GL Master Data in SAP FICO

General Ledger Account Master Data

GL Master data in SAP FICO is the information that records transactions. Transactions are posted on GL accounts. GL accounts represent individual items in the financial statements, such as assets, liabilities, revenue, and expenses. Each GL account is assigned to a specific account group within the chart of accounts. GL accounts are used to record financial transactions and are essential for generating financial reports. This master data ensures accurate recording and reporting of financial transactions within the SAP system.

In SAP, there are two main segment of G/L Master Data:

1. Company Code segment (gets stored in Table "SKA1")

2. Chart of Account segment (gets stored in Table "SKB1")

These two segments together form the core of the GL Master Data in SAP.

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General Ledger Account Group

G/L Account Group is a classification used to group together similar G/L Accounts for easier management and reporting purposes.

• Each Account Group are Dependent on Chart of Accounts.

• Account Groups also determines which fields are mandatory, optional, or hidden when creating or maintaining G/L accounts.

• Each Account Group has its own number range for G/L Accounts (Its Length was Mentioned at the time of Defining CoA).

To Define G/L Account Group - ( T.Code OBD4)

In Real time Business scenario, SAP suggests categorizing as:

• All Asset Accounts to start with 1 series.

• All Liabilities Accounts to start with 2 series.

• All Expenditure Accounts to start with 3 series.

• All Income Accounts to start with 4 series.

The Field Status of G/L Account Group Controls: Field Status of G/L Account Group Controls fields at the time of Creation of General Ledger Accounts.

Retained Earnings

Retained Earnings also known as "Retained profit" or "Earnings surplus".

Retained Earnings represent the cumulative amount of profits earned by a company that have not been distributed to shareholders as dividends or used for other purposes. It's essentially the portion of a company's net income that is retained within the business for reinvestment, Debt reduction.

To Maintain Retained Earnings Account ( T.Code- OB53)

At the end of a fiscal year, the system carries forward the balance of P&L account to the Retained earnings account.

Enter "X" in P&L Statement Account Type and Retained earning G/L number in Account.

Retained Earnings Account is used to maintain the G/L in which the system will transfer the P&L amount at the end of the every fiscal year when the balance carry forward activity is executed(with T.Code FAGLGVTR).

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GL Account Creation

A General Ledger account is a fundamental element in financial accounting that represents a specific item in an organization's financial statements.

• It is used to record financial transactions, and each G/L account is assigned to a particular account group within the Chart of Accounts.

• The General Ledger Master Data in SAP FICO is made up of a chart of accounts area and an area specific to the company code

• Example: 'Cash A/c', ' Interest A/c', 'Debtor A/c', 'Bank A/c' etc.

There are 3 different ways to create G/L Accounts in G/L Master Data :

1. Edit G/L Account Centrally (T.Code FS00) - To create G/L account centrally in both the chart of account area and company code area.

2. Edit Chart of Accounts Data (T.Code FSP0) - To create G/L account only in Chart of Account without specifying Company Code to use.

3. Edit Company Code Data (T.Code FSS0) - To Extend G/L account to one of Company code without specifying the Chart of Account.

To Define G/L Account Centrally ( T.Code FS00 )

STEP 1: Click on Create icon and Enter Company code and G/L Account Number.

STEP 2: In Type/Description Tab > Select "G/L Account Type" and Account Group, Enter Text of G/L Account.

"G/L Account Type " : This determines how the G/L Account can be used in FI and CO.

1. 'C' - is for Cash G/L Account.

2. 'N' - P &L account that is used in FI only.

3. 'P' - P &L account that is used in FI and CO.

4. 'S' - P &L account that is used in CO only

5. 'X' - is a Balance sheet account G/L account.

If G/L Account type is set as 'P' or 'S' : then "Cost Element Category" is required field. " Cost Element Category " : The cost element category determines which cost elements can be used for which business transactions.

The categories for primary and secondary cost elements like "01" for Primary costs/cost-reducing revenue, "11" Revenues, "22"External settlement, "21" Internal settlement, "41" Overhead rates , "43" Internal activity allocation

STEP 3 : In Control Data Tab > Enter G/L Account Currency and "Reconciliation Account for A/c Type".

"Reconciliation Account for A/c Type" : This field characterizes the G/L account as a reconciliation account. The Reconciliation A/c ensures the integration of a subledger account into the general ledger.

Postings values to Reconciliation A/c are booked automatically to the G/L account.

This G/L account itself is not for direct posting.

STEP 4 : In Create/Bank/Interest Tab > Enter Field status group and Save.

As shown below G/L Account 'Machinery' is created.

Similarly you can create many other G/L Accounts like Bank A/c, Sales A/c, Vendor A/c, Retained Earning A/c, Stock A/c, Purchase A/c, Discount A/c etc.

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