Company

A company is the smallest organizational unit for which individual financial

statements can be drawn up according to the relevant commercial law. A company
can contain one or more company codes. You cannot use the prefix sap at the
beginning of your company name.

How to define a company in SAP HANA

You can define a company in SAP HANA by using the following configuration steps
 Menu path: enterprise structure -> definition -> define company code
 Transaction code: ox15
Step 1: From the sap easy access screen, enter sap transaction code “ox15” in the sap
hana command field and press enter to continue.

Step 2: On the change view international trading partners screen, display a list of
defined companies in the sap s/4hana system. As it is a demo system of s/4hana, it
consists of a number of company entries. In real-time scenarios, an organization can
consist of one company for consolidation reporting purposes.

To create a new company in sap s/4hana, click on the option “new entries”
Step 3: on new entries of the company screen, update the following details

 Company: Enter the new key that defines the company in the SAP HANA
system
 Company name: Enter the name of the company
 Company name 2: Enter the company name 2

Detailed information
 Street: update the street address details of the company
 Po box: update the po box number
 Postal code: update post code
 City: update the city name
 Country: update the country key, where the company is located
 Language key: update the language key
 Currency: update the company currency key.

After maintaining all the required details for the company, choose the save icon to
save the configured details in SAP S4HANA system.
Step 4: Now you are prompt for customizing the request number, click on create icon
and enter the required details for customizing the request and click on the save icon to
save the details.
Now press enter and save the configured details.

Successfully we have created a new company in the sap s/4 hana system.

Company Code

Use. The company code is the central organizational unit of external accounting
within the sap system. You must define at least one company code before
implementing the financial accounting component. The business
A company in the sap s4 hana system can be created using the following
configuration steps:
 Menu path: enterprise structure -> definition -> financial accounting -> edit,
copy, delete, check company code
 Transaction code: ox02
Step 1: from sap easy access screen, enter sap transaction code “ox02” in the sap
command field and press enter to continue.

Transactions relevant for financial accounting are entered, saved, and evaluated at
company code level.

Step 2: on the change view “company code”: overview screen, display a list of
existing company codes that were defined in the sap hana system. From this sap hana
screen, you can maintain the following activities –
 You can create new company code by using the option new entries or copy as
an option
 You can modify the existing company code
 You can delete the company code

To create new company code in sap hana system, click on the new entries button as
shown below

Step 3: the new entries: details of the added screen, update the following details.

 Company code: enter the 4 alphanumerical keys that define as company code
in sap hana system. This company code will serve as the company identifies in
the business environment where multiple company codes exist in the sap hana
system.
 Company name: enter the name of the company
 Additional data
 City: update the city name, in which city that company code is located
 Country: update the country key from the dropdown list,
 Currency: enter the company code currency
  Language: enter the default language key for company code.


Step 4: a pop of window edit address: ad01 displays on the screen. The company code
address screen is divided into five sections. Update the required details with your
company code information.
Name:
 Title: choose the title of the company
 Name: enter the name of the company
Search terms: search terms enable to the search of the company code very quickly if
multiple company codes are defined in the s/4 hana system. Enter the relevant search
term keywords.
Street address
 Street/house number: update street no, house number, etc
 Postal code/city: update the postcode pin and city of the company
 Country: update the country key, you can choose the country key from the
dropdown list
 Region: update the region key, you can choose the region key from the drop-
down list
Po box address
 Po box: update the po box number, where the company is located
 Postal code: update the postal code
 Company postal code: update the details of the company postcode.
Communication
 Language: update the language key for the company code
  Telephone: update the contact telephone number
 Mobile phone: update the mobile number of the company code
 Fax: update the fax number for fax communication
 E-mail: update the valid email id of the company code.

For a print preview of address details, click on the print preview icon and preview the
address details.

After maintaining all the required details for the company code, press enters key to
continue.
Now click on the save icon to save the configured company code in sap s/4hana
system.
The prompt for customizing request pop-up screen displays, choose the customizing
request number and save the details.
Successfully we have defined new company code in the sap s4hana system.

Project work – practice space

Now create the 3 different company codes with different countries. In this scenario,
we have extended our business to locations in different countries. So we are going to
define new company codes.

For e.g.

Company code Country Currency

Adus Usa Usd
Adeu Uk Eur

Scenario 1: if you are implementing the project for the first time, you will be created
a company code as per customer requirements at the time of the realization project.

Business Area

The business area should be treated as a separate economic unit, for which you can
create an internal balance sheet and a profit and loss statement. The business area is,
however, only an internal organizational unit and does not have any external impact.
Business areas in sap s/4hana can be created by using the following configuration
steps:
 Img path: spro {transaction code} -> sap reference img -> enterprise structure
-> definition -> financial accounting -> define business area
 Transaction code: ox03

Step 1: From sap easy access s/4hana screen, enter tcode “ox03” and enter to
continue
Step 2: In next s/4hana change view business area overview screen, it displays lit of
business areas that are defined in SAP S/4 HANA system.

To define the new business area in SAP S/4 HANA system, click on new entries
option

Step 3: on entries of business area creation screen, update the following details
 Business area: enter the four characters alphanumerical key that identifies as
business area in sap s/4hana system
 Description: enter the description for newly defined business areas.
After maintaining all the required details of business areas, click and save icon and
save the business areas in sap s/4hana system.

The Chart of Accounts

It a series of accounting codes used to classify or categorize financial transactions

such as assets, liabilities, fund balances, budgets, revenues, expenses, and
encumbrances.

We can use the following methods to create a new chart of accounts in sap
1. Transaction code:– ob13
2. Sap menu path:- img –> financial accounting –> general ledger accounting –>
g/l accounts –> master data –> preparations –> edit chart of accounts list

Entries button to create a new chart of accounts in sap.

Update the required data in the new entries screen.

 1. Chart of accounts: - enter the 4 digits alphanumeric code of the chart of
accounts
2. Description: – enter the description of the chart of accounts
3. Maintain language: - select the language of the chart of accounts
4. Length of g/l account number: – update the length of gl account number.
The maximum length of g/l account number that sap supports is 10.
5. Integration: - we can have controlling integration manual creation of cost of
elements or automatic creation of cost of elements. It is advisable to have
manual creation of elements in sap
6. Consolidation: – enter the group chart of accounts for the consolidation of
reports.
7. Status: - under status, deselect the blocked check box.
1. After updating the required data, click on the save icon, and you will get the
message “data was saved”

The Account Groups

It a summary of accounts based on criteria that effects how master records are created.
The account group determines: the number interval from which the account number is
selected when a g/l account is created.

G/l account group in SAP

This tutorial guides you on how to create an account group in sap fico step by step
with screenshots. You can create new accounts group as per customer requirements.
Define account group: – chart of accounts contains different types of accounts. To
manage and control a large number of g/l accounts better in sap, they are arranged
in account groups. Account group must be specified while creating the g/l account.

Account group determines: -

1. The interval in which the gl account number must be defined.
2. The creation of the gl codes depends upon the specified number range that is
assigned to the account group in sap
3. Which fields are required and optional entries when creating and changing
master records
4. Which fields are suppressed when creating and changing master data
5. Here we are configuring the following account groups
 Coa Account Name From To
group account account
Adar Scpl Share capital 100000 119999
Adar Rspl Reserves & surplus 120000 129999
Adar Acdn Current liabilities and 130000 139999
provisions
Adar Scln Secured loans 140000 149999
Adar Unln Unsecured loan 150000 159999
Adar Acdp Accumulated depreciation 160000 169999
Adar Faac Fixed asset accounts 170000 179999
Adar Cuas Current assets 180000 189999
Adar Load Loans and advances 190000 199999
Adar Sale Sales & operating revenues 200000 219999
Adar Otin Other income 220000 229999
Adar Incr Increase / decrease in 230000 239999
stocks
Adar Rmco Raw material consumption 240000 249999
Steps to Adar Prex Personnel expenditure 250000 259999
define Adar Mfex Manufacturing expenses 260000 269999
accounts
group in Adar Admn Administration expenses 270000 279999
SAP: - Adar Intr Interest 280000 289999
Adar Depr Depreciation 290000 299999
 T Adar Intx Income tax expenses 300000 319999
code
for define account group: - obd4
 Img menu path :- sap implementation guide > financial accounting –> g/l
accounting –> gl accounts –> master data–> preparations –> define account
groups


Step 5: - update the following fields and press enters from keyboard.
 Chrts/accts: - enter charts of account key
 Acct group: - enter the account group
  Name: - update the account group
 From acct: – enter from account number, i.e., starting account number of
account group in sap.
 To account: - enter to account number, i.e., end of the account number of the
account group in sap.

Step 6:- After updating the data, save the data by clicking the save icon

Thus account groups are successfully configured in sap.

Retained Earnings Account

Is used to carry forward the balance from one fiscal year to the next fiscal year . You
can assign a retained earning account to each p&l account in the chart of accounts
(coa).

You can define retained earnings account in sap s/4hana by using transaction code
“obd4” or menu path.
  Img menu path – sap customizing implementation guide > financial
accounting > general ledger g/l accounting > master data > g/l
accounts > preparations > define retained earnings account
 Transaction code: ob53

Step 1: execute transaction code “ob53” in command field to define retained earnings
account in sap S4 HANA

Step 2: enter chart of accounts – adca and press enter from the keyboard to continue.

Step 3: in the next screen – “configuration accounting maintain automatic posts

accounts” update the following required details to define retained earnings account in
the sap s/4hana system
 P&l statement acct type – you can update the p&l statement account
type with the letter “x”
 Account – assign g/l account from reserve and surplus account group
“120001” to profit and loss statement account type. You can leave the
accounting field as empty for time being and once you create the g/l
account for retained earnings account, you can assign it here.
Note: all the balances will be carry forwarded to this g/l account 120001.
Step 4: click on the “save” button to save the configured retained earnings account.
You will get a warning message as “account 120001 not created in a chart of
accounts adca“, ignore the warning message, and again press enters from the
keyboard to save the retained earnings account.
Successfully we have maintained retained earnings accounts in sap s/4 hana.

Project work – work space

Now it is the time to practice and learn how to define the retained earning account to
carry forward the previous year’s balances.
P&l statement Account
X

Field Status Variant

A field status variant is a predefined set of filed statuses that control the status of
fields is a screen for a particular transaction or master record in sap.

You can define field status variants in SAP S/4 Hana using transaction code
“OBC4” and IMG Menu Path.
 SAP IMG Path: SAP Customizing Implementation Guide > Financial
Accounting > Financial Accounting Global Settings > Ledgers > Fields >
Define Field Status Variants
 Transaction Code: OBC4

Step 1: Execute transaction code “OBC4” in the command field to define field status
variants in the SAP Hana system.
Step 2: On the change view “Field Status Variants” screen, choose the standard
field status group 0001 and click on a copy as an option.

Step 3: In the next screen of Field Status Variants overview of the selected set,
enter the following details

 FStV – Enter New Field status variant key to define

 Field Status Name – Update the field status variant name
 After updating the Field status variant key and name, press enters to
continue.
Step 4: On the resulting pop-up screen, choose copy all option – So that all entries of
standard field status variant 0001 will be copied to new field status variant ADAR.

Now system displays an information message as “Number of dependent entries

copied “, press enter to continue

Click on the Save icon and save the configured field status variant ADAR in the SAP
Hana system.

Maintain Field Status Groups in SAP S4 Hana

Field status group determines which fields are ready for input, which fields are
required entry, which are display fields, and which are hidden during document entry.
Step 1: Check the field status variant “ADAR” and double click on the field status
group.

Step 2: In the next screen Field status groups, displays a list of field status
groups that are available in the field status variant.

Step 3: Now double click on Field status group to update the details as per an
organization’s requirements.
Choose the field which is required to enter, optional entry, and suppress as per
requirements.

Similarly, repeat the process and update required details for other field status groups
in SAP and save the details.

Fiscal Year Variant

It contains the number of posting periods in the fiscal year and the number of special
periods. You can define a maximum of 16 posting periods for each fiscal year in the
controlling component (co).

You can assign fiscal year variant to company code in sap s/4 hana by using the
following configuration steps
 Transaction code: ob37
  Menu path: sap customizing implementation guide > financial
accounting > financial accounting global settings > ledgers > ledger
>fiscal year and posting periods > assign company code to a fiscal year
variant.

 Step 1: execute transaction code” ob37” in the sap command field to assign
fiscal year variant to company code in SAP HANA

 Step 2: in the next screen – assign company code -> fiscal year variant
overview, click on the position button and enter the company code key
“ad01“, so that company code ad01 displays on top of the list and enables
easily to assign fiscal year variant key.

 Step 3: now update the fiscal year variant key “q3” for the company
code “ad01” and press enter, automatically description field will be updated
based on the fiscal year variant name.
  Click on the save button and save the configured assignment details
 Successfully we have assigned the fiscal year variant to a company code in the
SAP S4 HANA SYSTEM.

Posting Period Variant

It is used to make it easier to open and close posting periods for closing operations.
The posting period variants are per-configured. Each posting period variant is
assigned to just one company code.

Open and close periods

You define posting periods in your fiscal year variants. You can open and close these
posting periods for posting. As many periods as you require can be open for posting
simultaneously. Usually, only the current posting period is open for posting, all other
posting periods are closed.

You can define open and close posting periods in sap s/4hana by executing the
transaction code ob52 or menu path

 Sap img path : sap customizing implementation guide > financial

accounting > financial accounting global settings > ledgers > fiscal year
and posting periods > posting periods > open and close posting periods
 Transaction code: ob52

Step 1: execute transaction code “ob52” to define open and close posting periods in
sap s/4hana
Step 2: a pop-up window opens to enter the posting period variant key. To determine
the work area key, update the posting period variant key and press enter to continue.

Step 3: on change view posting periods: specify time intervals overview screen, enter
the following details

A: update the account type with

 + masking, is the minimum required entry for opening the periods for
all accounts
 A – for asset accounts
 D – for customers
 K – for vendors
 M – for material accounts
 S – for g/l accounts

 From acct – it is the lower limit of accounts, you can keep this field
as blank
 To account – it is an upper limit of accounts, update with zzzzzzzz, so
it included both numerical and nonnumerical number ranges.
 From per. 1 – enter the period number, which needs to be open. For
example, entering 2 means, you are opening 2nd posting period for
document entry
 Year – enter the fiscal year with period 1 that you want to open
 To per. 1: enter the period number, up to which period to be open. For
example, entering 3 means, you are opening posting periods from the
2nd to 3rd posting period for document entry
 Year: enter the fiscal year
 Augr: assign authorization group for permitting posting periods
  From per.2: period 2 is used for special periods, starting from 13
 Year: enter the fiscal year related to period 2
 To per.2: end of special periods.
 Period 3: in s/4hana, the period 3 field has been introduced. Period 3
will be used for co(controlling) purposes.

Period 3: period 3 is used for open and closing posting for controlling in s4hana.
After maintaining the details for open and close postings periods, click on the save
button to save the details.
Note: you can also copy the posting periods variant from the existing standard posting
period variant in sap s4hana and update the period’s details as per the requirements.

Posting period variant

You can define variants for open posting periods in sap s4 hana by transaction
code or menu path
 Sap img path : sap customizing implementation guide > financial
accounting > financial accounting global settings > ledgers > fiscal year
and posting periods > posting periods > define variants for open posting
period
 Transaction code: obbo

Step 1: execute transaction code “obbo” in the command field to maintain variants
for open posting periods in SAP HANA
Step 2: in the next screen, change view “posting periods: define variants” click on the
new entries button to create posting period variants in sap s4hana.

Step 3: on new entries of posting periods variants creation screen, update the
following details
 Variant: enter a new key that defines the posting period variant in sap
s4hana
 Name: enter the descriptive text of the posting period variant

After maintaining the required details for the posting period variant, click on the save
button and save the data in the sap s4hana system.
Successfully we have defined variants for the open posting period.

Tolerance in Sap

The tolerance group for employees determines the maximum document amount the
employees are authorized to post. The maximum amount can enter as a line item in a
vendor account or customer account. A tolerance group is created and assigned to the
employees.

You can define tolerance groups for employees by using the transaction code or
menu path
 SAP IMG Menu Path: SAP Customizing Implementation Guide >
Financial Accounting > General ledger Accounting > Business
Transactions > Open Item Clearing > Clearing Differences > Define
Tolerance Groups for Employees
 Transaction Code: OBA4
Step 1: Execute transaction code “OBA4” in the command field to define the
tolerance groups for employees in the SAP S4 Hana system.

Step 2: In the next screen change view “FI Tolerance Groups for Users” overview,
click on the new entries option to maintain tolerance groups for employees in the SAP
S/4 Hana system.

Step 3: In the next screen, Tolerance group for employees creation, update the
following details
 Group: Update the group key, and this group key can be assigned to one or
more login id in the SAP Hana system for tolerance group
 Company Code: Update the company code that you want to assign this
tolerance group
 Currency: Automatically currency field will be updated based on the given
company code currency

Upper Limits for posting procedures

 Amount per document – Enter the maximum amount that allowed for
posting per document
 Amount per open item account item – Enter the maximum amount that
is allowed to enter the amount per open item
 Cash discount per line item – Enter the maximum discount allowed to
provide per line item

Permitted payment difference

 Revenue – Enter maximum amount and percentage that an employee

permitted payment difference for revenue
  Expenses – Enter the maximum amount and percentage allowed that an
employee can grant for expenses.

Click the save button to save the tolerance group for employees in the SAP S/4 Hana
system.

Document number

Each document in the sap system is given a number that uniquely identifies it within a
fiscal year in a company code.

Document number ranges are defined at the specific interval within which
documents should be created in sap. Document number ranges depend upon company
code and are valid for the defined year. We can assign one or more document types to
each number range. The number range becomes effective by the document type
specified in document entry and posting.
 T-code to maintain document number ranges: - fbn1
 Img menu path: -

Implementation guide > financial accounting > global settings > documents >
document number range > define document number range

Step 1: – enter t-code spro in the command field of the sap easy access menu screen
and press enter key on the keyboard.
Step 2: – in the next screen, click on click sap reference img

Step 3: - follow the menu path as per the below screenshot.

Step 4: – in the next screen, update the company code and click on change intervals.

Step 5: – next, click on insert interval

Step 6:- let’s create a number range for document type “aa”
 1. No:– update the number range code of document type aa
2. Year:- enter year
3. From number:– enter from number
4. To number:- enter to number
5. Current number:- by default, the current number will be “0.”
6. Ext:- type of number assignment i.e. For internal or external
7. Save:- click on the save icon to save the settings
8. Interval:- click on interval to maintain the number range for another
document type

Document number ranges are successfully configured in sap.

Ledger

A ledger that contains a full set of configuration settings and full posting information
is called a standard ledger. Every system needs one main standard ledger that is called
the leading ledger (by default, this is ledger 0l).

Accounting principles

Accounting principles are local or international sets of rules and procedural

conventions that provide guidance for accounting practice and for the preparation of
financial statements. Examples: international financial reporting standards (ifrs)
generally accepted accounting principles (us gaap)
This is where we will work on.
tcode – finsc_ledger.

Let’s get started step by step with pictorial representations for better clarity.

1. Click currency setting for company code

Click on “new entries”.

Enter

 Company code – sc00

 Currency type – 30
 Currency – usd (client currency in scc4)
 Source currency type- 00
 Exchange type
 Translation data type
 Real time conversation ticked
 Press enter display cells will be filled

Save (ctrl+s)

This is how it will look like.

Leading ledgers in S/4 HANA

Sap provides 0l as the leading ledger. All company codes created in sap are
automatically assigned to ledger 0l. It is recommended not to change the leading
ledger as it also integrates with other modules such as asset accounting, controlling
and logistics
.

2.1) select 0l and click company code for ledger

2.2) click “position” and search your company code.

 Local currency will be automatically updated as you have specified it in ox02.

 Global currency as well will be updated as you have done previous step.
 Fill your fiscal year variant and posting variant.
 Save

This is how it will look like.

Accounting Principles

Accounting principles are local or international sets of rules and procedural

conventions that provide guidance for accounting practice and for the preparation of
financial statements. Examples: international financial reporting standards (ifrs)
generally accepted accounting principles (us gaap)
This is where we will work on.

tcode – finsc_ledger.

Let’s get started step by step with pictorial representations for better clarity.
2. Click currency setting for company code

Click on “new entries”.

Enter

 Company code – sc00

 Currency type – 30
 Currency – usd (client currency in scc4)
 Source currency type- 00
 Exchange type
 Translation data type
 Real time conversation ticked
 Press enter display cells will be filled
 Save (ctrl+s)

This is how it will look like.

Leading ledgers in s/4 hana

Sap provides 0l as the leading ledger. All company codes created in sap are
automatically assigned to ledger 0l. It is recommended not to change the leading
ledger as it also integrates with other modules such as asset accounting, controlling
and logistics
.
2.3) select your cell and click accounting principle

2.4) click on “new entries”.

Fill your custom or standard accounting principle.

Save.

Non-leading ledger
: you can define your “standard” non-leading ledger. These are parallel ledgers, for
example, based on local accounting principles. The records created in the leading
ledger are written as records in the non-leading ledger in table acdoca( is a standard
general ledger accounting transparent table in sap fi application,)
3. To create non leading ledger

3.1) click on “new entries”

 Fill all the necessary details

  Save

3.2) select the row and double click on company code for ledger

3.3) click on “new entries”

 Enter company code and press enter
 All the details will be automatically filled.
 Save it.

3.4) click on accounting principles

3.6) click on “new entries”.

 Fill your custom or standard accounting principle.

 Save.

EXTENSION LEDGER.

use. Ledgers build the basis for reporting and financial statements in accounting by
storing related transaction data and journal entries ...

Defining currency types for the general ledger in sap s/4hana

Every transaction that updates the general ledger in sap s/4hana is done in at least one
currency the definition of the currency depends on several organizational units, such
as the transaction, client, country, company code, controlling area, and master data. In
sap, a single transaction could contain multiple currencies depending on the currency
types that have been set up. In this blog post, we’ll discuss sap’s standard currency
types and how they are defined in the universal journal.
4. To create extension ledger

4.1) click on “new entries”

4.2) Fill necessary details

Save

4.3) Select the row and double click on company code for ledger

 Delete all except own company code from your extension ledger group
  Enter company code and press enter
 All the details will be automatically filled.

 Assign accounting principle to ledger group

Save.

Currency Conversion Type

We can configure currencies as per the rules of the country defined in the company
code. Sap provides currencies of every country and we can also define our own
currency if we require. You can select currency type 10 in controlling area only if all
company codes assigned to the controlling area uses same currency.

Define settings for ledger and currency types – t-code finsc_ledger

Introduction of currency setting: we can use maximum 10 currencies types in hana.
First two currency type should always be sap predefined currency type and remaining
8 currency type can be sap predefined or user defined or mixed. First currency type is
always company code currency and second currency type is controlling area currency
and controlling area currency should always be sap predefined currency. Asset
accounting supports sap predefined first three currencies only. User defined
currencies values are not updated in bseg table but updates in acdoca table.

1. Currency type
1.1 currency/valuation type – given numeric currency types are sap predefined
currencies. Y1, y2&y3 are user defined currency types.
1.2 description and short description – is description of currency types.
1.3 company code specific conversion. Please note that in this setting we have not
given currency symbol for y1 currency type and for y2 currency type and similarly for
others. This will be configured in next step. If this company code specific conversion
box is ticked it is considered as company code specific currency type. It means that
for same currency type for y1 we can give currency symbol as rub, aed, npr, myr
based on company code and we can also maintain company code specific currency
conversion. If this company code specific conversion box is not ticked it means we
need to give one specific currency symbol either rub, aed, npr, myr for y2 and y3 and
it is applicable for all the company codes. It is known as global level.

In our setting currency type y1 is defined as company code specific and y2 and y3 as
global currency type.

2. Global currency conversion setting

 2.global currency conversion setting

2.1 Curr /val. Type

Globally defined currency type in step1 only will appear in this tab. Such as y2 and y3
and others.

2.2 Currency type

It is the descriptions of the currency type.

2.3 Currency

Here we need to specify what y2 and y3 represent to. In our example, y2=jpy and
y3=gbp. Sap consultant knows about sap predefined currency type maintenance 10(t-
code ox02),30(t-code okkp and scc4),40(oy01).

2.4 Source currency type

We have given currency type 10 and it is company code currency. For example, our
company code currency inr and document posted in usd. System will convert value
from usd to inr then inr to jpy and inr to gbp. If you give source currency type 00 it
means that if you post document in usd, it will convert from usd to jpy and usd to gbp.
It is similarly applicable for other currency types.

2.5 Exchange rate type

While converting from source currency-10 to another currency like y1 what will be
the exchange rate type. We have taken average exchange type m.

2.6 Trans. Date type

While converting from source currency to another currency which date exchange rate
should be picked. We have taken translation date. It is similar to posting date.

2.6 Real-time conversion

If it is ticked then system will immediately convert value from source currency like 10
to target currency like y1 and it if it is not ticket then target currency value will be
blank and it will be converted during foreign currency valuation run (will cover
during fcr). And exchange rate type and translation date setting are not required.

In conclusion, y2 and y3 are jpy and gbp respectively defined at global. Jpy and gbp
are applicable to all the company codes using currency type y2 and y3 in their ledger
setting.

3. Currency conversion setting for company code

3.currency conversion setting for company code

3.1 company code

Enter your company code which wants to use y1 currency type.

3.2 Curr / val. Type

Enter your company code specific currency type defined in step 1. We have defined
y1 as company code specific in our example.

3.3 Currency
Enter currency symbol for y1. Since y1 is company code specific we can enter
different currency symbols for different company code and additionally we can enter
different exchange rate type and translation date and real-time conversion based on
company codes.

For example

Company codeCurrency typeCurrency

U100 Y1 Rub
U101 Y1 Aed
3.4 source currency type / exchange rate type/ translation type/ real-time
conversion

We can change source currency type, exchange rate type, translation date and real-
time conversion option as per company code for same currency type y1.

Document splitting

Document splitting is a powerful and mature tool in s/4 hana that can be used for the 3
followings reasons: to issue complete financial statement by specific characteristic:
profit center, segment, joint venture, segment
Document splitting under profit center accounting

As per the new gl profit center accounting (pca), there are two entry-views. The entry
view and the general ledger view.

You can find the sap new gl document splitting under the general ledger view.

Understand this with an example:-

Material purchased for two different profit centers under one invoice.

Entry view

Expenses a/c (dr) rs. 100 (profit center 1)

Expenses a/c (dr) rs.100 (profit center 2)

To vendor a/c (cr) rs. 200

In general ledger view

Expenses a/c (dr) rs.100 (profit center 1)

Expenses a/c (dr) rs.100 (profit center 2)

To payable a/c (cr) rs.100 (profit centers 1)

To payable a/c (cr) rs.100 (profit centers 2)

Benefits of documents splitting in sap

 1. If you see the general ledger view, you can find the object of document
splitting. While, under the business area concept, you cannot find this facility.
2. Likewise, document splitting allows you to display documents using a
differentiated representation. In the representation, line items are split
according to the dimensions you choose. Thus, you can draw up complete
financial statements with those dimensions at any time.
3. Furthermore, using the document splitting procedure, you can also create a
segmented display of a (partial) balance sheet. Either according to a set of
legal requirements (for example ias) or according to areas of responsibility.
4. In addition, you can allocate additional costs to the controlling account
assignment objects at the time of posting. Such as realized or evaluated
exchange rate differences. This is to which the costs relate.
5. Subsequently, you can also capitalise on an asset at the time of posting.

Document splitting implementation

Consider the following points:

 Make settings in customizing and other preparations for document splitting.

 Use the general ledger migration cockpit. (if you are already using new
general ledger accounting in your production system and subsequently want to
implement document splitting).

Document splitting integration

Document splitting affects subsequent processes, such as closing operations and

processes in controlling (co).

Further, you can use the document splitting procedure in two situations. First, to split
up line items for selected dimensions (such as receivables lines by profit center).
Second, to effect a zero balance setting in the document for specified dimensions
(such as segment).

Thus, it generates additional clearing lines in the document.

Document splitting process

To do the document splitting successfully, the system classifies the individual line
items as well as the documents. This takes place using your settings in customizing.

Moreover, the splitting rule selected for a document specifies the process and line
items to split the document. It also depends on how the system classifies a document.

Although, sap delivers a set of standard splitting rules. However, you can also define
your own rules.

Passive document splitting

The system creates references to existing account assignments. You use these account
assignments as the base for line items to split.
The system applies all account assignments that you define as document splitting
characteristics in customizing.

If you have set zero balance settings indicator for the document splitting
characteristic, the system then creates any necessary clearing lines. This is to ensure
that the characteristics produce a balance of zero in each document.

Active document splitting

If you split a document in this subfunction, the line items are split according to the
settings in customizing. This is the classification of the document and the splitting
rule assigned to the document.

Subsequent process- you can also use co account assignment relating to the costs for
the clearing process. Such as while realizing the exchange rate differences, you can
use co account assignments to post the difference in the rates occurring in this
subsequent process.

Closing operation

You can perform closing operations according to the document splitting

characteristics defined. An example of this is foreign currency valuation.

Document splitting simulation

During document entry, you can simulate the postings you want to generate. From the
simulation in the general ledger view, you can call the expert mode. Further, in the
expert mode, you can obtain detailed information about the split document as well as
about the document splitting rules applied.

Therefore, it allows you to view the customising settings for document splitting.
These settings are specific to the business transaction. Thus they display the split
document.

You can display a document as follows:

1. In its original form in the entry view.

2. Split from the view of the ledger in the general ledger view and with the
generated clearing lines.

Document splitting configuration in sap

As an overview, i here mention the basic steps we follow to configure document

splitting in the sap system.

1. First, classify the general ledger account – as per the nature of the business
transaction, we classify the gl considering the item categories.
2. In step 2, classify the document types – here we assign the “business
transaction” and “business transaction variant” to document types.
3. Next, define a zero balance clearing account– this we need to do when the
system is not able to balance out the transaction entry based on its own. I have
explained below in detail with steps.
 4. Defining characteristics for gl– it is a mandatory step in document splitting
configuration in sap. I.e. Defining characteristics of document splitting.
5. Modifying constants– in this step the constants are defined which helps to
assign the default account assignment when is not able to derive from any of
the sources.
6. Activating document splitting– here comes the final action step. We activate
the document splitting by selecting the check-box and choosing the relevant
method.
o Inheritance settings – this is a part of activating document splitting
itself. Here you also apply some more settings such as inheritance.
This means inheriting account assignments from other line items to
those who do not have them of their own.

How to define a zero balance clearing account in sap

Sometimes when the system does not balance out the transaction entries on its own,
then, we need to define the zero balance clearing account. This helps to generate and
balance out financial entries not done on their own.

You should refer to the following path:-

Spro => sap reference img => financial accounting (new) => general ledger
accounting (new) => business transaction => document splitting => define zero
balance clearing account