SAP Financial Accounting FI Dr. Djamal Ziani King Saud University

FI Overview FI AP AR AM GL CON Special Ledger FI: Financial Controlling module GL: General Ledger AM: Asset Management AR: Account Receivable AP: Account Payable CON: Controlling

G/L Reporting Legal or external reporting Balance sheet Income Statement Statement of Financial Position Financial Accounting

Stockholders Bankers, Lenders IRS, Taxing Authority IRS: Internal Revenue Service External Auditors SEC: Securities and Exchange Commission Financial Accounting External Accounting Balance Sheet Profit & Loss Financial Position

Internal management reporting Reports by cost centers or other cost “objects” and cost elements Cost centers Orders and Projects Budget/plan Actual vs. plan CO Reporting Controlling

Internal Accounting Departmental Expense Report Salaries10,000 Overhead 8,000 Other 5,000 Total23,000 Department Managers Controllers Executives Senior Management

FI and CO comparison CO FI Legal or external reporting Reports by accounts Balance Sheet Income Statement Internal management reporting Reports by cost centers and cost elements Cost Center Reports

FI/CO Organizational Structures Client Company Chart of Accounts Company Code Business Area Credit Control Area Controlling Area

Client Highest hierarchical level in an SAP system A complete database containing all the tables necessary for creating a fully integrated system Master records are created at the client level

Company Consolidated financial statements are created at the company level A company can include one or more company codes

Chart of Accounts A listing of the accounts A chart of accounts must be assigned to every company code Several company codes can use the same chart of accounts

Co code 1000 Co code 2000 Co code 3000 Co code 4000 Co code 5000 US CHART OF ACCOUNTS GERMAN CHART OF ACCOUNTS CLIENT

COMPANY CHART OF ACCOUNTS COMPANY CODE

Company Code A required structure A legally independent entity The smallest organizational unit for which accounting can be carried out The level where business transactions are processed The level where accounts are managed The level where legal individual financial statements, such as the balance sheet and the profit and loss statement, are created A BALANCED SET OF BOOKS

CLIENT CHART OF ACCOUNTS COMPANY CODE COMPANY CREDIT CONTROL AREA CREDIT CONTROL AREA

Credit Control Area An organizational unit or area of responsibility created to control customer credit limits A company code is assigned to one and only one credit control area Multiple company codes can be assigned to one credit control area

CLIENT CHART OF ACCOUNTS COMPANY CODE COMPANY CONTROLLING AREA

Controlling Area An organizational unit defining the company's cost/ managerial accounting operations A company code is assigned to one and only one controlling area A controlling area can have multiple company codes assigned to it –This allows cross company cost allocations and reporting

JANUARY FEBRUARY DECEMBER Fiscal Year Variant Determines the fiscal year Calendar year or non-calendar year Allows the use of special periods to aid year-end closing Is assigned to a company code

The functional Components of FI FI-GL FI-AR FI-AP FI-AA General Ledger Accounts Receivable Accounts Payable Asset Accounting FI-SL FI-LC Special Purpose Ledger Legal Consolidation

General Ledger G/L A ledger contains the accounts of an accounting system. Historically the ledger was a book where the accountant wrote into the postings. The main ledger of an accounting system is the general ledger. The general ledger (G/L) contains all accounts of the accounting system. All other ledgers are subsidiary ledgers (subledgers) of the general ledger. The SAP system contains:  accounts payable,  accounts receivable and  asset accounting.

Accounts Receivable / Accounts Payable Customers Vendors General ledger Accounts ReceivableAccounts Payable