Accounting 2008 by SAP AG All rights reserved

G/L Accounts w In the SAP R/3 system, each transaction that has a financial impact is recorded in a general ledger (G/L) account or sub-ledger accounts that are posted to the G/L via reconciliation accounts. w The central task of G/L accounting is to provide a comprehensive picture for external accounting and accounts. Recording all business transactions (primary postings as well as settlements from internal accounting) in a software system that is fully integrated with all the other operational areas of a company ensures that the accounting data is always complete and accurate. © 2008 by SAP AG. All rights reserved. 2

G/L Accounts w The SAP FI General Ledger has the following features: n Automatic and simultaneous posting of all subledger items in the appropriate general ledger accounts (reconciliation accounts) n Simultaneous updating of general ledger and cost accounting areas n Real-time evaluation of and reporting on current accounting data, in the form of account displays, financial statements with different financial statement versions and additional analyses. w Can take some getting used to as reports can change continuously © 2008 by SAP AG. All rights reserved. 3

G/L Account w Essentially, the general ledger serves as a complete record of all business transactions. It is the centralized, up-to-date reference for the rendering of accounts. Actual individual transactions can be checked at any time, in real-time, by displaying the original documents, line items, and transaction figures at various levels such as: n Account information n Journals n Totals/transaction figures n Balance sheet/profit and loss evaluations © 2008 by SAP AG. All rights reserved. 4

Master Data • Describes items or objects used in a business such as accounts, materials, vendors, customers that remains unchanged over an extended period of time • Transaction 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) • Transaction data is regularly removed from the system in a process known as archiving. For auditing purposes, it cannot simply be deleted. • A master record must be created for every G/L account © 2008 by SAP AG. All rights reserved. 5

Balance Sheet Accounts w Assets n What the firm owns, in various levels of

Balance Sheet Accounts w Liabilities n What the firm owes l Payables—payment for materials/services

Balance Sheet Accounts w Equity The difference between total assets and total liabilities n Includes n l Retained earnings l Net income on past periods Assets = Liabilities + Equity © 2008 by SAP AG. All rights reserved. 8

Profit and Loss (P&L) Accounts w Revenues n Money obtained by the sale of goods and services to customers w Expenses n Money spent to produce the revenue: l Materials l Utilities l Salaries l Selling expenses l Administrative expenses © 2008 by SAP AG. All rights reserved. 9

Profit and Loss (P&L) Accounts • • Contain an identifier for the Retained Earnings account At fiscal year end, the P & L accounts are ‘closed’ to the Retained Earnings account © 2008 by SAP AG. All rights reserved. 10

Reconciliation Accounts w Reconciliation account n Accounts receivable, Accounts payable, Assets l When you post to an account in the subledger, the system automatically posts to the corresponding reconciliation account l The general ledger is automatically updated © 2008 by SAP AG. All rights reserved. 11

G/L Master Records Contain: w Chart of Accounts w Company Code w G/L account number w G/L account name w Account type: Balance sheet or Income Statement w Account group © 2008 by SAP AG. All rights reserved. 12

Account Groups w Identifier that controls which fields must be entered when the account is created w Can determine a valid number interval for the G/L account w Must be created before creating G/L master records— configuration data w Three Account Groups created for Fitter Snacker n Balance Sheet Accounts n Profit and Loss Accounts n Reconciliation Accounts © 2008 by SAP AG. All rights reserved. 13

Account Groups Financial accounting General ledger accounting G/L accounts Master Records Preparations Define Account

Account Determination w When you enter a goods movement (inventory receipt, inventory withdrawal, variances, etc. ), you do not have to enter G/L accounts since R/3 automatically determines the correct accounts. w Automatic Account Determination is set in Customizing (IMG) © 2008 by SAP AG. All rights reserved. 15

Valuation Grouping Code w Allows the same account determination rules to be used in multiple plants w Assign a valuation grouping code to the valuation area, then use the valuation grouping code in automatic account assignment © 2008 by SAP AG. All rights reserved. 16

Automatic Account Determination w Hierarchical Process (classification) n Chart of Accounts/Company Code l Valuation area/grouping code w Transaction/Event Key (from transaction being executed) Goods Receipt Modifier (if applicable) § Valuation Class (from material master) § w All specified at time of transaction © 2008 by SAP AG. All rights reserved. 17

Automatic Account Determination w Transaction Keys: n n n BSX: Inventory Postings GBB: Offsetting Entry for Inventory Postings DIF: Materials Management Small Differences PRD: Cost (price) differences WRX: Goods receipt / inv. receipt clearing acct © 2008 by SAP AG. All rights reserved. 18

Automatic Account Determination w Valuation Class n n n 3000: Raw Materials 7900: Semi-finished

Automatic Account Determination General Account Modifier Usage AUF Goods Receipt From Production Order – post to production settlement BSA Goods Receipt Into Initial Stock – only used once for posting inventory offset for initial stock data load VAX Goods Issue To Sales - post to Cost of Goods Sold (COGS) VBR Goods Issue to Consumption - post to material consumption (e. g. , goods issue to job or production order) © 2008 by SAP AG. All rights reserved. 20

Automatic Account Determination w From Transaction: n n n Company Code Chart of Accounts Transaction Key (not same as transaction code) General Account Modifier (if applicable) w From Material n Valuation Class w Determines: G/L Account for Posting © 2008 by SAP AG. All rights reserved. 21

Transaction Keys © 2008 by SAP AG. All rights reserved. 22

Automatic Account Determination w CHFS BSX 00 AP 3000 Account 200000 © 2008 by

Controlling (CO) CO FI Controlling Internal Accounting Cost Accounting Managerial Accounting Management Accounting Flexible – Non-standard Financial Accounting External Accounting Financial Statements Legal Requirements Standard © 2008 by SAP AG. All rights reserved. 24

Controlling (CO) w While there are different requirements for internal and external users of accounting data, the underlying data is usually the same for both purposes and can be “captured” while recording business transactions— purchase orders, goods receipts, material withdrawals, etc. The data can then be presented in different ways for different users. w Info system reports in FI are standard n G/L Account Listing w Info system reports in CO are flexible © 2008 by SAP AG. All rights reserved. 25

Cost Elements w Primary Cost Elements n n n Expenses in FI that are relevant to cost accounting are recorded in CO using primary cost element. Primary cost elements can only be created when a G/L expense account exists. Thus, there is a one-to -one relationship between primary cost elements and G/L expense accounts. When an FI posting occurs in a G/L account for which a primary cost element has been defined, a valid controlling object (cost center, order, etc. ) is required before posting. © 2008 by SAP AG. All rights reserved. 26

Cost Elements w Secondary Cost Elements n n n Secondary Cost Elements are used exclusively for certain types of CO transactions. Secondary cost elements have no corresponding G/L account. Secondary cost elements can be used in transferring costs from one cost center to other cost centers. Primary costs are grouped together and transferred to receiver cost centers using a secondary cost element. © 2008 by SAP AG. All rights reserved. 27

Cost Centers w Cost centers are used to track WHERE costs occur in the organization. As costs are incurred, they are assigned or posted to the appropriate cost center. w The posting and assignment of costs to cost centers is a critical step in using the CO module. w Cost centers are organized in a Standard Hierarchy. © 2008 by SAP AG. All rights reserved. 28

Cost Center Standard Hierarchy w The cost center standard hierarchy organizes cost centers and provides the ability to organize reports at different levels in the organization: © 2008 by SAP AG. All rights reserved. 29

Cost Center Groups w Cost Center Groups can also be defined to support additional

Cost Allocation w Frequently, costs like rent, computer expense, utilities, etc. have to be allocated to cost centers to provide accurate cost reporting. w Costs can be allocated using a statistical key figure, which defines some measurable value related to the cost center, like square footage, head count, CPU hours, etc. w Costs can also be distributed using fixed percentages. © 2008 by SAP AG. All rights reserved. 31