Accounting

2008 by SAP AG. All rights reserved. 1

 G/L Accounts

In the SAP R/3 system, each transaction that has a

financial impact is recorded in a general ledger (G/L)
account or sub-ledger accounts that are posted to the
G/L via reconciliation accounts.
The central task of G/L accounting is to provide a
comprehensive picture for external accounting and
accounts. Recording all business transactions (primary
postings as well as settlements from internal accounting)
in a software system that is fully integrated with all the
other operational areas of a company ensures that the
accounting data is always complete and accurate.

2008 by SAP AG. All rights reserved. 2

 G/L Accounts
The SAP FI General Ledger has the following features:
Automatic and simultaneous posting of all sub-ledger items

in the appropriate general ledger accounts (reconciliation

accounts)
Simultaneous updating of general ledger and cost

accounting areas
Real-time evaluation of and reporting on current accounting

data, in the form of account displays, financial statements

with different financial statement versions and additional
analyses.
Can take some getting used to as reports can change
continuously

2008 by SAP AG. All rights reserved. 3

 G/L Account

Essentially, the general ledger serves as a complete

record of all business transactions. It is the centralized,
up-to-date reference for the rendering of accounts. Actual
individual transactions can be checked at any time, in
real-time, by displaying the original documents, line
items, and transaction figures at various levels such as:
Account information

Journals

Totals/transaction figures

Balance sheet/profit and loss evaluations

2008 by SAP AG. All rights reserved. 4

 Master Data

Describes items or objects used in a business such as

accounts, materials, vendors, customers that remains
unchanged over an extended period of time
Transaction data is data that is used for relatively short
periods of time, usually to record business transactions
(sales orders, purchase orders, production orders,
payroll amounts)
Transaction data is regularly removed from the system
in a process known as archiving. For auditing
purposes, it cannot simply be deleted.
A master record must be created for every G/L account

2008 by SAP AG. All rights reserved. 5

 Balance Sheet Accounts

Assets
What the firm owns, in various
levels of liquidity:
Cash
Receivables
Inventory
Plant& Equipment
Real Estate

2008 by SAP AG. All rights reserved. 6

 Balance Sheet Accounts

Liabilities
What the firm owes
Payablespayment for
materials/services received on credit
Bank loans

2008 by SAP AG. All rights reserved. 7

 Balance Sheet Accounts

Equity
The difference between total
assets and total liabilities
Includes

Retained earnings
Net income on past periods

Assets = Liabilities + Equity

2008 by SAP AG. All rights reserved. 8
 Profit and Loss (P&L)
Accounts
Revenues
Money obtained by the sale of goods and services

to customers
Expenses
Money spent to produce the revenue:

Materials
Utilities
Salaries
Selling expenses
Administrative expenses

2008 by SAP AG. All rights reserved. 9

 Profit and Loss (P&L)
Accounts
Contain an identifier for the Retained
Earnings account
At fiscal year end, the P & L accounts
are closed to the Retained Earnings
account

2008 by SAP AG. All rights reserved. 10

 Reconciliation Accounts

Reconciliation account
Accounts receivable, Accounts
payable, Assets
When you post to an account in the sub-
ledger, the system automatically posts to
the corresponding reconciliation account
The general ledger is automatically
updated

2008 by SAP AG. All rights reserved. 11

 G/L Master Records
Contain:
Chart of Accounts
Company Code
G/L account number
G/L account name
Account type: Balance sheet or Income
Statement
Account group

2008 by SAP AG. All rights reserved. 12

 Account Groups
Identifier that controls which fields must be entered
when the account is created
Can determine a valid number interval for the G/L
account
Must be created before creating G/L master records
configuration data
Three Account Groups created for Fitter Snacker
Balance Sheet Accounts

Profit and Loss Accounts

Reconciliation Accounts

2008 by SAP AG. All rights reserved. 13

 Account Groups

Financial accounting General ledger accounting

G/L accounts Master Records Preparations
Define Account Groups

2008 by SAP AG. All rights reserved. 14

 Account Determination

When you enter a goods movement

(inventory receipt, inventory withdrawal,
variances, etc.), you do not have to enter
G/L accounts since R/3 automatically
determines the correct accounts.
Automatic Account Determination is set
in Customizing (IMG)

2008 by SAP AG. All rights reserved. 15

 Valuation Grouping Code
Allows the same account determination rules
to be used in multiple plants
Assign a valuation grouping code to the
valuation area, then use the valuation grouping
code in automatic account assignment

2008 by SAP AG. All rights reserved. 16

 Automatic Account
Determination
Hierarchical Process (classification)
Chart of Accounts/Company Code
Valuation
area/grouping code
Transaction/Event Key (from transaction being
executed)
Goods Receipt Modifier (if applicable)
Valuation Class (from material master)

All specified at time of transaction

2008 by SAP AG. All rights reserved. 17

 Automatic Account
Determination
Transaction Keys:
BSX: Inventory Postings
GBB: Offsetting Entry for Inventory Postings
DIF: Materials Management Small
Differences
PRD: Cost (price) differences
WRX: Goods receipt / inv. receipt clearing
acct

2008 by SAP AG. All rights reserved. 18

 Automatic Account
Determination
Valuation Class
3000: Raw Materials
7900: Semi-finished
7920: Finished

2008 by SAP AG. All rights reserved. 19

 Automatic Account
Determination
General
Account Usage
Modifier
AUF Goods Receipt From Production Order
post to production settlement
BSA Goods Receipt Into Initial Stock only
used once for posting inventory off-
set for initial stock data load
VAX Goods Issue To Sales - post to Cost
of Goods Sold (COGS)
VBR Goods Issue to Consumption - post
to material consumption (e.g., goods
issue to job or production order)
2008 by SAP AG. All rights reserved. 20
 Automatic Account
Determination
From Transaction:
Company Code Chart of Accounts
Transaction Key (not same as transaction code)
General Account Modifier (if applicable)

From Material
Valuation Class

Determines: G/L Account for Posting

2008 by SAP AG. All rights reserved. 21

Transaction Keys

2008 by SAP AG. All rights reserved. 22

 Automatic Account
Determination
CHFS BSX 00AP 3000 Account 200000

2008 by SAP AG. All rights reserved. 23

 Controlling (CO)
Controlling
CO Internal Accounting
Cost Accounting
Managerial Accounting
Management Accounting
Flexible Non-standard

Financial Accounting
External Accounting
FI
Financial Statements
Legal Requirements
Standard
2008 by SAP AG. All rights reserved. 24
 Controlling (CO)
While there are different requirements for internal and
external users of accounting data, the underlying data
is usually the same for both purposes and can be
captured while recording business transactions
purchase orders, goods receipts, material withdrawals,
etc. The data can then be presented in different ways
for different users.
Info system reports in FI are standard
G/L Account Listing

Info system reports in CO are flexible

2008 by SAP AG. All rights reserved. 25

 Cost Elements
Primary Cost Elements
Expenses in FI that are relevant to cost accounting are
recorded in CO using primary cost element.
Primary cost elements can only be created when a G/L
expense account exists. Thus, there is a one-to-one
relationship between primary cost elements and G/L
expense accounts.
When an FI posting occurs in a G/L account for which
a primary cost element has been defined, a valid
controlling object (cost center, order, etc.) is required
before posting.

2008 by SAP AG. All rights reserved. 26

 Cost Elements
Secondary Cost Elements
Secondary Cost Elements are used exclusively for
certain types of CO transactions.
Secondary cost elements have no corresponding
G/L account.
Secondary cost elements can be used in
transferring costs from one cost center to other cost
centers. Primary costs are grouped together and
transferred to receiver cost centers using a
secondary cost element.

2008 by SAP AG. All rights reserved. 27

 Cost Centers
Cost centers are used to track WHERE costs
occur in the organization. As costs are
incurred, they are assigned or posted to the
appropriate cost center.
The posting and assignment of costs to cost
centers is a critical step in using the CO
module.
Cost centers are organized in a Standard
Hierarchy.

2008 by SAP AG. All rights reserved. 28

 Cost Center Standard
Hierarchy
The cost center standard hierarchy organizes cost
centers and provides the ability to organize reports at
different levels in the organization:
FS-CC-## (Standard Hierarchy)

##HQ (Cost Center Group / Hierarchy Area)

HQ Cost Centers
A010 Finance
A020 H/R
A030 Sales
A040 Marketing
A050 Purchasing
A060 - Administration

##MFG (Cost Center Group / Hierarchy Area)

MFG Cost Centers

P010 Production
P020 Warehouse
P030 Receiving
2008 by SAP AG. All rights reserved. 29
 Cost Center Groups
Cost Center Groups can also be defined
to support additional reporting
capabilities:
##HQ (Cost Center Group / Hierarchy Area)
HQ Cost Centers
A010 Finance
A020 H/R
A030 Sales
A040 Marketing
A050 Purchasing
A060 - Administration
## Sales group

2008 by SAP AG. All rights reserved. 30

 Cost Allocation
Frequently, costs like rent, computer expense,
utilities, etc. have to be allocated to cost
centers to provide accurate cost reporting.
Costs can be allocated using a statistical key
figure, which defines some measurable value
related to the cost center, like square footage,
head count, CPU hours, etc.
Costs can also be distributed using fixed
percentages.

2008 by SAP AG. All rights reserved. 31