SAP FI Notes 01

SAP FI (Financials) Notes Email: info@softtechno.co.
uk
Website: www.softtechno.co.uk
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Contents
1. ORGANIZATIONAL UNITS ................................................................................................................ 2
1.1 Client ....................................................................................................................................... 2
1.2 Company Code ........................................................................................................................ 2
1.3 Edit, Copy, Delete, Check Company Code............................................................................... 2
1.4 Business Area ........................................................................................................................ 10
1.4.1 Define Business area ..................................................................................................... 10
2. FISCAL YEAR VARIANT ................................................................................................................... 12
2.1 Maintain Fiscal Year Variant ....................................................................................................... 13
2.1.1 Calendar Year ................................................................................................................ 15
2.1.2 Non-Calendar Year ........................................................................................................ 16
2.1.3 Assign Company Code to Fiscal Year Variant ................................................................ 18
3. CURRENCIES .................................................................................................................................. 19
3.1 Currencies and Exchange Rate Types ................................................................................... 19
3.1.1 Enter Exchange Rates .................................................................................................... 19
3.1.2 Direct Quotation ........................................................................................................... 20
3.1.3 Indirect Quotation......................................................................................................... 20
3.2 Translation Ratios ................................................................................................................. 21
3.3 Maintaining Exchange Rates ................................................................................................. 21
3.4 Exchange Rate Spreads ......................................................................................................... 21
3.5 Base Currency ....................................................................................................................... 21
3.6 Direct/Indirect Quotation of Exchange Rates ....................................................................... 21
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SAP FI (Financials) Notes Email: info@softtechno.co.uk
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1. ORGANIZATIONAL UNITS
Business Example
Your client's company is a medium-sized enterprise based in the course country. The
enterprise is a single legal entity.
1.1 Client
The client is the highest level in the mySAP system hierarchy.
1.2 Company Code

Smallest organizational unit of external accounting for which a complete, self-contained set
of accounts can be created.
1.3 Edit, Copy, Delete, Check Company Code

IMG: Enterprise Structure→Definition→ Financial Accounting → Edit, Copy, Delete, Check
Company Code
Execute
Double click on
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Click on copy org. object
Enter „From Company Code: 2000 and „To Company Code‟: XXXX „Choose 4-digit or 4 4-
digit alphanumeric code for as a new Company Code e.g. 1600.
“To create a company code, copy an existing company code using the “Copy Company
Code” function. This copies the following data:
 Definition
 Global parameters
 Customizing tables
 General ledger accounts (if desired)
 Account determination
After this, all you have to do is make the required changes to the new company code.”
Choose Continue
Choose if you want to create your own G/L accounts.
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Choose
Choose Continue
Choose Continue
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Choose Continue
When the „Prompt for Customizing request‟ dialogue box appears, click Create request
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Enter the text „Customizing for 1600‟ in „Short Description‟ and Save
Choose Continue
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Confirm other warning messages by keep pressing Continue (Enter)
Choose Continue
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Go back
Double click on
Go to and look the Company Code: „1600‟. Double-Click on the

Company Code
Change the „Company Name‟, „City‟, „Country‟, „Currency‟ and „Language for your
Company Code 1600.
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Click on „Address‟
Change the Address for your Company Code 1600.
Press Copy (Enter) and Save
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1.4 Business Area
Business area is an Organizational unit of financial accounting that represents a separate area
of operations or responsibilities within an organization. Business area can be a geographical
area of operation or an individual product line of a company. Data can be assigned to the
business area while recording transactions, which produce business area financial statements
for internal purposes. They are primarily used to facilitate external segmental reporting across
company codes covering different business segments. In a Client you can create number of
business areas to which you can assign the accounting transactions of various company
codes.
1.4.1 Define Business area
IMG: Enterprise Structure→Definition→ Financial Accounting → Define Business Area
Execute
Choose
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Enter details about Business Areas
Save
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2. FISCAL YEAR VARIANT
Business Example
Your customer has been informed by an experienced consultant that there is a principle in
mySAP ERP that appears in several configuration tables and that simplifies the system for
him.
The variant principle is a three-step method used in the SAP system to assign particular
properties to one or more objects. The steps are:
 Define the variant
 Determine values for the variant
 Assign the variant to the objects
The variant principle is used for

 Fiscal Years
 Field Status
 Posting Periods
The following example should explain this principle: Create a fiscal year variant
 Define the variant: K4 is your fiscal year variant.
 Determine values for the variant K4: Define the properties of fiscal year K4.
 Assign the variant to mySAP ERP objects: Assign K4 to various company codes that use
this fiscal year.
 The main advantage for using variants is that it is easier to maintain properties which are
common among several business objects.
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2.1 Maintain Fiscal Year Variant
Business Example
The company's fiscal year corresponds to the calendar year. The Accounting Manager wants
four special periods for postings for year-end closing.
The fiscal year can be defined as

 Year independent - The number and start and end dates for the periods are the same for
every year
 Year – specific - Periods can vary from year to year
The fiscal year variant contains the definition of posting periods and special periods.
Special periods are used for postings that are not assigned to time periods, but to the business
process of “year-end closing”. In total, you can define 16 periods.
The system derives the posting period from the posting date. If the posting date falls within
the last normal posting period, you can post the transaction in one of the special periods.
The fiscal year variant does not specify whether a period is open or closed. This data is
managed in another table related to „Posting Period Variant‟. The fiscal year variant only
defines the number of periods and their start and finish dates.
If each fiscal year of a fiscal year variant uses the same number of periods, and the posting
periods always start and end on the same day of the year, the variant is year-independent. A
year-independent fiscal year variant can be defined as:
 Calendar year
 Non-calendar year
If the fiscal year is defined as the calendar year, the posting periods are equal to the months
of the year. Therefore, a fiscal year that is a calendar year must have 12 posting periods.
If the fiscal year is defined as a non-calendar year, you have to define the posting periods by
assigning end dates to each period. A non-calendar year can have between 1 and 16 posting
periods. If the non-calendar year does not start on January 1st, the periods of the year that
belong to the former or the coming fiscal year must have an indicator -1 or +1.
If one year of a fiscal year variant has less posting periods than the others, it is called a
shortened fiscal year. This could be required, for example, if closing has to be carried out
before the end of the normal fiscal year; (for example, if the beginning of the fiscal year
should be changed or if the company was sold). You have to define the shortened fiscal year
and its number of posting periods before you can define the period dates. For this year, you
can only assign a lower number of posting periods.
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IMG: Financial Accounting → Financial Accounting Global Settings → Fiscal Year →
Maintain Fiscal Year Variant (Maintain Shortened Fisc. Year)
Execute
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2.1.1 Calendar Year
Choose and do the following settings:
Save
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2.1.2 Non-Calendar Year
Save
Select FV „22‟ for Non-Calendar Year and double click on
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Save
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2.1.3 Assign Company Code to Fiscal Year Variant
IMG: Financial Accounting → Financial Accounting Global Settings → Fiscal Year →
Assign Company Code to a Fiscal Year Variant
Execute
Go to and search for your Company Code: „1600‟ and assign this to
the fiscal year variant „21‟ which is Calendar fiscal year variant or assign fiscal year variant
„22‟ if you want to use non-Calendar fiscal year for your Company code.
Save
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3. CURRENCIES
Business Example
The company has customers and vendors in several foreign countries. The head accountant is
worried that keeping the exchange rates up to date in the system will involve a substantial
amount of work. You need to convince him that it is much less work than expected if the
tools mySAP ERP offers are used.
3.1 Currencies and Exchange Rate Types

A currency key must be assigned to every currency used. Most currencies are already defined
in the SAP System with standard international currency keys. Each currency key can have a
validity date.
For every combination of two currencies, you can maintain different exchange rates which
are distinguished by an exchange rate type. These different exchange rates can be used for
various purposes such as valuation, conversion, translation, and planning.
3.1.1 Enter Exchange Rates

IMG: SAP Netweaver→General Settings→Currencies→ Enter Exchange Rates
Execute
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Choose
3.1.2 Direct Quotation
Save
3.1.3 Indirect Quotation
Save
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3.2 Translation Ratios
The relationship between currencies must be maintained per exchange rate type and currency
pair using translation ratios. This usually has to be performed only once. Because inflation
can heavily influence the relationship between currencies, translation ratios can be
maintained on a time period basis.
3.3 Maintaining Exchange Rates

Maintaining exchange rates is an on-going task.
To reduce maintenance, mySAP ERP offers several tools. For each exchange rate type you
can use one of the following tools:
 Inversion (of the tools available, inversion is the oldest and is seldom used today)
 Base currency
 Exchange rate spreads
Hint: You can only use one of these tools for each exchange rate type. You can however use
different tools for different exchange rate types.
3.4 Exchange Rate Spreads

Exchange rate spreads between the bank buying/selling rate and average rate usually remain
constant. If the exchange rate spread of an exchange rate type is entered in the system, you
only have to maintain the average rate since the buying and the selling rate can be derived by
adding/subtracting the exchange rate spread to/from the average rate.
Combination of base currency and exchange rate spreads:
A very efficient combination of the exchange rate tools is:
 Using a base currency for the average rate (M)
 Using the exchange rate spreads to calculate the buying and selling rates (B and G)
3.5 Base Currency

A base currency can be assigned to an exchange rate type. You then only have to maintain
exchange rates for all other currencies into this base currency. A translation between two
foreign currencies is calculated via the base currency, that is, by combining two exchange
rates.
3.6 Direct/Indirect Quotation of Exchange Rates

In direct quotation, one unit of foreign currency is quoted for the local currency, whereas in
indirect quotation, one unit of local currency is quoted for the foreign currency.
Example: Local currency = EUR, foreign currency = USD
 Direct quotation: 1 USD = 1.07021 EUR
 One unit of foreign currency USD costs the displayed number of units of local currency
 Indirect quotation: 1 USD = 0.93439 EUR
 For one unit of the local currency EUR you will receive the displayed number of units of
the foreign currency.
For each currency pair you can define either the direct quotation or the indirect quotation as
the standard notation for the exchange rate. If the exchange rate you enter does not have the
same quotation as the standard quotation set up here, the exchange rate is highlighted to show
this.
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SAP FI (Financials) Notes Email: info@softtechno.co.

1.2 Company Code

1.3 Edit, Copy, Delete, Check Company Code

Click on copy org. object

Choose if you want to create your own G/L accounts.

Confirm other warning messages by keep pressing Continue (Enter)

Go to and look the Company Code: „1600‟. Double-Click on the

Change the Address for your Company Code 1600.

Press Copy (Enter) and Save

Enter details about Business Areas

The variant principle is used for

The fiscal year can be defined as

Choose and do the following settings:

Choose and do the following settings:

Select FV „22‟ for Non-Calendar Year and double click on

Choose and do the following settings:

3.1 Currencies and Exchange Rate Types

3.1.1 Enter Exchange Rates

3.1.2 Direct Quotation

3.1.3 Indirect Quotation

3.3 Maintaining Exchange Rates

3.4 Exchange Rate Spreads

3.5 Base Currency

3.6 Direct/Indirect Quotation of Exchange Rates

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