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Table of Contents

1.

SAP Financial Accounting

1.1

Brief

1.1.1

The General Ledger

1.1.2

The Accounts Payable

1.1.3

The Accounts Receivable

1.1.4

Bank Accounting

1.1.5

Asset Accounting

1.1.6

Withholding Tax

1.1.7

Country India version

1.2

Implementation Scope

1.2.1

Client

1.2.2

Company

1.2.3

Company Code

1.2.4

Business Area

1.2.5

Company Code Segment

1.2.6

Chart Of Accounts

1.3

Master Data

1.3.1

General Ledger Master

1.3.2

Asset Master

1.3.3

General Master Data

1.3.4

Vendor Master Data

1.3.5

House Bank

1.3.6

Cash Journal

2.

SAP Controlling

2.1

Brief

2.2

Cost Center Details

3.

SAP Asset Accounting

3.1

Brief

3.1.1

Asset Class Details

3.2

Depreciation

3.2.1

Purpose

3.2.2

Features

3.2.3

Asset Depreciation

3.2.4

Asset Retirement & Transfer

3.2.5

Closing operation

4.

SAP Business Process

4.1

Basic Setting

4.1.1

Parameter of settings

4.1.2

Currency

4.1.3

Fiscal Year

4.1.4

Fiscal Year Variant

4.1.5

Posting Period Varian

4.1.6

Number Range.

4.1.7

Document Type

4.1.8

Posting key

4.1.9

Account Group

4.1.10

Field Status Variant

4.2

Extended Withholding tax

4.3

General Ledger Account

4.3.1

Purpose

4.3.2

Features

4.4

Manual payment

4.4.1

Prepaid Expenses

4.4.2

Parked Documents

4.4.3

Document Reversal

4.4.4

Closing Procedures

4.4.5

Accruals & Reversal of provisions

4.4.6

Closing of Period

4.4.7

Balance Carried Forward

4.5

Accounts Payable

4.5.1

Traveling Expenses

4.5.2

Vendor Payment

4.5.3

Vendor Down Payment

4.5.4

Down Payment Request & Advance Payment

4.5.5

Invoice Booking & Settlement of Advances

4.5.6

TDS Processing

4.5.7

TDS Calculation Requirement

4.5.8

TDS Certificate

4.6

Advances/Loans to employees & Travel expenses

4.7.1

Purpose

4.7.2

Clearing of Accounts

Annexure 1

SAP FINANCIAL ACCOUNTING:


1.1 Brief:
The Financial Accounting (FI) module components address the requirements of the financial
accounting department of an organization. It provides the following features:
Management and representation of all accounting data: All business transactions are recorded
with an unbroken audit trail from the financial statements to the individual documents.
Open and integrated data flow: Data is available in real time within Financial. Accounting.
Postings made in the sub ledgers always generate a corresponding posting in the General Ledger.
Thereby the necessity of reconciling the sub-ledger with the general ledger is undone with.
All accounting-relevant transactions made in Logistics (LO) are posted real-time to Financial
Accounting by means of automatic account determination. This data can also be passed on to
Controlling (CO). This ensures that logistical goods movements (such as goods receipts and
goods issues) are exactly reflected in the value-based updates in accounting. The financial impact
of the goods movement, inwards and outwards, are accounted online real time.

The Financial Accounting (FI) application component fulfills all the external reporting
requirements that must be met by the organization whether national or international. The SAP FI
application provides the following features

1.1.1 The General ledger:


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 ensures
that the accounting data is always complete and accurate.

1.1.2 The Accounts Payable:


The Accounts Payable application component records and manages accounting data for all vendors
as a whole. 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 MM. The concept of sub-ledger is used to ensure that the vendor related financial
entries are updated in the vendors accounts and also to the general ledger accounts. This is done by
the assignment of the general ledger account in the vendor master.
1.1.3 The Accounts Receivable:
The Accounts Receivable application component records and manages accounting data of all customers.
All postings in Accounts Receivable are also recorded directly in the General Ledger. Different G/L
accounts are updated depending on the transactions involved (for example, receivables & down
payments).

1.1.4 Bank Accounting:


This component is used to handle accounting transactions to be processed with the banks. It
includes the management of bank master data; cash balance management and the creation and
processing of incoming and outgoing payments.

1.1.5 Asset Accounting:


The Asset Accounting component is used for managing and supervising fixed assets with the SAP
R/3System. 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.

1.1.6 Withholding Tax: (Tax deducted at sources)


Country Version India uses the standard functions for calculating and collecting withholding
taxes. However, Withholding Tax comes with additional functions for tax remittance, journal
vouchers, creating withholding tax certificates, and preparing quarterly returns.

1.1.7 Country India Version:


Most of the country-specific functions for India relate to Financial and Logistics.
Company is subject to deductible as well as non deductible input tax and will also have relevant output
tax for processing of sales process.
Tax will be calculated through tax codes maintained with rates as per requirement. The relevant input
tax codes are listed below:-

1.2 Implementation Scope:


For SAP FI module the following are implemented:

General ledger

Accounts payable

Accounts receivable

Bank accounting and Cash journal

Fixed assets

FI organization structure:
CLIENT

Chart Of Account

Compa
ny Code

1.2.1 Client:
Client is the highest level in the SAP hierarchy.
Specifications or data which will be valid for all organizational units in all SAP applications
are entered at the client level, eliminating the need to enter this information more than once
(e.g. exchange rates).
Each client is a self-contained unit which has separate master records and a complete set of tables
and data.
Users must enter a client key and have a user master record in the client in order to log on to the
system.
The Enterprise Structure in SAP Finance module consists of the following entities under
Client: Company
Company Code
Chart of Accounts

1.2.2. Company
A Company represents a group of entities (one or more Company codes) in SAP.This entity is used for
consolidation of accounts of multiple entities (Company Codes). All company codes within a company
must use the same transaction Chart of accounts and the same Fiscal Year breakdown. However, the
company code currencies can be different.

1.2.3. Company Code


A Company Code represents an independent legal accounting entity in SAP. Balance Sheets
and Profit/Loss statements required by law will be created at the Company Code level. In
other words, the organizational unit for which a complete self-contained set of accounts can be
drawn up for external reporting purpose. The process of external reporting involves recording

all relevant transactions and generating all supporting documents required for financial
statements.

1.2.4 Business Area:


Business area in sap is defined as an organisational area within the financial accounting module. Business
area in SAP is used for internal and external reporting.Financial statement can be created for business area
and this financial statement can be used for internal purpose.

1.2.5 Company Code Segment:


The information, which is specific to a particular Company, is maintained in the Company code
segment of the General Ledger Master record. This data controls how one enters and processes
business transaction data in the appropriate account as well as how the account is managed within a
company code. The following are some of the specifications which will be made for each G/L
account:

1.2.6 Chart of Accounts:


Definition consists mainly of the account number, account name and the type of GL account, i.e.
whether the account is a Profit & Loss account type and Balance Sheet type of account. Chart of
accounts relation between company code.
1:1 or 1 :n

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