Chart of Accounts – OBY7

FICO Configuration Series – Part 2

Financial Accounting Enterprise structure

The FI Enterprise structure is the backbone of the organization. Most other modules build upon the FI organizational elements that are created in the enterprise structure. This is also the basis on which all other FI CO configuration would follow. A consultant would need to gather the existing structure from the Business Analysts in the project. She/he would also have to carefully analyze the organization structure provided to him before setting up the FI configuration. Also keeping in mind the future plans of how the organization would look in the future will also help.

FI and CO – essential difference

It would be prudent for the consultant to explain the difference between FI and CO to the project management team and business associates at the very beginning of the project.

FI

The main reporting purpose of FI is for external reporting – Securities exchange commission, Internal Revenue Service, etc

CO

The main reporting purpose of CO is for internal managerial reporting

Chart of Accounts

Settling on a chart of accounts with the users in the client sites is one of the big hurdles to overcome in a project. End-users may be used to having a long chart of accounts with it serving the reporting needs of internal and external purposes. The internal and external account numbers depended on the G/L account numbers.

First step for the consultant would be to review the existing list for deletions. Copy an existing chart of accounts (SAP delivers chart of accounts for US – CAUS). Use the following IMG menu path:

Financial accounting >> General Ledger Accounting >> G/L Accounts >> Master Data >> G/L Account Creation >> Copy (alternative 1) >> Copy Chart of Accounts

Transaction Code OBY7

Some of fields used in this screen are explained below:

Chart of Accounts:
Enter the four-digit alphanumeric identifier of the chart of accounts you wish to create. There is no right or wrong way to come up with a chart of account identifier, but usually the entry is all characters.

 

Chart of Accounts Name: Enter the description for your chart of accounts. The field is alphanumeric and can contain up to 50 characters.

 

Financial Stmt Vers: Enter the four-digit alphanumeric identifier of the financial statement version you wish to create. The financial statement version is used by SAP to form your company’s standard Balance and Profit and Loss statements. For now, you only need to enter a placeholder to be used later.

 

Fin. Stmt Version Name: Enter a descriptive name for your financial statement version. The entry is alphanumeric and can contain up to 50 characters.

 

Chart of Accounts: Enter the four-digit alphanumeric identifier of the chart of accounts you wish to copy from. A listing of all available charts can be seen from the drop-down box on this field.

 

Financial Stmt Vers: Enter the four-digit alphanumeric identifier of the financial statement version you wish to copy from. A listing of all available financial statement versions can be seen from the drop-down box on this field.

    

Generally, each SAP delivered chart of accounts has a corresponding financial statement version already created. Make sure you select the financial statement version that goes with your chart. For US, use CAUS as the chart of accounts and use BAUS as the sample financial statement version.

After you complete configuration in this screen, Chart of Accounts is copied and ready to use.

Assignment: Saks Apparel will utilize a single chart of accounts to be used by all of its company codes. The Mexican subsidiary company will utilize a country chart of accounts in addition to the standard chart of accounts. Because Saks Apparel is a US based company, CAUS was used to create SACA (Saks Apparel Chart of Accounts) and BAUS was used to create SA01 (Saks Apparel Financial Statement version).

ERP Software and Customization

FICO Configuration Series – Part 1

If you are not new to SAP configuration, skip this post.

If you don’t know what SAP is, click here….

  • Almost every other module affects FI/CO modules. Example: when a HR consultant runs the payroll incorrectly and posts it to the FI/CO modules, this affects the FI/CO consultants. So, FI/CO consultant mostly ends up reviewing all the financial updates to the system. As a FI/CO consultant, keep all this in your mind. So, the first thing you would ask yourself when you face a problem is which updates have come in from other systems J

What and Why ERP?

Companies can choose between buying packaged software and building applications from scratch to suit the organization’s needs.

Buy Packaged Software

Build Customer specific applications

Is the recent Trend

Old fashioned

Customizing the software for company’s needs

Develop Information systems that meet the specific requirement for the company

Better suited to meet the timeline based on experience

Tedious process especially given missed/changing business requirements

Software is updated regularly by the software provider on a regular basis

Maintenance was very costly as most of the programmers were retained

Integrated systems especially ERP software like SAP ensure data is not updated real-time and the various systems are well integrated

Various systems which were built were fragmented and stored data repetitively thus resulting in out-of-sync data

 

ERP (Enterprise Resource Planning) systems provide single source of data with designed integration between different functional modules to take advantage of an enterprise’s stored information.

What is Customization?

For these systems, a common set of source code was needed for these packages so that changes in technology could be rapidly introduced via upgrades to the programs. To facilitate these systems, a new way of customizing systems was needed. This new way was known as table-driven customization or configuration. Table-driven customization allows for rapid changes in business requirement with a common set of source code or programs. This is what makes the ERP systems so flexible.

Configuration of FI and CO

This series is intended for all aspirants who would like to be SAP FI or CO functional consultant. For others, like project managers who wish to take part in SAP implementations or SAP end-user – please choose the sections which are relevant for you.

 

I am planning to write a series on configuration of SAP for FI/CO. In this series, I will try to explain the FI module and its configuration. After I complete the FI module, I will take up the CO module which is very similar. If you are new to configuration, please start with my first post. I have also mentioned all SAP commands whenever I feel they were necessary. 

 

To explain the various configurations, I will take the example of Saks Apparel, a fictitious textile manufacturing company. It has six regionally based offices located in New York, Chicago, Los Angeles, Seattle, Kansas City and Atlanta. It also has a Mexican subsidiary. The company has 6 different product lines: winter wear, inner wear, casuals, denims, formal wear and suiting. It is made up of four legal entities: Saks Woolen Inc., Saks Knitwear, Saks International and Saks Textiles Inc.

 

This is first attempt at a complete series. Previously I have blogged about a number of aspects in SAP. So, please excuse me if I am not very good at this. Add my webpage to your favorites or read my pages using feed readers. You can also add my webpage to social bookmarking sites such as Delicious, Technocrati, etc – this helps get this site to a lot of other surfers.

 

Please feel free to give out your comments. Your comments will help me to improve my blog and also you can add or correct me with the comments. This helps in very healthy discussion.

    

I will update the links to the series below:

Part 1 – Why use ERP Software and what is configuration?

Part 2 – Chart of Accounts – OBY7

Part 3 – Fiscal year Variant – OB29

Part 4 – Posting Period Variant – OBBO

Part 5 – Company Code Configuration – OX02

Part 6 – Company Code Global Parameters – OBY6

Part 7 – Define Countries – OY01

Part 8 – Define parallel currencies – OB22

Part 9 – Business Areass – OX03

Part 10 – Define FI Validations – GGB0

Part 11 – Activate FI Validation – OB28 or GGB4

Part 12 – Maintain Functional Areas – OKBD

Part 13 – Functional Area Substitution – GGB1

SIMPLE DOCUMENTS

1) Document header contains: Document and posting date, Doc, header text, company code, Reference no, etc.

2) For each FI transaction code (E.g. Invoice, Credit memo, G/L entry – F-02) you can define a document type and default posting key. (You can over write these default values while entering document.)

3) In Enjoy transactions : while entering customer/vendor Invoice/Cr.Memo transactions Vendor/Customer (Business partner) master data can also displayed along side the a/c name, address and bank details, and open line items can be accessed by pressing “Open Items” button. Entry screen also contains a/c balance display.

4) In Enjoy transactions via “Tree” you can access screen variants, a/c assignment templates and held documents at the left side of the screen.

5) You can enter explanatory text for line items with “*” in front of the text so as to print this text in dunning notices and payment advice notes.

6) In customizing you can define text templates under 4 digit key, these text templates are copied into line item when you enter the relevant key (E.g. DP = “DOWN PAYMENT”). While entering 4 digit key “=” needs to be entered before the key.

IMG:FI A/cing>Doc>Line Item>Define texts for line items.

POSTING AUTHORISATION

IMG: FI.A/cing> F.A.Global settings>Document>Doc Item> Define tolerance groups for Employees.

1) The maximum amounts are defined per company code in “TOLERANCE GROUP”. (This is also where the payment processing of payment differences is controlled)

2) In the tolerance groups you can enter Upper limits for the following :

i) Total amount per document. (The posting amount is the total of all debit items or, similarly, the total of all credit items.)

ii) Amount per customer/vendor item. (Limit is per customer, one document with more than one customer/vendors can be entered) The restriction does not apply to automatically created line items, for example, during payment settlements.

iii) Cash discount – which user with this tolerance group is able to grant.

3) If a user is not assigned to any special tolerance group, then entries in the tolerance group “___” (blank) are valid for them. (This is default tolerance group)

POSTING PERIODS

IMG: FI.A/cing> F.A.Global settings>Document>Posting Periods> Open and close posting periods.

1) Several Company codes can use same posting period variant.
2) The SAP system automatically determines the posting period and fiscal year based on the posting date entered. (Only special period needs to be manually changed)
3) The posting period variant is assigned to the company code.
4) Posting periods are defined in the fiscal year variant, Closing/opening posting period are carried out in posting period variant.
5) The posting period variant must contain at least the account type “+”.
6) During year closing, two period intervals (Normal and special periods) must be open at the same time.
7) In the document header, the periods assigned to the account type “+” are checked with posting date, whether posting period is open for that date or closed. At the line item level, the system checks the account type of the posting key to ensure that the period is open for the assigned account type.

DOCUMENT STRUCTURE / CONTROL

1) A document is saved for every posting. Every Document is uniquely identified by the Document Number, Company Code and Fiscal Year.

2) A Document contains Document header + 2 to 999 line items.

3) Document Type : Controls the Document header and classify the business transactions to be posted.

>> Posting Key : Controls the Line items.

4) Document types are defined at client level. Document types define the following:

a) Number ranges for Document number.

b) Account types permitted for postings. And also

c) The field status of “document header Text” and “Reference number” in the Document header.

d) Whether the invoices are posted with net procedure.

5) Standard Document types are :

KR – Vendor Invoice DR – Customer Invoice.

KG – Vendor Cr.Memo. DG – Customer Cr.Memo.

KZ – Vendor Payment DZ – Customer Payment.

AB – General Document SA – G/L a/c posting.

6) Document numbers can have internal or external number assignment.

7) Up to a future fiscal year – Number range will continue irrespective of year end.

For each fiscal year – At the start of a new year the system starts the number assignment again at the start of the number range. (You need to define number range for every new fiscal year)

8) The document number range must not over lap.

9) Document type AB allows postings to all account types.

10) One number range can be assigned to several document types.

11) Posting keys are defined at client level.

12) Posting keys control:

i) On which type of account the line item can be posted to

ii) The item is posted as a Debit or Credit.?

iii) The field status of additional fields.

In addition to this posting key specifies the following:

>> Whether line item is connected to payment transaction or not.

>> Whether posting is sales relevant.

13) Document line item fields are controlled by :

a) G/L Account specific field status group assigned to the G/L account while creating. (Account specific field status groups are summarized under field status variant which is assigned to company code) If the document is posted to a sub ledger a/c, the field status group of the reconciliation a/c is used.

b) Posting key specific field status group.

(The field status HIDE cannot be combined with the field status REQUIRED entry which causes an error.)

14) Document type does not have default posting key or vise versa. For each FI transaction (E.g. Invoice, Credit memo, Out going payment) you can define a document type and default posting key at:

IMG:FI A/cing>F.A.Global Settings>Document>Default values for document processing>Default values.

(E.g. When posting outgoing invoices, you use the document type “DR” and

posting key “01”. You can store these specifications in the system. They

are proposed by the system when you call up the corresponding

transaction).

SAP FI/CO Interview and Certification Questions – Part 5

Organizational Units

1. Select the correct statements

a) The controlling area is the highest reporting level for profitability analysis
b) Data for overhead cost controlling is extracted from the operating concern
c) Product cost controlling extracts data from the controlling area
d) The business area is an organizational unit within financial accounting
e) Profit center accounting is a component of overhead cost controlling

2. Which of the following statements are true or false

a) The controlling area currency must be defined as the group currency
b) Company codes assigned to the same controlling area must have the same operational chart of accounts
c) Profit center accounting extracts data from the controlling area
d) The product cost controlling component enables you to calculate the minimum price at which a product can be profitably marketed
e) Profitability analysis is used to evaluate external market segments

Master Data

3. Select the correct statement(s)

a) Cost centers are assigned to the standard hierarchy through the master record
b) Cost centers can be assigned to any level in the standard hierarchy
c) Cost center categories enable you to assign the same characteristics to similar cost centers
d) All primary cost elements have a one to one relationship with the general ledger expense accounts
e) Secondary cost elements can only be created and used within controlling

4. Which of the following statements are true or false

a) All activity types can be used with all cost centers
b) An activity type allows you to allocate costs from FI according to tasks that were performed by other departments
c) Statistical key figures can be defined as either a fixed value or a totals value
d) Master data that can be grouped together include controlling areas and operating concerns
e) Activity types cannot be grouped like cost centers, cost elements and statistical key figures

Transaction Based Postings

5. Select the correct statements

a) Document numbering is defined according to the grouping of controlling transactions
b) When posting to a cost center and true order, the posting to the cost center becomes statistical
c) Profit center postings can be true postings if the indicator is selected in the master record
d) Postings to cost centers primarily arise out of transaction based postings in FI
e) When posting a transaction within FI, only one true object and one statistical object can be selected

6. Which of the following statements are true or false

a) Default cost centers can be specified in the cost element master record
b) Default cost elements can be specified in the cost center master record
c) Profit centers defaulted from the cost center master record, when posting an expense in FI can be changed in the document
d) Default values from customizing take preference over default values from the master records
e) Line items that are reposted in CO update the cost center in the original document in FI

Period-end Closing 

7. Select the correct statement(s)

a) Costing sheets are defined for the percentage method of the accrual calculation
b) Periodic reposting is performed when costs are manually reposted from one cost center to another according to a specific statistical key figure
c) The assessment cycle allows for the collection of both primary and secondary costs, and reposts the values using the original cost elements
d) Distribution is the method by which primary costs are reposted using the original cost elements
e) Allocation structures assigned to the distribution cycle allow for the grouping of cost elements and repost using secondary cost elements

8. Which of the following statements are true or false

a) The reconciliation ledger allows for the reconciliation of CO components
b) The period lock must be set for both plan and actual data
c) The period lock is automatically set when the FI period is closed
d) An overhead structure is assigned to a costing sheet
e) The results of an assessment can be reviewed in the cost center – actual/ plan/ variance report
Planning

9. Select the correct statement(s)

a) Planning profiles are defined with header rows and lead columns
b) Multiple planning layouts can be assigned to a single planning profile
c) Distribution keys can only be used when planning for a single period at a time
d) Planning using activity types can only be performed if the statistical key figures are planned as well
e) Activity dependant planning means planning with the use of an activity type

10. Which of the following statements are true or false

a) In order to transfer planned data from HR, a valid employee master record must exist along with a valid cost center, and the two records must be linked
b) Plan distribution allows for the distribution of secondary costs
c) It is not possible to perform planning using statistical key figures
d) It is possible to copy actual data to planning data as long as the planning version has been created first
e) All controlling objects are automatically transferred when one plan version is copied over to another

Internal Orders

11. Select the correct statement(s)

a) All internal orders must be created according to a specific order type
b) Four categories of internal orders exist namely overhead, investment, financial and revenue orders
c) Statistical orders are used for reporting purposes only
d) Accrual orders allow for the raising of accruals on the order itself
e) Internal orders are company code specific and must reference a profit center in the internal order master record

12. Which of the following statements are true or false

a) Orders cannot be grouped like cost centers and cost elements
b) Substitution rules are used for mass maintenance to internal orders
c) A commitment can be raised on an order when a purchase order or purchase requisition is created
d) A settlement procedure must be specified for all order types
e) An allocation structure allows you to determine whether cost elements must be grouped together and settled using a specific cost element, or if the original cost element can be used for the settlement of true order values


SAP FI/CO – Interview and Certification Questions – Part 3

Clearing

1. Select the correct statement(s)

a) All open item accounts are cleared automatically by running the automatic account clearing program
b) The open item indicator in the customer/ vendor master record must be activated in order to clear customer/ vendor open items
c) The open item indicator along with the line item display indicator is usually activated in the balance sheet clearing and profit and loss accounts
d) Accounts that are not automatically cleared can be cleared manually using the account clear function
e) A clearing document contains the line items to be cleared

2. Which of the following statements are true or false

a) All payment documents are clearing documents
b) Standard system maintenance includes clearing open items on a regular basis, either manually or automatically
c) Standard open items, special G/L transactions and noted items can be selected for clearing
d) If documents were cleared in error, the clearing must first be reset and the document must be reversed before attempting to clear again
e) Documents that are cleared have reference to the clearing document number in the document line items

Tolerances and payment differences

3. Select the correct statement(s)

a) Tolerance groups can be defined for customers, vendors and employees
b) The tolerance groups contain settings for permitted payment differences
c) Alternative accounts can be specified for the posting of payment differences
d) The values specified for the tolerances can be entered in a currency of your choice
e) All users that were not assigned to a tolerance group are by default assigned to the blank tolerance group

4. Which of the following statements are true or false

a) Tolerance groups can be assigned to general ledger accounts
b) Permitted payment differences are either defined as an amount or a percentage, not both
c) A reason code must be specified in the tolerance group for charging off payment differences
Financial Statements

5. Select the correct statements

a) Financial statements are defined according to financial statement versions
b) Financial statements can have a maximum of 10 hierarchy levels and are company code specific
c) Accounts can be assigned to different nodes in the hierarchy of the financial statements
d) Amounts are reflected in various groups within the financial statements according to the debit/ credit indicator and the specification of the general ledger accounts
e) Companies are restricted to 3 financial statement versions according to the 3 different charts of accounts

Payments

6. Which of the following statements are true or false

a) Payments from customers are usually processed using the automatic payment program
b) Customizing the automatic payment program includes defining payment methods by country as well as by company code
c) Partial payments clear the open items and cause residual items to be posted back to the account
d) Line items that are created when charging off the difference back to a vendor’s account, have reference to the original document that is being short paid
e) A document which is selected in the payment run, can be reallocated to a different payment method and house bank

7. Select the correct statement(s)

a) All vendor line items can be paid, as long as there is a reference to the house bank in the vendor master record
b) Every general ledger account that is linked to a house bank, must be maintained in the currency of the bank account
c) Specific programs linked with specific variants are used to create various types of payment media
d) Cheques (checks) that are not used are automatically voided by the system
e) All vendors must be assigned to a payment procedure in the master record in order to generate payments from the automatic payment program

Dunning

8. Which of the following statements are true or false

a) A dunning procedure must be assigned to the customer master record in order to dun the customer for late payments
b) Customers are only dunned according to the settings in the dunning procedure, which include the frequency, whether or not line items are printed with every letter that is issued, and how many grace days the system will accept before issuing a dunning letter
c) Dunning charges are levied on the customer’s account, and are reflected as a separate line item on the dunning letter
d) Interest can also be levied on the customer’s account according to the interest indicator in the customer master record
e) The master record of the customer is updated with the dunning level according to the highest dunned document in the customer account
f) Customers can be blocked from dunning by entering a dunning block key in the customer master record

Financial Closing

9. Select the correct statement(s)

a) An unrealized foreign currency valuation is created every time a foreign currency payment is made or received
b) Balance sheet accounts should be valuated according to the line items in the account
c) Assets are depreciated according to the depreciation key and useful life specified in the asset master record
d) The asset register is updated independently of the general ledger accounts for accumulated and expense depreciation
e) Balance confirmations are customized in the IMG, and cannot be linked to SAPScript forms

10. Which of the following statements are true or false

a) All reports must be executed using set variants, or user defined variants
b) The GR/IR account is a clearing account that must be maintained regularly by clearing open items
c) The balance carried forward program carries the balances of the accounts forward into the new posting period
d) The reconciliation ledger allows you to automatically reconcile the financial accounting and controlling modules
e) Assets under construction are settled periodically to fixed assets
f) Accrual documents are automatically reversed on the first day of the following period


SAP FI/CO – Interview and Certification Questions – Part 4

Clearing

1. Select the correct statement(s)

a) All open item accounts are cleared automatically by running the automatic account clearing program
b) The open item indicator in the customer/ vendor master record must be activated in order to clear customer/ vendor open items
c) The open item indicator along with the line item display indicator is usually activated in the balance sheet clearing and profit and loss accounts
d) Accounts that are not automatically cleared can be cleared manually using the account clear function
e) A clearing document contains the line items to be cleared

2. Which of the following statements are true or false

a) All payment documents are clearing documents
b) Standard system maintenance includes clearing open items on a regular basis, either manually or automatically
c) Standard open items, special G/L transactions and noted items can be selected for clearing
d) If documents were cleared in error, the clearing must first be reset and the document must be reversed before attempting to clear again
e) Documents that are cleared have reference to the clearing document number in the document line items

Tolerances and payment differences

3. Select the correct statement(s)

a) Tolerance groups can be defined for customers, vendors and employees
b) The tolerance groups contain settings for permitted payment differences
c) Alternative accounts can be specified for the posting of payment differences
d) The values specified for the tolerances can be entered in a currency of your choice
e) All users that were not assigned to a tolerance group are by default assigned to the blank tolerance group

4. Which of the following statements are true or false

a) Tolerance groups can be assigned to general ledger accounts
b) Permitted payment differences are either defined as an amount or a percentage, not both
c) A reason code must be specified in the tolerance group for charging off payment differences
Financial Statements

5. Select the correct statements

a) Financial statements are defined according to financial statement versions
b) Financial statements can have a maximum of 10 hierarchy levels and are company code specific
c) Accounts can be assigned to different nodes in the hierarchy of the financial statements
d) Amounts are reflected in various groups within the financial statements according to the debit/ credit indicator and the specification of the general ledger accounts
e) Companies are restricted to 3 financial statement versions according to the 3 different charts of accounts

Payments

6. Which of the following statements are true or false

a) Payments from customers are usually processed using the automatic payment program
b) Customizing the automatic payment program includes defining payment methods by country as well as by company code
c) Partial payments clear the open items and cause residual items to be posted back to the account
d) Line items that are created when charging off the difference back to a vendor’s account, have reference to the original document that is being short paid
e) A document which is selected in the payment run, can be reallocated to a different payment method and house bank

7. Select the correct statement(s)

a) All vendor line items can be paid, as long as there is a reference to the house bank in the vendor master record
b) Every general ledger account that is linked to a house bank, must be maintained in the currency of the bank account
c) Specific programs linked with specific variants are used to create various types of payment media
d) Cheques (checks) that are not used are automatically voided by the system
e) All vendors must be assigned to a payment procedure in the master record in order to generate payments from the automatic payment program

Dunning

8. Which of the following statements are true or false

a) A dunning procedure must be assigned to the customer master record in order to dun the customer for late payments
b) Customers are only dunned according to the settings in the dunning procedure, which include the frequency, whether or not line items are printed with every letter that is issued, and how many grace days the system will accept before issuing a dunning letter
c) Dunning charges are levied on the customer’s account, and are reflected as a separate line item on the dunning letter
d) Interest can also be levied on the customer’s account according to the interest indicator in the customer master record
e) The master record of the customer is updated with the dunning level according to the highest dunned document in the customer account
f) Customers can be blocked from dunning by entering a dunning block key in the customer master record

Financial Closing

9. Select the correct statement(s)

a) An unrealized foreign currency valuation is created every time a foreign currency payment is made or received
b) Balance sheet accounts should be valuated according to the line items in the account
c) Assets are depreciated according to the depreciation key and useful life specified in the asset master record
d) The asset register is updated independently of the general ledger accounts for accumulated and expense depreciation
e) Balance confirmations are customized in the IMG, and cannot be linked to SAPScript forms

10. Which of the following statements are true or false

a) All reports must be executed using set variants, or user defined variants
b) The GR/IR account is a clearing account that must be maintained regularly by clearing open items
c) The balance carried forward program carries the balances of the accounts forward into the new posting period
d) The reconciliation ledger allows you to automatically reconcile the financial accounting and controlling modules
e) Assets under construction are settled periodically to fixed assets
f) Accrual documents are automatically reversed on the first day of the following period