Mr. RG Nawin Krishna, Bsc(cs);Msc(psychology);MBA(HR);SAP(HCM/HR), - Nawin’s Training Academy

Mr. RG Nawin Krishna, Bsc(cs);Msc(psychology);MBA(HR);SAP(HCM/HR), - Nawin’s Training Academy SAP FI

Table of Contents • GL Overview • Sub Processes • Master Data • Transaction Processing • Account Analysis / Reconciliation • Periodic Processing • Reporting

SAP Modules - Overview FI SD Financial Accounting Sales & Distribution CO MM Materials Mgmt. Controlling PP AM Product Planning Fixed Asset Mgmt. SAP R/3 QM PS Quality Mgmt. Project System OC PM Office & Comm. Plant Maint. HR IS Human Resources Industry Solutions

GL Special Ledger Accounts Payable AP SL Legal Accounts Receivable Consolidation AR LC CM TM Travel AM & IM Management Cash Management GL Asset and Investment Management FI – Financial Accounting Modules FI - Financial Accounting Modules General Ledger FI

Financial Accounting / Controlling • Financial Accounting • Legal / Statutory Accounts • Standard Ledgers • Master Data Integrates with Controlling • Controlling • Management Accounts • Manage Budget Expenditure

General Ledger - Integration

A Group Hierarchical Structure A Group Company A Grp Common Chart of Accounts (YCCA) Chart of Accounts Company Codes A Ltd (9100) A1 Ltd (9200) Financial Management Area A Grp FM Area (9100)

Chart of Accounts • TheChart of Accounts • Contains the definitions of all G/L accounts in an ordered form • Each general ledger is set up according to a Chart of Accounts • Many company codes may use the same COA • All A Grp. organizational units use the same Chart of Accounts: YCCA. COA “YCCA” Company Code 9100 A Ltd Company Code 9200 A1 Ltd

Company Code • Company Code • It is an independent accounting entity. A company code is assigned to a chart of accounts. • Each company code in A Group uses the G/L accounts from only one chart of accounts for account validation. This is called the operating chart of accounts. • A chart of accounts can be used by multiple companies provided they have the same basic account requirements.

General Ledger Financial Accounting Master Data Transaction Processing Account Analysis & Reconciliation Reporting Periodic Processing General Ledger Process Overview

Master Data • Account Groups • Maintenance • Creation at 2 Levels • Chart of Accounts Data • Company Code Data • Change • Block • Delete • Cost Elements • Creation

GL Account Groups A Grp COA Number Ranges Account Groups

GL Account Master Record General Ledger Balance P&L T T T T T T T T T T T T T T T Balance P&L T T T T T T T T T T T T T T T Chart of accounts segment Acct number: 119430 Description: Account group: Material Mgmt Inventory – Finished goods Bal. sheet acct: (Balance c/fwd) Inc. statem. acct: Bank account number Aut. Posting control Other reference data Company code segment • Currency • Tax-related • Item management • Posting control...

Blocking of G/L Accounts • G/L Accounts are blocked at two levels • Chart of Accounts level • Company Code level • In Chart of accounts you block • A master from creating in the Company Code • An account for posting • In Company Code you block • An account for posting • NOTE: You can set or cancel the posting indicator at any time

Mark G/L Accounts for Deletion • G/L Accounts are not physically deleted without taking preparatory steps • Mark it for Deletion • Specify that record must be archived • Archive the transaction data attached to that master record • Execute the G/L deletion program

Cost Elements – Chart of Accounts A Grp. Chart of Accounts - YCCA Financial Accounting Financial Accounting 1 2 3 4 8 Expense Equity Assets Liabilities Revenue accounts 1 2 3 4 8 9 Non - Material Current Primary Revenue Secondary opera - inventory financial cost cost elements ting elements elements assets costs, and revenue short - term Controlling Controlling capital Profit Center Accounting Profit Center Accounting

The Cost Element CO CO FI FI G/L Primary cost elements accounts Primary cost element External order settlement P & L Balance sheet accounts accounts Accounts posted Expense accounts Secondary cost elements to directly, such as Internal activity allocation bank accounts Assessment Overheads Internal order settlement Accounts posted to indirectly, such as reconciliation Revenue elements accounts Revenue element Revenue account Sales deduction

Transaction Processing SAP R/3 supports the following transactions: • Journal (JV) Processing • Document Principle • Document Structure • Foreign Currency documents • Parked documents • Posting with Reference • Reversing / Canceling documents

Document Posting: Activity Flow

Credit Debit 1,000,000 800,000 200,000 1,000,000 1,000,000 Total: The Accounting Documents Document No: 123456 Date: 6/5/1000x Company Code: 5200 Currency: US$ ,,,, Header Line items • Each document consists of two segments: header and line items. • After posting it receives a unique document number. • A Grp. will use the standard document types of SAP. The system assigns the document numbers automatically.

00 Document Number Ranges 9999999999 02 EX 02 9000000000 External numbering 8000000000 Current numbers 7000000000 01 SB 01 6000000000 Internal numbering defined until fiscal year in the future 5000000000 4000000000 Current numbers 3000000000 DR 00 2000000000 Internal numbering defined per fiscal year 1000000000 0000000000 1998 1999 2000 2001...

The Document’s Header • Dates: • Document Date, • Posting Date, • Translation Date, • Entry Date (automatic), • Period. • Document Type • Company Code • Currency • Additional information: • Reference, • Short text.

Account Posting keys Field no Relevant for postings on accounts of this type? suppress yes Posted with which posting key? Posted on which account? PK ... PK ... Account- dependent field status Posting key- dependent field status ? Priority

Line items • During document entry, certain fields need to be filled in. For example, when posting expenses, a cost center and tax information is usually required. • Tax fields are only ready for entry if the general ledger account is set up as tax-relevant.

Posting a document Document entered correctly Posting functions • You can now: • Simulate your document - press the “Simulate” button: • Or post it immediately - press “Save” button (F11)

Posting in Foreign Currency • Local currency - Functional currency of the company code • Document currency - Currency of the document • Group currency - Alternative currency for group reporting • For every Company Code there’s defined a company code currency, ie, every company code has a “local” currency. • Every document, posted in different currency than company code currency, is processed as a foreign currency document. • Accounting documents can be posted in a foreign currency • The foreign currency is converted to local currency and both are stored in the document along with the exchange rate

Posting in Foreign Currency 1. 2. 3. 1. Exchange rate can be entered manually, 2. Or derived from “Exchange Rates Table” System automatically translates the foreign currency into CC currency.

Parking / Holding a Document • After entering the document it is possible: • To post it immediately • To “park” the document • To hold the document

Reference Documents Document # 1 (Reference Document): Header: 01/03/2003 Comp. Code: 5200 Line Items: PK Account Amount 40 123000 5000 50 345560 2000 50 907902 3000 Document # 2: Line Items: PK Account Amount 40 123000 5000 50 345560 2000 50 907902 3000 • Reference documents are either accounting documents or sample documents that are used as a reference to post an accounting document.

Balance sheet Assets Liabilities Shared equity Reverse a GL document Document entered incorrectly Document corrected by Reversal: Reverse with a standard reversal posting Reverse with a negative posting Document re-entered correctly

Mass Reversal of Documents Mass Reversal Procedure • Many documents may be reversed at the same time, • Process may be scheduled to be performed in the background.

Account Analysis / Reconciliation SAP R/3 supports the following transactions: • Display G/L account balance • Display G/L line items • G/L account analysis functions • Clear outstanding items on G/L account

Account: balance and line items Account balance • Account Balances display • Opening Balance (Carry forward Balance from previous year) • Totals of all transactions for each posting period broken down for • Debits and Credits • From these figures the system calculates the following for the account balance function • Balance per posting period • Accumulated balance for the account

Account: balance and line items Line items • Line items can be displayed on G/L accounts which are managed with Line Item display • Line items are displayed on-line • Line Items can be totaled and sorted according to user requirements • Additional fields can be added to the Line Item display screen • Alternative custom defined Line Layouts can be defined

Account Analysis Functions • Functions supporting account analysis are grouped on the “Application toolbar”

Open Item Clearing 1 2 3 You can only clear open items for accounts that are open item managed. Open items represent transactions that are incomplete. The balance of an open item managed accounts are the reconciliation items.

Reversal of Clearing Display cleared items Reversal of clearing • Reversal of documents that were cleared before is not possible, • First the clearing operation must be reset.

Period End Processing • SAP R/3 supports the following transactions: • Fiscal Year variants & Posting Period • Clear open items, both manually and automatically • Create, maintain and process accrual/deferral transactions • Recurring Entries • Revalue balances in foreign currencies • Reconciliation of documents with monthly debits & credits • Roll over of closing balances to form opening balances can be performed multiple times and after the beginning of the new fiscal year.

Posting Periods Fiscal Year Variants Company Code Data K4 Same as Calendar Year Shortened Fiscal Year V3 Non-Calendar Fiscal Year Company Code 0001 FY Variant R1 R1 Calendar Year Year 2003 Periods Properties R1 R1 FY Variants Mo. Day Period Year 01 31 10 -1 02 28 11 -1 03 31 12 -1 04 30 01 : 12 31 09 FY Variants Calendar Year Year-Dependent C No. of Post. Per. 12 No. of Special Per. 2 • Every transaction that is posted is assigned to a particular posting period

GL Account Clearing Automatic Payment Bank Statement • A typical example of an open item is, for instance, a bank clearing account. • A transaction is cleared when an offset value is posted to an item or group of items, so that the resulting balance of the items is zero.

Automatic Clearing Program • Open items for G/L Accounts, Vendors and Customers can be cleared automatically by running the Clearing Program • Set up predefined criteria for automatic clearing (Configuration) • Program groups those items from an account that have the same • Trading Partner ID • Reconciliation Number • Currency in which the General Ledger is updated • Four freely definable criteria Accounts xxxxxx xxxxxx xxxxxx xxxxxx ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Automatic clearing program

Deferrals & Accruals • Accruals and deferrals can be handled automatically by the SAP R/3 system • Accrual/Deferral Documents are created on a monthly basis to record expenses/income which were anticipated but not yet realized • Once a transaction has been approved, it can be set up and run automatically each month. • The recurring entry program helps to maintain Accruals / Deferrals postings • Standard Journal Posting • Has a reversing date • Reversal Date can be any date in the future • Monthly job is scheduled to reverse all Accrual/Deferral Documents automatically

Document ____________ ______________________ ______________________ Recurring Entry Document Posting Parameters First run on Last run on Interval in months Run Date Run Schedule 01/01/2002 12/01/2002 01 15 ____ 03/01/2002 ___________________ ___________________ ___________________ 02/01/2002 ___________________ ___________________ ___________________ 01/01/2002 ___________________ ___________________ ___________________ Batch Input Session

Recurring Entry Document (2) Dates when the first and the last recurring entries are to be carried out Document ‘s Header Line items

Reporting • SAP system offers number of reports that help analyzing entered business transactions: • Financial Statement Version (Balance Sheet and P&L) • Account Balances • Line Items • Documents • Master Data • Report can be: • Printed out directly to the printer, • Saved as a local file (txt format, Excel file etc.) • Sent by e-mail

Mr. RG Nawin Krishna, Bsc(cs);Msc(psychology);MBA(HR);SAP(HCM/HR), - Nawin’s Training Academy