Fi - BBP - 01 GL

Business Blueprint Document
Module Financial Accounting

Process General Ledger
Document Number 432277632.doc
Version 1.0
1. Scope

2. Brief Description
SGX is having 2 Divisions in 1 Plant i.e. Cold Rolling Mill Division and Galvanising Division . SGX
is practicing all transaction postings at Division Level, to get the Division wise Balance sheet for
internal reporting purpose. All common Expenses like Power, Insurance, Telephone, Water,
Audit fee, Salary, Administrative overheads, Security charges etc. are directly attributed to the
main division (CR) only but later gets bifurcated and the GAL share is posted in GAL division.
The power and fuel charges are transferred on the basis of consumption at cost centres
belonging to GAL division and other common expenses are bifurcated on % basis at the end of
each month. (i.e. now as on 30% basis, this is fixed by the SGL Management).
SGX is practicing both auto and manual Transactions made by the Finance Department for all
accounting transactions through Finance Module. For e.g.
 Sales billing (SD)

 Discounts to Customers (SD)
 Misc. Sales /Income related entries (SD)
 Commissions Paid to Agents (SD)
 CHA booking / Sea Freight booking (SD)
 Freight Outward Bills (SD)
 Depot Handling Exp. (SD)
 TDS deductions
 Export related Expenses (Freight/C&F/Port Exp) (SD)
 C&F Agents bills (Imports/Exports) (MM/SD)
 Inward Freight for Stores (MM)
3. AS – IS Process
3.1 General Posting:
SGX has two ways for booking of Purchase bills for Material and expenses.
1 Through Purchase Department, which are routed through P.O., Work Order and Rate Contracts
2 Direct booking by debiting expense account (Without any Order).
Generally all materials are routed through Purchase Department and expense like power, Fuel,
Travel, Telephone Expenses etc. bills are directly debited to Expense account.
STEELCO Page 1 of 15 CSPL


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Journal Vouchers
Separate Journal Vouchers are entered in the system for Journal Entries, Salary Entries, and
Other Expenses etc. Copy and reversal option is available for journal voucher.
Salary Vouchers
SGL is importing data from Salary files, including LTA, medical reimbursement etc. JV’s prepared
on a key press automatically. Grade wise, location wise, Bank wise salary summary and
automatic monthly JV for salary to be provided and automated letters to different banks for
salary payment and total emoluments for all employees also available.
3.2 Telephone bills and Vehicle expenses
Vehicle Expenses and Telephone Expenses are posting under sub-ledger wise i.e Telephone
number wise and vehicle number wise. These sub ledgers are different from Employee Sub
Ledgers.
Telephone exp entry: Vehicle exp entry
Exp a/c Dr Exp a/c Dr
To Bank a/c To Party a/c
And for payment
------- Party a/c Dr
To Bank a/c
3.3 Booking of Prepaid Expenses:
In most cases the expenses of insurance are paid in advance at the time of renewals and it
pertains to the entire period of financial year. Hence, it is imperative to reflect the amount
pertaining to each period with respect to insurance in the respective accounting month rather
than as one time expense at the time of renewal during the year.
All Insurance payments are booked directly by account department. Prepaid amount of policies
are ascertained manually and accordingly entry is passed in Accounting system. (SGL maintaining
the Cash Deposit a/c with Insurance co. & maintain balance with cd a/c through advance
payment. CD a/c will show in Loans and Advances at B/S.
Insurance co. Dr.

To Bank Cr.
Fire/Marine/Gen Ins. a/c Dr.
To insurance co. Cr.
For Prepaid:
Prepaid a/c Dr.
To Fire/Marine/Gen Ins Cr.
3.4 Utility Payment:
Power, Water etc. Bills are directly paid through Bank Vouchers by A/c department. Power bill
provisions are made on each month’s bill basis.


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Electricity, Water, Telephone, all Contract bills and Planning cost etc are received by the
concerned departments. They approve the document & forward to finance for making payment.
Accounts will verify and cross check the same, checks fund availability and do entry in the
System and generate a voucher. Actual payment date is given as reference, in place of Cheque
number, in voucher.
Obtain Accounts Controller signature and file.
Expenses a/c Dr.

To Bank a/c Cr
3.5 Cash Payments/Cash Journal:
SGL is paying direct cash payments for 2 areas
1. Cash Purchases less the 500/- without GRN, More than 500/- through GRN and bill booking.
2. Others: In this case for all other petty expenses approved and checked up by HOD of
respective Dept thoroughly and forwards to Accounts Department. Account Dept will verify and
cross check the same and do entry in the System and generate a voucher. Actual payment date
is given as reference. Obtain Accounts Controller signature and file.
Cashier in the morning update the system to generate the opening balance. Cashier has to take /
ensure proper approvals on vouchers from their dept. head. Cashier in turn marks or authorises
those voucher for payment and disburse cash across the counter. Once the payment is done
vouchers are filed.
For Cash withdrawal from bank to meet daily expenses, cashier prepares the voucher and
prepares the cheque. Besides this, actual cash balance is also written in notebook with currency
denominations for audit purpose.
3.6 Other Payments:
The department/person requiring the payment shall give a requisition duly signed by the HOD to
Accounts Controller for his authorization and approval e.g. marriage gift, telephone rent
reimbursement etc. Accounts Controller to forward the same to Accounts Department Verification
of supporting documents and Recording the data in System and disburse cash across the counter,
if it is cheque payment, concerned person prepare cheque and forward the same to authorized
signatories along with all supporting to obtain their signatures. Arrange to make the payment to
the concerned. All expenses related to Directors get posted by using JV.
3.7 Payments to be made Annually:
This Category includes all the payments pertaining to Renewals, which are to be made annually
on the due dates like Building Tax/ Renewal of Drug License, Annual Maintenance contract
charges etc. The Date of Payment will be informed by Concerned Department or by referring to
due date schedule maintained by Accounts Department. These payments are made by


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cheque/DD. Payment and approval procedure is same as in case of statutory and other utility
payments.
3.8 Professional Tax:
Arrive at the professional tax liability at the end of every month, based on the Salary Statement.
Prepare a payment voucher and cheque. Record the details in System. Forward it to Accounts
Controller for authorization of the transaction. Obtain signature of Authorised signatories. Pay the
cheque along with the monthly challan, duly signed by the Accounts Controller by due date.
3.9 Advance Tax Payments:
The due dates for payment of Advance tax are 15th of June, September, December and March of
every year. The tax liability is calculated based on current operating. This calculation is arrived,
basing on the existing ratio between expenditure and sales. The same is also applicable in case of
FBT and its calculations as per FBT guidelines given as per rules.
These calculations are done manually by the Accounts Department and forward the same to
Accounts controller for verification. It is finalized only after approval of Finance Director.
A cheque along with necessary Challans are prepared and forwarded to Accounts Controller for
his Approval. The approved Challans along with the cheque are submitted to Income Tax
Department on or before the due date.
3.10 Provident Fund Remittance:
Statement based on Salary, Payroll to calculate the PF contribution deducted from the employees
at the end of the month and prepares PF statement giving the details of Employee and
Employer’s contribution for remitting the PF amount, Payroll to forward the aforementioned PF
Statement to Accounts Department for processing the payment.
Accounts to verify the statements/Challans and prepare a payment voucher and cheque to
forward it to Accounts Controller for his authorization.
Cheque will be forwarded to Authorise signatories for their signatures. Cheque will be submitted
to the concerned authorities along with the duly completed Challan to ensure that the payment is
realized on or before 15th of every month.
3. 11 For any other point refer to FASDocument.Doc which is annexed.
4. Special Organizational Considerations
 Common expenses are posting to Main division (CRM) and later it will be bifurcated
to GAL.
 Division wise Balance sheet.
 Less than 500/- cash purchases - no need of GARN.


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 Manual transactions are taking place through Finance Department.

Reports:
 Journal Voucher.
 Cash Register.
 Individual General Ledger balance.
 Trial Balance.
 Balance Sheet/Pr&Loss Statement.
 Date wise ledger
 Income tax calculation and Form 16 generation
 Month wise reconciliation salary report
 Directors Payment Summary
 Sub-Ledger details for
o Advance to Employees,
o Furniture Loan, Imprest A/c,
o LTA Advance, LTA Payable,
o Medical Reimbursement,
o Salary Advance,
o Tour Advance & Vehicle Loan
o Mediclaim Insurance etc..


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5. TO BE Process
General ledger serves as a complete record of all business transactions. It is the centralized, up-
to-date reference for the rendering of accounts. Actual individual transactions can be checked at
any time in real time processing by displaying the original documents, line items, and transaction
figures at various levels such as:
 Account information
 Journals
 Totals/transaction figures
 Balance sheet/profit and loss evaluations
Enterprise Structure will be in SAP
Company
Current New
Justification / Purpose of the Organizational Unit
Code Description Code Description
For Steelco Gujarat Limited Using the same environment,
Company Steelco Gujarat Limited
Company has to be defined.
Company Code
Current New
Steelco Gujarat Limited Legal entity

Business Area
Current New
Division Cold Rolling Mill Business area functionality would be used. At present, Division
Division Galvanised wise Business Areas would be created.
Controlling Area
Current New
Steelco Gujarat Limited Controlling Area would be created and the company code would
Controlling Area be assigned to this controlling area.
Chart of Accounts
Current New
Steelco Gujarat Limited A Chart of Accounts would be created and the company code
Anchor Chart of accounts would be using this chart of account.


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Organization chart
Operating Concern
SGL
Controlling Area
SGL
Chart of Accounts
SGL
Company Code
SGL
Business Area Business Area
CRM GAL
5.1 General Posting:


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In SAP System, Every posting must have a document.

A document consists of a document header and at least two line items (one debit and one credit).
Document header is the part of a document that contains information valid for the whole
document, for example, document date and number. It also contains controlling information such
as the document type, currency and company code.
Line item includes an amount, account number, the credit or debit assignment, payment terms,
cost Centre, and additional details specific to the transaction being posted. The system prevents
the data in certain fields of a posted document from being changed. These are such fields as the
posting amount, account, posting key, fiscal year, and tax amount. Because they have updated
certain account balances during posting, these fields cannot be changed.
You can no longer change the account assignment to a cost centre if you use controlling. In case
a document has to be reversed entirely, the user need not manually enter the reversal entry. The
option of reversing the documents is available, where user has to give the original document
number and on selecting reversal option, system automatically generates a reversal entry. There
is an option in SAP to edit the document for Narration corrections and payment terms.
In SAP we are going to use different-different standard Document types to post the transaction.
Document type is used to differentiate the type of business transaction. E.g. salary JV posting,
Vendor Invoice, Customer Invoice, Bank Payments, Receipts, Cash Receipts, Payments etc (JV,
SA, KI, DI, BP, BR, CR, CP etc).
1. There is no need of passing the Journal vouchers for this purpose.

2. The display GL account option is available to view line item wise details of practically all
GL Accounts.
3. It’s a standard functionality that already created documents cannot be altered for value.
Manual transaction would be avoided as far as possible. Given are most cases of integration
entries. Automatic postings through integration to be achieved for SD, MM transactions.
Direct posting entry in SAP by using Documents type.
Expenses a/c Dr
To Cash/Bank a/c
In SAP also there is an option to get Copy and reversal of Vouchers.
Please refer Annexure B: GL Posting.
5.2 Telephone bills and Vehicle expenses:
SGL has to follow the following activity in FI.
Telephone/Vehicle Expenses are directly booked into FI:


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Telephone/Vehicle Expenses a/c Dr XXXX

Service Tax Receivable a/c………….Dr XX
ED Cess on Service tax a/c………….Dr X
To Vendor a/c……………….Cr XXXX
Payments made to Vendors:
Vendor a/c………..Dr XXXX

To Bank/Cash…Cr XXXX
Suggested Business Process:
While posting the Telephone/Vehicle expenses respective internal order has to be entered in said
mandatory field, through which the respective Cost centre will be populated & the system checks
for the limit/budget for the same (Covered in CO module).
5.3 Booking of Prepaid Expenses:
Regarding Prepaid expenses, in SAP the following entry is made initially.

Prepaid expenses Account Dr
To Vendor Account a/c
At the end of every month, the amount pertaining to that period is transferred to the P&L
Account. The entry is as follows
Expenses Account Dr
To prepaid expenses Account a/c
In the year-end the prepaid expenses is shown under Assets in the Balance Sheet.
The user will determine regarding posting of Prepaid expenses in each period the amount that
has to be posted to each period in advance.
5.4 Utility Payment:
SGL has to follow practice of booking vendor and making payment to vendor.
In SAP separate vendor will be created for each utility such as Electricity, Water etc and then
payment will be generated. The following entries will be posted
Expenses A/C Dr……..XXX

To Vendor A/C……… XXX
And for payment following entry
Vendor A/C Dr………..XXX


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To Bank / Cash A/C..XXX
5.5 Cash Payments/Cash Journal:
The petty cash accounts in SGL can be maintained by using cash journal option.
The reimbursement of expenses will be a contra entry for transferring the funds from Main cash
Account to Petty cash Account.
The payments received in cash are to be accounted using document type ‘CR’. Separate
document type ‘CP’ and number range are created for cash payments.
5.6 Other Payments:
The Approved voucher from Accounts controller to Accounts Department forms basis for
generating payment document in the system. The printout of the payment voucher can also be
generated from the system. The same can be forwarded to the Authorized signatories for their
approvals.
SAP standard functionality we can use like the above postings.
5.7 Payments to be made Annually:
The Approved voucher from Accounts controller to Accounts Department forms basis for
generating payment document in the system. The printout of the payment voucher can also be
generated from the system. The same can be forwarded to the Authorized signatories for their
approvals.
SAP standard functionality we can use like the above postings.
5.8 Professional Tax:
SGL has to follow present practice.
The same will be covered, as part of Human Resource module under Payroll and accounting entry
will be generated automatically.
Professional Tax Account Dr

To Professional Tax Payable Account
5.9 Advance Tax Payments:
Automated account postings are available as a part of HR Module.


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5.10 Provident Fund Remittance:

Automated account postings are taken place as a part of HR Module.
5.11 Closing Activities:
In order to arrive at correct Profit and loss account for the Month/Year end, the company has to
run few steps at Month end/Year End in Finance Module.
Please refer Annexure C: Closing Activities
6. Special Organizational Considerations
 Divisions are created as Business area so that Profit & Loss account and Balance Sheet
can be generated at Business area level across the Company code.
 Manual transaction would be avoided as far as possible.
 Please refer Annexure A: Business process Mapping
7. Functional Deficits
None
8. Approach to covering Functional Deficits
None
9. Change Management
None
10. Description of improvement
 In SAP, most of the transactions are posted automatically from other modules.
 Manual transaction would be avoided as far as possible. Given are most cases of
integration entries.
 In SAP, Business area postings are taken place at the time posting document itself. So
there is no need of posting of common expenses into one division and later bifurcation
into another division.
11. Notes on further improvement


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 In SAP there is always a scope of improvements that will be carried out later as per the
business scenario.
12. System Configuration Considerations
 Separate document type will be created for all type of business transactions.
 Separate Number Range will be created for every document type.
13. Authorization and User Roles
14. Interface Considerations
None
15. Data Migration Considerations
 In SAP all the Legacy Data i.e., General Ledger Masters Data & all GL Open Items are
migrated to SAP system either through Legacy System Migration Workbench or Batch
Data Communicator.
16. Reports
 Journal Voucher.
 Cash Register.
 Individual General Ledger balance.
 Trial Balance.
 Balance Sheet/Pr&Loss a/c.
 Date wise ledger
 Month wise reconciliation salary report
 Directors Payment Summary
 Sub-Ledger details for
o Advance to Employees,
o Furniture Loan, Imprest A/c,
o LTA Advance, LTA Payable,
o Medical Reimbursement,
o Salary Advance,
o Tour Advance & Vehicle Loan
o Mediclaim Insurance etc.
 All standard SAP reports are suggestible.


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Annexure A: Business Process Mapping

Trans Fitness Responsi Rem Processing
action bility/ arks system
Activity Code Authoriz (SAP, non-
in SAP D/W/N/ ation SAP etc.)
C
Enter G/L Account FB50 D - SAP
Document
Post with Clearing F-04 D - SAP

Document
Entry Incoming Payments F-06 D - SAP
Outgoing Payments F-07 D - SAP
General Posting F-02 D - SAP
General Document F-65 D - SAP

Park Parking
documents
Post/Delete FBV0 D - SAP
Display-Parked FBV3 D - SAP
Document Display FB03 D - SAP
Change FB02 D - SAP
Individual Reversal FB08 D - SAP

Reverse
Mass Reversal F.80 D - SAP
Reset cleared items

FBRA D - SAP
Display Balances FS10N D - SAP
Display Line Items FBL3N D - SAP

Account
Clear F-03 D - SAP
Display line items FBL3N D - SAP
Accrual / Enter Accrual / Deferral FBS1 D - SAP

Deferral document


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Reverse Accrual / F.81 D - SAP

Deferral document
Cash Journal FBCJ D - SAP
Cash
Journal
postings
Annexure B: GL Posting
Create G/L Create G/L Posting Post Manual

account posting Fast Entry Journal
Holding an incomplete
document
Simulate No
(Enough Info
to Complete Posting?)
Create/Display a Parked
Document
Yes
Posted Entry Post/Release a

Parked Document
Annexure C: Period End and Year End Closing Activities
Trans Fitness Responsi Rem Processing

action bility/ arks system
Activity Code Authoriz (SAP, non-
in SAP D/W/N/ ation SAP etc.)
C
Period End Review list of Recurring FBD3 D - SAP
Activities journal entries


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Execute all recurring F.14 D - SAP

entries
Post all Accrual and FBS1 D - SAP
deferrals
Process all parked FBV0 D - SAP
Documents
Process Bank FF67 D - SAP
Reconciliation statement
Interest calculation F.52 D - SAP
Foreign currency F.05 D - SAP

valuation
Run depreciation in test AFAB D - SAP
run and post
GR/IR Clearings F.19 D - SAP
Open and Close periods OB52 D - SAP
Period End Closing Above D - SAP
all
Capitalize AUC assets if AIAB D - SAP
Year End needed AIBU
Activities Display B/S adjustments F.5F D - SAP
Post B/S adjustments F.5E D - SAP
Asset Fiscal Year AJRW D - SAP
Change
Asset Fiscal Year close AJAB D - SAP
Carry Forward AP&AR F.07 D - SAP
balances
Carry Forward GL FAGLG D - SAP
balances VTR
Copy Number ranges OBH2 D - SAP
17. BBP Process Sign Off
Organi Key User Process Project Consultant Project

zation Owner Manager (CSPL) Manager
Unit STEELCO (CSPL)
Mr. Darji
Dharmendra, Mr. Sunil Mr. Dharma
STEELCO Mr. Sunil Chawla Mr. Rajesh Parker
Mr. Praveen Singhvi Rao. Yekula
Lohiya

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Business Blueprint Document

Module Financial Accounting

 Sales billing (SD)

3.1 General Posting:

STEELCO Page 1 of 15 CSPL

Module Financial Accounting

3.2 Telephone bills and Vehicle expenses

Insurance co. Dr.

3.4 Utility Payment:

STEELCO Page 2 of 15 CSPL

Module Financial Accounting

Expenses a/c Dr.

3.5 Cash Payments/Cash Journal:

SGL is paying direct cash payments for 2 areas

3.6 Other Payments:

3.7 Payments to be made Annually:

STEELCO Page 3 of 15 CSPL

Module Financial Accounting

3.8 Professional Tax:

3.9 Advance Tax Payments:

3.10 Provident Fund Remittance:

3. 11 For any other point refer to FASDocument.Doc which is annexed.

4. Special Organizational Considerations

STEELCO Page 4 of 15 CSPL

Module Financial Accounting

 Manual transactions are taking place through Finance Department.

STEELCO Page 5 of 15 CSPL

Module Financial Accounting

Enterprise Structure will be in SAP

Steelco Gujarat Limited Legal entity

STEELCO Page 6 of 15 CSPL

Module Financial Accounting

Business Area Business Area

5.1 General Posting:

STEELCO Page 7 of 15 CSPL

Module Financial Accounting

In SAP System, Every posting must have a document.

1. There is no need of passing the Journal vouchers for this purpose.

Direct posting entry in SAP by using Documents type.

In SAP also there is an option to get Copy and reversal of Vouchers.

Please refer Annexure B: GL Posting.

5.2 Telephone bills and Vehicle expenses:

SGL has to follow the following activity in FI.

Telephone/Vehicle Expenses are directly booked into FI:

STEELCO Page 8 of 15 CSPL

Module Financial Accounting

Telephone/Vehicle Expenses a/c Dr XXXX

Payments made to Vendors:

Vendor a/c………..Dr XXXX

Suggested Business Process:

5.3 Booking of Prepaid Expenses:

Regarding Prepaid expenses, in SAP the following entry is made initially.

5.4 Utility Payment:

Expenses A/C Dr……..XXX

STEELCO Page 9 of 15 CSPL

Module Financial Accounting

To Bank / Cash A/C..XXX

5.5 Cash Payments/Cash Journal:

5.6 Other Payments:

SAP standard functionality we can use like the above postings.

5.7 Payments to be made Annually:

SAP standard functionality we can use like the above postings.

5.8 Professional Tax: