What is G/L in SAP – New General Ledger Accounting in SAP S4 Hana

What is General Ledger Accounting in SAP

General Ledger Accounting (G/L) in SAP is one of the important sub-module of Financial Accounting. It is a central component of SAP S/4Hana system where the monetary values of business transactions are recorded and reported. So General ledger accounting is also called as the Main Ledger of SAP.

• The financial statements like Balance Sheets, Profit & Loss (P&L) statements are generated with the G/L accounting.
• The Financial business transactions are posted with the G/L accounts and each business transaction will have minimum two line items i.e. debit & credit line item.
• The Debit & Credit line items are determined through the posting keys. The standard SAP system delivers the posting keys as per the process.

Types of G/L data: In SAP, we can maintain the following data types for General Ledger Accounting

1. G/L Master Data
2. G/L Master Record (G/L Accounts)
3. Transactional Data.

G/L Master Data:

• The G/L master data includes the following configuration data
  • Chart of Accounts
  • Account Groups
  • Retained Earnings Accounts
• Before you create the General Ledger Accounts, you need to complete the above master data. Without this configuration, the SAP system won’t allow you to create the G/L Accounts.

G/L Master Record

• Each G/L account is created at two levels i.e.
  • Chart of Accounts area level
  • Company Code Level
• The G/L account at chart of accounts area level is created at one time only. The data maintained at the chart of accounts area level is common for all company codes that the G/L account is created.
• Each G/L account should be created at company code level. Without extending the G/L at company code level, you cannot use the G/L account to post any business transaction at that particular company code.
  • For Example: The G/L Account (Travel Expense): 100100 created at Chart of Area level and also extended to the company code AD01 only. When you are trying to use this G/L acccount:100100 for the company code AD02, then the system throws an error message as “The G/L account doesn’t exist for the company code AD02”.
• G/L accounts can be created using two steps level or one step level.
  • One step level – Means creation of G/L account centrally using transaction code (FS00). This transaction consists both chart of account area and company code area.
  • Two Step level – Mean G/L account created using two transaction codes. 1. FSP1 – Creation of G/L account at chart of Accounts Area 2. FSS0 – Company Code Level.

G/L Integration

In SAP, Financial Accounting module is integration with other module of SD, MM, PP, HR, QM, etc. This integration with other modules are linked through the G/L Accounts.

• Accounts Payable, Accounts Receivable, Asset Accounting are sub-modules of FI. This sub-modules are integrated to the main ledger through the reconciliation account type.
• The Account Payable (A/P) are linked to reconciliation account type K: Vendors, Account Receivable to D: Customer & Assets to A: (Assets).
• When the business transactions are posted, as the values are updated in the both accounts of sub-modules and main ledger through the reconciliation account type.
• For example: The vendor master record is created and assigned with a reconciliation account (G/L account) at the company code segment. When you post the business transaction for this vendor account, the values are updated to the vendor account (you can check report through FBL1n) and as well to the G/L account (Reconciliation account) that was assigned in the master data.

G/L Important Tables

As we already discussed above, the G/L accounts are created at different areas i.e. Chart of Accounts Level and Company Code level. Once you create the G/L accounts, the details are updated in the different tables.

• It is important that every SAP consultant should remember the important table that you are working on the daily basis.
• General Ledger accounting tables are also one of the important table, that you should remember. So when you are retrieving the details of G/L account or Group of G/L accounts, you can direct check the details through the table level using the transaction code: SE16 or SE16N.
  • For Example: You want to generate report with a list of Reconciliation G/L accounts for company code AD01. By executing T-code SE16n => Table: SKB1, by entering the company code: AD01 and selecting the field reconciliation account: A, D, K and you can generate the list of reconciliation G/L accounts under the company code AD01

Changes in SAP S4 Hana

When compared to SAP ECC version, there are lot changes in S4 Hana.

• The Creation of G/L account in SAP_ECC system and S4 Hana has been changed. New field G/L account type has been introduced in S4 Hana.
• In SAP ECC, the G/L accounts are created with an account type: P&L statement or Balance Sheet.
• In SAP S4 Hana, now the G/L accounts are created with an account types as:
  • X- Balance Sheet
  • P- Primary Cost or Revenue
  • N – Non-Operating Expense or Income
  • S – Secondary Costs
  • C – Cash Account
• In S4 Hana, the cost elements (Primary & Secondary Cost Elements) are created as G/L accounts. The transaction code KA01 (To create Cost Elements) are now obsolete in S4 Hana. If you try to execute this Transaction code, it will be automatically redirect to the FS00 G/L account screen.

General Ledger Account Fields

The important fields that are available in General Ledger accounting are

Chart of Accounts Area Level

• G/L Account type
• Account Group
• Description
• Consolidation Data

Company Code Level

G/L account at company code level is maintained at two tabs i.e.

1. Control Data
2. Create/Bank/Interest

1. Control Data

Account Control in company Code

• Account Currency
• Balance in Local Currency Only
• Exchange Rate Different key
• Valuation group
• Tax Category
• Posting without tax allowed
• Reconciliation account for account type
• Alternative account no

Account Management in Company Code

• Open Item Management
• Sort Key
• Authorization Group

2. Create/Bank/Interest

Control of document creation in Company Code

• Field Status Group
• Post Automatically only
• Supplement auto postings
• Reconciliation account ready for input

Bank/Financial Details in Company Code

• Planning level
• Relevant to Cash Flow
• House Bank
• Account Id

Interest Calculation Information in Company Code

• Interest Indicator
• Interest Calculation Frequency
• Key date for last interest calculation
• Date of last interest calculation.