1. FI Financial Accounting
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2. Financial Accounting External Accounting Cash Flow Profit & Loss
Balance Sheet
Profit & Loss
Cash Flow
Stockholders
Bankers, Lenders
IRS, Taxing Authority
External Auditors
SEC
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3. FI/CO Organizational Structure Elements
Client
Company Code
Chart of Accounts
Fiscal Year Variant
Credit Control Area
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4. Client Highest hierarchical level in an SAP system
A complete database containing all the tables necessary for creating a fully integrated system
Master records are created per client
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5. A COMPANY CODE IS...
A BALANCED SET OF BOOKS
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6. Company Code A required structural element
A legally independent entity
The smallest organizational unit for which accounting can be carried out
Where business transactions are processed
Where accounts are managed
Where legal individual financial statements, such as the balance sheet and the profit and loss statement, are created
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7. Chart of Accounts A listing of the accounts
A chart of accounts must be assigned to every company code
Several company codes can use the same chart of accounts
A different chart of accounts can be used if a different grouping of the chart of accounts is required
Flya Kite uses FICH
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8. Fiscal Year Variant Used to define the fiscal year for the company
Standard year = 12 periods
Special periods = up to four
Allow additional closings of the books during or at the end of the year
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9. Credit Control Area
An organizational unit or area of responsibility created to control customer credit limits
A company code is assigned to one and only one credit control area
Multiple company codes can be assigned to one credit control area
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10. CHART OF ACCOUNTS - FICH
CLIENT
CHART OF ACCOUNTS - FICH
CREDIT CONTROL
AREA = FIFL
COMPANY CODE
FIFL
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11. Master Data
Describes items or objects used in a business such as accounts, materials, vendors, customers
The information usually remains unchanged over an extended period of time
Each master data record is unique in name or number
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12. GL AR AP FI Master Data MASTER DATA G/L ACCOUNTS CUSTOMERS VENDORS
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13. G/L Master Records
A master record must be created for every G/L account
Business transactions are posted to G/L accounts
Line items are displayed by G/L account
Account number 10000_ _ _ Bank Account
Account number Accounts Payable
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14. G/L Master Records Chart of Accounts information G/L account number
G/L account name
Account type: Balance sheet or Income Statement
Account group: Info that controls creation of the master record in the company code
Account number
Chart of accounts
Balance sheet account
P&L statement acct type
Account group
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15. Account Group
Identifier that controls which fields must be entered when the account is created
Can determine a valid number interval for the G/L account
Must be created before creating G/L master records - configuration data
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16. Account groups Chrt/accts Acct group From acct To account Description
FLCH BSA Balance sheet
FLCH PLA P & L accounts
FLCH RAA Reconciliation
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17. G/L Master Records Contains Company Code information Account Currency
Tax Category
Used for country specific taxes during pricing
Reconciliation Account for Account Type
Open Item Management
Whether each item in an account must be used to clear other line items in the same account –each line must zero out before it can clear
Line Item Display
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18. Company Code Information
Sort key
Necessary when Line Item display is selected
Determines the field that will be used to sort the line items
Posting date
Document date
Cost center
Others
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19. Company Code Information
Reconciliation account
Accounts receivable, Accounts payable, Fixed Assets, etc.
When you post to an account in the sub-ledger, the system automatically posts to the corresponding reconciliation account
The general ledger is automatically updated
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20. Reconciliation Account
Customers Subledger
1000
2000
Customer1
Customer2
Accounts
Receivable
3000
Reconciliation Account
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21. Reconciliation Account
Vendors Subledger
3000
Vendor2
5000
Vendor1
Accounts
Payable
8000
Reconciliation Account
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22. Company Code Information
Field status group
An identifier which controls which fields appear on a G/L document which uses this account - configuration data
Sets screens for entering data so they are specific to the account or to the transaction
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23. Master Data GL AP AR MASTER DATA G/L ACCOUNTS VENDORS CUSTOMERS
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24. Accounts Payable Master Records - Vendors
A master record must be created for every vendor
Centralized data for both MM & FI
General data
Address
Control data
Payment
transactions
Company code data
Account
management
Purchasing org
data
Purchasing
Partner
functions
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25. Vendor Master General data Address screen Address screen Control
Payment transactions
Address screen
Vendor Name
Search Term
Street address, City, Postal code
Country
Language
Telephone, Fax, Data numbers
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26. Master Data GL AP AR MASTER DATA G/L ACCOUNTS VENDORS CUSTOMERS
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27. Account Receivable Master Records - Customers
A master record must be created for every customer
Centralized data for both SD & FI
General data
Address
Control data
Payment
transactions
Company code data
Account
management
Sales area data
Sales
Shipping
Billing
...
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28. GR/IR account: a suspense account
Purchase Requisition
No Impact on Finance
Purchase Order
Integration MM- FI
Via Automatic Account Assignment
Goods Receipt
Goods Receipt
Dr Cr
Inventory
$150
Dr Cr
Expenses
$150
Dr Cr
GR / IR
$150 or
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29. GR/IR account Invoice Receipt Payment GR/IR Vendor Cash Dr Cr Dr Cr
$150
$150
$150
$150
$150
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30. Customer Master Address screen Customer Name Search Term
Street address, City, Postal code
Country
Language
Telephone, Fax, Data numbers
Control data screen
Marketing screen
Unloading points screen
Foreign trade screen
Contact persons screen
Sales screen
Shipping screen
Billing screen
Taxes screen
Output screen
Partner functions screen
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31. FI Transactions
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32. Procurement Process Outline Agreement or Scheduling Purchase
Requisition
Vendor
Demand
Accounts
Payable
Purchase
Order
Goods Receipt
& Inventory Mgt.
Invoice
Verification
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33. Document Principle In SAP, transaction postings are
Document Principle
In SAP, transaction postings are
always stored in document form
The document remains as a complete unit in the system until it is archived
Only complete documents can be posted
A document consists of a document header and at least two line items
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34. Tolerances Groups for Account Postings
Amount limits for your employees which control
the maximum document amount the employee is authorized to post
the maximum amount the employee can enter as a line item in a customer or vendor account
the maximum cash discount percentage the employee can grant on a line item
the maximum acceptable tolerance for payment differences for the employee
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35. Tolerance Group for A/R & A/P
Handles differences in payment and residual items which can occur during payment settlement
Allocate a tolerance group to each vendor in the master record
Tolerances up to which differences in payment are posted automatically to expense or revenue accounts when clearing open items
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36. Where the company “really” finds out what is going on!
Controlling CO
Where the company “really” finds out what is going on!
Flya Kite
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37. Cost centers => Products
Cost Element Accounting
Which costs are incurred ?
Product related costs
(Direct , traceable costs)
Material
Labor
Overhead costs
(Indirect costs)
Admin wages
Depreciation
Interest
Product Costs
Direct
Traceable
Overhead costs
Indirect
Cost centers => Products
Must be allocated from cost centers to products
Cost Center Accounting
Where are the costs incurred?
Product Cost
Accounting
Purchasing
What for?
Product
Manufacturing
Administration
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Sales 37 37

38. Cost Elements Note: primary cost elements are same in CO and FI
General ledger accounts
Revenue accts
P & L accts
Expense accts
Bal. sheet accts
Primary cost elements CO
Secondary
cost elements
Note: primary cost elements are same in CO and FI
Cost element
Classifies organization’s valuated consumption of production factors within a controlling area
Corresponds to a cost relevant item in the chart of accounts
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39. Primary Cost Elements
A way to identify which type of cost - Salaries, utilities, selling expenses
Cost that arise from consumption of goods/services from outside of the enterprise
Must be created in the GL chart of accounts in FI
Each posting to a cost element must be assigned either to a cost center or an order
Primary Cost Elements
The same in FI and CO = primary cost element is a general ledger account in FI
Identify WHICH type of cost based on the nature of the cost in traditional financial accounting model
Costs that arise from consumption of goods/services from outside the enterprise
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40. Secondary Cost Elements
Used exclusively in CO for allocations and settlements
Internal cost allocations
Created and exist ONLY in CO
Cannot exist in FI
The internal value flows such as allocations and overhead calculations
Secondary cost elements are allocated to cost objects within CO
Represent activity values produced in internal cost allocations
Secondary Cost Elements
Used only in CO for allocations and settlements
Do not enter general ledger accounts or financial statements
Used to allocate costs for internal activities
Do not correspond to a G/L account in FI
Used only in CO and cannot be defined in FI as an account
Represents activity values produced in internal cost allocations
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41. Cost Centers and Cost Elements
Closely linked in SAP
Each posting to a cost element is assigned either to a cost center or an order
Data is subdivided between both cost centers and cost elements for analysis
Cost Centers = where
Cost Elements = which
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42. Distributions A method of allocating primary costs
Primary cost element is the same in the sender and receiver
Cost element retains its character: same element in receiver as it was in sender
Sender cost centers and receiver cost centers are documented in the CO document
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43. Distributions Identity of the cost is Identity of the cost
the same in the
Receiver Cost Centers
Identity of the cost
in the Sender Cost
Center
Primary Cost
Element
Rent Expense
$10,000
Cost center A060
Sales &
Mktg
Rent Exp
$2,500
Distributed
Rent Expense
780000
Mfg
Rent Expense
$5,000
Adm
Rent Expense
$2,500
Nature of cost (i.e., rent expense) comes across to receiver
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44. Assessments A method of allocating both primary and secondary costs
Iterative or hierarchical
Primary costs are grouped together and transferred to receiver cost centers as a single secondary cost element
Sender cost centers and receiver cost centers are documented in the CO document
Primary and Secondary Cost Elements
Costs grouped together and transferred as a single secondary cost element charge
EX: IS Charges, Cafeteria Charges
Useful when receiver does not care about elements of the transfer – only the total
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45. Assessments Primary cost element is lost to receiver
Secondary Cost
Element
Sender Cost Center
Receiver Cost Centers
Sales &
Mktg
IS Assessment
$25,000
Information Systems
Costs = $100,000 (wages, paper,
depreciation, etc)
Cost center A070
Mfg IS
Assessment
$50,000
Allocated
IS costs
800000
Primary cost element is lost to receiver
Primary costs grouped then sent as secondary cost
Type types
Hierarchical
Specified by the user
Iterative
System determines sequence iteratively
Admin
IS Assessment
$25,000
Nature of costs is unknown to receiver
Quarles: Flya Kite 45 45

46. EXERCISE FI/CO01: CREATE GENERAL LEDGER B/S ACCOUNT
FI/CO Transactions
EXERCISE FI/CO01: CREATE GENERAL LEDGER B/S ACCOUNT
We will create a bank account manually. A bank account is an asset account located in the Balance Sheet
EXERCISE FI/CO02: CREATE GENERAL LEDGER GR/IR ACCOUNT
EXERCISE FI/CO03: CREATE P/L ACCOUNTS
Now that the vendor account has been created, the corresponding rent expense account is to be created in your chart of accounts using a reference account. Also, a utilities expense account is to be created. Using a reference account copies much of the detail data from the reference account to the account being created thus saving time making repetitive entries.
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47. EXERCISE FI/CO04: CREATE GENERAL LEDGER P&L ACCOUNTS
FI/CO Transactions
EXERCISE FI/CO04: CREATE GENERAL LEDGER P&L ACCOUNTS
To process billing we will need Profit & Loss Statement accounts for Sales Revenue and Sales Discounts
EXERCISE FI/CO05: RUN GL ACCOUNTS REPORT
This report will give you a summary of all accounts assigned to your company code.
EXERCISE FI/CO06: CREATE PRIMARY COST ELEMENTS
Primary cost elements: are costs that arise through the consumption of goods and services that originate from outside the company. They represent the link between FI and CO. This exercise creates the linkage between FI cost elements (GL accounts in FI) and the cost element categories to which they will link in CO.
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48. EXERCISE FI/CO07: CREATE VENDOR MASTER RECORD
FI/CO Transactions
EXERCISE FI/CO07: CREATE VENDOR MASTER RECORD
Flya Kite has rented new office space. The accountant in charge is requested to create a new vendor account for the real estate company.
EXERCISE FI/CO08: G/L DOCUMENT ENTRY
You receive the utility bill for the month for the plant and it must be paid immediately. The bill is for $1, The expense must be recorded in the General Ledger. It will be initially charged to the Administration cost center and charged out to manufacturing cost centers later.
EXERCISE FI/CO09: DISPLAY ACCOUNT BALANCES (OR LINE ITEMS)
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49. EXERCISE FI/CO10: POST VENDOR INVOICE
FI/CO Transactions
EXERCISE FI/CO10: POST VENDOR INVOICE
Ross’ Rockin Rentals has sent the invoice for the first month’s rent of $350. Please post the invoice using the accounts you have created in your Company code.
EXERCISE FI/CO11: DISPLAY ACCOUNT BALANCES (AND/OR LINE ITEMS)
EXERCISE FI/CO12: POST OUTGOING PAYMENT
The invoice of Ross’ Rockin Rentals is due for payment now. You are requested to clear the invoice amount by posting an outgoing payment using the bank account (no _ _ _) of your chart of accounts.
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50. EXERCISE FI/CO13: POST OUTGOING PAYMENT
FI/CO Transactions
EXERCISE FI/CO13: POST OUTGOING PAYMENT
The invoice of Widgets & Things (created in the Procurement Logistics exercises) is due for payment now. You are requested to clear the invoice amount by posting an outgoing payment using the bank account (no _ _ _) of your chart of accounts.
EXERCISE FI/CO14: RECEIVE PAYMENT FROM CUSTOMER
A sale to a Crosby Trinkets was processed and billed in the Sales Logistics system. That customer has now received the invoice and sends you payment. The payment will be posted to his G/L account.
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51. EXERCISE FI/CO15: CREATE DISTRIBUTION CYCLE
FI/CO Transactions
EXERCISE FI/CO15: CREATE DISTRIBUTION CYCLE
Distribution accomplishes the charging of primary costs from a collection cost center to all of the cost centers that benefit from the incurrence of that primary cost. Periodically, usually at the end of the month, the primary cost element will be allocated (charged) to the receiving cost objects. The distribution process distributes the balance(s) from the original sender(s) to the receivers. The original sender account is credited and the original receiver account is debited by the distribution. In this manner the distributed primary cost retains its identity in the receiving cost object’s expense list.
EXERCISE FI/CO16: REVIEW ACTUAL LINE ITEM REPORT
This exercise allows you to see how the rent expense cost element has been distributed to the various receiving cost objects using the statistical key figure set up as the basis for the distribution.
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52. EXERCISE FI/CO17: CREATE ASSESSMENT CYCLE
FI/CO Transactions
EXERCISE FI/CO17: CREATE ASSESSMENT CYCLE
With assessment both primary and secondary postings can be allocated. You can define cost allocation by assessment if the composition of costs is not important for the receiver – for example, receiver cost centers rarely require detailed breakdowns of cafeteria costs. In our case, certain charges from the local utility company are known to be exclusively attributable to the Manufacturing cost centers. Therefore, once a month the utility charges are assessed from the Administration cost center to the Manufacturing cost centers.
EXERCISE FI/CO18: REVIEW ACTUAL LINE ITEM REPORT
Review how the utility expenses have moved from cost center to cost center as assessed costs with no indication as to coming from the utilities cost element
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