quarles: flya kite fi financial accounting. quarles: flya kite external accounting balance sheet...
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Quarles: Flya Kite
External Accounting
Balance Sheet
Profit & Loss
Cash Flow
Stockholders
Bankers, Lenders
IRS, Taxing Authority
External Auditors
SEC
Financial AccountingFinancial Accounting
Quarles: Flya Kite 33
FI/CO FI/CO Organizational Structure Organizational Structure
ElementsElements
ClientClient
Company CodeCompany Code
Chart of AccountsChart of Accounts
Fiscal Year VariantFiscal Year Variant
Credit Control AreaCredit Control Area
Quarles: Flya Kite 44
ClientClient
Highest Highest hierarchical levelhierarchical level in an SAP in an SAP systemsystem
A A complete databasecomplete database containing all the containing all the tables necessary for creating a fully tables necessary for creating a fully integrated systemintegrated system
Master recordsMaster records are created per client are created per client
Quarles: Flya Kite 66
Company CodeCompany CodeA A required required structural elementstructural element
A A legally independent entitylegally independent entity
The smallest organizational unit for The smallest organizational unit for which accounting can be carried outwhich accounting can be carried out
Where business transactions are processed Where business transactions are processed
WhereWhere accounts are managedaccounts are managed
Where legalWhere legal individualindividual financial statementsfinancial statements, , such as the balance sheet and the profit and such as the balance sheet and the profit and loss statement, loss statement, are createdare created
Quarles: Flya Kite 77
Chart of AccountsChart of Accounts
A A listing listing of the accounts of the accounts A chartA chart of accounts of accounts must be assignedmust be assigned to every to every company codecompany code Several company codesSeveral company codes can use the can use the same chart of accounts same chart of accounts – A different chart of accounts can be used A different chart of accounts can be used
if a different grouping of the chart of if a different grouping of the chart of accounts is requiredaccounts is required
Flya Kite uses FICHFlya Kite uses FICH
Quarles: Flya Kite 88
Fiscal Year VariantFiscal Year Variant
Used to define the fiscal year for the Used to define the fiscal year for the companycompany– Standard year = 12 periodsStandard year = 12 periods– Special periods = up to fourSpecial periods = up to four
Allow additional closings of the books during Allow additional closings of the books during or at the end of the yearor at the end of the year
Quarles: Flya Kite 99
Credit Control AreaCredit Control Area
An organizational unit or area of An organizational unit or area of responsibility created to responsibility created to control control customer credit limitscustomer credit limits
A company code is assigned to A company code is assigned to one one and only oneand only one credit control area credit control area
Multiple companyMultiple company codes can be codes can be assigned assigned to one credit control areato one credit control area
Quarles: Flya Kite 1010
CLIENT
CHART OF ACCOUNTS -
FICH
CREDIT CONTROL AREA = FIFL
COMPANY CODE FIFL
Quarles: Flya Kite 1111
Master DataMaster Data Describes items or objects used in a
business such as accounts, materials, vendors, customers
The information usually remains unchanged over an extended period of time
Each master data record is unique in name or number
Quarles: Flya Kite 1313
G/L Master RecordsG/L Master Records
A master record must be created for every G/L account– Business transactions are posted to G/L
accounts – Line items are displayed by G/L account
Account number 10000_ _ _ Bank AccountAccount number 20000000 Accounts Payable
Quarles: Flya Kite 1414
G/L Master RecordsG/L Master RecordsChart of Accounts Chart of Accounts informationinformation– G/L account G/L account numbernumber– G/L account G/L account namename– Account Account typetype: Balance : Balance
sheet or Income sheet or Income StatementStatement
– Account Account groupgroup: Info that : Info that controls creationcontrols creation of the of the master record in the master record in the company codecompany code
Account number 10000000Chart of accounts
Balance sheet accountP&L statement acct typeAccount group
Quarles: Flya Kite 1515
Account GroupAccount GroupIdentifier that Identifier that controls which fields controls which fields must be enteredmust be entered when the account is when the account is createdcreated
Can determine a Can determine a valid number valid number intervalinterval for the G/L account for the G/L account
Must be created before creating G/L Must be created before creating G/L master records - master records - configuration dataconfiguration data
Quarles: Flya Kite 1616
Chrt/accts Acct group From acct To account Description
FLCH BSA 10000000 39999999 Balance sheetFLCH PLA 60000000 79999999 P & L accountsFLCH RAA 11000000 30000000 Reconciliation
Account groupsAccount groups
Quarles: Flya Kite 1717
G/L Master RecordsG/L Master RecordsContains Company Code informationContains Company Code information– Account Account CurrencyCurrency– Tax CategoryTax Category
Used for country specific taxes during pricingUsed for country specific taxes during pricing
– Reconciliation AccountReconciliation Account for Account Type for Account Type– Open ItemOpen Item Management Management
Whether each item in an account must be used Whether each item in an account must be used to clear other line items in the same account –to clear other line items in the same account –each line must zero out before it can cleareach line must zero out before it can clear
– Line ItemLine Item Display Display
Quarles: Flya Kite 1818
Company Code InformationCompany Code Information
Sort keySort key– Necessary when Necessary when Line Item displayLine Item display is is
selected selected – Determines the Determines the field that will be used to field that will be used to
sort the line itemssort the line itemsPosting datePosting date
Document dateDocument date
Cost centerCost center
OthersOthers
Quarles: Flya Kite 1919
Company Code InformationCompany Code Information
ReconciliationReconciliation account account– Accounts Accounts receivablereceivable, Accounts , Accounts payablepayable, ,
Fixed Fixed Assets, etc. Assets, etc. When you When you post to an account in the sub-ledgerpost to an account in the sub-ledger, , the system the system automatically postsautomatically posts to the to the corresponding reconciliation accountcorresponding reconciliation account
The The general ledger is automatically updatedgeneral ledger is automatically updated
Quarles: Flya Kite 2020
2000
Customer2
1000
Customer1
AccountsReceivable
3000
Reconciliation AccountReconciliation AccountCustomers Subledger
Reconciliation Account
Quarles: Flya Kite 2121
Vendor2
50003000
Vendor1
AccountsPayable
Vendors Subledger
Reconciliation Account
8000
Reconciliation AccountReconciliation Account
Quarles: Flya Kite 2222
Company Code InformationCompany Code Information
Field status groupField status group– An identifier which controls which An identifier which controls which fields fields
appearappear on a G/L document which uses this on a G/L document which uses this account - account - configuration dataconfiguration data
– Sets screens for entering data so Sets screens for entering data so they are specific to the account or to they are specific to the account or to the transactionthe transaction
Quarles: Flya Kite 2424
Accounts Payable Accounts Payable Master Records - VendorsMaster Records - Vendors
A master record must be created for every vendor
Centralized data for both MM & FI
General data Address Control data Payment transactions
Company code data Account management Payment transactions
Purchasing orgdata Purchasing data Partner functions
Quarles: Flya Kite 2525
Vendor MasterVendor Master
Address screen
Vendor Name
Search Term
Street address, City, Postal code
Country
Language
Telephone, Fax, Data numbers
General data
Address screenAddress screen
Control Control
Payment transactionsPayment transactions
Quarles: Flya Kite 2727
Account Receivable Account Receivable Master Records - CustomersMaster Records - Customers A master record must be created for
every customer Centralized data for both SD & FI
General data Address Control data Payment transactions
Company code data Account management Payment transactions
Sales area data Sales Shipping Billing ...
Quarles: Flya Kite 2828
GR/IR account: a suspense GR/IR account: a suspense accountaccount
Purchase Requisition
Purchase Order
Integration MM- FI
Via Automatic Account Assignment
Goods Receipt
No Impact on Finance
Dr Cr
Expenses
$150
Dr Cr
GR / IR
$150
Dr Cr
Inventory
$150 or
Goods Receipt
Quarles: Flya Kite 2929
GR/IR accountGR/IR account
Dr Cr
GR/IR
$150
Invoice Receipt
Dr Cr
Vendor
$150 $150
Payment
Dr Cr
Cash
$150 $150
Quarles: Flya Kite 3030
Customer MasterCustomer Master
Address screen
Customer Name
Search Term
Street address, City, Postal code
Country
Language
Telephone, Fax, Data numbers
Address screenAddress screenControl data screenControl data screen
Marketing screenMarketing screenUnloading points screenUnloading points screen
Foreign trade screenForeign trade screenContact persons screenContact persons screen
Sales screenSales screenShipping screenShipping screen
Billing screenBilling screenTaxes screenTaxes screen
Output screenOutput screenPartner functions screenPartner functions screen
Quarles: Flya Kite 3232
Procurement Process
Demand
Purchase Requisition Vendor
Purchase OrderGoods Receipt
& Inventory Mgt.
AccountsPayable Invoice
Verification
OutlineAgreement orScheduling Agreement
Quarles: Flya Kite 3333
Document PrincipleDocument PrincipleIn SAP, transaction postings are In SAP, transaction postings are always always stored in document formstored in document form
The document remains as a complete The document remains as a complete unit in the system until it is unit in the system until it is archivedarchived
Only complete documents can be Only complete documents can be postedposted
A document consists of a document A document consists of a document header and at least two line itemsheader and at least two line items
Document
1000010
Quarles: Flya Kite 3434
Tolerances Groups for Account Tolerances Groups for Account PostingsPostings
Amount limits for your employees which Amount limits for your employees which control control – the the maximum document amountmaximum document amount the employee is the employee is
authorized to postauthorized to post – the the maximum amountmaximum amount the employee can the employee can enter as enter as
a line itema line item in a customer or vendor account in a customer or vendor account – the the maximum cash discountmaximum cash discount percentage the percentage the
employee employee can grantcan grant on a line item on a line item – the the maximum acceptable tolerance for paymentmaximum acceptable tolerance for payment
differencesdifferences for the employee for the employee
Quarles: Flya Kite 3535
Tolerance Group for A/R & A/PTolerance Group for A/R & A/P
Handles differences in payment and Handles differences in payment and residual items which can occur during residual items which can occur during payment settlementpayment settlement
Allocate a Allocate a tolerance group to each tolerance group to each vendorvendor in the in the master recordmaster record – Tolerances Tolerances up to which differences in up to which differences in
payment are posted automaticallypayment are posted automatically to to expense or revenue accounts when expense or revenue accounts when clearing open itemsclearing open items
Quarles: Flya Kite
ControllingControlling
COCO
Where the company “really” finds Where the company “really” finds out what is going on!out what is going on!
Quarles: Flya Kite 37
Cost Element AccountingWhich costs are incurred ?
Product related costs(Direct , traceable costs)
MaterialLabor
Overhead costs(Indirect costs)
Admin wages Depreciation Interest
Cost Center AccountingWhere are the costs incurred?Product Cost
Accounting
What for? ProductProduct
PurchasingManufacturing
AdministrationSales
Quarles: Flya Kite 38
Cost ElementsCost ElementsFI
General ledger accounts
Revenue accts
P & L accts
Expense accts
Bal. sheet accts
Primary cost elements
CO
Secondarycost elements
Quarles: Flya Kite 39
Primary Cost ElementsPrimary Cost Elements A way to identify which type of cost -
Salaries, utilities, selling expenses Cost that arise from consumption of
goods/services from outside of the enterprise
Must be created in the GL chart of accounts in FI
Each posting to a cost element must be assigned either to a cost center or an order
Quarles: Flya Kite 40
Secondary Cost ElementsSecondary Cost Elements Used exclusively in CO for allocations and
settlements Internal cost allocations
Created and exist ONLY in CO Cannot exist in FI
The internal value flows such as allocations and overhead calculations Secondary cost elements are allocated to
cost objects within CO Represent activity values produced in
internal cost allocations
Quarles: Flya Kite 41
Cost Centers and Cost ElementsCost Centers and Cost Elements Closely linked in SAP Each posting to a cost element is
assigned either to a cost center or an order Data is subdivided between both
cost centers and cost elements for analysis
Cost Centers = where Cost Elements = which
Quarles: Flya Kite 42
DistributionsDistributions A method of allocating primary costs Primary cost element is the same in
the sender and receiver Cost element retains its character:
same element in receiver as it was in sender
Sender cost centers and receiver cost centers are documented in the CO document
Quarles: Flya Kite 43
Rent Expense$10,000
Cost center A060
MfgRent Expense$5,000
Sales &MktgRent Exp$2,500AdmRent Expense$2,500
DistributedRent Expense780000
Identity of the cost in the Sender Cost Center
Primary Cost Element
Identity of the cost isthe same in the Receiver Cost Centers
DistributionsDistributions
Nature of cost (i.e., rent expense) comes across to receiver
Quarles: Flya Kite 44
AssessmentsAssessments A method of allocating both primary
and secondary costs Iterative or hierarchical
Primary costs are grouped together and transferred to receiver cost centers as a single secondary cost element
Sender cost centers and receiver cost centers are documented in the CO document
Quarles: Flya Kite 45
AssessmentsAssessments
Information Systems Costs = $100,000(wages, paper,
depreciation, etc)Cost center A070
Mfg IS
Assessment$50,000
Sales &Mktg
IS Assessment$25,000
AdminIS Assessment
$25,000
AllocatedIS costs 800000
Sender Cost CenterSecondary Cost
Element Receiver Cost Centers
Nature of costs is unknown to receiver
Quarles: Flya Kite
FI/CO Transactions
EXERCISE FI/CO01: CREATE GENERAL LEDGER EXERCISE FI/CO01: CREATE GENERAL LEDGER B/S ACCOUNTB/S ACCOUNT– We will create a bank account manually. A bank
account is an asset account located in the Balance Sheet
EXERCISE FI/CO02: CREATE GENERAL LEDGER EXERCISE FI/CO02: CREATE GENERAL LEDGER GR/IR ACCOUNTGR/IR ACCOUNTEXERCISE FI/CO03: CREATE P/L ACCOUNTSEXERCISE FI/CO03: CREATE P/L ACCOUNTS– Now that the vendor account has been created, the
corresponding rent expense account is to be created in your chart of accounts using a reference account. Also, a utilities expense account is to be created. Using a reference account copies much of the detail data from the reference account to the account being created thus saving time making repetitive entries.
Quarles: Flya Kite
FI/CO Transactions
EXERCISE FI/CO04: CREATE GENERAL LEDGER EXERCISE FI/CO04: CREATE GENERAL LEDGER P&L ACCOUNTSP&L ACCOUNTS– To process billing we will need Profit & Loss
Statement accounts for Sales Revenue and Sales Discounts
EXERCISE FI/CO05: RUN GL ACCOUNTS REPORTEXERCISE FI/CO05: RUN GL ACCOUNTS REPORT– This report will give you a summary of all
accounts assigned to your company code.EXERCISE FI/CO06: CREATE PRIMARY COST EXERCISE FI/CO06: CREATE PRIMARY COST ELEMENTSELEMENTS– Primary cost elements: are costs that arise through the
consumption of goods and services that originate from outside the company. They represent the link between FI and CO. This exercise creates the linkage between FI cost elements (GL accounts in FI) and the cost element categories to which they will link in CO.
Quarles: Flya Kite
FI/CO Transactions
EXERCISE FI/CO07: CREATE VENDOR EXERCISE FI/CO07: CREATE VENDOR MASTER RECORDMASTER RECORD– Flya Kite has rented new office space. The
accountant in charge is requested to create a new vendor account for the real estate company.
EXERCISE FI/CO08: G/L DOCUMENT ENTRYEXERCISE FI/CO08: G/L DOCUMENT ENTRY– You receive the utility bill for the month for the
plant and it must be paid immediately. The bill is for $1,000. The expense must be recorded in the General Ledger. It will be initially charged to the Administration cost center and charged out to manufacturing cost centers later.
EXERCISE FI/CO09: DISPLAY ACCOUNT EXERCISE FI/CO09: DISPLAY ACCOUNT BALANCES (OR LINE ITEMS)BALANCES (OR LINE ITEMS)
Quarles: Flya Kite
FI/CO Transactions
EXERCISE FI/CO10: POST VENDOR INVOICEEXERCISE FI/CO10: POST VENDOR INVOICE– Ross’ Rockin Rentals has sent the invoice for the
first month’s rent of $350. Please post the invoice using the accounts you have created in your Company code.
EXERCISE FI/CO11: DISPLAY ACCOUNT EXERCISE FI/CO11: DISPLAY ACCOUNT BALANCES (AND/OR LINE ITEMS)BALANCES (AND/OR LINE ITEMS)EXERCISE FI/CO12: POST OUTGOING EXERCISE FI/CO12: POST OUTGOING PAYMENTPAYMENT– The invoice of Ross’ Rockin Rentals is due for
payment now. You are requested to clear the invoice amount by posting an outgoing payment using the bank account (no. 10000_ _ _) of your chart of accounts.
Quarles: Flya Kite
FI/CO Transactions
EXERCISE FI/CO13: POST OUTGOING PAYMENTEXERCISE FI/CO13: POST OUTGOING PAYMENT– The invoice of Widgets & Things (created in the
Procurement Logistics exercises) is due for payment now. You are requested to clear the invoice amount by posting an outgoing payment using the bank account (no. 10000_ _ _) of your chart of accounts.
EXERCISE FI/CO14: RECEIVE PAYMENT FROM EXERCISE FI/CO14: RECEIVE PAYMENT FROM CUSTOMERCUSTOMER– A sale to a Crosby Trinkets was processed and billed
in the Sales Logistics system. That customer has now received the invoice and sends you payment. The payment will be posted to his G/L account.
Quarles: Flya Kite
FI/CO Transactions
EXERCISE FI/CO15: CREATE DISTRIBUTION CYCLEEXERCISE FI/CO15: CREATE DISTRIBUTION CYCLE– Distribution accomplishes the charging of primary costs from a
collection cost center to all of the cost centers that benefit from the incurrence of that primary cost. Periodically, usually at the end of the month, the primary cost element will be allocated (charged) to the receiving cost objects. The distribution process distributes the balance(s) from the original sender(s) to the receivers. The original sender account is credited and the original receiver account is debited by the distribution. In this manner the distributed primary cost retains its identity in the receiving cost object’s expense list.
EXERCISE FI/CO16: REVIEW ACTUAL LINE ITEM REPORTEXERCISE FI/CO16: REVIEW ACTUAL LINE ITEM REPORT– This exercise allows you to see how the rent expense cost
element has been distributed to the various receiving cost objects using the statistical key figure set up as the basis for the distribution.
Quarles: Flya Kite
FI/CO Transactions
EXERCISE FI/CO17: CREATE ASSESSMENT CYCLEEXERCISE FI/CO17: CREATE ASSESSMENT CYCLE– With assessment both primary and secondary
postings can be allocated. You can define cost allocation by assessment if the composition of costs is not important for the receiver – for example, receiver cost centers rarely require detailed breakdowns of cafeteria costs. In our case, certain charges from the local utility company are known to be exclusively attributable to the Manufacturing cost centers. Therefore, once a month the utility charges are assessed from the Administration cost center to the Manufacturing cost centers.
EXERCISE FI/CO18: REVIEW ACTUAL LINE ITEM EXERCISE FI/CO18: REVIEW ACTUAL LINE ITEM REPORTREPORT– Review how the utility expenses have moved from
cost center to cost center as assessed costs with no indication as to coming from the utilities cost element 750000.
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