Define Chart of Accounts | Assign Company code to Chart of Accounts | Define Account Groups
1. Define Chart of Accounts
A Chart of account is a list of all the General Ledger accounts that a company uses.
- SPRO > IMG > Financial Accounting > General ledger accounting > G/L Accounts > Master Data > Preparations > Edit chart of accounts list >
- Click on New Entries
- Type your unique 4 digit Chart of Accounts (COA) ID. (Eg: FWCA)
- Description: ‘Chart of accounts for ADCA company’
- Maint Language: Select a language (Eg: English)
- Length of G/L account number: Enter your limit for GL Account names. (Eg: 10)
- Controlling Integration: Since we are doing it manually chose ‘Manual creation of cost elements’
- Group chart of accounts: Leave it blank since we didn’t create a group COA.
- Status: Block?: Do not check this box. Leave it un-checked
- There are 3 types of COAs in SAP.
- Operating COA: This is the normal COA containing all GL a/c names & numbers.
- Group COA: GL a/cs of various company codes/branches are clubbed together. This is used by senior management to get a broad view on the company’s financial activities. This COA is optional.
- Country COA: This is meant to meet the legal requirements of any specific country. This is optional.
- You post entries into Operating COA. The other two, Group COA and Country COA are only for reporting purpose.
- Control integration can be either manual or automatic. In automatic SAP standard ready-to-use COA is assigned with most commonly used GL accounts in it. Manual creation is advised as companies might not use all the available SAP standard GL accounts under automatic method or may have certain newer GL account names and numbers.
2. Assign Company codes to chart of accounts
- SPRO > IMG > Financial Accounting > General ledger accounting > G/L Accounts > Master Data > Preparations > Assign Company code to Chart of accounts > (TC: OB62)
- Click on Position
- Enter Company code (In our eg: ADFW)
- Enter COA id under ‘Chrt/Accts’ (In our eg: FWCA)
- Enter ‘Cty Ch/Accts’ (Country COA) if you want one or else leave it blank
3. Define Account Groups:
General ledger account names are created under Profit & loss a/c or under Balance sheet. Here we define the heading under which a General Account name must lie. To Create GL accounts this step is a must.
Here we define the heading ‘Current Assets’. While creating General Ledger account names such as ‘Cash in hand’ or ‘Bank a/c’ we select ‘Current Assets’ and thus those G/L accounts fall under the right heading.
- SPRO > IMG > Financial Accounting > G/L Acounting > GL Accounts > Master Data > Preparations > Define Account Groups: (Or TC OBD4)
- Select NEW ENTRIES
- Update the following fields and press ENTER KEY to goto the next line
- Enter ‘Chrt/Accts’ (COA) unique Id we created in above (eg: FWCA)
- Enter Acct Group: your 4 character unique code. An abbreviation of a sort.
- Name: Heading name. Full form of your abbreviation.
- From Acct: From Account number
- To Acct: To account number
- After saving your work if you want to change field status for any of the Account Group simply double click on line item and change preferences. For example: Double click on Current Assets to see various options such as Account control/management etc. You can select any of these options and choose suppressed/required/optional/Display.
A typical Account group table would look like this:
|Chrt/Accts’||Acct Group||Name||From Acct||To Acct|
|FWCA||RSPL||Reserves and Surplus||120000||129999|
|FWCA||ACDN||Current Liabilities & Provision||130000||139999|
|FWCA||FAAC||Fixed Asset Account||170000||179999|
|FWCA||LOAD||Loans & Advances||190000||199999|
|FWCA||SALE||Sales & Operating revenue||200000||219999|
|FWCA||IDST||Increase/Decrease in Stock||230000||239999|
|FWCA||RMCO||Raw Material Consumption||240000||249999|
|FWCA||INTX||Income Tax Expense||290000||300000|