Define Tolerance Groups For Employees

Significance: This step helps us pre-determine various amount limits for the employees with which we can set:

a) The  maximum document amount the employee is authorised to post.

b) The maximum amount the employee can enter as a line item in a vendor/customer account.

c) The maximum cash discount percentage the employee can grant in a line item.

d) The maximum acceptable tolerances for payment differences for the employee.

T-Code: OBA4

Path: SPRO>IMG>Financial Accounting>GL Accounting>Business Transactions>Open Item Clearing>Clearing Differences>Define Tolerance Groups for Employees

The following steps need to be followed:

Select “New Entries” from Application Bar.

Fill in the  required details as shown in the screenshot above and choose “Save“.

Define Tolerance Groups For GL Accounts

Significance: Tolerance Group is used to maintain control over posting of transactions and their clearing.

T-Code: OBA0

Path: SPRO>IMG>Financial Accounting>GL Accounting>Business Transactions>Open Item Clearing>Clearing Differences>Define Tolerance Groups for GL Accounts

The steps to be followed are:

Choose “New Entries” from Application Bar.

Enter the data for fields shown in the screenshot above and choose “Save“.

Define Retained Earnings Account

Significance: Retained Earnings account defines the (P&L Account) to be sued for posting the expenditure and incomes of the year. The balance of this account appears as Reserves & Surplus in the Balance Sheet for the year.

T-Code: OB53

Path: SPRO>IMG>Financial Accounting>GL Accounting>GL Accounts>Master Records>Preparations>Define Retained Earnings Account

The following steps have to be followed:

Enter the Chart of Accounts.

Input ‘X’ for P&L Statement and choose a GL Number from among the range specified in the ‘Reserves & Surplus account’.

Define Account Groups

Significance: Account Groups controls the Master records. It controls the number range of Master record and Field status group (Supress, Required, Optional and Display) also. SAP follows a Grouping principle all throughout SAP to handle the Master Records that may be in GL, AR AP any thing.

Note: SAP allows a maximum of 10 digits for an Account Number, however for the purposes of this tutorial we will only be using 6 digits, since that is sufficient for all practical purposes. The format we will be following is as follows:

Liabilities - 100000 series
Assets - 200000 series
Income - 300000 series
Expenditure - 400000 series

T-Code: OBD4

Path: SPRO>IMG>Financial Accounting>GL Accounting>GL Accounts>Master Records>Preparations>Define Account Groups

The following steps need to be followed.

Choose “New Entries” from the Application Bar.

Fill in the required entries and choose “Save“.

Assign Company Code To Chart Of Accounts

Significance: In this step we specify which chart of accounts we are going to use for our company. Since there are already a huge number of pre-defined chart of accounts, we can either choose from those, or assign one that we have custom-created. Only one chart of accounts can be assigned to one company.

T-Code: OB62

Path: SPRO>IMG>Financial Accounting>GL Accounting>GL Accounts>Master Records>Preparations>Assign Company Code to Chart of Accounts

The steps to be followed are:

Use “Position” to locate our company and fill in the required entries, and choose “Save“.

Define Chart Of Accounts List

Significance: Chart of Accounts List refers to the list of all GL account numbers. It defines the set of accounts within which the transactions of the company will take place. A cahrt of accounts list can be assigned to any number of companies, however one company can have only one chart of accounts list.

T-Code: OBY7

Path: SPRO>IMG>Financial Accounting>GL Accounting>GL Accounts>Master Records>Preparations>Edit Chart of Accounts List

The following steps need to be followed:

Choose “New Entries” from the Application Bar.

Fill in the required entries and choose “Save“(it is recommended to name the chart of accounts the same as the company code for future convenience).

GL Structure - Index

After the initial customisations regarding the enterprise structure, the next set of customisations involve customising the GL Structure. In this set of steps, we will be customising items relating to fundamental items of the General Ledger that define the broad outline within which the financial activities of the company will be conducted.

 

The following GL Structure steps will be dealt with as individual posts in the posts following this one. Visitors can click on the links below to directly navigate to any of the individual steps, or can use the steps outlined below in their order(which is the suggested order of customisation) given below, to get a better understanding of the inter-linked sequence that the steps follow.

 

1. Define Chart of Accounts List

2. Assign Company Code to Chart of Accounts List

3. Define Account Groups

4. Define Retained Earnings Account (Profit & Loss A/c)

5. Define Tolerance Groups for GL Accounts

6. Define Tolerance Groups for Employees

Assign Company Code to Financial Management Area

Significance: In this step we assign our company code to the financial management area we have created(or vice versa). By doing this we are enabling the Cash Flow & Funds Flow Management features for our particular company.

T-Code:

Path: SPRO>IMG>Enterprise Structure>Assignment>Financial Accounting>Assign Company Code to Financial Management Area

The following steps should be followed:

Use “Position” button at the bottom to locate our company.

Input the required details and choose “Save“.

Define Financial Management Area

Significance: Financial Management Area is a customisation that helps to work on Cash Flow & Funds Flow Management. Without this customisation these features will not be activated.

T-Code:

Path: SPRO>IMG>Enterprise Structure>Definition>Financial Accounting>Maintain Financial Management Area

The following are the steps to be followed:

Select “New Entries” on the Application Bar.

Enter the details required on the page(it is suggested to give the FM Area the same as the company code for future convenience). Choose “Save“.

Assign Business Area To Consolidation Business Area

Significance: In this step we assign the various business areas that we want under a particular consolidation area under that particular consolidation business area. It must be noted that a business area can be assigned to more than one consolidation business area in order to enable better reporting and controlling activities.

T-Code:

Path:SPRO>IMG>Enterprise Structure>Assignment>Financial Accounting>Assign Business Area to Consolidation Business Area

The following are the steps to be followed:

Click on “Position” at the bottom of the screen.

Enter the business area you want to assign.

Click on the button next to Cons. Bus. Area to select from a list of Consolidation Business Areas.

Select the Consolidated Business Area you want to assign it to.

Similarly assign any other areas that you want to assign and choose “Save“.

Define Consolidation Business Area

Significance: This is another controlling tool like Business Area, but on a much larger scale. A consolidation business area is a consolidation of a number of business areas that satisfy certain geographic or demographic criteria(for example, belong to the same state, country, continent, etc. or belong to business areas in cities only/villages only etc.). This helps in a much more macro-controlling aspect as compared to business area.

T-Code:

Path: SPRO>IMG>Enterprise Structure>Definition>Financial Accounting>Maintain Consolidation Business Area

The following are the steps to be followed:

Select “New Entries” on the Application Bar.

Input the desired number of consolidation business areas and choose “Save“.

Define Business Area

Significance: A business area is a method of controlling wherein accounts can be maintained unit-wise so that each area can be evaluated as a separate business entity and their relative profitability and contribution to the overall figures can be measured. A business is usually a city/town of operation or an independent store/outlet of the company as per the company requirements(in this tutorial we will be treating a business as a city/town).

T-Code: OXO3

Path: SPRO>IMG>Enterprise Structure>Definition>Financial Accounting>Define Business Area

Note: Any number of business areas can be created on the same screen.

The following are the steps:

Select “New Entries” from the Application Bar.

Input the Business Areas you want to create and “Save“.

Note: Any other business areas like clbg(bangalore), clhy(hyderabad), clde(delhi) etc can also be created although only one has been created in this example, any number can be created by the user.

Assign Company Code to Company

Significance: In this step, we assign the company code we have created for our company. This ensures that whenever the company code is required to be quoted for any transactions, the resultant entries get passed to our company.

T-Code:

Path: SPRO>IMG>Enterprise Structure>Assignment>Financial Accounting>Assign Company Code to Company

The following are the steps:

Click on Position Button at the bottom of the screen.

Enter the company code that you want to assign.

Select the button next to the company column or press ‘F4′ .

Select the company you want to assign the company code to.

Choose “Save”

Define Company Code

Significance: The company code is the single most important of all the fundamental definitions in the enterprise structure customisation. The company code is the identifier by which a company is referred to in all its transactions. It is an independent accounting entity with 4 numeric characters(although the maximum size fixed for it is 4 digits, a company code can consist of less than 4 digits, however, this is not advisable because, only a company code with 4 digits can take advantage of some of the advanced features available in SAP).

 

T-Code: OX02

 

Path: SPRO>IMG>Enterprise Structure>Definition>Financial Accounting>Edit, Copy, Delete, Check Company Code> Double Click on “Edit Company Code Data”

 

The following are the steps:

 

 

Click on New Entries on the Application Bar.

 

 

Fill the fields and choose “Save”.

 

 

A new window will popup asking to fill the address and other details. Enter the required details as shown in screenshot. After it is done choose “Copy” (the green tickmark at the bottom left of the window).

System will give the following error message.

Just ignore the message. The company code is now defined.

 

Define Company

Significance:- This is the first step that is customised in FI. In this step, the company and company related parameters are defined.

Transaction Code(T-Code): OXO2

Path: SPRO>IMG>Enterprise Structure>Definition>Financial Accounting>Define Company

Note: Click on any image to enlarge(since the images are of very high resolution you might have to zoom in to see the image in proper resolution).

 

The following steps have to be followed:

 

 

After choosing “New Entries”, enter the company details in the next screen. The important thing to keep in mind is that the ‘Company’ field consists of a 4 letter reference to the company(this is not the company code, and is not to be confused with the company code). Although all the examples shown in the field are all numeric in nature, it is however suggested choose only alphabetical characters, in order to easily reference the company as well as avoid confusion with the company code.

Note: Be careful in the choice of a Company, because after saving, all the other details on this screen can later be edited except Company, so user discretion is advised in this regard.

 

 

After saving, a transport request is generated which is used as an identifier for future troubleshooting. This appears for every customisation, and hence will not be shown for the rest of the posts. It must be noted that the last step in every customisation is actually the transport request, though this will not be shown for the rest of the posts because of its repetitive nature.

 

Enterprise Structure - Index

Enterprise Structure customisation comprises of steps required to customise the settings that affect the Financial and certain other aspects of the entire organisation, i.e. steps that have an enterprise-wide effect. These are the first steps that are carried out before any other steps can begin.

The following Enterprise Structure steps will be dealt with as individual posts in the posts following this one. Visitors can click on the links below to directly navigate to any of the individual steps, or can use the steps outlined below in their order(which is the suggested order of customisation) given below, to get a better understanding of the inter-linked sequence that the steps follow.

1. Define Company

2. Define Company Code

3. Assign Company Code to Company

4. Define Business Area

5. Define Consolidation Business Area

6. Assign Business Area to Consolidation Business Area

7. Define Financial Management Area

8. Assign Company Code to Financial Management Area

Consolidated Index of Posts

The following topics will be covered in the blog presently,

1. Enterprise Structure

2. GL Structure

3. Global Structure

4. GL Transactions

5. Accounts Payable

6. House Bank

7. With Holding Tax

8. Accounts Receivable

9. Interest Calculation

10. Bills of Exchange

11. Dunning

12. Tax on Sales/Purchases

13. Automatic Payment

14. Cash Journal

15. Integration

16. Financial Statement Version

17. Asset Management

18. Closing Entries

Each of the topics will be discussed in further detail in their respective posts. Clicking on the links will take you to the respective topic-index post, where further details of the customisation steps under the topic will be discussed.