Define Countries – OY01

FICO Configuration Series – Part 7

Define Countries

Global Settings >> Set Countries >> Define Countries

Transaction Code: OY01

In the first screen, you need to select the country (MX) – the next screen that pops up will require the following details:

Hard Currency: Enter the key of you want to set as hard currency for the country. Hard currencies are used in countries with high inflation to improve the value of the transactions. When a hard currency is selected, the document is automatically updated in the local currency and the hard currency.

Index-Based Currency: Index currencies are used for statutory purposes in some countries with very high inflation. The way index currency valuation reporting works depends on the rules of each specific country. Enter the key of the currency that you want to set as index currency, if applicable, for your country.

Date Format:
Enter Date preference. Also keep in mind whether Europeans may use the same database at some future time.

Decimal Format:
Decimals using periods or commas. Also keep in mind whether Europeans may use the same database at some future time.

Although hard currency has been configured at country level, to activate this feature, hard currency needs to be configured at the company code level be defining parallel currencies.

Company Code Global Parameters – OBY6

FICO Configuration Series – Part 6

Company Code Global Parameters

Here is where we link the company code to the chart of accounts, fiscal year variant and posting period variant among other settings.

Financial Accounting >> Financial Accounting Global Settings >> Company Code >> Enter Global Parameters

Transaction Code: OBY6


 

Company: Company consists of one or more company codes. Used generally in legal consolidation module to roll up financial statements of several company codes. Use a 6 character alphanumeric identifier that relates to this company.

FM Area/Financial Management Area: They are used in treasury module, specifically for funds management. Funds Management allows the organization to budget commitment and financial resources. If you are using Funds Management, enter the four character identifier of FM Area. If you are using Investment Management along with Funds Management, the FM areas must be assigned to controlling areas assigned to your company codes. FM areas can contain more than one company code.

Credit Control Area: Credit Control Area controls the credit limits for the organization’s customers. A Credit Control Area can be assigned to many company codes, but a company code can linked to only one credit control area.

Ext.Co. Code: If you are using ALE, Check this field.

X-System Co. Code: If Ext. Co. Code is checked (i.e. if ALE is used), the corresponding external company code ID is entered here. For Example, Company Code of 1001 might have been linked to Company Code ID of EXCC01 that relates to Company Code 1001 in the other ALE system.

Company Code is Productive: (This setting is done only in production client). Once the company code is set to productive, it becomes impossible to delete transactional data from the SAP system.

VAT Registration Number: If company is subject to EU regulations, enter VAT registration number here.

Business Area balance Sheet: Set this indicator if Business Areas are used for the organization.

Document Entry Screen Variant: This setting controls country-specific on- screen gelds for accounting documents. The most common U.S. setting is 21 this setting is for countries with withholding tax, like the U.S.

Assign the company code to the chart of Accounts (SACA), fiscal year variant (SA) and posting period variant (US01). Currently legal consolidation funds management and fixed assets are beyond our scope. Saks Apparel has used document entry screen variant 2 because company code 1000 is a US-based company that utilizes withholding taxes. The CFO has determined that a 10% exchange rate deviation is acceptable. The standard field status variant 0001

Company Code Configuration – OX02

FICO Configuration Series – Part 5

Company Code

Company code is representative of a stand-alone legal entity that requires its own set of accounting records for reporting purposes. For detailed description of company codes with examples click here. For SPRO path for Company codes, Click here.

Enterprise Structure >> Maintain Structure >> definition >> Financial Accounting >> Define, Copy, delete, Check Company Code

Transaction Code: OX02

Enter the Company code details such as description, country and address details. All Address details are stored in table SADR. SAP recommends that all the address details are not transported – rather they are to be maintained by hand in the production client.

Company Code: Enter the four-digit alphanumeric identifier (normally number from 1000 upwards are used)

For Saks Apparel, the company has decided to all numeric company codes. In the contents post we assumed 4 legal entities – Saks Woolen Inc, Saks knitwear, Saks Textile and Saks International. Saks International is based on Mexico. All 3 others are based in USA.

Next: Define Company Code Global Parameters

Posting Period Variant – OBBO

FICO Configuration Series – Part 4

Posting Period Variant

This controls which posting periods (normal and special) are applicable for each company code. It is possible to have a different posting period variant for each company code. The posting period variant is independent of the fiscal year variant.

Financial Accounting >> Financial Accounting Global Settings >> Document >> Posting Period >> Define variants for open posting periods

Transaction Code: OBBO

Assignment: With the implementation of SAP, Saks Apparel has decided to streamline its back office functions. Before SAP implementation, each company within Saks Apparel operated its own accounting department independently. Using SAP, there will be only two accounting departments: one for the US based companies and the one for the Mexican based company. Because of this change only two posting period variants, US01 and MX01, are needed. All US based companies will be closed at the same time. The Mexican based company (and any additional future Mexican based companies) will be closed at the same time (different from the time US companies are closed).

Fiscal year Variant – OB29

FICO Configuration Series – Part 3

Fiscal year variant

The fiscal year variant determines the posting periods to be used by the client’s company. SAP allows a maximum of 16 posting periods each fiscal year – normally 12 regular posting periods and 4 special posting periods are used. The special posting periods are used for posting audit or tax adjustments to a closed fiscal year.

Financial Accounting >> Financial Accounting Global settings >> Fiscal Year >> maintain Fiscal year variant (maintain shortened fiscal year)

Transaction Code: OB29

You can copy existing values or create ones from scratch.

Financial Year Variant: Enter the two-digit alphanumeric identifier of your fiscal year variant. Avoid using K or V as the first character as SAP delivered financial year variants use them.

Calendar Year: Set this indicator if the fiscal year is also the calendar year.

Year-Dependent: Set indicator if fiscal year is changing from year to year.

Number of Posting Periods: Enter the Number of normal posting periods (maximum is 12) [correction based on comment – can be more than 12, thanks to Singh]

Number of Special Periods: Enter the Number of special posting periods

Annual Displacement: Enter values as -1, 0 or +1. For years which have the fiscal year same as the calendar year, always use 0. For -1 and +1 are used to offset whenever calendar year is different from the fiscal year.

Assignment: Saks Apparel operates on an April-March calendar month fiscal year. (So, copy any existing year variant that uses April-March year). Create a Financial year variant SA. We also setup 12 regular posting periods and 4 special posting periods.

Some more details on fiscal year variants configuration

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)