General Ledger Accounting (FI-GL)

Purpose

The central task of G/L accounting is to provide a comprehensive picture for external
accounting and accounts. Recording all business transactions (primary postings as well as
settlements from internal accounting) in a software system that is fully integrated with all the
other operational areas of a company ensures that the accounting data is always complete and
accurate.

()

Features

The SAP FI General Ledger has the following features:

 Free choice of level: corporate group or company

 Automatic and simultaneous posting of all sub-ledger items in the appropriate general
ledger accounts (reconciliation accounts)
 Simultaneous updating of general ledger and cost accounting areas
 Real-time evaluation of and reporting on current accounting data, in the form of
account displays, financial statements with different financial statement versions and
additional analyses.

Essentially, the general ledger serves as a complete record of all business transactions. It is
the centralized, up-to-date reference for the rendering of accounts. Actual individual
transactions can be checked at any time in real time processing by displaying the original
documents, line items, and transaction figures at various levels such as:
  Account information

 Journals

 Totals/transaction figures

 Balance sheet/profit and loss evaluations

Accounts Receivable and Accounts Payable:

Overview
The Accounts Payable application component records and manages accounting data for all vendors.
It is also an integral part of the purchasing system: Deliveries and invoices are managed according to
vendors. The system automatically triggers postings in response to the operative transactions. In the
same way, the system supplies the Cash Management application component with figures from
invoices in order to optimize liquidity planning.

Payables are paid with the payment program. The payment program supports all standard payment
methods (such as checks and transfers) in printed form as well as in electronic form (data medium
exchange on disk and electronic data interchange). This program also covers country-specific
payment methods.

If necessary, dunning notices can be created for outstanding receivables (for example, to receive
payment for a credit memo). The dunning program supports this function.

Postings made in Accounts Payable are simultaneously recorded in the General Ledger where
different G/L accounts are updated based on the transaction involved (payables and down payments,
for example). The system contains due date forecasts and other standard reports that you can use to
help you monitor open items.

You can design balance confirmations, account statements, and other forms of reports to suit your
requirements in business correspondence with vendors. There are balance lists, journals, balance
audit trails, and other internal evaluations available for documenting transactions in Accounts
Payable.

The Accounts Receivable application component records and manages accounting data of all
customers. It is also an integral part of sales management.
All postings in Accounts Receivable are also recorded directly in the General Ledger. Different G/L
accounts are updated depending on the transaction involved (for example, receivables, down
payments, and bills of exchange). The system contains a range of tools that you can use to monitor
open items, such as account analyses, alarm reports, due date lists, and a flexible dunning program.
The correspondence linked to these tools can be individually formulated to suit your requirements.
This is also the case for payment notices, balance confirmations, account statements, and interest
calculations. Incoming payments can be assigned to due receivables using user-friendly screen
functions or by electronic means, such as EDI.

The payment program can automatically carry out direct debiting and down payments.

There are a range of tools available for documenting the transactions that occur in Accounts
Receivable, including balance lists, journals, balance audit trails, and other standard reports. When
drawing up financial statements, the items in foreign currency are revalued, customers who are also
vendors are listed, and the balances on the accounts are sorted by remaining life.

Accounts Receivable is not merely one of the branches of accounting that forms the basis of
adequate and orderly accounting. It also provides the data required for effective credit management,
(as a result of its close integration with the Sales and Distribution component), as well as important
information for the optimization of liquidity planning, (through its link to Cash Management).

Asset Accounting Overview

Purpose
The Asset Accounting (FI-AA) component is used for managing and supervising fixed assets with the
SAP R/3 System. In SAP R/3 Financial Accounting, it serves as a subsidiary ledger to the FI General
Ledger, providing detailed information on transactions involving fixed assets.

Implementation Considerations
The R/3 Asset Accounting component is intended for international use in many countries, irrespective
of the nature of the industry. This means, for example, that no country-specific valuation rules are
hard-coded in the system. You give this component its country-specific and company-specific
character with the settings you make in Customizing. To minimize the time and energy involved in
Customizing, country-specific defaults are provided in the standard system where possible.

The Implementation Guide (IMG) provides the necessary functions for this in Asset Accounting.

Integration
As a result of the integration in the R/3 System, Asset Accounting (FI-AA) transfers data directly to
and from other R/3 components. For example, it is possible to post from the Materials Management
(MM) component directly to FI-AA. When an asset is purchased or produced in-house, you can
directly post the invoice receipt or goods receipt, or the withdrawal from the warehouse, to assets in
the Asset Accounting component. At the same time, you can pass on depreciation and interest
directly to the Financial Accounting (FI) and Controlling (CO) components. From the Plant
Maintenance (PM) component, you can settle maintenance activities that require capitalization to
assets.
Integration of Asset Accounting

Features
The Asset Accounting component consists of the following parts:

 Traditional asset accounting

 Processing leased assets

 Preparation for consolidation

 Information System

Traditional asset accounting encompasses the entire lifetime of the asset from purchase order or the
initial acquisition (possibly managed as an asset under construction) through its retirement. The
system calculates, to a large extent automatically, the values for depreciation, interest, insurance and
other purposes between these two points in time, and places this information at your disposal in
varied form using the Information System. There is a report for depreciation forecasting and
simulation of the development of asset values.

The system also offers special functions for leased assets, and assets under construction. The
system enables you to manage values in parallel currencies using different types of valuation. These
features simplify the process of preparing for the consolidation of multi-national group concerns.

The Plant Maintenance (PM) component offers functions for the technical management of assets in
the form of functional locations and as equipment. The Treasury (TR) component offers special
functions for managing financial assets
Cash Journal
Use

The cash journal is a subledger of Bank Accounting. It is used to manage a company's cash
transactions. The system automatically calculates and displays the opening and closing
balances, and the receipts and payments totals. You can run several cash journals for each
company code. You can also carry out postings to G/L accounts, as well as vendor and
customer accounts.

Recommendation

You should run a separate cash journal for each currency.

Integration

You can use the cash journal independently of other posting transactions. You can enter
amounts in different currencies. In a two-step procedure, you save the entries in the cash
journal before they are transferred to Financial Accounting. After this transfer, the cash
journal postings correspond to the FI documents (see illustration below).

()

You can assign authorizations for the various activities involved in running the cash journal
using authorization object F_FBCJ.

Prerequisites

In Customizing for Bank Accounting, under Business Transactions Cash Journal , you
have made the settings required for setting up a cash journal.

If you use extended withholding tax in your company code, you have to make the appropriate
settings for posting withholding tax on payment in Customizing for Financial Accounting
Global Settings under Withholding Tax Extended Withholding Tax .
Features

The cash journal is a single-screen transaction. This means that you can enter, display, and
change cash journal documents on one screen.

You have the following options:

 Entering, saving, and posting cash journal entries

You can save cash journal entries locally in the cash journal. The system also calculates the
balances. The cash journal entries saved are then posted to the general ledger.

For a cash journal document, you can carry out CO account assignments, and have taxes,
including withholding taxes, calculated by the system with reference to business transactions,
taking account of tax jurisdiction codes, for example.

 Displaying follow-on documents

You can also display the follow-on documents arising for the cash journal entries posted.

 Defining cash journal business transactions

As well as defining cash journal business transactions in Customizing, you can also, if
necessary, define a new business transaction while you are making entries in the cash journal.

 Printing the cash journal

You can print all of the cash journal entries posted in the time period displayed. You select
the print form in Customizing.

 Printing receipts

You can print the cash journal entries saved. You select the print form in Customizing.

 Deleting cash journal entries saved

If you have the appropriate authorization, you can delete cash journal entries that have been
saved.

 Displaying all cash journal documents that have been deleted

You can display all the cash journal documents that have been deleted within a specific time
period.

 Changing the cash journal

You can change the cash journal and the company code while you are processing entries.
Activities:

Posting Documents in the Cash Journal

Cash Journal: Depositing Checks

R/3 Architecture
The SAP R/3 System has a three-tier client/server architecture. All data is stored in a database, and
the data is processed in the application layer on the application servers. The SAPgui frontend
(presentation layer) is the interface to the user. All three layers are connected to each other with
networks. The following graphic depicts the client/server architecture of the R/3 System, and the
communication requirements between the presentation and application layers and between the
application and database layers:

Depending on your requirements, you can distribute the services to different hosts.

Smaller applications keep the database and the R/3 application on the same host. The large volume
of data that passes between the R/3 application and the database (SAP server communication) is
processed locally and not through a network.

The presentation layer is usually made up of PCs on which the SAPgui frontend is installed. The
SAPgui is not a terminal emulation but an application program that displays R/3 application data
graphically. This means that there are no great demands placed on the connection between the
SAPgui frontend PCs and the R/3 application (access communication).

Higher processing demands on the R/3 application can be realized by additional application servers
(application servers are hosts on which the R/3 application runs).

Very high demands are made on bandwidth and delay time between the application servers and the
database server. You need to set up a suitable network connection to meet these demands.
You can speed up and secure data throughput to the database by placing the database on a separate
host. The database server host then communicates only with the R/3 application servers. By isolating
the database completely from the rest of the corporate network, you prevent unauthorized access to
sensitive data and ensure high performance.

For data backup purposes you may need to connect the database server to a dedicated network
(SAN = Storage Area Network).

Access Communication
Access communication covers all access to the R/3 System. This includes user access through the
SAPgui, and also links to other R/3 Systems and external applications.

An access network is not a dedicated network segment, but includes all network segments through
which the R/3 System is accessed.

Important Design Criteria for the Access Network:

 Block-oriented data traffic  delay times in the network are relatively non-critical for the
SAPgui
 Bandwidth must be determined separately for each location, depending on the number of
users and their activities
 The availability of the network must also be specified according to the user group or location

Server Communication
Server communication covers all communication between the application servers and the database
server, and is of great importance for the R/3 System. In each individual case you must decide
whether you want to process the server communication through its own physical network (server
network), or whether you want access and server communication to share a physical network. You
must remember that any worsening in server communication also has a negative effect on the
performance of the R/3 System.
A server network is the network connection between the servers (application servers and database
servers) of an R/3 System.

Important Design Criteria for the Server Network:

 High throughput of data or high bandwidth

 Minimum delay time (round trip time)
 Includes the servers of the R/3 System only
 High availability
 No non-SAP data traffic (for example, data backup over the network)
 Direct server connection  no expensive cabling
 Greatest possible security against unauthorized access to the database server if the server
network is set up as a separate segment from the rest of the corporate network

Network Topology for the R/3 System

See

Network Topology