Document splitting in SAP

With the introduction of New Gl accounting, Document splitting was introduced along with the parallel ledger accounting along with the others functionality. However, these two functionality/tools have played an important role in SAP domain and are commonly used.
The basic Idea of document splitting is that documents split the line item based on the characteristics we define in the system.
Need of Document splitting: Basic Idea
Let us put an example where we have a vendor invoice of Rs 100 which consists of two-line items along with the input tax of 10 which will sum up to 110.

Now if any one responsible for-Profit center (PC1) want to analyze the transaction performed on PC1, he cannot perform the task as that Vendor balance and tax are not assigned to any Profit center and are cumulative in Nature.
If we investigate the Expanse account, we will notice that Expanse account has been distributed on 80%-20% ratio and same needs to apply for the vendor Balance and Tax cumulative.
And this will look like –Vendor balance splitting

As per the above-mentioned diagram the posting would be

Key concept of the Document splitting:
  • Passive Splitting – This type of splitting is mostly occurring when the payment transaction is posted for a vendor invoice. Now system splits the payment document bases on how the vendor invoice was split in place already.
  • Active Splitting – In Active Splitting the document is split according to mySAP ERP predefined rules. SAP almost supports all the business process transactions but if it doesn’t suit to any requirement the own splitting rules can be created.
  • Zero Balancing Splitting – When the amounts within financial documents are not able to balance out to Debit of Profit Centre and Credit of Profit Centre which does not Net Off as its own, SAP then automatically generates new line item to balance the document. 
  • Item Category – Item category categorizes the general ledger accounts for document splitting. In the configuration each GL account is assigned to item category. Just to name a few like 01000 – Balance Sheet Account, 02000 – Customer, 03000 – Vendor and so on.
  • Business Transaction – Business transaction is real scenario of business processes happens in organization such as vendor invoice, customer invoice etc.
  • Business Transaction Variant – In the SAP, financial postings are derives the item category for individual line item. Business transaction variant always works in conjunction with business transaction where business transaction restricts the business processes to be posted to. System validates a check all postings against the item category to validate if these postings are allowed by splitting rule if not then understand this failed.
  • Document Splitting Method – Document splitting method works in combination with business transaction and business transaction variant it determines the document splitting rule.
  • Document Splitting Rule: Document splitting rule determines which item categories will be split and from which item categories it will derive the account assignment.
Thanks for reading!               
Author: Sanket Jha

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