Module 1

1
Module 1

• Company Code
• And
• Chart of Accounts

2
Financial Accounting (FI)

• The key building block for the organization
• Most modules build on the FI organizational
• elements
• FI is for External Accounting for
• Stockholders
• Bankers
• Lenders
• Auditors
• SEC
• IRS

3
Company Code

• A company code represents a stand-alone legal
  entity that requires its own set of accounting
  records for reporting purposes
• The company code represents the smallest
  organizational unit for which accounting can be
  carried out
• The level where transactions are processed
• The level where accounts are managed
• The level where legal individual financial
  statements, such as the balance sheet and the
  profit and loss statement, are created

4
Company

• Consolidated financial statements are created at
  the company level
• A company can include one or more company codes
• All company codes must use the same chart of
  accounts and fiscal year
• The financial statements of several companies can
  be rolled up to the company level using the
  legal consolidation module (whatever that is).

5
Chart of Accounts

• A chart of accounts is a listing of the accounts
• A chart of accounts must be assigned to every
  company code, but more than one company code can
  share a chart of accounts
• FI is for external reporting, CO is for internal
  reporting
• In other (usually older) systems,there may be
  thousands of accounts in the chart of accounts
  with internal vs. external coding logic. With
  the FI/CO concept, there are usually fewer
  accounts in chart of accounts.

6
Client, Company, Company Code
For Fitter Snacker, we will not use the Company
structure
7
Fiscal Year Variant

• Determines the posting periods to be used by the
  company. It should be configured to match the
  companys fiscal year.
• e.g. Jan 1 to Dec. 31 for most businesses, July 1
  to June 30 for most colleges and universities
• SAP allows for 12 regular posting periods and up
  to 4 special posting periods
• Special periods allow for posting of audit or tax
  adjustments to a closed fiscal year
• 4 periods allow for quarterly adjustments

8
Credit Control Area

• An organizational unit or area of responsibility
  created to control customer credit limits
• A company code is assigned to one and only one
  credit control area
• Multiple company codes can be assigned to one
  credit control area
• Credit control covered in Module 13