SAP FICO Enterprise Structure Notes for Beginners

sap notes

1. SAP FICO

2. Enterprise structure Define Company in SAP S/4Hana Define Company Code in Hana Define Business Area Define Functional Area Define Credit Control Area Define Segment Define Financial Management Area Assign Company Code to Company Assign Company Code to Credit Control Area Assign Company Code to Financial Management Area

3. It is an organizational unit in Financial Accounting that divides the organization based on the area of activity or line of activity Business areas are used to prepare the financial statement according to the Business areas for the internal management purposes . Business Area

4. Washington Newyork California These are nothing but the branches. So branches of the organization can be created as the business area . Area of Activity

5. Textiles Manufacturing Paper Manufacturing Chemical manufacturing Line of Activity

6. SPRO – SAP Reference IMG – Enterprise Structure- Definition-Financial accounting- Define Business Area T-code OX03 Business Area=3366 Description =California Branch Click on “Save” Define Business Area

7. Functional areas in Finance accounting are used to define the expenses in a company according to individual functional units. The most common functional areas are: Manufacturing Sales and Distribution Production Administration Functional area

8. T code FM_FUNCTION (Earlier it was OKBD, but this is obsolete. It will open a new window Path SPRO – SAP Reference IMG – Enterprise Structure- Definition-Financial accounting- Define Functional Area Enter the following details- Name of Functional areas Description Click on save or Ctrl+S Define Functional area

9. Functional Areas are used to create Profit & loss account using the cost of sales account. For this you need to activate the cost of sales accounting as follows SPRO- SAP Ref IMG- Financial Accounting-FI Global Settings-Company Code-Cost of Sales Accounting-Activate cost of Sales accounting for preparation

10. Credit control area Credit Control area in SAP is an organizational element that controls and monitors credit limit of customers. The Credit control area is used for credit management in the application components, Account receivables (FI-AR) and Sales and Distribution(SD)

11. T Code OB45 SPRO – SAP Reference IMG – Enterprise Structure- Definition-Financial accounting- Define Credit control Area New Entries Credit Control area : Any code Currency : INR Credit Limit :500,000 Define Credit Control Area

12. Path Same as above T Code : OB38 Position Company Code:336 Ccar Area Assign Company Code to Credit Control Area

13. segment Segment is a division of a company for which you can create financial statements for external reporting Manufacturing, sales The segment is defined as a subarea of a company with activities that generate expenses and revenues, with an operating result that is regularly used by management for profit assessment and resource allocation purposes, and for which separate financial data is available.

14. SPRO – SAP Reference IMG – Enterprise Structure- Definition-Financial accounting- Segment Define Segment

15. In SAP S/4HANA, an FM Area, or Financial Management Area, is an organizational unit that plans, controls, and monitors funds and commitment budgets. It's a key part of funds management and budget management in SAP Financial Management Area

16. SPRO – SAP Reference IMG – Enterprise Structure- Definition-Financial accounting- Financial Area Define Financial Area

17. Assign Company Code to FMA

18. Company Code Global Parameters

19. Every transaction that updates the general ledger in SAP S/4HANA is done in at least one currency.   The definition of the currency depends on several organizational units, such as the transaction, client, country,  company code , controlling area, and master data. In SAP, a single transaction could contain multiple currencies depending on the currency types that have been set up.  Settings for ledger and currency type

20. go to the configuration menu path  Financial Accounting > Financial Accounting Global Settings > Ledgers > Ledger > Define Settings for Ledgers and Currency Types  or use Transaction FINSC_LEDGER. In the subsequent screen, double-click the  Currency Types  folder, Currency/Valuation Type:  Two-digit key that represents the currency type. Description:  Currency type description. Valuation View:  The view that is used for transfer pricing purposes. Company Code Specific Conversion:  Definition level for the currency type settings that determines whether the currency type is to be used for all company codes (when the box isn’t checked) or can be selected for particular company codes (when the box is checked). As you can see, this field is gray for some of the currency types, which means the standard system setting is fixed, and you can’t change it. Fields in white are changeable. Define settings

21. Ledgers  in SAP S/4HANA are an area in the general ledger application that stores accounting documents based on different accounting principles. Ledger Group

22. Ledgers in SAP S4 HANA Finance are of two types. These are the following:- Standard Ledgers (Leading or Non-Leading Ledger) Extension Ledgers Standard Ledger in SAP S4 HANA Standard Ledger includes Leading & Non-Leading Ledger. Leading Ledger In New G/L there is one leading ledger for each client that is valid for all company codes. An important decision you need to make is which accounting standard to use in the leading ledger. We cannot deactivate this assignment once we have defined it. You can define only one ledger as the leading ledger. SAP provides the leading ledger 0L as standard. Example – A leading ledger “0L” for multiple companies codes 1000,2000,3000 & 4000. Types of Ledgers in SAP S4 HANA

23. Non-Leading Ledger The non-leading ledgers are used as parallel ledgers together with the leading ledger. Parallel ledgers are ledgers that we manage in parallel within a general ledger. We can use these to apply different accounting standards such as IAS/IFRS or US-GAAP etc.

24. Define ledger Group Ledger Leading/Non-Leading Accounting Principle Corporate/Local 0L Leading IFRS or US-GAAP Corporate 2L  or  3L Non-Leading Local Accounting Principle for Each Company Code Local

25. Accounting principles are local or international sets of rules and procedural conventions that provide guidance for accounting practice and for the preparation of financial statements. Examples: International Financial Reporting Standards (IFRS) Generally Accepted Accounting Principles (US GAAP) Accounting Principles

26. Path SPRO—SAP REF IMG----FA----FAGS----Ledger---Ledger----Parallel settings Define Accounting Principles

27. Assign Accounting Principle to ledger Group

28. Fiscal year Accounting year Calendar year Non-Calendar Year Jan to Dec (April-March) Fiscal Year Variant

29. The present fiscal year is 2024-2025 This is called the year 2024-2025 In SAP The year 2024-2025 is called Fiscal year 2024 The year 2025-2026 is called Fiscal year 2025 The fiscal year 2024 contains the periods from April 2024-March 2025 Fiscal year

30. 1 2 3 8 9 6 5 4 7 12 11 10 16 15 14 13 Normal Posting Period Special Posting Period

31. In the fiscal year variant we define the no of normal posting period and the no of special posting periods System defined Fiscal Year Variants V3 April to March 12 Normal and 4 Special K3 Calendar Year 12 Normal and 3 Special K4 Calendar Year 12 Normal and 4 Special The Normal Posting period are used to post the daily business transactions The Special posting Period are used to carry on the year end adjustment to previous book of Accounts The maximum number of normal posting periods = 12 The maximum number of special posting periods =4

32. SPRO- SAP Reference IMG-Financial Accounting-Financial Accounting Global Settings- Maintain Fiscal Year Variant T-Code OB29 No action required. Just identify which fiscal year variant you want to use for your company code Define Fiscal Year Variant

33. Path : Same as above T Code: OB37 Click on “Position” Company code=3366 Fiscal Year Variant= V3 Click on “Save ” Assign Company Code to FSV

34. The posting period are defined in the fiscal year variant. To prevent documents from being posted to wrong posting period desired period can be closed. Usually the current posting period is open and all other periods are closed. At the end of the period it is usually closed and the next period is opened . Posting Period

35. A period is opened by entering a range into the posting period variant which encompasses the period. It is possible to have as many period open as required. During the procedure of financial closing, some special periods may also be open for closing posting. The following activities are involved in the maintenance of the posting period variant. Define the posting period variant Assign the posting period variant to Company code Open and Close Posting period Posting period Variant

36. Path SPRO-SAP Reference IMG-Financial Accounting-Financial Accounting Global Settings-Ledger-Fiscal Year and Posting Period-Posting Period-Define Variant for Open posting Period T Code – OBBO New Entries Enter Variant=3366 Enter name= Posting Period for 3366 Save Define Posting Period Variant

37. It is used to define the fields which are used for input like cost center, profit center, plant etc…which are entry field, and hidden field. Field status variant is a tool which is provided by SAP to assign the same set of properties to more than one object Field status variant contains various field status groups. Each field status group contain various fields like at the time of document entry. 70 fields debit and 70 fields credit. So SAP has given a option to reduce these fields at the time of document entry Field Status Variant

38. T Code- OBC4 New entries Select field status variant by clicking 0001 (the field status variant 0001 contain most of the field status group) Then press F6 or click on Copy Change name and click on copy all Then Save Define Field Status Variant

39. T Code- OBC5 Position Company Code=336 FSTV= RS01 Save Assign Company code to Field Status Variant

40. Setting the maximum limit equal to which or below which the difference in balance sheet GL Account are automatically taken to the profit and loss account or some predefined account like sundry balances written off alc ..based on the requirement of accounting department wer define different tolerance group and we assign them in the respective GL Account master records. Based on the limit specified in those tolerance limits, the difference in that GL account is automatically transferred to the profit and loss account. The limits are applied at account level not for the every transaction level in the GL account. Tolerance group for GL Account

41. Open items Pending items Vendor Account Customer Account Some Balance sheet GL Accounts O/S Expenses O/S Income a/c Pre-paid expenses Income received in advance etc…

42. 31.10.2024 Rent alc Dr 10,000 Salaries a/c Dr 20,000 Commission a/c Dr 5000 To O/s Expense 35,000 1.11.2024 O/s Expense a/c Dr 34800 To Cash a/c (R) 10,000 To Cash a/c (s) 20,000 To Cash a/c (c) 4800 o/s Expense Account To Cash a/c (R) 10,000 Rent alc 10,000 To Cash a/c (s) 20,000 Salaries a/c 20,000 To Cash a/c (c) 4800 Commission 5000

43. Tolerance Group A tolerance Group can assigned to any number of GL accounts master records. But a GL account master records can be assigned with only one tolerance group. The upper limit can be specified either for the debit difference or for credit difference separately. We can define the upper limit either in whole amount or in terms of percentage or both. If both the terms are defined, the system will consider the lower of the two as upper limit and behaves accordingly

44. SPRO-SAP Reference IMG-Financial Accounting-General Ledger Accounting-Business transaction-open item clearing-clearing differences-define tolerance group for GL Account T Code- OBAO Click on New Entries Company code=3366 Tolerance group=a (upper limit 100) Debit posting 100 USD percentage 1% Credit Posting 100 USD percentage 1% Define Tolerance Group

45. Setting the maximum limit for the posting posting procedure of Employees Posting Procedure: The amount of Document an employee can post in GL account, Vendor Accounts, Customer Accounts and Asset Accounts Tolerance Group for Employees

46. In the Implementation Guide for Financial Accounting, choose  Financial Accounting Global Settings    Ledgers    Parallel Accounting    Define Accounting Principles . Specify your parallel accounting principles. Assign Accounting Principle to Ledger Group Assign the accounting principle whose values are to be posted to the parallel ledger to the corresponding ledger group. Assign an accounting principle to the valuation area of General Ledger Accounting. (You have already assigned this accounting principle to a ledger group in the first step.) To do this, go to the Implementation Guide for Financial Accounting (New) and choose  General Ledger Accounting (New)    Periodic Processing    Valuate    Assign Valuation Areas and Accounting Principles . Define accounting Principles

47. Tolerance Group for Employees Group A Group B Group C Group D 1 1,00,000 2,00,000 3,00,000 4,00,000 2 1,50,000 2,50,000 3,50,000 5,00,000 3 0% 1% 2% 5% 4 1,000 2000 4,000 5000

48. Employees groups Group 1 Group 2 Group 3 Group 4 JR Accountant A/c Officer MNGR(f) GM(F) JR Cashier SR.A/C Officer SR.MNGR(F) DIRECTOR(F) Accountant

49. Global Parameters The settings done in activity are applicable to the company code as a whole Business area financial statement By selecting this indicator the system allows the user to generate the business area financial statement Propose fiscal year by selecting this indicator the system automatically defaults the current fiscal year at the time of displaying the document.

50. Define default value date By selecting this indicator the system automatically defaults the current data (system data ) as value date Negative posting period by selecting this indicator we can use the reversal function to rectify wrong posting Global Parameters

51. Posting keys in SAP FI are used to determine Account types(A, D, K, M,and S) and also the type of posting. It is 2 digit numerical key. Different account types in SAP FI are: A= Asset D= Customer K= Vendor M= Material S= General Ledger Account Posting key decides the debit and credit side of an transaction Posting keys

52. The business transactions are posted to the system through an accounting process is called “posting”. As evidence of posting, a record is generated and stored in the database. This record is called DOCUMENT. Document types

53. There are two categories of document Original Document These include the Vouchers, Cheque books, Purchase invoice, Copies of sales invoice and Receipts. These are the basis for entering business transactions into the system. Processing Documents These includes the recurring documents, Sample documents, and accounting documents. The accounting documents represent the posting of original documents into the system . Document types

54. Every accounting documents contain two parts: Document Header This part contains data such as document date, posting date, posting period, currency, company code, Document type etc.. Document line item Part Rent a/c Dr to Cash a/c Parts of Document

55. The document type control the following The number to be assigned to the document It differentiate the business transaction among the account type and for every account type it differentiate among the nature of business transactions The document types are defined at the client level and are valid for all the company codes. The standard system is delivered with document type which can be used, changed or copied. The number range for document type is defined at company code level

56. For document type SA Path: SPRO-SAP ref IMG-Financial Accounting-Financial Accounting Global Settings-Document –Document header-Define document type-Tcode OBA7 Document type=sa Double click Number range-company code-change intervals Creation of number range

57. It is the list of general ledger account used by the organization It is compulsory to define the chart of account before creating an General ledger master record For every general ledger account it contains information such as the name of the account, general ledger account number and account groups. Chart of Accounts

58. Operating Chart of Accounts: it is the list of all the general ledger accounts to which the daily business transaction are posted it is compulsory for every company code that it should be assigned with one operational chart of account Type of Chart of Account

59. Group Chart of Account It contain the list of the general ledger accounts used by the corporate group to prepare the consolidated financial statement. It’s definition is optional. kalyan silks kalyan jewellers Type of Chart of Account

60. Type of Chart of Account Country Specific Chart of account It contain the general ledger accounts required to meet the country specific legal requirements. america india

61. A chart of account can be used by the one or more company code. In this case the name of the account, account number, and account group is same in all company code. This is possible when all the company code lying in the same country. A company code can be assigned with two type of chart of account Operational Chart of account Country specific Chart of account 3366

62. Define chart of Account Path SPRO-SAP Ref IMG- Financial accounting-General Ledger Accounting-Master Data-G/L Account-Preparation-Edit Chart of Account List Click on New Entry Chart of Account= Description= Maint language= Length of G/L account number=(max26) Click on Save

63. Path : Same as above Click on position Dialogue box appear Enter Company code Enter the chart of account= Click on “save” Assign Company code to Chart of Account

64. All the General ledger accounts of the organization are classified into different groups for the easy and convenient management of G/L account. These are called the Account Group. For this we assign the number range for every G/L account group. At the time of creation of G/L account master record, we select the number from the number range of the account group under which the G/L account master record is created and give to the G/L account master record Account Group

65. Functions of Account Group To control the number to be allotted to the general ledger master record created under the respective group. To control the display of fields to be maintained in the General ledger master record created under the respective group. ie.whether every field is required or optional or displayed or suppressed

66. T-Code – OBDA Path Same as above Click on ‘new entries’ Define Account Group

67. Chart of acc Account Group Name 3355 SCPL Share Capital 3366 RSPL Reserves and Surplus 3366 ACDN Accumulated Depreciation 3366 SCLN Secured Loan 3366 UNSL Unsecured Loan 3366 CLPR Current Liabilities 3366 FAST Fixed Assets 3366 CAST Current Assets 3366 SALE Sales 3366 OTHR Other Income 3366 INCR Stock 3366 RMCV Raw Material Consumption 3366 PRSN Personal Cost 3366 MFRC Manufacturing Cost

68. Document splitting Document splitting is a feature in SAP S/4HANA that allows users to split line items for selected dimensions to create financial statements. It can be used for a variety of purposes, including:  Financial statements: Create financial statements for specific dimensions, such as business areas, profit centers, segments, receivables, funds, and customer-defined dimensions  Working capital analysis: Analyze working capital for profit centers or segments  Legal requirements: Meet legal business requirements 

69. Path SPRO---SAP REF IMG---Financial Accounting--- General Ledger Accounting----Business Transaction----Document Splitting----Classify GL Account for Document Splitting Define Document splitting

70. Path same Activate Document Splitting

71. Retained Earning Account While creating the expense account and income account, we have to specify the profit and loss account type. For this it is compulsory to create one Retained earning account. We can define any no.of profit and loss account type. For example Operating profit and loss a/c to know the operating profit and non- operating profit or loss. At the year end the balance in these profit and los account are taken to the balance sheet

72. Tcode- OB53 Path Same as above Chart of account 3366 T ransaction BIL Account Assignment X 1001000 Y 1001001 Define Retained Earning

73. Operating Profit or Loss It is the difference between operating Revenue and operating expense Non Operating profit It is the Difference between non operating revenue and expense Retained Earnings Account type

74. The General Ledger accounting is called main ledger. Because every details required to prepare Balance sheet and P&l a/c are available in the G/L account. In G/L account there is no other module, but in financial accounting it contains many submodules AP A R A A T M etc General Ledger

75. Gl account Asset account Account receivable Account payable Account receivable Balance sheet P&l account mm S&d

76. Financial accounting Account analysis and reconciliation Transaction processing Master data General ledger Periodic p[posting Reporting

77. There are two types of Data Master Data The Data which is permanent in existence is called Master data. The record which contains the master data is called master Record. The Master data is again and again used during processing 2. Transactional Data It is the data which is posted to master record during the daily management of the business. This is temporary in existence. The GL Account master record contain the data under two segments Chart of Account Segments Company code segment sales July 10000 August 20000 Sep 15000

78. Chart of account Segment GL Account number Gl account name Account Group Short text Long text Company Code segment Account Currency Line item display Short key Field status group

79. Methods to create GL account One Step Method Two step method

80. T CODE OBD4 Path SPRO-SAP Ref IMG- Define GL ACCOUNT

81. In sap General Ledger Data Changes- GL Account Type GL Master Data Balance sheet Accounts Balance Sheet items Non Operating Expense or Income Profit & loss account used only in FI Primary Cost or Revenue Profit & loss account used both in FI & CO Secondary Cost Profit & los account used only in CO

82. A zero-balance clearing account is a balance sheet account that is maintained for posting additional clearing entries in the event that the documents are not balanced with respect to different dimensions used for your reporting such as profit center, business area, etc. Zero balance clearing Account

83. Park Document Park Document is a feature that allows users to temporarily save financial documents without posting them to the general ledger. This functionality is useful in situations where validation or approval is required before finalizing and posting a document.

84. From the  SAP Easy Access  screen, choose  Accounting     Financial accounting    General ledger    Document entry    Park/Edit G/L account document    . To display the tree, choose    Tree on  . Select the required parked document from the tree with a double-click, or choose  Edit      Select parked document. Confirm the data with  Enter  . The parked document appears. Choose    Post  to post the parked document. Path to Park Document

85. Organizations can use holds to prevent items that may be relevant to ongoing litigation or investigation from expiring or being destroyed before the event to which they are relevant has been resolved. Hold Document

86. ACCOUNTS PAYABLE

87. SAP FI Accounts Payable is used to manage and record accounting data for all the vendors. All invoices and deliveries are managed as per vendor requests. Payables are managed as per the payment program and all the payments can be made using checks, transfer, electronic transfers, etc. All the postings that are made in the Account Payable are also updated in the General Ledger simultaneously and the system also maintains forecasts and standard reports that can be used to keep track of all the open items. ACCOUNTS PAYABLE

88. Vendor Master Records are used by both the Accounting components and the purchasing components. Before creating a vendor master record in Accounting we need to make sure that the master record is not already created in purchasing. Create a Vendor

89. Vendor master Record contain 3 segments: General Data: It contains the name, address, language, telephone no, communication data which can be used by all the company code. It is stored at client level. Vendor Master Record

90. Company code data It includes Reconciliation Account no. and Payment terms and payment method etc. This specific to every company code This Data is stored at Company code level Purchase Data Used by the purchase department of the company It includes the Order, Currency, terms of Delivery etc....

91. Step 1: Define account group With screen layout (OBD3) Step 2: creation of number range Step 3: assign number range to group To create vendor master record

92. A vendor account group is a classifying feature of vendor master records in SAP ERP. It determines the following: Interval from which a unique number is assigned to a vendor Whether the number is assigned by the user (external number assignment) or by the system (internal number assignment) Vendor Account Groups

93. local vendors Foreign vendors Third party vendor One time vendor Inter company vendor Intra company vendor Employee vendors Vendors categories ap reconciliation general

94. Use the  T-code  OBD3 or go to the path given below − SPRO → SAP Reference IMG → Financial Accounting → AR and AP → Supplier accounts → master data → preparation for creating supplier master data → Define Account groups with screen layout (Vendors) → Execute. DEFINE VENDOR ACCOUNT GROUP

95. It will open a new window. Enter the following details − Unique key as Account Group key. Description for the Account Group. Select box for creating Account Group for One Time Vendors. Select the Field Status. Once you provide the above details, click Edit Field Status and a new window will open. Select the fields you want to maintain in the field status. After providing the required details, click the Save .

96. In this configuration activity you are able to define number ranges for Vendor Master Data. When you enter initially into the transaction you have the choice to display or edit the intervals as well as to change the number range current status. Create no range for vendor account (XKN1)

97. OBAS Assign no range to vendor account group

98. Tolerance groups are a set of assigned authorization of users using the SAP S4HANA software. They define the limits which differences are accepted and posted to predefined accounts automatically. Tolerances can be based on amount, percentage, or debit and credit. Tolerances are used for payment differences, cash discount, and G/L account clearing. There are three types of tolerance groups: employee, general ledger account, and customer or vendor. Tolerance Group

99. SPRO → Financial accounting → Accounts payable & Accounts receivables → Business transactions → Open item clearing → Clearing difference → Define tolerances for customers and vendors. Tcode-oba3 Define tolerance group

100. SAP Business partner is a person, Organization, or group of organizations. It is a single point of entry to maintain company code, vendor and customer data. BP is an integrated with SRM and CRM modules into core module. For creation of Vendor and customer to a business partner we need the inputs of General data, company code data, Purchase organization data and Sales organization data. In sap S4HANA system we have multiple options to create the business partners. Those are Business partner as a customer Business partner as a Vendor Business partner as a customer and vendor Business partner

101. Sap IMG- cross application Component- SAP Business Partner- Business Partner- Organization Define Business Partner

102. Sap IMG- cross application Component- SAP Business Partner- Business Partner Define business Partner Role

103. T code FI01 Bank key should start with alphabet Provide bank name Branch name save Bank key

104. Represents a branch of a bank. A house bank may consist of one or more accounts Bank Key It’s an unique key used by bank for the transfer of money from one bank account to another bank account Bank ID- its an ID for House Bank. The company code uses for transacting business Account ID- Represents a particular Bank Account a particular branch. HOUSE BANK

105. Tcode FS00 Define house bank FI12 Create Bank Account

106. When you change a master record, the system logs these changes and generates the change documents. For each field, it store the time of changes, the name of the user, and the previous field contents. Path Accounting----Financial Accounting----Accounts Payable----Master Records----Display Changes T Code—FK03 Display Changed Field

107. You can block a vendor account for posting. You have to block the vendor master record before you can mark it for deletion. You would also block a vendor that you use as an alternative payment recipient, so that nobody can post it by mistake. Tcode – FK05 Block a Customer

108. Tcode- FK06 Delete a Vendor