1

Company Code Global Settings & General Ledger

Define Organizational Units Define Company Define Company Code Define Credit Control Area Edit, Copy, Delete, Check Company Code Define Business Area -----Define Functional Area Maintain Consolidate Business Area Maintain Financial Management Area Create Risk Categories Create Representative Groups

OX15 ----OX02 OX03

---------

OB01 OB02

Assign Organizational Units Assign Company Code to Company OX16 Assign Company Code to Credit Control Area Assign Business Area to Consolidation Business Area Assign Company Code to Financial Management Area Fiscal Year Variant: Maintain Fiscal Year variant -----Assign Company code to Fiscal Year variant ----Create Chart of Accounts: Edit Chart of Accounts list --Assign Company Code to Chart of Accounts ----Define Accounts Groups -----Define Retained Earnings Accounts ----OB29 OB37 OB13 OB62 OBD4 OB53

Currency Settings Check exchange rate types ----OB07 Define translation ratios for currency translation -----OBBS Enter exchange rates ------OB08 Maintain exchange rate spreads -----OBD6 Posting Period Variant: Define Variants for Open Posting Periods -----Assign Variants to Company Code -----Open and Close Posting Periods -----Documents Types: OBBO OBBP OB52

2 Define Document Types -Posting Keys -Tolerance Groups: Define Tolerance Groups for G/L Accounts ----Define Tolerance Groups for Employees -----Assign Users to Tolerance Groups -----OBA7 OB41

OBA0 OBA4 OB57

Field status variant: Maintain Field Status Variants -----OBC4 Assign Company Code to Field Status Variants ----- OBC5 Global Parameters: Enter Global Parameters ----OBY6

General Ledger Accounting

G/L Accounts creation: Create G/L accounts in Company Code Area ---Create G/L accounts in Chart of Accounts Area ---Create G/L accounts centrally ---Delete the G/L account ----General Documents: Normal document Posting --Normal document (Single Screen) -To view the document list --To view the ledger balances -Change layout: Display with our define layout --Hold document: F-02 & Select Hold from Document menu Parked document: Create a parked document ---Change parked document ----Display parked document ----Post parked document ----Open item Management (G/L Accounts) To view open items for ledger ----Out going payment ----Incoming payments ----F- 65 FBV2 FBV3 FBV0 FBL3N F- 07 F- 06 FSS0 FSP0 FS00 OBR2 F-02 FB50 FB03 FS10N FB00

Sample Document: Define number range for sample document -----Create sample document ----Change sample document ----Display sample document ---FBM3 Create normal document with ref sample document ---Delete Sample Document ---Recurring document: Create number ranges for recurring document ----Create recurring document ----Change recurring document ----Display recurring document ----Status of recurring document ----Execute recurring document ----Delete recurring document -----

FBN1 F-01 FBM2 F-02 F.57 FBN1 FBD1 FBD2 FBD3 F.15 F.14 F.56

Foreign currency valuation: Define valuation method ----OB59 Prepare automatic posting for foreign currency valuation ---OBA1 Foreign currency fluctuation / revaluation run ----F.05 Reversal documents Individual reversal document ---Mass reversal document -----Cleared item reversal document---Reversal of reversal document ---Create accrual / deferral document ---Reverse accrual /deferral document----Interest calculation: Define interest calculation types ----Prepare account balance interest calculation ----Define reference interest rates -----Define time dependent terms -----Enter interest values -----Prepare G/L account balance interest calculation ----Interest calculation ----General ledger Reports: G/L Account Balances Chart of Accounts Report -----F.08 S_ALR_87012326 FB08 F.80 FBRA F-02 FBS1 F.81 OB46 OBAA OBAC OB81 OB83 OBV2 F.52

4 GL Accounts List ------S_ALR_87012328 GL Totals & Balances (Trial Balance)-----S_ALR_87012301 GL Account Balances -------S_ALR_87012277 Trial balance report ------S_ALR_87012310 Ledger Report ------S_ALR_87100205 View User Manual ------S_ALR_87012330 Structured Account Balances (B/S & P&L A/c in FS version)S_ALR_87012279 General Ledger Line Items S_ALR_87012282 Statements for GL A/cs, Customers & Vendors S_ALR_87012332 Compact Document Journal ----S_ALR_87012289 Chart of Accounts Report -----S_ALR_87012326 GL Accounts List ------S_ALR_87012328 Document Journal Register --------S_ALR_87012287 Line Item Journal ---S_ALR_87012291 Display of Changed Documents S_ALR_87012293 Invoice Numbers assigned twice ---S_ALR_87012341 Gaps in Document Number Assignments ---S_ALR_87012342 Posting totals Document Type wise ----S_ALR_87012344 Recurring Entry Documents -----S_ALR_87012346 Display Changes to GL Accounts ----S_ALR_87012308 Final Statement Version ------FSE2 /NEX /I /O /N Log off system End session Open new session it close the existing session and generate new session

SAP-FI/CO
SAP: Systems, application and products in data processing FI: Financials: co: controlling Version: 4.7 EE (Enterprise edition) No. of co. working with 4.6b 4.6c SAP Started in 1972 Head quarters in Germany ERP: Enterprise Resource Planning

Organization Function

Purchase

Product

Sales

Finance

ERP integrated all the function It facilitate free flow of data among the functions/departments ERP Packages: SAP, Oracle, financials, peoples soft, BAAN, J. D. Edwards 1972 SAP R/1 Real time data processing 1980 SAP R/2 Included No. of countries and No. of currencies 1990s SAP R/3 R/3 Stands for Data structure: 1. Application server 2. Data base server 3. Presentation 1999 My SAP.com Web based 2004 Net weaver - Integrates information, people and processes. Areas to be covered under FI/CO FI: 1. 2. 3. 4. CO: 1. 2. 3. 4. 5. 6. Cost element accounting Cost centre accounting Internal orders Profit centre accounting Product costing Profitability analysis. General ledger accounting Accounts payable Account receivable Asset accounting

Integration of 1. 2. 3. 4. 5. Reports: Material Management Module to Financial Sales & distribution module to financial module integrate Production planning module to controlling module integration Data take over Closing Procedure

In all the module systems gives around 2000 reports You can attach the reports to favorites Some important reports you can attach the reports on desktop. Cross company code transactions: India version: T. D. S, Excise and sales tax. Companies Act: Schedule VI: Balance sheet and profit & loss A/C

Basic Settings: Group Company 1 Hyd Unit

Production dept A

Company 2 Bangalore unit

Company 3

Mumbai Unit Serv. dept

Prod dept B

Fiscal Year: Indian companies April to March + 4 special periods U. S January to December

7 Example: Account year April 2005 to March 2006 (12 + 4) 25/04/06 Profitability by Account dept 13 10/05/06 Profitability by Management 14 05/06/06 Profitability finalized by Auditors 15 Create a project Customization with different scenarios Testing SMB (Small and medium business companies) How to Open SAP How to Start the Server:Click on SAP R3 Management Consol SAP R/3 systems -- right click - select start button Go to Work process table, wait status come then the server started. How to log on to SAP System: Double click on SAP Logon Icon Then double click on SAP class First screen; First field: Client: 2 clients 1. Development Client 2. Production Client In the Implementation SAP 1. Consultants 2. Company Staff (Core Team Members) The consultants they do the customization in development client. The company staff will do the testing. The customization will be transferred to client through transport requests.

In the production client you enter your day-to-day transaction. Some companies they will give 3 clients 1. Development client 2. Testing client 3. Production client Client: 800/000/810 You can copy and give any number. User: Cost of Package will depend on the No. of users Licenses. 100 Users License - used by 1000 Employees It fixes the responsibility on employee. User ID: SAP user: You can use small or capital letters (Its not case sensitive) Password: The length of password Min3 Max8. (It can be Numeric, Alpha Numeric, Alphabets, and special characters. Password is not case sensitive Not possible to change password more than once in a day. Latest 5 passwords cannot be used Password cannot be restored. * Money is the password. Language: Along with the packages you can get 41 languages. If the language not given or EN Default English If you give DE all fields on screens in German. Once you complete press Enter. One user can work in Number of sessions at a time (window) Maximum is six (6) 1st Row is called Menu Bar 2nd Row standard tool bar.

3rd Row is called Title bar. 4th Row is called Application tool bar 5- SAP Menu Last Row is called Status bar (Tick) is called Enter. Beside Tick there is Box called command field. To open a new session from to Menu bar select systems Create session. To move from one session to another session Use Alt + Tab To close the session the path is from Menu Bar Systems End session How to log off SAP System: Menu bar- system -- Log off (or) /nex How to create a session:Menu bar -- system--create session (maximum 6) How to close session:Menu bar - System - End Session

How to use Transaction codes (TC)

Posting of document (2 ways)

Go through the path

Use transaction code in Command field and press enter

Standard codes one common in all over the world To go back to SAP easy access screen

10 Use /N in command field and press enter Example: For posting of Transaction: F-02 Account display (FS10N)

/N is command field and press enter Easy Access Use FS10N in command field you can directly enter into Accounts display /N FS10N change session with new transaction code. /o FS10N create session with new transaction code. How to close the system: *From the Menu bar select system Log off. Select yes button to Log off How to unlock screens: *Tools Administration Monitor Lock Entries (Transaction code is /NSM12) Select list button From the Menu bar select Lock entry delete all. Press yes button to delete all lock entries. How to activate Transaction codes Path: From the Menu select extras setting Display Technical Name (check) Box Enter Set start Transaction You can make screen as default screen How to set start transaction: From the Menu select extras set start transaction Give the transaction code f-02 (start Transaction) Press enter Creation of project Group Companies Units

11

In SAP Group is called as company Company is called as company code. Unit is called as Business areas.

Group--> Aravind group

Aravind Mills Ltd (AML companies Ltd) ()

Aravind Steels Ltd (ASL)

Aravind Chemicals (ACL)

Hyd

Mumbai

Bangalore

Hyd

Mumbai

Bangalore

Hyd

Mumbai

Bangalore

.The consultant does customization at company code level The company or group is only for information. How to go into your customizing environment:SAP menu -ToolsCustomising-Img--SPRO BASIC SETTINGS:1) Check Country sprosap reference img-general settings-set countries. Press position button- give the country IN-select IN -press details button -save. Insert Reigions:sprosap reference img-general settings-set countriesinsert regioins. New entries give country IN. save it 2) Decimal Format 3) Date Format 4) Currency sprogenral settingscurrenciescheck currency codespress position buttongive the currency INR-select and press details button. 5) Tax procedure Define Company:

12 Path: SPRO Enterprises Structure Definition Financial AccountsDefine Company. (T.CODE-/NOX15) The company or Groups is only for Information This is called customization area (or) configuration area (or) Implementation area. 1st button is called IMG documentation (Description path about Company) 2nd button is called IMG activity. If you want to customization select IMG Activity. Double click on IMG Activity Button Select New Entries Button. Enter company name AVG (optional) Company name is Aravind group Name of the Company2 if groups have any second Name Street Ameerpet Postal Code 500 000 City Hyderabad Country one button is called drop down button or pull down button For country select drop down button 236 Countries Select IN for India. Language key: select drop down button 41 languages Select EN for English Currency: select the drop down button 183 Currencies. Select INR Indian Rupee. Select Save button or (ctrl + s) Before saving, the screen gives you latest transport request Select create request button (F8)

13

Short description - FI Basic settings for Aravind Mills Ltd Press enter Press Enter once again to saving the request. You can see the system data saved. It can saved in client 800 AML Company How to view the request details:Open one more session give T.code SE09 click display. Define Credit Control Area:- (OB45) SPRO-IMG- Enterprise Structure- Definition- Financial Accounting Define Credit Control Area Press new entries Give ACCA, Currency IN and Update: 12 only

Define Company code: Tools Customizing IMG Edit Project SAP reference IMG button (SPRO) Enterprises structure definition Financial Accounting Edit, copy, delete, Check Company code. (T.CODE-/NOX02) Double click on IMG Activity button. Double click on Edit company code data Select new entries button. Company code AML (Max 4 characters) Company Name Aravind Mills Ltd City Hyd Country IN Currency INR Language EN Once you can complete the data, select save button or (ctrl + s).

14 It gives a big screen Title: Company Name: Aravind Mills Ltd. Address: Street Ameerpet Postal code 500 000 City Hyd Country IN Once you complete press Enter You can enter it gives you latest request To choose your request select drop down button beside Requests number it gives the entire request. Select your request number press Enter to save in the request. It saved in two places 1. Client 800 2. Request Assign company code to company: (T.CODE-/NOX16)

Path is SPRO Enterprise structure Assignment Financial Accounting Assign company code to company. Double click on IMG Activity button. Shortcut: Select position button Give you company code AML press Enter. For company code (AML) Assign Company (AVG) select save button or (ctrl + s) Press Enter to save your request. Define Business Areas: (T.CODE-/NOX03)

Business Areas assignment to company code is not required.

15

The same Business area can be used by any company code. Path: SPRO Enterprises structure definition financial accounting define business area Double click on IMG Activity button Select new entries button. Code May be numerical or Characters Max 4 Code: AMH Hyderabad business Area. AMB Bangalore Business Area AMM Mumbai Business Area Select save button or (ctrl + s) Select drop Box. Press enter to save in your request. Define Functional Area Path: SPRO Enterprises structure definition financial accounting define functional area Press new entries Aadmin Administration Afin Finance Ar&d Research and development SAVE Maintain Consolidation Business area: Path: SPRO Enterprises structure definition financial accounting define functional area Press new entries ASTH ANTH South Consolidation business area North Consolidation business area

Save it Maintain Financial Management Area:

16 Path: SPRO Enterprises structure definition financial accounting Maintain financial management area. Press new entries Give FM area name, text and Currency. Save it. Assignment of Organizational Units:Assign Company code to Credit Control area Path:spro Enterprise Structure-Assignment-Financial Accounting-Assign company code to credit control area Press position button, give company code and put credit control area. Save it Assign business area to Consolidation business area Path:spro Enterprise Structure-Assignment-Financial Accounting- Assign business area to consolidation business area. Press position business area and give consolidation business area. Save it. Assign Company Code to Financial Management Area Path:spro Enterprise Structure-Assignment-Financial Accounting- Assign company code to financial management area. Press position button give company code and put financial management area and give text Save it Chart of Accounts: 1. Common set of Accounts accounting coding should be same, and then only you can compare and consolidate between company code or business areas. 2. Separate set of Accounts: 3. Group chart of Accounts: In this case you have to give 2 No (Company code Number + Group code Number)

17 *Companies they follow common set of Accounts Chart of Accounts name Description Maintenance language Length of the Account Number Max 10 digits But companies are normally using 6 digits. Path of chart of Accounts SPRO Financial Accounting General Ledger Accounting G/L Accounts Master Records Preparation Edit chart of Accounts list Double click on IMG Activity button (T.Code OB13) From the Menu select system status short cut Select New Entries button Chart of Accounts ---> AML (Max 4 characters) Description Chart of Accounts for Aravind Group Maintenance Language --> Select English Length of G/L Account no: enter 6 Controlling integration Select Manual creation of cost element Group chart of Accounts Blank Under status Blocked Deselect Blocked Check Box Use of Block is to avoid duplicate Accounts creation. Once you complete you can select save button Press Enter to save in your request. Assign Company Code to chart of Accounts: Path: SPRO Financial Accounting General Ledger AccountG/L Accounts Master Records Preparations Assign company code to chart of Accounts. (T. code OB62) Select Position Button

18 Give the Company code AML press Enter. For the company code AML assign chart of accounts AML Select save button or (ctrl + s) button Press Enter to save your request. Account Groups: 1. Liabilities 2. Assets 3. Income4. Expenditure1.series 2.series 3.series 4.series

Path: SPRO SAP Ref IMG Financial Accounting General Ledger Accounting G/L Accounts Master Records Preparations Define Account Group (Transaction code OBD4) Select New Entries button.

Chart of Accounts:
Three types - Operational Chart of Accounts - Group Chart of Accounts - Country Specific Chart of accounts Create Chart of Accounts:Path:-SPRO- Financial Accounting General Ledger Accounting G/L Accounts Master Records Preparations Edit Chart of Accounts List (OB13) Press new entries Give the chart of Accounts --> AML1 (this is for Country specific Chart of Accounts) Description Language English Edit Chart of Accounts List 4 Edit Chart of Accounts List Manual creation of cost elements Group chart of accounts leave blank Save it

Chart of accounts

Account group Name

From Account

To Account

19 AML AML AML AML AML AML AML AML AML AML AML AML AML AML AML AML AML SCPL RSPL ACDN SCLN UNSL CLPR FAST CAST SALE OTHR INCR RMCN PRSN MFRG ADMN INTR DEPR Share Capital Reserves & Surplus Accumulated depreciation Secured Loans Unsecured Loans Current liabilities &provisions Fixed assets Current Assets, Loans and advance Sales Other Income Increase/Decrease in stocks Raw Material consumption Personnel Cost (Staff cost) Manufacturing Administration Interest Depreciation 100000 100100 100200 100300 100400 100500 200000 200100 300000 300100 300200 400000 400100 400200 400300 400400 400500 100099 100199 100299 100399 100499 100599 200099 200199 300099 300199 300299 400099 400199 400299 400399 400499 400599

Once you complete select save button or (ctrl +s) save in your request.

20

Retained Earnings Account: Year Ending P&L Account Balance Surplus in P&L A/Cs transfer to Reserves & Surplus. Balance sheet Account balance carry forwards to next year Opening Balance for next year. Assign one Account for retained earnings 100100. Path: SPRO Financial Accounting General Ledger Accounting G/L Accounts Master Records Preparations Define Retained Earnings Accounts. (T. Code OB53) Give your chart of Accounts AML Press Enter. P&L Statements Accounts Type X Select save button or (ctrl + s) It gives the Message, Account 100100 not created in chart of Accounts AML Ignore the message press Enter. Press Enter once again to save in your request. Fiscal Year Indian Company Apr to March + 4 Special Periods V3 U.S. Company - Jan to Dec + 4 Special Periods -K4 Account 100100

How to convert Calendar your Periods to Accounting your periods

21 Path: SPRO. Financial Accounting Financial Accounting Global settings fiscal year Maintain fiscal year variant (Maintain shortened fiscal year) (T. Code OB29) Select position button Give fiscal year variant V3 Enter Select fiscal year variant V3 Double click on periods folder Select back arrow (or) F3 Select new entries button Fiscal variant Give A3 - Max 2 characters Description April March + 4 special periods Deselect- year dependant check Box Deselect calendar year check Box No. of posting periods 12 No. of special periods 4 Once you complete select save button (or) (ctrl +s) Save in your request Select fiscal year variant: A3 Double click on periods folder Select new entries button. Conversion table: Month January (1) February (2) March (3) April (4) Days 31 29 31 30 Period 10 11 12 1 Year shift -1 -1 -1 0

22 May (5) 31 June (6) 30 July (7) 31 August (8) 31 September (9) 30 October (10) 31 November (11) 30 December (12) 31 Once you complete select save button or (ctrl + s) Assign company code to a fiscal year variant SPRO Financial Accounting Global Settings Fiscal Year Assign Company Code to a fiscal year variant (T.Code is OB37) Select position Button Ignore the Message press Enter Give your Company Code AML Press Enter For company code AML, Assign Fiscal Year variant V3 (or) A3 Select save button (or) (ctrl + s) Ignore the Warning Message Press Enter Press Enter to save in your request. Document Types and No. Ranges Stores (factory) RE 03 200001 To 300000 Sales (Depot) RV 02 100001 To 200000 Accounts(City office) SA 01 1 To 100000 2 3 4 5 6 7 8 9 0 0 0 0 0 0 0 0

Document type Number Range Number Range Intervals

Path: SPRO Financial Accounting Financial Accounting Global Settings Document Document Header Define document types. (T. Code OBA7). Select position Button Give the document type SA.

23

Press Enter. Select Type: SA Select details button Note down to No. Range 01 Select No. Range Information button. Give your company code AML Screen Shows: Intervals It show what no. we are give Status Change status how many documents we have posted. Intervals Change intervals to give document Number. Select change Intervals button. Select Intervals button. Give the Number Range 01. Year 2006 From Number1 to Number 100000 Current Number 0 Deselect External check box. Press Enter Select save button. Number range intervals can not be transferred to production client. Ignore the message. Press Enter. SAP also gives voucher numbers in two ways. Example: Scenario: - I 01 01 01 Same session for each year. Scenario: -II 2006 2007 2008 1 100000 1 100000 1 - 100000

24 01 9999 (Any year) (We do not know how many document we have posted in each year)

Note: Companies normally follows Scenario I. Field status variant & field status groups At the time of entry the system gives 70 fields. Examples: Quantity, text, business area, value date. (Around 140 fields to use, all the fields are (70 debits + 70 credits). You can make any field as 1. Surplus field Field will not be visible. 2. Required field To enter the values. 3. Optional field Choice to enter or not enter. Entry lay out based on fields selection in the field status group which is assigned to G/L Account. Field Status group one Created under field status variants and field status variant is assigned to company code: Example: Cash A/C Dr To Share Capital A/C Text & Business area Required fields

Equity share capital (General) Cash Account Bank Account

Text & Business area Required fields Text & Business area & Required fields Value date

Path: SPRO Financial Accounting Financial Accounting Global settings document Line Item Controls Maintain field status variants. (OBC4) Select field status 1000 Select copy as button Change the field status variant AML Field status name:

25 Field status variant for AML Press Enter Select copy all button. No. of dependent entries copied 45. Enter. Select save button (or) (ctrl + s). Save in your request Select field status variant AML Double click field status group folder Select G001 General and double click on General data. Text make it required entry field. Select next group button. Select next page or page down button. Select required entry for business area. Select save button (or) (ctrl + s). Select 005 Bank Accounts and double click. Double click on general data. Text field make it required entry field. Select new group button. Select next page (or) page down button. Business area make it required entry field. Select next group button 2 times. Value date make it required entry field. Press save button Assign company code to field status variant:

26 Path: SPRO Financial Accounting Financial Accounting Global settings document Line item controls Assign company code to field status variants. (OBC5) Select position button. Give your company code AML. Enter. For company code AML, Assign field status variant AML Save, save in your request. Posting periods: a. Define posting period variant. b. Assign posting periods to company code. c. Define open and close periods for variant. April, 2006 to March 2007 Fiscal year 2006 If company is completed quarterly results July 2006 to March 2007 (4, 2006) to (12, 2006) Define posting period variant: Path: SPRO financial accounting financial accounting Global settings document posting periods define variants open posting periods.(OBBO) Select new entries button. Give the variant AML. Give the name posting period variant for AML. Select save button (or) (ctrl + s). Save in your request Assign variants to company code:

27 Path: SPRO Financial Accounting Financial Accounting Global settings document posting periods Assign variants to Company code. (OBA4) Select position button. Give your company code AML. Press Enter. For Company code AML Assign variant AML. Save, save in your request.

Define open and close posting periods: Path: SPRO Financial Accounting Financial Accounting Global settings document Posting periods Open and close posting periods. (OB57) Select New Entries button. Select variant AML. A for Account Type. Select + variant for all accounts type From Account Blank To Account Blank. From period 1 is = 4 (July) Year is 2005. To period is = 12 (March) Year is 2006. If Audit is not over (March 2006 to March to 2006) (13, 2005) (13, 2005) From period 13 (special Period) Year 2005

28 To Period 13 (Special Period) Year 2005 Authorization Group: Authorization will give to some persons like Manager (Accounts) ID, Dy. Managers (Accounts) ID at user level. Once you complete select save button (or) (ctrl + s). Press enter to save in your request. Path for posting periods at user level: Path: Accounting Financial Accounting General Ledger Environment current setting Open and close posting periods (T. Code is S _ALR _ 87003642).

How to give the transaction code when you get SPRO Path: SPRO from the Menu select additional information, once again additional function display key IMG activity. Note down the last 4 (OBBO) (OB52) (OBBP). OB52 (is open and closing periods).
Tolerance groups for G/L Accounts (2 types)

G/L Accounts (Tolerance Group)

Employee (Tolerance Group)

Open Item Management Used for vendors/customers/Balance sheet Accounts where clearing is required Out standing expenses A/C Salaries 1,00,000 Bank cash 15,000 Wages 1,00,000 Rent 15,000 We can see the items in three ways: 1. Open Item: We can see only outstanding Payable Item. 2. Cleared: We can see only cleared Item Paid Item.

29 3. All: We can see all items included Paid/Payable Items. Tolerance Group: Amount A 1000 B 0 Percentage 0% 5%

C If you commission is payable 100020 only paid 100000 the remaining balance (20/-) may be transferred to payment difference Account (or) payable (Partial payment). Disadvantages: a. It given at account level and not at transaction level b. No flexibility. Path: SPRO Financial Accounting General Ledger Accounting Business transactions Open item clearing clearing differences define Tolerance group for G/L Accounts. (OBA0) Select new entries button. Company code: AML Tolerance group: Blank. Name of tolerance group: Tolerance group for AML. Debit amount 0 Credit amount 0 Percentage of debit 0 Percentage of credit 0 Deselect value date (VD) check box Select save button (or) (ctrl + s) Save in your request Value date (effective date) If I received term loan from I.D.B.I on 15/07/06

30 If I deposited in Bank on 17/07/06 Document date: 17/07/06 Posted date: 17/07/06 *Value date: 15/07/06 (effective date) Tolerance group for employees Here we give user wise upper limits for posting Amount per document Amount per open item Account item Open item: Vendors/customers. Cash discount Payments difference we can accept. *Path: SPRO Financial Accounting General Ledger Accounting business transactions Open item clearing clearing differences Select new entries button Group Blank Company Code AML Amount document 9999999999 Amount for open item account item 9999999999 Cash discount per line item: 10% Permitted payment differences: Blank Select save button or save button Press enter to save your request.

31 Global Parameters 1. Enter Global Parameters; Path: SPRO Financial Accounting Financial Accounting Global settings Company code Enter Global parameters. Select position button Give your company code AML Press Enter Select company code AML Select details button Select Business area financial statements check box Select propose fiscal year check box Select Define default value date check box Select negative posting allowed check box When you reverse a document it reduces from the same side. Ex: - Cash A/C Dr To Equity share capital 500000 500000

And another posting for 300000 Periods 1 2 3 4 (July) 5 6 7 8 9 Debit Credit Balance for the month balance Cumulative

800000

800000

800000

32 10 11 12 13 14 15 16

If the 2nd Entry 300000 is wrongly entered in equity share capital Actual entry in preference share capital. Reversal A/C 1. Equity share capital A/C Dr 300000 To Cash A/C 300000 2. Cash A/C Dr 300000 To preference Share capital 300000 (Or) Rectification Entry Equity share capital A/C To Preference share capital A/C Then the Equity Share Capital Summary is Periods 1 2 3 4(July) 5 6 7 8 9 10 11 12 13 Debit Credit Balance for the Month Cumulative balance 300000 300000

300000

500000

500000

500000

33 14 15 16 Select additional details button 49A PAN (Permanent Account No) 49B TDS No (Tax deduction of source) PAN & TDS Number given at company code level TDS No. AP 945678906 PAN No. AP 7890000 A Select back arrow and save Save in your request General ledger master creation (G/L Masters) G/L Masters created at Field Year: Chart of Accounts Area G/L Account No. Account group P&L A/C (or) B/S A/C Short Text Long Text Company Code Area Account Currency Tolerance group Open item management Line item display Short Key Field status group Centrally It having both charts of Account fields + company code Area fields.

To check Account groups for giving Account no.s Path: SPRO Financial Accounting General Ledger Accounting G/L Accounts Master Records Preparations Define account group (T.Code OBD4) Select position button Give your chart of accounts AML

34 Enter Reserves & Surplus 100100 to 100199 100000 to 100099 200100 to 200199

Equity share capitals Current Assets -

Creation of G/L Master (user levels) Path: Accounting Financial Accounting General Ledger Master records Individual processing Centrally (T. Code FS00) Give the G/L Account No: 100100 Company code AML From the Menu select G/L Account create Select the Account group: Reserves & Surplus Select Balance Sheet A/C Radio button Short Text Surplus in P/L Account G/L Account Log Text Surplus in Profit and Loss A/C Select Control data Tab Select only balances in currency check box Tolerance group Blank Select Line Item display check box Note: All Accounts give line item display check box. Sort key Select 001 posting date Select create/bank/interest tab Field status group Select 001 General Select save button (or) (ctrl + s)

35

2. One more G/L Account FS00 Give the G/L Account no: 100000 Company code AML Select with Template button Give G/L Account No. 100100 Company code AML Press Enter Select the Account Group: Share Capital Change the Short text to equity share capital Change the G/L Account long text equity share capital Other fields are common Select save button (or) (ctrl + s) Give the G/L Account No. 200100 Company code AML Select with Template button (w-Template) Give the G/L Account no. 100100 (Reserves & Surplus) Company code AML Press Enter Change the Account group to Current Assets & Loans and Advances Change short text to cash account Change G/L Account log text to cash account Select create/bank/Interest tab Change the field status group G005 (Bank Accounts) Select relevant to cash flow check box

36 Select save button (or) (ctrl + s). To give the list of Accounts created Select drop button beside G/L Account No. (Or) (T. code OBD4) The screen is called as Match code. Give the company code AML Enter It gives the what Accounts that are created. Posting of Transactions Path: Accounting Financial Accounting General Ledger Document entry General posting (F-02) Document date: Party bill date F4 Calendar. F2 - Selection of date. Posting date: Server date, Ledger updating based on posting date period comes automatically. Ref Party Bill No Document No: Type: SA Company code: AML Currency INR To differentiate between debit and credit You are using posting key Posting key (PST Key) 40 G/L Account debit 50 G/L Account credit Select posting key: 40

37 The next field is account: Select A/C No: 200100 Press Enter Give the amount 100000 The fields are come on the basis of selection of Field Status Group Business Area: AMH (Hyderabad Business area) Text enter: Equity share capital receipt Select posting key: Select 50 For Account: Select the drop down button Give the company code AML And press Enter Select Account No: 100000 (Equity Share Capital) Press Enter You can make Enter amount manually i.e. 100000 (or) Enter * (* makes debit and credit equal) Business area: AMH Text: Enter (+) (plus): Copying the latest line item narration (or) make manually Press Enter From the menu select document simulate In once document you can post up to 999 line item in a document Debit will be with out sign Credit will be with Minus (-) sign Once you complete select save button or (ctrl + s)

38 It gives the message document 1 was posted in company code AML. How to view the latest document From the menu select document display Select display document header button (F5). Change document Path: Accounting Financial Accounting General Ledger Document Change (Transaction code FB02) Press Enter Double click on 1st line item Enter We can change only value date, assignment and text How to view the documents: Path: Accounting Financial accounting General Ledger Document Display (Transaction code (FB03) Select document list button Give your company code: AML Give the document type: SA To give the posting date: From and to (Specific date) To view the document posted by a particular user From the menu select edit dynamic selections (shift + F4) Give the user name: SAP user Select execute button (F8) Double click on document No.1 It shows the document

39

Display Ledger
Path: Accounting Financial Accounting General Ledger Account Display Balance (Transaction code FS10N) To give multiple Accounts Select right arrow beside G/L Account To view continuous number select ranges tab with green pound symbol To exclude any account select singly values tab with Red Pound symbol Green Inclusion Red Exclusion Once you complete select copy button To give singly Account Select drop don button beside G/L Account Give your company code AML Press Enter Select your account number 100000 Equity share capital Give your company code AML Fiscal year 2006 Business Area, select AMH Select execute button (F8) Double click on Cumulative balance amount Double click on document No. 1 Select call up document over view button Select back arrow

How to create own line layout:

40

Select change layout button Select the fields which one not required under column content Document no, Amount, Text not select Select right arrow (or) Hide selected fields button For the hidden fields column select posting date, Select left arrow (or) show selected fields button. Change the column positions: Document N0. Should be one (1) Posting date should be two (2) Text should be three (3) Amount in local currency (4) Text column length change to 35 For amount in local currency Select total check box Select copy button. How to save the layout 2 Lay notes 1. User specific 2. Common to All. User specific: It can be saved with any number or name. Common to all: It should be saved with/any number or name Select save lay out button (ctrl + F12) Lay out: /AML Description: Standard layout for AML Select save button (or) (ctrl + s). How to choose your layout

41

From the Menu select lay out button Select /AML How to make default layout Path: Accounting Financial Accounting General Ledger Environment User parameters Editing options (T. Code FB00) Select Line Items Tab. For default select on screen under G/L Account layout Select /AML Select save button Go and see the G/L Account Path FS10N Select G/L Account No. 200100 (cash account) Company code AML Fiscal year 2006 Business area - AMH Select execute button (or) F8 Double click on cumulative balance Accrual/deferred document a. Creation of 3 G/L Accounts i) Salaries A/C Personnel cost ii) Rent A/C Administration iii) Outstanding expenses Current liabilities & provisions b) Define reversal reason and reversal reason should allow us to reverse on any day. c) Creation of accrual/deferred document One provision is today date and one for month ending date. 24/07/06 - Rent

42 31/07/06 - Salaries d. Reversal of accrual/Deferred documents Creation 3 G/L Accounts: In this case first to check Accounts groups for giving Account group Give the Transaction Code OBD4 Select position button Give the chart of Accounts AML Enter. Note down personnel cost range 400400 to 400199 Note down the range for administration 400300 to 400399 Note down the range for current Liabilities & provisions 100500 to 100599 Creation of G/L Masters (FS00) Give G/L Account No. 400100 Company code: AML Select with template button Give G/L Account No: 100000 (Equity share capital) Company code: AML Press Enter. Change the account group to personnel cost Select P&L Statement Account Radio Button Change short text to salaries account. Change G/L Account Long Text to Salaries Account Other fields are common. Select save button (or) (ctrl + s).

43

2. G/L Account No: 400300 Company code: AML Select with template button Give G/L Account No: 400100 (salaries A/C) Enter. Change the Account group to administration. Change the short text: Change to Rent Account G/L Account long text: Change to Rent Account Save. 3. G/L Account No. 100500 Company code: AML. Select with template button. Give G/L Account No: 100000 (Equity share capital) Company code AML Enter. Change the A/C group to current liabilities & provisions Change short text & long text to outstanding expenses. Select control data tab. Select open item management check box. Save.

Reversal Entries
Define: Reversal reason and reversal reason should allow is to reverse on any day. Path: SPRO Financial Accounting General ledger accounting Business Transactions Adjustment posting/Reversal Define reasons for reversal

44 (T. Code: FBS1) Select new entries button. Reason is 41 (Text field). Give the text accrual/deferral document. Give the document date: 28.07.06 Type: SA Company Code: AML. Reversal reason: 41. Reversal date: 01.08.2006. Posting Key: 40 A/C No: 400300 (Rent Account). Enter. Give the amount Rs. 10000/Business area AMH Text: Rent provision for July. Posting Key: 50 Account No: 100500 (Outstanding expenses) Enter. Amount: *. Business Area: AMH. Text: + Document Simulate and save.

Salary Provision
Same Path: FBS1. Give the document date and posting date: 31.07.06.

45 Type: SA. Company code: AML. Reversal reason: 41. Posting Key: 40 A/C No: 400100 (Salaries Account), Enter. Ignore the warning message, Press Enter. Give the amount Rs.200000. Business Area: AMH. Text: Salary provision for July. Posting Key: 50 A/C No. 100500 (Out standing expenses). Enter. Amount: * Business Area: AMH. Text: + Document Simulate and save.

Reversal Accrual/Referral document Path: Accounting Financial Accounting General Ledger Periodic process Closing Valuate Reversal accrual referral Document. Transaction Code: F.81 Give the company code: AML. Give the reversal posting date: 01.08.2006. Select text new check box.

46

Select execute documents button. Select reverse documents button. Open item management Vendor Accounts Customers Accounts Balance sheets Accounts where clearing required. Provision payment outstanding expenses Recovery payment PF, TDS In G/L Masters we have to select open items management check II (Refer Tolerance Group) 3 Scenarios: Full clearing Partial clearing Residual clearing Provision Payment - Partial clearing Residual clearing

1. Full Clearing Scenario: 1. Rent Provision: User transaction code: F-02 Give the document date: 28.07.06 Type SA: Company code: AML: Posting key: 40 Account No: 400300 (Rent Account) Enter. Amount is 5555 Business area: AMH Rent provision for July.

47 Posting Key: 50 A/C No: 100500 (Outstanding expenses) Enter. Amount: * Business Area: AMH. Text: + Document Simulate and save. 2. How to view open item repaid A/C Path: Accounting Financial Accounting General Ledger Account display/check line items (T. Code: FBL3N) Give the G/L Account No. 100500 (outstanding expenses). Company code: AML. Select open items radio button. Select execute button. 3. Outgoing payment with clearing: Path: Accounting Financial Accounting General Ledger Document entry out going Payment (T. Code: F -07) Give document date: 28.07.2006. Type: SA. Company code: AML. Clearing Text: Out going payment Account under bank data: 200100 Cash A/C. Business Area: AMH. Amount: 5555.

48

Text: Out going payment. Account under open item selection: 100500 (Outstanding expenses). Account Type: S comes by default. S stands for G/L Accounting. Select process open items button. Double click on 5555 payable. Documents simulate and save. 4. Go and see the G/L Account (FBL3N) Give G/L Account No: 100500. Company code: AML. Select cleared items radio button. Execute. Select back arrow. Select open items radios button. Execute. Partial clearing Net payable To check what steps you have done in your reverse. Path: SPRO Financial Accounting Global Settings Company code Enter Global Parameters. Select your company code: AML. Select details button. From the menu select utilities. Change reverses (customization) Select the folder for your reverse no. Select sub folder customizing table. Partial clearing Method:

49

Vendors/Customers 1. Rent provision F-02): Document date: 31-07-2006. Type: SA. Company code: AML. Reference Bill No. 1234. Posting Key: 40 Account No: 400300 (Rent Account). Enter. Amount: 50000. Business Area: AMH. Text: Rent provision for July Posting Key: 50 Account No. 100500 (Outstanding expenses) Enter Amount: * Business Area: AMH Text: + Document Simulate & Save. Out going payment using partial clearing method Transaction code: F -07 Document date: 31-07-06 Type: SA Company code: AML Reference: 1234 Clearing Text: Out going payment Account: 200100 (Cash/Bank Accounts) Business Area: AMH

50

Amount: 15,000 Text: Out going payment Account: Under open item selection 100500 (Outstanding Expenses) Account type: S comes by default Select process open items button Keep the cursor the amount fields of the line items against which we want adjust Select Partial payment tab It creates payment amount column Double click on Net amount 50000 Double click on payment amount 50000 Document simulate It gives the message correct the marked line item Double click on blue font line item Text Enter + Save (or) (ctrl +s) Go and see the G/L Accounts (FBL3N) Give the G/L Account No: 100500 Company Code: AML Select open items radio button Execute Select change layout button From the hidden fields column select reference field

51

Select Text field under column content Select left arrow (or) show selected fields button Select copy button Keep the cursor on reference field Select sub total button Making the balance payment and clearing the account (Transaction code F-07) Document date: 31-07-06 Company code: AML Reference: 1234 Clearing text: Out going payment Account No: Under Bank data: 200100 Business Area: AMH Amount: 35000 Text: Out going payment Account: Under open item selection 100500 (Outstanding expenses) Account type: S comes by default Select process open items button Double click on payable Amount 50000 Double click on part paid amount: 15000 Documents simulate and save Go and see the G/L Account: (FBL3N) Give G/L Account No: 100500 Company Code: AML Select clear items radio button Execute Residual Payment (Residual clearing) 1. Rent Provision (F-02) Document date: 31-07-2006 Type: SA

52

Company code: AML Posting Key: 40 Account No: 400300 (Rent account) Enter Amount: 60000 Business Area: AMH Text: Rent provision for July Posting Key: 50 Account No: 100500 (Outstanding expenses) Enter Amount: * Business Area: AMH Text: + Document Simulate & save Outgoing payment using residual clearing method User Transaction code F-07 (Payable amount) Document date: 31-07-2006 Type: SA Company code: AML Clearing text: Out going payment Account under bank date: 200100 (Cash Account) Business Area: AMH

53 Amount: 20000 Text: Out going payment Account: Under open item selection: 100500 Account type: S default Select process open items button Keep the cursor on the amount field of the line item on Which we want to adjust Select residual items tab It creates residual items column Double click on Net amount 60000 Double click on residual items Document simulate It gives the message correct the marked line item Double click on blue font line item Text enter + Save (or) (ctrl + s) Go and see the G/L Accounts (FBL3N) Give the G/L Account No: 100500 (Out standing Expenses) Company code: AML Select open items radio button Execute Foreign currency postings: Check exchange rate types; Bank buying rate Export G Type

54 Bank Selling rate Imports/Expenditure B Type Average Rate: Used by MM/SD People M Type Path: SPRO General settings Currencies Check exchange rate types. (OB07) Select types Select position button Enter B Enter Define transaction ratios for currency transaction Path: SPRO General settings Currencies Define translation radio for currency translation. (OBBS) This defines the conversion factory between two currencies. USD 1 Japanese year 100 Europe 1 INR 1 INR 1 INR 1

Once we follow one conversion factory, follow continuously the same for all the year. This is at client level Double click on IMG Activity button Ignore the message select yes button Select new entries button Ext rt: (Exchange rate type) Select G Bank buying From: Select USD (American Dollar)

55 To: Select INR Valid from: 10-07-2006 Ration (From) 1 Radio (To) 1 Exchange rate: Select B (Bank setting) From: USD To: INR Valid from: 10-07-2006 From ratio 1 To ration - 1 Exchange rate: Select M (Average) From currency: USD To currency: INR Valid from: 10.07.2006 Ratio from 1 Ratio to 1 Save (or) (ctrl + s) Save in your request Enter exchange rates: Path: SPRO General settings Currencies Enter exchange rates (OB08) Select new entries button Exchange rate type: G (Bank buying) Valid date: 25-07-2006 From Currency: USD To select: INR Direct quotation: 44/-

56 Enter Exchange rate type: Select B Valid date: 25-07-2006 From currency: USD To currency: INR Direct quotation: 46/Exchange rate type: M Valid from: 25-07-2006 From currency: USD To currency: INR Direct quotation: 45/Save Save in your request You can enter each type for each day only Path for forex rates at user level Accounting Financial Accounting General Ledger Environment Current settings Events translation rates (S_BCE_68000174)

Postings When the rate is not given When the rate is given

When the rate is not given: It takes the rates from forex table It takes the latest date rate To enter default exchange rate Type based on document type

57

G/L Posting SA b (Bank selling) Purchase invoice-posting G (Bank buying) (If we dont specify it takes M type by default. M Average rate To enter default exchange rate type B (Bank selling) for document type SA (Use the transaction code (OBA7). Select position button Give the document type SA Enter Select document type SA. Select details button Under default values exchange rate type for foreign currency documents Enter B Select save button (or) (ctrl + s) Save in your request Foreign Currency Posting (F-02) Document date 02-08-2006 Type: SA Company code: AML Currency: USD Posting key: 40 Give account No. 400100 (Salaries account) Enter Give the amount 1000$ Business area: AMH

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Text: Salary payment Enter Posting key: 50 Account No. 200100 (Cash account) Enter Amount: * Business area: AMH Text: + Document Simulate To view in INR Select display currency button. Select save button (or) (ctrl + s). When the rate is given at the time of posting Use the transaction code (F-02) Give the document date: 02-08-2006 Type: SA Company code: AML Currency: USD Give the rate: 48/Posting key: 40 Account: 400100 (Salaries Account) Enter It gives message Exchange rate: 48$ deviate the increase 4.38%

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Ignore message and Enter Give the amount: 1000$ Business area: AMH Text: Salary payment Press: Enter Posting key: 50 Give the account no: 200100 (Cash account) Enter Amount: *. Business area: AMH Text: + Documents Simulate & save. Reversals | | | Individual Reversal of Mass Document reverse Reversal Reversal document Individual document reversal This is used to reversal one document at a time To give reversal reason If we dont specify reversal date, it takes original document posting date That period should be open. Path: Accounting Financial Accounting General Ledger Document Reverse Individual reversal (FB08) Give the document No: 1 Company code: AML

| Cleared items reversal

| Accrual/deferral reversal

60 Fiscal year: 2006 Reversal reason: Select 01 (reversal in current period) Posting date: Blank Select display before reversal button Select back arrow Select save button From the menu select document display Select display document header button Double click on 1 (Reverse document for) Select display document header button SA Original document list AB reversal document list Details button No range 01 FB03 Document display Company code: AML Document type: SA Original document AB Reversal document (System defined) Reversal of reverse document Use the transaction code (F-02) From the menu select document Post with reference Give the document No. 15 Company code: AML

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Fiscal year: 2006 Select generate reverse posting check box Select display line items check box Enter Enter once again Change Text: Reversal for document No. 15 Enter Text: + Enter: Save (or) (ctrl + s). Enter From the menu select document display Select display document header button

Mass Reversal
To reverse more than one document at a time, we use mass reversal; it can be continuous or random. Path: Accounting Financial Accounting General Ledger Document Reverse Mass reversal (F.80) Give the company code: AML To reverse random Numbers Select multiple selection Beside document number Give the document No. 2 & 4 Select copy button Give the reason for reversal 01 Select text run check box

62 Select execute button Instead of 2 and 4, Give documents No: 13 & 16 If documents are O.K Select reverse document button Clear item reversal Use the transaction code: (FBL3N) Give the G/L Account No: 100500 (Outstanding expenses) Company code: AML Select cleared items button Execute

Full cleared items

Out standing expenses Cash/Bank 5555 (7) Document N0 Rent A/C 5555 (6)

If cheque dishonored it must be reversal Here i.e. Full cleared items this is not possible to reversal But you can make it as open items then reverse Path: For reversal of cleared items Accounting financial accounting General Ledger Document Reset cleared items (Transaction code FBRA) Give the clearing document No.7 Company code: AML Fiscal Year: 2006 Select save button (or) (ctrl + s)

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Select resetting & Reserves Give the reversal reason 01 (Reversal in current period) Enter It gives the message clearing 7 reset. Enter Go and see the G/L Account FBL3N Give the G/L Account No: 100500 Company code: AML Select open items radio button Execute

Interest calculations

Balance Interest calculations Defined S type Use fro G/L Accounts P Type

Item interest calculations

Use for vendors/customers.

Define interest calculation Type: Path: SPRO Financial Accounting General ledger accounting Business transactions Bank Account in test calculation Interest calculation Global settings Define interest calculation types (OB46) Select new entries button Interest Indicator (Ind Id): M1 Name: 10% Monthly

64 Interest calculation Type: Select S Balance interest calculation Save Save in your request Prepare Account balance interest calculation: Same path (Next step) Transaction code (OBAA) Select new entries button Interest calculation Indicator M1 Interest calculation frequency: Select 01 1 Month. Calendar type In case of rupee term loan Select G (28, 29, 30, 31 /365) In case of foreign currency Term loan: Select F (28, 29, 30, 31 /360) This is based on LBOR (London Inter bank offer rate) Select G Select balance plus interest check box Select save button (or) (ctrl + s) Save in your request Define reference interest rates: Path: SPRO Financial Accounting General Ledger Accounting Business Transactions Bank account interest calculation Interest calculation Define reference interest rates (Transaction Code OBAC) Interest may be calculated Method (i) 10/04/06 to 31/3 10/09/06 to 31/03 100000 * 1o/100 * 355/365 = Say 15000 10000 * 10/100 * 205/365 = Say 3000 ---------

65 12000 ---------(Method ii) 10/04/06 to 09/09/06 10/09/06 to 31/03 100000 * 10/100 * 150/365 = 5000 90000 * 10/100 * 205/365 = 7000

Normally banks follow 2 typed of interest rates In SAP you have two options for this one You can create 2 interest rates for debit & credit items

Here Interest indicator -

M1

Credit Items

Debit items

Ref int rate (M2) 10%

Ref int rate (M3) 8%

In India & US follows the same rate of interest rates Hence give M2 for (debit & credit items) Select new entries button Ref Interest rate M2 Long Text: 10% Monthly Short Text: 10% Monthly

66 Date from: 01-04-2006 Currency: INR Select save button (or) (ctrl + s) Save in your request Define time dependent terms: Same path Select new entries button Interest calculation indicator M1 Currency key: INR Effective from: 01-04-2006 Sequential Number: 1 Terms: Select credit testing column balance interest calculation Ref interest rate: M2 Save (or) (ctrl + s) Save in your request Select next entry button Interest calculators Indicator: M1 Currency Key: INR Effective from 01.04.2006 Sequential No. 2 Term: Select debit interest column balance interest calculation Ref. Interest rate: M2 Save

67 Enter interest values: Same path: Transaction code (0B83) Select new entries button Give the reference interest rate M2 Effective from 01-04-2006 Interest rate: 10% Save Save in your request

Creation of 2 G/L Accounts; 1st Accounts: SBI Rupee term loan under secured loans. 2nd Account: Interest Account under interest group To check account groups for giving account number (Transaction code OBD4) Select position button Give the chart of account: AML Enter Note down the range for secured loans: 100300 to 100399 Note down the range of interest: 400400 to 400499 Creation of G/L Masters: Transaction code FS00 Give the G/L Account No. 100300 Company code: AML

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Select with Template button Give the G/L Account No. 100000 (Equity share capital) Company code: AML Enter Change account group: Secured Loans Change short text and G/L Account log text: SBI Rupee term loan Select create/bank/interest Field status Group: Select 005 Interest Indicator: Select M1 Save. 2nd Account: G/L Account No: 400400 Company code: AML Select with template button Give the G/L Account No: 400300 Company code: AML Enter Select type/description tab Account group: Select interest Change short text & Long text: Interest Account Select save button (or) (ctrl +s) Assignment of Accounts for automatic posting

69 Path: SPRO Financial Accounting General Ledger Accounting Business transactions Bank Account interest calculation Interest posting Prepare G/L Account balance Interest calculation (Transaction code (OBV2) Select symbols button Example: 100300 - SBI Term Loan 100301- ICICI Term Loan 100302 - IDBI Term Loan If we have more than one term loan then give 10 pluses (+ + + + + + + + + +) Select Accounts button Give your chart of Accounts AML Enter Give the account symbol 0002 Currency INR Give the G/L Account: 400400 Give the Account symbol 2000 Currency INR G/L Accounts, Mark with 10 times plus + + + + + + + + + + Select save button (or) (ctrl + s) Save in your request User levels: To open posting period April: Use the Transaction code OB52 Select position button Give the posting period variant AML Enter

70 From Period 1 Save Save in your request Term Loan receipt (F 02) Give the document data and posting date: 12-04-2006 Type SA Company code: AML Currency: INR Posting Key: 40 Give the G/L Account No. 200100 Enter Give the amount: 100000 Business area: AMH Value date: 10-04-2006 Text: SBI Rupee term loan receipt Posting Key: 50 Account No: 100300 (SBI Rupee Term Loan) Enter Amount: * Business area: AMH Value date: 10-04-2006 Text: + Documents simulate and save

71 Term Loan repayment: Give the document data and posting date: 06-09-06 Type: SA Company Code: AML Posting Key: 40 Account No: 100300 (SBI Rupee term loan) Enter Ignore the messages, press enter Give the amount: 10000 Business area: AMH Value date: 10-09-2006 Text: SBI Term loan repayment Give the posting key: 50 Account No: 200100 (Cash Account) Enter Amount: * Business Area: AMH Value date: 10-09-2006 Text:+ Documents simulate and save Interest Calculations: Path: Accounting Financial accounting General ledger periodic processing Interest calculation Balances (F.52) Give the G/L Account: 100300 (SBI Term Loans)

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Give the Company code: AML Calculation period: 01.04.2006 to 31.03.2007 Execute To view line item wise interest: Select back arrow Select additional balance line check box Execute In case of floating rate of interest Select back arrow: To give effect for floating rate of interest open one more session with SPRO Financial Accounting General Ledger Accounting Business transactions Bank Account interest calculation Interest calculation Enter Interest values Transaction Code: OB83 Select new entries button Give the reference interest rate: M2 Effective from 01.06.2006 Interest Rate: 12% Save Save in your request Come to the first session Execute Select back arrow For interest posting Give the calculation period 01.04.2006 to 30.04.2006 Execute

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Select back arrow Select post interest settlements check box Select update master record check box Batch input session Give the session name: AML Posting to business area: AMH Posting date of session: 30.04.2006 Document date of session: 30.04.2006 Posting segment text: Interest for April 2006 Select execute button To post the batch input session From the menu select system Services Batch input Sessions Select the session Name: AML Select process button Select display errors only radio button Select process button It gives the message: Processing of batch input session complete Select exit batch input button To view all document posted use the transaction code FB03 Enter Enter once again Go and see the G/L Master FS00 Give the G/L Account No. 100300

74 Company code: AML Select create/bank/interest tab

Foreign currency balances revaluation;

Foreign currency term loan may be used

Long term working capital

Fixed assets Purchases

Local assets

Import assets

Example: If we take foreign currency term loan. Exchange rate On 09.08.2006 100000$ On 31.03.2007 Excess payable As per account standard The variation is charge to P&L Accounts. In case of purchased imported assets 45 50

Amount payable 4500000 5000000 --------------500000 ---------------

Add to asset value and calculate depreciation over balance life of asset. Customization of Foreign currency Creation of 3 G/L Account 1. SBI Foreign currency term loan under secured loans group 2. Exchange gain under other income/ exchange loss under administration

75 To check account groups for giving account Number (OBD4) Select position button Give the chart of accounts: AML Enter Note down the range for other Income group 300100 to 300199. Creation of G/L Masters (FS00) Give the G/L Account No: 100301. Company code: AML Select with template button Give the G/L Account No: 100300 Company code: AML Enter. Change the long text, short text to: (SBI FC term loan) Select control data Tab Give the account currency: USA Deselect only balances in local currency check box Select create bank/interest tab Remove interest indicator Remove the dates also Save. 2nd G/L Account: 300100: Company code: AML Select with template button Give the G/L Account No: 400300 (Rent) Company code: AML Enter Select type/description tab

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Change the account group to other income Change short text and long text to exchange gain Other fields are common Save (or) (ctrl + s) G/L Account No: 400301 Company code: AML Select with template button Give the G/L Account: 400300 (Rent account) Enter Change the short text and long text: Exchange loss Other fields are common Save. Define valuation methods: Path: SPRO Financial Accounting General Ledger Accounting Business transactions Closing Valuating Foreign Currency Valuation Define Valuation Methods. (Transaction Code OB59). Select new entries button Valuation Methods: AML1 Description: FC Valuation Bank Selling for AML Document Type: SA Debit balance exchange rate type (B) (Bank Selling) Credit balance exchange rate type B (Bank Selling) Select determine rate type from account balance Select save button (or) (ctrl + s) Save in your request

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Prepare automatic postings for Foreign Currency valuation (OBA1) Double click on exchange rate defining using exchange rate key Give your chart of accounts: AML Enter Exchange rate difference key: SD Expenses account: 400301 E/R (Exchange rate) gain account: 300100 Save Save in your request

Assign exchange rate difference key in loan account: (FS00) Give the G/L Account No: 100300 (SBI F/C Term loans) Company code: AML From the menu select G/L Account charge Select control data tab Exchange rate difference key Select USD Save. Foreign currency term loan receipt (F 02) Give the document data and posting date: 11/08/06 Type: SA Company Code: AML Currency: USD: Rate: 45/Posting Key: 40 Give the account No: 200100 (Cash Account) Enter

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Give the amount: 100000 Business Area: AMH Text: SBI F/C Term loan received Enter Posting Key: 50 Account No: 100301 (SBI FC Term loan) Enter Amount * Business Area: AMH Text: + Documents simulate and save To enter 31st March, 2007 exchange rates in forex table Path: Accounting Financial Accounting General Ledger Environment Current settings Enter transaction rates (S _ BCE _ 68000174) Select new entries button Exchange rate type: G Valid from 31-03-2007 From Currency: USD To Currency: INR Direct quotation: 49 Exchange rate type: B (Bank selling) Valid from: 31-03-2007 From: USD

79 To Currency: INR Direct quotation: 50 Save. F/C revaluation: Path: Accounting Financial Accounting General Ledger Periodic Processing Closing Valuate Foreign Currency Valuation (F.05) Enter Company Code: AML Evaluation period: 31st March 2007 Valuation Method: AML1 Valuation in currency type: Select 10 (Company code currency) Select G/L balances tab Select valuate G/L Accounts check box Give the G/L Account No: 100301 Execute Select posting button Select back arrow two times Showing monthly wise revaluation: Example: If we take 100000 USD On 11/08/06 31/08/06 30/09/06 Steps to be followed for month end valuation Give evaluation key date: 31-08-2006 Select create positions check box Give the reversal posting date: 01-09-2006 Select reverse postings check box Select execute button Rate of exchange 45 46 48

80 Steps to be followed for your end valuation Evaluation key date: 31-03-2007 Select balance sheet preparation valuation check box Select create postings check box Reverse of posting date: Blank Deselect reverse posting check box Execute Go and see the document FB03 Enter Double click on first line Item. To view path when transaction code is given at user level In the command field enter search _SAP Menu Enter Search text entry: Transaction Code (F-02) Enter How to view path in customization: SPRO Select find button Give the search term fiscal year Enter Select fiscal year under financial accounting Global settings Area Enter

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NOTES:
Q1. How are the organizational Units important in FI module? ANS: Organizational units are used to structure business functions and for reporting. The organizational units of Financial Accounting are used for external reporting purposes, that is, they fulfill requirements of the business, which is subject to from external parties, for example, legal regulations. The financial statements for example, are created based on the organizational units of Financial Accounting. The Organization structure is a very important step in mapping the physical organization of a company onto the SAP system. The organization structure design must take all the aspects of the business into account, including the present and future implementation strategy of SAP in the organization. In Financial Accounting the organizational units are of two types External and Internal External structures are created for meeting the external reporting requirements and legal requirements. Company and Company Code is the organizational units created to meet this purpose. Internal structures are created for the internal control and reporting purposes. Business Area, Controlling Area, Dunning Area are the organizational created for meeting the internal requirements. Q2. What is a Company? ANS: Company is the smallest organizational unit for which individual financial statements are created according to the relevant legal requirements. A companys financial statements also form the basis of consolidated financial statements. A company can include one or more company codes. The definition of the company organizational unit is optional.

82 All of the company codes within a company must use the same chart of accounts and fiscal year. However, each company code can have a different local currency. To define a company, choose the following in Customizing for the Enterprise Structure: Definition Financial Accounting Define Company In the next step the company codes are assigned the companies. To do so, choose Assignment Financial Accounting Assign Company Code to Company in Customizing for the Enterprise Structure. Q3. What is a Company Code? Company Code is the smallest organizational unit of external accounting for which a complete, self-contained set of accounts can be created. This includes the entry of all transactions that must be posted and the creation of all items for legal individual financial statements, such as the balance sheet and the profit and loss statement. The business transactions relevant for Financial Accounting are entered, saved, and evaluated at company code level. The definition of the company code organizational unit is obligatory. The company code is the central organizational unit of external accounting within the SAP System. Before implementing the Financial Accounting component at least one company code must be defined. A company code could also be a separate, but not independent, commercial place of work. This is necessary for example; if the place of work is actually situated in a different country and evaluations therefore have to be carried out in the appropriate national currency and in accordance with other tax and legal specifications. If several independent companies are to be managed to meet accounting requirements simultaneously, we can set up several company codes in one client. To define a company code, choose the following in Customizing from the Enterprise Structure: Definition Financial Accounting Define, Copy, Delete, Check Company Codes. Integration If the other components of the SAP System, are in use we have to make assignments between the company codes as the central organizational unit of Financial Accounting, to the organizational units of the other components in order

83 to achieve the integration. This is necessary to ensure that data can be transferred between the components. Q4. What is a Business Area? Business Area as an organizational unit corresponds to a specific business segment or area of responsibility in a company. Financial statements can be created for business areas for internal purposes. The definition of the business area organizational unit is optional. To define business areas, choose the following in Customizing for the Enterprise Structure: Definition Financial Accounting Define Business Area. NOTE: To create financial statements for business areas, make sure that the Business area field is ready for input in all the line items. To do this, proceed as follows in Customizing for Financial Accounting: Financial Accounting Global Settings Business Area Enable Business Area Balance Sheet. Set the field status as required entry. Q5. What is a Chart of Accounts and how many types Chart of Accounts can be used in FI module? Chart of Accounts is a list of all G/L accounts used by one or several company codes. For each G/L account, the chart of accounts contains the account number, account name, and the information that controls how an account functions and how a G/L account is created in a company code. The chart of accounts contains general specifications for the G/L account master record. These include the specification whether a G/L account is a balance sheet or a profit and loss account. Each company code uses only one chart of accounts. However, several company codes can use the same chart of accounts. Financial accounting as well as cost / revenue accounting share the chart of accounts. The items in a chart of accounts can be both expense or revenue accounts in financial accounting and cost or revenue elements in cost/revenue accounting. Charts of accounts can have three different functions in the system: As Operating chart of accounts

84 The operating chart of accounts contains the G/L accounts that are used for posting in the company code during daily activities. Financial Accounting and controlling both use this chart of accounts. An operating chart of accounts is assigned to a company code. As Group chart of accounts The group chart of accounts contains the G/L accounts that are used by the entire corporate group. This allows the company to provide reports for the entire corporate group. The assigning of a corporate group chart of accounts to a company code is optional. As Country-specific chart of accounts The country-specific chart of accounts contains the G/L accounts needed to meet the country's legal requirements. This allows to provide statements for the country's legal requirements. The assigning of a country-specific chart of accounts to a company code is optional. Q6. What is the significance of Fiscal Year in FI and how is it configured? Fiscal Year usually a period of twelve months for which a company regularly creates financial statements and checks inventories. A fiscal year is divided into posting periods. Each posting period have defined by a start and a finish date. We have to define the posting periods before posting documents, which in turn define the fiscal year. In addition to the posting periods, you can also define special periods for yearend closing. In General Ledger Accounting, a fiscal year can have a maximum of twelve posting periods and four special periods. In the Special Purpose Ledger we can define up to 366 posting periods. In the system we define the fiscal year as fiscal year variants, which are then assigned to company code.

85 One fiscal year variant can be used by several company codes. Following options for defining fiscal year variants: Fiscal year same as calendar year Fiscal year differs from calendar year (non-calendar fiscal year). The posting periods can also be different to the calendar months. Fiscal year is year-dependent. This means that the fiscal year only applies to a specific calendar year. Fiscal year variants are defined in customizing for Financial Accounting as follows: Financial Accounting Global Settings Fiscal Year Maintain Fiscal Year Variant (Maintain Shortened Fiscal Year) In the general ledger, the system saves the transaction figures for all accounts for each posting period and each special period separately according to debits and credits. In the Special Purpose Ledger component (FI-SL), we can save the transaction figures as a balance.

Q7. How are the currencies configured in FI? Currencies are the Legal means of payment in a country. Currencies are entered in the system as the ISO standards, for example, USD for US dollar and are defined in Customizing using the path General Settings Currencies Check Currency Codes. In Financial Accounting, we have to specify for each of your company codes, in which currency ledgers should be managed. This currency is the national currency of the company code, that is, the local currency (or company code currency). From a company code view, all other currencies are then foreign currencies. The ledgers can be managed in two parallel currencies in addition to the local currency, for example, group currency or hard currency. In order for the system to translate amounts into various currencies, we must define exchange rates. For each currency pair, we can define different exchange rates and then differentiate between them by using exchange rate types.

86 Integration In Financial Accounting, currencies and currency translation are relevant in the following circumstances: General Ledger Account master data Posting Clearing Foreign currency valuation Defining account currencies Accounts Receivable and Accounts Payable Defining reconciliation accounts

Posting documents in foreign currency Clearing open items in foreign currency Foreign currency valuation

Q8. What is an Exchange rate and how is it defined? Exchange Rates are the relationship between two currencies. Exchange rates are used to translate an amount into another currency. Exchange rates are defined in the system for the following purposes: Posting and Clearing To translate amounts posted or cleared in foreign currency, or to check a manually entered exchange rate during posting or clearing. Exchange Rate Differences To determine gains or losses from exchange rate differences. Foreign Currency Valuation To valuate open items in foreign currency and foreign currency balance sheet accounts as part of the closing operations. Exchange rates are defined in Customizing under General Settings Currencies Enter Exchange Rates. Exchange rates are defined at client level and therefore apply for all company codes. Structure For each foreign currency, specify the exchange rate in the local currency in the system.

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In addition, the following specifications apply for each exchange rate: Specify an exchange rate type. Set time restrictions for the exchange rate, in order to take exchange rate fluctuations into account, for example. Use the validity date to specify the date from which the exchange rate should apply. The system then refers to either the posting date or the translation date and uses the current exchange rate from the system. We can use either direct or indirect quotation to specify exchange rates. We must specify the relationship of the exchange rate, for example, USD/DEM exchange rates are normally specified 1:1, ITL/DEM exchange rates in the relationship 1000:1. NOTE: If the exchange rates are maintained on a daily basis, delete the exchange rates that no longer require from the system, so that there are not too many entries in the system. Integration There are various tools that can be used to automatically determine other exchange rates from existing ones. Specify the tool to be used for each exchange rate type. The following tools are available: Inversion Inversion is the process of calculating the opposite rate from a defined exchange rate. NOTE: Inversion is not permitted for exchange rate type M (average rate), since the opposite rate calculated would not be sufficiently precise. TIP: SAP recommends using the reference currency and exchange rate spread as tools. Reference Currency Exchange Rate Spread

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Q9. What is an Exchange Rate Type? Exchange Rate Types - Key used to define exchange rates in the system. For each currency pair we can define different exchange rates. Using the exchange rate type we can differentiate between these exchange rates. The different exchange rates are used for the following purposes, for example: Valuation Conversion Translation Planning Exchange rate types are defined in Customizing under General Settings Currencies Check Exchange Rate Types. The following exchange rate types exist: Buying rate Bank selling rate Average rate Historical exchange rate Key date exchange rate Q10. What is Reference Currency? Reference Currency - Currency key used to carry out all foreign currency translations for a specific exchange rate type. Use Reference currency can be assigned to an exchange rate type. For every other currency, enter the exchange rate in the reference currency. All other translations are carried out using the reference currency. Reference currency can only be used for exchange rate type M (average rate), and not for buying or bank selling exchange rate types. For e.g. specify USD as the reference currency. To translate from GBP to DEM, the system uses the GBP/USD and DEM/USD exchange rate specifications. Several reference currencies can be specified for one exchange rate type. This may be necessary for example, to comply with legal regulations. To specify a reference currency for an exchange rate type, proceed as follows in Customizing: General Settings Currencies Check Exchange Rate Types.

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Q11. What is Exchange Rate Spread? Exchange Rate Spread is the Constant difference between the average rate and the buying rate, or between the average rate and the bank-selling rate. For exchange rate types, we can define fixed exchange rate spreads between average rate and buying rate, as well as between average rate and bank selling rate. Then we only have to enter exchange rates for the average rate. The system then calculates the exchange rates for the buying rate and bank-selling rate by adding and subtracting the exchange rate spread for the average rate. TIP: SAP recommends defining a reference currency for the average rate and then entering exchange rate spreads for the buying and bank selling rates. This combination is particularly efficient since you only have to enter exchange rates for the individual currencies to the reference currency for the average rate exchange rate type. The system calculates all the other exchange rates. Q12. What are the Parallel Currencies and how are they defined in system? In Financial Accounting, we can define up to two parallel currencies in addition to the local currency. The FI General ledgers are thereby managed in these parallel currencies in addition to the local currency. When defining the organizational units these currency types are defined indicating the currency key. Following are the various different currency types, which can be used as parallel currencies. Group Currency Group currency is used in the consolidated financial statements. Before the consolidation process can be completed all values in the individual financial statements must be translated from the local or transaction currency into group currency Group currencies are defined at the client level. Global company Currency Currency used for an internal trading partner.

90 Global company currency is defined when defining the company that is assigned to the company code. Hard Currency Country-specific second currency used in countries with high rates of inflation. Hard currency is defined while defining the country to which the company code is Assigned to. Index-Based Currency Country-specific theoretical currency used in some high inflation countries as a comparison currency for purposes of statutory reporting. Index-based currency is defined while defining the country to which the company code is assigned. We can use a maximum of two parallel currencies (second and third local currencies). If we have defined the group currency as the second local currency, this has no additional effects. In all other cases, an additional ledger has to be defined in which transaction figures are managed. Managing ledgers in parallel currencies, this has the following effects: During posting, the amounts are also saved in the parallel currencies. The amounts are translated automatically, but you can also enter them manually. G/L account transaction figures are also updated in the parallel currencies. Exchange rate differences also arise in the parallel currencies. You can also carry out a foreign currency valuation in the parallel currencies. Parallel currencies are defined in Customizing by using the path Financial Accounting: Financial Accounting Global Settings Company Code Parallel Currencies. Q13. Describe something about Tax functionality in Financial Accounting. SAP system can be used to manage various types of taxes as per the legal requirements of the country.

91 The Financial Accounting components Accounts Receivable (FI-AR), Accounts Payable (FI/AP), and General Ledger provide the following comprehensive tax functions: Tax calculation the system calculates tax amounts with or without cash discount based on the tax base amount. Tax codes are used to calculate and check the amounts. Tax posting the system posts the tax amounts to defined tax accounts. Adjustments the system corrects tax amounts, in the case of cash discount or other deductions, for example. Tax reporting we can use the system to create tax returns. In other words the AR, AP, and GL application components support the calculation and posting of tax as follows: The tax amount can be determined upon request The tax amount is checked by the system at document level The tax amount is posted to the tax accounts automatically A tax adjustment can be performed automatically, if required, for cash discount postings and other deductions To make use of the various tax types and for their effective functionality the relevant settings are made in the Implementation Guide (IMG) for Financial Accounting under Financial Accounting Global Settings. The following specifications need to be made: (1) To determine the tax amount, the system calculates a base amount, the composition of which varies from country to country. We have to determine whether the base amount for tax calculation is to include the specified cash discount amount. This information must be defined for each company code. (2) To enter and determine taxes automatically, a tax code is required, which will include the tax rate prescribed by law. (3) The tax amount is generally posted automatically. For posting, specify the tax accounts to which the individual taxes are to be posted.

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(4) In a G/L account master record, specify whether the account is a tax account, and if so, which tax type (input tax or output tax) can be posted to the account. Q14. What are the Tax Codes and how are they defined? Tax Codes is the two-digit code that represents the specifications used for calculating and displaying tax. The specifications that are defined under the tax code are: Tax rate Type of tax (input tax or output tax) Calculation method (% included or % separate) Target tax code If copied from the existing taxing code taking it as reference. Check indicator: This indicator is used to specify whether the system is to output a warning message or an error message if the tax amount entered manually does not match the amount calculated automatically. EU indicator with various options to be used as required, such as " " = Not EU-relevant 1 = goods delivery within EU, display in EC sales list 2 = services within the EU 3 = subcontracting within the EU 9 = acquisition tax Tax codes are used to: Check the tax on sales/purchases amount in the document Calculate the amount of tax on sales/purchases automatically on request Calculate the non-deductible input tax portion Check if a tax account with tax type (input or output tax) can be posted to Determine the tax account Q15. What are the specifications to be made in GL accounts? Following specifications are to be made in GL accounts via three fields for calculating, checking, and posting taxes on sales/purchases. These are: Tax category (In the Control Data section of Company Code area) By means of this field in the master record of a G/L account, we can determine whether the account is a tax account, a tax-relevant G/L account, or a G/L account that is not tax-relevant.

93 For a tax-relevant G/L account, we can determine the tax codes that can be used to post to the account. Posting without taxes allowed (By means of a check box in the Control Data section of Company Code area) By means of this field, we can indicate the accounts are tax-relevant, but for which posting of non-tax-relevant transactions without a tax code is allowed. This is especially necessary for postings with a jurisdiction code to avoid having to define "dummy" jurisdictions. For tax processing with a jurisdiction code, the jurisdiction code is also ready for input on the G/L accounts/asset screen, in addition to the tax code. Automatic posting only (By means of a check box in the Create/bank/interest section of Company Code area) For each account, by use this field we can determine whether the account is to be posted to by the system only, that is automatically, or manually as well. Tax Accounts We define the tax accounts by entering the characters specified below in the Tax category field. Through this we can also determine which tax type (input or output tax) is displayed on the account. Indicators in tax accounts Indicator < >

Meaning You can only post to this tax account with an input tax code. You can only post to this tax account with an output tax code.

For the tax accounts, we must also decide how the account should be posted to: manually or only by the system. This is determined by means of the entry in the only automat. Post. Field. NOTE: The Only automat. Post. indicator is set for all output tax accounts. Manual posting to the tax account is only necessary in exceptional cases, such as when posting a tax adjustment.

94 Reconciliation Accounts The field for the tax category in the reconciliation accounts plays a special role as these specifications affect the vendor or customer account when posting is made. Indicators in reconciliation accounts Indicator + *

Meaning Only postings with input tax codes are allowed. Only postings with output tax codes are allowed. All tax codes are allowed.

If you enter one of the above indicators in the master record of a reconciliation account, the Tax code field is output with the default value ** when line items are entered. Q16. What is the scenario for Tax adjustments for payment transactions? Q. Describe the Tax Calculation procedure. A calculation procedure is defined for each country, containing the specifications required to calculate and post tax on sales/purchases. Each calculation procedure contains several tax types, which are called condition types in the procedure. The system defaults condition types when you define a tax code. The condition type (such as input or output tax) specifies the base amount on which the tax is calculated and the account key that is used to post the tax. The specifications necessary for calculating and posting tax have been defined for the condition type and account key. The calculation procedure determines the amount on which the individual condition types are calculated. This can be the base amount (total of expense and revenue items) or a subtotal. Incoming acquisition tax, for example, is not calculated based on the expense or revenue items, but on the tax amount for outgoing acquisition tax. The column Fr.level determines the amount on which tax is calculated. Q17. What is a condition type? The Condition Type

95 The following information is specified for each condition type: Condition type and condition class. For example, where tax is to be calculated, the condition type might be "base amount" (K) or "tax" (D), and the condition class "base amount" (A) or "tax" (D). Calculation rule: Either "percentage included" (A) or "percentage separate" (I) The side of the account to which the tax amount is posted. This need only be specified for additional taxes, since these (in contrast to input, output, and acquisition tax) can be posted to either side of the account. If you want tax to be posted to the opposite side of the account, select the +/- sign field. Whether it is possible to change the tax amounts and percentages (which are displayed on a special screen) when you enter a document. To make this possible, choose the Manual entries field, then choose either Rate/percent (to make the percentages changeable), or Value (to make the tax amounts changeable). Q18. What is Process Key? The process key contains the following properties: Tax type. This is required for reporting purposes, to be able to determine where the individual tax line items in a document are to be displayed. As tax type you can specify output tax (1), input tax (2), additional tax (3) or not relevant to tax (4). Non-deductible input tax. This specification is also required for reporting. When input tax and non-deductible input tax is posted, separate line items are created if the non-deductible part is not to be distributed to the G/L account line items and asset line items. For tax reporting, you must indicate the input tax line items that do not display the non-deductible portion of input tax. Posting indicator You specify whether the tax amount is posted separately (2) or distributed between expense and revenue line items (3). The system posts tax to the tax accounts automatically. You can specify tax account numbers for each process key. This is not necessary for process keys for which it has been specified that the tax amount is to be distributed (posting indicator 3). Therefore, these keys are not offered in the function for entering the tax account numbers.

96 Q19. What is a Jurisdiction Code? Q20. What is the Document Type? Document Type - A key that is used to classify accounting documents and distinguish between business transactions to be posted. The document type is entered in the document header and applies to the whole document. The document type has the following functions: Differentiating between business transactions. The document type tells you instantly what sort of business transaction is in question. This is useful, for example, when displaying line items for an account. Controlling the posting to account types (vendor, customer, or G/L accounts). The document type determines which account types that particular document can be posted to. Assigning document numbers. A number range is assigned to every document type. The numbers for the documents you create are taken from this number range. The original documents from one number range should be stored together. In this way, the document type controls document storage. Applying the vendor net procedure. This means that any discount and the net amount are calculated (and posted) when the vendor invoice is posted. Document types are defined at client level. The standard system already contains document types, which can be used or changed if required. The system usually defaults the appropriate document type when a business transaction is entered. With some transactions (such as clearing transactions), the document types that are required for automatic postings are required to be entered. Q21. What are the different areas of GL Master records? G/L account master records control the posting of accounting transactions to G/L accounts and the processing of the posted data. The master data is to be created in the system before making the postings to a G/L account. G/L account master records are divided into two areas which makes company codes with the same chart of accounts can use the same G/L accounts. Chart of accounts area

97 The chart of accounts area contains the data that is valid for all company codes, such as the account number. Company code specific area The company code specific area contains data that may vary from one company code to another, such as the currency in which the account may be posted. Q22. What are the prerequisites for creating GL master records? The following objects play a central role in the creation and management of master records: Chart of Accounts List Chart of accounts Account group The sample account and the data transfer rules are optional and provide special functions. The chart of accounts list contains all of the charts of accounts that are supported within a client. The chart of accounts is a list of all G/L account master records, which are used in one or several company codes. For every G/L account master record, the chart of accounts contains the account number, the account name and controlling information. The sample account and the data transfer rules determine which field values are predefined when creating a G/L account master record and whether these values can be overwritten. The account group is a summary of characteristics that control the creation of master records. You can use it to determine which fields must or can be filled when creating the master record. In addition, it can be used to predefine a number interval, from which the numbers for the master records should be chosen. Accounts that require the same master record fields and use the same number interval are created with the same account group. The G/L account master record in the company code contains company code-specific information, which controls the entry of data to this account and the management of the account. Q23. What data the Chart of Accounts area of GL Master record contain? G/L account master data in the chart of accounts area contains information about the G/L account that is valid for all company codes.

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The chart of accounts area also contains data that controls how a G/L account is created in the company code-specific area. The following information is contained in the chart of accounts area of a G/L account master record. The chart of accounts The account number and account name (short and long text) The indicator that specifies whether the account is a balance sheet account or a P&L statement account. At the start of a new fiscal year, the balance of a balance sheet account is carried forward to itself. With P&L statement accounts, you must specify the account to which the profit or loss is carried forward at the end of a fiscal year. The account group With the account group, we can group similar accounts together and control the creating and changing of master records. They control The account number interval in which the account number must lie. The screen layout for creating G/L accounts in the company code-specific area. This means that you can define whether fields require an entry, may have an entry, or are hidden when creating or changing a master record in the company code-specific area. You defined the account groups prior to creating G/L accounts. Entries, which are necessary for consolidation, are trading partner and group account number. Q24. What data the Company Code specific area of GL Master record contain? The company code specific area of a G/L account contains data that is only valid for one company code, such as the currency in which the account may be posted. The following are some of the specifications: Account Currency The account currency indicates the currency in which this account is held. If a currency other than the company code currency is specified, users can only post items in that currency to this account. (An exception to this is exchange rate differences resulting from valuating G/L account balances.)

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If the company code currency is specified, users can post items in any currency to this account. For egg. An account is to be posted in USD, while the company code currency is INR. This defines the following: The currency used for postings made to this account The currency in which transaction figures are updated and the account balance is displayed The system automatically uses the local currency that is defined when creating the company code as the default value. This allows posting to the G/L account in any currency. When a posting is made in a foreign currency, the amount is translated into the local currency. The transaction figures are kept as follows: In the local currency, that is, the total of all the amounts posted in the local currency In the individual currencies, that is, the total of all the amounts posted in various currencies. Enter a foreign currency. The G/L account can only be posted to in this currency. The transaction figures and the account balance are kept in the foreign currency entered and in the local currency. Only Balances in local currency (Check box) When creating a G/L account in a company code, you can decide whether the transaction figures should only be kept in the local currency for this account. You have to set this indicator for clearing accounts you use to clear line items in various currencies with one local currency amount and without posting any exchange rate differences that may occur. This indicator need not set for A/P A/R reconciliation accounts. The indicator has to be set for the following accounts: Cash discount clearing accounts Clearing accounts for goods receipt / invoice receipt Accounts without open item management in which no foreign currencies are managed (Balance sheet accounts) Tax Category - Determines whether the following apply to the G/L account:

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Is it tax-relevant? Is it a tax account? Is it a tax-relevant G/L account? Tax-relevant account? With this we can decide whether this account can be used for tax-relevant postings. If not, leave the field blank. Tax account? With this we can decide whether to use this account exclusively for posting taxes. In this case defined tax type on sales and purchases will be entered such as Input tax or output tax. Tax-relevant G/L account? With this we can decide whether to use this account as a G/L account to which you make tax-relevant postings. Define the tax code, which can be used to post to the account. When posting to this account, the system then checks whether the tax code in the line item is permitted for this account. This is useful to post this account using the same tax rate. When you post to this account, the tax code is defaulted and can no longer be changed (for example, the account "Domestic trip costs taxed flat rate" in Germany). In tax accounts, you can specify the type of tax on sales/purchases (input or output tax) that can be posted to the account. In rare cases, it is useful to assign a certain tax code to an account. You enter the tax code in the master record in this case. Only this tax code can be used when posting to this account. If a G/L account is not tax relevant, you may make no specification in this field. Posting without tax allowed (check box) If this indicator is set, no tax code needs to be entered when posting to this account. If a tax code is entered, it is checked according to the tax category for this account. We can use this indicator if taxable and non-taxable postings are to be entered to an account at the same time. In such a case, you normally set up your own tax code to allow for non-taxable transactions. However, this is not possible - for example - for tax entry with jurisdiction code, since no jurisdiction code can be

101 specified for customers abroad. You would then allow postings without tax codes for the corresponding expense or revenue accounts. This indicator is not needed for invoice verification postings, since the account assignments are generally derived from the purchase order. The indicator is therefore not checked by the system for these postings. For items with no tax code, no tax information is created, and they are not contained in the tax report lists. Reconciliation Account for Account Type An entry in this field characterizes the G/L account as a reconciliation account. The reconciliation account ensures the integration of a sub-ledger account into the general ledger.

Open Item Management (check box) Determines that open items are managed for this account. If you set the "Open item management" indicator in the master record for an account, the line items in this account is marked as open or cleared. The balance of an account with open item management is equal to the balance of the open items. General ledger accounts are kept with open item management if you need to check whether there is an offsetting posting for a given business transaction Line Item Display (check box) If you set the "Line item display" indicator in the master record for an account, all line items that have been posted to this account are displayed if they have not been archived. You use line item display to display the document line items from the account Field Status Group Determines the screen layout for document entry. Fields can have the following statuses: Optional entry - you can enter data in the field Mandatory entry - you must enter data in the field Suppressed - the field does not appear on the screen Post automatically only (check box)

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Indicates that this account can only be posted to by the system using account determination tables. When posting documents, the system automatically adds line items to manually entered items as needed. For example, the tax amount, the cash discount amount, and profits or losses from foreign currency translations (exchange rate differences) can all be calculated and posted automatically by the system. You can decide that accounts to which these automatic postings are made can only be posted to automatically. This will prevent any manual postings to such an account. A definition like this would be useful for tax accounts, if, for example, you had no subsequent tax debit to post. Supplement to automatic postings (check box) Indicates that line items, which are generated automatically by the system for this account, can be supplemented manually. Examples: You set this indicator for the G/L account for bank charges. If you post an incoming payment, which contains bank charges, the system automatically generates a line item for these charges and displays the document overview screen where you can select the line item and supplement it with an account assignment. You could then assign the bank charge to a cost center, for example. Reconciliation account ready for input - (check box) Indicator, which determines that the reconciliation account is ready for input when posting a document. The indicator is used in Financial Assets Management. Q25. What is a Sample Account? A sample account is a master record containing data that is transferred when you create G/L account master records in the company code area. The following is true for sample accounts: Sample accounts are dependent on the chart of accounts. You must not enter sample accounts in the chart of accounts as G/L account master records. Sample accounts have an effect only when you create a master record. Sample accounts are assigned to the corresponding G/L account master records in the chart of accounts.

103 You can create as many sample accounts as you require. You cannot post to sample accounts. When you create a G/L account master record in the company code, the system transfers the data from the sample account. Sample accounts are dependent on the chart of accounts. As a result, you can use a sample account only in the chart of accounts in which it is created. Q26. What are Data Transfer Rules? Data transfer rules determine which values are transferred from the sample account and how. You specify a rule for each field that is to be transferred. The rules are grouped into rule types. The following is true for data transfer rules: You define rule types independent of the sample account. You assign a rule type to a company code. Consequently, rule types are company code-specific. You can define as many rule types as you require. Several company codes can use the same rule type. The rules take effect when you create a master record and also when you change a master record in the corresponding company code. Use You use the rules to specify for each company code: The fields to be included in the sample account Whether transferred field data can be overwritten (default value) Whether transferred field data is mandatory (required value) The individual rules are grouped into rule types. You assign rule types to the company code to which they are to apply. Using rule types, you can specify separately for each company code how the data is transferred. You can transfer data in one company code as required values and in another company code as default values. If you do not want to apply the sample account specified in the chart of accounts to a particular company code, you simply do not enter a rule type for this company code. Structure The following table explains individual data transfer rules. What do the data transfer rules mean? Rule Meaning Value is transferred from sample The value from the sample account is

104 account Field cannot be changed, if set transferred into the master record and can be overwritten. If a value is contained in the field of the sample account, it can no longer be overwritten in the master record. If no value is contained in the field of the sample account, nothing can be entered in the master record of the G/L account. A blank is also regarded as an initial value.

Field cannot be changed if contains its initial value

By selecting the rules, you determine which rule should be valid for a field. If no rule was marked for a field, the value from the sample account is not transferred. Q27. What is Posting Key ? Posting Key is a two-character numerical key that controls the entry of line items. The posting key determines: Account type Debit/credit posting Layout of entry screens This key determines how the item is posted. Posting keys are defined at client level and therefore apply to all company codes. SAP delivers predefined posting keys with the standard system. The following table lists some of the posting keys in the standard system. Posting keys in the standard system Posting Key Description 40 G/L account debit posting 50 G/L account credit posting 01 Customer invoice 11 Customer credit memo 21 Vendor credit memo 25 Vendor payment 31 Vendor invoice Integration

105 The document type specifies which account types you can post to. The posting key specifies which account types you can post to. A posting key can only be entered for an account type which is permitted for that document type. Q28. What is an Account type? Key that specifies the accounting area to which an account belongs. Examples of account types are: Asset accounts Customer accounts Vendor accounts G/L accounts The account type is required in addition to the account number in order to identify an account, since the same account number can be used for each account type. Q29. What is Reference Method of Posting? The reference method is a document entry tool. If you frequently post the same documents with the same data, you can save time and avoid errors by using different reference methods for document entry. We can use any of the following reference methods: Posting with Reference Documents Posting with Account Assignment Models Posting with Sample Documents Recurring Entries Q30. What is a Posting with Account Assignment Models? A reference for document entry that provides default values for posting business transactions. An account assignment model can contain any number of G/L account items and can be changed or supplemented at any time. In contrast to sample documents, the G/L account items for account assignment models may be incomplete. If you frequently use the same broad account assignments, such as a distribution of amounts to several company codes, accounts, or cost centers, you can use the account assignment model method to save input time and avoid input errors. You can also assign equivalence numbers to account assignment models. In this case, you simply enter a total amount, which is then distributed, to the items within the model according to set ratios. Creating or Changing Account Assignment Models

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To create or change an account assignment model, proceed as follows: 1. In the General Ledger, Accounts Receivable, or Accounts Payable menu, select Document entry Reference documents Account assignment model. 2. Enter a name for the account assignment model. The system saves the account assignment model under this name. Select Create or Change. When you create an account assignment model, an additional field is displayed in which you can enter the name of an existing account assignment model. To display a list of the models available, use the possible entries help. Save your entries. 3. Maintain the attributes of the account assignment model: Currency To enter amounts in the account assignment model, you must also enter a currency key. The model can then only be used for postings in the specified currency. If you do not want to specify amounts, leave the currency key field blank. The account assignment model can then be used for any currency. Chart of Accounts If you do not want to specify a company code in the line items of the account assignment model, but want the system to check that the specified accounts exist, you can enter a chart of accounts. Sample Text If you want to provide an explanatory text for the account assignment model, you can enter a sample text. Note that the text, like the document header text, is not language-dependent.

Authorizations You can limit authorization for an account assignment model to certain users by specifying an authorization group. Calculate tax If you select this field, the system calculates taxes automatically during posting. Equivalence to Select this field if you want to distribute a total amount to several items using equivalence numbers. When you use this account assignment

107 model, you enter an amount, which is then distributed to the items according to the equivalence numbers specified. 4. Use Goto Line items to access the screen for entering the line items in the account assignment model. Before entering the line items, you have the option of changing the entry screen. Use Settings Screen template to select a screen, which meets your requirements. 5. Enter the line items with the posting data, which you want the system to propose. 6. Save your entries. Using Account Assignment Models for Document Entry Prerequisites Enter the document header data. Procedure To use an account assignment model for document entry, proceed as follows: 1. To call up an account assignment model, choose Goto Account assignment model from the menu, or the button Account assignment model. A dialog box appears for you to enter the key for the required account assignment model. Alternatively, to skip a step in the procedure, you can call up an account assignment model via the entries in the line at the bottom of the screen. In the First line item section, enter 00 in the Posting key field and the name of the account assignment model in the Account field. Save your entries. 2. The account assignment model is displayed as it was entered. You can change, add to, or delete the proposed data to meet your requirements. You can also add items, without having to change to the standard document entry procedure. If you are using an account assignment model with equivalence numbers, you cannot enter amounts in the items. Instead, the screen header contains two fields in which you enter the debit or credit amount which is to be distributed. The system then automatically distributes the amount to the items. 3. Once you have finished editing the account assignment model, you can either return to the standard entry procedure, or post the document directly.

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To return to the standard entry procedure, select Back. You will usually return to the document overview. If you called up the account assignment model from open item processing within a clearing transaction, you return to the open itemprocessing screen. To post directly, select Save. Provided no errors are found, the document is posted. Q31. What are the Recurring Entries? Recurring entries are business transactions that are repeated regularly, such as rent or insurance. The following data never changes in recurring entries: Posting key Account Amounts You enter this recurring data in a recurring entry original document. This document does not update the transaction figures. The recurring entry program uses it as a basis for creating accounting documents. In the recurring entry document, you define when a posting is to be created with this document. You have two options for scheduling. Postings can be made periodically or on a specific date: For periodic postings, specify the first and last day of execution, as well as the interval in months. If you want to specify certain dates, enter a run schedule in the recurring entry original document. Store the required dates in the Implementation Guide (IMG). Choose Financial Accounting Global Settings Document Recurring Entries Define Run Schedules/Enter Run Dates. Program SAPF120 creates accounting documents using the recurring entry original documents. You have to run the program at regular intervals. It checks each recurring entry original document to see if a document should be created. Recurring Entries Process Flow Using recurring entries requires the following steps: 1. You enter a recurring entry original document once. In this document, you enter the data necessary for posting accounting documents, such as the amount, account number, and posting key. You also enter control information: Day of the first run, day of the last run, and scheduling dates.

109 2. Run the recurring entry program at the intervals you require. It determines which recurring entry documents have to be processed and creates a batch input session that contains the following: - Data required to post accounting documents - Data for updating recurring entry documents. This includes next run date, the number of runs, and a deletion indicator if necessary. 3. Process the batch input session. This posts the accounting documents, updates the transaction figures of the accounts posted to, and updates the recurring entry documents themselves. Q32. What is Financial Statement Version? Financial Statement Version is the Hierarchical arrangement/positioning of G/L accounts. The accounts can be arranged in accordance with the legal regulations used to generate your financial statements. Alternatively, you can arrange the accounts in accordance with your requirements. Use You need a financial statement version for the following functions: To create and print financial statements To run various reports, such as a structured list of account balances As a basis for planning in General Ledger Accounting You can define several different financial statement versions. This may be necessary if you want to generate the financial statements using different formats. Q33. What is a GR/IR Clearing Account? GR/IR Clearing Account is an account, which is posted to in the following cases: Goods received which have not yet been invoiced Invoices for goods, which have not yet been received When you receive the goods (or invoice), the system makes an offsetting posting to the GR/IR clearing account. The respective items are not cleared. Q34. What are Onetime accounts? Account on which the transaction figures for a group of customers/vendors with whom the business is conducted once or rarely is recorded. One-time accounts require a special master record.

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Certain customer/vendor data such as address and bank details is not entered in the master record but in the document itself. For One time customer/vendors we can create a special customer/vendor master record, the master record for "one-time accounts" in contrast to other master records, no data specific to a single customer is stored in the one-time master record, since this account is used for more than one customer. The customerspecific entries such as address and bank details are not entered until the document for the transaction is entered into the system. When we post to a one-time account, the system automatically goes to a master data screen. On this screen, enter the specific master data for the customer, which is stored separately in the document. This includes name, address, and bank data, for example. We can process the master record for a one-time account in the same way as all other customer master records are processed. We can dun open items from it with the dunning program or pay items using the payment program. The functions for one-time customers are only different in a few aspects. For example, you cannot clear amounts with a vendor. Customer master records for one-time accounts are created with their own account groups. Via this account group the customer-specific fields (such as Name, Address and Bank details) are hidden from display when you enter the customer master record. For line item display, enter a key for sorting line items in the Sort key field. Keys 022 and 023 are provided in the standard system. Enter 022 to have the system sort and display line items by name and city. Enter 023 to have the system sort and display line items by city and name. The line items of customers in the same city are displayed together. Sort criteria can also be specified when entering a document. These criteria will override the sort keys specified in the master record. Q35. What is the function of Reconciliation Account? The Reconciliation Accounts are specified in the master record of customers/vendors, so that all postings made to a subsidiary ledger are also posted to the general ledger. Make an entry in the Reconciliation account field in the master record. Features

111 When the items are posted to a subsidiary ledger, the SAP system automatically posts the same data to the general ledger at the same time via the reconciliation accounts. Each subsidiary ledger has one or more reconciliation accounts in the general ledger. These reconciliation accounts ensure that the balance of G/L accounts is always zero. This means that the financial statements can be drawn up at any time without having to transfer totals from the sub ledgers to the general ledger. The reconciliation accounts are also used to make the following settings: Reconciliation account is used to configure the screens for posting items to customer or vendor accounts. Using the reconciliation account we could, for example, suppress the fields for entering exchange rate hedges if these types of transaction are not made. Reconciliation account is used to specify which currencies can be used when posting to the corresponding customer or vendor accounts. Usually we enter the local currency in the master record. Postings can then be made in all currencies to the customer and vendor accounts that the reconciliation account is assigned to. However, we can also enter a foreign currency key in the master record of the reconciliation account. In this case, we can only post to the relevant customer and vendor accounts in the foreign currency specified. Q36. How is the Customer Master Data is arranged? Customer master records contain the specifications that control how an account is processed. Therefore we must create a master record in the system for each account that is required. Master records are divided into the following areas so that each company code and each sales organization can store its own information for doing business with customers: General data This is data that applies to every sales organization in your company. The general area includes, for example, the customer's name, address, language, and telephone data. Company code data This is data that is specific to an individual company code. Company code data includes, for example, the reconciliation account number, terms of payment, and dunning procedure. Sales area data

112 This is data relevant to the sales organizations and distribution channels of your company. Data that is stored in this area includes, for example, data on order processing, shipping, and billing. Q37. What are the fields in the Customer Master records? Company code data 1. Account Management group Reconciliation Account, Cash Management group, Previous Account Number, Sort Key, Head Office, Authorization, Preference indicator, Interest Caluculation, Buying group, Personnel number, Release approval group, Gross Income-tax, Value adjustment Key. 2. Payment Transactions group Terms of payment, B/Exch. Charges terms, Payment Block, Payment methods, Alternative Payer account, Clearing with vendor, Bill of Exchange limit, Next Payee, Indicate Payment History, Tolerance group, House Bank, Known/Negotiated leave, Lock box, Payment advice via EDI, Payment advice notes, Single Payment, Grp Key, PM supl, Credit memo terms of payment, Diff. Payer in document, Accts. Rec. pledging indicator, 3. Correspondence group Payment Notices, Accounting clerks communication, Dunning data, Account Statement, Local processing, Collective Invoice variant, Account at Customer, Accounting Clerks, and Users at Customer, Account memo. 4. Insurance group Export Credit Insurance 5. With-holding tax data with tax2 W/holding tax deduction with tax2, Withholding tax code 2, Withholding tax number, and Withholding tax types. Q38. What are the configurations to be done for offsetting customer accounts with vendor accounts or vice versa? If a customer is also a vendor, or vice versa, we can have the payment program and the dunning program offset the customer and vendor open items against

113 each other. We can also select the vendor line items when we display the customer line items for this account. This is done by way of defining Clearing Between Customer and Vendor in the master records. A check box Clearing with vendor is provided in the customer master records A check box Clearing with customer is provided in the vendor master records The system offsets the open items of the selected customers and vendors against one another in the dunning program and in the automatic payment program. Before we can clear items between a vendor and customer account, we must: Create a customer master record for the vendor that is also a customer. Enter the vendor account number in the Vendor field in the control section of the general data in the customer master record. Enter the customer account number in the Customer field in the control section of the general data in the vendor master record. Choose Clrg with vend. and Clrg with cust. in the company code data in both the customer and vendor master records. In this way, each company code can decide separately whether it wants to offset the customer against the vendor.

Q39. What is the importance of the indicator Accounts Receivable Pledging? Accounts Receivable Pledging indicator is the indicator for receivables from goods and services that is used for financing purposes. It is merely an indicator that is used for subsequent evaluations; setting the indicator does not trigger any process with a third party (for example, bank or credit provider). This indicator is set in the customer master record or in the document, and then display the receivables separately in the line item display and the open item list.

Q40. What are the Special GL transactions? Special G/L transactions are special transactions in accounts receivable and accounts payable that are displayed separately in the general ledger and the sub

114 ledger. This may be necessary for reporting or for internal reasons. This is achieved by posting to alternative reconciliation accounts, instead of posting to the reconciliation accounts for receivables and payables. The following special G/L transactions are available: Down payments and down payment requests Bills of exchange receivable, bills of exchange payable and checks/bills of exchange Bank bills Payment requests Guarantees Reserves for bad debt Security deposits To post special G/L transactions you require special posting keys, which are supplemented by a special G/L indicator. Posting Keys for Special G/L Transactions Posting key Description 09 Outgoing debit posting 19 Outgoing credit posting 29 Incoming debit posting 39 Incoming credit posting

Usage (example) Payment of bill receivable Down payment received Down payment made Payment of bill payable

A special G/L indicator identifies special G/L transactions. The system uses the specifications (posting key and special G/L indicator) to determine the alternative reconciliation account.