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Basic configuration in SAP FI to create GL accounts

By Lokesh Mohanasundaram, Wipro Tech

Introduction: The paper gives the complete configuration required to create GL-account in SAP-FI, Right from the definition of Company to creation of GL-account in the company code and chart of accounts with screen shots and explanation of the entire process to make the Reader have a clear understanding of the configuration. The process of creating an Enterprise structure begins with the definition of Company. The various organizational units in a business are defined individually and they are assigned to each other in a hierarchical way which forms the whole Enterprise Structure in an ERP system. A Company: It is said to be an organization or a corporate group which has one or many Company code under it. The screen shots below will give the detailed step to define Company in SAP system. Most of the configuration relating to SAP is done in SPRO (SAP Project Reference Object); follow the navigation shown in the picture to Define Company in SAP,

The definition of the company is shown above; The Company is represented using a Four Digit numerical character (it can also be alphanumerical) 4623 with the name Lokesh Group of Industries. Company Code: It is said to be the representation of an independent balancing or legal accounting entity within the Corporate Group which can create its own financial statements; there can be n number of company code within a corporate group.

Choose Second option to create New Company Code and First option to Copy and create new company with all the data from an existing Company Code. Creation of Company Code 1000:

Company Code 1000 is created. Creation of Company Code 2000:

Once the Creation of Company code is done they are to be assigned to the Company in SAP to achieve the Enterprise Structure. Company 4623- Lokesh Group of Industries Company Code 1000- Lokesh Iron & Steel Company Code 2000- Lokesh Paper Mills

The tabular column describes that the Company Code 1000 & 2000 are contained in the Company 4623. The above screen shot explains the creation of the Company Code in SAP system. To achieve this assignment of Company Code to Company the following steps are to be done Assign Company Code to Company:

The Screen shot explains the assignment of the CC 1000 & 2000 to Company 4623. Thus a basic Organizational Structure is achieved in the Enterprise structure. Now the Financial accounting Global setting is explained below with configuration steps and screen shots.

Financial accounting Global Settings: The Variant Principle: The Variant Principle is a Three Step Method used in the SAP system to assign particular properties to one or more objects, the steps are; 1. Define The Variant. 2. Determine Values For The Variant. 3. Assign The Variant To The Object. Maintain Fiscal Year Variant:

A Fiscal Year or the Financial Year is usually a period of twelve months for which a company regularly creates an inventory and financial statements. The screen shot explains the navigation and the creation of Fiscal Year Variant. The Fiscal year variant is categorized into three types namely 1. Year Independent FYV. 2. Year dependent FYV. 3. Shortened FYV. Year Independent: The starting date and the ending date of the Fiscal doesnt change according to the year, this type of FYV is called year independent. For e.g. FY of INDIA, irrespective of the year the FYV is from APRIL 1ST to MARCH 31st. Creation of this type of FYV is explained below with screen shorts. Year Dependent: The starting date and the ending date change every year, this type of FYV which is dependent on the year is called year dependent FYV. The FYV must be changed every year to carry out transaction. For e.g. FY of USA, changes every year. Shortened FYV: This type of FYV is used to compensate the difference or the gap which occurs between FY usually this FYV will have less than 12 periods. Usage of SFYV is shown below with business scenarios as examples. Scenario 1: Say the FY of USA is from JAN 1ST to NOV 31st this year (2011), and next year they use FY from MARCH 1ST TO DEC 31ST (2012), For this type of scenario Shortened FYV is incorporated to fill the GAP between DEC 1ST (2011) TO FEB 28TH (2012). Scenario 2: Suppose the business of an Company starts in between there FYV say OCT 1ST and ends at MAR 31st so to do posting SFYV is created and used for the first year of their business.

Fiscal Year Variant LO-YEAR INDEPENDENT is defined in the screen above, The periods of the FYV is determined below which is a 12period & 4special posting period variant. The Fiscal year followed in India is Year Independent which is from APRIL 1ST to MARCH 31ST irrespective of the year.

The year shift which indicates -1 is the months of last year and the year shift 0 indicates the months of the present years.

Thus the FYV is assigned to Company Code 1000 & 2000. Note: The fiscal year variant doesnt specify whether a period is open or closed, it only defines the number of periods and their start & finish days. Special Posting Period: In order to ensure that you can compare the closing months with the other periods of the fiscal year, we make closing posting in the special periods for e.g. 12 posting periods & 4 special posting periods. These special posting periods could be 1. Accruals & deferrals. 2. Audit posting. 3. General meeting of share holders. 4. Adjustment Postings. Etc . Posting Period variant:

It is responsible for the opening & closing of periods in a Fiscal year for posting to take place. You can specify which company codes are open for posting in a posting period variant. Posting period variants are cross-company code and you have to assign them to your company codes. The posting periods are then opened and closed simultaneously for all company codes via the posting period variants. Working with posting period variants is recommended if you are responsible for a large number of company codes. Since you only have to open and close the posting period once for the variant, your work is considerably reduced. Posting Period Variant can control posting according to the account type also. The configuration of Posting Period variant is explained below

The Posting Period Variant is defined for the company 4623. According to the variant principle the next step is to determine values for the variant,

Navigation is shown.

As the Screen shot explains the posting period can be maintained per account type and the year which is to be open & closed can be easily managed. + determines the Masked account type applicable for all the account type, the posting is possible from 2011 to 2020 for periods 1 to 12 and the for periods 13 to 16 it is open from 2011 to 2021.

Assign Variant to Company Code:

the variant PP46 is assigned to company code 1000 & 2000 below.

Maintain Field Status Variant: We have to define field status outside of the master record. Mark the field status you need for each field or field group under a field status group. Then assign the field status group to individual G/L accounts in the G/L account master records. Field status groups are independent of company code, attaching instead to the field status variant. A separate variant exists in each company code for field status groups in the standard delivered system. The variant name is the same as the company code, and each company code is assigned to this variant. 1. Maintain field status variant. 2. Determine Field status groups. 3. Assign company code to field status variant. Definition and the navigation of the field status variant is shown below,

FS46 is created and the group are defined according to the requirement of the customer which is explained below,

Field status group is defined according to the requirement of the customer e.g. G000 for general usage, G001 for making cost center as an mandatory requirement at the time of posting. Assigning FSV to Company Code:

Document Number Range: It is defined as the specific interval within which documents should be created in SAP, Document number range depends upon Company Code and valid only for the defined year. The configuration along with the navigation is given below,

Document can be created from number 1 to 9999999999 for the Fiscal 2011 in CC 1000, if the requirement of the customer is to create document number by themselves at the time of posting the checkbox Ext (seen at the corner) must be checked. If it is not checked the system automatically picks document number sequentially during posting.

Tolerance Group for Employees & G/L Accounts: It is said to be the authorization given to the employees or the end user for the maximum amount permitted per transaction. It also includes the amount of discount to be given to their customer. Normally tolerance is created and assigned to the employees according to their designation or the authorization. It can also be assigned to G/L accounts as well so that the maximum posting to that G/L can be restricted to specific amount.

In the above Screen the tolerance group for CC 1000 & 2000 is seen, where the amount permitted per line item and the discount to be given is maintained, this tolerance group is assigned to the users accordingly.

The screen shot explains the maximum clearing difference permitted by the system per DEBIT & per Credit and are posted automatically. Thus the basic configuration required for creating GL account is done in the financial account Global Settings. Well move on the General Ledger setting for other configurations. General Ledger Settings: General Ledger (G/L) Accounting is a central component in SAP Financials where monetary values corresponding to all business transactions are recorded. Chart of accounts:

It is a variant which contains the structure and the basic information about the general ledger accounts. It is a list of the GL accounts maintained in an organization. We define the chart of accounts with a four digit id. In our case COA-4623 is created and assigned to CC.

COA-4623 is created. The field Length of the G/L account number is given as 6, i.e. the maximum length of G/L account permitted by the system for creation in this case we can create G/L from 1 to 999999. Note: The maximum length of G/L account can be 10. The purpose of given Automatic creation of cost elements is to create cost elements (nothing but G/L accounts) automatically by the usage running Batch Input or else the cost elements are to be uploaded using LSMW again. Assign Company Code to COA:

The COA-4623 is assigned to Company Code 1000 & 2000.

Account Groups: The process of grouping similar accounts together and assign number range to it so that it can be identified easily is the usage of Account groups in SAP. The added advantage of this is that the Field Status for the master data can be created at this level, so the fields which are mandatory or optional for the creation of Master data i.e. G/L accounts can be assigned here.

The grouping of similar accounts can be seen in the above screen shot. Retained Earnings Account: The percentage of net earnings not paid out as dividends, but retained by the company for reinvesting in its core business or to pay off the debts is called retained earnings. It is recorded under share holders equity on the balance sheet. The account in which this amount is retained is called Retained earnings account. Creation and the navigation is shown below,

Each Profit & Loss a/c is assigned to a Retained Earnings Accounts via key. For profit and loss statement accounts, the balance is carried forward to a retained earnings account and the profit and loss statement account is set to zero. A key (for example, .X.) is assigned to the account to which the balance is carried forward. You enter this key in the field "P&L Statement Type" in the chart of accounts segment. Transaction Code = OB53 is used. Thus the basic G/L settings is achieved by these configuration mentioned above. Now we have finished the entire configuration required for creating GL account, so what next?? Creation of G/L Account: The GL account is made up of two segments namely company code segment and chart of accounts segment. Creation of G/L account can be done in three ways namely, 1. Creation of G/L account centrally-FS00. 2. Creation of G/L account in COA- FSS0. 3. Creation of G/L account in CCFSP0.

Creation of G/L account in COA- FSS0: This functionality gives a basic template of the GL account. The account is created with entire data required from the COA perspective namely, 1. Account Group to which it belongs. 2. P&L a/c or Balance sheet a/c. 3. Description and other information like person created. Etc. This can be used by all CC with same COA; in this case CC-1000 & CC-2000 can use the same GL. Creation of G/L account in CCFSP0:

This functionality is used to assign the Company Code relevant data to the GL account; these are exclusively used by that CC alone namely, 1. Currency. 2. Tax relevant settings. 3. Field status group. 4. Tolerance group. 5. Authorizations. Etc.

Creation of G/L account centrally-FS00: The purpose of creating GL account centrally is to create GL account in both the segment together, which is shown in the screen shot below, The creation is carried out using FS00:

Screen shot gives the overview of the field which has the COA related data.

Screen shot gives the field relating to Company Code relevant data.

A revenue account is created in CC 1000, the account number falls under the account group revenue of 4623. The Field status group G000 is assigned in the Create bank/interest tab. The G/L account300001 revenue account of CC-1000 is created. Result: Thus the entire configuration required for creating a G/L account is explained with required explanations and the relevant screen shots.