SAP FI/CO Short notes and Interview Questions

Generally, in every business organization the following business transactions events occur.
1. Customer transaction
A. Advances or deposits from customers
B. Supply of goods/services i.e., sales
C. Payments against supply of goods/Services
D. Credit or debit memo's for discounts, returns of goods and transfer
E. Loans and deposits
F. Bills receivables, letter of credits and guarantees.
2. Vendor transactions
A. Advances or deposits from vendors
B. Supply of goods/services i.e., purchases
C. Payments against supply of goods/Services
D. Credit or debit memo's for discounts, returns of goods and transfer
E. Loans and deposits
F. Bills payable, guarantees etc.
3. General ledger account transaction
Payments for expenses,
Repayment of loans, Taxes
General receipts for miscellaneous incomes
4. Bank transactions
Cash deposits and with drawls
Cheques issues and deposits
Transfers
5. Fixed Asset transactions
Acquisition or procurement or purchases
Depreciation accounting
Any transfers
Revaluations
6. Material transactions
Goods receipts
Goods Issues
Transfers
7. General Journal transaction
8. Opening entries
9. Yearend adjustments
10. Closing entries.

In manual system the financial transactions are documented, recorded, posted and
summarized to derive the results. For this the following books of account are maintained
1. Books like Cash book and bank book
2. Registers like sales and purchases
3. Ledge like General ledger, customer and vendor and assets.

The business transactions are to be classified and identified by period wise, nature of
transaction number. This will help you to summarize the accounts transactions period wise
for preparing financial statements, due statements and to authorize to process a business
transaction.
The Golden Rules of Accounting

Personal A/C
Receiver a\c Dr
Giver a\c Cr

Nominal A\C
All expenses & loss a\c Dr
All income & gain a\c Cr

Real A|C
What comes in a\c Dr
What goes out a\c Cr
FI Basics

FI Organizational structure

Client
|
Operating Concern
|
Controlling area1 Controlling Area 2
|
Co. Code 1 Co. Code 2
|
Bus area 1 Bus area2 Bus Area3 Bus Area 4

What is software life cycle?

It is nothing but Road map- five phases like, project preparation, Blueprint, Realization,
final preparation and Go-live support.

Company Code
Company code is an organizational unit for Legal Reporting. At this level, recording and
tracking the financial transactions, bookkeeping and preparing or extracting the financial
statements like balance sheet and P&L. Company code is FI core element and integrated
with all other modules.

Controlling area:
It is the organizational unit and at this level system records and analyzes the overhead
related activities(cost element, cost center accounting, and internal orders), manufacturing
related activities (product costing) and also activities of internal units analysis or evaluation
of the internal unit analysis (profit center accounting)

Business area
Business area is an organizational unit for line if business reporting. It can be structured
by responsibility area, region, or other reporting needs of a Business.

Company
Company is the organizational unit used in the legal consolidation module to roll up financial
statements of several company codes.

Assignment of company code to Controlling area:

We can assign 'n' number of company codes to one controlling area subject to the following
conditions:
1. Chart of accounts should be the same between company code and controlling area, that
means the accounting structure should be the same between the company code and
controlling area.
2. The fiscal year should satisfy the below conditions between the company code and
controlling area:
a. The number of posting periods should be the same (other than the special periods)
b. The start period and end period should be the same.
c. The start date and end date of each period should be the same.
The below are advantages if multiple company codes are assigned under single controlling
area
 cross company code transactions for reallocations of costs

Where we want see the effort of transfer price from one SBU to the other end.

Fiscal year variant

Fiscal year is a period is a period of 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 Fiscal year determines posting periods are used to assign business transactions.
You can define maximum of 16 posting period for each fiscal year. The special periods are
used for yearend activity.
The fiscal year can be defined as year dependent or year independent
Year Dependent: the financial year is same as calendar year. starting from 1st Jan to 31st
Dec where posting periods and the calendar months are equal).
year Independent: the financial year is different from calendar year starting from 1st April
31st march (where the posting period months are not equal to calendar year months.)

What are special periods used for?

Ans: The special periods in a fiscal year variant can be used for things like posting audit or
tax adjustment to a closed fiscal year.

Shortened fiscal year

Ans Shortened Fiscal Year: a financial year, which has less than 12 periods.

Posting periods
The posting period variant controls which posting periods, both normal and special, are open
for each company code. It is possible to have a different posting period variant for each
company code in the organization. The posting period is independent of the fiscal year
variant.
PPV is used to open and close the periods based on a/c types considering GL Accounts. Tr.
Code. OB52.

Document types
Ans: Document type is nothing vouchers containing line items. Document type is the
identifier of different account transactions like SA for G/L, AA for Asset Accounting etc.
Document type is a 2-digit identifier in sap. These document types are defined at client
level, so document types are applying for all company codes. It identifies different types of
accounting posting.
- It is determined define Number ranges for document. And
- It controls accounts types for postings e.g. Asset, vendor, Customer and GL
Account.

Posting keys
Posting keys 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. Posting keys are SAP delivered. If u want changes like making additional
fields optional on payment type posting keys, then the best possible actions to copy the
posting key that needs to be modified and then modify it.

Fields status variant

Fields status variant is a 4 digit identify in sap it is assigned at company code level, in GL a/c
it controls the coding block of accounting entries.

Field status group

Ans: Field status groups control the additional account assignment and other fields that
can be posted at the line item level for a G/L account.
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

What is internal and external number ranges?

Ans: 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.
Number may be an alpha numeric.

FI-GL

Chart of account
Ans: 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. One COA can be assigned to several companies.

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.

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. Ex: country specific
Group COA used for consolidation of Company codes. This is for group consolidation
purpose.

Account group
Ans: 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.
GL Master Data

Chart of Account Segment Level

Type/Description
Key word/Translation
Information

Company code Segment Level.

Control Data
Create/Bank/Interest
Information

Type/Description Tab
We need to select the Account Group and whether account is belongs to which A/c (P&L
A/c. or Balance Sheet A/c)
Text: We can able to see the G/L Text
Trading Partner: Highest priority is at Customer/Vendor Master Level.
Group Account Number: It is for Consolidation purpose.

Control Data Tab

Account in Currency: This should be always Company Code Currency

If account currency not equal to company code currency, then we can able post the
transaction any type of currency
If account in currency different from the company code currency, then system won’t have
allowed post the transaction company code currency. That mean only allowed GL Currency

Only Balances in Local Currency:

Once we have selected this indicator we can get GL reports in local currency and here if
we not selecting balance in local currency those gl a/c s involved FCR & incase of account
in currency other than company code currency.
Normally we can select this Indicator for Balance Sheet G/L A/c's and Clearing Nature of
the G/L A/c's.
Eg: GR/IR

Exchange Rate Difference Key: This will have arrived at the time of clearing of the
Invoice.
It contains the Exchange Loss or Gain. Normally we would do the month end FCR

Tax Category: It Controls the Tax Calculation

Eg: Sales
Purchased
TDS Payable
Tax payable
GR/IR

Posting without Tax Allowed: If we activated this Indicator, we can able to post the
invoice without tax.

Recon. Account for Acct. To update the transactions from subsidiary ledger to main GL
a/c.Those G/L A/c's are activating the Recon. Account, we should not activate the Open
Item Management Indicator.
Customer - Bills Receivables, Adv. Paid to Customer, Dep paid to Customer
Vendor- Bills Payable, Adv. Paid to Vendor, Dep paid to Vendor.

Asset - Asset Purchased & Accumulated Depreciation

Alternative Account: This can be used for Country Specific COA G/L A/c and Legacy GL
a/c No purpose. (For Tracking).

Open Item Management: Open item means yet to receive/ yet to make payment. It means
business transaction is pending for clearing payments like AP/AR. Where we want set-off
against the invoice that is the open item.
All clearing nature of the G/L A/c we can select Open Item Management Indicator in GL
master record. It’s not applicable for Recon. Account. This is applicable for Balance Sheet
Related G/L A/c.

Eg: Outstanding G/L A/c's

Salary clearing account
GR/IR
Tax Payable
Bank G/L A/c's
All Bank Intermediate G/L A/c
Bank Transfer.

Open item management is further reconciled and cleared against another 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.

Line Item display: By using this we can see the report line item wise. Line item display is
mandatory to select while you are selecting open item management. This is applicable for
both P&L A/c and Balance Sheet. It shows the line item wise.

Sort Key: It displays the Line Item Sequentially based on the Sort key in the G/L Line item
report.
Ex: Doc no, F.Y, Posting date, Purchase order no etc.

It updates the Assignment filed in the line item during the transaction posting. The main
purpose is used as a base to clear the transactions during the automatic clearing.

- This Assignment fields we can use in Automatic Clearing Program.

- By using the T. Code OB16 we can create our own sort keys.

Create/Bank/Interest tab

Field Status Group: It controls the data entry, while posting G/L Accounts (which is req,
optional, suppress). It is mandatory for all G/L Accounts

E.g. G001- General Text

G005-Bank G/L
G007-Asset G/L
G012-Bills Payable/Bills Receivable
G029-Revenu Accounts
Post Automatically Only: When GL a/c integrated with another module then it is
activated. This can be select of all type of G/L Accounts except Recon. Accounts.

Those accounts we have activated we cannot post the transactions manually.

We need to select the Post Automatically Indicator for all balance sheet related Stock G/L
Account.
E.g.: Intergrade with other’s Module
Salaries -H. R Module.
Recon. Account Ready Input: We can able to modify the Recon. G/L Account at the time
of Document Posting

Planning Level: This is purely related to B/s bank GL a/c. It is helpful to prepare cash
flow and fund flow.

Relevant to Cash Flow: It can be helpful to prepare the Cash Flow and Funds Flow
statement. All type of Cash and Bank G/L Accounts we can activate.

House Bank: We can select for all Bank G/L Account. It is nothing but a Bank Branch of
the Address.

Account Id: Nothing but a Bank Account Number.

Interest Calculation: Interest is calculated on bank GL a/c & loans & advances GL a/c.

Interest indicator: Interest indicator is the variant in which we have define configuration.
how we have to calculate interest. Once it is defined it will relate to the GL a/c to which
interest you want to calculate.

Interest calculation frequency: How frequency you are calculating interest E.g.: daily,
monthly yearly etc.

In GL, master we have a option ''Balance in local currency'' and ''Account currency’’.
What does it mean?
Account currency is that the GL account in which currency do you want to maintain. if you
decided that you want to maintain separate currency, you can post any currency in that
account. if not, you want to maintain separate currency for that GL then exchange rate
difference will come because the conversion rate. Balance in currency - some GL, account
can't be maintaining on open item basis and can't in foreign currency like clearing account
and discount account etc., in such case you can assign this indicator to show the balance in
local currency.

Retained Earnings account

The main purpose of retained earning account is at the yearend net profit or net loss
balance in the P&L a/c to carry forward to the Balance sheet account. Retained Earnings
account is a Balance sheet account.

Financial Statement Version

Financial statement version is helps to prepare the Income statement and Balance sheet in
structured format, for the reporting purpose.
It contains 20 hierarchy levels, each hierarchy level called as financial statement item. In
the lower level we assign the GL accounts.
Tolerance group for employees
Ans Tolerance group stores posting amounts defaults. Tolerance groups are assigned to
user ID'S that ensures only authorized persons can make postings.

Exchange Rate Difference

Direct Quotation
Maintenance between from "FOREIGN CURRENCY" to "LOCAL CURRENCY". (INR)
Indirect Quotation
Maintenance between from "LOCAL CURRENCY" to "FOREIGN CURRENCY".
Configuration Steps
1.Check Exchange Rate Types OB07
2.Define Translation Ratios for Currency Translation OBBS
3.Enter Exchange Rates OB08

Foreign Currency Revaluation.

Before creating the financial statement, we have to perform foreign currency revaluation
process. Documents posted in foreign currencies have to be converted to company code
currency for preparing the company financial statements.
At the month end you will have certain open items, which need to be revalued with month
end exchange rate and can be carried out as a monthly closing activity. Once the month
end process is completed then the revaluation entries are reversed.
These transactions can be bills receivable or bills payables or might be intercompany
money transfer.

Exchange rate difference

1. Realized Exchange rate diff gain /loss

When the foreign currency transaction payment has completed, and you have
gained/losses due to that transaction is called as realized gain/loss.

Ex: Vendor 12.01.2016 invoice 60$ 1000rs 60000

20.01.2016 payment 70$ 1000rs 70000
Loss on ex. rate 10000

Entry Dr. Vendor 60000

Dr. Loss on ex. Rate 10000
To Bank account 70000

2. Un realized exchange rate diff gain/Loss

Exchange rate difference at the time of revaluation of Foreign Currency Open items

Here the foreign exchange rate difference appears but not realized, because the
transaction is not cleared up.
Will do Revaluation on Vendor & Customer Open items & FCR Related GL Accounts.
Entries for gain
31.01.2016 – Dr. Provisional for FCR 01.02.2016 Dr. unrealized gain on FCR
Cr. Unrealized gain on FCR Cr. Provisional for FCR
Overview

Ledger Link to the Postings.

Ledger Group Link to the Ledgers.
Accounting Principle link to the Ledger Group.
Valuation Area link to the Accounting Principle.
Valuation Area link to the Valuation Method.
Valuation Method Link to the Valuation Types/Procedures.

Valuation Method: It specifies which method (or) procedure is used to valuate the open
item (FCR open Items) & To valuate the GL a/c balance which is maintained in the Foreign
Currency.

Types of Valuation Procedures (or) valuation Types

Always Valuate - when we are doing FCR (Revaluation) system will generate entries either
gain or loss.
Lowest value principle- When valuating the FCR revaluation, it will valuate only in case of
Loss on Foreign Currency Revaluation.
Strict Lowest Value Principle- When we are comparing the last revaluation it currency
revaluation is more Loss, that time only it will work.
Revaluate Only- when we have the gain on revaluation, it will do revaluation only in case
of Gain

Valuation Area
By using valuation area, we can use more than one valuation methods
By using valuation area, we can post to the different gl a/c's & different ledgers.
one valuation area, it represents to the one valuation method. (1:1) relationship.

Accounting Principles - It represents the Legal Authorities (or) regulations.

Ex : IFRS/IAS/USGAP
One Accounting principle, we can link to the multiple valuation areas.
One valuation area not possible to link to the multiple accounting principle.
One accounting Principle represents one ledger group.
one ledger group can be link to the multiple accounting principle.

KDF can be used for both "Foreign currency Revaluation" and also to account the "
Realized Exchange Rate Differences".

Exch. Rate Diff. using Exch. Rate Key KDB

Exchange Rate Dif.: Open Items/GL Acct KDF

FCR configuration

1. Define valuation methods

2. Define valuation areas
3. Assignment of accounting principle to ledger group
4. Assign valuation areas to accounting principles
5. Maintain the Default G/L Accounts for Exchange Rate Difference and for Foreign
Currency Revaluation (OBA1)
6. Execute the Foreign Currency Revaluation (FAGL_FC_VAL) OR (F.05 old)
Parking document:
The Concept of parked document when we have the waiting for authorization for posting
invoice.
Like Incomplete of the document
- Payment document not possible to parking
- While doing the document parking system it won't check tolerance and exchange
rates, filed status also it won’t check
- It is also possible delete the parked document
- Not Possible to use same number for another document
- When convert the document from park document to normal document it will
update same document number.
Enter the document he will park in the system Informs to SR person approval SR person
he can make changes to the document form amount / Date / head of account before
release, once he releases the document will be posted and updates records.

Steps:
1. Posting of Parked document by cashier FBV0
2. Informed to Sr. person for release –Be cashier
3. Display Parked document and change date and amount
4. After change, inform to Cashier about approval
5. Display changes to packed document.
Hold Documents:
It is a temporary document
This is user for adjustment purpose or at the time of posting we do not know either debit
or credit.
This document can be deleted there is no tracking for this document.
- Normally this functionality using daily base transactions
- It's for user specific
- When performed Held document user given by external number

- While convert to held document to normal document time system generates the
invoice number
- It is also editable while doing post transaction

A) Loans to Directors
- Create as hold document a once he gives money back delete the document.

B) Payment to a party –purpose of payment we don’t know

Cash balance = Account balance +/ Hold documents
Hold documents will not update records

Steps:
1. Run a program called “RFTMBLU” for conversion of hold documents
2. Creation of hold documents
3. Delete / complete hold documents

1. Run a program called “RFTMBLU” for conversion of hold documents

Path: Tools – ABAP Workbench- Development –ABAP Editor (SE38)

Program: Give the program name: RFTMBLU”

Account Assignment Model FKMT

Account Assignment Model is a reference for document entry that provides default values
like GL A/C, Company Code, Amount, CC for posting business transactions. An account
assignment model can contain any number of G/L account items and can be changed or
supplemented at any time. In contrast to sample documents, the G/L account items for
account assignment models may be incomplete.

It's like predefined template

By using this function, we can make multiple transaction for the same time

- It can be possible the distribute the amount based on %

- We need to create variant for account assignment object
- By using F-02 we can able to post the line items for account assign object

Sample Document
Sample documents are the data sources for an accounting document. Sample documents
have a separate number range. Their advantage is that you can change or enhance them.

Sample document is predefined reference document and it can be created with default
values like GL A/C, Amount and CO Account Assignment Object.
Create a sample document and store in the system every month by coping sample
document number and by changing date and amount we can post the provisions we will
not forget any provisions.
This is used for month end provisions.

Salaries A/c Dr. 100000

Rent Dr 50000
Wages Dr 500000
To outstanding 650000
Steps:
1. Create 3GL masters
- Salaries A/c -Personal cost
- Rent A/c -Administration
- Outstanding expenses – Current liabilities & Provision
2. Create no. range interval for no. range X2
3. Creation of sample document
4. Posting of transaction by copying sample document.

Recurring Entries FBD1

Recurring entries are business transactions that are repeated regularly, for example rental
payments or insurance premiums.
When the postings happened accruals and repetitive nature case we are using this
function.

Use transaction FBD1 for entering the recurring entry data. This document is not an
accounting document, it does not update the transaction figures therefore it does not
affect the account balance. The recurring entry program uses it as a basis for creating
accounting documents.
To store the recurring entry document the system uses a special number range "X1"
(transaction FBN1).

Recurring Document having

Month Intervals - one month or two months
Run Date - like which date every month run
Run Schedule
First Run
Last Run
Currency Type
Transaction Date
Execute the program F.14
Display the Program F.15

What is the difference between Sample document, Recurring document and Account
assignment model?

Sample document is a reference document for the original documents. It will not update
any transaction figures. We can use the sample documents for month end provisions. The
Tc is F-01, You can use the standard document type X2 for sample documents.

Recurring documents can eliminate the need for the manual posting of accounting
documents, which do not change month to month. For example, office rent. at the end of
the month all recurring entries automatically posted through a batch process.
Account assignment model is contrast to sample document, the G/L account items for
account assignment models may be incomplete.

What is residual payment and partial payment?

Ans: Residual payment it clear 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.

FI-AR/AP

What are all the segments in a Customer/Vendor master record?

Ans: Segments in Customer/ Segment in Vendor
-General Data Segment /General data segment
-Company code segment /Company segment
-Sales area segment/ Purchase organization Segment
Whether any FI document will be created during PO (purchase order)? If please mention the
entry also?
Ans: There is no document that is created in FI side during PO. But in controlling there can
be a commitment posting to a cost center. The offsetting entry is posted at the time of GR.

Bank

House Bank: House bank provide the information about the bank through which the
company make payments to vendor/ Customer.

House Bank- FI12

The Company Having the account in the bank, that bank represents the house bank. Each
Individual bank it represents the House Bank. House bank like branch of bank. It is used
APP and BRS. One House Bank Having Multiple Account ID’s. Each Account ID Linked to the
main bank.
While do the transaction the data saved under this GL Accounts. Every GL Account Linked
to House Bank &Account ID.

Control Key: It’s Controls the Different Types of Account Id's like, Personal, Current
Accounts
Non-House Bank: It is required APP (Bank Transfer, DME)
- Not Required the Account ID, only required the Bank Key.

Bank Directory: It like Index of or list of bank GL Accounts, Function of this one it
addresses the all bank Information Like Bank key (Bank Basic Details)
It represents the both House Bank and Non-House Bank. Like both specifies Bank Of branch

Bank Key-FI01: It Uniquely Identifies Bank Details in SAP like IFSC Code, Bank Key Defines
the Country Specific
Account ID: It specifies the Individual accounts in the Branch. Each House Bank is
Represents in the sap by a House Bank ID, and each the Account it represents the account
ID.
Check Lot-FCHI: It like a set of the number ranges reserved for check number Assignment.
This May Be Used either for the printed pre-numbered Check Stationary supplied by a
house bank or Self Printed Check Stationary Based on the number interval provide the
Bank. Check Lots Can BE Maintained for Paying Company Code Wise Combination of House
Bank, Account ID, GL.
Non-Sequence: If you want Check Print through SAP Not Select This Indicator. Incase If
You Have Select This Indicator Not Possible to Get Check Print Through APP. Normally This
Indicator Selected Only Check Print With Out APP. If Select This Indicator System Fallows
Non-Sequence Check
Payment Method List
- The Purpose of this Indicator Check Lot Allowed to Use Which Payment Method.

Payment Process in Accounts payable

Manual Payment Process

1. Manual Payment with check updated without check print.

Maintain Payment Method in Vendor Master Data and maintain Vendor Bank Details.

Post Invoice (FB60)

Payment (F-53)
Manual Check Assignment (FCH5)
Check Register (FCHN)
Print Check (FBZ5)
Cancel Check (FCH9)

2) Manual Payment with Check Printing FBZP Configuration Required

Post Invoice (FB60)
Post Payment Document and Check Print (F-58)
GO and Check Spool List (SP02)

3) Automatic Payment Program (FBZP+F110)

What is Automatic payment program, and explain process?

The APP in SAP FI is used to identify the due and overdue items and Process a huge list of
vendor invoices and customer invoices to make payments in single time. The APP
Payments are used to both vendor as well as customer.

APP configuration steps to be involved.

1. All the company code
2. Paying company code
3. Payment method in country
4. Payment method in company code
5. Bank determination
6. House bank

1. All the company code

 Sending Company Code- Those Company Having Vendors is a called Sending Company
Code, like Inter Company Transactions
Paying Company code- Those Company Having Payment Responsibilities Called as a Paying
Company code
Sending Company Code Paying Company Code
DR.Inter cc 1000 DR.Vendor
CR.Bank 1000 CR.Inter CC

Separate Payment for business area. We can Made the payment each Business area wise

Payment Method Supplement: It is nothing but Search Term and Sort Key. Based on this
key we can sort the print out to sort the payment for the printing purpose. It's like Two
Digits Key Can Be assign to the vendor invoice. If you select this indicator, it is predefined
for the customers and vendors. By using this option group payments. Payments and
printing separately according to the payment method supplement.

Cash Discounts and Tolerance Days

Tolerance Days for Payable- This IS Grace Days for the Payment

Out Going Payment with Cash Discount from% - It Specifies the lower limits for the
payments with cash discount deductions.
Maximum Cash Discount- Once select this indicator after cash discount period also it
allowed to deduct and process for the payment
Vendors
Special Gl Transaction
Down Payment Request
Request for Payment

2. Paying company code

In this section we maintain

1. Maintain minimum amount for incoming and outgoing payments.
2. Bill of exchange parameter
3. Forms for payment Advice & EDI
4. Payment method in country

Minimum and Maximum Incoming Payment

No Exchange Rate Difference- No Exchange Rates Postings while doing APP when we have
select This Indicator
No Exchange Rate Difference (Part Payments)
Bills of Exchange
Separate Payments for Each Reference wise- It Groups the Items and Each reference wise
made the payment.
It is applicable Only Invoice and Credit Notes. Those Invoice Having Same Reference Can
Be settled Single Payment.
Form for the Payment Advise F110_IN_AVIS

3. Payment method in Country

Payment Method for Out Going/Incoming

Payment Method Classification: Check/Bank Transfer/Bills of Exchange/Check Bills Of
Exchange.
Post Office Current Account Method
Allowed for Personal Payments
Required for Master Data Specification
It's Required while Doing the Bank Transfer the Payment Process
Payment Medium Program RFFOUS_C
Payment Document ZP
Clearing Document ZV

4 Payment Method in Company code

In this section we maintain the
1. Minimum and maximum amount
2. Whether payments abroad & foreign currencies are allowed
Foreign Payments and Foreign Currencies Payment
Foreign Business Partner Allowed
Foreign Currency Allowed
Customers/Vendors Abroad Allowed
3. Grouping optional
Group Items
Single Payment for Marked Items
Those Open Items which is having this payment methods to be paid individually
Single payment will be created for every line item if this check box is selected.
Payment for Due Date: Those Invoice Having Same Due Date We Can Made the Single
Payment.
One payment document is created for all the invoices which are due on specific due date
4. Bank Optimization
Bank Selection Control
No Optimization
Optimize by Bank Group
Optimize BY Postal Code
5. Form for Payments media - F110_PRENUM_ChCK
5 Bank Determination
In this section we maintain the
1. Ranking orders
2. Amounts
3. GL accounts
4. Bank charges
5. Value dates

Automatic Payment Program Run F110

BRS – Bank Reconciliation Statement

1. Manual bank reconciliation statement

2. Electronic bank statement

At the time of data entry At the time of bank statement upload

1. Payment to Vendor Posting keys
Dr. Vendor Dr. Check issue GL A/c
Cr. Check issue GL a/c Cr. Main bank GL a/c
Posting areas
2. Check received from customer
 Dr. Check deposit a/c Dr. Main bank GL a/c
Cr. Customer a/c Cr. Check deposit a/c
3. Dr. Bank charges
Cr. Main bank GL a/c

Dr. Interest Paid a/c

Cr. Main bank GL a/c

Dr. Main bank a/c

Cr. Interest Received a/c

EBS Configuration
1. Account symbol
2. Assign GL account to Account Symbols
3. Create the keys for posting rule
4. Define the posting rules for each posting key
5. Create the transaction type
6. Assign bank account to transaction type

1. Account symbol: account symbol it represents the bank gl account.

- Account symbol is the identification Key, it represents the relevant G/L Account
which bank transaction to be posted
- Before applying the posting, rules system replaces this a/c symbol with relevant gl
account and posting keys effected to GL accounts.

2. Assign GL a/c to Account Symbol

We need to assign the G/L accounts to the Account Symbols. This is the Account
Determination process.
- One G/l Account we can assign to more Account Symbol.
Note: For All Bank Intermediate G/L Account we need to activate the "Open Item
Management" Indicator.

Eg: Cheque Issue G/L Account

Cheque Deposit G/L Account
Customer Directly Deposit G/L Account
Bank Transfer (Out Going) G/L Account
Bank Transfer (Incoming) G/L Account
3. Create the keys for posting
- It is nothing but posting key’s
- Posting key represent the posting rules
- We need to define the posting rules for each posting key based on transaction
appearing the bank statement.
Eg: CHI, CHD, Bank charges, Interest paid, Interest Received.
4. Define the posting rules for each posting key
Posting Rule, which specify which G/L A/c is to be Debit and Credit for Particular
Transaction, while uploading the Bank statement in the system.
The posting rule it contains the posting area and posting type

Posting Area: Posting Area it determines whether system updates only Bank Accounting
Entries (Posting Area-1) or also subledgers accounting (Customer Accounting, Posting Area-
2)
Eg: Customer Directly Deposited in the Bank

Posting Area: 1 Dr. Cheque Deposit

Cr. Customer

Posting Area: 2 Dr. Main Bank

Cr. Cheque Deposit.

Posting type: It determines whether Transactions from a Bank statement is to be only

posted to the G/L Account or also clear the corresponding Debit or Credit lying in the bank
sub accounts (Bank clearing accounts, CHI, CHD, CHDD).

5. Define the Transaction Type

Transaction type is nothing but a variant and grouping the external Transactions and
mapping with the Posting keys for posting rules.
5.1) Assign the External Transaction type to the Posting Rules
Here we need to map the External Bank Transactions code with the bank statement.

Interpretation Algorithm
The purpose of the Interpretation algorithm is used to base as a clear the open item, while
uploading the bank statement.
6. Assign the Bank Account to the Transaction type
Transaction type assign to with the combination of the bank key and bank account.
- Each transaction we need to create posting keys.
7. Upload the E-BRS (Electronic Bank Statement) (FF_5)
BELNR: This is nothing but a Document Number, if we specify any Document No. Range
out of these No Range, program will not consider as a clear the open item.

File format MT940

8. Check the Bank Statement Updation/Reprocess the Bank Statement (FEBAN)

Lock Box:

Lockbox is a function, performed by a bank, which allows the Customer to send payments
directly to a bank via ‘lockbox’ (a specific mail address set-up for the company at the
bank). These payments are collected by the bank and applied to the company’s bank
account, with data from the payments (like check routing number, Customer bank account
number, check number, payment amount and invoices being paid) being made available to
the company in a file format to allow for collective processing. The lockbox data is either
sent daily to the company, or located at the bank, and retrieved by the company daily.

Ex: TeS have operations in United States, where They are receiving Customer Payments
through Lockbox system.
SunTrust Bank providing them this facility to clear Lockbox Payments and credited their
Bank Accounts from that proceedings.
SunTrust is using BAI2 file format for Lock Box Payments, which we have configured in
SAP to process Lockbox statement receive from Bank.

100TESUSLKBX 00610001041807101300
2TESUSLKBX 0061000104000000000040008000802
50010001167630180710TESUSLKBX 0061000104
600100100001000000610001040000000001000010000106071
4001001601011000000610000100000
700100111676301807100010000100000
50010001167630180710TESUSLKBX 0061000104
600100100001000000610001040000000001000020000106072
4001001601011000000640000100000
700100111676301807100010000100000
50010001167630180710TESUSLKBX 0061000104
600100100001000000610001040000000001000030000106073
4001001601011000000720000100000
700100111676301807100010000100000
8000000116763018071000030000300000
9000003

TESUSLKBX - Origin#
061000104 – Destination
180525 – Deposit Date
0123456- Lock box number
0560100902 Invoice Number
0000386462 _ Invoice Amount
0000480291 -Remittance Amount
0000422111- check number
061000104- TR/ABA# (RT#)
000008800644444 -Customer account
9000015 _ Total records

Lockbox process configuration:

1.Define lock boxes for house banks

2.Define Posting Parameters OBAX
3.Define posting data OBAY
Maintain Bank details in customer master data which bank will send in lockbox file XD03
Lockbox file Import FLB2.
SAP supports both US lockbox file formats – BAI & BAI2.
Lock box Accounting Entries:

When the bank receives a check from customer with remittance information its sends it in
Lockbox file. Lockbox file when processed will generate below accounting posting.

Dr Bank Clearing account – incoming

Cr Lockbox Clearing Account

Dr Lock box clearing account

Cr Customer account (customer sub ledger)

APP There will be many banks in a house bank. If the payment should be made from
bank GL account. Where it is configured?

Ans: There can be several accounts in the same house bank. We should assign the GI,
accounts exclusively at the time of creating the Bank master data and the bank accounts.
Accordingly, we can do the bank determination in FBZP for the individual banks and the
corresponding sub accounts. Transaction code for defining bank: FI12.
How to use the program RFEBKATX? This creates two files STATE.TXT and ITEM.TXT.
How are these files imported into SAP?
Ans: Try using program RFEBKA00 to upload the two files.
- One is the header file containing the House bank & account information along with the
date and the statement number
- The other is the item details.

Dunning Procedure - FBMP

Dunning is nothing but a sending the reminders to follow up the payments, those Customers
are having the debit balance.
The Dunning Program run based on the configuration and selection parameters. System it
selects which Customers are having the Debit balance then it checks each Invoice and it
determines the level of Dunning.
Dunning procedure
- The Dunning Procedure contains parameters to execute dunning
- The Dunning Procedure it is linked in the Customer Master Company Code Data Tab.
1.Parameters of dunning procedure:
Dunning intervals in days: The Minimum time gap between the Two Dunning Levels.
No. Of Dunning Levels: Maximum we can have 9 Dunning Levels. Last Dunning Level treated
as a Legal Notice.
Total Due Items from Dunning Level: From the specific Dunning Level onwards want to
display all Due items on the account to Display in Dunning Notice.
Minimum. Days in Arrears (Account): At least one item in the account should reach the
Minimum Days, otherwise that account will not consider in the Dunning Notice.
Line Item Grace Periods: nothing but tolerance days.
> Giving the some more days to the Due Days.
> Line Item Grace period is applicable only for First Dunning Level only.
> Any Item which is (<) to the Line Item Grace Period that Item will be excluded from the
dunning notice.
Interest Indicator:
>If we want to calculate the Interest on Dunning Amount.
>We can assign the Interest Indicator in the Customer Master/Dunning Procedure.
>System gives the 1st priority to Customer Master and Second Priority to Dunning Procedure.
Standard Transactions Dunning: We need to activate this Indicator.
Dunning Special G/L Transactions: If we want to include the Special G/L Transactions in the
Dunning Notice, then we need to activate the Dunning Special G/L Transactions Indicator.
If we have activated this Indicator, then we need to specify which type of Special G/L
transactions are to be include in the Dunning.
Reference Dunning Procedure for Texts:
- By using this Text field, we can Assign and Determine the Dunning Forms.
- This Text filed we can be maintained manually, otherwise by default system will
take the Dunning Procedure code.
2.Dunning Levels:

Calculate the interest: From which Dunning Level onwards, we want to calculate the
Interest.
Always Done: It indicates that a Dunning notice is still printed even if no changes has been
made to the Dunning proposal since the last Dunning Run. (There is no changes from the
previous Dunning Level even though such case also Dunning notice will print).
Note: Usually we can select the Always Dun indicator for Highest Dunning Level.
Print All Items: To Print All open items in the Dunning Notice. Then we need to select this
Indicator. Normally we can select this Indicator for Hight level of Dunning.
This Indicator will give the Overview to the Customer of Account Balances.
Payment Deadline: Dead line date for the payment. Payment Dead line date is start from
the Dunning Notice Generated date.
3.Dunning Charges:
The Different Dunning Charges can be maintained separately for each Dunning Level wise.
The Dunning Charges can be maintained either Fixed Amount or Percentage based.
The Percentage is calculated only on Dun Amount.
Note: Dunning charges are Statistical Postings.

4.Minimum Amount :
>From the above amount only sent the Dunning Notice.
>If we have maintained in the both Minimum Amount and Percentage, system will consider
the whichever is highest.
>The Minimum Percentage is applied total of all Open Item of the Account.
Minimum Amount for Interest: The Interest to be calculate on these Amount.

5.Dunning Texts: Always Dunning forms can be maintained Company Code & combination
of Dunning Area.
> If we want to maintain the forms at Dunning Area wise then we need to select the “Dunning
by Dunning Area" Indicator. otherwise the Dunning form can be maintained at Comp. Code
level.
Separate Notices Per Dunning Level: This Indicator needs to be select, if we want to
maintain the separate Dunning Notices for each Dunning Level.

Assign the Dunning Procedure in the Customer Master

We need to assign the Dunning Procedure in the Customer Master Company Code Segment
Data Tab.

Dunning List Variant: Program RFMAHN21

Configuration Steps:
1. Define Dunning Procedures FBMP
2. Assign the Dunning Procedure in the Customer Master FD02
3. Execute the Dunning Program (F150).

What factors differentiate from one dunning level and other dunning level?
Ans: The most important thing that differentiate the dunning levels are the dunning texts.
The dunning text defines the urgency of the dunning notice. The other things can be the
dunning charges, minimum & maximum amounts etc.

New GL Concepts:

What are the advantages of new GL concept?

We can get the segment reporting in the New GL concept of document split. Reconciliation
between finance and controlling can be online and no need to run month end process. That
is the not required to run (T Code KALC)
Need not run the month end process in the PCA like transferring, receivables and payables
to profit center transfer. Asset transfer balances, stock transfer and regrouping of
receivables and payables not required to do in New GL.
We can have multiple ledgers like leading and parallel ledgers, new ledger as on extended
data structure compare to traditional GL accounts. Which always to store additional fields
for reporting analysis.

Document splitting: -

Document splitting means the document splits the line items based on the
“Characteristics” we define in. Often this function is used to get the financial statements
correctly for segment reporting It will split by profit center wise or segment wise.
Documents splitting classified into 3types. 1. Active Split 2. Passive Split 3. Zero
Balance Split
1. Active split: the document will be split based on splitting rule.
a. The document is entered with the document types, system identify the business
transaction to the document type.
b. From the business transactions which are defined in the splitting rule, systems
identify the category of transaction, instance of company code and expenditure
& Revenue.
c. A transaction category determines item category. Item category consists base
item category it is used for active split.

2. Passive split – It is used at the time of clearing of the transaction like reschedule
payments. For passive split need not required to configure. This split depends on
active split of the document.

Ex: During the document splitting for a vendor payment transaction, the system
uses rules from the vendor invoice

3. Zero Balance split – In this split system generate extra line item to achieve the
split. The extra line item is controlled by zero balance account. This is applicable
at the time of F.C. R & Reclassification of balance.

Configuration steps:
1. Classify G/L Accounts for Document Splitting
Here in this step GL’s are classified according to item categories according to business
transaction nature
2. Classify Document Types for Document Splitting
In this step the “Business Transaction” and “Business Transaction Variant” is assigned to
document types
3. Define Zero-Balance Clearing Account
In this step we have to define the zero-balance clearing account which will be used to
generate and balance out financial entry when it is not possible to balance out at its own,
4. Define Document Splitting Characteristics for General Ledger Accounting
This is one of the most important configurations step in document splitting. In this step we
have to define the splitting characteristics. Additionally, you can define whether this
should be Zero Balance and Mandatory.

5. Edit Constants for Non-Assigned Processes

In this step the constants are defined which helps to assign the default account assignment
when is not able to derive from any of the sources.
6. Activate Document Splitting

What is Parallel ledger concept? Define Diff b/w Leading and non-leading ledger?

Parallel ledger: In addition to the leading ledger. We can maintain two additional ledgers,
those are called as a parallel ledger. It is providing the ability to produce different sets of
financial statement.

Leading ledger:
 Leading ledger maintain at client level. It is applicable for all company codes.
 You can define only one leading ledger, has the leading ledger – sap provide the
leading ledger “0L”
 The leading ledger is integrated with all subsidiary ledgers.
 Only values from the leading ledger are sent to controlling module
 Leading ledger follow company code currency
 Leading ledger uses the GL total table: FAGLFLEXT
 The leading ledger fiscal year and Posting period always follow as per company code

Non-Leading Ledger:
The non-leading ledgers are used as parallel ledger together with the leading ledgers. This
can be used to apply different accounting standards, such as IAS/ IFRS or US – GAAP.
 Non-leading ledger is not integrated with logistics and Controlling module
 Each non-leading ledger can have different fiscal year and posting period.
 We can maintain different currency other than company code currency
 If we have not specified during the posting of transaction, then system updates
transaction all the ledgers.
 Separate Documents types and number ranges can be maintained for non-leading
ledgers by users.
What is segmental Reporting?

In new GL concept, we can get each segment wise report and profit center wise
report, depends on, online base. The Selection of splitting characteristics in FI
document
(This is IFRS / IAS segmental reporting requirement)

Classic GL Concept.

1. In classic Gl account we can activate profit center under controlling area level.
2. In classic gl account there is no online reconciliation b/w FI to CO. So, we need to
run the month end procedure b/w two modules (KALC)
3. Dummy profit center concept available in classic Gl account.
4. At the time of document posting, the line items are updated in respective profit
center, so we post to the dummy profit center.
5. During the period end, we will follow some assumptions like profit center
distribution and assessment, through we allocate to respective Profit center.
6. In classical GL account we can use business area concept, at company code level
for financial statement.

Questions

When we activate New GL concept system will automatically activate in six areas? What
are those?
How many types of views the report in profit center accounting?
What is the difference between ECC 6.0 and 4.7 in profit center accounting?

Tax

Taxes are 2 types 1. Tax on sales and purchases(GST)

2. TDS

GST Notes

Intrastate Transactions:
-Central GST (CGST)
-State GST (SGST)

Interstate Transactions:
-Integrated GST (IGST)

Imports:
-Basic Customs Duty (BCD)
-Integrated GST (IGST)

Exports:
-GST -Zero rated
GST Rates slabs- 0,5,12,18,28

Configuration steps:
 1. Company Code settings -Tax item must be ‘unchecked’ (Line item wise break up
purpose)
2. Assign tax Procedure to country OBBG
3. Define Condition types OBQ1 Copy MWVS and MWAS)
4. Create transaction keys OBCN (Copy MWS and VST)
5. Assign condition type and transaction key in tax Procedure OBQ3
6. Creation of Tax codes FTXP
7. Assign Tax codes to company codes
8. Create Business Place – Here we need to assign GST Registration number
State wise individual registrations

9. Assign business place to plant - Link the GST registrations to plants

10. OB40 Rule settings.
11. Assign GLs OB40
12. GL account determination table J_1IT030K_V
13. Condition records maintains FV11

Master data

Vendor
GST Registration number of Vendor
GST Classification of Vendor - Registered, not registered, Compounding scheme

Customer Master

GST Registration number of Customer

Goods Recipient Partner function
GST Partner
GST Classification of Vendor - Registered, not registered.

Material master

HSN code
Tax Indicator
Used for tax determination in Purchase transactions

Reports

ZSTR1 - GST Output report

ZSTR2 - GST Input report

Condition Account
type Description keys Description
JICG IN Central GST JIC
JICR IN: RCM CGST JCR
JIIG IN Integrated GST JII
JIIR IN: RCM IGST JIR
JIMD IN Import GST JIM
JISG IN State GST JIS
JISR IN: RCM SGST JSR
JCIS IN: GST Comp cess JCI
IN: GST Comp cess-
JCIN
ND NVV
IN: GST Comp.cess
JIDC
Imp JIM
IN: Comp.cess Imp-
JINC
ND NVV
IN: RCM Comp. JCR IN: RCM Comp. CESS
JCIR
CESS
ZCRN IN: RCM CGST Inv ZCR
ZSRN IN: RCM SGST Inv ZSR
ZIRN IN: RCM IGST Inv ZIR
ZRCN IN: RCM CESS Inv
JOCG OUT Central GST JOC
JOSG OUT State GST JOS
OUT Integrated
JOIG
GST JOI
RCM CGST
ZICR Receivable ZCR
RCM SGST
ZISR Receivable ZSR
RCM IGST
ZIIR Receivable ZIR
IN Central GST –
JICN
ND NVV
JISN IN State GST – ND NVV
IN Integrated GST
JIIN
ND NVV

Tax procedure
Reference access sequence for Purchasing

Go to SM30
Now maintain the G/L account in view J_1IT030K_V

GST Entries

Output entry (Sales)

Dr Customer a/c
Cr Sales Revenue a/c
Cr CGST
Cr SGST

Or IGST

Input entry(Purchase)

Dr GR/IR A/c
Dr CGST
Dr SGST
Cr vendor A/c

RCM Purchase
Dr GR/IR a/c
Dr GST RCM Receivable a/c
Cr GST RCM Payable a/c
Cr Vendor a/c

With Holding Tax (or) TDS, Tax deducted at source

As per Income Tax Rule

At the time of Advance Payment

At the time of Invoice

Tax rate % is different based on the "nature of payment" (or) Rules

Nature of payment
Insurance
Rent
Sub-Contractors
Advertisement
Professional charges
Need to Deposit to government Through bank
Bank Challans
Detail of Transactions

Quarterly Returns
TDS certificate

Official Tax Key

It represents the Income tax sections and Rules.
Receiver Type
To identify the receiver, and based on the receiver type, TDS (%) will be deduct.

TDS incurred in 2 places

1. Invoice time
2. Payment time
With Holding Tax type
At the time of advance payment (one withholding tax type)
At the time of Invoice (one more withholding tax type)

Withholding tax code (Tax Rate % (or) TDS%)

we are maintaining in the withholding tax code.
tax code it contains the tax percentage (%)
Withholding Tax codes represents the combination of withholding tax keys+ WHT tax type.

Postings to the GL Accounts

Here you can maintain separate TDS GL accounts for tax
Mapping gl accounts tax code + withholding tax type.

To deposit tax amount to government

Bank challan is required
Number range for bank challan

quarterly Returns
Form
No. Range for quarterly returns.

TDS Certificate
Required "TDS" Forms
Number range for TDS Forms

NON-SAP SAP
1 Sections/Rules With Holding Tax Key
Each section in sap we will call as a
Examples withholding tax key.
194C Subcontracting
(payment to sub contract vendors)
194I (RENT)
194J(Professional or technical
services)
194A (Interest Income other than
securities)
2 Beneficier (or) Receiver Recipient Type (or) Receiver Type
With PAN Based on Recipient type, % will deduct TDS
Without PAN
Corporate
Individual
3 TDS Deductions Withholding tax types
At the time of payment
(or) At the time of Invoice
whichever is earlier
4 TDS Rate Tax Codes
Tax percentage (%)
Tax code + Tax key + Tax type with these
combinations we are going to post different
5 TDS to post GL Account GL Accounts
6 TDS Challan Challan Forms
To deposit to the Bank Number ranges for challan Forms
7 Quarterly Returns Quarterly Returns Forms
Number Ranges for Quarterly Return Forms
8 TDS Certificate Forms for certificate
Number Ranges for TDS Certificate
9 Responsible place to deduct TDS Section Code
It represents the business place, Where the
place is responsible to deduct the TDS.
Business place =Section code

Entries
At the time of Advance:
Ex: Advance payment =50000
10%TDS =5000
Dr Vendor A/c 50000
Cr Bank 45000
Cr TDS Payable 5000

At the time of Invoice:

Ex: Invoice =100000
TDS 10%= 10000

Dr Expenditure 100000
Cr TDS Payable 10000
Cr Vendor Payment 90000

Configuration Steps

1. Check Withholding Tax Countries

2. Define Withholding Tax Keys
3. Define Reasons for Exemption
4. Define Business Places
5. Activate Business Place
6. Define Section Codes
7. Assign Factory Calendars to Business Places
8. Assign Factory Calendars to Section Codes
9. Define Withholding Tax Type for Invoice Posting
10. Define Withholding Tax Type for Payment Posting
11. Define Withholding Tax Codes
12. Define Formulas for Calculating Withholding Tax
13. Check Recipient Types
14. Maintain Tax Due Dates
15. Assign Withholding Tax Types to Company Codes
16. Activate Extended Withholding Tax
17. Define Accounts for Withholding Tax to be Paid Over
18. Specify Document Type
19. Maintain Number Groups
20. Assign Number Ranges to Number Groups
21. Maintain Number Ranges
22. Maintain Number Groups and SAP script Forms TDS CERTIFICATE
23. Maintain PAN Number in the company code general data OBY6
 FI-AA

Depreciation area:
An area showing the valuation of fixed asset for a particular purpose. It controls the
valuation, depreciation and postings for asset related transactions.
Purpose:
The chart of depreciation should contain at least one depreciation area.
Usually only one depreciation area will have real time posting i.e., it will be updated with
all asset related postings as and when they happen. For other depreciation areas, the
processing is done periodically.
The depreciation areas in a chart of depreciation can be activated according to need.

Chart of Depreciation

Chart of Depreciation is a list of Depreciation areas. Like Book Dep area, Income tax
Dep area, and cost accounting Dep areas.
Depreciation areas control the rules and specifications for valuation of asset and
calculation of the depreciation according to legal requirement. And reporting as for
IFRS, Local GAAP, IAS.
- Chart of Depreciation maintained at country level.
- One COD we can assign to no. of comp codes but not possible to maintain one
company code more than one COD.
-
Asset class

It determines grouping of similar nature of the assets, in asset classes we will specify

- Account determination
- Screen layout
- No. ranges
- Asset classes are linked to Depreciation areas. Based on asset classes we can define
no. of assets.

Account determination: It determines the General Ledger accounts for automatically

updating asset accounting related transactions that are posted to Fixed Asset accounts
such as purchase of assets, sale of assets, transfer of assets asset scrapping etc.
Every account determination is linked uniquely to a G/L account. These G/L accounts are
reconciliation accounts for A/c Types 'Assets'.

Transaction type:
Entry of transactions type is must for each posting activity that is relevant to Asset
accounting. Transaction types classify the different type of accounting transaction in asset
accounting. The transaction type is in addition to the asset posting keys and is included as
part of the transaction while posting an asset.
100- External asset acquisition
101- Acquisition for a negative asset
120- Goods receipt
121- Goods receipt for production order

Delta Depreciation
Whenever you have two depreciation areas posting to GL a/c (as per leading ledger and as
per non-leading ledger) you need to have a delta dep. Area which manages the differential
value b/w the two depreciation areas.
Dep had to be posted as per IFRS in leading ledger and as per Indian GAAP in non- leading
ledger.

Depreciation Key

Depreciation key which contain the valuation methods under Dep. Area.
- It specifies the type of Dep. Methods like base method, multilevel method, period
control method etc.
- Dep key specified in depreciation areas in asset master
- Dep key = Dep method + Dep rate (nothing but a %)

Depreciation methods: -

Base method: It control the depreciation to be calculate either Manual percentage base
(or) depreciation percentage to be arrived based on the useful life of asset.
- It specifies the type of depreciations (Ordinary Dep., Special tax Dep., Interest
Dep.)

Multilevel method: In multilevel method we will specify the from which date do you want
to calculate depreciation, from Capitalization date, or Ordinary depreciation start date)
- If we select capitalization date the depreciated from capitalization of the asset.
- If we select ordinary Dep. Start date, we should specify manually in asset master at
depreciation area at the time of asset master creation.
In multilevel method we specify Asset Acquisition validity field, Asset useful life end Dep.
Method (Straight line method, Written down value method-WDV).
- If you follow Straight line method the depreciation calculates based on the book
value of asset.
- If you follow WDV method the depreciation calculated from Net Book Value of
asset.

Period Control Method: In period control method we should specify FROM which date TO
which date, the Depreciation to be calculate.
- In case of Acquisition of asset, Retirement of asset, and Transfer of asset.
Maximum amount method: it is nothing but maximum Depreciation selling limit for
Depreciation calculation and posting.

Eg: Maximum Dep amount annually 60,000.

In this case system it won’t allow to post the depr. More than 60,000. That means system
it allows to post whichever is least between Dep calculated amount and maximum selling
amount

Eg1: Assume asset value -300,000, & Dep 30% = Depreciation Calculated amount 90,000.

- That means system it will allow to post only 60,000 (which is least) not 90,000.
Eg2: Assume asset value – 1,00,000 & Dep 30% = Depreciation calculated amount 30,000.
- That means system it will allow to post only 30,000 (which is least) not 60,000.
Decline balance method: it is also called as factor control method that means the Dep.
Percentage arrived based on multiplication method.

Eg: case1: Manual Dep percentage is 10% & my multiplication factor is ‘ 2 ’.

- The dep. Calculated = Manual dep. Percentage 10% * multiple factor 2 = 20%

Case2: based on useful life

Useful life of the asset is 5 years & multiplication factors is 2
- Dep. Calculated 100/5years = 40%

Depreciation: Reduction in the value of fixed asset is known as depreciation.

Accumulated Depreciation: Nothing but depreciation reserve

Methods Control parameters

Base method: Depreciation type
Ordinary depreciation
Special depreciation
Interest
Calculation methods
Treatment of the end of the depreciation
Declining balance Multiplication factor
method Minimum percentage
Maximum percentage
Maximum amount Maximum amount of depreciation
method
Multilevel method Validity date or period
Base value for each method
Percentage
Reduction of base value
Control indicator for calculation of depreciation
With remaining useful life of the asset
Period control method Period control for
Acquisition
Subsequent acquisition
Retirement
Transfers

Post capitalization

The purpose of that to capitalize the historical asset with effect from historical date.
If this indicator is activated, then we must maintain capitalization date manually and this
date should be the previous year.
Asset post capitalization means, if we forgot to capitalized asset for the closed fiscal year,
then we have procedure to capitalize those assets... that will be calling as post
capitalization of Asset.
Eg:
Asset value 1,00,000 Dr. Asset 100,000
 Cr. Acc. Dep
Acc. Dep. 30% 30,000 30,000
Reven.post Cr. Revn.post capt
capt. 70,000 70,000

What is asset retirement?

Asset retirement is removal of an asset; when company decided to no longer use

equipment for business operations.
Company will not receive any profit from taking the equipment out of services.

What is Scrap?

Scrap value is associated with the depreciation of asset used in business. Scrap value is
defined as the expected (or) estimated value of the asset at the end of its use full life.

What is asset revaluation?

Revaluation of a company’s assets consider inflation or changes in fair value since assets
were purchased or acquired.
If company wants to sell one of its assets, it is revaluated in preparation for sales
negotiations.

Asset Entries in SAP

1. Purchase of asset F-90

(70) Dr Asset A/C 100000
(31) Cr to vendor 100000
2. Sales of asset F-92 with customer Gain
(01) Dr Customer A/C 45000
(50) Cr Asset Sale A/C 45000
(70) Dr Acc. Dep. on Asset 60000
(75) Cr Asset A/C 100000
(40) Dr Asset Sale A/C 45000
(50) Cr Profit on Asset sale or (40) Dr Loss on Asset sale 5000
3. Sale of Asset without customer if Gain – ABAON
75 – Cr. Asset 100000
70 – Dr. Acc. Dep 5000
40 – Dr. Asset Sale 110000
50 – Cr. Gain on asset sale 15000
4. Deprecation posting AFAB
(70) Dr Depreciation A/C
(75) Cr To Acc. Dep A/C
5. Scraping of asset/Asset retirement ABAVN
(40) Dr Scrap of asset A/C
(70) Dr Acc. Dep A/C
(75) Cr Asset A/C
6. Post capitalization ABNAN
70 – Dr. Asset 100000
75 – Cr. Acc. Dep 30000
50 – Cr. Revenue from post capitalization 70000

Transfer of an asset
ABUMN----->Asset transfer within Company Code
70 Asset debited in NEW Business Area
75 Asset credited in OLD Business Area
70 Acc. Dep debited in OLD Business Area
75 Acc. Dep credited in NEW Business Area
ABT1N------>Inter Company Asset Transfer
OLD Company Code 75 OLD Business Area Asset A/C Credit
OLD Company Code 70 OLD Business Area Acc. Dep Debit
OLD Company Code 40 OLD Business Area Asset Sale A/C Debit
NEW Company Code 70 NEW Business Area Asset A/C Debit
NEW Company Code 50 NEW Business Area Inter Company Clearing Credit

FI-MM-SD Integration Concepts

FI -MM Integration:
When a material get a moment in MM during the time the relevant G/L has to be updated
in FI. It is the reason behind that for FI-MM integration.
while creating Purchase Order, the system will take the movement type as base, with
moment type, it will identify the movement indicator(movement indicator-used to define
whether it is goods movement type for production order, purchase order) and it will
identify the value string [it is must to assigned to movement type, through allocation of
value string to movement type, system will automatically identify the G/L] and it will
post the entry in G/L based on transaction / event key figure (which is used to determine
the debit and credit entry of G/L).
Valuation level: valuation level determines the valuation area, there are two valuation
areas are there 1. Plant level
2. Company code level
plant level: if you select the valuation level plant, the valuation area is plant level * in
plant level if you purchase the same nature of material with diff. Price in that time the
system can valuate the price separately that mean individual material price
Company code: if you select the valuation level company code the valuation area is
company code level. In company code level if you purchase the same nature of material
with diff. price in that time the system can valuate inventory with moving avg price that
same price for all materials
Material type: Grouping of similar nature of material either for reporting or configuration
purpose.
Valuation class: It consists of bunch of G/L accounts. It is the main integration part
between MM and FI.
ACR - (Account category reference): It is the list of the valuation class.
ACR is linked to the material type. Valuation class linked to the material master as well as
material master linked to the material type.
Valuation category: It is used for material split valuation.
Valuation type: It is the sub division of the valuation category.
Movement Indicator: specifies the type of the document.
Ex: purchase order, production order.
Movement type: Nature of movement of goods.
Example: goods receipt, goods issue, physical stock transfer
Valuation string: It consists of the list of the possible transactional event keys.
Transaction/event key: SAP defines Internal processing key and it is facilitating for
automatic account determination for the various materials and invoice postings.
Ex: BSX-inventory postings
 GBB-offsetting entry for inventory postings.

Procure to pay cycle: -

 Every organization that operates a business has to purchase materials such as a raw
material, service etc.
 The procurement process has become parts of today efficient business operation
 The company procure those material as in-house production or external procurement

MRP PALANING

VENDOR SELECTION

REQUEST FOR QUOTATION

PURCHASE REQUISITION

PURCHASE ORDER

GOODS RECIEPT INVOICE

INVOICE VERIFICATION

PAYMENT TO VENDOR

MRP Planning: - material requirement planning (MRP) type controls the MRP procedure,
pricing, material valuation, MRP carried out by MRP controller in production deportment

Vendor selection: - vendor selection is one of the important step in procurement process
With the help of obtained quotations from sources and by comparing them, vendors are
selected.

Request for quotations: -

Requesting potential vendors to submit a quotation for a material or service
Quotation it contains the vendor’s terms and condition and constitute the basis for vendor
selection

Purchase requisition: - ME51N

Purchase requisition is an internal request to purchasing
It contains the below functions
1 Material qty, value, description
2 Department account number
3 Signatures by an authorized deportment
4 Delivery instructions.

PURCHASE ORDER: - ME21: purchase order is a formal request to a vendor to supply certain
materials or service under the certain conditions.
Po usually specify terms of payment, incoterms, delivery date, specifications, material qty,
price, and reference or part numbers.
Types of purchase orders in procurement process: -standard PO, planned PO, contract PO

GOODS RECIEPT: - GR is created to reflect the goods receipt for the specified material
ordered from a vendor using purchase order process.

After receiving the goods, the company can record the following information

This information can be used for accounting, stock check and rotation, to return an goods if
there is problem

1.what goods were delivered

2.which vendor delivered the goods

3.who, how, when goods were delivered and received the goods

GOODS RECIEPT INVOICE: Goods receipt invoice process is one of the important process in
p to pay cycle.
It is a matching the goods that a company receives with the company PO,it involves checking
the goods are not damaged and fit for use, verifying the price, qty, payment terms.
Goods movement are entered in to the system with reference of purchase order and
Goods receipt material document posted automatically appropriate gl are posted and stock
a/c are updated.

INVOICE VERIFICATION

After GRIN process of p to pay is invoice verification

It plays important role in procurement process and mm module which performs the following
tasks.
Vendor invoice can be created with reference to a purchase order, a goods receipt and a
delivery note
Invoice verified in terms of prices, quantity
Necessary approvals by pm
If any price difference between PO and IR as fallow

21 Any difference between PO and invoice

Opt-1 if full stock available MIRO
PO price 100
Inv price 110
PO QTY 10pc

DR/GR, IR (WRX) 1000

DR/STOCK (BSX) 100
CR/VENDOR (KBS) 1100
OPT-2
22 Partial stock available
PO price 100
Inv price 110
PO QTY 10pc
Available stock 4pc
Consumption stock 6pc

DR/GR, IR 1000
DR/STOCK (BSX) (4*10) 40
 DR/PRICE DIFFERENCE (PRD BLANK) (6*10) 60
CR/VENDOR (KBS) 1100

OPT-3 No stock available

23 PO price 100
Inv price 110
PO QTY 10pc

DR/GR, IR (WRX) 1000

DR/price difference (PRD BALNK) (10*10) 100
CR/vendor (KBS) 1100

After verified all data, the invoice is posted, and the data is saved in the system
The system updates the invoice data in MM and F/A.

PAYMENT TO VENDOR
The last step in p to pay cycle is payment to vendors and it is also known p to pay process

Vendor are get paid as per payment terms

In this fast technology in the world companies can pay through many methods to vendor

ex: - through net banking, check payment etc.

FI-SD Integration

All billing transactions happening in the SD module will result in FI posting

Ex: Dr Customer A/C
Cr Revenue A/C
In the above entry customer, A/c gets picked up from the customer master data. All we
need to do is to configure the revenue A/c (or) the discounts and surcharge.
So basically, the FI-SD integration is for picking up the revenue accounts (or) the discounts
and surcharges.
The account determination in SD happens through an access sequence. Access sequence is
nothing but SAP’s terminology of determining the G/L accounts.
When we enter VKOA transaction code the system will display the access sequence table.

Customer group Material group Account key

If any G/L account is maintained here the system will then go to the transaction data of
the particular billing document and see whether such a combination of customer group
and material group exists. If it does it will pick that relevant revenue A/C and past the
accounting documents. If it does not it moves to the next combination in the table which
is customer group/A/C key and so on.
Customer group is maintained in the sales view of the customer master data, material
group is maintained in the sales view of the material master, A/C key is maintained in the
pricing procedure for that condition type.
Frond end process:

Step1: Create Sales Order – VA01

A customer orders some item from your company by creating sales order.
“No Entry”

Step2: Outbound Delivery – VL01N

Your company decides to deliver the item order by the customer
- This is recorded by creating an outbound delivery document (with/without ref.
order)

Step3: Post Good Issue – VL02N

Once items are available for sending to the customer, when you do PGI which reduce the
inventory and put the delivery in transit.
FI Entry
Dr. COGS (GBB-VAX)
Cr. Inventory (BSX)

Step4: Shipment document – VT01N

Ship the items

Step5: Sale Billing – VF01

Finally create billing document

FI Entry
Dr. Customer account
Cr. Revenue account (ERL)

Step6: Payment Received (Incoming payment)

Dr. Bank clearing a/c
Cr. Customer account.

FI month end activities

We have lot of month end activities

- Recurring Documents.
o Create Recurring documents
o Create Batch Input for Posting Recurring Documents
o Run the Batch Input Session
- Posting Accruals or Provisions entries at month end
- Managing the GR/IR Account-Run the GR/Ir Automatic Clearing
- Foreign Currency Open Item Revaluation-Revalue Open Items in AR.AP
- Maintain Exchange Rates
- Run Balance Sheets –Run Financial Statement Version
- Run the Depreciation Calculation
- Fiscal Year Change of Asset Accounting if it is year end
- Run the Bank Reconciliation
- Open Next Accounting Period

Tables

FI

BKPF DOCUMENT HEADDER DATA

BSEG LINE ITEM DATA
BSIS GL OPEN ITEM OPEN ITEM BALANCE
BSAS GL BALANCE CLEARED ITEMS
BSIK VENDOR OPEN ITEMS
BSAK VENDOR CLEAR ITEMS
BSID CUSTOMER OPEN ITEMS
BSAD CUSTOMMER CLEARED ITEMS
BNKA BANK MASTER DATA
SKA1 GL MASTER CHART OF ACCOUNTS DATA
SKB1 COMPAYNY CODE SEGEMENT
LFA1 VENDOR MASTER GENERAL DATA
LFB1 VENDOR MASTER COMPANY CODE DATA
LFM1 VENDAR MASTER PURCHASE ORG DATA
LFBK VENDAR MASTER BANK DETAILS
KNA1 CUSTOMER MASTER GENERAL DATA
KNB1 CUSTOMER MASTER COMPANY CODE DATA
KNVV CUSTOMER MASTER SALES ORG DATA
KNB4 CUSTOMER MASTER PAYMENT DETAILS
KNB5 CUSTOMER MASTER DUNNING DETAILS
KNBK CUSTOMER MASTER BANK DETAILS

Asset important tables

ANEK Document Header Asset Posting

ANEP Asset Line Items
ANEV Asset Down pymt Settlement
ANKA Asset Class: General Data
ANKB Asset Class: Depreciation Area
ANLC Asset value Fields
ANLH Main Asset Number
ANLP Asset Periodic Values
ANLB Depreciation terms
ANLC Asset Accounting Value fields
ANLA Asset Master Record Segment

CO

COBK CO OBJECT DOCUMENT HEADDER

COEP CO OBJECT LINE ITEM (BY PERIOD)
COEJ CO OBJECT LINE ITEM (BY YEAR)
COSS TOTAL RECORDS FOR SECONDARY POSTINGS
COSP TOTAL RECORDS FOR PRIMARY POSTINGS
CSKS CC MASTER DATA
CSKA CE MASTER DATA
CEPC PROFIT CENTER MASTER DATA TABLE
KEKO PRODUCT COSTING HEADDER DATA
KEPH COST COMPONENT FOR COST OF GOODS MFGD
KALA COSTING RUN