SAP FICO basic Settings: Creations company Company code Assign company code to company Business area Fiscal year variant Asian fiscal year variant to company code Chart of accounts Accounts Group Retained earning account Posting period variant Document Types and no ranges Filed status variant Tolerance group Posting Keys General Ledger Configuration GL master record Posting of document Display balances of GL Parking, hold Accrual, sample documents Deferral documents Foreign exchange Reversal of documents Interest calculation Cash management Bank reconciliation Account Payable Vendor groups(MM and FICO vendors) No. ranges for vendor accounts Tolerance group for vendors House bank Correspondence Automatic payment program Extended with holding tax Terms of payments Down Payment Made Cash discount (received) Account Receivable Customer group (SD and FI/CO customers) No. ranges for customers accounts Customer master records Down Payment Received Dunning Cash discount (CIN version) Bills of exchange Treasury management Asset Accounting Chart of depreciation Account determination Screen layout Asset classes Integration with FI Depreciation methods Depreciation keys Asset master Sub Asset Master Asset report Depreciation run Sale of asset Transfer of asset Scrapping of asset Capital work in progress Controlling Controlling area No. of ranges for controlling documents Versions Cost element accounting(manual, automatic) Cost Centre Accounting Repost line items, repost of cost Actual overhead assessment Planning cost centre and cost element Budgeting Internal Order Order type Order, Statistical Key Figure Planning internal order wise View internal order wise report Profitability Accounting (PCA) Controlling settings Dummy profit centre actual data Profit centre assignment of revenue elements Choose account, creation of cost object Planning profit and loss items Planning balance sheet items Profitability Analysis (CO-PA) Operation concern Profitability segments Assignment of controlling area to operating Activate profitability analysis Mapping of conditions to coop values Drill down report Report painter Product Costing-Material Ledger Creation of secondary cost element Active type Price calculation Work centre Overhead keys Routing Cost sheet variant Cost estimate with quantity structure Cost estimate without quantity structure Marking and Releasing Work in Progress Integration Procurement cycle Integration with MM Sales process integration with SD Integration with asset accounting Integration with controlling Integration with PP Reports Financial statement version GL reports Accounts payable reports Accounts receivable reports Assets Cash book reports LSMW Transport Management SAP Organizational Structure Define a Company Define a Company Code Assign Company Code to Company Define Chart of account Assign Company Code to Chart of Accounts SAP Global Accounting Setting Charts of Account Allocate Company Code to Chart Of Accounts Setup Account Groups and their Number Ranges Assign Fiscal Year Variant Assign Posting Period Variant to Company Code Document Number Ranges for company code Assign Field Status variant to Company Code Define Tolerances for Employees Set up Business Partners: Customer and Vendor Set Tolerance for Customers and Vendors Customer Account Groups Create Number ranges for customer accounts Allocate Number Ranges to Customer Groups Customer Master Record Create Vendor Groups Create Number Ranges for vendor Accounts Allocate Number ranges to vendor account groups Create Vendor Master Post a Customer Invoice Set up Business Partners: Customer and Vendor Clear Open Items by Incoming Payments Post Partial Payment against an invoice Residual Payment Create Under / Over Payment Account Assign Under / Over Payment Account to Process Key ZDI Cash Discount Granted Account at General Ledger level Assign Cash Discount Granted Account to process Key SKT Cash Discount Taken Account Process Key SKE Payment Within Tolerance (incoming) Payment within Tolerance (outgoing) Payment within Tolerance with 3% discount Special Program Sample Account Configure Automatic Payment Program Dunning Down Payment Down Payment Received What is ERP ? What is ERP ? This is normal for someone who dont know about ERP systems. ERP stands for Enterprise Resources Planning. ERP system was originally used in manufacturing company as it has a complicated business processes. Today, ERP system has been applied in various companies, such as manufacturing, retail, oil and gas, banking, telecommunication, and many more. ERP software system has an objective to integrate all of the business data and process so it can be managed in most effective and efficient way. It reduces the redundant data and process by making all data from various business processes in a company can be accessed by all departments of that company (of course, with an Then this same data can trigger . One system’s data can not be used by another. With ERP software. etc) If an organization don’t have ERP then it has to use different types pf other software. ORACLE. a data only needs to be entered once by a department that triggers it in its business process.appropriate authorization according to that company’s policy). ERP software integrate all the data from all the business departments and makes assure data synchronization in all departments. and then it can be used by other departments according to their business process needs. What is ERP ? What is ERP? (SAP. Mostly they are of different system and its hard to synchronize among them all. because the data only needs to be entered by the responsible department in its business process/transaction. Also this data can lead to another process in another department. the data integrity can be assured better. To flow data from one business segment to another is pretty hard too. So. Accounting Software Payroll Software Purchasing Software Asset Accounting Software Inventory Control Software Sales Software Invoicing Software Supply chain management Software Project management Software Now each software have their own database and system. By doing so. It may lead to possible errors if get some data synchronization problem. not like other application such as office application. Material Management (MM) and Financial Supply Chain Management (FSCM) as well. Plant Maintenance. typical business processes in a manufacturing company are:Demand for finished products from customer will be recorded by Sales department in a sales order document.For example. If there are not enough finished products in current stock. The purchase requisition will be processed by Procurement department to be a purchase order that is sent to vendor. Then the finished products will be delivered to the customer.All of business processes in the above example can be integrated in one ERP system. The ERP system usually consist of several modules such as Customer Relationship Management (CRM). Human Resources. After the ERP System configured based on our needs. Purchasing.another business process/transaction in other department. SAP Organizational Structure To understand any ERP and its functions. Once the raw materials are available. depends on its scope. Sales. . usually it can’t be used / implemented as soon as you’ve installed it. then it will ‘Go Live’. SAP Organizational structure includes high level hierarchy for an organization. The consultants will map our business process into the ERP System configuration. The production order can trigger a purchase requisition for the raw materials. It’s been designed with a standard set of tables. In order to produce the finished products maybe it requires some raw materials that have to be bought from vendors. and Finance department will send invoice to the customer. Inventory. Sales order data can be analyzed by Inventory department. so it can be configured / customized according to a specific business process or company need. its very important to understand its organizational structure. so it can adopt all business process in all companies. etc. This project can take months or even years. with MRP function. we must first configure and or customize it based on our business processes and needs. Basic Organizational Structure for SAP FICO is as below: Operating concern >Controlling area >Company code > Sales Organizations /Plants/ Purchase Organizations This is the basic organizational structure in SAP. It’s so complicated because it tries to be flexible. Before it can be used. Supplier Releationship Management (SRM). the sales order can trigger a planned order that can be converted to a production order that requests the Production department to start producing the finished products. the Production process begins. Usually. and report programs. Production Planning. Accounting. all of them are in the same platform and same database. Although they say their ERP system is off-the-shelf products. transaction programs. It is true for FICO as well other modules such as Sales and Distribution (SD). and ready to be used in a daily operational activities in our company. But. It also provides a configuration/customizing program. Accounting department will record the vendor’s invoice and Finance department will process the payment. Vendor will deliver the raw materials and Inventory department will receive them.There are some ERP software vendors that provide an off-the-shelf ERP System. the configuration process needs expert consultant services. This process is usually called ERP Implementation Project. ERP system is one of the largest software code ever written. Operational concern can be assigned to more then one controlling areas. More then one company codes can use a single controlling area. These were the basic structure of SAP Organizational Structure.Both sales and purchase organizations assigned to company codes. Controlling area gets assigned to operating concern. Controlling area maintains management accounting. Company code is a separate legal entity for legal reporting. Sales organization control sales activities such as sales offices. etc. Company code is useful for reporting. sales organizations and purchase organizations gets assigned to Company code. Company code gets assigned to controlling area. Purchase organization controls activities under purchase planning. sales persons. ASAP Methodology of SAP : 6 Phases of Implementation SAP. Controlling area in SAP organizational structure is the main entity in controlling organizational structure. Plants. Sales organization and purchase organizations are under sales and purchase departments simultaneously. Plants assigned directly to company codes. Plants are assigned to both company codes and sales organizations. An organization’s strategic planning decided in operating concern. ERP System .SAP Organizational Structure Operating Concern is the level where strategic planning designed for the organization. balance sheet . profit and loss statements and cash flow statements. how many people going to use it etc. legacy system etc. companies). SAP Implementation road map ASAP Methodology is the methodology to implement SAP in an organization. SAP implementation should go in some pre defined phases. This is done by core team. There are total 6 phases in ASAP methodology. · As is flow chart (tools are Visio.) · Gather all the reports · Study legacy system · Information on drawing (handled by Document Management System DMO. need to have.) · Team size: two teams implementation team and core team · (Project managers and steering committee from implementation team and core team together called PMO: Project Management Organization) · As is study: study of current situation. processes. then our work starts.ASAP Methodology. also by PP) · Gather information on interfaces-must have. arise etc. Cost. And then company chooses which is more suitable for their requirements (let’s say they chose SAP.e. 1) Presales ( Presales phase of ASAP Methodology ) In this phase of ASAP methodology.) 2) Preparation (Preparation phase of ASAP Methodology) In this phase of ASAP Methodology. nice to have · Document As Is · Sign off 3) Business Blueprint (Requirement analyze phase of ASAP Methodology) · Gather requirement for legacy · To be · GAP analysis (difference between as is and to be) · To be process flow · List of interfaces to be finalized (must have done now and need to have will be post go live) . SAP and other ERP’s try to sell their products to the clients (i. we decides Landscape information/ preparation (server info. These are customize reports. Interfaces. Conversion. Enhancements. vendor and customer. · Functional specification. no master data. complicated and complex · Business process procedure (ASAP) · Using PowerPoint all functional consultant give a demo · Using PowerPoint presentation give demo only for your module (workshop) · Using 800 client give a SAP demo-800 is IDES server (IDES never have customer information) · Q&A database (to be answered by core team) · Organization structure · Collision list (material.· List of reports · RICEFW objects (Reports. Forms and Workflow). complex scenario (5) · Training needs and documents. group test). just configuration so we can’t do testing in 300 (testing by core team) · You are provided with a new client 400 (basic) · Carry out additional configuration in 400 (200+400) · Copy of configuration sent to 300 · Testing carried out in 400 (core team) · You are provided with a new client 600 (sandbox) · Carry out additional configuration in 600 (600+200+400) · Copy all configurations to client 300 · Testing carried out in 600 · Using client 600 · Upload master data across all modules (sample load of few parts or entire data end as per client wants) · All RICEFW objects must be ready tested by you and ready for testing by business · Carry out integration testing 1 in client 600 (across all modules)-simple scenario (10) and complicated scenario (10) · Integration testing in client 600 (across all modules.for all RICEFW objects · Technical specification · Sign off on docs above · Test scripts · Test cases · Test scenario-Simple. unit of measure) · To be documentation · To be sign off (consultant and project manager) 4) Realization (Configuration phase of ASAP Methodology) · Carry out baseline testing in 800 clients · You are provided with a new client 200 · Carry out basis configuration (back end) – done by consultant · Copy of configuration sent to client 300 · Testing carried out in 200-300 is a golden client. identify roles and responsibility (based on SOX compliance) · Training client 910 produced by basis 5) Pre go live phase . allocate. •SAP can monitor and automatically check budgets assigned to each job. üCost Centre Accounting •Cost Center Accounting analyzes where overhead occurs within the organization •Costs are assigned to the sub-areas of the organization where they originated. •SAP offers a wide variety of methods for allocating posted amounts and quantities. . when to stop legacy. all configurations from golden client will be moved to 910. controlled start up 6) Post production support · Configuration change · Master data changes · Transaction level changes · Some more training · Master data to be plugged · Missing authorization · Complete all documentation work (For both configuration and end use depend upon client) Overhead Cost Management ØThe Overhead Cost Controlling component (CO-OM) helps you to plan. as well as monitoring the operations of their business. reporting. üInternal Order Accounting •Internal Orders collect and analyze costs based on individual internal jobs. when to start SAP. Management decision-making can be achieved with the level of information provided by this module. that allow you to control costs and valuate internal activities. and monitor overhead in your organization ØBy planning in overhead areas. when to run MRP. you can develop standards. tibco. control. XI etc) · Training session carried out · You are provided with a new client 910 (Development server) · Master data upload into 910 · Sometimes Business carried out integration testing 3 · You are provided with a new client 960 (quality and integration test server) · Master data upload into 960 · You are provided with a new client 999 (production server) · Master data upload to 999 (this is the live server use for business) · Cut over activities (in client 999).if we upload just sample data before then we need to provide templates here otherwise templates provided when entire data uploaded in previous phase) · Upload master data there are 2 tools: LSMW and interfaces (interfaces like Biz Talk. 960 and 999 · Master data templates provided by business. The SAP Controlling also known as SAP CO.(Pre go live phase of ASAP Methodology) · Suggest business to clean up master data in legacy. Module provides supporting information to Management for the purpose of planning. Internal Orders. Human Resources. Finance. you have the ability to assign Cost Centers to departments and /or Managers responsible for certain areas of the business as well as functional areas within your organization. Administrative Support. Cost Center Accounting provides information on the costs incurred by your business. These postings are automatically updated from FI (Financial Accounting) to CO (Controlling). Examples of accounts that can be assigned are Cost Centers. or even Quality. Within SAP. Cost Centers can be created for such functional areas as Marketing. (2) Cost Center visibility of functional departments/areas of your business. WBS(work breakdown structures). Facilities. Shipping/Receiving. Some of the benefits of Cost Center Accounting : (1) Managers can set Budget /Cost Center targets. Legal. Information Systems. .SAP Controlling Organization Structure Some of the components of the SAP CO(Controlling) Module are as follows:· Cost Element Accounting· Cost Center Accounting· Internal Orders· Activity-Based Costing (ABC)· Product Cost Controlling· Profitability Analysis · Profit Center Accounting The Cost Element Accounting component provides information which includes the costs and revenue for an organization. Purchasing. The cost elements are the basis for cost accounting and enables the User the ability to display costs for each of the accounts that have been assigned to the cost element. production sites or by functions. Production lot Cost Estimates) . Cost estimates without quantity structure. Posting Keys Posting Key in SAP FICO SAP Posting Key is a 2 digit key to control line items. Profitability Analysis can be obtained by the following methods: · Account-Based Analysis which uses an account-based valuation approach. Profit Centers can be set-up to identify product lines. and CRM Service Processes. and Price Changes. The difference between a Cost Center and a Profit Center is that the Cost Center represents individual costs incurred during a given period and Profit Centers contain the balances of costs and revenues. The methods which can be utilized for EC-PCA (Profit Center Accounting) are period accounting or by the cost-of-sales approach. Master data for Mixed Cost Estimates. · Cost-Based Analysis uses a costing based valuation approach as defined by the User. actual and target values are analyzed. Product Costs by Sales Orders. In this analysis. It is within this module of CO (Controlling) that planned. and (5) Assessments/Distribution of costs to other cost objects. Product Cost by Order. Sub-components of the module are: · Product Cost Planning which includes Material Costing( Cost estimates with Quantity structure.(3) Planning . Activity-Based Costing enhances Cost Center Accounting in that it allows for a process-oriented and cross-functional view of your cost centers. . (4) Availability of Cost allocation methods. Posting Key config controls. Actual Costing. This level of monitoring can be very detailed but allows management the ability to review Internal Order activity for better-decision making purposes. Profitability Analysis allows Management the ability to review information with respect to the company’s profit or contribution margin by business segment. Profit Centers are used for Internal Control purposes enabling management the ability to review areas of responsibility within their organization. service. and Reference and Simulation Costing. Whether the posting is debit or credit. These accounts can be reconciled with FI(Financial Accounting). Internal Orders are used as a method to collect those costs and business transactions related to the task. · Actual Costing/Material Ledger includes Periodic Material valuation. Product Cost Controlling (Product Costing) allows management the ability to analyze their product costs and to make decisions on the optimal price(s) to market their products. It can also be used with Product Costing and Profitability Analysis. Activity-Based Costing allows a better definition of the source of costs to the process driving the cost. cost and revenue element accounts are used. geographical regions. Internal Orders provide a means of tracking costs of a specific job . offices. divisions. · Cost Object Controlling includes Product Cost by Period. Price Updates. Intangible Goods and Services. Profit Center Accounting provides visibility of an organization’s profit and losses by profit center. or task. Vendor. 31.25. Screen Layout – Fields can be suppressed.11. Customer. 35 and 38 are some of the most important posting keys. required or optional. 5.12. 2. 32. Assets. Material) Posting key for reversal. 10. (G/L. SAP Posting Key Below is the list of SAP Posting Keys : Posting keys 1. if document is reversed.27. Field status can be controlled using Posting Key Field status as well as Field status Group assigned to G/L.8. The type of account the entry will be made to. 15. Maintain Accounting Configuration : SAP Posting Key List Posting keyName 1 Invoice 2 Reverse Credit Memo 3 Bank Charges 4 Other Receivables 5 Outgoing payment 6 Payment Difference 7 Other Clearing 8 Payment Clearing 9 SPL G\L Debit 10 G\L postings 11 Credit Memo 12 Reserve Invoice 13 Reserve Charges 14 Other Payables 15 Incoming payment 16 Payment Difference Debit\CreditAccount Types Debit Customer Debit Customer Debit Asset Debit Customer Debit Customer Debit Customer Debit Customer Debit G\L Account Debit Customer Debit G\L Account Credit Customer Credit Customer Credit Customer Credit Vendor Credit Customer Credit Asset . 17 18 19 21 22 24 25 26 27 28 29 31 32 34 35 36 37 38 39 40 50 70 75 80 81 82 83 84 85 86 89 91 92 93 94 95 96 99 Other Clearing Credit Payment Clearing Credit SPL G\L Credit Credit Credit Memo Debit Reverse Invoice Debit Other Receivables Debit Outgoing payment Debit Payment Difference Debit Clearing Debit Payment Clearing Debit SPL G\L Debit Debit Invoice Credit Reverse Credit Memo Credit Other Payables Credit Incoming payment Credit Payment Difference Credit Other Clearing Credit Payment Clearing Credit SPL G\L Credit Credit Debit Entry Debit Credit Entry Credit Debit Asset Debit Credit Asset Credit Inventory Taking Debit Cost Debit inventory Difference Debit Price Difference Debit Consumption Debit Change in Stock Debit GR\IR Debit Debit Stock inwd movement Debit Cost Credit inventory Difference Credit Price Difference Credit Consumption Credit Change in Stock Credit GR\IR Credit Credit Stock Outwd MovementCredit What is General Ledger (GL) in SAP ? Customer Customer Customer Vendor Vendor Vendor Vendor Vendor Vendor Vendor Vendor Vendor Vendor Vendor Vendor Vendor Vendor Asset Vendor G\L Account G\L Account Asset Asset G\L Account G\L Account G\L Account G\L Account G\L Account G\L Account G\L Account Material G\L Account G\L Account G\L Account G\L Account G\L Account G\L Account Material . Company 4623. Transaction data contains mostly Finance data. Now the Financial accounting Global setting is explained below with configuration steps and screen shots. The Company is represented using a Four Digit numerical character (it can also be alphanumerical) 4623 with the name Ketan Group of Industries. 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. payroll. Charts of Account (COA). This will show you the configuration for definition of Company. SAP General Ledger (SAP GL) is a core element of SAP FI.Ketan Paper Mills What is General Ledger in SAP Assign Company Code to Company: The Screen shot explains the assignment of the CC 1000 & 2000 to Company 4623. 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. Financial accounting . Most of the configuration relating to SAP is done in SPRO (SAP Project Reference Object). The screen shots below will give the detailed step to define Company in SAP system. Creation of Company Code 1000: Company Code 1000 is created. The definition of the company is shown above.This article gives the complete configuration required to create SAP General Ledger (SAP GL) account in SAP-FI. creation of General Ledger account in the company code.Ketan Group of Industries Company Code 1000. Thus a basic Organizational Structure is achieved in the Enterprise structure. It also comprise retained earning. Company: It is said to be an organization or a corporate group which has one or many Company code under it. 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. General ledger is also integrated with cost centers in controlling. follow the navigation shown in the picture to Define Company in SAP.Ketan Iron & Steel Company Code 2000. there can be ‘n’ number of company code within a corporate group. General Ledger comprise all the transaction data for all the activities involved in the organization. It can be more then one. a company code must be assigned to a company. . A company can comprise one or more company codes. 2) Determine values for the variant. the steps are as below: 1) Define the variant. It’s the smallest and minimum necessary organizational structure in SAP that required by law to provide a set of financial reports (such as Balance Sheet and Profit/Loss Statements). 3) Assign the variant to the object Business Process associated with SAP FICO: Business Process Associated with SAP FICO Here is the list of business process associated with SAP FICO General Ledger Accounts Fixed Asset Accounts Customer master accounts Vendor master accounts Sales Order Sub Ledger accounts Purchase/Procurement accounts SAP FICO Company Code Configuration Company Code The first step of SAP FI configuration is to Create Company Code. it can be a company of a corporate group and in an SAP client. In the real world. It is a unique four alphanumeric characters that represents an independent and legal accounting entity. For consolidation process in SAP EC module.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 general ledger is kept at company code level. The other one is Business Area. etc. MM. It gives more useful information that can be used in decision making process. etc) will generate accounting journals in company code’s general ledger. HR. for example. . Material valuation can be set at company code level or plant level. such as for company’s management. It can have several plants. Business areas represent separate areas of operation within one or some companies. But. With business areas. A company code’s financial reports are used for external purpose. company code can be determined from the plant that input by user). The transaction can determine the company code involved either from the user input for the company code (such as in FI module) or from other organizational unit that related to the company code (such as in MM module. tax office. we can generate the financial reports of a company code. a business area can be assigned to several plants. with business areas (depends on how it configured). By doing so. SAP can only generate one set of financial reports for USA office. The use of Business Areas is optional in SAP FI module. such as for external auditors. Let’s say Coca Cola Company has one company code in USA (and several others in the whole world). SAP FICO Company Code It is one of the two main organizational units of SAP FI module. SAP can generate financial reports of a specific regional area of a company. A plant can also be assigned to a business area. SAP can generate sets of financial reports per state in the USA. Business areas are used for internal purpose. With company code. shareholders/stock exchange commission. All SAP transactions that have impact to the financial reports from all SAP modules (such as FI. the management can analyze the performance of each branch in each state better. In MM module (Logistics).With SAP FI module. each plant must be assigned to a CC. § Length of G/L Account number of the COA (up to 10 digits. after creating Company Code. account name. We can define Chart of Accounts with “OB13” T-code or through “SPRO” T-code menu: Financial Accounting – General Ledger Accounting – G/L Accounts – Master Records – Preparations – Edit Chart of Account Lists. Copy. Chart of Accounts is a unique four alphanumeric code that represents the structure of group of General Ledger (G/L) accounts. § The language of COA. The advantage is SAP will also copy the existing company code-specific parameters.In SAP R/3 term. Chart of Accounts :SAP COA In SAP FICO system. which are: § Chart of Accounts code and its description. The COA must be assigned to the company code. /P&L. Check Company Code. can be numerical or alphanumeric).Copy Company Code We create company code from the following menu path of “SPRO” t-code: Enterprise Structure – Definition – Financial Accounting – Edit. There are two options: § Copy from other company code § Create from the scratch SAP recommends that we copy a CC from an existing CC. But if we create company code from the scratch then we have to define other parameters need in other relevant configuration process manually. and the type of G/L account (whether the account is a Profit &Loss. Delete. A COA can be assigned to several company codes which mean that these company code’s general ledgers have the same structure. . Then we can change certain data in the relevant application if necessary. This is much less time-consuming than creating a new company code. Each company code must have one chart of accounts (COA) for its general ledger. The definition of COA determines some characteristics of the COA. the next thing we have to do is creating Chart of Accounts (COA). type account or a balance sheet type account). The COA contains the definition of all G/L accounts such as their account number. SAP suggests blocking COA if charts of accounts are created centrally and accounts are created locally. When we save a new G/L account. § Group Chart of Accounts for consolidation process (if the general ledger of the company code will be consolidated to the parent company’s general ledger).Define Screen layout per account group (G/L Accounts) SAP Account group decides: Classifying the accounts (A.K. A cost element classifies the company’s valuated consumption of production factors within a controlling area. § The status of COA: blocked or not. The following options are available for each G/L account: § No maintenance of cost elements. then the block prevents accounts from being created in the company codes for a chart of accounts that is not yet completed.M or S) Number ranges (Internal or external) Screen layouts (What fields are going to be populated in master record data). It controls of how a cost element can be maintained when maintaining a G/L account. SAP Account Group . SAP Account Group OBD4 SAP Account group determine which fields you can configure on the G/L master record for SAP FICO system. § Cost elements maintained automatically.D. The standard SAP require at least two account groups. the related cost element is automatically created. If this is the case. § Cost elements maintained manually. A cost element corresponds to a cost-relevant item in the chart of accounts such as expense account (a P&L. one for balance sheet accounts and one of the profit and loss accounts. If no default value is found. A prerequisite is that a default value for the cost element category has been set up for this cost element.§ Type of integration between G/L accounts and cost elements. account). OBD4 . the system will not create a cost element. it shows number ranges as well whether its internal or external. Now if we see maintaining number range for vendor in XKN1. customer or vendor account groups can not have overlapping number ranges.account group Next step is to create number range and assign it to account groups. Account Group number range G/L account groups can have number ranges overlapping each other. We can see here vendor account 001 is assigned to number range 01. SAP Accounts Payable (AP) outline Accounts Payable (AP) is a very important sub module in SAP FICO main parts in SAP AP is as follows: Master data Invoice Processing / Logistics Payment / Disbursements Account analysis & reconciliation Periodic processing Reporting . address. Automated Clearing House ACH is the process of automatic payment to vendors. control data) Company data ( reconciliation account. Automatic payment program (APP) We can run Automatic Payment Program (APP) through t code F110 . After all configuration. one time vendors etc. By using ACH. purchase data. Automatic Payment Program (APP) ACH Automatic Clearing House and Automatic Payment Program(APP) is most important in SAP Account Payable (AP).Master data: Master data can be created at 3 levels. ACH Automatic Clearing House Configuration: Setup payment method per country Setup payment method per company code Setup all company codes Setup paying company codes Bank determination Assign payment methods for vendor SAP FBZP. payment term. one can set up parameters and criteria in F110. account management) Purchasing data ( Purchase order currency.Here are steps for ACH Automatic clearing house ACH configuration in t code FBZP. incoterms. ACH Automatic Clearing House . ACH Automatic clearing house. General data ( name. Automated Clearing House ACH configuration contains FBZP configuration. partner functions) Other master data consists of account groups. we can set up criteria to pay all open vendor line items. : K4) . delete. check company code -Copy .Enterprise structure . currency address.Financial Accounting – Financial accounting global setting – Fiscal Year – Maintain fiscal year variant (T CODE: ob29) – Position k4 .VG01 change name/select that line and go to edit address. Proposal: Payment run: Print: if check payment is configured Electronic Bank Statement (EBS) configuration: Create House bank & account ID (FI12) Setup EDI partner profile for FINSTA message type (WE20) Configure global settings for EBS Account symbols Assign account symbol to account Key for posting rules Posting rules Transaction types Assign transaction types for posting rules We can get Bank Reconciliation statement through t code FF67 1. Payment methods. Create Company Code/nspro Screen . enter.Status: Parameters: Vendors. no. yes 2. e.enter-save (Update the company information like name. no. Create a Fiscal Year Variant /nspro Screen (Purpose: In the below path you define your fiscal year variant that matches your company Fiscal year.From company code 3000 to company code “VG01” (create your company code). copy. next payment date.Financial Accounting . etc…) Note: The ‘address icon’ in the top right corner of the screenSecond step is to create Fiscal Year Variant : Fiscal Year Variant 2.Edit.g.Definition . Copy. check plant 1. delete. Edit company Code Data – Position . Special posting periods can be useful for posting audit or tax adjustment to a closed fiscal year. k4). Create a Posting Period Variants /nspro Screen .Financial Accounting – Financial accounting global setting – Document – Posting Period 1.. Define Variant for open posting periods – Position 3000 – Select that line – Copy . Next step is to set up Posting Period Variant :Posting Period Variant 3.Save In the below path you assign your fiscal year variant to your company code.Select K4 Line .Financial Accounting – Financial accounting global setting – Fiscal Year – Assign company code (T CODE: 0b37) – Position Your Company Code – Select – Save (Go to position and go to your company code. e. Open and close posting periods – Position 3000 – Select all 3000 lines – Copy .Change variant and name from 3000 to your C. Four special periods can be used for four quarters. Go back to the previous screen . inducing 12 regular periods and 4 special posting periods. Code – Save 2.g. in the fiscal year variant column select the variant column you defined in the previous step. SAP FICO system allows maximum of 16 periods. Target company code details.VG01 – Execute Next step is to set up Field Status Variant 5. Create Document Number Ranges /nspro Screen .company code-3000 . Req. Assign Variant to company code .Position 3000 – Copy .company code. Define document number ranges – Company Code – Status (If ranges table is blank) then go….Financial Accountin . Entry the fields /nspro menu . Assign Company code to field status variants (TCODE: obc5) . Copy and company code – Fiscal Year 2010 .Financial Accounting Global Setting – Document – Line item – Controls 1. Create Field status variant /nspro Screen Purpose: To create your field status variant to suppress.Position AJ01 – Select that line – Save Next step is to set up Document Number Range 4.Change it.* 2.Change it from 3000 to your company code – Enter – Copy all – Enter – Save 2. Entry or opt. Maintain Field Status Variant (TCODE: obc4) .Position VG01 . from 3000 to your company code – Save 3..Document Number Ranges 1.Financial Accounting – Financial accounting global setting – Document .Source Company code details. Financial Accounting Global Settings – Company Code – Enter Global Parameters (TCODE: oby6) – Position VG01 – select – Details-f2 – Company code – Country Key – US – Currency – USD .Check – Financial assets mgmt active .Cost of sales accounting actv.Financial Accounting – General Ledger – Master Records – Individual Processing – FS00-Centrally . – 2 .Posting period variant – VG01 .Check – Propose fiscal year . 7.Fiscal year variant – K4 .Country Chart – CAUS .Max. Statements” is unchecked. Also the work flow variant needs to be blank.Financial Accounting .Field status variant – VG01 .Check – Cash management activated ? .Accounting .Credit Control area – 3000 .Check – Define default value date .)Next step is to create G/L Accounts. Company Global Parameters Check Company Global Parameters: /nspro Screen . Exchange rate deviation – 10% .Make changes in last column with your company code . Creating GL Account:SAP Menu Purpose: Creating 2 GL Accounts (Cash 110000.Language key – EN .Check – Purchase account processing (Select your company and make sure the “Business area fin.Chart of accounts – CAUS ..Document entry screen variant – 2 . Revenue 800000) .Enter and Save Let’s check Global Parameters now. Master Records .General Ledger .Create with Reference You can see: Reference Account GL account # 110.Line item display .Save It.Financial Accounting .Company Code .Financial Accounting .. Do the same thing for the GL Account: 800000Now let’s post some transactions F-02 posting 8.F-02 – General Posting We have a dialogue box. Posting Your Transactions.Document Entry . let’s create some more Custom G/L Accounts Create a Custom GL Accounts.Posting without Tax allowed .SAP Menu .GL Account No.Control Data . SAP Menu .Accounting . . Now as you guys know how to post in F-02.Debit G/L Account {Cash}) Next screen is: Account: 800000 50 – Credit G/L Account (Revenue) Document Menu –> display Save it.Accounting .Account currency – USD .000 Company Code # 3000 Click Yes . Document Date: Type: SA Company Code: VG01 Posting Date: period: Current Month Currency Rate: USD Document Number: Transaction date: Psk’y:40 Account: 110000 (Note: 40.Open GL account (Top left side) .Short key .General Ledger . Individual Processing .Accounting . Setup business to $100.000 on Credit 40-Db.000 4.000 50-Cr. Cash (110000) $50. Expenses 40-Db.000 40-Db. Furniture (22000) $25.000 2. Purchased Services (417000) $15000 50-Cr.250 . Bought Furniture for $25.Financial Accounting . BuildingRent (470000) $3. Trade Payable (160030) $25.000 on Cash 40-Db.000 50-Cr. Cash (110000) $100. Land(1000) $50..General Ledger . Buying Land for $50.000 50-Cr. Ø 110000 Cash Ø 800000 Revenue/Sales Ø 2000 Building Ø 1000 Land Ø 22000 Furniture Ø 70000 Common Stock Ø 140001 Trading Receivable Domestic Ø 160001 Trade Payables Domestic Ø 160030 Trade Payables Ø 466000 Insurance Ø 470000 Building Rent Ø 473000 Postage Ø 476000 Office Supplies Ø 417000 Purchasing Services Ø 435000 Annual Bonus Ø 451000 Building Maintenance Ø 452000 Machinery and equipmentNow let’s post some more transactions in these accounts in F-02 GL posting G/L Transactions or Posting: SAP Menu . Postage (473000) $10. Cash (110000) $28.FS00 – Centrally Create all the following accounts in T code fs00. Common Stock (70000) $100.Document Entry -General Posting (TCODE: F-02) Enter the postings for the following transactions (Here you can be creative and use accounts and amounts to your liking) 1.250 40-Db.000 40-Db.000 3. Type of Assets : Asset Management in SAP Fixed asset in asset management comprise of various asset types. Assets under construction: It is a form of tangible assets. Its usually been shown as separate balance sheet item and so it need separate account determination in their asset class. Click proposal and gives starting date and time or start immediately. System will show all the payments done in tab edit –> payment–> payment list Print check: Once we run the printout. Payment Run-F110: Run the payment run by hitting payment run tab. ). ( Why next payment date? : So it will consider all the transactions till that date for the payment run. It will show proposal in some time. for check payment C and for wire transfer its T.5. give the company codes for which you want to run Automatic payment. Also we can edit the proposal if needed. Here are some of the asset types. Proposal list can be seen through proposal log tab. Sales (800000) $50. SAP FICO system will go ahead and print out all the checks and create documents for banks. RFFOUS_C is the program for check printing. we can set up time to run it in SAP FICO system. Save printer information in printout/data medium and save the parameters. customer master and vendor master record in free selection tab. We also can put more than one asset under constructions in one master record.F110: There is a tab Proposal on the top in F110 when you select status tab. We can also restrict the selection by document types. Proposal Run.000 $50. Once the assets gets completed we can distributes to proper assets via . Sales 40-Db. Maintain log for the proposal in additional log tab. As per balance sheet there are three classes: Intangible assets Fixed assets Financial assets In general we need to be more specific about asset types. For example. We can manage assets under construction as separate separate master record just as we do for completed assets.000 SAP APP : Automatic payment program steps for SAP FICO system are Setting up payment method per country Setting up payment method for company code Setting up all company codes Bank determination Assign payment methods for vendor account The process for SAP APP are: Parameters. Give payment method based on your payment method.Give next payment date. We can see the proposal list in edit–> proposal –> proposal list. In the parameters field. Cash (110000) 50-Cr. It is unique combination for the given payment. It shows the status of parameters in status tab.F110: System identify given payment run by date and identification. SAP Asset Mangemenet Intangible Assets: Intangible assets such as patent can be managed the same way as tangible assets. Here is the accounting entries for leasing assets in Capitol leasing. Line item settlement transfer to other asset master record Leased Assets: Leased assets need special accounting requirements. We can use two approach while handling accounting entries of leased assets. Depreciation methods . SAP Asset Management Second option is we can handle it as periodic rent expense and flow into profit and loss statement as Operating Lease Here is the accounting entries for leasing assets in Operating leasing. Leased assets are responsibly of lessor and shouldn’t be used to assess the asset portfolio value of lessee. We can capitalize and depreciate some leased assets as Capitol lease. Leased assets remains leaser’s property. Suppose you have a clerk and he is not authorized to post due to company policy. SAP system thinks that. But if company code currency is in USD and GL account currency is in EUR then we can post to that GL only in EUR not in any other currency.Here is a example of the depreciation methods and different methods: Suppose a piece have acquisition and production value of $1000. His supervisor ( who is authorized) can see the post. Currency in SAP FICO There are mostly three type of currencies in SAP FICO Company code currency Parallel Currency Group currency If the account currency is same as the company code currency. the GL account is foreign currency GL account and hence should be able to be posted only in that foreign currency of that GL account and not in any other currency including its own company code currency. Document parking allows users to do their transaction and then park the document for the upper level or other users who can do posting after reviewing the document. . For example if a company code currency is USD and GL account currency is also USD then we can post in any transaction currency. This function is important in SAP FICO. life value is 10 years and scrap value is $2000 Straight line method without basis reduction: Cost/life –> $10000/10–> $1000 Straight line method with basis reduction: (cost-scrap value)/life = $800 Diminishing balance method: %=1/life= 10% For 1st year its $1000 and net book value is $9000 For 2nd year its 10% of NBV of first year that is $900 and net book value for second year is $9000-$900= $8100 Accumulated depreciation for first year is $1000. not even in USD. change it if he wants or post it if all correct. But if Account code currency is different from the company code currency. then you can post to that GL account in any transactional currency. for second year is $1900 etc. Document Parking: Document parking is a functionality SAP system gives so a user can park a document while he or she is doing something else. SAP System allows to complete transaction but park it instead of post it. It is an important certification question that only clearing document display have just header data and no line items.Electronic Bank Statement (EBS) To set up Electronic Bank Statements (EBS) 1. Select which line items to be cleared. All the financial accounting entries saved in tables BKPF and BSEG for header data and line item data respectively. give the vendor account number whom we want to clear line items. Define Search String for EBS(Optional) – Search String Definition – Search String Use 5. It will clear the line items and gives a document number. F-53 kept the line items open even if it got paid. Define Program and Variant Selection In SAP FICO. Upon displaying document it shows a document with no line items but just header data. . Configure Global Settings for EBS (IMG) – Create Account Symbols – Assign Accounts to Account Symbols – Create Keys for Posting Rules – Define Posting Rules – Create Transaction Types – Assign External Transaction Types to Posting Rules – Assign Bank Accounts to Transaction Types 4. Here in F-44. Setup EDI Partner Profile for FINSTA Message Type (WE20) 3. So for most of the documents there is a link between these two tables. Create House Bank and Account ID (FI12) 2. but for clearing document there is an entry in BKPF only. simulate and save. How to clear them? Through F-44. Process open items will redirect to the new screen. Suppressed: The field is not even visible to the end user. Generally there are four options when dealing with Field status. SAP FSCM : Financial Supply Chain Management . Optional: An entry is permitted.F-44 Manual clearing of vendor account in SAP Field Status Field status appear at four different levels in the systems: The Account groups: This will dictate how master data is created. The posting key: This has an impact on how entries are processed from a debit versus a credit perspective. but no editing is allowed. Required: The system will not permit the transaction to be complete until there is a valid entry in the field. The activity: Here the system controls what fields are required when using different transactions/ activities in the system. Display : This field can be seen. The G/L account: This will dictate what kind of data is required while processing transactions in G/L against this account. SAP system will bring two other lines ( yellow lines) upon simulating it one more time. How the transaction is going to post in both company codes. CA is paying. CA company code is 1000 and NY company code is 2000. 4)In House Cash management These four parts of SAP FSCM combine easy supply chain management all together. Credit management deals with overall credit exposure and risk management of a business partner. 3)Collection Management. It consists mainly four parts: 1)Biller Direct. CA pays $2000 on behalf of NY If we post just first line and last line. 2)Credit Management. Biller Direct gives insights of how a customer can directly pay through online using SAP FSCM.SAP FSCM (Financial Supply Chain Management ) is a part of SAP Finance.For example. Collection management also known as dispute management. Intercompany transactions Intercompany Transactions: Suppose you have two company codes NY and CA Now for any transactions of NY company code. This submodule deals with collection and disbursement of business partners. Intercompany . Intercompany transaction Intercompany transaction . Financial accounting –> G/L –> business process –> prepare cross company code transaction.intercompany transaction From where these two lines gets populated and how SAP. how does system know these account? It’s from SAP FICO configuration. SAP tax procedure :Assign tax procedure to country (OBBG): SAP Tax procedure assign to the country in which the company code exists. SAP tax procedure . In spro. The system determine the pricing procedure using document pricing procedure and customer pricing procedure. Choose the third option – Domestic Taxes. . the detail screen shows how the tax codes are determined according to customer tax class and material tax class. 3. and can be applied where ever necessary. SAP domestic tax codes The customer tax class and material tax class are stored in customer master and material master separately. JR1 – State Tax and so on. Choose ‘Records for access’ button. Several tax related condition types are configured in the pricing procedure. 2. In my test example. Go to IMG path: SAP Customizing Implementation Guide -> Financial Accounting (New) -> Financial Accounting Global Settings (New) -> Tax on Sales/Purchases -> Basic Settings -> Check Calculation Procedure. Choose condition type JR1. MWST is an output tax can be used where there is a sale in Europe. so the tax code should be O1 according to the condition record. A pop-up window with three key combination will appear.SAP tax calculation procedure How SD document determine tax codes ? 1. Go to transaction VK13 and enter UTXJ. Code. Condition type UTXJ is used to determine the tax codes. both value are 1. UTXJ – Tax Jurisdiction. Condition type UTXJ is specifically used in USA which will be an interface condition type where VERTEX is used. Enter country US and execute the program. For example. in divisions or user departments. for which the company produces financial statements and takes inventory. In next post. Logical enterprise structure. organizational and technical terms.Enter Country ‘US’. The tax rate is 4% which is the same percentage in the sales order. The HR application component portrays the social structure of an enterprise fiscal year variant: A variant defining the relationship between the calendar and fiscal year. the account name and control information for G/L account master record. The account group determines: The data that is relevant for the master record A number range from which numbers are selected for the master records. Finance Terminology Finance Terminology : Terms frequently used in SAP FICO Client: In commercial. a self-contained unit in an R/3 System with separate master records and its own set of tables. Chart of Accounts: Systematically organized list of all the G/L account master records that are required in a company codes. Financial statement version: A hierarchical positioning of G/L accounts. . Tax Code ‘O1’ and Tax Jurisdiction ‘GA0000000’ and execute the report. This positioning can be based on specific legal requirements for creating financial statements. The COA contains the account number. Annual displacement/Year shift: For the individual posting periods various entries may be necessary. Social enterprise structure. Business Area: An organizational unit of financial accounting that represents a separate area of operations or responsibilities within an organization and to which value changes recorded in Financial Accounting can be allocated. The fiscal year variant specifies the number of periods and special periods in a fiscal year and how the SAP System is to determine the assigned posting periods. Company Code: The smallest organizational unit of Financial Accounting for which a complete selfcontained set of accounts can be drawn up for purposes of external reporting. Account group: An object that attributes that determine the creation of master records. including the organizational units required to manage the SAP System such as plant or cost center. Enterprise structure: A portrayal of an enterprise’s hierarchy. Technically. It can also be a self-defined order. the condition table is A053 – Taxes via Jurisdiction Code. For example. description of the way in which an enterprise is organized. in the first six periods the fiscal year and calendar year may coincide. Fiscal Year: A period of usually 12 months. I will try to explain how the tax amount is posted to corresponding G/L account. whereas for the remaining periods there may be a displacement of +1. Clearing: A procedure by which the open items belonging to one or more accounts are indicated as cleared (paid). Special G/L transaction: The special transactions in accounts receivable and accounts payable that are shown separately in the general ledger and sub-ledger. For each procedure. Account type: A key that specifies the accounting area to which an account belongs. They include: Bills of exchange Down payments Guarantees House Bank: A business partner that represents a bank through which you can process your own internal transactions. Open item management: A stipulation that the items in an account must be used to clear other line items in the same account. Type of posting (debit or credit). Special G/L transactions include down payments and bills of exchange. the user defines Number of dunning levels Dunning frequency Amount limits Texts for the dunning notices Dunning level: A numeral indicating how often an item or an account has been dunned. Standard accounting principles require that the following be listed: All assets All debts. to which transactions in the subsidiary ledgers (such as in the customer. Examples of account types are: Asset accounts Customer accounts Vendor accounts G/L accounts Dunning procedure: A pre-defined procedure specifying how customers or vendors are dunned. Document type: A key that distinguishes the business transactions to be posted. accruals. such as items you are not sure about or items for which payment information exists. Posting Key: A two-digit numerical key that determines the way line items are posted.Field status group: Field status groups control the additional account assignments and other fields that can be posted at the line item level for a G/L account. The account balance is therefore always equal to the sum of the open items. The document type determines where the document is stored as well as the account types to be posted. and deferrals . Year-end closing: An annual balance sheet and profit and loss statement. Reconciliation account: A G/L account. Dunning key: A tool that identifies items to be dunned separately. vendor or assets areas) are updated automatically. Items must balance out to zero before they can be cleared. This key determines several factors including the: Account type. Special G/L indicator: An indicator that identifies a special G/L transaction. both of which must be created in accordance with the legal requirements of the country in question.Layout of entry screens . All revenue and expenses Month-end closing: The work that is performed at the end of a posting period. received guarantees of payment). It also contains the rules for the evaluation of assets that are valid in a specific country or economic area. A distinction is made between: Accruals An accrual is any expenditure before the closing key date that represents an expense for any period after this date. Accrual and deferral: The assignment of an organization’s receipts and expenditure to particular periods. Each asset master record must be assigned to one asset class. Valuation area: An organizational unit in Logistics subdividing an enterprise for the purpose of uniform and complete valuation of material stocks. For each asset class. When you post a noted item. Functional area: An organizational unit in Accounting that classifies the expenses of an organization by functions such as: Administration Sales and distribution Marketing Production Research and development Classification takes place to meet the needs of cost-of-sales accounting. Special asset classes are. Each company code is allocated to one chart of depreciation. for example: Assets under construction Low-value assets Leased assets Financial assets Technical assets . Certain noted items are processed by the payment program or dunning program – for example. Deferral Deferred income is any receipts before the closing key date that represent revenue for any period after this date. Noted item: A special item that does not affect any account balance. for purposes of calculating the net income for a specific period. The chart of depreciation and the chart of accounts are completely independent of one another. The item can be displayed using the line item display. a document is generated. down payment requests. control parameters and default values can be defined for depreciation calculation and other master data. Chart of depreciation: An object that contains the defined depreciation areas. Statistical postings create statistical line items only. Statistical posting: The posting of a special G/L transaction where the offsetting entry is made to a specified clearing account automatically (for example. Several company codes can work with the same chart of depreciation. Asset class: The main criterion for classifying fixed assets according to legal and management requirements. acquisitions and transfers. sales tax. Data flow: . corporate tax. Depreciation key: A key for calculating depreciation amounts. for example: Acquisition and production costs Net book value Replacement value SAP Vertex Integration Vertex It is a third party tax solution for SAP FICO. balance sheets for tax purposes. service tax. It gets integrated with SAP FICO system and automatically calculates tax liabilities to government. consumer use tax. you can instruct the system only to start revaluating asset acquisitions in the first full month after their acquisition. for example. for individual financial statements. for example. Depreciation base: The base value for calculating periodic depreciation. Usually it gets integrated with SAP system using RFC. payroll tax etc. Using the period control method. for interest and for the cutoff value Various control parameters Period control method: A system object that controls what assumptions the system makes when revaluating asset transactions that are posted partway through a period. use tax and other types of taxes. The period control method allows different sets of rules for different types of asset transactions. VAT. value added tax (VAT). The depreciation key controls the following for each asset and for each depreciation area: Automatic calculation of planned depreciation Automatic calculation of interest Maximum percentages for manual depreciation The depreciation key is defined by specifying: Calculation methods for ordinary and special depreciation. It is a tax compliance software which makes sure tax compliance for income tax.Depreciation area: An area showing the valuation of a fixed asset for a particular purpose (for example. or management accounting values). The following base values are possible.It gives integrated solution for various kind of tax such as income tax. Vertex tax procedure Pricing Procedures: We can defined new or use existing pricing procedure with Vertex defined condition types. we need to create a new tax procedure based on SAP country templates with Vertex tax conditions. Establish the communication through RFC and transnational RFC. Tax procedure: For this purpose.SAP Vertex dataflow SAP VERTEX O-Series Integration: We do need tax procedures and pricing procedures for integration. . Tax procedure assigned to country for output and input tax. Change: Vertex O series and SAP interface component (SIC) must be installed for the SAP tax interface Remote function call (RFC). Tax interface configuration: External tax interface is appended to receive and pass data between VAT O series and SAP SAP code need to be changed to enable other countries to call the external tax interface. corporate tax. vertex RFC destination SIC: SIC links RFC to Vertex O series. compliance cycle and other management efforts. It automates mostly every aspects pf personal property tax. its easy to get up to date tax data so an organization can stay informed about it . AP FICO Check configuration SAP FICO Check configuration Transaction codes: FCH1: Display check information FCH2: Display for payment document FCH3: void checks FCH5: Create manual checks FCH7: Reprint checks FCH8: reverse check payment . Moreover. It can automate tax system as well provide accuracy and smooth processing. With vertex. it provide complete set of tools to help in consumer tax liability and audit purposes. SIC link RFC to Vertex O series It helps automating tax solution for any organization.RFC destination: Program ID links RFC to SIC. FCHN: Check register FCHT: Assignment to payment .