Let’s consider below example to understand operational chart of account in SAP
Company is selling laptops to customer. Takes services from vendors and pays rent to building owner.
Above picture shows the business activity and corresponding accounting entry to be recorded.
To be able to post above accounting entries, below general ledger accounts need to be set up in the company code.
General ledger for laptop inventory account
General ledger for cost of goods sold
General ledger for accounts receivable
General ledger for sales account
General ledger for bank account
General ledger for service account
General ledger for accounts payable
General ledger for rent expense account
Similarly in practical business scenario there will be various business transactions and in order to record corresponding accounting entry, appropriate general ledger account needs to be set up in company code.
Accounting entry is recorded in sap by posting a document. An accounting document will have few general ledger accounts debited and few general ledger accounts credited (net sum zero hence double entry book keeping).
General ledger account needs to be created prior to accounting document posting.
In sap, general ledger accounts are represented by a number. Each general ledger account will be represented by a unique number.
Below screenshot showing an accounting document which has two general ledgers account posted.
accounting document
General ledge for accounts payable is represented by number 11
General ledge for home expenses is represented by number 3
What is GL account group and operational chart of account ?
A company might have thousands of different accounts in their book of accounts. Hence thousands of general ledgers need to be created in sap. General ledger of similar nature is grouped together and is called as account group.
All account groups put together is called operational chart of accounts.
As the name suggests, chart of accounts is the list of all the accounts put together.
account groups in chart of accounts
Company is assigned chart of accounts.
Account groups are created under operational chart of account.
General ledger accounts are created under account group.
Each account group is assigned a number range. General ledger account when created under an account group has to be within account group’s number range.
While creating general ledger account (master data) you will have to provide input into various fields. Each field has its own significance.
General ledger master data fields and its significance is covered under separate topic, you will find as you proceed.
GL ACCOUNTING
- What is SAP FICO ?What business requirement is fulfilled in this module?
- What is enterprise structure in sap fico?
- What is GL account? What is account group? What is operational chart of accounts?
- What is the need of country chart of account or alternate chart of account? How country chart of account helps fulfill a business requirement?
- What is the need for group chart of account? How group chart of account helps in consolidation of financial data?
- What is non leading ledger in sap fico?
- What is company code global settings? What global parameter is assigned to company code?
- What is fiscal year variant? Why fiscal year variant is assigned to company code?
- What is posting period variant? Why posting period variant is assigned to company code?
- What is field status variant? What is field status group?
- What is document type in sap? Explain the purpose of document type?
- Document date vs Posting date vs Entry date vs Translation date. Explain
- What is posting key? what is the use of posting key?
- Document header & line items capture information of business transaction.
- Everything about currency & exchange rate in sap.
- Foreign currency valuation in sap. Explain with example
- Retained earnings account helps in year end balance carry forward. Explain
- What is the significance of tolerance groups in sap?
- What parameters are maintained in GL master and how does it impact in document posting?
ACCOUNTS PAYABLE
- What is meant by accounts payable in sap?
- Understanding procure to pay (PTP) cycle and accounting document at each step.
- Understanding MM FI integration in very simple terms.
- Purchase order price determination in SAP. Explained in very simple words.
- House bank, Bank key, Account ID in SAP
- What configuration (FBZP) needed for executing F110 in sap ?
ACCOUNTS RECEIVABLE
- How sap overcomes challenges in accounts receivable process?
- What is customer reconciliation account?
- Understanding order to cash cycle in sap.
- Understanding SD FI integration in very simple terms.
- What is lock box? How lockbox helps in collection from customers?
TAX ACCOUNTING
- How sap helps in tax accounting?
- Tax configuration in sap: Tax procedure, Tax code & Tax jurisdiction code
- Concept of tax jurisdiction code & tax jurisdiction structure
- Significance of “Tax category & Posting without tax allowed” in GL master.
- Tax base amount and Discount base amount
- Assigning tax code V0 & A0 for non taxable transaction?
- Deductible input tax vs non deductible input tax
WITHHOLDING TAX
- Withholding tax in sap explained with example.
- How sap overcomes challenges in managing withholding tax?
- Withholding at the time of invoice or payment
- Withholding tax configuration in sap
- Business place & Section code in sap
- Withholding tax certificate numbering in sap
- Withholding tax report for filling tax returns
ASSET ACCOUNTING
- How sap helps in asset accounting?
- What is meant by asset accounting?
- What is the use of asset class?
- What is the use of depreciation key in asset accounting?
- Depreciation area and Chart of depreciation in sap.
- Derived depreciation area VS real depreciation area?
- Understanding asset accounting configuration needed in sap
- GL account determination for posting asset transaction
- Asset transaction and corresponding accounting document?
- How depreciation is posted in sap?
SAP CONTROLLING