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Chart of Account Structure

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... Currency are defined on the Basic Initialization tab just by the chart of accounts template ... required for the conversion of opening balances between ... – PowerPoint PPT presentation

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Title: Chart of Account Structure


1
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  • 98/03/06
  • ?????? ?

2
CHART OF ACCOUNT STRUCTURE
  • ???????

3
Chart of Account Structure
  • At the conclusion of this topic you will be able
    to
  • Change the Chart of Accounts for your company
  • Create, delete and change General Ledger Accounts
  • Explain what a Control Account is
  • Define the Currencies that the system uses to
    manage a General Ledger Account Balance
  • Use Account Segmentation for reporting purposes

4
The Structure of COA
5
Chart of Accounts (1)
  • A chart of accounts arranges a company's general
    ledger accounts in a hierarchical structure.
  • The top level in the structure shows the titles
    of the account groups, which might be visualized
    as filing cabinet drawers.
  • There are 4 furthers levels Levels 2 through 4
    contain either title accounts or active accounts.
    Level 5 only active accounts.

6
Chart of Accounts (2)
  • When starting a new company, you can create your
    own chart of accounts or use one of the system
    templates.
  • There is an option to import a chart of accounts
    with the data transfer workbench. Let us look in
    the software at setting a template chart of
    accounts

7
Demo Setup
  • In the Business One Command Center, choose
    Administration gt System Initialization gt Company
    Details gt Basic Initialization tab The dropdown
    list shows the available chart of accounts
    templates
  • Select one and click OK The chart of accounts can
    be seen in Financials gt Chart of Accounts
  • The levels can be seen in the indenting of the
    list of accounts, And the level field.
  • Title accounts appear in blue, And active
    accounts in black.

8
Test Your Knowledge
  • SAP Business one allows you to operate with your
    own individually structure Cart of Accounts?
  • A True
  • B False

9
Control Account
10
Control Account
  • A General Ledger account can be set as a control
    account. A control account is an account that
    links a sub-ledger, a group of external accounts,
    to the general ledger. Business Partners
    accounts are linked through the control account
    set on their master record Whenever you post a
    document to a business partner account, the
    system automatically adds a journal entry to the
    general ledger which posts the receivables or
    payables to this control account. Some
    transactions, such as bills of exchange, must be
    posted to special control accounts, in Business
    One.

11
Accounting Currencies
12
Accounting Currencies
  • Business One handles the accounts in two parallel
    currencies, the local currency and the system
    currency. The local currency is the currency in
    which the company is legally required to keep its
    books.
  • The system currency may be a different to the
    local currency useful for subsidiaries reporting
    to head office the system automatically
    calculates all postings into the system currency
    and manages an additional account balance Local
    Currency
  • System Currency are defined on the Basic
    Initialization tab just by the chart of
    accounts template

13
G/L Account Currencies
14
G/L Account Currencies
  • In addition to the ledger currencies, you may
    specify a different currency for each General
    Ledger account. If the account currency is local,
    you can post to the account only in local
    currency. But if you specify a foreign currency
    for the account, then you will be able to enter
    transactions and see the balance in that currency
    as well. If you set the account as
    Multi-Currency, then you will be able to enter
    transactions in any currency.

15
Other G/L Account Properties
16
Other G/L Account Properties
  • There are other properties which will be set for
    each active account. The Account Type defines an
    account as revenue or expense for the profit and
    loss account, or Other for Balance Sheet An
    account must be defined as a Cash Account if cash
    or payments are handled it will appear in the
    Cash Flow report. Other properties and flags can
    be used to put an account on hold, restrict
    access, provide extra details, and so on. Let us
    look in the software at editing General Ledger
    accounts

17
Demo Account Editing and Properties
18
Demo Account Editing and Properties
  • An account can be created in Financials gt Chart
    of Accounts We wish to add a General Ledger
    account for a new Euro bank account, so we
    highlight the title account where we want it to
    appear And click Add mode We enter an account
    code And a name select Euro as the currency
    Identify the account as a cash account And click
    to add the account to the list. We wish the
    account to appear in sequence, so we will go to
    Edit Chart of Accounts, Choose the correct
    account group the drawer - Find the account And
    change the location in drawer To sort in its
    correct position, And click update. If we wish to
    delete an account, a right click in Edit Chart of
    Accounts will allow us to do this.

19
OPENING BALANCE - BUSINESS PARTNERS
  • ????-????

20
????-????
  • Create and Verify opening balance for Business
    Partners

21
Opening Balances
22
Opening Balances
  • The set up of a new company in SAP Business One
    requires the transfer of both outstanding
    transactions and current balances from the
    existing business. There are three key data
    elements
  • Firstly, the physical quantities and values for
    Items recorded against a warehouse within SAP
    Business One.
  • Secondly, the outstanding Business Partner
    balances.
  • Some business may not hold stock or buy and sell
    on credit in which case one or more of these
    first two data elements may not be applicable.
  • For all companies however opening General Ledger
    account balances will exist and must be created.

23
Considerations
24
Considerations (1)
  • The three opening balances elements are
    inter-related.
  • The current value of Inventory will normally
    correspond to the initial balances against one or
    more General Ledger accounts.
  • The total of unpaid and unmatched Customer
    documents will correspond to the initial balances
    against the General Ledger control accounts for
    Customers.
  • The total of unpaid and unmatched Vendor
    documents will correspond to the initial balances
    against the General Ledger control accounts for
    Vendors.

25
Considerations (2)
  • The set up of opening balances for Items may, or
    may not result in the generation of General
    Ledger account balances depending on the SAP
    Business One company settings, and Inventory set
    up details and method used.
  • The set up of Business Partner Balances will
    always result in the generation of General Ledger
    account balances.
  • This interaction of the three elements dictates
    the sequence of set up
  • in that opening General Ledger balances should
    always follow and take into account the effect of
    the Inventory and Business Partner opening
    balance setup.

26
Business Partner - Opening Balances
27
Business Partner - Opening Balances (1)
  • Business Partner balances can be created by
    entering a current total against each Business
    Partner using the Business Partner Opening
    Balance menu option. Customer balances should be
    entered as positives, Vendor balances should be
    entered as negatives. Before attempting to enter
    the Business Partner Opening Balances, the
    current period should be set in line with the
    intended posting date for the opening balances.

28
Business Partner - Opening Balances (2)
  • Similarly, the exchange rates required for the
    conversion of opening balances between Business
    Partner functional currency, Local Currency and
    System Currency must be defined for the intended
    posting date. An Opening Balance Account should
    be created in the G/L. The reverse of the net
    total Business Partner opening balances entered
    will be posted to this account. We will now take
    a look at this process in a demonstration.

29
Demo Business Partner Opening Balances
30
Business Partner - Balance Verification
  • It is important to verify opening balances in
    both Business Partner functional Currency and
    Local Currency.
  • Verification of Business Partner opening balances
    to the Legacy System General Ledger opening
    balances is recommended before starting the set
    up of Business Partner opening balances or
    documents.
  • If data is extracted from the Legacy System for
    import into SAP Business One, it is essential to
    verify the extracted data to the Legacy System
    report before starting data mapping and import.

31
Demo Business Partner - Balance Verification (1)
32
Demo Business Partner - Balance Verification (2)
33
OPENING BALANCE GENERAL LEDGER
  • ????-????

34
????-????
  • Enter and Verify opening balance for the General
    Ledger

35
????-????
36
G/L Accounts Opening Balance (1)
  • General Ledger Account balances can be created by
    entering the un-posted opening balance against
    each General Ledger Account using the General
    Ledger Account Opening Balance menu option.
  • Debit balances should be entered as positives,
    Credit balances should be entered as negatives.
  • Before attempting to enter the General Ledger
    Opening Balances, the current period should be
    set in line with the intended posting date for
    the opening balances.

37
G/L Accounts Opening Balance (2)
  • Similarly, the exchange rates required for the
    conversion of opening balances between specific
    Account Currencies, Local Currency and System
    Currency must be defined for the intended posting
    date.
  • An Opening Balance Account should be created in
    the General Ledger. The same Account used in the
    set up of Business Partner Opening Balances can
    be used or a separate Account created. The
    reverse of the net total General Ledger Account
    opening balances entered will be posted to this
    account. We will now take a look at the opening
    balances screen in SAP Business One.

38
Demo G/L Account Open Balance
39
Demo G/L Account Opening Balance Verification
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