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2. Table of Contents
GL Overview
Sub Processes
Master Data
Transaction Processing
Account Analysis / Reconciliation
Periodic Processing
Reporting
3. SAP Modules - Overview
4. FI – Financial Accounting Modules
5. Financial Accounting / Controlling
6. General Ledger - Integration The general ledger holds all accounts for balance sheet and income (profit and loss) statements.
The general ledger contains a number of sub ledgers:
Accounts Payable records all accounting transactions for dealings with suppliers. Much of its data is obtained from procurement (Materials Management).
Accounts Receivable records all accounting transactions for dealings with customers. Much of its data is obtained from Sales and Distribution.
Asset Accounting records all accounting transactions relating to the management of assets.
Travel Management manages and calculates travel costs and supports travel planning and travel expenses.
Bank ledger supports the posting of cash flows.
All general ledger account postings that post to business expense accounts automatically send the expenses as costs to Controlling. The balances of general ledger accounts are used to calculate financial statements.The general ledger holds all accounts for balance sheet and income (profit and loss) statements.
The general ledger contains a number of sub ledgers:
Accounts Payable records all accounting transactions for dealings with suppliers. Much of its data is obtained from procurement (Materials Management).
Accounts Receivable records all accounting transactions for dealings with customers. Much of its data is obtained from Sales and Distribution.
Asset Accounting records all accounting transactions relating to the management of assets.
Travel Management manages and calculates travel costs and supports travel planning and travel expenses.
Bank ledger supports the posting of cash flows.
All general ledger account postings that post to business expense accounts automatically send the expenses as costs to Controlling. The balances of general ledger accounts are used to calculate financial statements.
7. A Group Hierarchical Structure
8. Chart of Accounts
9. Company Code
10. General Ledger Process Overview
11. Master Data Account Groups
Maintenance
Creation at 2 Levels
Chart of Accounts Data
Company Code Data
Change
Block
Delete
Cost Elements
Creation
12. GL Account Groups Different types of accounts can be bundled into different “account groups”. Usually one account group bundles accounts with the same tasks within the general ledger
By assigning a number range to an account group, you can ensure that accounts of the same type are within the same number range. Number intervals for G/L account master records can overlap.
Different types of accounts can be bundled into different “account groups”. Usually one account group bundles accounts with the same tasks within the general ledger
By assigning a number range to an account group, you can ensure that accounts of the same type are within the same number range. Number intervals for G/L account master records can overlap.
13. GL Account Master Record The GL account master record is divided into two segments: A chart of accounts segment and a company code segment.
The chart of accounts area contains the data that is valid for all company codes, such as the account number.
The company code specific area contains data that may vary from one company code to another, such as the currency in which the account may be posted.
The result is that individual company codes can control their business processing requirements, yet the common chart of accounts provides reporting capabilities across company codes.
There are available three different transactions to create a new GL account:
FS00: centrally
FSP0: in chart of accounts (only)
FSS0: in company codeThe GL account master record is divided into two segments: A chart of accounts segment and a company code segment.
The chart of accounts area contains the data that is valid for all company codes, such as the account number.
The company code specific area contains data that may vary from one company code to another, such as the currency in which the account may be posted.
The result is that individual company codes can control their business processing requirements, yet the common chart of accounts provides reporting capabilities across company codes.
There are available three different transactions to create a new GL account:
FS00: centrally
FSP0: in chart of accounts (only)
FSS0: in company code
14. Blocking of G/L Accounts
15. Mark G/L Accounts for Deletion
16. Cost Elements – Chart of Accounts The chart of accounts (YCCA) contains all the general ledger (G/L) accounts belonging to Financial Accounting.
From the cost controlling viewpoint, a circular system exists because the expense and revenue accounts in Financial Accounting correspond to primary cost and revenue elements in Controlling, and because postings in FI are passed on in real-time to Cost and Revenue Element Accounting (CO-OM-CEL).
In addition, it is only in Controlling that you can create secondary cost elements. These are used to record internal value flows like activity allocations, assessments and settlements.
The chart of accounts (YCCA) contains all the general ledger (G/L) accounts belonging to Financial Accounting.
From the cost controlling viewpoint, a circular system exists because the expense and revenue accounts in Financial Accounting correspond to primary cost and revenue elements in Controlling, and because postings in FI are passed on in real-time to Cost and Revenue Element Accounting (CO-OM-CEL).
In addition, it is only in Controlling that you can create secondary cost elements. These are used to record internal value flows like activity allocations, assessments and settlements.
17. The Cost Element The integrated nature of the R/3 System means that you need to create expense accounts in Financial Accounting with corresponding primary costs elements in Controlling. This ensures that you can reconcile expenses in FI with primary costs in CO. Before you can create primary cost elements in CO, you first need to create them as G/L accounts in FI.
To be able to post to a primary cost element, you require a cost-carrying object (such as a cost center) to identify the origin of the costs. Examples of primary cost elements are material costs and salary costs.
Secondary costs elements are used exclusively in CO to identify internal cost flows such as assessments or settlements. They do not have corresponding general ledger accounts in FI and are defined in CO only.
When you analyze revenues in cost controlling, the R/3 System records them as revenue elements. Revenue elements are primary cost elements.
When you create a cost element, you must assign a cost element category. This assignment determines the transactions for which you can use the cost element. For example, category 01 (general primary cost elements) is used for the standard primary postings from Financial Accounting or Materials Management.
The integrated nature of the R/3 System means that you need to create expense accounts in Financial Accounting with corresponding primary costs elements in Controlling. This ensures that you can reconcile expenses in FI with primary costs in CO. Before you can create primary cost elements in CO, you first need to create them as G/L accounts in FI.
To be able to post to a primary cost element, you require a cost-carrying object (such as a cost center) to identify the origin of the costs. Examples of primary cost elements are material costs and salary costs.
Secondary costs elements are used exclusively in CO to identify internal cost flows such as assessments or settlements. They do not have corresponding general ledger accounts in FI and are defined in CO only.
When you analyze revenues in cost controlling, the R/3 System records them as revenue elements. Revenue elements are primary cost elements.
When you create a cost element, you must assign a cost element category. This assignment determines the transactions for which you can use the cost element. For example, category 01 (general primary cost elements) is used for the standard primary postings from Financial Accounting or Materials Management.
18. General Ledger Process Overview
19. Transaction Processing SAP R/3 supports the following transactions:
Journal (JV) Processing
Document Principle
Document Structure
Foreign Currency documents
Parked documents
Posting with Reference
Reversing / Canceling documents
20. Document Posting: Activity Flow
21. The Accounting Documents An accounting document represents within the SAP R/3 system the “real” document (an invoice for example) that triggered the posting.
Accounting documents consist of one or more line items (postings), each of which represents an individual transaction posted to an account.
The document header contains information that applies to the entire document, such as the document date and document number.
The line item is that part of a document containing information on a single item. It always includes an amount, an account number, the assignment to debits or credits and further specifications which depend on the business transaction to be posted.An accounting document represents within the SAP R/3 system the “real” document (an invoice for example) that triggered the posting.
Accounting documents consist of one or more line items (postings), each of which represents an individual transaction posted to an account.
The document header contains information that applies to the entire document, such as the document date and document number.
The line item is that part of a document containing information on a single item. It always includes an amount, an account number, the assignment to debits or credits and further specifications which depend on the business transaction to be posted.
22. Document Number Ranges Each type of document is assigned to a number range.
The document number range is the key which identifies each document in a company code and defines the allowable range in which a document number must be positioned and cannot overlap.
The document number range has to be defined for the year in which it is used. Document number ranges can be defined:
Until a fiscal year in the future: At the beginning of each fiscal year the system continues to take the next number after the “current number”. It does not restart at the lower limit.
Per fiscal year: At the beginning of each fiscal year the document numbering starts again at the lower limit. This helps to avoid reaching the upper limit of a range.
One number range can be assigned to several document types.Each type of document is assigned to a number range.
The document number range is the key which identifies each document in a company code and defines the allowable range in which a document number must be positioned and cannot overlap.
The document number range has to be defined for the year in which it is used. Document number ranges can be defined:
Until a fiscal year in the future: At the beginning of each fiscal year the system continues to take the next number after the “current number”. It does not restart at the lower limit.
Per fiscal year: At the beginning of each fiscal year the document numbering starts again at the lower limit. This helps to avoid reaching the upper limit of a range.
One number range can be assigned to several document types.
23. The Document’s Header Dates:
Document Date,
Posting Date,
Translation Date,
Entry Date (automatic),
Period.
Document Type
Company Code
Currency
Additional information:
Reference,
Short text. The document date is the date on which the original document (such as customer invoice) was created.
The posting date is used by the system to determine the accounting period in which the document will be updated. It represents the date on which posting becomes effective.
The translation date is the date on which an amount is translated into another currency.
The entry date is the date on which the document is entered on the system. SAP R/3 uses the system date to enter in this field. The document date is the date on which the original document (such as customer invoice) was created.
The posting date is used by the system to determine the accounting period in which the document will be updated. It represents the date on which posting becomes effective.
The translation date is the date on which an amount is translated into another currency.
The entry date is the date on which the document is entered on the system. SAP R/3 uses the system date to enter in this field.
24. Posting keys Every line item contains the posting key. The posting key defines:
The account type to be posted
Whether it is a debit or credit posting
Which fields of the line item may have or require an entry
In the new Enjoy transaction, you no longer need to enter the posting key. It does, however, appear in the document and its control functions are still relevant.Every line item contains the posting key. The posting key defines:
The account type to be posted
Whether it is a debit or credit posting
Which fields of the line item may have or require an entry
In the new Enjoy transaction, you no longer need to enter the posting key. It does, however, appear in the document and its control functions are still relevant.
25. Line items
26. Posting a document
27. Posting in Foreign Currency
28. Posting in Foreign Currency When you post a invoice in a foreign currency, you enter the appropriate foreign currency key in place of the local currency key, USD that is defaulted by the SAP R/3. The system stores the amount in both local currency and foreign currency in each line item and checks whether the currency key has been defined and is therefore permitted.
The amount is entered in only one currency, as the system translates this amount into the other currency automatically.
Normally you will use the exchange rate defined in the exchange rate table.
If the exchange rate on the invoice is different than default daily rate the currency exchange rate table can be overridden by entering an exchange rate manually (in the document header), or entering the local/foreign currency amount at line item level.When you post a invoice in a foreign currency, you enter the appropriate foreign currency key in place of the local currency key, USD that is defaulted by the SAP R/3. The system stores the amount in both local currency and foreign currency in each line item and checks whether the currency key has been defined and is therefore permitted.
The amount is entered in only one currency, as the system translates this amount into the other currency automatically.
Normally you will use the exchange rate defined in the exchange rate table.
If the exchange rate on the invoice is different than default daily rate the currency exchange rate table can be overridden by entering an exchange rate manually (in the document header), or entering the local/foreign currency amount at line item level.
29. Parking / Holding a Document
30. Reference Documents When posting a document, it is sometimes easier to use a previously posted document as a reference.
In this example, the user copies an existing document to post the new one. This is done by simply indicating the “Reference Document” at the time of posting.When posting a document, it is sometimes easier to use a previously posted document as a reference.
In this example, the user copies an existing document to post the new one. This is done by simply indicating the “Reference Document” at the time of posting.
31. Reverse a GL document “Nobody’s perfect”. As a result, the posted document may contain incorrect information.
The system provides a function to reverse G/L, A/R and A/P documents both individually or in mass process.
A document may be reversed either by:
entering a standard reversal posting or
entering a negative posting.
To reverse a document user must enter the reason code.
Documents with cleared items cannot be reversed. The clearing document must first be reset.
“Nobody’s perfect”. As a result, the posted document may contain incorrect information.
The system provides a function to reverse G/L, A/R and A/P documents both individually or in mass process.
A document may be reversed either by:
entering a standard reversal posting or
entering a negative posting.
To reverse a document user must enter the reason code.
Documents with cleared items cannot be reversed. The clearing document must first be reset.
32. Mass Reversal of Documents
33. General Ledger Process Overview
34. Account Analysis / Reconciliation
35. Account: balance and line items An account balance shows:
The opening balance (from the previous year),
Total of all transactions per posting period, broken down into debits and credits (transaction figures).
Using these figures the system also calculates the balance per posting period, and the accumulated balance of the account.
Using the report “account line items” you can display the document for each line item by drilling-down on the relevant line item in the line item list.
Both reports can be exported directly to MS Excel or Word, or send by e-mail,
You can display items from more than one G/L account (cross-company code) in a list or you can change individual documents and carry out mass changes to posted line items from the list.
An account balance shows:
The opening balance (from the previous year),
Total of all transactions per posting period, broken down into debits and credits (transaction figures).
Using these figures the system also calculates the balance per posting period, and the accumulated balance of the account.
Using the report “account line items” you can display the document for each line item by drilling-down on the relevant line item in the line item list.
Both reports can be exported directly to MS Excel or Word, or send by e-mail,
You can display items from more than one G/L account (cross-company code) in a list or you can change individual documents and carry out mass changes to posted line items from the list.
36. Account: balance and line items An account balance shows:
The opening balance (from the previous year),
Total of all transactions per posting period, broken down into debits and credits (transaction figures).
Using these figures the system also calculates the balance per posting period, and the accumulated balance of the account.
Using the report “account line items” you can display the document for each line item by drilling-down on the relevant line item in the line item list.
Both reports can be exported directly to MS Excel or Word, or send by e-mail,
You can display items from more than one G/L account (cross-company code) in a list or you can change individual documents and carry out mass changes to posted line items from the list.
An account balance shows:
The opening balance (from the previous year),
Total of all transactions per posting period, broken down into debits and credits (transaction figures).
Using these figures the system also calculates the balance per posting period, and the accumulated balance of the account.
Using the report “account line items” you can display the document for each line item by drilling-down on the relevant line item in the line item list.
Both reports can be exported directly to MS Excel or Word, or send by e-mail,
You can display items from more than one G/L account (cross-company code) in a list or you can change individual documents and carry out mass changes to posted line items from the list.
37. Account Analysis Functions Under line item selection you can choose the status and type of items you want to display.
The selection criteria enable you to restrict the items for displaying with various criteria.
You can display individual accounts or a defined account group using the dynamic selection transaction.
The line item list can be displayed according to various line layout options. You can create your own line layout variants.
In the line item list, you can navigate to individual documents and access additional information.
You can access the account master record directly from the line item display screen.
You can print the line item list.
You can choose display -> change in the document display transaction to make the document changes that are permitted by the system.
Under line item selection you can choose the status and type of items you want to display.
The selection criteria enable you to restrict the items for displaying with various criteria.
You can display individual accounts or a defined account group using the dynamic selection transaction.
The line item list can be displayed according to various line layout options. You can create your own line layout variants.
In the line item list, you can navigate to individual documents and access additional information.
You can access the account master record directly from the line item display screen.
You can print the line item list.
You can choose display -> change in the document display transaction to make the document changes that are permitted by the system.
38. Open Item Clearing Open items are incomplete transactions, such as an invoice for which goods or services have not yet been received.
In order for an open item transaction to be considered complete, the transaction must be cleared. A transaction is considered cleared when an offset value is posted to it, so that the resulting balance of the items is zero.
In the above example:
Two invoices are posted to the Customer account. These invoices are regarded as the open items because at this point the corresponding payment has not been received.
The payment is received and the invoices are set off against it.
The transaction is now cleared and the resulting balance is zero.Open items are incomplete transactions, such as an invoice for which goods or services have not yet been received.
In order for an open item transaction to be considered complete, the transaction must be cleared. A transaction is considered cleared when an offset value is posted to it, so that the resulting balance of the items is zero.
In the above example:
Two invoices are posted to the Customer account. These invoices are regarded as the open items because at this point the corresponding payment has not been received.
The payment is received and the invoices are set off against it.
The transaction is now cleared and the resulting balance is zero.
39. Reversal of Clearing
40. General Ledger Process Overview
41. Period End Processing
42. Posting Periods To prevent documents from being posted to a wrong posting period, desired periods can be opened and closed.
Up to 4 “Special periods” may be defined. They are used e.g. for entering documents, relating to year-end closing (auditor’s requests etc.)To prevent documents from being posted to a wrong posting period, desired periods can be opened and closed.
Up to 4 “Special periods” may be defined. They are used e.g. for entering documents, relating to year-end closing (auditor’s requests etc.)
43. GL Account Clearing
44. Automatic Clearing Program The program groups together items from an account that have the same reconciliation account number, currency, and Special G/L indicator, as well as pre-defined criteria from the document header or item such as the allocation field, reference number and amount.
If the balance, in local currency, of the items within a group is zero, the system automatically clears them and creates clearing documents.
Prerequisites for using the automatic clearing program:
Accounts must be managed on an open item basis.
Accounts to be cleared must be defined in customizing.
The automatic payment program does not clear noted items, statistical posting, down payments, bills of exchange and items with withholding tax entries.
When clearing open items in a foreign currency, differences may occur due to fluctuations in exchange rates. The system automatically posts these differences as realised gains or losses.
The program groups together items from an account that have the same reconciliation account number, currency, and Special G/L indicator, as well as pre-defined criteria from the document header or item such as the allocation field, reference number and amount.
If the balance, in local currency, of the items within a group is zero, the system automatically clears them and creates clearing documents.
Prerequisites for using the automatic clearing program:
Accounts must be managed on an open item basis.
Accounts to be cleared must be defined in customizing.
The automatic payment program does not clear noted items, statistical posting, down payments, bills of exchange and items with withholding tax entries.
When clearing open items in a foreign currency, differences may occur due to fluctuations in exchange rates. The system automatically posts these differences as realised gains or losses.
45. Deferrals & Accruals Accruals and deferrals can be handled automatically by the SAP R/3 system
Accrual/Deferral Documents are created on a monthly basis to record expenses/income which were anticipated but not yet realized
Once a transaction has been approved, it can be set up and run automatically each month.
The recurring entry program helps to maintain Accruals / Deferrals postings
Standard Journal Posting
Has a reversing date
Reversal Date can be any date in the future
Monthly job is scheduled to reverse all Accrual/Deferral Documents automatically Accruals: recognition of expenses and revenues that have not been paid or received as of the year end. Examples: wages, interest expense and revenue, utility costs. The expense or revenue is recorded before the cash flow.
Deferrals: recognition of expenses and revenues at year end which were not recognized at time of payment or receipt of cash during the year. Examples: rent expense (expiration of prepaid rent paid during the year), service revenue (reduction of unearned revenue received during the year, before providing service). The expense or revenue is recorded after the cash flow. Accruals: recognition of expenses and revenues that have not been paid or received as of the year end. Examples: wages, interest expense and revenue, utility costs. The expense or revenue is recorded before the cash flow.
Deferrals: recognition of expenses and revenues at year end which were not recognized at time of payment or receipt of cash during the year. Examples: rent expense (expiration of prepaid rent paid during the year), service revenue (reduction of unearned revenue received during the year, before providing service). The expense or revenue is recorded after the cash flow.
46. Recurring Entry Document Recurring entries are very effective in streamlining data processing for transactions that occur on a regular basis.
To save time and streamline month-end processing, you use recurring entries to post these transactions.Recurring entries are very effective in streamlining data processing for transactions that occur on a regular basis.
To save time and streamline month-end processing, you use recurring entries to post these transactions.
47. Recurring Entry Document (2)
48. General Ledger Process Overview
49. Reporting SAP system offers number of reports that help analyzing entered business transactions:
Financial Statement Version (Balance Sheet and P&L)
Account Balances
Line Items
Documents
Master Data
Report can be:
Printed out directly to the printer,
Saved as a local file (txt format, Excel file etc.)
Sent by e-mail Additionaly, SAP offers a number of reports that meet country-specific requirements. There is a list of country-specific reports for completing VAT tax forms and reports for additional legal reporting requirementsAdditionaly, SAP offers a number of reports that meet country-specific requirements. There is a list of country-specific reports for completing VAT tax forms and reports for additional legal reporting requirements
50. Reporting Requirements While there are often different accounting information requirements for internal and external users, much of the underlying data may be relevant for both purposes. But that same data can be presented in very different ways to satisfy the different requirements.
Standardized accounting intended for external users is sometimes termed “financial accounting”. The term “management accounting” generally refers to the non-standardized accounting approach that supports the management decision-making process.
Financial accounting reports typically required include the income statement (or profit & loss statement), and balance sheet. Management accounting reports can be completely unique, although a common example could be departmental actual vs. plan costs for the current accounting period.
While there are often different accounting information requirements for internal and external users, much of the underlying data may be relevant for both purposes. But that same data can be presented in very different ways to satisfy the different requirements.
Standardized accounting intended for external users is sometimes termed “financial accounting”. The term “management accounting” generally refers to the non-standardized accounting approach that supports the management decision-making process.
Financial accounting reports typically required include the income statement (or profit & loss statement), and balance sheet. Management accounting reports can be completely unique, although a common example could be departmental actual vs. plan costs for the current accounting period.
51. Financial Statement Version
52. Report Tree
53. Report Tree
54. Report Execution
55. Report Variant Several report variants can be created for a single report so that different users can access the same report with their own specific data
Report variants allow user to access the required data quickly and easily Several report variants can be created for a single report so that different users can access the same report with their own specific data
Report variants allow user to access the required data quickly and easily
56. General Ledger Process Overview
