Managing General Ledger Accounting

We will now focus on the first business process step within Record-to-Report processing: Manage G/L Accounting.  

Please have a look at the interaction below, to learn more about the current process step:

As part of the first integration test during the SAP implementation project, you have a look at the most important master data in Financial Accounting. The first manual postings are then made in General Ledger Accounting. We will also test the first reporting options in the General Ledger. Finally, we will learn about the first integrative value flow in Management Accounting. 

The General Ledger (G/L) is the core of Financial Accounting. All accounting-relevant business transactions are posted to G/L accounts.

G/L accounts are managed using a chart of accounts. The chart of accounts serves as a framework to ensure the G/L accounts are created uniformly in Financial Accounting.

The Bike Company has decided to use the standard chart of accounts YCOA delivered with SAP S/4HANA in each company code for their operational postings.

Advantages:

• Uniform structure of individual general ledger accounting

• Prerequisite for cross-company code controlling

The YCOA chart of accounts is assigned to each company code in configuration and is referred to as its Operating Chart of Accounts.

G/L Accounts 

The G/L accounts in the YCOA chart of accounts are grouped according to business aspects using their eight-digit G/L account number as follows.

The account number enables the account department to select, post, and analyze documents quickly and reliably. 

In addition to the account number and description, a G/L account master record also contains information about how business transactions are posted to G/L accounts and how the posting data is processed.  

Example: A specific profit and loss account always needs to be posted in relation to sales tax, or a G/L Account can only be posted using certain currency (for example, a foreign currency account that is managed in USD (US Dollars) at the bank). 

General Ledger Accounting provides the information needed to create a balance sheet and a profit and loss (P&L) statement. These reports must meet country-specific requirements.

Andy has prepared some examples for you, to see what different financial statements could look like, based on different standards.

The structure of a balance sheet and P&L statement is determined in SAP by the Financial Statement Version.

The required G/L accounts are assigned to the individual balance sheet and income statement sub-items. The aggregated values of the assigned G/L accounts are then displayed at the level of the corresponding balance sheet or P&L items and sub-items. 

We are now moving on to the Record-to-Report process step: Reporting.

The current process step is highlighted in the overview below:

General journal entries can be accessed and analyzed in several ways in the system.

You can review the entries in detail from the total values in the balance sheet and profit and loss statement, through an item display to the document level. Or you call up specific documents using an account or document display to change or reverse them if necessary.

The original document (for example, an invoice or credit memo) can also be attached to the Journal Entry document.