General Ledger

1. General Ledger Instructor Name

2. Course Purpose • This course covers General Ledger Accounting in SAP, including: • General ledger account master records • Creating and working with general ledger documents in USD and foreign currency • Creating recurring entries in the general ledger • Month-end closing procedures • Bank transactions • Reporting data from general ledger accounts

3. Course Contents • Topic 1 – G/L Overview • Topic 2 – Cost Center Master Data • Topic 3 – G/L Postings • Topic 4 – Recurring Entries • Topic 5 – Cleared Items in the G/L • Topic 6 – Foreign Currency • Topic 7 – Month-End Closing Cockpit • Topic 8 – Bank Transactions • Topic 9 – G/L Reports

4. General Ledger Topic 1 – General Ledger Overview

5. Topic 1 Objectives • Upon completion of this unit, you will be able to: • List the key steps in the general ledger process flow. • Define the key data types in general ledger master records. • Describe how general ledger master records are maintained. • Identify the sources of general ledger postings. • Describe the purposes of general ledger account clearing, balances and reports.

6. Purpose of General Ledger • Post journal entries of credit and debit balances in the Chart of Accounts (CoA): • Posting can be made on one-time or recurringbasis. • Postings are in real time: all subsequent transactions are made in light of prior postings. • Postings can be made automatically, manually and throughinterfaces with non-SAP applications. • Provide data for balance sheets, profit-and-loss statements and other financial statements and reports for internal and external consumption.

7. General Ledger Master Records • General ledger process flow begins with the creation of master records for the G/L accounts in the Chart of Accounts (CoA).

8. Chart of Accounts and the G/L • The Chart of Accounts is the collection of all the accounts for the company: • Provides a framework for classifying financial and controlling data – revenue, expenses, assets and liabilities - for one or more company codes. • G/L account master records contain CoA-specific data. CoA Data Account Name Account Number Account Type Account Group

9. CoA Account Name and Number • Account name can have a maximum of 30 alpha-numerical characters. • Account number is 6 digits. • Related accounts numbersfall in a specific range. I/C Rev Returns DPAs Pricing Adjustments

10. CoA Account Types • Account type identifies G/L accounts as: • Account types are used to manage debit and credit entries for all business transactions that affect assets, liabilities, revenues and costs.

11. CoA Account Groups • Each G/L account is assigned to an accountgroup when its master record is created. • G/L accounts in an account group: • Are related in function or purpose. • Example: Balance sheet account group • Require the same data when creating master records and making journal entries. • Have account numbers within a specific range. • Financial data from G/L accounts in an account group can be reported separately and collectively in financial statements.

12. CoA Data in G/L Master Records

13. Company Codes and the G/L • Company is the smallest legal entity with its own balance sheet and profit-and-loss reporting. • G/L master records also contain company-code-specific data, such as: Company Data Currency type Tax status Field status group

14. CoCode Currency Type • Currency of record appears under Control data. • Postings can be made in any currencies, but G/L account balances are maintained and updated in the currency of record. USD Euro Yen Yuan

15. CoCode Tax Status • G/L accounts can be taxable or non-taxable: • Tax status may mandate the entry of tax data for debits and credits when creating a journal entry.

16. CoCode Field Status Group • Different account types (e.g., reconciliation, bank, clearing) require different data in journal entries. • Requirements are defined by field statusgroup code.

17. Display G/L Master Records • G/L master records contain: • Chart of Accounts data shared by all company codes. • Company code data that differs from one company code to the next. • You can display master records’: • CoA data only • Company code data only • CoA and CoCode data (centrally)

18. G/L Master Record Display - FS00 Enter Click Tabs Chart of Accounts data Company Code data

19. Sub-Ledger Account Displays • Display customer and vendor sub-ledger account master records with transactions FD03 and FK03: • Reconciliation account is identified under the Account Management tab.

20. General Ledger Process Flow • Once the G/L accounts and their master records are created, the G/L process flow can begin: G/L Account Balance Inquiries Standard G/L Account Reporting G/L Account Master RecordCreation G/L Postings & Recurring Entries G/L Account Maintenance

21. ACTION REQUIRED OUTPUT TRIGGER Triggers, Actions and Outputs Need forOne-time and Recurring Postings Need for Account Maintenance Need forData on Accounts Need forAccount Balances Maintain master record by entering or changing: Review activities and balances: Create reports on G/L accounts: Post transactions in general ledger: • At month-end and year-end closings • On an ad hoc basis • Month-end accrual • Manual one-time journal entries • I/C entries • Foreign currencies • Reevaluations • Review existing G/L accounts as part of monthly analysis of all accounts • Account group • Company code • Cost center • Other relevant data • General ledger master records are revised General ledger accounting documents General ledger account balances reports Standard general ledger reports

22. General Ledger Maintenance • Once created, G/L accounts and master records must be maintained: • CoA and CoCode data can be changed. • Accounts can be blocked or marked for deletion. • Maintenance can be conducted atCoCode or CoA level: • Changes to master records can be displayed with transactions FS04 (centrally), FSP4 (in the CoA) and FSS4 (in a company code). G/L Account Master RecordCreation G/L Account Maintenance

23. Blocked and Deleted Accounts • Blocking prevents activities in G/L accounts: • Postings for one or all company codes to G/L accounts can be blocked. • G/L account in one company code cannot be created in another company code. • Delinquent customer accounts and inactive accounts can be deleted: • Accounts should be blocked from postings before they are deleted. • Accounts can be deleted for selected company codes without being deleted from the CoA.

24. Demonstration #1 Display Changes to G/L Master Record Centrally, in CoA and in CoCode – FS04, FSP4 and FSS4

25. Exercise #1 Display Changes to G/L Master Record Centrally, in CoA and in CoCode – FS04, FSP4 and FSS4

26. G/L Account Master RecordCreation G/L Postings & Recurring Entries G/L Account Maintenance General Ledger Postings • Once G/L master records are created, financial transactions can be posted to them.

27. Sources of G/L Postings • G/L accounts receive posting from: • Automated postings from AR, AP, AM and CO modules of costs, revenues, and asset values and depreciations. • Interface postings via batch feeds from non-SAP applications (such as payroll and banking). • Manual postings by end users: • One-time postings with FV50 and other transactions for customer invoices, vendor payments, goods receipts etc. • Recurring postings with F.14 and other transactions. • Record of postings is an accounting document of a particular document type.

28. Sources of G/L Postings Automatic postings Interface postings Asset Management (FI – AM) Purchase Orders (FI – AP) Batch feeds from external systems UploadsfromMS Excel FI - G/L Sales Orders(FI - AR) Manual postings Controlling (CO - CC) SAP manual-entrytransactions

29. AP, AR, AM and G/L Accounts • Vendor payments (AP), customer payments (AR) and asset values and book depreciations (AM): • Posted manually in sub-ledger accounts. • Automatically to G/L reconciliation accounts to create a clearing document. Sub-Ledger Posting Document Type AA Asset Value/Depreciation G/L Clearing Doc Vendor Invoice Payment KR G/L Clearing Doc Customer Bill Payment DZ G/L Clearing Doc

30. FI CO CO and G/L Accounts • Costs of production, maintenance and projects are collected by cost centers in CO module. • Costs are simultaneously posted in the G/L module. • See Topic 2 for more information. Posted to a G/L accountfor PMcosts $643 Posted to acost centerfor plant maintenance $643 Manual Automatic

31. SAP SAP Sub-Ledger Reconciliation Vendor Invoice Customer Payment • Received by APfrom vendor • Received by ARfrom customer • AP Posting AR Posting • Posted in vendor’s sub-ledger account • Creates vendor invoice payment document • Posted in customer’s sub-ledger account • Creates customer invoice payment document SAP G/L Posting G/L Posting • Automatically posted* in G/L reconciliation account • Creates G/L clearing document • Automatically posted* in G/L reconciliation account • Creates G/L clearing document SAP * No direct postings to reconciliation accounts are allowed.

32. G/L Account Balance Inquiries G/L Account Master RecordCreation G/L Postings & Recurring Entries G/L Account Maintenance General Ledger Balances • Account balances can be displayed for analysis, review in prep for closings, and other purposes: • Balances can be displayed for open or cleared items, and for any time periods.

33. General Ledger Reporting • G/L reports can be created at any time (including post-closings) on account reconciliation, balance sheets and P&L statements. G/L Account Balance Inquiries Standard G/L Account Reporting G/L Account Master RecordCreation G/L Postings & Recurring Entries G/L Account Maintenance

34. Knowledge Check • Under what tab(s) of a G/L master record do you find: • Chart of Accounts data? • Company code data? • What are the four sources of automatic postings to the general ledger? • What is the relationship between vendor and customer accounts and the general ledger?