FI module is used to maintain financial records on daily basis and to provide

financial reports .

further it consists of sub-modules i.e General Ledger, Accounts payable, Accounts

receivable , Asset accounting and so..on.

1)so for implementation of FI module we need to create company first. A

company is called group of companies in real world. and the main purpose of this
is business consolidation.

for example TATA group as a company , then tata motor and tata steel are
subsidiaries of TATA group.

TATA Group (Company)

TATA motor(Company code) TATA steel (Company code)

A company code represents a legal entity and complete financial structure is

based on company code. (Creation of this is mandatory)

so if there are subsidiaries then we need a company and company code and in
this case we need to assign our company code to company.

2) Fiscal year variant - it represents the accounting year . in a business all

transactions are recorded in a time frame. this variant defines companies posting
periods. (posting periods are technical terms refer to months). SAP provides
12posting periods and special posting upto 4. special periods are used for
adjustment entries related to accounting, taxation ..,

in SAP there are two fiscal year variants.

1) year independent

a)calendar year
b)Non-calendar year

2)year specific or year dependent

with year independent the accounting periods of a company remain same each
year.

a) calendar year - the posting periods is same as calendar year (starts in January
and ends in December)

b) Non-calendar year - the posting periods may start and end any month of the
year, except january & december)

for example india - fiscal year starts in April and ends in march.

2)year dependent - the start and end dates of the posting period of one fiscal
year is different to other fiscal year.

ex - start up business , M&A

3)posting period variant - posting periods are defined in fiscal year variant. while
recording a business transaction based on the posting date it gets posted to a
specific period. so system should prevent or permit user to post transactions for
specific posting period.

the benefit of defining PPV is to avoid posting of accounting transactions in wrong

period.

-- specialized feature provided by SAP here is while posting of transactions to

specific account types like Accounts payable, accounts receivable etc.., is
permitted.
and authorized employees can be permitted to post specific transactions through
Authorization group.

4)COA - chart of accounts - it is a list of GL accounts.

there are three types of COA.

a) operating COA - creation of this is mandatory. it is required to record day to

day business transactions in company code.

b)group COA - they contain corporate General ledger accounts applicable to all
company codes in a group. its creation is for consolidation purpose for multiple
company codes. in simple words this is used when a set of subsidiaries (company
codes) under a company use different operating COA.

c) country COA - this is required to record and report business transactions for
international operations.

COA - it controls the length of GL account number.

it controls creation of cost elements manually or automatically.

for group consolidation purposes we assign group COA.

COA not yet completed can be blocked , so that no company code can use it until
it is ready.

Account group - it is a tool in SAP that determines how master records are
created. the importance of account group is grouping of Accounts. Example -
Asset group ,liability group.

it controls the fields which appear while creating Master data.

it also controls master date no. range.

Retained earnings - it is used to carry forward balances of P&L from one year to
another financial year.
field status variant - it controls the fields which appear during document posting
through field status groups. (Required/optional/suppress)

posting key - it directs a transaction whether it is debit or credit. importance of

posting key is it controls the field status for document entry.

it determines for which account type can be posted.

standard posting keys for GL postings are 40 debit, 50 credit.

document type - it is a key to differentiate and classify business transactions.

important control functions are - no. ranges for document postings

which account type to be posted

field status of document header text & reference field.

and default exchange rate type.

Tolerance groups - it helps us to apply restrictions in terms of discount , payment.

it helps to us to define employee limits per line item posting of Amounts.

there are three types of tol groups

a)tolerance groups for GL Accounts ( used in Automatic postings)

b) tolerance groups for Employee

c)tol groups for customers/vendors (for any difference of amount in invoice and
amount received/paid)

creation of GL account - FS00

there are two segments in creation of GL 1) COA segment 2)company code

segment

COA segment contains a) control field (GL Account group, balance sheet, P&L)

Name of the account (short & long)

consolidations fields - trading partner - company code responsible for preparing
group COA

then in company code segment we have control data , create bank interest.

(will explain all fields in interaction session).

Accounts payable - it is a sub module in FI . it takes care of vendor management,

procurement related activities like invoicing, payments, advance payments
discounts etc..,

A vendor is a business partner to whom payables are due.

This submodule is integrated with GL accounts through reconciliation accounts.

they are called "sundry creditors" in Accounts payable. reconciliation account is a
GL account . All postings made to a subsidiary ledger are also posted to the
general ledger. for that we need to specify a reconciliation account in vendor
master record . the purpose of this is to draw financial statements using this GL's.

To deal with vendor management we need to define account groups .

we define vendor account groups in SAP, which will provide the advantage of
grouping vendor accounts , vendor no. ranges vendor master records.

The advantage of vendor account group is, we can control the fields which
appears during the creation of vendor master data.

steps in Accounts payable

1) vendor account group creation

2) create no. ranges for vendor account group

3) assignment of no.ranges to account group.

4)creation of reconcilation Account

5) creation of master data

6) posting a vendor invoice

7) payment to vendor

payment to vendor can be done manually and automatically through APP.

Accounts receivable

it represents customer accounts. A customer is usually referred as sundry debtor.

A customer is a business partner from receivables are due.

same as accounts payable here also we create a reconciliation account and

maintain it in customer master.

steps in accounts receivable

1) creation of account groups for customer

2)create no. ranges

3) assign no. range to customer account group

4)create reconciliation account

5) creation of master data

6)post a sales invoice

7) post incoming payment.

8) Dunning configuration and execution

Asset Accounting - it is a submodule in SAP, which manages fixed assets , right

from acquisition to retirement/scrapping. all the transactions relating to
depreciation.
COD - chart of depreciation - it contains list of all country specific depreciation
areas. depreciation areas are used to calculate depreciation values of assets.

Asset classes - assets with similar characteristics are classified in the same asset
class . it serves as link between the asset master and the relevant accounts in GL.