Charts of Account

After creating Company Code, the next thing we have to do is creating Chart of Accounts (COA).In SAP R/3 term, Chart of Accounts is a unique four alphanumeric code that represents the structure of group of General Ledger (G/L) accounts. The COA contains the definition of all G/L accounts such as their account number, account name, and the type of G/L account (whether the account is a Profit &Loss; /P&L; type account or a balance sheet type account).

Each company code must have one chart of accounts (COA) for its general ledger. The COA must be assigned to the company code. A COA can be assigned to several company codes which mean that these company code’s general ledgers have the same structure.

We can define Chart of Accounts with “OB13” T-code or through “SPRO” T-code menu: Financial Accounting – General Ledger Accounting – G/L Accounts – Master Records – Preparations – Edit Chart of Account Lists.

The definition of COA determines some characteristics of the COA, which are:

§  Chart of Accounts code and its description.

§  The language of COA.

§  Length of G/L Account number of the COA (up to 10 digits, can be numerical or alphanumeric).

§  Type of integration between G/L accounts and cost elements. It controls of how a cost element can be maintained when maintaining a G/L account. A cost element classifies the company’s valuated consumption of production factors within a controlling area. A cost element corresponds to a cost-relevant item in the chart of accounts such as expense account (a P&L; account).

 The following options are available for each G/L account:

§  No maintenance of cost elements.

§  Cost elements maintained manually.

§  Cost elements maintained automatically. When we save a new G/L account, the related cost element is automatically created. A prerequisite is that a default value for the cost element category has been set up for this cost element. If no default value is found, the system will not create a cost element.

§  Group Chart of Accounts for consolidation process (if the general ledger of the company code will be consolidated to the parent company’s general ledger).

§  The status of COA: blocked or not. SAP suggests blocking COA if charts of accounts are created centrally and accounts are created locally. If this is the case, then the block prevents accounts from being created in the company codes for a chart of accounts that is not yet completed.

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