Explaining G/L Account Settings on Chart of Accounts Level, Company Code Level, and Controlling Area Level


After completing this lesson, you will be able to Explain G/L account settings on chart of accounts level, company code level, and controlling area level.

G/L Account Settings on Chart of Accounts Level, Company Code Level, and Controlling Area level

G/L Account Settings

Kevin has had an introduction to the relationship between the Chart of Accounts, Company Code, General Ledger and the Controlling Area. He is ready to explore more G/L account settings. Choose the PLAY button to discover!

In a G/L Account fields can be defined on these different levels:

  • Chart of Accounts
  • Company Code
  • Controlling Area

Roll over each hotspot on the screenshot below to learn about the most important settings on the Chart of Accounts level of a G/L Account. When you have explored all hotspots, you can use Click Next on this screenshot to go to screenshots of other levels. You can also use the Hamburger Menu icon to select a screenshot.

G/L Account: Chart of Account Settings

Each G/L Account is set up according to a Chart of Accounts which contains the definitions of all G/L Accounts. The following are some of the important fields defined at the Chart of Accounts level:

  • Account Number, usually numeric with a fixed number of digits, in our example eight numbers.
  • G/L Account Type, e.g. Primary Costs or Revenue, Secondary Costs, Cash account, Balance Sheet, Non-operating Income or Expense.
  • Account Group, used to organize and manage groups of similar G/L Accounts.
  • Short and Long Text, the description of the G/L Account.

G/L Account: Company Code Settings

Before you can post to a G/L Account in a Company Code, you have to maintain the G/L Account at the Chart of Accounts view. You then create the Company Code-specific settings, which are only valid in the Company Code. An example of a Company Code-specific setting is defining the account currency. Most of the G/L Accounts in Company Code 1010 use the EUR currency, whereas Company Code 1710 uses currency USD. When the account currency is the local currency of the company code one can post to that account in any currency.

G/L Account: Controlling Area settings

The Controlling Area view of the G/L account is only required for G/L Accounts that are setup as a G/L Account Type 'Primary Costs or Revenue' or 'Secondary Costs' accounts. A Cost Element Category needs to be specified, e.g. '01' for Primary costs. This ensures for example when posting to a G/L expense account, you are required to enter a CO assignment which can be a Cost Center which is updated in the Controlling (CO) module from the FI expense posting.

Reconciliation Accounts

The Reconciliation Account field links subledger accounts to the G/L account. This means that a posting to an account in a subledger posts to the corresponding reconciliation account in the general ledger at the same time. We can connect accounts in subledgers such as Accounts Receivable, Accounts Payable and Assets to their own G/L reconciliation account by specifying the type of subledger (D- Customers, K- Vendors, A - Assets). In master data maintenance of the individual accounts in the subledger the G/L reconciliation account is specified.

Roll over each hotspot on the figure below to learn about Reconciliation Accounts.

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