Accounting

1
Accounting
2
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.

3
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

4
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

5
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

6
Balance Sheet Accounts

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

7
Balance Sheet Accounts

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

8
Balance Sheet Accounts

• Equity
• The difference between total assets and total
  liabilities
• Includes
• Retained earnings
• Net income on past periods

Assets Liabilities Equity
9
Profit and Loss (PL) 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

10
Profit and Loss (PL) Accounts

• Contain an identifier for the Retained Earnings
  account
• At fiscal year end, the P L accounts are
  closed to the Retained Earnings account

11
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

12
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

13
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
  recordsconfiguration data
• Three Account Groups created for Fitter Snacker
• Balance Sheet Accounts
• Profit and Loss Accounts
• Reconciliation Accounts

14
Account Groups
Financial accounting ?General ledger accounting
?G/L accounts ?Master Records ?Preparations
?Define Account Groups
15
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)

16
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

17
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

18
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

19
Automatic Account Determination

• Valuation Class
• 3000 Raw Materials
• 7900 Semi-finished
• 7920 Finished

20
Automatic Account Determination
21
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

22
Transaction Keys
23
Automatic Account Determination

• CHFS BSX 00AP 3000 Account 200000

24
Controlling (CO)
Controlling Internal Accounting Cost
Accounting Managerial Accounting Management
Accounting Flexible Non-standard
Financial Accounting External Accounting Financi
al Statements Legal Requirements Standard
25
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 transactionspurchase 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

26
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.

27
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.

28
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.

29
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

30
Cost Center Groups

• Cost Center Groups can also be defined to support
  additional reporting capabilities

31
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.