Major functions of FA, GL Accounting implementation in SAP HANA GUI 730
Financial accounting is the process of record-keeping, summarizing, and reporting of business transactions resulting in the business operations over a period of time. Financial statements that companies use to show their financial performance and position to people outside the company, including investors, creditors, suppliers, and customers.
The process of financial accounting is composed of some necessary functions, they are Recording, Classifying, Summarizing, Interpreting, and Communicating.
In the sense of SAP FI, Financial Accounting Components are
• General Ledger Accounting
• Accounts Payable
• Accounts Receivable
• Asset Accounting
- Bank Accounting
1) General Ledger Accounting:
The General ledger account is an account where the company records all the information for its various expenses and income types into separate accounts. Such that all the debits and credits pertaining to that particular type of transaction can be entered in one place and kept balanced.
The general classification of accounts that usually ledger account involves are
· Assets- Cash, Accounts Receivable
· Liabilities- Accounts Payable, Loans Payable
· Stockholders’ equity- Common Stock
· Operating revenues- Revenues through Sales
· Operating expenses- Rent Expense, Salaries Expense
General Ledger FI Account Integration
General Ledger Functionality
· FI-General Ledger
· Master records management: GL Accounts
· Document entry: direct posting, recurring posting, reverse posting, automatic posting, drill-down capability
· Periodic Processing: Closing, interest calculation, automatic clearing, foreign currency valuation, Tax management, archiving
· Reporting
General Ledger overview based on SAP FI
General Ledger Account Posting(Journal Entry)
General Ledger Accounts Posting (SAP Screen)
2) Accounts Payable:
Accounts Payable records and administers accounting data for all vendors. Accounts payable is one of the liabilities for your company to pay money to a vendor in the future, for some product or service provided by the vendor.
Accounts payable in the FI module integrate with the Material Management module, or purchasing system, where deliveries and invoices are managed according to vendors.
3) Accounts Receivable:
Accounts receivable records and administers accounting data of all customers. Accounts receivable is money to be paid by customer to your company in the future, for some product of service provided by your company, in contrast to the accounts payable.
Posting in accounts receivable are also recorded in the general ledger.
Several tools for users to monitor open items, such as account analysis, alarm reports, due date lists, and flexible dunning programs are provided as standard functionality in SAP.
4) Asset Accounting:
Asset Accounting is used to manage and supervise fixed assets. In Financial Accounting, it serves as a subsidiary ledger to General Ledger, providing detailed information on transactions involving fixed assets.
Asset Accounting is closely integrated with Material Management or Production Planning module. When an asset is purchased or produced in-house, invoice receipt, goods receipt, or material is withdrawn from the warehouse would be posted in the Asset Accounting module. At the same time, depreciation and interest would be passed on Financial Accounting and Controlling.
5) Bank Accounting:
Bank accounting is used for transactions between your company and bank.
Bank accounting includes management of bank master data, cash balance management such as check and bill of exchange management, and creation and processing of incoming and outgoing payment as its related processes.
So, as we see there are five main functions in SAP FI (GL Accounts, AP, AR, Asset Accounting, and Bank Accounting) In this article only cover the GL SAP entry process partially near future I will write another article to cover others processes as well. Thank you for reading.
