Company Code is a legal entity for which financial statements like Profit and Loss and Balance Sheets are
generated. Plants are assigned to the company code, Purchasing organization is assigned to the company
code, and Sales organization is assigned to the company code.

A Controlling area can have the following 2 type of relationship with a Company code
a. Single Company code relation
b. Cross Company code relation
This means that one single controlling area can be assigned to several different company codes.
Controlling can have a one is to one relationship or a one is to many relationship with different company
codes.
Controlling Area is the umbrella under which all controlling activities of Cost Center Accounting, Product
Costing, Profit Center and Profitability Analysis are stored. In a similar way Company Codes is the
umbrella for Finance activities.

A single Company code can have only one Chart of Account assigned toit. The Chart of Accounts is nothing
but the list of General Ledger Accounts.

Fiscal year is nothing but the way financial data is stored in the system. SAP provides you with the
combination of 12 normal periods and also four special periods. These periods are stored in what is called the
fiscal year variant. There are two types of Fiscal Year Variant
· Calendar Year – e.g. Jan-Dec
· Year Dependent Fiscal Year

In a year dependent fiscal year variant the number of days in a month are not as per the calendar month. Let
us take an example:- For the year2005 the period January ends on 29th, Feb ends on 27th, March ends on29.
For the year 2006 January ends on 30th, Feb ends on 26th, March ends on 30th. This is applicable to many
countries especially USA. Ever
year this fiscal year variant needs to be configured in such a case

A company code can have 3 currencies in total. They are local currencies company code currency) and 2
parallel currencies. This gives the company the flexibility to report in the different currencies.

There is no posting which happens from MM in special periods. Special periods are only applicable for the
FI module. They are required for making any additional posting such as closing entries, provisions. Which
happen during quarter end or year end.

Where only 2 currencies are configured (Company code currency and parallel currency) there is no need
for an additional ledger. In case the third parallel currency is also configured and if it is different than the
second currency type, you would then need to configure additional ledger.

In this case you either need to write an ABAP program or you need to implement the Special
Consolidation Module of SAP. If both the company codes use the same chart of accounts then standard
SAP reports give you the consolidated figure.

Stock and Consumption accounts are instances of GL accounts that should be automatically posted . In the
GL account master record, a check box exists wherein the automatic posting option is selected called "Post
Automatically Only"

An Account group controls the data that needs to be entered at the time of creation of a master record.
Account groups exist for the definition of a GL account, Vendor and Customer master. It basically controls
the fields which pop up during master data creation in SAP.

Field status groups control the fields which come up when the user does the transactions. There are three
options for field selection. They are:
Display only
Suppressed
Mandatory
So basically you can have any field either for display only or you can totally suppress it or make it
mandatory. The field status group is stored in the FI GL Master Record.

A FSV (Financial Statement Version) is a reporting tool and can be used to depict the manner in which the
financial accounts like Profit and Loss Account and Balance Sheet needs to be extracted from SAP. It is
freely definable and multiple FSV's can be defined for generating the output for various external agencies
like Banks and other Statutory authorities.

A Document type is specified at the Header level during transaction entry and serves the following purposes:
· It defines the Number range for documents
· It controls the type of accounts that can be posted to eg Assets, Vendor, Customer, Normal GL account
· Document type to be used for reversal of entries
· Whether it can be used only for Batch input sessions
Document Type is created for differentiating business transactions. Eg Vendor Invoice, Credit Memo,
Accrual Entries, Customer Invoice. It is a two digit character.

A tax procedure is defined for each country and tax codes are defined within this. There is flexibility to
either expense out the Tax amounts or Capitalize the same to Stocks.

Validations/Substitutions in SAP are defined for each functional area e.g. FI-GL, Assets, Controlling etc at
the following levels

1. Document level

2. Line item level

These need to be specifically activated and setting them up are complex and done only when it is really
needed. Often help of the technical team is taken to do that.

Yes. To be able to do so the valuation group code should be activated. The valuation grouping code is
maintained per plant and is configured in the MM module. Account codes should be maintained per
valuation grouping code after doing this configuration.

No. Business area is at client level. What this means is that other company codes can also post to the same
business area.

This question is usually very disputable. But both Business Areas and Profit centers are created for internal
reporting. Each has its own pros and cons but many companies nowadays go for Profit center as there is a
feeling that business area enhancements would not be supported by SAP in future versions.

There are typical month end procedures which need to be executed for both of them and many times
reconciliation might become a big issue. A typical challenge in both of them is in cases where you do not
know the Business Area or Profit Center of the transaction at the time of posting.

The problem of splitting of account balance is more pertinent in case of tax accounts.

The default exchange rate type picked up for all SAP transactions is M (average rate)

Yes it is possible to default values for certain fields where a parameter id is present.
Step 1 Go to the input field to which you want to make defaults.
Step 2 Press F1, then click technical info push button.

This would open a window that displays the corresponding parameter id (if one has been allocated to the
field) in the field data section.

Step 3 Enter this parameter id using the following path on SAP Easy access screen System à User profile à
Own data.

Step 4 Click on parameter tab. Enter the parameter id code and enter the value you want as default. Save the
user settings.

Yes it is possible. In the document type definition of GL, you need to attach a different exchange rate type.

The Gl Account must be managed as an ‘open item management’ . This checkbox is there in the General
Ledger Master Record called Open Item Management. It helps you to manage your accounts in terms of
cleared and uncleared items. A typical example would be GR/IR Account in SAP (Goods
Received/Invoice Received Account)

GR/IR is an interim account. In the legacy system of a client if the goods are received and the invoice is
not received the provision is made for the
same. In SAP at the Goods receipt stage the system passes an accounting entry debiting the Inventory and
crediting the GR/IR Account .Subsequently when an invoice is recd this GR/IR account is debited and the
Vendor account is credited. That way till the time that the invoice is not received the GR/IR is shown as un
cleared items.

The number of line items in one document you can accommodate is 999 lines.

This value comes from the Sort key entered in the Gl master record.

Number range is to be created in the production client. You can transport it also by way of request but
creating in the production client is more advisable.

Once the company code is live(real time transactions have started) this check box helps prevents deletion
of many programs accidentally. This check box is activated just before go live.

The balance in a GR/IR account is basically because of 2 main types of
transactions:-
1.Goods delivered but invoice not received – Here the Goods receipt is made but no invoice has yet been
received from the vendor. In such a scenario GR/IR account will have a credit balance.

2.Invoiced received but goods not delivered – Here the Invoice is received from the vendor and accounted
for, but goods have not been received. In such a scenario GR/IR account will have a debit balance. The
GR/IR account would contain the net value of the above two types of transactions.The GR/IR regrouping program analyses the above transactions and regroups them to the correct
adjustment account. The balance on account of first transactions will be regrouped to another liability
account and the balance on account of second transactions will be regrouped to an asset account.

In the financial statement version the most important functionality available is the debit credit shift. This is
more important in case of Bank overdraft accounts which can have a debit balance or a credit balance.
Thus in case of a debit balance you would require the overdraft account to be shown on the Asset side. In
case of credit balance you would require the account to be shown on the Liability side.

Yes. It is possible to print the financial statement version on a SAP script form.

Yes. It is possible to generate a form automatically.

Yes. It is possible to keep open the FI posting period only for certain GL codes.

In transaction code OB52 click on new entries and maintain an interval or a single GL code for the account
type S with the posting period variant. If the GL codes are not in sequence then you need to maintain
further entries for the posting period variant and account type S.

It is possible to generate a form from the financial statement version and print the financial statements on a
SAPscript form. In the customizing for financial statement version select the FSV you created and choose
Goto
->Generate form -> One column or Two column form. You can also copy form from the standard system.

Yes. Posting period variant can be assigned to more than one company code.

The customer and vendor code are at the client level. That means any company code can use the customer
and vendor code by extending the company code view.

Vendor payments can be made in the following manner: Manual payments without the use of any output
medium like cheques etc. Automatic Payment program through cheques, Wire transfers, DME etc.

It is attached to the payment method per company code

Payment terms for customer master can be maintained at two places i.e. in the accounting view and the
sales view of the vendor master record.

The payment term in the accounting view of the customer master comes into picture if the transaction
originates from the FI module. If an FI invoice is posted (FB70) to the customer, then the payment terms is
defaulted from the accounting view of the customer master. The payment term in the sales view of the
customer master comes into picture if the transaction originates from the SD module. A sales order is
created in the SD module. The payment terms are defaulted in the sales order from the sales view of the
customer

The following are the steps for configuring the automatic payment program:-
Step 1 Set up the following: Co. code for Payment transaction Define sending and paying company code.
Tolerance days for payable Minimum % for cash discount Maximum cash discount Special GL
transactions to be paid
Step 2 Set up the following:
Paying company code for payment transaction Minimum amount for outgoing payment No exchange rate
diff Separate payment for each ref Bill/exch payment Form for payment advice

Step 3 Set up the following:
Payment method per country Whether Outgoing payment Check or bank transfer or B/E Whether allowed
for personnel payment Required master data Doc types Payment medium programs Currencies allowed
Step 4 Set up the following:
Payment method per company code for payment transactions Set up per payment method and co. code The
minimum and maximum amount. Whether payment per due day Bank optimization by bank group or by
postal code or no
optimization Whether Foreign currency allowed Customer/Vendor bank abroad allowed Attach the
payment form check Whether payment advice required
Step 5 Set up the following:
Bank Determination for Payment Transactions Rank the house banks as per the following Payment
method, currency and give them ranking nos Set up house bank sub account (GL code) Available amounts
for each bank House bank, account id, currency, available amount Value date specification

Payment terms for Vendor master can be maintained at two places i.e. in the accounting view and the
purchasing view.

The payment term in the accounting view of the vendor master comes into picture if the transaction
originates from the FI module. If an FI invoice is posted (FB60) to the Vendor, then the payment terms is
defaulted from the accounting view of the vendor master. The payment term in the purchasing view of the
vendor master comes into picture if the transaction originates from the MM module. A purchase order is
created in the MM module. The payment terms are defaulted in the purchase order from the purchasing
view of the vendor

Yes. Reconciliation account can be changed in the vendor master provided that the authority to change has
been configured. Normally we should not change the reconciliation account.

These are the following steps: A goods receipt in SAP for a purchased material is prepared referring a
purchase order.
When the goods receipt is posted in SAP the accounting entry passed is:- Inventory account Debit
GR/IR account credit A GR/IR (which is Goods receipt/Invoice receipt) is a provision account which
provides for the liability for the purchase. The rates for the valuation of the material are picked up from the
purchase order. When the invoice is booked in the system through Logistics invoice
verification the entry passed is as follows:- GR/IR account debit Vendor credit

The following are instances of tolerances that can be defined for Logistic Invoice Verification.
a. Small Differences
b. Moving Average Price variances
c. Quantity variances
d. Price variances
Based on the client requirement, the transaction can be “Blocked” or Posted with a “Warning” in the event
of the Tolerances being exceeded.

Any change you make to the reconciliation account is prospective and not retrospective. The old items and
balances do not reflect the new account only the new transactions reflect the account.

It depends on the configuration setting in the special GL indicator A. If the “Relevant to credit limit”
indicator is switched on in the Special GL indicator A the advances will be relevant for credit check,
otherwise it will not be relevant.

There are 4 options available:-
1) No default
2) Posting date
3) Document date
4) Entry date

Generally document date is configured in the payment term as a default for base line date.

You can use an existing special GL indicator ID or create a new one. After creating a special GL indicator
id, update the chart of accounts and the Reconciliation account. Also as a last step you need to update the
special GL code.
The special GL code should also be marked as a Reconciliation account. Switch on the relevant for credit
limit and commitment warning indicators in the master record.

FI MM settings are maintained in transaction code OBYC. Within these there are various transaction keys
to be maintained like BSX, WRX, GBB, PRD etc. In each of these transaction keys you specify the GL
accounts which gets automatically passed at the time of entry. Few examples could be: BSX- Stands for
Inventory Posting Debit
GBB-Stands for Goods Issue/Scrapping/delivery of goods etc
PRD- Stands for Price Differences.

They are at the chart of accounts level.

In the Inventory GL accounts (Balance sheet) you should switch on the ‘Post automatically only’ tick. It is
also advisable to maintain the aforesaid setting for all FI-MM accounts and FI-SD accounts. This helps in
preserving the sanctity of those accounts and prevents from having any difference between FI and MM, FI
and SD.

This is actually the link between Materials Management and Finance. The valuation in SAP can be at the
plant level or the company code level. If you define valuation at the plant level then you can have different
prices for the same material in the various plants. If you keep it at the company code level you can have
only price across all plants. Valuation also involves the Price Control .Each material is assigned to a
material type in Materials Management and every material is valuated either in Moving Average Price or
Standard Price in SAP. These are the two types of price control available.

The Valuation Class in the Accounting 1 View in Material Master is the main link between Material Master
and Finance. This Valuation Class along with the combination of the transaction keys
(BSX,WRX,GBB,PRD ) defined above determine the GL account during posting. We can group together
different materials with similar properties by valuation class. Eg Raw material,Finsihed Goods, Semi
Finished We can define the following assignments in customizing :
All materials with same material type are assigned to just one valuation
class. Different materials with the same material type can be assigned to different valuation classes.
Materials with different material types are assigned to a single valuation class.

Once a material is assigned to a valuation class in the material master record, we can change it only if the
stocks for that material are nil. If the stock exists for that material, then we cannot change the valuation
class. In such a case, if the stock exists, we have to transfer the stocks or issue the stocks and make the
stock nil for the specific valuation class. Then only we will be able to change the valuation class.

The moving average price in the case of goods issue remains unchanged. Goods issue are always valuated
at the current moving average price. It is only in goods receipt that the moving average price might change.
A goods issue only reduces the total quantity and the total value in relation to the price and the moving
price remains unchanged. Also read the
next question to learn more about this topic.

The moving average price in the material master changes in the scenario of Split Valuation which is
sometimes used by many organizations. If the material is subject to split valuation, the material is managed
as Several
partial stocks and each partial stock is valuated separately. In split valuation, the material with valuation
header record will have ‘v’ moving average price. This is where the individual stocks of a material are
managed cumulatively. Here two valuation types are created, one valuation type can have ‘v’ (MAP) and
the other valuation type can have
‘s’(standard price). In this case, whenever the goods are issued from the respective valuation types, always
the MAP for the valuation header changes.

Client | Operating Concern |Controlling

area1 Controlling Area 2 | Co. Code 1 Co.

Code 2| Bus area 1 Bus area2 Bus Area3 Bus

Area 4

12 Normal posting period and 4 special periods are in the fiscal year which can be used for

posting tax and audit adjustments to a closed fiscal year.

PPV is used to open and close the periods based on a/c types considering GL Accounts. Tr.

Code. OB52.

4 digit Alphanumeric key.

Name of the company

City

Country

Currency

Language

Address

Document type is nothing vouchers containing line items. Several business transac! tions can be identified
within a particular document type.

It controls the document number ranges.

It controls the Header part of document

IT controls the line item level of the document

Helps filing of physical document

These are special classification keys. Two character numerical key it controls the entry of line items.
Posting key determines Account type, Debit/credit posting, Field status of transaction.

FSG is mandatory field in ! GL Creation. You use this field to define which fields are displayed when
you post business transactions to a G/L account.

A field may have one of the following statuses.

Suppressed

Display

Optional

Required

Chart of account is a list of all G/L accounts used by one or several company codes. For each G/L
account, the chart of accounts contains the account number, account name, and the information that
controls how an account functions and how a G/L account is created in a Company code.

You have to assign a chart of accounts to each company code. This chart of accounts is the Operating chart
of accounts and is used for the daily postings in this company code. You have the following options when
using multiple company codes. You can use the same chart of accounts for all company codes

If the company codes all have the same requirements for the chart of accounts set up, assign all of the
individual company codes to the same chart of accounts. This could be the case if all company codes are in
the same country.

In addition to the operating chart of accounts, you can use two additional charts of accounts If the individual
company codes need different charts of accounts, you can assign up to two charts of accounts in addition to
the operating chart of accounts. This could be the case if company codes lie in multiple countries.

The use of different charts of accounts has no effect on the balance sheet and profit and loss statement. When
creating the balance sheet or the profit and loss statement, you can choose whether to balance the company
codes which use different charts of accounts together or separately.

chart of account key

Name

Maintenance language

Length of the GL Account Number

Controlling Integration

Group chart of accounts (Consolidation)

yes. One COA can be assigned to several companies.

Account group determines which fields you can configure on the G/L master record. It is necessary to
have at least two one for B/S and another one for P&L a/c. It controls the Number ranges of GL A/C. The
status of fields of the master record of GL belongs to company code area.

When you p! ost items to a subsidiary ledger, the system automatically posts the same data to the
general ledger. Each subsidiary ledger has one or more reconciliation accounts in the general ledger. We
can’t use reconciliation account for direct postings.

Field status variant is maintained all FSGs.

COA

Segment

A/C group

Nature of account

Short text

GL a/c long text

Trading partner

Group Account Number

Company code segment

Account currency

JOBSMATE.COM

Tax

Reconciliation a/c for a/c type

OIM,LID,FSG.

It controls the account assignments that are made to the account. Specifically the field status group
controls whether postings to cost centers, internal orders, profitability segments and so on are required, not
allowed (suppressed), or optional.

Operational chart of account – Day to day activities It is mandatory. Country COA – It’s used for legal
specific requirement of each country. It’s additional and optional.Group COA used for consolidation of
Company codes. This is for group consolidation purpose.

Segments in Customer Segments in Vendor

General Data segment General data segment

Company code segment Company code segment

Sales area segment Purchasing organization Segment

Open item management is further reconciliation function. OIM allows you to display the open and
cleared items and amounts in an account. OIM should be used if an offsetting entry is made for every line
item posted in the account. The a/c is reconciled and cleared against another account. Ex. Salary clearing
account and GR/IR Clearing account.

Residual payment it clears original invoice with incoming amount and create new line item for
remaining outstanding amount. Partial payment it leaves the original invoice amount and creates new line
item for incoming amount.

Internal Number Ranges: Doc. No will be provided by the system automatically in serial order allotting
the next available progressive number. The number must be in numerical. External Number ranges: Doc.
No will be given manually by the end user. System will not lock no automatically in this case. User can
pick the number randomly. Number may be an alpha numeric.

The Baseline date is used to calculate the due date by taking into account the payment terms. On the APP,
the baseline date helps to pick the relevant invoices for payment. During the APP run when invoices are
pulled into the run, the system checks the 'Next Payment Date' before picking the invoices to be paid.

Procurement cycle – a sales order is placed on a requirement made by a customer, after which it is passed on
to create a purchase order (this could either happen based on the requirements on the SO, or a planned SO).
the value flow gets passed on to FI at the time of goods movement. In the case of SD(Sales and
Distribution), the impact on FI happens only at the time of billing.

Depreciation – a decrease in the value of an asset due to wear and tear

Accumulated Depreciation – the total amount of depreciation calculated on a particular asset.

APC – refers to Asset transactions other than depreciation

The GR/IR – the goods receipt/Invoice Receipt account is used to post to whenever goods that are not yet
invoiced have been received or when invoices arrive b4 the the delivery of goods. During the time between
the invoice being created and delivery of goods, there can be a timing difference, in order to accommodate
this timing difference, a GR/IR account is maintained temporarily

Value from MM to FI is defined in OBYC…. on the material master the flow of values are assigned on the
Costing, acctg, etc tabs where the system helps to post the necessary stock values into the appropriate GL
accounts. helps to determine, the GL accounts updated when there is a movement of goods.

SDFI

VKOA

Company code should have same financial year, may have different currencies. You can assign 2 or more
company codes to one controlling area as long as the chart of accounts are same. Furthermore, if you have
different fiscal year variant in the company code, then make sure that the number of period remain the
same.

Yes it is possible , but in such situation cost centre will be real and production order is stastical. If you
assign both cost center and Prd Order then since Prod. Order are real co object, Cost center entry would be
statistical.

The question is not very clear. If you are talking about CO Master data. Then Cost center need to be
uploaded. You can use Data Transfer Workbench or write abap for it.

Yes can be possible , this can resolved through ranking order and bank optimization in FBZP. You use
further selection in proposal parameter, if you would like to filter the open item based on the city

Field status.

Document header cannot be changed, after posting the document you cannot change. only if you want to
change the document the reseversal entry.

The transaction other than A/P and A/R is called the special g/l transaction for ex: Bills of exchange,
Interest payable , acquisition

By doing reversal posting.

For payment terms it is used. base line date is the due date.