Configuring the G/L Accounts

1. Configuring the G/L Accounts

2. G/L Overview • If the transaction appears externally (FI), it’s recorded to the general ledger • Via direct posting • Via sub-ledger accounts (reconciliation accounts) • Via settlements from internal accounting systems • It’s the complete, centralized, real-time record of all business transactions

3. G/L Overview • Accounting data is always complete and accurate • We can look at (in real time) • Detailed account information • Summarized account totals • Evaluations such as balance sheets and P/L statements • G/L accounts and cost accounting areas are updated automatically

4. Everything Financial winds up in the GL From help.sap.com

5. Financial Master Data • It’s data that lives for an extended period of time • G/L accounts • Customer (A/R) ledger • Vendor (A/P) ledger

6. Financial Transaction Data • It’s short lived data that archived or removed after a period of time • Of course, we might archive to our DW or not archive it at all • G/L transactions • Payments • Cash transactions

7. G/L Account Types (1) • They mimic accounting account types • Assets • At various levels of liquidity • Liabilities • At various levels of liquidity • Equity (retained earnings)

8. G/L Account Types (2) • P & L accounts • Revenues • Expenses • SAP predefines comment expense categories • Contain a pointer to a “special” retained earnings account so that the P & L accounts can be closed to retained earnings

9. Reconciliation Accounts • Recon accounts (payables and receivables) • Each sub-ledger is tied to a G/L reconciliation account • Both the sub-ledger and G/L account are always synchronized

10. G/L Master Records (Contents) • Applicable COA • Company code • Account number and name • Account type • Balance sheet or P & L • Account group • Account groups must be created before G/L accounts can be created

11. Account Groups • They configure the behavior of G/L accounts • G/L accounts belonging to the same account groups work similarly • We typically create account groups for • Balance sheet accounts • P/L accounts • Recon accounts • The account groups already exist for the simulation • Use account groups to define the numeric range of accounts

12. Configuring G/L Account Groups (1) • Select G/L Account group and click Field Status • Field Status groups are used by account groups and many other configurable SAP screens • They are used to configure whether a screen or field is hidden / optional / required /

13. Configuring G/L Account Groups (2) • Account Groups or organized into sub groups

14. Configuring G/L Account Groups (3) • And finally, select the optional and required fields

15. G/L Account Currency • The currency used to record GL transactions • Only balances in local crcy if set, forces accounts to be cleared in the local currency • GR / IR accounts for example

16. Tax Categories • Think of taxes as one of two types • Input tax is used for tax paid on purchases • Input for production, for example • Usually paid to vendors or the govt. • Output tax is charged to customers on sales • Charted to customers by us and then paid to the government • Look at transaction code FTXP

17. Tax Categories (Illustration)

18. Open Item Accounting (1) • “Open Item” accounts are those that require clearing • All accounting systems and ERP systems support it • An OPEN ITEM is a contractual or scheduled commitment that is not yet reflected in Financial Accounting but will lead to actual expenditures / receipts in the future, e.g. a purchase order that is not shipped in full will list those unshipped items as open items within the shipping invoice

19. Open Item Accounting (2) • Bank accounts are typically not cleared • Salary / Payroll accounts are cleared • GR / IR accounts are cleared • Vendor and customer accounts are automatically cleared (Open Item Management is enabled

20. The GR/IR Account • Example: Clearing accounts such as the Goods Receipt/Invoice Receipt (GR/IR) account • When goods are received for a purchase order, a credit is created in the GR/IR account to show that an invoice must be received • When the invoice is received, a debit entry is created to clear the goods receipt entry • You can only archive documents if all line items are cleared

21. Line Item Display • If this item is selected, then all debit and credit detail for the account is available • When posting items to such accounts and displaying line items, additional storage space and system time are required • Line item display should not be used for reconciliation accounts, accounts that have a summation function and are analyzed by another application, such as the accounts "Revenue" and "Stock“ and input and output tax accounts

22. Sort Keys • Necessary when Line Item display is selected • Determines the field that will be used to sort the line items, for example: • Posting date • Document date • Cost center

23. G/L Accounts Individual vs. Collective Processing • Individual processing applies changes to a single (G/L) account • Collective processing applies changes to a range of accounts