calculated in Certificate, however changes allowed
13 L = % of D Recovery of Advance Payment on PO
10% % Tage available from the PO, Auto Calculated in Certificate, however changes allowed
14 M = K + L Total Recovery Auto Calculation
15 N Contra Charges on Materials Auto available from different material issue transaction on Internal Order wrt Work Order
16 O Contra Charges Other than Materials
Auto available from Parking of contra charges booking on Internal Order wrt Work Order
17 O1 Mark Up on Contra Charges (Value) Manual Entry in Certificate
18 P = N + O + O1 Total Contra Charges Auto Calculation
19 P1 Retention Release Manual Entry in Certificate
20 P2 Release of Contra Charges Manual Entry in Certificate
21 Q = F - I + J - M - P + P1 + P2
Total Auto Calculation
22 R Less Previous Certificate Auto from previous certificate
23 S = Q-R Net Total Payable Auto Calculation
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Following are the heads which are considered for payment certificate:
1. Estimated Value of Work Done During the Month - To get the total value of work executed during a
particular period. This value will be available after posting of service entry sheet. This field will be in
display mode and hence no manual entry will be allowed.
2. Estimated Value of Additional Work Executed - To get the total value of additional work executed during
a particular period. This will be identified by mentioning the supplement work in the work order for each
service line number. This value will be available after posting of service entry sheet. This field will also be
in display mode and hence no manual entry will be allowed.
3. Extra Work Deduction - To deduct the value of work executed, if paid in the earlier payment certificates.
This field value will be allowed to enter manually at the time of creation of payment certificate. This field
will be used when there is no work balance (No service entry sheet) and only deduction of work is required.
However if any work in terms of quantity is to be deducted in the current certificate which is related to the
previous certificate, the QS has to mention those line items in terms of quantity in the service entry sheet
itself. System will allow entering the negative quantities keeping the total value of service entry sheet as
positive.
4. Total Value of Work Executed - This will be the sum total of all the work executed after deduction of
extra work and will be available automatically. This field will be in display mode.
5. Material on Site - This is a manual entry field. QS Department has to enter the value of material on site
after calculating the value on 80% manually.
6. Total Value - Since material on site is also considered as work executed and later on, this value is shifted
/ transferred to the work executed, hence this total will be the sum total of work executed and material on
site. This field will be in display mode.
7. Retention on Material on Site - Based on the retention mentioned in the work order, retention percent
will be available at the time of creation of payment certificate. The value of retention will be calculated on
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Material on site value automatically and will be in display mode. However percentage is allowed to change
as per the certificate requirement. If percentage is changed at the time of creation of certificate,
accordingly, value of retention will get changed.
8. Retention on Work Executed - Similarly, value of retention on total work executed will be calculated
automatically based on the percentage and will be in display mode. However percentage is allowed to
change as per the certificate requirement. If percentage is changed at the time of creation of certificate,
accordingly, value of retention will get changed. This field will be in display mode and no manual entry is
allowed.
Above two types of retention is shown separately for calculation purpose. However at the time of printing
of payment certificate, the value of retention will be shown on total (work executed and material on site).
09. Total Retention - This will be calculated automatically which will be the total sum of all types of
retention. This field will be in display mode.
When total cumulative value of total retention is reaching the max retention percent, system will
automatically proposed the max retention amount.
10. Additional Retention in Lieu of Performance Bond - As per the contract terms and conditions, some
contracts also have retention clause which are applicable in lieu of performance bond.
For such type of retention, QS department has to enter the retention percent manually. Accordingly value
of retention will get calculated on Total Contract Value. Retention value will be in display mode, only
percentage can be entered manually.
11. Advance Payment on PO Value - For any advance payment on PO like mobilization advance, QS
department has to create the advance payment request with T.Code ME2DP. After creating request, this
value of advance will be automatically available during creation of payment certificate. This value will be
available in display mode and no changes will be allowed.
12. Recovery of Advance Payment on Material on Site - Advance payment % will be available from the
advance percent mentioned in the PO. Value will get automatically calculated based on the value of
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Material on Site. This value will be in display mode and will not be allowed to change. However percentage
field will be allowed to change. If percentage is changed at the time of creation of certificate, accordingly
value of recovery of advance payment will be calculated as per the changed percentage.
13. Recovery of Advance Payment on PO - Similarly, advance payment % will be available from the advance
percent mentioned in the PO. Value will get automatically calculated based on the value of work executed.
This value will be in display mode and will not be allowed to change. However percentage field will be
allowed to change. Accordingly value of recovery of advance payment will be calculated as per the changed
percentage.
14. Total Recovery - This value will be the total sum of recovery on advance payment on material on site
and advance payment on PO. This value will be in display mode.
15. Contra Charges on Materials - For execution of work, sometimes contractors requires material from our
store. This value of material is debited to the contractor as per the terms and conditions mentioned in the
WO. Additional mark up is also debited from the contractor.
For issuing materials, each contractor will have an internal order number on which the cost of materials will
be booked. During the period, store person will issue the material on contractor internal order with
reference to contractor's work order number. For this, QS person shall communicate the store for internal
order number and corresponding work order number for which material is being issued and value to be
debited.
This value of issued materials during the period will be available automatically at the time of creation of
payment certificate. This value will be in display mode and will not be allowed to change.
At the time of creation of payment certificate, if value is not coming, it means no material has been
booked.
16. Contra Charges Other than Materials - There are other charges like TAC charges, food charges,
penalties, repairs which need to be debited to contractor. These different charges are communicated to the
QS team by site admin or site QS.
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These charges will be booked by site admin or site QS at the internal order by parking the value in different
heads through T.Code FV50. In this transaction, internal order alongwith work order number shall be
mentioned.
This value of issued materials during the period will be available automatically at the time of creation of
payment certificate. This value will be in display mode and will not be allowed to change.
At the time of creation of payment certificate, if value is not coming, it means no material has been
booked.
17. Mark up on Contra Charges - Since system will not automatically calculate any mark up on contra
charges, hence QS department has to mention the mark up value manually at the time of creation of
payment certificate. This value will be allowed to enter manually.
18. Total Contra Charges - This will be the total sum of all the contra charges and mark up value and will be
in display mode.
19. Retention Release - During the creation of payment certificate, if any retention is required to be
released, then QS has to mention the value of retention release manually in the certificate. Based on the
value, account has to pass the accounting entry for retention release.
20. Release of Contra Charges - During creation of payment certificate, if any contra charges is required to
be released, then QS has to mention the value of contra charges to be released manually in the certificate.
Based on the value, account has to pass the accounting entry for contra charges release.
21. Total Value - This value will be calculated based on the total cumulative values of all the heads. This
value will be in display mode.
22. Less Previous Certificate - This value will be derived from the last certificate saved and will be in the
cumulative value till this bill.
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23. Net Total Payable - This value will be the total net value of the current certificate which will be
required to pay to the subcontractor. This value will be calculated from all above heads and will be in
display mode.
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2.0 Create Payment Certificate
T-Code: ZMM_PC
Step 1. Enter the necessary details on initial screen
Sr.no
Field Name Description R/O/C
User Action
and Values
Comments
1 Purchase Document
Purchase order Number
R ZP03/ZP04
Select Purchase Order Number while creating new payment certificate. Starting from 43* or 44* number series of purchase order
2 Posting Period
Posting Period
R Enter appropriate posting period
3 Fiscal year Fiscal year R Enter fiscal year for entry of payment certificate
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4 Select option: create
Creation of payment certificate
R * Select, option to create payment certificate.
(Note: On above table, in column R/O/C; R = Required, O = Optional, C = Conditional)
Step 2. Enter the header details for the payment certificate.
Sr.no
Field Name Description R/O/C
User Action
and Values
Comments
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1 Remarks Remarks for the payment certificate
O Specific remarks or instructions for the payment certificate
2 Invoice Number
Vendor Invoice number
O Enter the vendor invoice number for the reference
3 PDO PO Ref PDO PO reference number
O PDO purchase order reference number for the reference in payment certificate
4 Work done up to
Work completed till month
O Enter the month till work completed for the payment certificate.
5 PDO SES Ref PDO SES reference number
O PDO service entry sheet reference number for the reference in payment certificate
6 ATE client valuation/ P.C.
ATE client valuation/ P.C.
O Reference text for ATE client valuation/ P.C.
(Note: On above table, in column R/O/C; R = Required, O = Optional, C = Conditional)
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The column wise details in the payment certificate are as follows,
1. Particulars: description & details for the amount
2. Percentage: values calculated from the Percentage details for the specific particulars
3. Cumulative till this bill: total cumulative value including the payment certificate
4. Cumulative till last bill: total cumulative value till last payment certificate (excluding the current)
5. Net value: difference between total cumulative & cumulative till last bill
All the values in gray are not editable.
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3.0 Change payment certificate
In order to correct or add entries of the payment certificate, user change option. But user can
change entries before submission of the certificate to accounts.
T-Code: ZMM_PC
Sr.no
Field Name Description R/O/C
User Action
and Values
Comments
1 Purchase Document no
Purchase/ work order number
R Specific purchase order number
2 Certificate No
Payment certificate Number
R Payment certificate Number
3 Change Select change R Select option, change
4 Execute Execute the entry R Execute the process
(Note: On above table, in column R/O/C; R = Required, O = Optional, C = Conditional)
Payment certificate screen will opened in editable format, after making necessary changes user can submit it to accounts & save it
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Payment Certificate for only advance payment shall be printed and forwarded to accounts.
Based on the payment certificate, accounts shall process the advance payment request as per
payment process
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4.0 Print payment certificate
T-Code: ZMM_PC
Sr.no
Field Name Description R/O/C
User Action
and Values
Comments
1 Purchase Document no
Purchase/ work order number
R Specific purchase order number
2 Certificate No
Payment certificate Number
R Payment certificate Number
3 Change Select change R Select option, change
4 Execute Execute the entry R Execute the process
(Note: On above table, in column R/O/C; R = Required, O = Optional, C = Conditional)
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Select, save or print option
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5.0 Delete payment certificate
User can make any changes in payment certificate, till its submitted to accounts, if he/she has to
change payment certificate after submission to accounts, it should be deleted first & new payment
certificate needed to be created again, which will be next serial number for the payment
certificate. User cannot delete the payment certificate if any subsequent payment certificate is
created. Means if payment certificate -1 is needed to delete while payment certificate-2 already
created & submitted, then system will not allow user to delete the payment certificate.
T-Code: ZMM_PC
Sr.no
Field Name Description R/O/C
User Action
and Values
Comments
1 Purchase Document no
Purchase/ work order number
R Specific purchase order number
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2 Certificate No
Payment certificate Number
R Payment certificate Number
3 Delet Select, Delet R Select option, delet
4 Execute Execute the entry R Execute the process
(Note: On above table, in column R/O/C; R = Required, O = Optional, C = Conditional)
Tick cancelation indicator, & Specify the reason to delete
In the print preview of payment certificate, the CANCELLED watermark gets printed.
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6.0 Scenario-1 Advance Payment to Contractor on Work Order
Advance Payment to Contractor on Work Order Recoverable in equal instalments)
Prerequisite: Advance Payment clause in terms of percentage must be mentioned in the work order
QS Department has to create the advance payment request through T.Code ME2DP.
Transaction Code ME2DP
SAP Menu SAP Menu >> Logistics >> Materials Management >>
Purchasing >> Purchase order >> Reporting>> ME2DP >>
Down payment monitoring for PO
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Sr.no
Field Name Description R/O/C
User Action
and Values
Comments
1 Purchase Document
Purchase order Number
R Enter Purchase Order Number
2 Execute Execute the entry R Execute the process
Select header, create document as shown in snapshot
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Enter Purchase document number, Press Enter for Down payment request
Enter the down payment amount, it should be less than or equalt to down payment amount specified in PO.
Execute the entry
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Sr.no
Field Name Description R/O/C
User Action
and Values
Comments
1 Document date
Document date R Enter Document date
2 Reference Text reference R Any reference for down payment
3 Document Header Text
Header reference R Any reference for down payment
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4 Vendor Vendor code R Vendor code as per PO
5 Trg sp G/L ind
Target Special G/L indicator
R Target Special G/L indicator: A Adv to Subcontractor
6 Enter R Press, Enter to proceed
Sr.no
Field Name Description R/O/C
User Action
and Values
Comments
1 Amount Amount R Enter amount for the down
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payment
2 Tax Code Tax code R Enter, valid tax code, AA
3 Save Header reference R Save the entry
Create Payment Certificate by mentioning the period of certificate.
Advance payment value will automatically be available in the payment certificate. This value is
fetched from the advance payment request created through ME2DP - system will consider all ME2DP
requests for this PO.
T-Code: ZMM_PC
Step 1. Enter the necessary details on initial screen
Sr.no
Field Name Description R/O/C
User Action
and
Comments
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Values
1 Purchase Document
Purchase order Number
R ZP03/ZP04
Select Purchase Order Number while creating new payment certificate. Starting from 43* or 44* number series of purchase order
2 Posting Period
Posting Period
R Enter appropriate posting period
3 Fiscal year Fiscal year R Enter fiscal year for entry of payment certificate
4 Select option: create
Creation of payment certificate
R * Select, option to create payment certificate.
(Note: On above table, in column R/O/C; R = Required, O = Optional, C = Conditional)
Step 2. Enter the header details for the payment certificate.
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Sr.no
Field Name Description R/O/C
User Action
and Values
Comments
1 Remarks Remarks for the payment certificate
O Specific remarks or instructions for the payment certificate
2 Invoice Number
Vendor Invoice number
O Enter the vendor invoice number for the reference
3 PDO PO Ref PDO PO reference number
O PDO purchase order reference number for the reference in payment certificate
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4 Work done up to
Work completed till month
O Enter the month till work completed for the payment certificate.
5 PDO SES Ref PDO SES reference number
O PDO service entry sheet reference number for the reference in payment certificate
6 ATE client valuation/ P.C.
ATE client valuation/ P.C.
O Reference text for ATE client valuation/ P.C.
(Note: On above table, in column R/O/C; R = Required, O = Optional, C = Conditional)
The column wise details in the payment certificate are as follows,
6. Particulars: description & details for the amount
7. Percentage: values calculated from the Percentage details for the specific particulars
8. Cumulative till this bill: total cumulative value including the payment certificate
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9. Cumulative till last bill: total cumulative value till last payment certificate (excluding the current)
10. Net value: difference between total cumulative & cumulative till last bill
All the values in gray are not editable.
Step 3. Advance payment details
Enter the necessary details on initial screen for the advance payment, amount auto picked from
PO,
Check the net payable amount & save the certificate.
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7.0 Scenario-2 Payment certificate for material on site
Material on site will be treated as an advance and will be posted to a separate special g/l account. For
this, a special g/l indicator "G- Material at Site-SC Vendor" has been created to track the material on site
advances separately.
QS Department has to create a new Payment Certificate for initiation of Material on Site payment. In
this certificate, he shall manually enter the amount to be paid in the certificate screen.
Prerequisite:
After that, an Advance Payment Request needs to be created through T.Code F-47 by QS Department.
This payment certificate only for material on site needs to be printed and to be submitted to the
accounts for payment processing.
Based on the payment certificate, Account shall consider the payment request created (F-47) for
further payment processing
If any additional Material on Site is to be paid, request through F-47 shall be created to get the "Net
Value this bill" in the certificate.
F-47 transaction:
Menu Path:
Transaction Code F-47
IMG Menu SAP menu >> Logistics >> Accounting >> Financial
Accounting >> Account Payable >> Document entry >>
Down payment >> F-47 Request
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Sr.no
Field Name Description R/O/C
User Action
and Values
Comments
1 Document date
Document date R Enter Document date
2 Posting date Posting date R Enter Posting date
3 Reference Text reference R Any reference for down payment
4 Document Header Text
Header reference R Any reference for down payment
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5 Account Vendor code R Vendor code as per PO
6 Trg sp G/L ind
Target Special G/L indicator
R Target Special G/L indicator: G Material onsite SC vendor
7 Company code
Company code for the transaction
R Press, Enter Company code for the document entry
8 Currency Currency R Currency for payment
(Note: On above table, in column R/O/C; R = Required, O = Optional, C = Conditional)
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Sr.no
Field Name Description R/O/C
User Action
and Values
Comments
1 Amount Amount for material onsite
R Amount for the material onsite
2 Tax Code Valid tax code O Enter Valid Tax code
3 Due on Date of payment R Date of payment due for material onsite
4 PO Number PO number R Purchase Order Number with Item No.
5 Account Vendor code R Vendor code as per PO
6 Save R Save the entries
(Note: On above table, in column R/O/C; R = Required, O = Optional, C = Conditional)
Document number gets generated.
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Creation of new payment certificate
T-Code: ZMM_PC
Enter the certificate header details,
Specify the amount for material on site excluding the percentage,( for example OMR 27,489 is 80% 34361.828)
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Sr.no
Field Name Description R/O/C
User Action
and Values
Comments
1 Material on site
Amount of material onsite
R Enter the Amount of the material onsite excluding the percentage (E.g. for example OMR 27,489 is 80% 34361.828)
2 Retention of material onsite
Percent of retention onsite
C Change Percent of retention onsite, if necessary
(Note: On above table, in column R/O/C; R = Required, O = Optional, C = Conditional)
System automatically calculates the amount as per the chart specified on page no.12.
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8.0 Scenario 3: Creation of Payment Certificate for work executed
Certified Quantities and extra work executed:
QS Department has to create the Service Entry Sheet based on the certified quantities and also for
extra quantities.
This service entry will get released as per the approval hierarchy.
QS Department shall initiate for the creation of payment certificate.
All the service entry sheets values for the month posted till that date will be available in the
certificate
All the billing will be on the cumulative values
Previous certificate values will be available in the current certificate
Percentage calculation for retention and advance recovery will be available from the PO and will be
auto calculated accordingly in the certificate. However it is allowed to change as per the
requirement.
Check the status "submit to accounts" in payment certificate before sending the physical paper to
accounts.
This payment certificate shall be printed and submit to accounts for further processing
At the time of invoice booking, accounts have to recover the advance payment mention in the
payment certificate in MIRO (amount should be adjusted only on value of work executed and not on
material on site. Advance recovery on material on site will be done manually).
Entry for Retention on vendor bill will be done auto through invoice booking in MIRO. (either on 10%
as per PO or up to Maximum mentioned in the PO)
System will calculate all the retention amount deducted and will post only the amount which is equal
to or less than the amount of maximum retention % maintained in the WO.
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All entries which are to be made by accounts shall be on "Net Value this Bill" only.
Step- Creation of Service Entry Sheet:
Transaction Code ML81N
SAP Menu SAP Menu >> Logistics >> Materials Management >>
Purchasing >> Purchase order >> Follow on function>>
Service Entry Sheet >> ML81N
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Select the Other Purchase Order, Enter Purchase Order Number: Enter.
Click on, Create new Service Entry Sheet
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Service Entry for Unplanned Services: If in Work order services specifically not mentioned service limit is mentioned, services can be
entered in service entry sheet manually.
Sr.no
Field Name Description R/O/C
User Action
and Values
Comments
1 Service Number
Service Number R select service number as per required service description
2 Quantity Amount of work completed
R Amount of work completed, needed to be confirmed
3 Gross Price Gross Price R Gross Price for service per unit
(Note: On above table, in column R/O/C; R = Required, O = Optional, C = Conditional)
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Save the document.
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Service Entry for Planned Services: For Planned Services: if in Work order services specifically mentioned follow the process, user can adopt the services with reference to work order.
Sr.no
Field Name Description R/O/C
User Action
and Values
Comments
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1 Short text Short text for ref R Reference short text
2 Reference Reference detail R Reference details for services
3 Service Sel. Service Selection R Service Selection for adoption in Service entry sheet
(Note: On above table, in column R/O/C; R = Required, O = Optional, C = Conditional)
Select the Purchase order,
Enter.
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Select the services which are executed.
Adopt the Services in to service entry sheet, as highlighted in snapshot.
Update the Quantity of service executed.
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Save the document.
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Create Payment Certificate:
T-code: ZMM_PC
Sr.no
Field Name Description R/O/C
User Action
and Values
Comments
1 Purchase Document
Purchase order Number
R ZP03/ZP04
Select Purchase Order Number while creating new payment certificate. Starting from 43* or 44* number series of purchase order
2 Posting Period
Posting Period
R Enter appropriate posting period
3 Fiscal year Fiscal year R Enter fiscal year for entry of payment certificate
4 Select option: create
Creation of payment certificate
R * Select, option to create payment certificate.
(Note: On above table, in column R/O/C; R = Required, O = Optional, C = Conditional)
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Value of the work executed will automatically come from payment certificate,
Extra work deduction value can be entered manually if required.
After confirming all the details payment certificate can be submitted to accounts & saved.
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Print for the payment certificate for work executed
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9.0 Scenario 4: Certified Quantities and Material on site consumed
This is applicable if the Material on Site is consumed and the valuation is done as per the BOQ line item.
In such case, the value of material advance will be reduced and billing is to be done for BOQ service line
item.
QS Department has to create the Service Entry Sheet based on the certified quantities.
This service entry will get released as per the approval hierarchy.
QS Department shall initiate for the creation of payment certificate.
All the service entry sheets values for the month posted till that date will be available in the
certificate.
For Material on site, QS has to manual remove the value in the new certificate. The net impact of
removing the material on site will be as -ve value in the column "Net value this bill".
% tage calculation for retention and advance recovery will be available from the PO and will be auto
calculated accordingly in the certificate. However it is allowed to change as per the requirement.
This payment certificate shall be printed and submit to accounts for further processing.
Check the status "submit to accounts" in payment certificate before sending the physical paper to
accounts.
At the time of invoice booking, accounts have to recover the advance payment mention in the
payment certificate in MIRO (amount should be adjusted only on value of work executed and not on
material on site. Advance recovery on material on site will be done manually).
Entry for Retention on vendor bill will be done auto through invoice booking in MIRO. (either on 10%
as per PO or up to Maximum mentioned in the PO)
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System will calculate all the retention amount deducted and will post only the amount which is equal
to or less than the amount of maximum retention % maintained in the WO.
All entries which are to be made by accounts shall be on "Net Value this Bill" only.
Service entry sheet can be posted as per the process mentioned above,
Payment certificate created for the work executed along with reduction in material on site, as highlighted below,
However the planned & additional value of the work done executed will directly come from Service entry sheet.
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10.0 Scenario 5: Creation of Payment Certificate with contra charges
This is a scenario wherein materials and services are given to the subcontractor and those needs to be
recovered from the bill.
Contra charges for materials shall be booked on Internal Order of the vendor with respect to the work
order. These entries will happen as and when materials are issued on internal order.
Contra charges other than materials - like repairs, TAC charges, penalties, medical charges, food
charges etc
Repair charges - P&M department shall provide the value of recoverable amount to QS
Department.
Other Charges - Admin at site shall inform all the recoverable charges to QS Department.
QS Department shall park an FI document through T.Code FV50 by crediting the cost center and
debiting the internal order along with PO number. These entries shall be parked in the respective g/l
heads.
Expense A/c Dr (with internal order and PO number)
Expense A/C Cr (with cost center with PO number)
QS Department shall initiate for the creation of payment certificate.
All the service entry sheets values for the month posted till that date will be available in the
certificate.
All the cumulative entries of contra charges will be available in the payment certificate based on the
parked entries. If no values are coming in the contra charges, then QS has to check with all other
departments.
% tage calculation for retention and advance recovery will be available from the PO and will be auto
calculated accordingly in the certificate. However it is allowed to change as per the requirement.
This payment certificate shall be printed and submit to accounts for further processing
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Parking of document FV-50 for debiting the Services rendered to the subcontractor:
Transaction Code FV-50
IMG Menu SAP menu >> Accounting >> Financial Accounting >>
General Ledger >> Document entry >> FV-50 >> Edit or
Park G/L Document
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Sr.no
Field Name Description R/O/C
User Action
and Values
Comments
1 Document Date
Document Date R Enter the Document Date
2 Posting Date Posting date R Enter the Posting Date
3 Reference Reference R Reference text
4 Doc. Header Text
Document Header text
R * Enter Document Header text
5 G/L Acct. General Ledger A R Specific G/L for entries, E.g. 4040820 for accommodation expenses
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6 D/C Debit/Credit R Debit/ Credit entries
7 Amount Amount R Amount in doc
8 Order Internal order number
R Internal order: Vendor & plant specific,
9 Plant Plant code R Enter Plant code
10 Purchase Doc
Purchase order
No
R Enter, Purchase Order Number
(Note: On above table, in column R/O/C; R = Required, O = Optional, C = Conditional)
Create payment Certificate,
Payment certificate will reflect the entries made in FV-50 document as contra charges other than materials,
As shown below,
If any markup is to be taken on Contra Charges, then QS has to mention the amount at the time of
preparation of payment certificate.
Check the status "submit to accounts" in payment certificate before sending the physical paper to
accounts.
Rest of entries for advance recovery and retention etc will be posted as mentioned in the details of
the previous certificates.
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All entries which are to be made by accounts shall be on "Net Value this Bill" only.
Mark up on Contra Charges
If any mark up is to be taken on Contra Charges, then QS has to mention the amount at the time of
preparation of payment certificate.
Contra charges on the materials:
Contra charges for materials shall be booked on Internal Order of the vendor with respect to the work
order. These entries will happen as and when materials are issued on internal order.
Goods Issue to the sub-contractor on Debitable basis:
Reservation made for Goods Issue to the sub-contractor on Debitable basis Z-61 MvT & Vendor internal
order with reference to the work order, followed by Goods Issue to the vendor,
Creation of the reservation,
Transaction Code MB21
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IMG Menu SAP menu >> Logistics >>Materials Management >>
Inventory Management >> Reservation >> MB21 -Create
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Sr.no
Field Name Description R/O/C
User Action and
Values
Comments
1 Base date Base date R Base Date for reservation
2 Movement Type
Movement Type R Enter the Movement Type for the reservation Z-61: GI to sub con Debitable basis
3 Plant Plant Code R Plant Number
(Note: On above table, in column R/O/C; R = Required, O = Optional, C = Conditional)
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Sr.no
Field Name Description R/O/C
User Action and
Values
Comments
1 Goods Recipient
Goods Recipient R Goods Recipient: Text
2 Order Internal Order No.
R Internal Order Number: vendor & plant combination
3 Material code
Material code R Material code for the reservation
4 Qty Quantity R Quantity for the reservation
5 Batch Valuation Type R Select, proper Valuation Type
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Enter the Purchase Order number for the contract for the vendor & plant.
Save.
Reservation is created.
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Goods Issue to Sub Contractor (by site personnel)
As per the Goods Issue, all the entries will be reflected in the payment certificate, refer the below screenshot
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11.0 Release of Retention & Contra charges
Release of Contra Charges
At the time of preparation of certificate, if any contra charges needs to be released, QS has to manually
enter the amount of contra charges to be allowed. This information will also be passed on to the account
through payment certificate.
Retention Release
Any retention release required by QS needs to be mentioned at the time of creation of payment certificate.
This needs to be mentioned manually in the payment certificate.
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12.0 Checks and Validation:
1. Payment Certificate will be prepared based on the period of work. All the values posted other than the
previous certificate will be available in the payment certificate.
2. Option of Create, Change and Display will be available for payment certificate. If any entry is missed, it
can be rectified in the change mode. For manual entries, QS Department has to change the entry manual,
however all other entries which are posted through different transactions will appear automatically.
3. There will be an indicator "Submit to account". This indicator needs to be set for submission of payment
certificate to account. If this indicator is not set, user will not be able to create the new certificate.
Also, once this indicator is set, no change will be allowed in the same certificate. For any correction, QS
has to create the new certificate.
4. If Advance payment request on PO through ME2DP is not created, the amount will not be available in the
payment certificate.
5. Material issued to contractor will be issued to the internal Order alongwith work order, corresponding to
the plant and vendor code.
6. At the time of park and post of contra charges, the user has to mention the PO number against which
contra charges are being booked. If it is not mentioned, amount will not be available in the payment
certificate.
7. At the time of booking of retention amount for Material at site amount, the account has to mention the
PO number against which retention amount is being retained. This will also be applicable when any
retention amount is being released.
8. Payment certificate will not be available for work execution amount until SES is not passed and material document is not posted.