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GL Account Creation - PowerPoint PPT Presentation

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Fitter Snacker Module 3 G/L Account Creation Fitter Snacker Configuration G/L Accounts

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Fitter Snacker Module 3

G/L Account Creation

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G/L Accounts

  • In the SAP R/3 system, each transaction that has a financial impact on the organization is recorded in a general ledger (G/L) account or sub-ledger accounts that are posted to the G/L via reconciliation accounts.

  • The central task of G/L accounting is to provide a comprehensive picture for external accounting and accounts. Recording all business transactions (primary postings as well as settlements from internal accounting) in a software system that is fully integrated with all the other operational areas of a company ensures that the accounting data is always complete and accurate.

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G/L Accounts

  • The SAP FI General Ledger has the following features:

    • Automatic and simultaneous posting of all sub-ledger items in the appropriate general ledger accounts (reconciliation accounts)

    • Simultaneous updating of general ledger and cost accounting areas

    • Real-time evaluation of and reporting on current accounting data, in the form of account displays, financial statements with different financial statement versions and additional analyses.

  • Can take some getting used to as reports can change continuously

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G/L Account

  • Essentially, the general ledger serves as a complete record of all business transactions. It is the centralized, up-to-date reference for the rendering of accounts. Actual individual transactions can be checked at any time, in real-time, by displaying the original documents, line items, and transaction figures at various levels such as:

    • Account information

    • Journals

    • Totals/transaction figures

    • Balance sheet/profit and loss evaluations

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Master Data

  • Describes items or objects used in a business such as accounts, materials, vendors, customers that remains unchanged over an extended period of time

  • Transaction data is data that is used for relatively short periods of time, usually to record business transactions (sales orders, purchase orders, production orders, payroll amounts)

  • Transaction data is regularly removed from the system in a process known as archiving. For auditing purposes, it cannot simply be deleted.

  • A master record must be created for every G/L account

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Balance Sheet Accounts

  • Assets

    • What the firm owns, in various levels of liquidity:

      • Cash

      • Receivables

      • Inventory

      • Plant & Equipment

      • Real Estate

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Balance Sheet Accounts

  • Liabilities

    • What the firm owes

      • Payables—payment for materials/services received on credit

      • Bank loans

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Balance Sheet Accounts

  • Equity

    • The difference between total assets and total liabilities

    • Includes

      • Retained earnings

      • Net income on past periods

Assets = Liabilities + Equity

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Reconciliation Accounts

  • Reconciliation accounts are a special type of balance sheet account that record the total amount of accounts receivable and accounts payable:

    • When you post to an account in the sub-ledger (e.g. customer account, supplier (vendor) account), the system automatically posts to the corresponding reconciliation account, and the general ledger is automatically updated

    • Reconciliation accounts provide a summary of the company’s accounts receivable and accounts payable

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Profit and Loss (P&L) Accounts

  • Revenues

    • Money obtained by the sale of goods and services to customers

  • Expenses

    • Money spent to produce the revenue:

      • Materials

      • Utilities

      • Salaries

      • Selling expenses

      • Administrative expenses

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Profit and Loss (P&L) Accounts

  • Contain an identifier for the retained earnings account

  • At the fiscal year end, the P&L accounts are ‘closed’ to the retained earnings account

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G/L Master Records Contain:

  • Chart of Accounts

  • Company Code

  • G/L account number

  • G/L account name

  • Account type: Balance sheet or Income Statement

  • Account group

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Account Groups

  • Identifier that controls which fields must be entered when the account is created

  • Can determine a valid number interval for the G/L account

  • Must be created before creating G/L master records

  • Three Account Groups were created for Fitter Snacker

    • Balance Sheet Accounts

    • Profit and Loss Accounts

    • Reconciliation Accounts

  • Already created in the Chart of Accounts for entire class

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Account Groups

Financial accounting General ledger accounting

G/L accounts Master Records Preparations

Define Account Groups

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Field Status Groups and Variants

  • Because SAP is a general purpose program, not all fields on all screens will require an entry for a particular company’s implementation.

  • Conversely, some fields will require an entry, while others will be optional.

  • Field Status Groups and Variants can be used to configure the General Ledger account screens to define each field as a required entry, optional entry or suppressed (hidden).

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Field Status Setting

All 5 Account management settings are optional

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Corresponding G/L Account Screen

All 5 Account management fields are displayed

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Field Status Setting

Two account management settings are suppressed

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Corresponding G/L Account Screen

Only 3 Account management fields are displayed

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Field Status Groups and Variants

  • Field status groups are combined into a Field Status Variant, which is then assigned to a company code.

  • The use of Field Status Groups and Variants is optional—its only purpose is to simplify G/L Account screens for the user

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Account Currency

  • Account Currency

    • Currency that the account will use to record transactions

  • Only balances in local currency

    • This setting determines how transactions are handled if postings to this account are made in currencies other than the account currency

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Tax Category

  • Determines whether the account is a tax account, or a tax-relevant account

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Open Item Management

  • Indicates that the G/L account entries requires clearing

  • Accounts with open item management require offsetting entries to be assigned to the postings made to the account. Postings to these accounts represent incomplete transactions.

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Open Item Management

  • Example: Clearing accounts such as the Goods Receipt/Invoice Receipt (GR/IR) account

  • When goods are received for a purchase order, a credit is created in the GR/IR account to show that an invoice must be received

  • When the invoice is received, a debit entry is created to clear the goods receipt entry

  • You can only archive documents if all line items are cleared

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Line item display

  • If this item is selected, then all debit and credit detail for the account is available

    • When posting items to such accounts and displaying line items, additional storage space and system time are required

  • Line item display should not be used for reconciliation accounts, accounts that have a summation function and are analyzed by another application, such as the accounts "Revenue" and "Stock“ and input and output tax accounts

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Sort key

  • Necessary when Line Item display is selected

  • Determines the field that will be used to sort the line items, for example:

    • Posting date

    • Document date

    • Cost center