What is the purpose of a “Document type” in SAP?

A Document type is specified at the Header level during transaction entry
and serves the following purposes:

· It defines the Number range for documents
· It controls the type of accounts that can be posted to eg Assets, Vendor, Customer, Normal GL account
· Document type to be used for reversal of entries
· Whether it can be used only for Batch input sessions


Document Type is created for differentiating business transactions. Eg
Vendor Invoice, Credit Memo, Accrual Entries,Customer Invoice. It is a
two digit character.