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Chart Of Account in SAP FICO

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A company groups the accounts it uses to develop the financial statements in the chart of accounts. Its a list of all open accounts that the accounting department can use to record transactions. Every organization must have a chart of accounts for its accounting use. In SAP the chart of accounts is a variant created within FI module which contains the structure and the basic information about general ledger accounts. Information to be given while defining a chart of Accounts are Maintenance Language, Length of GL Account Number, Manual or automatic creation of cost elements, Group chart of accounts etc. Within chart of accounts variant we create different Account groups so that it will be easy in future to identify the nature of accounts by looking into the naming convention of it and also it will be easy to manage the accounts field status from these groups. With the help of account groups we can handle the number range of GL accounts and field status for creating GL Accounts. Three type of chart of accounts are maintained: 1. Operating chart of accounts 2. Country Specific Chart of Accounts

3. Group Chart of Accounts

Operating Chart of Accounts

This contain the General ledgers that the organization uses for its day to day posting. The company code has to be assigned with a operating chart of accounts. Company code under one controlling area should have the same operating chart of accounts.

Country Specific Chart of Accounts

It contains the General Accounts needed to meet the Countrys legal requirements. This allows you to provide statements for the countrys legal requirements. This is an optional requirement for company codes.

Group Chart of Accounts

This is used at the group level for reporting purpose. The G/L accounts that are used by the entire corporate group are defined in group chart of accounts. This allows the company to provide reports for the entire corporate group. In order to organize and manage a large number of accountss filed status and numbering system its better that they are arranged in account group. Account groups are created on the basis of there business use and functions. While posting business transactions, a user selects the operational chart of accounts General Ledger Account to get posted the transaction into SAP then it flows to other accounts maintained in SAP.

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USE OF ACCOUNT GROUP IN A CHART OF ACCOUNT SAP FI If you want a transaction to be recorded in a general ledger account then both the segments of a general ledger master i.e. chart of accounts segment and company code specific segment needs to be defined. You can not do Continue reading

Case 1: Using Group Chart of account For internal purposes, reporting over several company codes may be desirable, e.g a balance sheet shall be generated which contains the financial positions of several company codes. This is no problem as long as all company codes use the same chart of accounts. However, some company codes may have to use special charts of accounts because of legal requirements. If this is the case for internal reporting, then: 1) a group chart of accounts can be used. This chart has to contain all of the group accounts. 2) the group chart of accounts has to be assigned to each operational chart of accounts. If this is done, the field group account number in the chart of account segments of the operational charts of accounts becomes a required entry field. 3) in the chart of account-segment of every operational account, the group account number has to be entered. Different accounts of one operational chart of accounts can point to the same group account. 4) a financial statement version, for the group chart of account, has to be used. Disadvantage: Because the company codes use different operational charts of accounts, no intercompany code controlling can be performed.

Case 2 : Using Country Chart of Account An alternative to using a group chart of accounts is to use a country charts of accounts. While every company code uses the same operational chart of accounts, the company codes which require a different chart of accounts for external reporting can: 1) have a country chart of accounts assigned 2) have the country chart of account number (alternative number) entered in every company code segment. Every country account number can only be used once. Note: Since all company codes post into the same operational chart of accounts, cross-company code controlling is possible. Disadvantage: Accounting clerks who may be familiar with the country charts of accounts may have to get used to using the operational chart of accounts.