You are on page 1of 10


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
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 1 to MARCH 31 . 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


Scenario 1: Say the FY of USA is from JAN 1 to NOV 31 this year (2011), and next year they use
FY from MARCH 1 TO DEC 31 (2012), For this type of scenario Shortened FYV is incorporated to
fill the GAP between DEC 1 (2011) TO FEB 28 (2012).

Scenario 2: Suppose the business of an Company starts in between there FYV say OCT 1 and
ends at MAR 31 so to do posting SFYV is created and used for the first year of their

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 1 to MARCH 31 irrespective of the

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.