SAP FICO

Chart of Accounts in SAP – Beginners Guide

Chart of Accounts in SAP – Introduction

The chart of accounts in SAP is a group of GL Accounts that controls the name of the General GL Master, the number of GL Master and some control information. In other words, the grouping of G/L accounts forms the framework for recording accounting transactions in a structured way.

What is Covered in this article?

How it is important for GL Accounts?

Each G/L account is made up of an account number, account name and same control information. The control information decides how an account is created in a company code and posted to.

There are a number of Chart of accounts in SAP that meet the statutory and legal requirements of various countries. Likewise, the international chart of accounts (INT) works in a similar way and any country can use them.

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(Types) List of Chart of Accounts in SAP

In SAP FICO, We have three types of Chart of Accounts. Let us understand them briefly.

1. Operating Chart of Accounts

The operating chart of accounts in SAP is used for recording the day-to-day transactions in a company code. We also call them the standard chart of accounts. Both FI & CO make use of this element.

Noteworthy, this can be different from the country chart of account. Each company code works with exactly one operating chart of accounts. However, we can assign the same chart to more than one company code.

2. Country Specific Chart of Accounts in SAP

The country chart of accounts in sap helps to meet the country-specific legal requirements. Although it is optional to assign to a company code, you need such a chart when you work with a different operating chart of accounts.

Subsequently, you can establish the linkage by entering the country chart of G/L account number in the alternate Account number field of GL Master Record.

3. Group Chart of Accounts

We use a group chart of accounts in SAP for consolidating all company codes with a dissimilar operating chart of accounts belonging to a company.

However, the assignment of a group chart of accounts to a company code is not mandatory. We also call it the Corporate Chart of Accounts.

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How to create Chart of Accounts in SAP?

After clicking on the “Edit Chart of Accounts List”, to create a new chart of accounts, click on New entry, Fill in the required details and Save.

So, now let’s see how to create COA in two different applications – ECC and S/4HANA.

However, before creating the chart of accounts you must understand that we need to maintain some values which are necessary for the defining process.

Values to Maintain for defining Chart of Accounts in SAP

  • Chart of Accounts – Enter the four-character identifier
  • Description– Enter a Description
  • Maintenance Language – Select ENGLISH as the maintenance language. Consequently, all the G/L accounts of this chart have their descriptions in this language. We can easily translate the account names to a target language from the maintenance language. However, only if we use the same chart of account in other company code.
  • Length of G/L Account Number– Enter (1-10) as the length of the G/L account number.
  • SAP Controlling Integration– This field indicates how the system should create cost elements when we create New G/L accounts. Here, the system automatically creates the required cost elements for the option AUTOMATIC Creation of Cost Elements. Provided if you have maintained a default Cost Element Category. (Remember, you can use Transaction Code OKB2 for this). You may also set the system to have the cost elements created manually using the appropriate transactions (Transaction KA01 for creating a primary cost element and Transaction Code KA02 for creating a secondary cost element).
  • Group of Chart of Accounts in SAP– This chart of account is used for company consolidation.
  • Blocked– If you select this indicator, then you are not able to create any New G/L accounts in the company code from this chart of accounts.

Now see the process to define chart of accounts in SAP.

Since we have two applications- ECC and S/4HANA. So there is a slight difference in the steps or path. I have put both here.

Steps to create a new Chart of Accounts in the SAP ECC system

Create COA in SAP FICO with the following process:-

SPRO => SAP IMG-Financial Accounting (New) => General Ledger Accounting (New) => Master Data => G/L Accounts => Preparation => Edit Chart of Accounts List. – [Transaction Code – OB13]

Steps to create Chat of Accounts in the SAP S/4HANA system

SPRO=> SAP IMG => Financial Accounting => General Ledger Accounting => Master Data => G/L Accounts => Preparation => Edit Chart of Accounts List. – [Tcode is same – OB13]

Chart Account can be defined with a maximum 4 digit code. In my example, it is “C160”.

How to create a Group Chart of Account?

The process to create a Group Chart Of Accounts is the same as we create an Operating Chart of Account. Once you create it, assign it to one of the existing operating charts of accounts. Now the earlier one becomes a group chart of accounts.

For example, first, we create a chart of accounts with the name “A”. As mentioned, we will create it in the normal way as an operating chart of accounts. After creation, we assign this “A” chart of account to an already existing COA eg. name “B”.

Finally, after this assignment, the first COA i.e. “A” becomes a Group Chart of Accounts.

How to Assign Company Code to Chart of Accounts?

Since we create the chart of accounts at the client level, thus, the next logical step is to assign them to company codes.

Steps to Follow:

 SPRO => IMG => Financial Accounting (New) => General Ledger Accounting (New) => Master Data => G/L Accounts => Preparation => Assign Company Codes to Chart of Accounts. – [Transaction Code- OB62]

Process for assigning company code:

  • Firstly, you need to enter TCode OB62 in the SAP command field area and go ahead.
  • Next, you see a screen having Change view Assign company code- chart of accounts – Overview screen.
  • Here you select the position option and enter the company code in the box appearing.
  • Lastly, after successful completion, you would see the specific company code on the top of your SAP screen.

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How to Display Chart of Accounts in SAP

It’s very simple. Just follow the below steps.

Click on the Edit Chart of Account List => Use TCode OB13 => Click on the Position => Search the specific Chart of Accounts.

Same as the image above. The steps are the same as creation. Just enter the specific COA Tcode.

Tcode to display chart of accounts

It is OB13.

You must have known already. Since it is a common question by readers, so I put it here separately. We use it to see a specific Chart of Account.

How to Copy a Chart of Accounts in SAP

The steps are the same as creating a new COA. After which certain things you need to do. Here is the whole process.

  • SPRO => SAP IMG-Financial Accounting (New) => General Ledger Accounting (New) => Master Data => G/L Accounts => Preparation => Edit Chart of Accounts List. – Click on COPY Icon (shown in image below) =>
  • Here system will ask you to select a Source Chart of Accounts. Eg. 0001. Then, you need to give your target COA.
  • Click enter.
  • Do the necessary changes (if required).
  • Finally Click Save.

(Same Tcode is to use – OB13).

Related: List of Top50+ SAP Finance Tcodes and their use

Interestingly, this Chart of Accounts is a feature that SAP introduced in ECC as compared to its R/3 model. This added much functionality here in the SAP functional module.

Why do you need to create Chart of Accounts?

In order to maintain the General Ledgers in SAP properly, you must create the Chart of Accounts in the proper format. Since the general ledger accounts are the backbone of the SAP Financial Management system. This is to say, in FICO and SAP S4 HANA Finance both it has their significance.

Thus, you must consider the chart of accounts as their internal structure.

Importantly, if you would like to understand the General Ledger system in SAP in a deeper way, you must learn the chart of accounts at its best. Also, that should be from a good source.

Know About: Latest Version of S4 HANA Finance 2020

Related Video: How to Chart of Accounts in SAP | Structure & Types

Pradeep

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