1. Financials Contents: Chart of Accounts Journal Entries Posting Tools
Budgeting
Cost Accounting
Integration Postings

2. Financials: Unit Objectives
At the conclusion of this unit, you will be able to:
Maintain the chart of accounts
Define, activate, and lock posting periods
Post journal entries manually
Create journal vouchers
Use posting templates
Use recurring postings
Use budgeting
Monitor your projects and profit centers

3. Financials: Course Overview Diagram
Financial Statements and Reporting
Banking
Service
Human Resources

4. Financials: Business Scenario
Due to legal requirements and business reasons, all transactions that lead to a change in a company's net worth, equity capital, and external capital must be documented in accounting records. These records are used at the end of an accounting period to prepare the company's financial statements.

5. Chart of Accounts: Topic Objectives
At the conclusion of this topic, you will be able to:
Change the chart of accounts for your company
Create, delete, and change G/L accounts
Explain what a control account is
Define the currencies the systems uses to manage a G/L account balance
Use account segmentation for reporting purposes

6. Structure of the Chart of Accounts
General Ledger
Level 1
Assets
Liabilities
Cap. + Res.
Turnover
Cost of Sales
Operating C.
Non-Operating
Tax + Extr.
Level 2
Level 3
Level 4
Level 5
Freehold Land
Land
& Buildings
...
Tangible Assets
Buildings
...
Fixed Assets
Plant & Machinery
...
Formation Expenses
...
Intangible Assets
...
Patents, etc.
Current Assets
Title
A chart of accounts arranges a company's general ledger accounts in a hierarchical structure. The top level in the structure (level 1) consists of several account groups for accounts of different types (assets, liabilities, capital and reserves, turnover, and so on). The number of account groups depends on the chart of accounts.
Choose Financials  Chart of Accounts to create and maintain G/L accounts. All changes in the definition of an account are logged in an account history.
Choose Financials  Edit Chart of Accounts to maintain the structure of the chart of accounts.
Levels 2 through 4 can contain either active accounts or titles that combine several active accounts. Level 5 only contains active accounts.
The system displays the group (cabinet drawer as shown in the figure) titles in black with a blue background. You cannot change these titles. The system displays all other titles in blue and normal active accounts in black. Accounts that you have entered in the G/L account determination (primary accounts) are displayed in green.
When you do the system initialization, you can either use one of the charts of accounts shipped with the system as a template (recommended) or create your own chart of accounts. Choose Administration  System Initialization  Company Details and choose a template in the Chart of Accounts Template field on the Basic Initialization tab. Another option is to import a chart of accounts using the data transfer workbench.
Active Account

7. Standard Transactions
Control Accounts
General Ledger aa bb
Control accounts for payables and receivables aa bb
Control accounts aa bb
Control accounts
Standard Transactions
Business partners aa bb
Customers
Special Transaction types
Vendors
You can define a G/L account as a control account.
A control account links the business partner accounts to the general ledger. You must enter a control account in every business partner master record. Whenever you post a document to a business partner account, the system automatically adds a journal entry to the general ledger, which posts the receivables or payables to this control account.
Some transactions, such as transactions with bills of exchange, must be posted to special control accounts. Therefore, you can assign these special accounts to predefined transaction types, such as open debts, assets account, or other (country-dependent).
You can also enter default control accounts under Administration  Definitions  Financials  G/L Account Determination. These accounts appear by default whenever you create a new business partner.
The system displays the total account balance in the business partner master record. From there you can navigate to the line item display of the account. In the line item display, the system displays the debit values in black and the credit values in green and in parentheses.
If you are working with several control accounts, the system can display the business partner balances separately for every control account. To activate this, choose Administration  System Initialization  General Settings and select the Display Bookkeeping Balance by Control Accounts indicator on the Sales tab.
For viewing the accounts and the balances, you must have the proper authorization.

8. Accounting Currencies
mySAP Business Suite
SAP BW
Currency: USD
SAP Business One
SAP Business One
SAP Business One
Local Currency: EUR
Local Currency: USD
Local Currency: JPY
System Currency: USD
System Currency: USD
System Currency: USD
SAP Business One can handle accounting in two parallel currencies, the local currency and the system currency.
The local currency is the currency in which the company is legally required to keep its books.
The system currency may be a different currency than the local currency and is especially useful for subsidiaries of global companies whose head office uses a different currency than the subsidiaries (for example, EUR (€) in the subsidiary and USD ($) in the head office). In this case, the system automatically calculates all postings in the system currency and manages an additional account balance in this currency. This makes it easier to have aggregated reporting on all the subsidiaries and allows for better integration with the system of the head office.
Choose Administration  System Initialization  Company Details to define the local currency and the system currency on the Basic Initialization tab.

9. Account Currencies Currencies for Entering Journal Entries
Currencies of the Account Balance
Account Currency
= Local Currency
Local Currency
System Currency
= Specific Foreign Currency
Specified Foreign Currency
= Multi-Currency
Any Foreign Currency
You must specify an account currency for each business partner master record and each G/L account to specify the following:
The currencies in which line items to this account can be entered
The currencies in which the system manages the account balance
If you enter the local currency in the Currency field, you can enter line items in the local currency and the system manages the account balance in the local currency and the system currency in parallel.
If you enter any specific foreign currency in the Currency field, you can enter line items in the specified foreign currency or the local currency. The system then manages the account balance in the specified foreign currency, the local currency, and the system currency in parallel.
If you enter multi-currency in the Currency field, you can post line items to this account or business partner in any currency. The system, however, manages the account balance only in the local and system currencies. In other words, it does not manage the balance in the currencies in which the items were entered. This makes it difficult to reconcile the account with an external bank statement. You should, therefore, try to avoid managing an account in multiple currencies if at all possible.
The G/L Accounts and Business Partners report produces a list of all accounts, including their name, account group, and balances. To run the G/L Accounts and Business Partners report, choose Financials  Financial Reports  Accounting  G/L Accounts and Business Partners.

10. Some G/L Account Details
Balance
Confidential
Account Type
Cash Account
Active or On Hold
External Code
Code for Exporting
Alternative Account Name
Details
The system displays the account balance in the account master record. From there you can go to the line item display of the account. In the line item display, the system displays the debit values in black and the credit values in green and in parentheses.
For viewing the accounts and the balances you need the right authorization. You can define a G/L accounts as confidential. You can use and display confidential accounts only if you have the necessary authorizations.
With the Account Type field, you define an account as revenue account (sales) or expense account (expenditure).
Accounts that you defined as cash accounts appear in the Cash Flow report.
You can set a G/L account as active or on hold for a certain period of time.
In the External Code field or the Code for Exporting field, you can enter alternative codes for the account. The alternative codes can be used by external programs, which you integrated with SAP Business One.
You can define an alternative account name for the account. This can be useful when your company works in different languages.
In the Details field, you can enter additional information about the account.

11. Region Segment Department Division Natural Account - Division (Food) -
Account Segmentation
Region
North
South
West
Segment
Sales
Department
Clothing
Equipment
Purchasing
Food
Production
Division
Natural Account -
Division
(Food) -
Department
(Sales) -
Region
(North)
The accounts in SAP Business One can be subdivided into segments. A segment is built from the values of up to nine segment dimensions. The figure shows the segments composed of the values for the segment dimensions
region
department
division
Because this example uses only three segment dimensions, a segment can be pictured as a cube.
When using account segmentation, you do not just post to an account but also to a segment. By doing this, you classify the posting as belonging to a certain division (for example, Food), department (for example, Sales) and region (for example, North).
Account segmentation is very important for financial reporting in the USA.

12. Definition of Account Segmentation
Segment Dimensions
Account Segment Separator
Natural Account -
Division -
Region -
Department
Clothing
Equipment
North
Sales
Purchasing
Production
Segment Characteristics
South
West
You decide on company level whether you want to use account segmentation or not. After accounts with segments are created, you will not be able to change back.
Choose Administration  System Initialization  Company Details and then select the Use Segmentation Accounts flag on the Basic Initialization tab to switch on the account segmentation.
The system displays an account segment separator between the characteristics of a segment. You can specify the account segment separator under Administration  System Initialization  General Settings in the Account Segment Separator field on the Display tab. This field is available only if the account segmentation is switched on in the company details.
If you want to use account segmentation, you must define how many and which segment dimensions you need. Up to nine dimensions are possible. You can freely choose the names of the segment dimensions, for example, division, region, department, cost center, business area, functional area, and so on. You also define the length and the type (numeric or alphanumeric) of the segment characteristics.
For every segment dimension, you define the possible segment characteristics, for example, clothing and equipment as segment characteristics for the segment dimension division.
To define the segment dimensions and the segment characteristics, choose Administration  Definitions  Financials  Define Account Segmentation. This path is available only if the account segmentation is switched on in the company details.
When defining the segment dimensions and segment characteristics, keep in mind that the number of segments increases dramatically with every segment dimension and every segment characteristic.

13. Account Code Generator
Natural Account
Natural account:
with three segments
 Clothing
 Equipment
Division
North
South
West
Region
 North
 South
 West
Account Code Generator
Sales
Clothing
Equipment
Purchasing
Food
Department
 Sales
 Purchasing
 Production
Production
You can use the account code generator to create the segments. In the account code generator, you specify the natural account and its properties, as well as the segment characteristics for which you want the system to generate segments.
You must enter the codes of the segment characteristics to specify a segment. The system displays the short names of the segment characteristics in the description of the segment.
You find the account code generator under Financials  Account Code Generator. This path is available only if the account segmentation is switched on in the company details.

14. Journal Entries: Topic Objectives
At the conclusion of this topic, you will be able to:
Define, activate, and lock posting periods
Post journal entries manually
Use the functions for displaying documents
Explain how journal entries and original documents are related
Maintain document numbers and serials
Post journal entries in foreign currencies

15. Posting Periods Year 1 2 3 4 Quarters Fiscal Year 1 1 2 3 4 5 6 7 8 910 11 12
Months
Days
To create posting periods in SAP Business One, you must specify a code and name for the fiscal year (for example, 2004 as the key, and Year 2004 as the name). You must then define how this fiscal year is to be split. You can split the fiscal year into:
Year (one sub-period)
Quarters (four sub-periods)
Months (twelve sub-periods)
Days (any number of sub-periods, usually 365 or 366)
Using this information, the system automatically creates the corresponding number of posting periods. You can change these periods, if necessary. The codes for the posting periods are structured the following way: <fiscal year key>-<number sequence for the posting period> (for example, for March 2003).
To create a new posting period, choose Administration  System Initialization  General Settings and choose New Period on the Posting Periods tab.
To maintain an existing posting period (for example, to change the status), choose Administration  System Initialization  General Settings and go into the posting period to be changed.
You can deactivate the relevant period when you carry out the period-end closing activities. After you have deactivated the period, you cannot post any documents to this period in purchasing or sales; however, you can still post accounting data manually to make closing entries. After the period-end closing activities are completed, you can lock the period so that no postings of any kind can be made.

16. Journal Entry Table Settings and Defaults Document Header Data
Expanded Editing Mode for a Line Item
G/L Acc./BP No
Name
Debit
Credit
Value Date
Line Items Table
To enter a journal entry, choose Financials  Journal Entry. The screen for entering journal entries manually is divided into three areas: document header data, extended editing mode for an item, and the items table.
The system automatically enters a number in the document header. This number is incremented with every transaction. The system proposes the current date as the Posting date and Tax date (document date). The Ref. 1 and Ref. 2 fields can contain references to associated actual documents. You can also classify the document using a transaction code, for example, as an accrual/deferral document, depreciation document, or value adjustment document. Choose Administration  Definitions  Financials  Define Transaction Codes to maintain the transaction codes. The system copies the description of the transaction code to the Details field. The journal entry itself is always posted with the exchange rate that is entered in the exchange rates table. You can mark postings made for your closing operations as adjustment transactions (Period 13). You can specify that you want to reverse the journal entry automatically at a certain date for accrual postings.
You can show or hide the extended editing mode. The mode always refers to the item that is currently selected and displays all the item fields for you to enter the relevant data. The Ref. 1, Ref. 2, Project, and Details fields are usually filled with the content of the fields with the same name in the header.
The system displays the amounts in the local currency in the items table. You can also display the amounts in the system currency or you can activate additional fields for entering foreign currency amounts.
In the settings, you can define which columns are displayed in the items table. Furthermore, you can store values in the settings that the system uses as default values when you enter a journal entry.
Add
Cancel
Cancel Template
Display FC
Display SC

17. Reference to Origin Document Type and Origin Document Number
Origin Documents
A/R Invoices IN
Reference to Origin Document Type and Origin Document Number
Journal Entries JE
Journal Entries
Transaction Numbers 1, 2, 3,....
A/P Invoices PU
All journal entries refer to the type and number of the origin document (for example, IN for customer invoices). The origin documents of manual journal entries are the journal entries themselves. For this reason, they refer to themselves and are of type JE (journal entry). Most journal entries, however, are integrated (that is, they are not entered manually in the accounting system) and refer to other document types (for example, IN for customer invoices or PU for AP invoices).
The journal entries contain a sequential number, beginning with 1. With all other document types, you can define how these numbers are assigned.
The Transaction Journal Report shows all the journal entries of a certain origin type in chronological order, sorted by transaction number. From here, you can go directly to the origin document for the posting. To run the Transaction Journal Report, choose Financials  Financial Reports  Accounting  Transaction Journal Report.
The Document Journal functions in a similar way. Here you can use more options to select and tailor the output. To run the Document Journal, choose Financials  Financial Reports  Accounting  Document Journal.
The General Ledger report provides a view of the selected general ledger and business partner accounts and lists all line items that you have posted to the account. To run the General Ledger report, choose Financials  Financial Reports  Accounting  General Ledger.

18. Document Numbering and Series
Internal Document Number Assignment
3,000,000
Branch B
2,000,000
A/R Invoices
Branch A
1,000,000
External Document Number Assignment
Primary
For every document type, you must create at least one series of document numbers, which is then used by the system to assign sequential document numbers to the documents.
Choose Administration  System Initialization  Document Numbering to maintain the document series. For every document type, you must at least enter the first number of the document series that you want to use in the First field. The system always displays the next available document number in the Next field. You may also enter an upper limit for the document numbers in the Last field.
You can assign several document series to a single document type and use these document series to distinguish between the documents from different branches. For example, A/R invoices from branch A are from the series 1,000,000 to 1,999,999 and A/R invoices from branch B are from the series 2,000,000 to 2,999,999. These series may not overlap. You can add a prefix and suffix to the document numbers, but prefixes and suffices are not displayed on the screen and can be used only when printing the documents.
In addition to the automatic assignment of document numbers by document series, you can also enter documents with an external document number that you enter manually. This makes sense, for example, if you write A/R invoices manually on a prenumbered invoice block and want to transfer these invoices into the system. In this case, you select the Manual indicator and enter the number from the handwritten A/R invoice manually into the No. field.
Document Series Maintenance is linked to authorization management by a numeric group key (1 to 10). You can use a document series only if you have the authorization for a group key that is also linked to that document series. You can also set a series as a default series for certain users.
You can lock document series so that no one can use numbers from the locked series anymore.
A/R Invoices

19. Journal Entry Functions
Configuration
Adjust the settings for the document type
Adjust the form for printing the document
Contacts
Create contact for the document
Display related contacts
Editing Functions
Reverse documents
Change certain document fields
Find documents
Duplicate document
Add documents
Print
Print preview
Print documents
Journal posting
Export
Send document by or fax
Export document to Microsoft Excel
This slide shows some important functions in the journal entry transaction.
Configuration functions
Editing functions
Contact functions
Exporting functions
Create transaction journal

20. Reverse Transactions Standard Reverse Transaction Incorrect Posting
Account 1
Account 2
Account 1
2050
2050
2050
2050
2050
2050
2050
2050
2050
2050
Increase in Transaction Figures
Account 2
Reverse Transactions with Negative Amounts
2050
Account 1
Account 2
2050
2050
2050
-2050
-2050
Users can make input errors. As a result, the journal entry created will contain incorrect information. To provide an audit of the correction, the user must first reverse the journal entry in error, and then capture the document correctly.
You can specify whether reversal transactions are performed:
as a standard reverse transaction
as a reverse transaction with negative amounts
The standard reverse transaction causes the system to post the debit in error as a credit and the credit in error as a debit. This corrects the balance of the accounts. However, the standard reverse transaction causes an additional increase in the transaction figures on the debit and credit sides, which might be misleading sometimes.
The reverse transaction with negative amounts causes the system to post the debit in error as a negative debit and the credit in error as a negative credit. This not only corrects the balance of the accounts but also the transaction figures.
It depends on the country whether standard reverse transactions or reverse transactions with negative amounts are required. Choose Administration  System Initialization  Company Details and select the Use Negative Amount for Reverse Transaction field on the Basic Initialization tab to switch on the reverse transaction with negative amounts.
Reset of Transaction Figures

21. Display of Debit and Credit
Account with Debit Balance
Credit Postings
(100.00)
Debit Postings
130.00
Debit Balance
30.00
Account with Credit Balance
(130.00)
100.00
Credit Balance
-30.00
When you enter the line item display of any account (G/L account or business partner), the system displays the debit and credit amounts the following way:
Debit Postings: Black amount, for example,
Credit Postings: Green amount in parentheses, for example, (100.00)
The amounts are usually positive. There may be negative amounts if you selected the Use Negative Amount for Reverse Transaction indicator under Administration  System Initialization  Company Details on the Basic Initialization tab. These negative amounts indicate reversal postings.
The balance is the difference between the sum of all credit postings and the sum of all debit postings.
If the sum of the debit postings is greater than the sum of the credit postings, there is a debit balance.
If the sum of the credit postings is greater than the sum of the debit postings, there is a credit balance.
Usually, the system displays a credit balance with a negative sign because the a credit balance represents liabilities in an asset account. If you want this kind of display, make sure that the Display Credit Balance with Negative Sign indicator is selected. Choose Administration  System Initialization  Company Details and the Basic Initialization tab to do so.

22. Postings in Foreign Currencies
Account in Foreign Currency
Journal Entry in Foreign Currency
Exchange Rates Table
...
1.23 4
1.21 3
1.15 2
1.20 1
Foreign Currency
Month
Account in Multiple Currencies
Specify the Currency for the Journal Entry
When you make journal entries in foreign currencies to a foreign currency account, you do not need to specify the currency because it is stored in the account. When you make journal entries to an account that is managed in multiple currencies, you must specify the currency codes.
The system uses the exchange rate in the exchange rates table to convert the amount to the local and the system currency. Choose Administration  Define foreign currency exchange rates to update the exchange rates table. You can also specify exchange rates for certain periods of time.
You can configure the system so that the entry window is displayed automatically as soon as you log on. Choose Administration  System Initialization  General Settings and select the Open Exchange Rates Table indicator on the Services tab to activate this service for your user.
If the exchange rates table has not been maintained, it is displayed automatically when you enter an item in a foreign currency.
If you have defined several companies in the system, you can first export exchange rates from one company into a general exchange rates table, and then import this data into a different company.

23. Posting Tools: Topic Objectives
At the conclusion of this topic, you will be able to:
Use journal vouchers
Use posting templates
Use recurring postings

24. Entries in Journal Voucher
Journal Vouchers
Entries in Journal Voucher
Create Journal Voucher
Journal Entries
Correct and Update
SAP Business One offers a two-stage procedure for creating journal entries. You can create the journal entries as drafts first and correct and post them later.
When you do so, you create a special folder named journal voucher for storing several journal entry drafts. You can change journal entry drafts at any time because they have not been posted yet. Your colleague, for example, can then access the journal voucher, make any necessary corrections, and then post the entire journal voucher. You do not have to post each journal entry individually. If you do want to post the journal entries individually, however, you must create a separate journal voucher for each journal entry draft.
To create, change, and post journal vouchers, choose Financials  Journal Vouchers.
Journal Voucher (Folder of Journal Entry Drafts)

25. Posting Template with Percentages
Journal Entry
Template Type: Percentage
Template: Cash
Code: Cash
Description: Cash Purchase with Input Tax
G/L Account/BP No.
G/L Account/BP Name
Debit%
Credit%
Add
Expense Account
Add
Cancel
100
Cancel
Cancel Template
270010
Input Tax 16
160000
Cash EUR
116
You can create posting templates for journal entries that have a very similar structure. These templates can contain account numbers but you can also just specify an account description in a line item if you do not yet know which exact account will be used for this line item. In the posting template shown on the slide, the expense account for the cash purchase, for example, is not known yet because the type of expense can differ.
Instead of fixed amounts, only percentages are entered here. These percentages indicate how the total amount is distributed among the relevant line items.
The posting template is stored under a code and with a description. Choose Financials  Posting Templates to enter and maintain posting templates.
When you enter a journal entry manually, choose Percentage in the Template Type field and enter the template code in the Template field.

26. For Manual Journal Entries Template Type: Recurring Posting
Recurring Postings
Code: Rent
Description: Rental Payment
G/L Account/BP No.
G/L Account/BP Name
Debit
Credit
620000
Property Rent
1000
161000
Girobank Account
1000
Frequency:
Monthly
On 1 
Valid to
Next Execution:
10/01/04
09/30/05
Daily
Weekly
Monthly
Quarterly
Half Yearly
Annually
One Time
Template
Not Executed Yet
Frequency List
SAP Business One features a recurring postings function for journal entries created on a regular basis. Choose Financials  Recurring Postings to enter and maintain recurring postings.
Recurring postings use a posting template that is stored with a code and a description. In this template, you define (among other things) the frequency in which the journal entry is supposed to be created and until when the recurring posting is valid. The possible entries in the Frequency field include:
Daily, Weekly, Monthly, Quarterly, Half Yearly, Annually: You must also specify the next execution date for these entries. You can display a list of all the recurring postings in the system. You can then adjust these postings and confirm them. You can also configure the system so that the execution list is displayed automatically as soon as you log on. Choose Administration  System Initialization  General Settings and select the Display Recurring Postings on Execution indicator on the Services tab to activate this service for your user.
One time: Although a one-time recurring posting seems a bit odd, it serves a special purpose. With this you can schedule a journal entry for a specific date.
Template: Journal entries that you need repeatedly but not on a regular basis can be created as this type. You can access these templates from the manual journal entry. To do so, you must specify Recurring Posting in the Template Type field.
Not executed yet: If you do not need the recurring posting at present, you can turn it off with this entry.
In the Valid To field, you can enter a date until which the recurring posting is valid and will be executed by the system.
For Manual Journal Entries
Template Type: Recurring Posting
Inactive

27. Budgeting: Topic Objectives
At the conclusion of this topic, you will be able to:
Define budget scenarios
Define budget distribution methods
Define budgets
Run the budget report

28. Budget Scenarios Budget Account 100000 Account 200000 Account 300000
Optimistic Budget
Main Budget
Pessimistic Budget
In SAP Business One, you can decide if you want to use a budget restriction that does not allow any exceeding over budget or if you want to just get an alert if there is a deviation. In this case, you need to have certain authorizations to accept the deviation before you can go on. You must also specify at which point in the process the system performs the budget check (when entering purchase orders, delivery notes or invoices). Choose Administration  System Initialization  General Settings and then the Budget tab to define when and how the system is supposed to check for any budget deviations.
Using SAP Business One, you can use several budget scenarios, which can be independent or may be based on one another. Choose Financials  Budget  Budget Scenarios to define your budget scenarios.
You always have one main budget that is the operative one against which the system performs the budget checks.
An example for an additional scenario could be an optimistic one that would be relevant when your business runs better than expected and you have more money to spend. Another example could be a pessimistic scenario that would be relevant when your business runs worse than expected and you have less money to spend.
The budget checks are always performed against the main budget. The other scenarios are for reporting purposes only.
Account
100000
Account
200000
Account
300000
Account
400000
Account
500000

29. Definition of Budgets Accounts must be marked as Relevant to Budget
Equal 1
Asc. 1 2 3 4 5 6 7 8 9 10 11 12
Desc. 12 11 10 9 8 7 6 5 4 3 2 1
any x
Budget is entered on debit side for expenses
Jan.
Febr.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
monthly distribution
Actual: current balance
Actual – Future:
open purchase orders plus open delivery notes
Budget may be calculated as percentage of other budget
If you want to use the budget functionality, you must switch it on in the general settings. The system then automatically marks all profit or loss accounts as Relevant to Budget. You can manually remove the selection or set it also for balance sheet accounts.
Choose Financials  Budget  Define Budget to manually enter an annual budget for every account marked as Relevant to Budget. The budget is entered on the debit side (expense side). Only a debit budget is checked by the system.
The system breaks down the annual budget into monthly budgets by using a Budget Distribution Method. Three budget distribution methods are preconfigured:
Equal: Every month receives an equal share of the annual budget.
Ascending: The annual budget is distributed by using ascending weights from 1 to 12.
Descending: The annual budget is distributed by using descending weights from 12 to 1.
Of course, you can define additional methods, for example, a seasonal distribution method. Choose Financials  Budget  Define Budget Distribution Method.
You can manually change the monthly distribution if you double-click an account when you define the budget.
Instead of manually entering an annual budget, you can enter a parent account and a percentage. The system then derives the budget of the child account as the percentage of the annual budget of the parent account.
The system also displays the current balances of the accounts.

30. Cost Accounting: Topic Objectives
At the conclusion of this topic, you will be able to:
Create and group profit centers
Define distribution rules and assign them to accounts
Run the profit center report
Define and evaluate projects

31. Profit Centers and Sort Codes
Center_z
Summer Sports
Golfing
Hiking
Biking
Paragliding
Sort Code
Winter Sports
Profit Center
Alpine skiing
Ice skating
Cross-country skiing
To use the cost accounting functions in SAP Business One, you must define the cost centers or departments in your company as profit centers. You can then compile a profit and loss statement for each profit center in every period.
You can combine your profit centers into groups by using a sort code.
Choose Financials  Cost Accounting  Define Profit Centers to define and maintain profit centers.
The system automatically creates a profit center as a zero profit center (Center_z) that collects the costs and revenues that cannot be clearly distributed to other profit centers because not enough information is available. The Center_z profit center can also record costs that are not to be reported in internal cost accounting. For example, if you want to show only 80% of your rental expenses as costs, you can assign the remaining 20% to Center_z.

32. Distribution Rules Profit Center Dist. Rule Total Center_z PC 1 PC 2
100
100
Distribution Rules for DIRECT Costs and Revenues
PC 2
100
100
PC 3
100
100
Area
500
100
200
200
Distribution Rules for INDIRECT Costs and Revenues
Employees 20 2 4 8 6
Distribution rules define how the costs or revenues posted for an account are distributed to the profit centers.
When you create a profit center, the system automatically creates a distribution rule with the same name. This rule (which cannot be changed) is configured so that the system posts all the costs or revenues to the relevant profit center. In other words, the system does not split the amounts. You can use these distribution rules for direct costs and revenues, which you can assign uniquely and in full to a specific profit center.
You cannot assign indirect costs and revenues directly to a specific profit center. Instead, you must distribute them to the profit centers on a cause basis. You must define distribution rules manually for these costs and revenues. For example, you can distribute heating costs to the profit centers in accordance with the size of the heated areas. Similarly, you can distribute voluntary social benefits among the number of employees.
If you cannot define a distribution rule precisely (because you do not have enough information on the distribution keys), any costs or revenues that cannot be assigned are allocated to the Center_z profit center. When you finally have the information you need, you can change the distribution rule so that the system corrects the distribution accordingly.
Choose Financials  Cost Accounting  Define Distribution Rules to define and maintain distribution rules.

33. Link Between General Ledger and Cost Accounting
Heating Costs
Distribution Rule X
area
Journal Entry
1000
Heating Costs
Distr. Rule area
Profit Center 1
For costs to be included in cost accounting, you must enter a distribution rule into the journal entry for every line item that posts to a revenue or expense account. As soon as you make a posting to an account with a distribution rule, the system distributes the costs or revenues to the profit centers as described in the rule.
To avoid having to enter the distribution rule manually, you can enter a distribution rule into the account’s master record. This distribution rule will then be used as a default value.
You can use the Profit Center report to display an overview of the posted costs and revenues. Choose Financials  Cost Accounting  Profit Center – Report.
Profit Center 2
Profit Center 3

34. Projects Project A Project B Original Documents Project: ....
Trial Report - Budget Report
Trial Report - Budget Report
P&L Budget Report
P&L Budget Report
Project:
....
Transaction Report
Transaction Report
P&L
P&L
Accounting Documents
General Ledger
General Ledger
Trial Report - Budget Report
Trial Report - Budget Report
Project:
....
You can use projects in SAP Business One to monitor your company's larger key projects and their economic success. To do so, you first define projects in the system. Choose Administration  Definitions  Financials  Define Projects. You can then enter these directly in the relevant line items. Original documents forward the entry to the follow-on journal entries.
You can also enter projects in general ledger accounts or business partners. The relevant project is then automatically entered in the documents you post to these accounts.
The Transaction Report by Projects lists all postings that you have made for a selected project. Choose Financials  Financial Reports  Accounting  Transaction Report by Projects.
You can often limit your reports to a specific project to generate a profit & loss statement for the project, for example.

35. Integration Postings: Topic Objectives
At the conclusion of this unit, you will be able to:
Configure and maintain the G/L account determination for postings from logistics
Describe which accounts are needed for which logistics processes

36. G/L Account Determination
Set G/L Accounts by WH
Ware-house
Set G/L Accounts by Item Group 
Item Group
Set G/L Accounts by Item Level
On the Warehouse Data tab of the item master record, you specify the G/L account determination.
You can specify these accounts on item level and enter them directly into the item master record. Choose Inventory  Item Master Data and choose the Warehouse Data tab. This enables detailed account determination but also involves much maintenance work. To simplify the account determination, in every item master record you can specify that the accounts are retrieved from a higher level:
Warehouse level: In this case the system automatically retrieves the accounts from the warehouse definition. To maintain the accounts in the warehouse definition, choose Administration  Definitions  Inventory  Define Warehouses and choose the Accounting tab.
Item group level: In this case the system automatically retrieves the accounts from the item group definition. To maintain the accounts in the item group definition, choose Administration  Definitions  Inventory  Define Item Groups and choose the Accounting tab.
You can define default account under Administration  Definitions  Financials  G/L Account Determination. The default values are valid for both levels (warehouse level and item group level).
Item

37. Stock Transfers Stock Transfer Stock account (WH 01)
Purchased Item
Sales Item
WH Item
Fixed Assets
Stock Transfer
Stock account (WH 01)
Stock account (WH 02)
100
100
Item
Item
Warehouse 01
Warehouse 02
When you post a stock transfer from warehouse 02 to warehouse 01, the system creates a stock transfer document and a journal entry. The journal entry posts the value of the transferred goods on the debit side of the stock account of warehouse 01 and on the credit side of the stock account of warehouse 02. The stock accounts are retrieved from the Stock Account fields on the Warehouse Data tab of the item master record.
To post a stock transfer, choose Inventory  Inventory Transactions  Stock Transfer.

38. Inventory Transactions
Purchased Item
Sales Item
WH Item
Fixed Assets
Goods Receipt
Ware-house
Stock Account
Increasing Account
100
100
Item
G/L Account Determination
Goods Issue
Ware-house
Decreasing Account
Stock Account
100
100
For goods receipts and goods issues that do not refer to a sales process or purchasing process, you must specify the warehouse to which or from which you want to post the goods. Because the system always uses the first warehouse from the warehouse definition as the default warehouse, SAP recommends that you add the Warehouse field to the line items table through the document settings.
To post a goods receipt, choose Inventory  Inventory Transactions  Goods Receipt.
To post a goods issue, choose Inventory  Inventory Transactions  Goods Issue.
You can enter the Increasing Account (for goods receipts) or the Decreasing Account (for goods issues) directly in the document. The system uses the account from the general G/L account determination as the default account. To enter the general G/L account determination, choose Administration  Definitions  Financials  G/L Account Determination.
A goods receipt creates a journal entry that posts the value of the received goods on the debit side of the stock account and the credit side of the increasing account.
A goods issue creates a journal entry that posts the value of the issued goods on the debit side of the decreasing account and the credit side of the stock account.
The stock accounts are retrieved from the Stock Account fields on the Warehouse Data tab of the item master record.
G/L Account Determination
Item

39. Sales Process for Warehouse Items
Purchased Item
Sales Item
WH Item
Fixed Assets
Order
100
Cost Account
100
Stock Account
Delivery
Item
Item
A/R Invoice
100
Customer
100
Revenues Account
EU Revenues Account Foreign Revenues Acc.
When you sell warehouse items, the system creates the following journal entries:
The delivery creates a journal entry that posts the value of the delivered goods to the debit side of a cost account (cost of goods manufactured or COGM) and to the credit side of the stock account. The stock account and the cost account are retrieved from the Stock Account field and the Cost Account field on the Warehouse Data tab of the item master record.
The A/R invoice creates a journal entry that posts the invoiced amount to the debit side of the customer account and to the credit side of a revenues account. The revenues account is retrieved from the Warehouse Data tab of the item master record.
If the customer is located in the same country, the account from the Revenues Account field is used.
If the customer is located in a European Union (EU) country, the account from the EU Revenues Account field is used.
If the customer is located in a non-EU foreign country, the account from the Foreign Revenues Account field is used.
If you skipped the delivery before posting the A/R invoice, the system adds the stock posting to the A/R invoice posting.
To post an order, choose Sales – A/R  Order. To post a delivery, choose Sales – A/R  Delivery. To post an A/R invoice, choose Sales – A/R  A/R Invoice.
Tax postings or postings of additional revenues and expenses are not covered on this slide. The order document is not relevant for accounting.
Business Partner
Item

40. Sales Process for Non-Warehouse Items
Purchased Item
Sales Item
WH Item
Fixed Assets
Order
Delivery
A/R Invoice
Revenues Account
EU Revenues Account Foreign Revenues Acc.
Customer
100
100
When you sell items that you do not manage as warehouse items (for example, services that you created as items), the system does not trigger a posting for the delivery. Actually, you can skip the delivery altogether.
The A/R invoice is posted the same way as it is posted for warehouse items. Although the item is not a warehouse item, the Warehouse Data tab does not disappear from the item master record. You must still define one warehouse as the default warehouse because the system requires it for the G/L account determination. The revenues account is retrieved from the default warehouse on the Warehouse Data tab of the item master record.
If the customer is located in the same country, the account from the Revenues Account field is used.
If the customer is located in an EU country, the account from the EU Revenues Account field is used.
If the customer is located in a non-EU foreign country, the account from the Foreign Revenues Account field is used.
Tax postings or postings of additional revenues and expenses are not covered on this slide.
Business Partner
Item

41. Sales Process with Return
Purchased Item
Sales Item
WH Item
Fixed Assets
Order
Cost Account
Stock Account
Delivery
100
100
Item
Item
Return
Returning Account
Cost Account
100
100
Item
Item
If a delivery is damaged or of poor quality, the customer returns it to you. You post the return in the system and the system creates a journal entry that posts the value of the returned goods to the debit side of a returning account and to the credit side of the cost account. The value of the returned goods is not posted back to the original stock account to keep it separate from the value of the undamaged goods. The returning account and the cost account are retrieved from the Returning Account field and the Cost Account field on the Warehouse Data tab of the item master record.
If you also want to manage the inventory of the damaged goods separately from the undamaged goods, you should define a special warehouse for the damaged goods and enter this warehouse in the return document.
If you already invoiced the delivery to the customer before you received the return, you must reverse the process by posting an A/R credit memo. The A/R credit memo posts a reversal to the A/R invoice and at the same time posts the return to the returning account.
To post a return, choose Sales – A/R  Returns.
To post an A/R credit memo, choose Sales – A/R  A/R Credit Memo.

42. Purchasing Process for Warehouse Items
Purchased Item
Sales Item
WH Item
Fixed Assets
Purchase Order
100
Stock Account
100
Allocation Costs Account
Goods Receipt PO
Item
Item
A/P Invoice
100
Allocation Costs Account
100
Vendor
Business Partner
Item
When you buy warehouse items, the system creates the following journal entries:
The goods receipt PO creates a journal entry that posts the value of the received goods to the debit side of the stock account and to the credit side of an allocation cost account. The stock account and the allocation cost account are retrieved from the Stock Account field and the Allocation Cost Account field on the Warehouse Data tab of the item master record.
The A/P invoice creates a journal entry that posts the invoiced amount to the debit side of the allocation costs account and to the credit side of the vendor account. The allocation costs account is retrieved from the Allocation Costs field on the Warehouse Data tab of the item master record.
You need the allocation costs account to check if the goods receipts PO and the A/P invoices match. You need to reconcile this account on a regular basis.
To post a purchase order, choose Purchasing – A/P  Purchase Order.
To post a goods receipt PO, choose Purchasing – A/P  Goods Receipt PO.
To post an A/P invoice, choose Purchasing – A/P  A/P Invoice.
Tax postings or postings of additional revenues and expenses are not covered on this slide. The purchase order document is not relevant for accounting.

43. Purchasing Process for Non-Warehouse Items
Purchased Item
Sales Item
WH Item
Fixed Assets
Purchase Order
Goods Receipt PO
A/P Invoice
Expenses Account
EU Expenses Account Foreign Expenses Acc.
Vendor
100
100
When you buy items that you do not manage as warehouse items (for example, items that are directly consumed), the system does not trigger a posting for the goods receipt PO even if you create one.
The A/P invoice amount is posted on the debit side of an expense account because it goes directly into expenses. The credit side is posted on the vendor account. Although the item is not a warehouse item, the Warehouse Data tab does not disappear from the item master record. You must still define one warehouse as the default warehouse because the system requires it for the G/L account determination. The expenses account is retrieved from the default warehouse on the Warehouse Data tab of the item master record.
If the vendor is located in the same country, the account from the Expenses Account field is used.
If the vendor is located in an EU country, the account from the EU Expenses Account field is used.
If the vendor is located in a non-EU foreign country, the account from the Foreign Expenses Account field is used.
Tax postings or postings of additional revenues and expenses are not covered on this slide.
Business Partner
Item

44. Purchasing Process with Goods Return
Purchased Item
Sales Item
WH Item
Fixed Assets
Purchase Order
100
Stock Account
100
Allocation Costs Account
Goods Receipt PO
Item
Item
Goods Return
100
Allocation Costs Account
100
Stock Account
Item
Business Partner
If a goods receipt PO is damaged or of poor quality, you issue a goods return to the vendor. You post the goods return in the system and the system creates a journal entry that reverses the goods receipt PO.
If you already received and posted the A/P invoice for the goods receipt, you must reverse the process by posting an A/P credit memo. The A/P credit memo posts a reversal of the A/P invoice and of the goods receipt PO.
To post a goods return, choose Purchasing – A/P  Goods Returns.
To post an A/P credit memo, choose Purchasing – A/P  A/P Credit Memo.

45. Purchasing Process for Assets
Purchased Item
Sales Item
WH Item
Fixed Assets
Purchase Order
100
Special Control account
Goods Receipt PO
A/P Invoice
Asset Account
Vendor
100
100
Item
Business Partner
You can define an item as a fixed asset by selecting the Fixed Asset indicator. Because the asset is intended for continuous use and not for sale and because you do not place it in stock, the system automatically deselects the Sales Item indicator and the WH Item indicator.
The A/P invoice amount is posted on the debit side of an asset account and on the credit side of the vendor account. In the general ledger, the system posts to a special control account, which belongs to the Assets Account transaction type.
Although the item is not a warehouse item, the Warehouse Data tab does not disappear from the item master record. You must still define one warehouse as the default warehouse because the system requires it for the G/L account determination.
If the vendor is located in the same country, the account in the Expenses Account field is used as the asset account.
If the vendor is located in an EU country, the account in the EU Expenses Account field is used as the asset account.
If the vendor is located in a non-EU foreign country, the account in the Foreign Expenses Account field is used as the asset account.
Usually, you don’t distinguish the assets by vendor location. Therefore, you should enter the same asset account in all three fields.
You can configure the G/L account determination on asset item level and enter a separate asset account for each asset item or you can configure the G/L account determination on item group level to gather similar assets on one collection account.

46. Purchase Accounts Posting System
Purchase Order
Use Purchase Accounts Posting Systems
Purchase Account
100
Goods Receipt PO
Stock Account
Allocation Costs Account
Item
100
100
PA Offset Account
Item
Item
100
Item
A/P Invoice
100
Allocation Costs Account
100
Vendor
To allow a better budget and cost controlling, you can activate the purchase accounts posting system. You do this before any inventory postings have been made by choosing Administration  System Initialization  Company Details. Then, select the Use Purchase Accounts Posting System indicator on the Basic Initialization tab.
After you activated the purchase accounts posting system, the G/L account determination contains three additional accounts: purchase account, PA offset account, and PA return account.
Whenever you post a document that posts a goods receipt PO (goods receipts PO itself but also A/P invoice not based on a goods receipt PO), the system adds two additional line items. One line item posts the stock posting amount to the debit side of the purchase account. The system posts the offsetting line item to the credit side of the PA offset account.
When you post a goods return or a credit memo, the system also adds two additional line items. In that case the system posts the stock posting to the credit side of the PA return account and the offsetting line item to the debit side of the PA offset account.
Purchase accounts offer these advantages:
The purchase account allows you to control the purchasing budget. Goods receipts to a warehouse are usually not posted to an expense account, therefore, you cannot enter a purchasing budget. If you make the purchase account an expense account, you can create a budget for it.
If items, item groups, or warehouses belong to special profit centers, you can assign special purchase accounts to their G/L account determination and enter the distribution rule (direct distribution to the profit center) in the definition of the purchase account. This automatically assigns the purchasing expenses to the correct profit center.
Business Partner
Item

47. Financials: Unit Summary
You are now able to:
Define, activate, and lock posting periods
Post journal entries manually
Create journal vouchers
Use posting templates
Use recurring postings
Post deferrals
Use budgeting
Monitor your projects and profit centers