Basic Settings Laxmiswamy

SAP FICO Basic settings
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BASIC SETTINGS
Enterprise structure
Every company will have some departments, manufacturing plant and branches. These are
called organizational units in the company. One organizational unit is linked with the other
organizational units in some way or the other way. This relation is called enterprise structure.
The enterprise structure is different for every module. The enterprise structure for each
module is created by the respective functional consultants.
Company, company code and business areas are called organizational units in financial
accounting.
COMPANY: Company represents the group. It can contain up to 6 characters. It is alpha

numeric. At the company level we can prepare the consolidated financial statements. The
definition of company is optional. A company can have any number of company codes
Faculty:
1 K.Lakshmana Swamy saplakshman@yahoo.com
___________________________________________________________________________
1. Project creation
Step 1.1: Creation of company
Path: SPRO - Enterprise structure – Definition - Financial accounting –Define Company

T.code OX15
Click on “New entries”
Company =
Company name =
City =
Country =
Language Key =
Currency =
Click on “save”
Click on “create request”
Short description =
Click on “save” and click Enter
Step 1.2: Define company code
Company code:it is the organizational unit in the financial accounting for which a complete
set of books of accounts are maintained necessary for external legal reporting i.e. to prepare
the legal financial statements. Generally every separate legal entity is created as company
code in sap. If the boundaries of particular country are also crossed, then we have to create
the company code. The definition of the company code is mandatory. It can contain up to 4
characters.. It is alphanumeric.
Path: SPRO – enterprise structure - definition -financial accounting - Edit, Copy,

Delete, Check Company code T.code OX02
Double click on: “Edit Company code data”
Click “new entries”
Company code =
Company name =
City =
Country =
Currency =
Language =
Click on “save”
Title =
Country =
Click on “save” and click on Enter on the Request message.
Faculty:
___________________________________________________________________________
Country: the information given in this field is called the home country of the company code
and every other country is considered by the system as foreign country.
Currency: the currency entered in this field is called ‘company code local currency’. Every
other currency is treated by the system as foreign currency. This information is used by the
system in identifying the foreign currency. The financial statements are prepared in the
company code local currency.
Language: the language entered in this field determines the language in which the books of
accounts are maintained, the checks and correspondence documents are printed.
Step no 1.3: Assign company code to company
Assignment: providing the links between two objects in the software is called assignment.
Path: SPRO –Enterprise structure-assignment-financial accounting-assign company

code to company T.CODE. OX16
Click on position,
Company code= click on enter
Company = click save
Step1.4: Define Business area.
BUSINESS AREA: it is the organizational unit in the financial accounting which structures
the organization according the geographical area of operations or the line of activity to which
the business transactions can also be posted. Generally the branches of the organization can
be can be created as business areas. The purpose of the business areas is to prepare the
financial statements for the internal management analysis purpose. The definition of the
business areas is optional. The system identifies the expenses and incomes with the business
areas by specifying the business area while entering the business transactions. The business
areas are not assigned to any company code. The business areas are created at client level so
that they can be used across the company codes.
Faculty:
___________________________________________________________________________
Faculty:
___________________________________________________________________________
Path: SPRO-enterprise structure-definition-financial accounting-define business area

T.code OX03
Business area =
Description =
Business area =
Description =
Business area =
Description =
Business area =
Description =
Business area =
Description =
Business area =
Description =
Business area =
Description =
Business area =
Faculty:
___________________________________________________________________________
Description =
Click “save”.
Step 1.5: Maintain consolidation business area.
Consolidation business area: the consolidation business areas are used to prepare the
statements according to regions or product groups. The definition of consolidation business
areas are also optional. The individual business areas are assigned to consolidation business
area.
Path: SPRO – enterprise structure – definition – financial accounting – maintains

consolidation business area.
Click on “new entries”

Consolidation business area =
Description =

Description =

Description =

Description =
Click on “save”
Faculty:
___________________________________________________________________________
Step: 1.6 Assign business area to consolidation business area.
Path: SPRO – enterprise structure – assignment – assign business are to consolidation

business area.
Click on “position”
Business area =
Click on “enter”
Business area description Consolidation description

business area
Click on save.
2. Fiscal year variant
Step2.1: Define Fiscal year variant
Variant: it is an object for which some values are defined. When this object is assigned to
another object, then those values are also applicable to that other object. This is called variant
principle. The variant principle is widely used in sap.
Fiscal year: it also called Accounting Year. The accounting year is a period of 12 months for
which the organizations generally prepare the financial statements. The fiscal year may the
calendar year or it may be non-calendar year.
Faculty:
___________________________________________________________________________
Faculty:
___________________________________________________________________________
Faculty:
___________________________________________________________________________
Faculty:
___________________________________________________________________________
Faculty:
___________________________________________________________________________
In the fiscal year variant, we define the number of normal posting periods and the number of
special posting periods. For the purpose of general ledger accounting the number of normal
posting periods are 12 and maximum number of special posting periods are 4. So the total
maximum number posting periods for the General Ledger accounting is 16.
It is mandatory that every company code should be assigned with one fiscal year variant.
Otherwise the postings are not possible. For this purpose we can use the system defined fiscal
year variant or we can define our own fiscal year variants. The following are the some of the
system defined fiscal year variants.
V3 ---- April to March --- 12 normal periods+ 4 special periods
K4 ----- calendar year --- 12 normal periods+ 4 special periods
K3----- calendar year---- 12 normal periods+3 special periods
V6 ----- July to June --- 12 normal periods+4 special periods
V9 --- October to September—12 normal periods+4 special periods.
Path: SPRO-financial accounting (new) - financial accounting global settings (New) –

ledgers - fiscal year and posting periods - maintain fiscal year variant - T code – OB29
No action required. Just identify which Fiscal Year Variant you want to use for your
Company code.
Step2.2 Assign Company code to Fiscal year variant
Path: same as above- T code – OB37
Click on “position”,
Company code= click “enter”
Fiscal year variant = click “save”
If any warning messages are displayed ignore the warning message by clicking on
enter button in the key board.
3Chart of accounts:
Step3.1: Define chart of accounts.
• It is the list of General Ledger accounts used by the organization.
• It is compulsory to define the Chart of Accounts before creating any General Ledger
master record
• For every general ledger account it contains the information such as the name of the
account, general ledger account number and account group etc.
Faculty:
___________________________________________________________________________
There are three types of chart of accounts.
 1. Operating chart of accounts:It is the list of all the general ledger accounts to
which the daily business transactions are posted.It is compulsory for every company
code that it should be assigned with one operational chart of accounts. The financial
statements according to the legal requirements of the country are prepared from the
operational chart of accounts. The controlling component also uses this operational
chart of accounts.
 2. Group chart of accounts: it contains the list of the general ledger accounts used
by the corporate group to prepare the consolidated financial statements. The definition
of Group chart of accounts is optional.
 3. Country specific chart of accounts: it contains the general ledger accounts

required to meet the country specific legal requirements.
A Chart of account can be used by one or several company codes.
Chart of accounts
Company code Company code

B
In this case, the GL account number, Account name and Account group etc. will be same in
all the company codes. In order that the several company codes to use the same chart of
accounts, the following two conditions should be satisfied.
1. All the company codes should be in same nature of business
2. All the company codes should lying in the same country.
A company code can be assigned with the two chart of accounts.

1. Operational chart of accounts
2. Country specific chart of accounts
Company code
Operational COA Country specific COA
Faculty:
___________________________________________________________________________
Path: SPRO-financial accounting (new) - general ledger accounting (new) - Master data
- G/L accounts – preparations - edit chart of accounts list – T code OB13

Chart of accounts =
Description =
Maintenance language =
Length of GL A/c No = click save
Step3.2: Assign company code to chart of accounts - T code- OB62
Path: same as above.
Click on “position”,
Company code = click enter
Chart of accounts = click save
Step3.3 Define account groups T.code OBD4
All the general ledger accounts of the organization are classified in to different groups for the
easy and convenient management of GL accounts. These are called the account groups. The
GL account master records are created under the respective GL account group. Every GL
account is to be identified with the number. For this we create and assign the number range
for every GL account group. At the time of creating the GL account master records we select
the a number from the number range of the accounts group under which the GL account
master records is created and give to the GL account master record. There is no limit to the
maximum no of GL account groups. But there should be minimum two GL account groups.
1. Balance sheet account group

2. Profit and loss accounts group.
Faculty:
___________________________________________________________________________
We can add the GL account groups during the fiscal year if the need arises. We can delete the
GL account group provided no accounts are created in that group.
The following are the functions of the GL account groups.
1. To control the number to be allotted to the general ledger master record created
under the respective group.
2. To control the display of fields to be maintained in the general ledger master records
created under the respective the group. i.e. Whether every field is required or optional
or displayed or suppressed.
Faculty:
___________________________________________________________________________
Path: same as above
Click on “New Entries”
Chart of Account Group Name From A/c To A/c

Account
s
SCPL Share capital 100000 100099
RSPL Reserves and surpluses 100100 100199
ACDN Accumulated depreciation 100200 100299
SCLN Secured Loans 100300 100399
UNSL Unsecured Loans 100400 100499
CLPR Current Liabilities&prvns 100500 100599
FAST Fixed Assets 200000 200099
CAST Current 200100 200199
Assets,Loans&adv
SALE Sales 300000 300099
OTHR Other Income 300100 300199
INCR Incr/decr of stocks 300200 300299
RMCN Raw material consumption 400000 400099
PRSN Personnel cost 400100 400199
MFRG Manufacturing cost 400200 400299
ADMN Administration cost 400300 400399
INTR Interest 400400 400499
DEPR Depreciation 400500 400599
Click save
Step3.4: Define Retained Earnings Account T code OB53
RETAINED EARNINGS ACCOUNT
While creating the expenses accounts and incomes accounts we have to specify the profit
and loss account type. For this, it is compulsory to create one retained earnings account. We
can define any no of profit and loss account types. For example operating profit and loss a/c
to know the operating profit and non-operating profit and loss account to know the non-
operating profit or loss. At the year end the balances in these profit and loss accounts are
taken to the Balance sheet.
Path: same as above
Chart of accounts = click enter
P&L statement a/c type =

Account = click save
Warning message appears. Ignore it by clicking on Enter again.
Faculty:
___________________________________________________________________________
Operating profit or loss a/c---- type X–100100
Salaries a/c type X

Rent a/c type X
Wages a/c type X
Sales a/c type X
Non-operating profit or loss a/c--- type Y--- 100101
Dividend on shares a/c----- type Y

Brokerage on share a/c— type Y
 Operating profit or loss: it is the difference between operating revenues and

expenses.
 Operating revenues: these are the revenues generated from the Main business
operations of the company. Ex: sales
 Operating expenses: these are the expenses which are incurred to run the main
business. Ex: rent, wages and salaries etc.
 Non-operating profit or loss: it is the difference between non operatingRevenues

and non-operating expenses.
 Non-operating Revenues: these are the revenues generatedFrom the business

operations which are not related to main business
 Ex: dividend on shares if the main business is textile manufacturing.
 Non-operating expenses: these are the expenses incurred to earn Non-operating

revenues: ex. Brokerage paid on purchase of shares
4.Posting Period Variant
Step.4.1: Definition of posting period variant
POSTING PERIOD VARIANT

The posting periods are defined in the fiscal year variant. To prevent documents from
being posted to wrong posting period, desired periods can be closed. Usually the current
posting period is open and all other periods are closed. At the end of period it is usually
closed and the next period is opened. A period is opened by entering a range into the
posting period variant which encompasses this period. It is possible to have as many
periods open as required. During the procedure of financial closing, some special periods
may also be open for closing postings. The following activities are involved in the
maintenance of the posting period variant
1 Define the posting period variant
Faculty:
___________________________________________________________________________
2. Assign the posting period variant to the company code

3. Open and close posting period.
Path: SPRO-financial accounting (new) - financial accounting global settings (new) –
ledgers – fiscal year and posting periods – posting periods – define variants for open
posting periods . T.code OBBO
Variant =
Name =
Click on “save”
Step 4.2: Assign posting period variant to company code T.code: OBBP
Path: same as above.
Click on “position” button

Variant = click save
Step4.3: open and close posting periods T.code: OB52
Path: same as above

Variant =
Account type =
(To open the Normal posting periods)
From period 1 = year =

To period = year =
(To open special periods)

From period 2 = year =
To period = year = click on save
Account types in SAP:the account types describes the nature of the account in sap. The
account types are already defined in the system. We cannot define our own account types or
we cannot change the existing account types. The following are the account types defined in
the system already.
1. GL accounts (S)
2. Vendor accounts (K)
3. Customer account D)
4. Asset accounts (A)
5. Material Accounts (M)
5. Creation of number ranges for document types
DOCUMENT TYPES AND NUMBER RANGES
Faculty:
___________________________________________________________________________
The business transactions are posted in to the system through an accounting process called
“posting”. As evidence of posting, a record is generated and stored in the database. This
record is called DOCUMENT.
There are two categories of documents.
1. Original documents. These include the vouchers, cheque book, purchase invoices, copies
of sales invoices and receipts. These are the basis for entering business transactions in to the
system.
2. Processing documents. These include the recurring documents, sample documents, and
accounting documents. The accounting documents represent records (journal entries)
generated on the posting of original documents into the system.
Every accounting document contains two parts.
1. Document Header. This part contains the data such as document date, posting date,
posting period, currency, company code, DOUCMENT TYPE. Etc. the document header
describes the whole business transaction.
2. Document line item part.
Rent a/c dr 10000 (line item no 1)
To cash a/c 10000 (line item no 2)
The document line item part contains the data such as posting key, GL account no. and
amount etc. for every line item. A document should contain minimum two line items. One
should be the debit line item and the other should be credit line item. In SAP the accounting
document can contain up to 999 line items including both debits and credits. The total of the
debit line items should be equal to the total of the credit line items. It is called the document
principle in SAP.
The document type controls the following.
1. It differentiates the business transactions among the account types
2. For every account type it differentiates among the nature of business transactions.
3. The number to be assigned to the document
4. Whether the number assignment to the document is internal assignment (the number
to the document is assigned by the system serially) or external assignment (the
number to the document is assigned by the user by himself from the assigned number
ranges.)
The standard system is delivered with documents types which can be used, changed or
copied. Or we can define our own document types.
SL no doc. Type description account type number range
01 SA GL account posting GL accounts 1-100000
19 KR vendor invoice posting 100001-200000
15 KZ vendor payment posting vendor accounts 200001-300000
Faculty:
___________________________________________________________________________
17 KA vendor other document 300001-400000
18 DR customer invoice posting 400001-500000
14 DZ customer payment posting customer accounts500001-600000
16 DA customer other document 600001-700000
04 AF depreciation posting. Asset accounts 700001-800000
The document types are defined at the client level and are therefore valid for all company
codes.The number ranges for document types are defined at company code level.
Note1:if any object is defined at the client lever (group level), that object can be used by all
the company codes of the client.
Note2:if the object is defined at the company code level, that object is specific and applicable
to that company code only.
Note3: at the time defining the object, if the system does not ask for the company code, then
we can assume that the object is created at client level. And at the time of creating object, if
the system asks for the company code, then we can assume that the object is created at the
company code level and it is applicable to that company code only.
Step: creation of number ranges for document type “SA”
Path: SPRO-financial accounting (new) - financial accounting global settings (new)

-document- document types – define document types for entry view. T.code OBA7
Document type =SA click enter

Select “SA”document type line
Click on “details” button
Notice the properties of “Number range” (i.e. Serial number of number range)
Click on “Number range information” T.code FBN1
Company code =
Click on “(change) intervals” button
Click on “(insert) intervals” button
No =
Year =
From number =
To number =
Click on “insert (enter)” button
Click on “save” and OK” button on the message.
Faculty:
___________________________________________________________________________
6.Field Status Variant
Step6.1: definition of field status variant
FIELD STATUS VARIANT.
During document entry, different fields are displayed depending on the transaction and the
account used. For example, when posting expenses, cost center and tax information is usually
required. However, when posting cash, this same information is not necessary. These
different displays during document processing are controlled by the field status.
In the above example, the text field, and business area field are required for every account.
The cost center field is required only for rent a/c, but not for other accounts. The tax rate field
and quantity field is required only for raw materials account but not for other accounts. That
is why for every field, there are three statuses available.
Faculty:
___________________________________________________________________________
For every field we can maintain only either of the following status.
1. Suppressed status: if this is selected then that particular field is hidden in the
document while posting the business transaction.
2. Required status: if this is selected for a field then it is compulsory to give the
information in that field.
3. Optional status: if this selected for field then that field is displayed in the document
but we may or may not provide the information in that field.
Based on the nature of the GL accounts, all the fields were categorized in to 41 groups. These
are called the field status groups. Every field status group contains all the 75 fields. Based the
information to be maintained at the time posting to the GL accounts, we select either
suppressed status, or required status or optional status for every field in every field status
group. Later on, at the time of creating the GL account we assign the required field status
group. As a result at the time of debiting or crediting the GL accounts, the fields will be
populated accordingly.
In short the field status variant controls the display of fields to be entered at the time of
posting the transactions to the GL accounts (at the time of the document entry)
It is mandatory that every company code should be assigned with one field status variant.
For this purpose we can use the system defined field status variant or we can define our own
field status variant by copying from one of the system defined field status variant 1000 or
0001.
Faculty:
___________________________________________________________________________
Step6.1: definition of field status variant
Path:SPRO – financial accounting (new) – financial accounting global settings (new) –

ledgers – fields – define field status variants. T.code OBC4
Select “0001” field status variant line

Click on “copy as” button
FSTV =
Field status name = click enter
Click on “copy all” button and click enter on the message
Select”--------“field status variant line created above
Double click “field status groups”
Double click on the field status group “G001”

Double click “General data”
Select “Required entry” option against “Text” field. Click save
Double click on field status group “G001”

Double click “additional account assignments”
Select “Required entry” option against “Business area” field
Select “optional entry” option against “partner business area” field.click save

Double click on “General data”
Select “Required Entry” option against “text” field click save

Double click “additional account assignments”
Select “required entry” option against “Business area” field
Select “optional entry” against “partner business area” field click save

Double click on “payment Transactions”
Select “Required entry” option against “value date” click save
Value date:it is the expected date of realization of funds involved in the bank instruments,
like cheques and bank drafts. At the time of creating the bank accounts, we assign the filed
status group G005 in which we have selected value date also as required entry. As the result,
at the time either debiting or crediting the Bank account , the user has to enter the value date
compulsorily. Then this information is passed on to the treasury or cash planning department
to help in the cash planning
Step6.2: Assign company code to field status variant
Path: same as above T.code OBC5
Faculty:
___________________________________________________________________________
Field status variant = click save
Tolerance groups: in the financial Accounting we have to define the tolerance groups for
the following objects in the financial accounting
1. GL accounts
2. Users (employees in the finance and accounts department)
3. Vendors and customers.
Tolerance groups for GL accounts: setting the maximum limits equal to which or below
which the differences in balance sheet GL accounts are automatically taken to the profit and
loss account or some predefined account like sundry balances written off a/c. based on the
requirements of accounting department we define different tolerance groups and we assign
them in the respective GL account master records. Based on the limits specified in those
tolerance limits, the differences in that GL account is automatically transferred to profit and
loss account. The limits are applied at account level not for the every transaction level in that
GL account.
A tolerance group can be assigned in any no of gl account master records. But a GL account
master record can be assigned with only one tolerance group. The upper limits can be
specified either for the debit difference or for credit difference separately. We can define the
upper limits either in terms of whole amounts or in terms of percentages or both. if the both
the terms are defined, the system will consider the lower of the two as upper limit, and
behaves accordingly.
Faculty:
___________________________________________________________________________
Faculty:
___________________________________________________________________________
Step7.1:Define tolerance groups for G/L accounts
Path:SPRO:- financial accounting-general ledger accounting-business

Transactions-open item clearing-clearing differences – define tolerance groups for
G/L accounts OBA0

Company code =
Tolerance group =
Name =
Click on “save”
Faculty:
___________________________________________________________________________
Step7.2: define tolerance groups for employees OBA4
Tolerance group for employees: For the employees of the accounting dept. we define the
upper limits for posting procedures. With help of tolerance groups for employees, we can
control the posting activities of the employees in the finance and accounts department. The
following are the posting procedures.
1. The amount of a document an employee can post into gl accounts, vendor accounts,
customer accounts and asset accounts
2. The amount of the open item he can deal with
3. The percentage of cash discount he can offer or post
4. The amount of payment difference he can accept.
Based on the requirements of the accounts department, the fi consultant will define the
number of tolerance groups with the upper limits for the above posting procedures. The
required tolerance group is assigned to the users. As a result, the upper limits are applicable
to the user, for postings. When the user has to post a document whose amount is more than
his allowable upper limit, he has to get the approval from the respective employee. For this
purpose keeps the document pending for posting. This is parked document.
Faculty:
___________________________________________________________________________
Path: same as above

Group =
Company code =
Amount per document =
Amount per open item =
Cash discount per line item = click save
Step7.3: assign users to tolerance groups OB57
Path: same as above

User name =
Tolerance group = click save
8.Global parameters: in this activity, we can define various global specifications for the
company code. We can also display all the objects defined and assigned to the company in
the overview .
Step: enter global parameters
Path : SPRO-financial accounting – financial accounting global settings – company

Code – enter global parameters OBY6
Click on “position” button

Select “ ” company code line
Click on details button
Select “Business area financial statements”
Select “propose fiscal year”
Select “define default value date”
Select “negative postings permitted” click save
Faculty:

Basic Settings Laxmiswamy

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SAP FICO Basic settings

COMPANY: Company represents the group. It can contain up to 6 characters. It is alpha

Step 1.1: Creation of company

Path: SPRO - Enterprise structure – Definition - Financial accounting –Define Company

Click on “New entries”

Step 1.2: Define company code

Path: SPRO – enterprise structure - definition -financial accounting - Edit, Copy,

Double click on: “Edit Company code data”

Click “new entries”

Step no 1.3: Assign company code to company

Path: SPRO –Enterprise structure-assignment-financial accounting-assign company

Company code= click on enter

Company = click save

Step1.4: Define Business area.

Path: SPRO-enterprise structure-definition-financial accounting-define business area

Step 1.5: Maintain consolidation business area.

Path: SPRO – enterprise structure – definition – financial accounting – maintains

Click on “new entries”

Consolidation business area =

Consolidation business area =

Consolidation business area =

Step: 1.6 Assign business area to consolidation business area.

Path: SPRO – enterprise structure – assignment – assign business are to consolidation

Business area description Consolidation description

2. Fiscal year variant

Step2.1: Define Fiscal year variant

V3 ---- April to March --- 12 normal periods+ 4 special periods

K4 ----- calendar year --- 12 normal periods+ 4 special periods

K3----- calendar year---- 12 normal periods+3 special periods

V6 ----- July to June --- 12 normal periods+4 special periods

V9 --- October to September—12 normal periods+4 special periods.

Path: SPRO-financial accounting (new) - financial accounting global settings (New) –

Step2.2 Assign Company code to Fiscal year variant

Path: same as above- T code – OB37

Step3.1: Define chart of accounts.

• It is the list of General Ledger accounts used by the organization.

There are three types of chart of accounts.

 3. Country specific chart of accounts: it contains the general ledger accounts

A Chart of account can be used by one or several company codes.

Company code Company code

A company code can be assigned with the two chart of accounts.

Operational COA Country specific COA

Click on “new entries”

Step3.2: Assign company code to chart of accounts - T code- OB62

Path: same as above.

Step3.3 Define account groups T.code OBD4

1. Balance sheet account group

The following are the functions of the GL account groups.

Path: same as above

Click on “New Entries”

Chart of Account Group Name From A/c To A/c

Step3.4: Define Retained Earnings Account T code OB53

RETAINED EARNINGS ACCOUNT

Path: same as above

Chart of accounts = click enter

P&L statement a/c type =

Operating profit or loss a/c---- type X–100100

Salaries a/c type X