Defining the Chart of Accounts

• Demonstrate an understanding of the various charts of accounts represented

in SAP ERP.
• Create a chart of accounts.
• Assign a company code to a chart of accounts.
• Define an account group to the chart of accounts.
• Define a retained earnings account.

The Chart of Accounts

A chart of accounts is a fundamental financial tool in SAP ERP. It contain
accounts used by a company code or several company codes for posting
reporting financial performance to the financial statement and balance
by transaction type in the chart of accounts. It holds basic information a
accounts in the SAP ERP system, such as account numbers and names, a
that determine how G/L accounts are created and function in SAP ERP

The benefits of the chart of accounts are that it:

• Defines the basic structure for creating G/L accounts.
• Gives you the flexibility to use the same chart of accounts for several c

note:
You can assign an additional two charts—country-specific and group—to
operational chart of accounts in a company code
 To create a general ledger and assign it to a company code, you must as
accounts to each company code in SAP ERP. One operational chart of ac
company codes if those company codes have identical general ledger str

The functions of the three charts of accounts in SAP ERP are explained h
• Operational chart of accounts: This is also referred to in the industry a
chart of accounts. It is used to post the daily financial accounting and co
accounting transactions. Each company code must be assigned an opera
of accounts.
• Group chart of accounts: Contains the corporate G/L accounts applicab
company codes in the group. It’s purely for consolidation reporting for t
• Country-specific chart of accounts: This optional chart of accounts is im
a company in a corporate group is required by law to produce a financia
specifically to meet a country’s reporting requirements

Create the Chart of Accounts

IMG: Financial Accounting

(New) ➤ General Ledger Accounting (New) ➤ Master Data ➤
Accounts List. You can also use the transaction code OB13.
 • Manual creation of cost element: The system will not automatically cre
cost elements when you create your G/L accounts. Instead, you have to
do this.
• Automatic creation of cost element: When a new G/L account is saved
cost elements are automatically created.
Consolidation: Enter the group chart of accounts used by your corporate
The group chart of accounts you enter here will be required when creati
corporate G/L accounts that are used for consolidating financial stateme
reporting for the corporate group.
Status: This section of the screen allows you to activate the blocked che
This function blocks postings to the G/L account unless this checkbox is
deactivated. For example, you can block your chart of accounts from be
posted to until you have completed your configuration. We recommend
not activate this function, unless your company or client requires this

Assign Company Code to Chart of Accounts

Several company codes can be assigned to one chart of accounts, but on
is assigned to a company code (a group chart of accounts for consolidati
chart of accounts for meeting specific country reporting requirements ca
code).

IMG:
Financial Accounting (New) ➤ General Ledger Accounting (New) ➤ Mast
Preparations ➤ Assign Company Code to Chart of Accounts. Or you can

note;
Tip You have the option of assigning additional charts of accounts to your company
reporting needs. For example, if you want to provide a consolidated corporate repo
of accounts to your company code with the operational chart of accounts. Likewise
country-specific reporting needs, you can assign a country chart of accounts to you

Define Account Group

A chart of accounts holds a large number of account types, and they det
created in SAP ERP. For proper management, accounts are systematicall
groups by grouping accounts with similar tasks together in the same gen
accounts related to revenue are grouped together and assigned the sam
 assigned to an object). G/L accounts belonging to account groups such a
Assets are also grouped together in the appropriate group and number r

Why are account groups important? There are two main reasons:
• They determine the number ranges assigned to an account when crea
a G/L account.
• They determine the screen layout for creating G/L accounts in the com
code area.

■■Note You can create your own account groups or copy the account groups tha
from the predefined list and then modify them to meet your needs

IMG:
Financial Accounting (New) ➤ General Ledger Accounting (New) ➤ Master Data ➤
Preparations ➤ Define Account Group. Or you can use the transaction code OBD4.

Define Retained Earnings Account

In accounting, a portion of the profits is held back at the end of a fiscal year as reta
after distributing dividends to the shareholders in proportion to their investment in
the net profit or net loss figure is carried forward to retained earnings on the balan
IMG: Financial Accounting (New) ➤ General Ledger
Accounting (New) ➤ Master Data ➤ G/L Accounts ➤ Preparations ➤ Define Retain
Or you can use the transaction code OB53.

■■Note X is a symbol used in SAP to represent an account type for ret

If you have more than one retained earnings, you cannot use account ty
You have to assign the next retained earnings account type Y and the ne

■■Note S ince you have not created a G/L account for retained earnin
message on the status bar that says . Click the Enter button twice or pre
the Enter button on your keyboard twice. The system will accept your G
continue customizing. In Chapter 5, you will learn how to create G/L acc
 s of accounts represented

cial tool in SAP ERP. It contains the list of general ledger (G/L)
ral company codes for posting daily financial activities and for
ancial statement and balance sheet. Transactions are classified
ts. It holds basic information about the structure of general ledger
ccount numbers and names, as well as other control parameters
ted and function in SAP ERP

G/L accounts.
chart of accounts for several company codes

country-specific and group—to the minimum required

 a company code, you must assign an operational chart of
P. One operational chart of accounts can be assigned to several
ave identical general ledger structures

nts in SAP ERP are explained here:

o referred to in the industry as a common
ily financial accounting and cost
de must be assigned an operational chart

orporate G/L accounts applicable to all

r consolidation reporting for the group.
optional chart of accounts is important when
d by law to produce a financial report
equirements

nting (New) ➤ Master Data ➤ G/L Accounts ➤ Preparations ➤ Edit Chart of

the transaction code OB13.
 stem will not automatically create primary
ccounts. Instead, you have to manually

en a new G/L account is saved, the related

counts used by your corporate group.

e will be required when creating
onsolidating financial statements

ou to activate the blocked checkbox.

count unless this checkbox is
our chart of accounts from being
onfiguration. We recommend that you
mpany or client requires this

rt of Accounts
o one chart of accounts, but only one operational chart of accounts
art of accounts for consolidation reporting and a country-specific
ntry reporting requirements can also be assignment to a company

ger Accounting (New) ➤ Master Data ➤ G/L Accounts ➤

Chart of Accounts. Or you can use the transaction code OB62

s of accounts to your company code based on specific

a consolidated corporate report, assign a group chart
nal chart of accounts. Likewise, if your goal is to provide
untry chart of accounts to your company code

of account types, and they determine how G/L accounts are

ent, accounts are systematically classified into appropriate account
asks together in the same general ledger. For example, all G/L
ogether and assigned the same number range (array of numbers
ging to account groups such as Liabilities, Expenditure, and
propriate group and number ranges

e are two main reasons:

gned to an account when creating

eating G/L accounts in the company

r copy the account groups that meet your requirements

et your needs

nting (New) ➤ Master Data ➤ G/L Accounts ➤

e the transaction code OBD4.

the end of a fiscal year as retained earnings (net profit)

oportion to their investment in a corporation. Normally,
etained earnings on the balance sheet
 Preparations ➤ Define Retained Earnings Account.

resent an account type for retained earnings in the P&L statement.

ngs, you cannot use account type X again once it has been used.
ngs account type Y and the next one Z.

/L account for retained earnings, the system will issue a warning

the Enter button twice or press
The system will accept your G/L account temporarily to allow you to
ill learn how to create G/L accounts.