R/3 Financial Accounting system is designed for automated
management and external reporting of general ledger, accounts
receivable, accounts payable and other sub-ledger accounts
with a user defined chart of accounts. As entries are made
relating to sales production and payments journal entries
are automatically posted. This connection means that the
"books" are designed to reflect the real situation.
Financial Accounting gives you the ability to centrally
track financial accounting data within an international
framework of multiple companies, languages, currencies and
charts of accounts. The fully integrated SAP finance accounting
systems offers a comprehensive range of capabilities with
open, integrated data flow and user-friendly handling for
the external accounts. Every company needs Accounting to
provide information to shareholders, creditors, employees,
and general public. SAP Accounting application consists
of the following components, which are, Accounting,
Controlling, and Treasury. Accounting is integrated with
Logistics and Human Resources components. SAP provides Preconfigured
systems for various industries with specific charts of accounts.
SAP supports multilingual approach, flexible currency
handling, and country-specific functions for taxes, reporting,
and payment transactions.
Accounting System offers you a complete set of applications:
Financial Accounting (FI) includes
Treasury (TR) includes
Controlling (CO) includes:
Accounting component includes:
The G/L Accounting function uses a chart of accounts
that can be installed in individual companies or in entire
corporate groups. If the system must meet both international
corporate and specific national demands, you can use different
charts of accounts side by side.
To satisfy specific statutory requirements at a national
level, the system allows you to balance the books of foreign
subsidiaries in up to three currencies simultaneously. Every
business transaction is recorded in historical values from
local, corporate group, and hard currency perspectives.
The FI application maintains different types of balance
can also maintain balance sheets by purpose:
date balance sheet
Besides integrating Logistics with Financial Accounting
functions, it is also essential to link sub-ledgers with
the General Ledger itself. All movement involving the sub-ledger
Debtors and Creditors accounts, as well as
the asset accounts, are immediately reflected in the assigned
General Ledger balance sheet. As a result, sub-ledgers are
always reconciled with the General Ledger.
Accounts Receivable monitors and controls customers' accounts.
Account analyses, maturity lists, as well as a flexible
dunning system, make it easier to pursue open items.
Accounts Payable manages accounting data for all
vendors. It serves as an important information source
for the sales department regarding delivery, invoicing,
and payment values.
Special Ledger provides special calculations for a particular
customer. A ledger is an accounting book that has been expanded
to include various dimensions from the account assignment
feature (cost center, product). It maintains and analyzes
figures to meet the reporting wishes of the individual firm.
All firm-specific ledgers come with validation and derivation
of characteristic features. You can perform planning, allocation,
and currency conversion calculations for each ledger. SAP
automatically updates ledgers whenever business transactions
take place. Data collected at a more detailed level is stored
in compressed form using a rollup function
Complex organizations need to have the big picture.
Corporate group financial statements have grown in importance
compared to individual statements. Another trend is the
need to portray the corporate group to the public by making
conscious balance sheet policy decisions. This may be at
odds with the picture painted by individual financial statements.
corporate group can be broken down into consolidation units.
You can base it on legally autonomous companies or on business
area segments. In centralized companies, data from operative
company codes are typically incorporated directly into a
corporate group ledger.
they are periodically incorporated into this ledger using
ALE. This often involves external data from non-SAP accounting
systems. The R/3 System has special tools to capture this
data. The ability to regroup corporate groups and consolidation
units is an essential function for internal corporate reporting.
This allows the corporate group ledger to fulfill information
needs along with those required by law. This includes meeting
the needs of national or regional distribution companies.
This represents a legally autonomous entity,
composed of one or more company codes.
code: This represents the tax law (national)
view of the company. Fiscal calendar, chosen currency, and
tax reporting requirements determine the design of the complete
and reconciled tracking system. In the context of a company,
the company code can also represent a foreign operation
that carries inventory.
area: This helps depict internal structures for
external segment reporting. You use business area to analyze
selected balance sheet items and profit and loss statements
for product divisions or regional structures.
area: This area displays profit and loss calculations
according to cost-of-sales accounting. This is in comparison
to period accounting, which differs depending on the request.
By grouping functional areas, such as administration and
manufacturing, cost-of-sales accounting shows what company
costs were incurred for what and displays business expenses
for the operation.
center: With its flexible design, this Controlling term
depicts internal areas of responsibility. The objects of
a company's operating readiness are assigned to profit centers.
These objects include cost centers, assets, materials, and
those that measure performance (such as production and customer
orders). Consequently, areas of responsibility are more
detailed than can be captured by just using the business
center provides more than a determination of revenues, costs,
and corresponding profit margin for an area of responsibility.
Relevant items from the balance sheet, such as inventory,
work in progress, receivables, payables, or investments
can also be used to produce a targeted yield report, such
as return on investment (ROI).