What is General Ledger Accounting?

G/L account master records is a function of the account. G/L account master records control transactions and account posting.
General Ledger Accounts (GL) in SAP are partitioned into two sections –

  • Outline of Account Section
  • Organization Codes Section.

GL is made at first for Chart of Account area and further extension is done to various organization codes if needed. In S/4 HANA there numerous progressions in GL master compared with ECC condition. Presently General Ledger and Cost Element got combined.

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General Ledger Accounting

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Changes in GL in S/4 HANA

General Ledger Account and Cost Element got consolidated. Auxiliary Cost Element is likewise considered as GL. Optional cost components are additionally made through exchange code FS00.Transaction code, for example, KA01, KA02, Ka03, KA06 does not exist anymore. SAP tables are still updated for GL SKA1 and SKB1 and so forth and for cost component CSKA and CSKB etc..
GL Account Type :
X – Balance Sheet Account/Accounts
N-Non-operating Expenses or Income
P-Primary Costs or Revenue
S-Secondary Costs
Cost Center default account task isn’t accessible at GL Account level. Default CO items can be kept up in Transaction code OKB9 which is exceptionally stable and useful.

Cost Elements :
SAP Cost Elements-Primary and Secondary. Cost and Revenue Elements are separated into two types-

  • Primary Cost Elements for cost flow from Financial Accounting to Controlling
  • Secondary Cost Elements for cost flows inside Controlling

Additionally direct posting will workout for primary cost elements whereas indirect posting occurs in secondary cost elements. Secondary cost elements will not have a corresponding G/L account.
Primary Cost Element :
Primary Cost Elements compares to General Ledger Accounts in the Operational Chart of Accounts with balanced relationship. GL account description is the default description for primary cost element. Also the grouping varies depending on the business type. So Cost Element Groups can be

  • Staff Costs
  • Administration and Operating Supplies
  • Total Maintenance Costs
  • Other Overhead Costs

Cost Element Groups :
SAP has grouping in the Cost Elements. Cost Element groups are valuable in

  • Reports preparation for Service and Operating Supplies costs
  • Aggregate processing, like Planning for Total Maintenance Costs

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General Ledger Accounting

Managing Ledgers in SAP Accounting :
The G/L accounting has an important task to give an elaborative picture of external accounting and accounts. Recording all business exchanges (primary postings and additionally settlements from internal accounting) in a system framework that is completely incorporated with the various operational regions of an organization guarantees that the accounting information is complete and accurate.
General Ledger Accounting additionally satisfies different necessities for current accounting:

  • Parallel Accounting – It can perform parallel accounting by dealing with a few parallel records for various accounting standards.
  • Integration of Legal & Management Reporting – In General Ledger Accounting, you can perform inside administration reporting in parallel with legal reporting. For this reason, the Profit Center Accounting capacities are coordinated with General Ledger Accounting.
  • Segment Reporting – General Ledger Accounting underpins the fragment reports required by the accounting standards IFRS (International Financial Reporting Standards) and US GAAP (Generally Accepted Accounting Principles). For this reason, General Ledger Accounting contains the Segment dimension.
  • Cost of Sales Accounting – You can perform cost of sales accounting in General Ledger Accounting. For this reason, General Ledger Accounting contains the Functional Area dimension.

 Reporting options in S/4 HANA finance :
SAP S/4 HANA gives different flexible reporting options. You can choose between various options in the backend and the frontend framework. Real time reporting can be performed on top of Simple Finance framework. Some of the reporting tools used in SAP HANA are SAP Lumira, SQL or Smart Business Apps.

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