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

Kevin wants to learn about other important fields that are maintained on the different views of a G/L Account. He wants to have a more detailed look at G/L Account master records and learn about the most important settings of a G/L Account on Chart Of Accounts, Company Code and Controlling Area level. The focus will be on the different levels of G/L account maintenance and the potential impact it could have on other users. Kevin plans to use the Manage G/L Account Master Data app to assess the key settings for G/L account maintenance,

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

• Chart of Accounts
• Company Code
• Controlling Area

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.

• Operational chart of accounts assigned to the company code.
• G/L Account Type determines how the general ledger account can be used in financial accounting (FI) and controlling (CO).
• The Account Group determines the fields for the data entry screens on the Company Code Data tab.

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.

• The G/L Account 21100000 can be represented in multiple Company Codes.

• Account Currency indicates the currency in which the account is held.
• Reconciliation Account connects subledgers to the G/L account (D - Customers, K - Vendors, A - Assets).

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.

If the G/L Account Type is a Primary Costs or Revenue or a Secondary Cost, the Controlling tab needs to have a Cost Element Category to enable the Controlling Area to be posted with transactions.

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.

• Subledger linked to General Ledger Reconciliation Accounts.
• Customer line items recorded on customer account in the subledger.