SAP S4/HANA Finance & Controlling Simplified sap.rashid@yahoo.

com

Interest Calculations

We have two types of interest calculations in SAP.

Type 1 Type 2
Balance Interest Calculations Item Interest Calculations
Defined as Type "S" Defined as Type "P"
Used for General Ledger A/c Used for Vendors/ Customers

Purpose of balance Interest:

1. To double check the interest posted by the bank w.r.f to Loan GL
Account
2. To close month end faster by way of automation to calculate and post
system entries.

Example:
Loan taken from Bank 10000 @ 10% p.a compound interest.

Compound Interest: Interest Expenses posted to Loan a/c and interest is

calculated on GL running balance including interest posted earlier.

No of 1 Day
Details Date Days Interest Loan GL ACT
Loan Taken 11-07-2023 10000.00

Interest @10% 31-07-2023 21 2.7397 57.53

GL Closing Balance 10057.53

GL O/B 01-08-2023 10057.53
Installment Paid 01-08-2023 1000.00

Interest @10% 31-08-2023 31 2.4815 76.93

GL Closing Balance 45169 9134.46

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Journal Entries:

Date GL ACT Dr/Cr Amount Tcode

Bank A/c Dr 10000 FB50

To Bank Loan A/c Cr 10000

Interest Expenses A/c Dr 57.53 F.52

To Loan GL A/c Cr 57.53

Bank Loan A/c Dr 1000 FB50

To Bank A/c Cr 1000

Interest Expenses A/c Dr 76.93 F.52

To Interest Payable A/c Cr 76.93

GL -------Interest Indicator -----Z0

|
Z1 Reference Interest Z2
| |
Debit Credit
10% 10%
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Configuration Steps:
1. Define Interest Calculation Types
2. Prepare Account Balance Interest Calculation
3. Define Reference Interest Rate
4. Define Time Dependent Terms
5. Enter Interest Values
6. Create GL Accounts required
7. Create New Document Type and Number Ranges
8. Assignment of Accounts for Automatic Postings

Configuration Steps :

1. Define Interest Calculation Types

Path IMG-->Financial Accounting-->General Ledger Accounting-->Business
Transactions-->Bank Account Interest Calculation-->Interest Calculation
Global Settings-->Define Interest Calculation Types
Tcode OB46

Click “New Entries”

Interest ID =
Name/description =
Calculation type =S Click on 

2. Prepare Account Balance Interest Calculation

Path Same as above
Tcode OBAA

Click on “New entries”

Interest calculation Indicator =
Interest Calculation frequency =
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Settlement Day =
Calendar Type =G
Select “Balance plus interest” Click on 

Settlement day: if you want to run all the settlements on a particular date in a
month you can mention the date here.

3. Define Reference Interest Rate

Path IMG-->Financial Accounting-->General Ledger Accounting-->Business
Transactions-->Bank Account Interest Calculation-->Interest
Calculation-->Define Reference Interest Rates
Tcode OBAC

Click on “new entries”

Reference interest rate =
Long text =
Description =
Date from =
Currency = Click on 

Click on Next

Reference interest rate =

Long text =
Description =
Date from =
Currency = Click on 
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4. Define Time Dependent Terms

Path Same as above
Tcode OB81

Click on “new entries”

Interest calculation indicator =
Currency =
Effective from =
Sequential number =
Term = credit interest: balance interest calculation
Reference interest rate =
Click on 

Click on “next entry” button

Interest calculation Indicator =
Currency =
Effective from =
Sequential number =
Term = Debit interest: balance interest calculation
Reference interest rate =
Click on 

Note: Both Credit & Debit is mandatory for interest indicator.

5. Enter Interest Values

Path Same as above
Tcode OB83

Select “new entries”

Reference interest rate Effective from Interest rate
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Click on 

End-User T.Code : S_ALR_87002678 - Enter Reference Interest Values

6. Create GL Accounts required

Path Accounting>> Financial Accounting>> General Ledger>> Master
Records>> G/L Account>> Individual Processing>> Centrally
Tcode FS00

Interest GL Account:
G/L Account

Company Code

Click on 

G/L Account Type

Account Group

Short Text

G/L Acct Long Text

Control Data Tab

Balance in Local Crcy Only 

Sort Key 0001

Create/bank/interest

Field Status Group G005

Click on 

Create Loan GL Account:

G/L Account

Company Code

Click on 

G/L Account Type

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Account Group

Short Text

G/L Acct Long Text

Control Data Tab

Balance in Local Crcy Only 

Open Item Management 
Sort Key 0001

Create/bank/interest

Field Status Group G001

Interest Indicator

Click on 

Create Bank GL Account:

G/L Account

Company Code

Click on 

G/L Account Type

Account Group

Short Text

G/L Acct Long Text

Control Data Tab

Balance in Local Crcy Only 

Sort Key 0001

Create/bank/interest

Field Status Group

Click on 
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7. Create New Document Type and Number Ranges

Path
Tcode OBA7

Click on Position Button

Document Type = SA
Select ‘SA’ Document Type Line
Click on  Copy as button

Document Type = ZA
Reverse document Type =
Number Ranges = Click on 

Double Click on “Number Range Information”

Company code =
Click on” (change) intervals” button
Click on  “(insert) intervals” button
No Year Number From Number To

Click on 

Note: If document splitting is active for your company code. Don’t forget to classify
Newly Created document for doc.splitting.

8. Assignment of Accounts for Automatic Postings

Path IMG-->Financial Accounting-->General Ledger Accounting-->Business
Transactions-->Bank Account Interest Calculation-->Interest Posting--
>Prepare G/L Account Balance Interest Calculation
Tcode OBV2
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Click “symbols” button, Observe symbols

0002 – Interest paid
2000 – GL Account Paid (Bank Loan account)

Click on “Accounts” button

Chart of accounts = 

Account Symbol Currency GL Account

0002 INR 400400
2000 INR ++++++++++

Click on ‘Goto --> Document Type’

Change Document Type = Click on 

Missing steps: added

9. Classify Document Types for Document Splitting

Path SPRO –> SAP Reference IMG –> Financial Accounting (New) –> General
Ledger Accounting (New) –> Business Transaction –> Document Splitting –
> Classify Document Type for Document Splitting
Tcode

Click on Position
Document Type = 

10. Default Account Assignment – OKB9

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End-User Testing
1. Post Journal Entry for expenses

2. Check G/L Account Balance Report

3. Calculation of Interest
4. Post Interest by executing batch input sessions
5. Check G/L Account Balance Report

6. Verify Loan GL Account - FS00

7. Post first Instalment

8. Calculate Interest For Next Month

9. Check G/L Account Balance Report

10. Verify Loan GL Account - FS00

Journal Entries:

Date GL ACT Dr/Cr Amount Tcode

Bank A/c Dr 10000 FB50

To Bank Loan A/c Cr 10000

Interest Expenses A/c Dr 57.53 F.52

To Bank Loan A/c Cr 57.53

Bank Loan A/c Dr 1000 FB50

To Bank A/c Cr 1000

Interest Expenses A/c Dr 76.93 F.52

To Bank Loan A/c Cr 76.93
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1. Post Journal Entry for expenses

Path SAP Easy Access – Accounting – Financial Accounting – General ledger – Document entry
– Enter G/L Account Document
Tcode FB50

Document Date =
Posting Date =
Header Text =
GL Account Dr/Cr Amount Cost Center

Dr

Cr

Click on 

Value Date Means effective date.

2. Check G/L Account Balance Report

Path SAP Menu-> Accounting-> Financial Accounting-> General Ledger-> Account-> FAGLB03
- Display Balances (New)
Tcode FAGLB03

G/L account =
Company code =
Fiscal year = Click on Execute

3. Calculation of Interest
Path Accounting-Financial Accounting-General Ledger-Periodic Posting-Interest Calculation-
Balance Interest Calculation
Tcode F.52

Chart of accounts =
G.L. Accounts =
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Company code =
Further selections
Calculation period =
Output control
Select “Additional Balance line”
Posting control
Select “post interest settlements”
Select “update master record”
Note the session name =
Posting date of session =
Document date of session =
Posting Segment Text = Click on Execute

4. Post Interest by executing batch input sessions

Path Go to Menu---System---services---batch input sessions
Tcode SM35

Select “ ” line
Click on “process” button
Select the “Display errors only” radio button
Click on “process” button
‘-----------------------------------------------------------------------------------------
Update Master Record - By selecting this checkbox, the system will update two
fields in every term-loan account master record on which the interest was calculated
and posted. They are
1. key date of last interest calculation- It is the date up to which the interest was
calculated and posted.
2. Date of last interest run: It is the date up to which the interest session was run
lastly.
‘-----------------------------------------------------------------------------------------
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5. Check G/L Account Balance Report

Path SAP Menu-> Accounting-> Financial Accounting-> General Ledger->
Account-> FAGLB03 - Display Balances (New)
Tcode FAGLB03

G/L account =
Company code =
Fiscal year = Click on Execute

6. Verify Loan GL Account - FS00

GL account number =
Company code =
Menu, GL account, display
Go to create/bank/interest tab
Observe “key date of last interest calculation” and
the “date of last interest run” date

7. Post Journal Entry for Instalment

Path SAP Easy Access – Accounting – Financial Accounting – General ledger – Document entry
– Enter G/L Account Document
Tcode FB50

Document Date =
Posting Date =
Header Text =
GL Account Dr/Cr Amount Cost Center

Dr

Cr

Click on 
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8. Calculate Interest For Next Month

Path Accounting-Financial Accounting-General Ledger-Periodic Posting-Interest
Calculation-Balance Interest Calculation
Tcode F.52

Chart of accounts =
G.L. Accounts =
Company code =
Further selections
Calculation period =
Out put control
Select “Additional Balance line”
Posting control
Select “post interest settlements”
Select “update master record”
Note the session name =
Posting to business area =
Posting date of session =
Document date of session =
Posting Segment Text =
Click on execute

Check the Posted Document – TC – FB03

Click on Enter
Click on Display Document Header

9. Check G/L Account Balance Report

Path SAP Menu-> Accounting-> Financial Accounting-> General Ledger->
Account-> FAGLB03 - Display Balances (New)
Tcode FAGLB03

G/L account =
Company code =
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Fiscal year = Click on Execute

10. Verify Loan GL Account - FS00

GL account number =
Company code =
Menu, GL account, display
Go to create/bank/interest tab
Observe “key date of last interest calculation” and
the “date of last interest run” date
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Simple Interest Calculation

Example:
Loan taken from Bank 10000 @ 10% p.a interest.

Simple Interest: interest posted to a separate GL Account

No of 1 Day
Details Date Days Interest Loan GL Interest GL
Loan Taken 11-07-2023 10000.00

Interest @10% 31-07-2023 21 2.7397 57.53

GL Closing Balance 10000.00

GL O/B 01-08-2023 10000.00
Installment Paid 01-08-2023 1000.00

Interest @10% 31-08-2023 31 2.4658 76.44

GL Closing Balance 45169 9000.00

Journal Entries:

Date GL ACT Dr/Cr Amount Tcode

Bank A/c Dr 10000 FB50

To Bank Loan A/c Cr 10000

Interest Expenses A/c Dr 57.53 F.52

To Interest Payable A/c Cr 57.53
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Bank Loan A/c Dr 1000 FB50

To Bank A/c Cr 1000

Interest Expenses A/c Dr 76.44 F.52

To Interest Payable A/c Cr 76.44

Configuration Steps:
1. Define Interest Calculation Types
2. Prepare Account Balance Interest Calculation
3. Define Reference Interest Rate
4. Define Time Dependent Terms
5. Enter Interest Values
6. Create GL Accounts required
7. Assignment of Accounts for Automatic Postings

GL--Interest Indicator—Y0
|
Y1 Reference Interest Y2
| |
Debit Credit
10% 10%

1. Define Interest Calculation Types

Path IMG-->Financial Accounting-->General Ledger Accounting-->Business
Transactions-->Bank Account Interest Calculation-->Interest Calculation
Global Settings-->Define Interest Calculation Types
Tcode OB46

Click “New Entries”

Interest ID =
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Name/description =
Calculation type =S Click on 

2. Prepare Account Balance Interest Calculation

Path Same as above
Tcode OBAA

Click on “New entries”

Interest calculation Indicator =
Interest Calculation frequency =
Settlement Day =
Calendar Type =G
Select “Balance plus interest” Click on 

Settlement day: if you want to run all the settlements on a particular date in a
month you can mention the date here.

3. Define Reference Interest Rate

Path IMG-->Financial Accounting-->General Ledger Accounting-->Business
Transactions-->Bank Account Interest Calculation-->Interest
Calculation-->Define Reference Interest Rates
Tcode OBAC

Click on “new entries”

Reference interest rate =
Long text =
Description =
Date from =
Currency = Click on 

Click on Next

Reference interest rate =

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Long text =
Description =
Date from =
Currency = Click on 

4. Define Time Dependent Terms

Path Same as above
Tcode OB81

Click on “new entries”

Interest calculation indicator =
Currency =
Effective from =
Sequential number =
Term = credit interest: balance interest calculation
Reference interest rate =
Click on 

Click on “next entry” button

Interest calculation Indicator =
Currency =
Effective from =
Sequential number =
Term = Debit interest: balance interest calculation
Reference interest rate =
Click on 

Note: Both Credit & Debit is mandatory for interest indicator.

5. Enter Interest Values

Path Same as above
Tcode OB83
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Select “new entries”

Reference interest rate Effective from Interest rate

Click on 

6. Create GL Accounts required

Path Accounting>> Financial Accounting>> General Ledger>> Master
Records>> G/L Account>> Individual Processing>> Centrally
Tcode FS00

Interest GL Account:- already created

Create Loan GL Account:
G/L Account

Company Code

Click on 

G/L Account Type

Account Group

Short Text

G/L Acct Long Text

Control Data Tab

Balance in Local Crcy Only 

Open Item Management 
Sort Key 0001

Create/bank/interest

Field Status Group G001

Interest Indicator

Click on 
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Create Interest Payable Account:

G/L Account

Company Code

Click on 

G/L Account Type

Account Group

Short Text

G/L Acct Long Text

Control Data Tab

Balance in Local Crcy Only 

Open Item Management 
Sort Key 0001

Create/bank/interest

Field Status Group G001

Interest Indicator

Click on 

7. Assignment of Accounts for Automatic Postings

Path IMG-->Financial Accounting-->General Ledger Accounting-->Business
Transactions-->Bank Account Interest Calculation-->Interest Posting--
>Prepare G/L Account Balance Interest Calculation
Tcode OBV2

Create New Symbols:

Click on Create
Account Symbol =
Description = click on 

Create New Posting Specification:

Business transaction =
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Company code =
Interest indica =
Business area = 

Click on 

Click on Account :

Chart of accounts = 

Account Symbol Currency GL Account

INR 400400

Click on 

End -User Testing:

1. Post Loan Receipt entry - FB50
2. Check GL balance Report FAGLB03
3. Calculate Interest and Create batch F.52
4. Post Interest SM35
5. Check GL balance Report FAGLB03
6. Post 1st First installment FB50
7. Check GL balance Report FAGLB03
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