Document type purpose is to segregate the documents based on nature of business transaction.
Let’s consider below example to understand:
In real business scenario, thousands of accounting documents are posted every single day. Let’ say there are thousands of documents from which you need to segregate the documents which are customer invoice, customer payment, vendor invoice, vendor payment, asset depreciation.
One way to segregate documents is to look at each & every document and decide if it’s a customer invoice or customer payment or vendor invoice or vendor payment or asset depreciation etc.
Other way, while posting a document follow below rule:
If documents are posted with above rule, then document segregation can be done on the basis of document type itself. No need to look at each & every document to decide document belongs to which business transaction.
In sap, no accounting document can be posted without document type.
Document type controls below:
What account types can be posted:
Out of below predefined account types in sap, which accounts cab be posted
S: General ledger
Example: Vendor cannot be posted with type DR. Customer cannot be posted with type KR.
Every document type is assigned a number range. When a document gets posted, document number created is always within the assigned number range.
Document number range can be internal or external
Internal number range: When a document is posted, system decides the document number as last posted document number + 1.
External number range: While posting document, document number can be manually assigned. Assigned document number should fall under the number range assigned to the type.
Screenshot showing parameters maintained in document type in sap.
(Number 18 refers to a number range like 100000 to 199999)
How document type helps in building reports?
Different reports are needed by management. Reports are prepared by fetching appropriate data and displaying on report as per requirement.
Document type plays crucial role in filtering documents to arrive at appropriate data for the report.
Link to read more about doc type: http://help.sap.com/saphelp_erp60_sp/helpdata/en/73/19e5848b5142a3bc2c4b58d7e6dc8c/content.htm