One day the Financial Accountant from the German Company Code (1010) notices an issue: invoices cannot be posted to an expense G/L account. He informs Kevin, who is responsible for G/L Account maintenance. Kevin calls the Financial Accountant responsible for the US Company Code (1710), and he does not have the same issue. When Kevin talks to the Corporate Controller she mentions that she has noticed that the actual posted amounts for some expenses on cost center reports are relatively low; this is very unusual.
Kevin is asked to check the G/L account, as he might have made a mistake when originally setting it up. He displays the expense G/L account and finds out that it is not blocked for posting on the General tab page, but there is a block for posting set on the Company Code tab of the German Company Code. He wants to know why there are different tab pages in G/L Account maintenance and why the blocked for posting setting is available twice on the G/L Account.
Chart of Accounts, General Ledger, Company Code, Controlling Area and Their Relationship
In SAP S/4HANA there's a relationship between company code, general ledger, chart of accounts and controlling area.
All financial transactions are recorded on the level of a company code in order to produce financial reports for reporting purposes. Thus, the company code is one of the most important organizational objects within financial accounting (FI) and must be specified for every financial transaction.
A chart of accounts is a list of all G/L accounts that are available for the company codes that are assigned to the chart of accounts. A general ledger is a subset of G/L accounts from the chart of accounts that is used in a company code. So it may occur that a G/L account exists in a chart of accounts, but does not belong to the general ledger of a company code.
The controlling area is an organizational object that is part of controlling (CO) and is used for internal management accounting purposes, managing costs and revenue. No balance sheet accounts are used in controlling. There is a very close relationship between FI and CO as many of the postings in CO originate from FI. A controlling area may contain one or more company codes, which enables management of costs and revenue across the company code level. Company Codes within a controlling area must all use the same operational chart of accounts and fiscal year variant, but can operate in different currencies, if required.
- Controlling Area: Used to manage costs and revenue.
- Chart of Accounts: Uses the same set of accounts for all company codes, which makes cross company code management accounting possible.
- Company Code: Used to produce financial statements.
- General Ledger: A selection of accounts from the chart of accounts that can be used for postings in a company code.
Charts of Accounts Level and Company Code Level of a G/L Account
In order to be able to post to a G/L account in a Company Code, the G/L Account must belong to the General Ledger of the Company Code. So besides the Chart of Accounts specific information (which is valid across Company Codes), also Company Code specific information needs to be maintained in the G/L Account master record. Company Code settings of a G/L Account may differ for the Company Codes that are using a G/L Account.
Examples of chart of account level fields are:
- Account number
- Texts and translated texts
- G/L account type
Examples of company code level fields are:
- Tax information
- Field status group
- Account currency
You can decide to block G/L accounts either on the company code or the chart of accounts level. If you block an account on the chart of accounts level, no company code can use it. An account blocked on the company code level will not work for the specific company codes.