SCM & Finance

Pankaj Singh
 Learning Objectives
• Business Definition, Financial Statement & Chart of
Accounts
• Major Business Processes
• Procure to Pay – Process & Accounting
• Order to Cash – Process & Accounting
• Journal Entry Posting & Trial Balance
• Trial Balance to Financial Statements
What is Business?
A business is a set of activities performed by a group of
people to meet certain objectives.
 Financial Statements
Financial Statement is a written report which quantitatively describes
the financial health of a company. It includes:
1. Income Statement or Profit and Loss Accounts (PLA)
2. Balance Sheet
3. Cash Flow Statement

The statement provide useful information about company’s financial

performance and health. Also important business decisions are based on
information from the statements.
 Accounts & Financial Statements
• An account is an entity from General Ledger
that is used to record and store Debit & Credit
amounts.
• Companies predefined their accounts in what
is called as Chart of Accounts and use them to
record Debit & Credit amounts related to all
business transactions having accounting
impact.
 Accounts in Use
Typically following are the accounts that are used in business to record Debits
& Credits. Some of the accounts are specific to the business and hence
change from business to business.

Note:
1. All accounts of Asset or Liability nature are reported in Balance sheet.
2. All accounts of Revenue or Expense nature are reported in income statement or
PLA.