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Chart of Accounts in SAP – Introduction in SAP

The chart of accounts in SAP is a group of GL Accounts that controls the name of General GL Master, number of
GL Master and some control information. In other words, it is the grouping of G/L accounts that forms the
framework for recording accounting transactions in a structured way.

What is Covered in this article?

• Importance of COA for GL Accounts

• List or Types of Chart of Accounts
• How to Create Chart of Accounts
• Values to Maintain for defining Chart of Accounts in SAP
• Steps for creation of COA in S/4HANA
• The process to create Group Chart of Accounts
• How to Assign Company Code to Chart of Accounts?
• How to display COA?
• Why do you need to create COA?

How it is important for GL Accounts?

Each G/L account is made up of an account number, account name and same control information. The control
information decides how an account is created in a company code and posted to.

There are a number of Chart of accounts in SAP that meet the statutory and legal requirements of various
countries. Likewise, the international chart of accounts (INT) works in a similar way and any country can use
them.

Important: SAP New GL Migration- Overview

(Types) List of Chart of Accounts in SAP

In SAP FICO, We have three types of Chart of Accounts. Let us understand them briefly.

1. Operating Chart of Accounts

The operating chart of accounts in SAP is used for recording the day-to-day transactions in a company code. We
also call them the standard chart of accounts. Both FI & CO make use of this element.

Noteworthy, this can be different from the country chart of account. Each company code works with exactly one
operating chart of accounts. However, we can assign the same chart to more than one company code.

2. Country Specific Chart of Accounts in SAP

The country chart of accounts in sap helps to meet the country-specific legal requirements. Although it is
optional to assign to a company code, you need such a chart when you work with a different operating chart of
accounts.

Subsequently, you can establish the linkage by entering the country chart of G/L account number in the
alternate Account number field of GL Master Record.

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3. Group Chart of Accounts

We use a group chart of accounts in SAP for consolidating all company codes with a dissimilar operating chart of
accounts belonging to a company.

However, the assignment of a group chart of accounts to a company code is not mandatory. We also call it the
Corporate Chart of Accounts.

How to create Chart of Accounts in SAP?

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After clicking on the “Edit Chart of Accounts List”, to create a new chart of accounts, click on New entry, Fill in
the required details and Save.

So, now let’s see how to create COA in S/4HANA.

However, before creating the chart of accounts you must understand that we need to maintain some values
which are necessary for the defining process.

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Values to Maintain for defining Chart of Accounts in SAP

• Chart of Accounts – Enter the four-character identifier

• Description– Enter a Description
• Maintenance Language – Select ENGLISH as the maintenance language. Consequently, all the G/L
accounts of this chart have their descriptions in this language. We can easily translate the account
names to a target language from the maintenance language. However, only if we use the same chart of
account in other company code.
• Length of G/L Account Number– Enter (1-10) as the length of the G/L account number.
• SAP Controlling Integration– This field indicates how the system should create cost elements when we
create New G/L accounts. Here, the system automatically creates the required cost elements for the
option AUTOMATIC Creation of Cost Elements. Provided if you have maintained a default Cost Element
Category. (Remember, you can use Transaction Code OKB2 for this). You may also set the system to
have the cost elements created manually using the appropriate transactions (Transaction KA01 for
creating a primary cost element and Transaction Code KA02 for creating a secondary cost element).
• Group of Chart of Accounts in SAP– This chart of account is used for company consolidation.
• Blocked– If you select this indicator, then you are not able to create any New G/L accounts in the
company code from this chart of accounts.

Now see the process to define chart of accounts in SAP.

Steps to create Chat of Accounts in the SAP S/4HANA system

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SPRO=> SAP IMG => Financial Accounting => General Ledger Accounting => Master Data => G/L Accounts =>
Preparation => Edit Chart of Accounts List. – [Tcode is same – OB13]

Chart Account can be defined with a maximum 4 digit code. In my example, it is “PCKI”.

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How to create a Group Chart of Account?

The process to create a Group Chart Of Accounts is the same as we create an Operating Chart of Account. Once
you create it, assign it to one of the existing operating charts of accounts. Now the earlier one becomes a group
chart of accounts.

For example, first, we create a chart of accounts with the name “A”. As mentioned, we will create it in the
normal way as an operating chart of accounts. After creation, we assign this “A” chart of account to an already
existing COA eg. name “B”.

Finally, after this assignment, the first COA i.e. “A” becomes a Group Chart of Accounts.

How to Assign Company Code to Chart of Accounts?

Since we create the chart of accounts at the client level, thus, the next logical step is to assign them to company
codes.

Steps to Follow:

SPRO => IMG => Financial Accounting (New) => General Ledger Accounting (New) => Master Data => G/L
Accounts => Preparation => Assign Company Codes to Chart of Accounts. – [Transaction Code- OB62]

Process for assigning company code:

• Firstly, you need to enter TCode OB62 in the SAP command field area and go ahead.
• Next, you see a screen having Change view Assign company code- chart of accounts – Overview screen.
• Here you select the position option and enter the company code in the box appearing.
• Lastly, after successful completion, you would see the specific company code on the top of your SAP
screen.

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How to Display Chart of Accounts in SAP

It’s very simple. Just follow the below steps.

Click on the Edit Chart of Account List => Use TCode OB13 => Click on the Position => Search the specific Chart of
Accounts.

Same as the image above. The steps are the same as creation. Just enter the specific COA Tcode.

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Tcode to display chart of accounts

It is OB13.

You must have known already. Since it is a common question by readers, so I put it here separately. We use it to
see a specific Chart of Account.

How to Copy a Chart of Accounts in SAP

The steps are the same as creating a new COA. After which certain things you need to do. Here is the whole
process.

• SPRO => SAP IMG-Financial Accounting (New) => General Ledger Accounting (New) => Master Data =>
G/L Accounts => Preparation => Edit Chart of Accounts List. – Click on COPY Icon (shown in image
below) =>
• Here system will ask you to select a Source Chart of Accounts. Eg. 0001. Then, you need to give your
target COA.
• Click enter.
• Do the necessary changes (if required).
• Finally Click Save.

(Same Tcode is to use – OB13).

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Copy Company Code

In this activity you can copy G/L accounts from one company code to another.

Requirements

No G/L accounts may exist in the target company code.

The chart of accounts for the target company code must be a copy of the source company code's chart of
accounts.

Note

If no master data exists for G/L accounts in the chart of accounts area in the target company code, the
system copies the master data from the source company code's chart of accounts.

Activities

Enter a target company code in the Company code field. In the Copy from company code field, enter the
company code you want to copy.

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Why do you need to create Chart of Accounts?

In order to maintain the General Ledgers in SAP properly, you must create the Chart of Accounts in the proper
format. Since the general ledger accounts are the backbone of the SAP Financial Management system. This is to
say, in FICO and SAP S4 HANA Finance both it has their significance.

Thus, you must consider the chart of accounts as their internal structure.

Importantly, if you would like to understand the General Ledger system in SAP in a deeper way, you must learn
the chart of accounts at its best. Also, that should be from a good source.

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