quarles: flya kite fi financial accounting. quarles: flya kite external accounting balance sheet...

Quarles: Flya Kite

FIFI

Financial AccountingFinancial Accounting

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


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


A COMPANY CODE IS...

A BALANCED SET OF BOOKS


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


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


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


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


CLIENT

CHART OF ACCOUNTS -

FICH

CREDIT CONTROL AREA = FIFL

COMPANY CODE FIFL


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


GLGL

MASTER DATA

G/L ACCOUNTS

AR

CUSTOMERS

AP

VENDORS

FI Master Data


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


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


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


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


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


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



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


2000

Customer2

1000

Customer1

AccountsReceivable

3000

Reconciliation AccountReconciliation AccountCustomers Subledger

Reconciliation Account


Vendor2

50003000

Vendor1

AccountsPayable

Vendors Subledger

Reconciliation Account

8000

Reconciliation AccountReconciliation Account



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


Master DataMaster Data

APAP ARGL

MASTER DATA

G/L ACCOUNTS CUSTOMERSVENDORS


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


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


Master DataMaster Data

ARARAPGL

MASTER DATA

G/L ACCOUNTS VENDORS CUSTOMERS


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 ...


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


GR/IR accountGR/IR account

Dr Cr

GR/IR

$150

Invoice Receipt

Dr Cr

Vendor

$150 $150

Payment

Dr Cr

Cash

$150 $150


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

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FI TransactionsFI Transactions


Procurement Process

Demand

Purchase Requisition Vendor

Purchase OrderGoods Receipt

& Inventory Mgt.

AccountsPayable Invoice

Verification

OutlineAgreement orScheduling Agreement


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


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


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!


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


Cost ElementsCost ElementsFI

General ledger accounts

Revenue accts

P & L accts

Expense accts

Bal. sheet accts

Primary cost elements

CO

Secondarycost elements


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


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


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


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


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


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


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.

quarles: flya kite fi financial accounting. quarles: flya kite external accounting balance sheet...

Documents

gl account account number

number slide

accounts payable slide

year slide

client slide

company code account

client chart of accounts

bank account account