BP in GL

Business Process in
Financial Accounting
FINANCIAL ACCOUNTING VERSUS MANAGEMENT ACCOUNTING
Financial Accounting Management Accounting
 This type of accounting aims  This type of accounting aims

to serve the external entities. to serve the internal
management
 Includes the following
elements:
1-General Ledger  Include the following
2-Accounts Payable elements:
3-Accounts Receivable 1-Profitability Accounting
4-Bank Accounting 2-Cost Center Accounting
5-Inventory Accounting
3-Budgeting
6-Fixed Assets
GENERAL LEDGER
 General ledger module is the core and the most
important module in the financial and management
accounting
 The GL is mainly built on small embedded application

that is called chart of accounts.
 This chart of accounts is built from scratch according to

the requirement of the customer.
 It is important to mention that each small transaction has

an effect on accounting has to make an effect on the
general ledger.
GENERAL LEDGER - CONT’D
 the general ledger has a summarized information

about the general accounts but the detailed
information will be found in some thing that it
called the sub ledger.
 we always have to make the details in the sub

ledger consistent with the summarized information
in the general ledger by making reconciliation
process.
Figure shows the Integration Of
GL Accounts in Financial
Accounting
Reconciliation Accounts and Sub
Ledger
Figure shows the Procurement
process from accounting point of
view
FIGURE SHOWS THE SALES CYCLE FROM
ACCOUNTING POINT OF VIEW
ORGANIZATIONAL STRUCTURES FOR
FINANCIAL REPORTING
 Organizational structures occur in all important

functional areas of the SAP system.
 The most important FI organizational elements

are the Company Code and the Business
Area.
 The Controlling (CO) application's key

organizational element is a controlling area.
COMPANY CODE
 A company code is an independent accounting entity (the
smallest organizational element for which a complete self-
contained set of accounts can be drawn up)
 A company code has a unique, four-character key, which can be

alphanumeric
 The general ledger is kept at the company code level and is used
to create the legally required balance sheets and profit-and-loss
statements for the company code.
 A company code is specified on every financially based

transaction of mySAP ERP. This is done either manually or by
deriving the company code from other data elements.
BUSINESS AREA
•The business segments, or branches, in which a group operates can be set up in

the SAP system as business areas.
•Business areas provide an additional evaluation level for such purposes as

segment reporting.
CONTROLLING AREA
 The Controlling Area is the most important

organizational element in the Controlling
application.
 A controlling area identifies a self-contained

organizational structure for which costs and
revenues can be managed and allocated.
 It represents a separate unit of cost accounting.

CONTROLLING AREA
More than one company code can be assigned to one or more controlling areas.
This enables a cross-company code costing between the assigned company codes.
However, assigning more than one company code to the same controlling area is
possible only if all the assigned company codes use the same operating chart of
accounts and fiscal calendar year.
PROCESSING IN THE GENERAL LEDGER
 How to create G/L postings using both the Enjoy and the traditional
complex posting screen.
 Enjoy screen
 Work templates to select screen variants, account assignment templates,
or held documents as references.
 Header data applies to the whole document.
 Line item information of the document are entered.
 Information area the debit and credit balances are displayed by using a
traffic light icon.
G/L POSTING ENJOY SCREEN
STANDARD/COMPLEX POSTINGS
G/L POSTING COMPLEX SCREENS
STANDARD DOCUMENT TYPES
 In order to distinguish between the various FI transactions,
document types are used. Each document is assigned to one
document type, which is entered in the document header.
 Document numbers are provided by the document number

ranges assigned to one or more document types.
 DR  Customer invoices KR  Vendor invoices

 DG  Customer credit memos KG  Vendor credit memos
 DZ  Customer Payments KZ  Vendor Payments
 SA  G/L Account Posting AB  General document
Document Types Can Be Defined Manually

POSTING KEY
 Each document line item contains one posting
key. It is entered in the complex posting screen
to tell the system:
. Which account type is being posted to
. Whether the line item is a debit or credit posting
G/L MASTER RECORDS
 A company code must be assigned to an operating
chart of accounts in order for postings to occur for
that company code.
 A chart of accounts is a list of G/L accounts to

which one or more company codes may post.
 In order to post to a G/L account, a company code

must have its own specific segment of the G/L
account master record created in addition to the
chart of accounts segment, which just exists once
and pertains to all company codes.
CHART OF ACCOUNTS
 Each general ledger is set up according to a chart
of accounts.
 The chart of accounts contains the definitions of

all G/L accounts in an ordered form.
 The definitions consist mainly of the account

number, account name, and the type of G/L
account, that is, whether the account is a P&L-
type account or a balance-sheet-type account.
CHART OF ACCOUNTS ASSIGNMENT
 For each company code, you must specify one chart of
accounts for the general ledger. This chart of accounts is
assigned to the company code in configuration and is
referred to as its operating chart of accounts.
 Before you can use an account in a company code, you
have to maintain the account definition at the chart of
accounts level. You then create company code-specific
settings, which are only valid in the company code.
COMPANY CODE-SPECIFIC SETTINGS
G/L MASTER RECORD (CENTRAL VIEW)
The Central View of the G/L Master Records shows the
chart of account data and the company code specific data.
ACCOUNT GROUPS FOR G\L ACCOUNTS
 Account groups are used to organize and
manage a large number of G/L accounts.
 Whenever a new G/L account is created, an
account group must be specified for it.
ACCOUNT GROUPS FOR G\L ACCOUNTS
 Account groups also control the appearance of the

company code segment of G/L accounts.
 That is, account groups control which fields are

required for data entry, which fields are optional
for data entry, and which fields do not show up at
all in the company code segment.
RECONCILIATION ACCOUNTS
 Reconciliation accounts connect subsidiary
ledgers with the general ledger in real time.
 This means that a posting to a subsidiary ledger
posts to the corresponding reconciliation account
in the general ledger at the same time.
FINANCIAL STATEMENT VERSION
 A general ledger is kept in order to provide the
information needed to create a balance sheet and
a profit-and-loss statement. These reports have
to meet country-specific requirements.
 To meet the various reporting requirements,

various financial statement versions have be
created in the SAP system.
 When running financial statement reports, select

a financial statement version that contains the
details of the report structure.
GROUP CHART OF ACCOUNTS
 Because not all company codes of the IDES group

use the same operating chart of accounts, a
Group Chart of Accounts, CONS, is being
used for consolidation purposes.
 The operating charts of accounts are assigned to

this group chart in configuration.

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Business Process in

Financial Accounting Management Accounting

 This type of accounting aims  This type of accounting aims

 The GL is mainly built on small embedded application

 This chart of accounts is built from scratch according to

 It is important to mention that each small transaction has

 the general ledger has a summarized information

 we always have to make the details in the sub

 Organizational structures occur in all important

 The most important FI organizational elements

 The Controlling (CO) application's key

 A company code has a unique, four-character key, which can be

 A company code is specified on every financially based

•The business segments, or branches, in which a group operates can be set up in

•Business areas provide an additional evaluation level for such purposes as

 The Controlling Area is the most important

 A controlling area identifies a self-contained

 It represents a separate unit of cost accounting.

 Document numbers are provided by the document number

 DR  Customer invoices KR  Vendor invoices

Document Types Can Be Defined Manually

 A chart of accounts is a list of G/L accounts to

 In order to post to a G/L account, a company code

 The chart of accounts contains the definitions of

 The definitions consist mainly of the account

 Account groups also control the appearance of the

 That is, account groups control which fields are

 To meet the various reporting requirements,

 When running financial statement reports, select

 Because not all company codes of the IDES group

 The operating charts of accounts are assigned to

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