fi introduction

8/9/2019 FI Introduction

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AccountingAccounting, or accountancy, is the measurement,

processing and communication of financial information

about economic entities to external and internal users.

The operation which records financial transactions i.e.

storing, sorting, retrieving, summarizing, and presenting

the information in various reports and analyses.The central task of G/L accounting is to provide a comprehensive picture for

external accounting, which is achieved by recording business transactions in all

the other operational areas of a company code. Integration with other

operational areas ensures that the accounting data is always complete and

accurate.

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FI/! !rg. "nits

ompany # onsolidationontrolling $rea % Internal reporting

o.ode % &xternal reporting

redit control area % credit controlF' area % ash and finance

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Chart of Accounts (COA)

COA is a list of all G/L accounts used by one or several companycodes.

In the A! "/# system$ each transaction that has a financialimpact is recorded in a general ledger (G/L) account or sub%ledger

accounts (&endor$ Customer$ 'ied Assets and Contractor"eceivables/!ayables%'ICA) that are posted to the G/L viareconciliation accounts. his is achieved through use of COA(Chart of Accounts). Chart of Accounts consists of GL accounts$group *ise. GL accounts are master data created under GLaccount groups.

+ach GL account group controls fields of GL account master data.

Charts of accounts can have three different functions in the system

% Operating Chart of Accounts

% Group Chart of Accounts

% Country pecific Chart of accounts


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Account Groups

controls *hich fields must be entered *hen a GLaccount master is created

determines a valid number interval for the G/L account

master ,ust be created before creating G/L master records

Account groups can be defined freely. -ut normalclassification can be made

% General GL accounts% -an accounts

% +pense accounts

% "evenue accounts

% "econciliation accounts


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G/L ,aster "ecords

Contain Chart of Accounts

Company Code G/L account number

G/L account name

Account type -alance sheet or Incometatement

Account group


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G/L Account%'eatures

he A! 'I General Ledger has the follo*ing features Automatic and simultaneous posting of all sub%

ledger items in the appropriate general ledgeraccounts (reconciliation accounts)

imultaneous updating of general ledger and costaccounting areas

"eal%time evaluation of and reporting on currentaccounting data$ in the form of account displays$financial statements *ith different financialstatement versions and additional analyses.


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G/L Accounts%0sage

All individual transactions posted to GL accounts canbe checed at any time$ in real%time$ by displaying theoriginal documents$ line items$ and transaction figures

at various levels such as Account information (Ledger -alances) 1ournals (&ouchers) otals/transaction figures (&oucher totals) -alance sheet/profit and loss evaluations


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,aster 2ata

3 ,aster 2ata describes items or ob4ects used in abusiness such as GL accounts$ materials$ vendors$customers and assets that remains unchanged over anetended period of time.

3 GL accounts are identified as !5L account or -/account in it6s master data.

3 he profit/loss is posted to a specific GL account called7"etained +arnings8 account. he value posting to this

account happens on yearly basis.3 ransaction data is data that is used for relatively short

periods of time$ usually to record business transactions(sales orders$ purchase orders$ production orders$payroll amounts).

3 Codes '99%GL account$ :;9


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"econciliation Accounts

"econciliation account

Accounts receivable$ Accountspayable$ Assets=hen you post to an account in the sub%

ledger$ the system automatically posts to

the corresponding reconciliation accounthe general ledger is automatically

updated


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"econciliation Account%+ample

+ach ,aster data ob4ect *ill have

a account group to control masterdata fields lie either to suppress$

mandatory $optional or to display

the field entry.

>ere the asset master data linage

to GL accounts Is depicted.

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Account 2etermination

=hen a transaction occurs (inventory receipt$

*ithdra*al etc.)$ A! automatically determines the

correct GL accounts and other account assignment

ob4ects *ith reference to nature of transaction andother parameters. his is achieved through account

determination$ *hich is configured in I,G. Account determination is configured for ,,$ 2$ Asset

accounting$ aation and Cost ob4ects.


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Account determination

ob4ectsAllo*s the same account determination rules

to be used in multiple plants

Assign a valuation grouping code to thevaluation area$ then use the valuation grouping

code in automatic account assignment


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'I%,, Account

2etermination Account determination happens at COAlevel

Account determination for 'I%,, happens

on belo* parameters!lants/&aluation grouping code

,ovement type and ransaction/+vent ;ey

,aterial type and valuation class


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FI#'' $ccount 5etermination



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'I%2 Account

2etermination 'I Account determination is guided by

condition tables defined in 2. Generally$ 'I Account determination *ith 2

happens on the parameters of $pplication # 6

$ccount determination type#7!FI/7!F7

hart of accounts %I8T or $I8 etc.

)ales organisation#

5istribution hannel#

ustomer account assignment group# +1 or +( etc.

'aterials account assignment group# +1 or +( etc.

$ccount 9ey#&:;,&:6 etc. ustom access 9eys


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FI#$$ account determination

"sing theAsset Accounting


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FI#$$ account determination



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'inanacial tatement

&ersionAll the Gl accounts identified as -/ or !5Laccounts are presented as belo*? .Code '+@Liabilities%hare Capital

% +uity % !reference%Loans % hort term % Long term%Current liability and provisions

Assets% 'ied Assets

% Investments

% Current assets

% 2ebtors

% -an

% Cash


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'inanacial tatement

&ersionAll epenses are debits

All incomes are credits

2ifference is the profit/loss.!rofit/loss is posted to 7"etained +arnings A/c8at the end

of year.

Carry for*ard balances of -/ accounts to ne* fiscal

year happens at the end of the year.

.Code 'AGLG&"Bote his transaction do not post any accounting document.


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=hile there are different reuirements for internal and

eternal users of accounting data$ the underlying data

is usually the same for both purposes and is 7captured8

*hile recording business transactionspurchase

orders$ goods receipts$ material *ithdra*als$ etc. he

data can then be presented in different *ays for

different users.

Info system in 'I is standard for eternal reporting

Info system in CO is fleible for internal reporting

Controlling (CO)


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Controlling (CO)

CO

'I

Controlling

Internal Accounting

Cost Accounting

,anagerial Accounting

,anagement Information

'leible D Bon%standard

'inancial Accounting+ternal Accounting

'inancial tatements

Legal "euirements

tandard


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Cost +lements

!rimary Cost +lements +penses in 'I that are relevant to cost accounting are

recorded in CO using primary cost element. !rimary cost elements can only be created *hen a G/L

epense account eists. hus$ there is a one%to%onerelationship bet*een primary cost elements and G/Lepense accounts.

=hen an 'I posting occurs in a G/L account for *hicha primary cost element has been defined$ a validcontrolling ob4ect (cost center$ order$ etc.) is reuiredbefore posting.


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Cost +lements

econdary Cost +lements econdary Cost +lements are used eclusively for

certain types of CO transactions. econdary cost elements have no corresponding

G/L account. econdary cost elements can be used in

transferring costs from one cost center to other costcenters. !rimary costs are grouped together andtransferred to receiver cost centers using asecondary cost element.


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Cost Centers

Cost centers are used to trac =>+"+ costsincurred in the organiEation. As costs are

incurred$ they are assigned or posted to theappropriate cost center.

he posting and assignment of costs to costcenters is a critical step in using the CO

module. Cost centers are organiEed in a StandardHierarchy.


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Cost Center tandard

>ierarchy he cost center standard hierarchy organiEes cost

centers and provides the ability to organiEe reports at

different levels in the organiEation

'%CC%FF (tandard >ierarchy)

FF> (Cost Center Group / >ierarchy Area)

! "ost "enters

A9ierarchy Area)

#$G "ost "enters

!9ierarchy Area)

#$G "ost "enters

!9


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Cost Center Groups

Cost Center Groups can also be defined

to support additional reporting

capabilities

FF> (Cost Center Group / >ierarchy Area)

! "ost "enters

A9/"

A9#9 D ales

A9H9 D ,areting

A99 D !urchasing

A9J9 % Administration

! "ost "enters

A9


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Cost Allocation

'reuently$ costs lie rent$ computer epense$utilities$ etc. have to be allocated to cost

centers to provide accurate cost reporting. Costs can be allocated using a statistical ey

figure$ *hich defines some measurable valuerelated to the cost center$ lie suare footage$

head count$ C!0 hours$ etc. Costs can also be distributed using fied

percentages.

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