Company Code

A company code is an independent accounting entity (the smallest organizational element for which a complete self-contained set of accounts can be drawn up). Example: a company within a corporate group. A company code has a unique, four-character key, which can be alphanumeric. Each affiliate (company code) is a legal entity that is required by law to Provide financial records according to country-specific regulations. Each company code has a local currency. Amounts posted in foreign Currencies are automatically converted to the local currency. Many companies not only have to create reports according to a specific accounting principle, but also need to meet different information requirements (country-specific requirements, corporate group standards, and so on). The general ledger is kept at the company code level and is used to create the legally required balance sheets and profit-and-loss statements for the company code. There is only exactly one ledger in new General Ledger Accounting - the leading ledger. A company code must be assigned to an operating chart of accounts in order for postings to occur for that company code. A chart of accounts is a list of G/L accounts to which one or more company codes may post.

Chart of Accounts
Each general ledger is set up according to a chart of accounts. The chart of accounts contains the definitions of all G/L accounts in an ordered form. The definitions consist mainly of the account number, account name, and the type of G/L account, that is, whether the account is a P&L-type account or a balance-sheet-type account.

A chart of accounts can be used by multiple company codes . This means that the G/L accounts of these company codes have an identical structure.

Account groups
Account groups are used to organize and manage a large number of G/L accounts. Whenever a new G/L account is created, an account group must be specified for it. Accounts with the same account group normally have similar business functions. You could, for example, have an account group for cash accounts, one for expense accounts, one for revenue accounts, and one for other balance sheet accounts. The account groups are assigned number ranges. Via the number ranges, you can control which account numbers are permissible for cash accounts, expense accounts, etc. Account groups also control the appearance of the company code segment of G/L accounts. That is, account groups control which fields are required for data entry, which fields are optional for data entry, and which fields do not show up at all in the company code segment.

Reconciliation accounts
Reconciliation accounts connect subsidiary ledgers with the general ledger in real time. This means that a posting to a subsidiary ledger posts to the corresponding reconciliation account in the general ledger at the same time. The subsidiary ledgers, which are connected to the general ledger via reconciliation accounts, are the accounts payable, accounts receivable, and asset ledgers.

Financial Statement Version

A general ledger is kept in order to provide the information needed to create a balance sheet and a profit-and-loss statement. To meet the various reporting requirements, various financial statement versions have be created in the SAP system. In these financial statement versions, you define exactly which accounts are to appear in which line items of the financial statement. Many financial statement versions are included in the SAP system. The balance sheet and income statement report can be run using different versions, called financial statement versions. Note: When a transaction is posted in FI, it automatically appears on the balance sheet. The account must be assigned to an appropriate line item in the financial statement version used when running the balance sheet. Otherwise, the posting will appear at the end of the financial statement in a category called Accounts not assigned.

Alternative account number

In the company code segment of the master record, each G/L account must be assigned to an account from the country chart of the company code. This is done using the Alternative account number field. A document consists of two parts: a header and the line items.

Document types
Document types are used to distinguish between and order various accounting documents easily. Each document is assigned to one document type, which is entered in the document header. Document numbers are provided by the document number ranges assigned to one or more document types.

Posting key

Describes

. Which account type is being posted to . Whether the line item is a debit or credit posting . Field status of additional data. A posting key allows posting to just one account type.

Accounts Payable: Vendor master record

Vendor accounts are made up of two areas: 1. General data A vendor account is defined for all company codes at the client level. such as the vendor's name and address, is stored here. 2. Company code data Such as accounting info, payment condition, reconciliation account

Vendor accounts can be divided into various account groups in the same way as G/L accounts, so that they can be organized and managed more easily. The accounts in an account group usually have similar characteristics. Domestic vendors, Vendors abroad, Affiliated vendors, and One-time vendors. Number ranges Number ranges are assigned to account groups. These number ranges are usually internal where the system assigns you a number when you save the vendor master record. However, some number ranges are external. With external number ranges, you fill in the vendor number manually when creating the vendor master record.

The Recurring Entry Program

You can use the recurring entry program for postings that are repeated at regular intervals, such as rent payments and payments of fees and property taxes. With this program, the necessary documents are generated automatically. For postings to recur on a regular basis, the recurring entry program can be used to generate the necessary documents. A reference vendor is used to have defaulted data come over when creating a new vendor master record. A financial document is created when goods are received and when the invoice is received, but not when the purchase order is created. In SAP ERP Financials, adjustments can be posted in special periods (such as periods 13-16) for year-end closing adjustments.

Accounts Receivable: Customer master record

Accounting transactions involving customers are recorded in the Accounts Receivable sub ledger. Customer master data creation is usually initiated by sales and distribution, since they generally make the first contact with customers. Customer accounts also consist of two areas. 1. General data A customer account is defined for all company codes at the client level. General data, such as the customer's address, is stored here. General data applies for all company codes that do business with the customer. 2. Company code segment Postings cannot be made to the customer account for a company code until company code-specific settings have been created. The company code segment contains information that pertains to just one company code, such as agreed terms of payment.

Account groups
In the same way as for G/L accounts and vendor accounts, customer accounts are stored in various account groups, so that they can be organized and managed more easily. The accounts in an account group usually have similar characteristics. 1. 2. 3. 4. domestic customers customers abroad affiliated customers one-time customers

Account groups have a number range assigned to them. Number ranges are of two types: Internal: Do not enter a customer number when creating the customer. Instead, the system assigns you a customer number from the number range assigned to the account group when the new customer master record is created. External: Enter the customer number manually when creating the customer. The number can be alphanumeric, if the number range allows for that. Account groups define the layout of all parts of the customer master record. That is, they determine which fields are optional, mandatory, displayed, or hidden.

Dunning
Dunning Functions
The SAP system provides you with a tool that automatically analyzes all the open items and duns any items that are overdue. The system determines a dunning level, which corresponds to the number of days in arrears. The dunning level determines the dunning charges and interest levied, as well as which dunning text is selected. The dunning history keeps a record of which dunning notices have been issued. You can trigger automatic dunning for a single account (individual dunning notice), or you can have the dunning program carry out automatic dunning for a selected number of accounts. Dunning is controlled by the dunning procedure. A dunning procedure must be entered in every customer and/or vendor account that is to be included in automatic dunning. A dunning procedure that is valid for one-time customers is entered in one-time accounts.

During the dunning run, accounts are selected and checked for overdue items. The system then checks whether dunning notices have to be sent and assigns the relevant dunning levels. All dunning data is stored in a dunning proposal.