SAP -FICO

CLIENT - (In the SAP landscape, a client is an entity with independent information and data.)
Client is the highest organizational unit in SAP. Its a subdivision of the system, enabling
separate independent organizations to use SAP system installation. Its also known as a self-
contained data area unit with separate master records and a complete set of tables.

Within one SAP instance, a number of Clients can be created.

What does client contain?

 Application Data- Application data is the data that are stored in the database tables.
 Customizing Data - Customizing data is data created by customers when they
customize their systems

 User Master Record- A user master record defines the authorizations assigned to a
user. Basis consultants are responsible for maintaining the user master record and
assigning authorizations.
COMPANY (OX15)
Company is an Organisational unit in accounting which represents a business organisation for which
individual financial statements can be drawn according to the relevant commercial law.

A company can consists of one or more company codes.

COMPANY CODE (OX02)………………(MAIN ROLE OF FI IS COMPANY CODE (IMPORTANT))

The Company Code is the smallest organizational unit for which a complete self-contained set of
accounts can be drawn up for purposes of external reporting

is the smallest unit in an organization for which financial statements (profit-loss statement, etc.) can be
generated.

Vidhai Groups (Instance) – Company

- 100 (VIDHAI TECHIN) company code
- 200 (VIDHAI MSAND) company code

The company code is the central organizational unit of external accounting within the SAP System

CHART OF ACCOUNT LIST

A chart of accounts list consists of all the chart of accounts that can be used and each company code must
have one chart of account.

CHART OF ACCOUNT - (OB13)

In SAP, the Chart of Accounts (COA) is defined at the client level and assigned to each company
code. It is a list of General Ledger account's master data that fall under different account groups of a
company code. This grouping mechanism helps to develop better financial reports.

An important purpose of a COA is to segregate expenditures, revenue, assets and liabilities so that
viewers can quickly get a sense of a company’s financial health. A well-designed COA not only meets
the information needs of management, it also helps a business to comply with financial reporting
standards.

FISCAL YEAR
A fiscal year normally consists of twelve months’ time period where company creates the financial statements.
ACCOUNT

An account is a unique record for each type of asset, liability, equity, revenue and
expense.

GENERAL LEDGER ACCOUNTING

G/L Account Master Records

A general ledger (G/L) account is required to record business transactions of an

organization. Financial and management reports in SAP are generated based upon
the transactions booked against general ledger accounts.

 A General Ledger contains all the transaction details of a company.

 It acts as the primary record to maintain all accounting details.
 The G/L account master records control the posting of accounting transactions to G/L accounts and the
processing of the posting data.

 Before you can make postings to a G/L account, you have to create a master record in the system for the
account.

 Structure of a G/L Account

- Chart of accounts area

- Company code specific area

G/L account master records are divided into two areas so that company codes with the same chart of accounts
can use the same G/L accounts.

Chart of accounts area

The chart of accounts area contains the data that is valid for all company codes, such as the account number.

Company code specific area

The company code specific area contains data that may vary from one company code to another, such as the
currency in which the account may be posted.
There are two types of G/L accounts in SAP:

Balance Sheet and

P&L Statement accounts.

P/L statement account

It is a financial statement which summarizes costs, expenses and revenues
incurred for the specific period of time. Expenses /losses are booked on the debit
side and profit/income is booked on the credit side in SAP financial accounting.

Balances of SAP profit and loss accounts will be moved to the retained
earnings account.

BALANCE SHEET
It is a financial statement which summarizes a company’s assets, liabilities and
equity for the specific period of time. At the end of the year, net profit or net loss
will be moved to the capital account in the balance sheet.

Balance sheet accounts are prepared at the end of the financial year
and show a company’s assets, liabilities and capital. Profit and loss
statement accounts show expenses, income, gains and losses of a company
code. during a period of time. At the end of the financial year, net profit or net
loss will be moved to a capital account in the balance sheet statement.

Balances of SAP balance sheet accounts will be carried forward to the next
financial year

Reconciliation account in SAP is a general ledger account assigned to the business partner master
record to record all transactions in the sub ledger. Posting to the sub ledgers are automatically get
posted to the assigned reconciliation account in SAP by which the general ledger will always be up to
date.
Trial Balance
With this app you can display debit or credit balances for a specified time range. You can do this for each ledger and all
company codes

Journal Entry

Posting Key

Posting Keys in SAP FI are used to determine Account types (A, D, K, M, and S)
and also the type of posting. It is 2-digit numerical key.

Different Account Types in SAP FI −

 A = Assets

 D = Customers

 K = Vendors

 M = Materials

 S = General Ledger Account

Posting Key in SAP is a two digit numeric key defined to control the entry of document line items in
a FI Transaction.

Posting Key in SAP also specifies whether the line item is a debit or a credit entry, account type that
can be posted (Vendors, Customers and General Ledger etc.) and the screen layout of line items.

As per standard practice, each key is used for a specific business transaction.