Financial Accounting:

SAP FI stands for Financial Accounting and it is one of important module of

SAP ERP. It is used to store the financial data of an organization. SAP FI helps
to analyze the financial condition of a company in the market. It can integrate
with other SAP modules like SD, PP, SAP MM, SAP SCM etc.

SAP Financials accounting module enables you to manage financial accounting data
within an international framework of multiple companies, currencies, and languages.
SAP FI module mainly deals with the below financial components −

 Fixed asset
 Accrual
 Cash journal
 Accounts receivable and payable
 Inventory
 Tax accounting
 General ledger
 Fast close functions
 Financial statements
 Parallel valuations
 Master data governance
Clearing:
A due entry and it is to be adjusted or paid.
Example:
Vendor Line Item Display (fbl1n), vendor has an overdue payment which is to
be cleared.
Create a credit note in miro against document no. to be cleared.
Go to Automatic payment transaction status (f110) and post order.

Check fbl1n. Entry will be wiped off.

Base Amount:
a. Base amount for discount calculation can be net (product price).
b. Base amount for discount calculation can be gross (product price + tax).
c. Base amount for tax calculation can be net (product price).
d. Base amount for tax calculation can be net (product price - discount)
To calculate TDS, Base Amount should be present.

Number Range:
The number range is responsible for generate the document number (BELNR)
and is defined by
1. Document type
OBA7
2. Table and Number Range Object.
Accounting documents uses Object Type RF_BELEG.
Transaction SNRO or SNUM
Object list-NRIV table
Company Code:
A company is defined as smallest unit for which financial statements can be
created in accordance with commercial legal regulations.
In SAP FI, a company can comprise of multiple codes, however it acts as a single
unit for which financial statements are available. All the company codes must
use the same chart of accounts list and fiscal year however each code can have
a different local currency.
Ox02-Customizing: company code Setup
Oby2: Copy company code (G/L account)
Oabl: Reset company code
Oaob: Assign company codes
Fss1: Create Master Record in company code
Fss4: G/L Account Changes in company code
Of18: Assign company code to FM Area
Flq3: Treasury company code Data
Fqp4: company code Details for Payment
S_ALR_87100993: Account List for company code

Letter of Credit:
After the PO has been created in SAP, from the finance side, they will post LC
the functionality is similar to bill of exchange or as a noted item. While posting the
transaction, in the reference field PO number will be maintained.
Once the Goods are received at port,Customs duties has to be paid, for this you have
to post an invoice through tcode: MIRO for the customs clearing agent with reference
to your PO(For customs duties you have to maintain appropriate condition types in PO
and against these condition types, custom clearing agents number(vendor number) has
to be maintained. All these condition types are to be created with condition category
'delivery costs').
For imports PO -- GR based-IV should not be checked because before receiving the
goods you have to clear the custom duties.
Then once the goods are received you will post the GR and the you will post the
invoice for the material vendor.
Then from the finance side, they will clear, whenever they post the clearing
transaction to the vendor, LC related transaction gets reversed automatically. Bank
account will be -ve and your vendor account will be +ve.
Note: Tracking of LC has to be done manually as the functionality is not complete in
SAP.
Process of Letter of Credit for Imports:
1. The Clearing agent ask for amount, the person who receive the product will give
Letter of Authority to Clearing Agent. The clearing agent move to bank and take
check.
For this purpose, we just issue LA.
2. Prepare Purchase for the Vendor from whom we are going to receive the product.
There may be 2 or more Vendors.
a. Product cost to be transferred to Vendor A
b. Freight or Other Charges to Vendor B
c. Customs Duty and Others to Vendor C
T-code: Me21n
3. First We have to pay Customs Duty to Commissioner of Customs after LA issued.
Entry: Customs Clearing a/c Dr
Cess on Custom a/c Dr
CVD Clearing a/c Dr
Cess on CVD a/c Dr
Special CVD a/c Dr
Vendor C a/c Cr.
T-code: MIRO
4. Cen vat credit for the product will be taken by person who handling Excise in that
company
Entry: Cen vat Clearing a/c Cr.
RG23A Part II a/c Dr.
5. Clearing of Cen vat Credit
Entry: Cen vat Clearing a/c Dr.
CVD clearing a/c Cr.
Cess on CVD a/c Cr.
Special CVD a/c Cr.
6. After Bank payment they will transfter to us
Entry: Vendor a/c - Dr.
Bank a/c - Cr.
Configuration:
1. Create Special GL for vendor with Note Item selected in its properties in
transaction FBKP.
2. Use transaction F-57 and post entry with this special GL.
Letter of Credit is only for information, so they will not update any balance in the
vendor account.

Currency:
OY03 (Set up currency), OY04 (Defining decimal), OBBS (Transactional Ratios)
In the new G/L SAP accounting, a company code can have 3 currencies. The first one is the
local currency (company code or functional currency). The second and the third currencies
are maintained as per the reporting requirements. For example, a company code currency is
INR, whereas the second currency is USD and the third currency is EUR, so if a document is
posted in the local currency (INR), the system in background updates values in USD and
EUR through the exchange rate maintained in this transaction.
Types:
Company code currency: The currency in which a company code is configured.

Group currency: The currency is assigned at the client level.

Hard currency: The currency which is assigned at the country level.

Index based currency: This currency is assigned to countries in case of high

inflation in these countries.

Global company currency: The currency is assigned to a company or an internal

trading partner.