FI Configuration Steps

1. Enterprise Structure
1.1. Company
A Company is created with a six-digit character code with the information of address,
language, currency, and country. The Company is used for the consolidation of the
financial results of the companies within the group.

Path; IMG ➤ Enterprise Structure ➤ Definition ➤ Financial Accounting ➤ Define

Company
T Code: OX15

1.2. Company codes

In the SAP ERP, the company code is an organizational unit used in FI to structure a
business process for financial reporting purposes. SAP FI gives you the option to edit
(create from scratch) your company code or copy the parameters of an existing
company code and modify them to meet your requirements.

Path: IMG ➤ Enterprise Structure ➤ Definition ➤ Financial Accounting ➤ Edit,

Copy, Delete
T code; OX02

After this, we have to assign of company code to the company.

Path: IMG ➤ Enterprise Structure ➤ Assignment ➤ Financial Accounting ➤ Assign
Company Code to Company
T code; OX16

1.3. Plants

Path; IMG ➤ Enterprise Structure ➤ Definition ➤ Logistics-General ➤ Define, Copy,

Delete, Check Plant
T code: OX10

After this, we have to assign of company code to the company.

Path: IMG ➤ Enterprise Structure ➤ Assignment ➤ Logistics general ➤ Assign Plant
to Company Code.
T Code: OX18
1.4. Business Areas

A business area is an organizational unit that represents a specific business segment

in SAP that defines a functional area of operation, a plant, or an area of responsibility.
For example, business areas can be a product the company sells, a geographical
location, and so on. The business area is optional and is intended purely for internal
financial reporting. They can be used across company codes for reporting. They are
also viewed as balancing entities that can produce their own set of financial
statements.

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 Path: IMG ➤ Enterprise Structure ➤ Definition ➤ Financial account ➤ Business area
T code; OX03.

2. Financial Accounting global settings

2.1. Fiscal year variant

The fiscal year represents the accounting year or annual accounting period. A fiscal
year variant defines your company’s accounting posting periods. Variant can be
defined either as:
 Year independent
 Year specific (dependent)
IMG ➤ Financial Accounting (New) ➤ Financial Accounting Global Settings (New) ➤
Ledgers ➤ Fiscal Year and Posting Period ➤ Maintain Fiscal Year Variant (Maintain
Shortened Fiscal Year)
T code; OB29

Assign the fiscal year variant to the company code.

path: IMG ➤ Financial Accounting (New) ➤ Financial Accounting Global Settings

(New) ➤ Ledgers ➤ Fiscal Year and Posting Period ➤ Assign Company Code to a
Fiscal Year Variant
T code; OB37.

2.2. Opening and closing posting period

Posting periods are defined in fiscal year variants. The benefit of defining variants to
open periods is to avoid the problem of posting accounting transactions to the wrong
period. Posting periods are independent of the fiscal year; that is, they are not
dependent on nor controlled by the fiscal year. Posting periods are defined at the global
level in SAP ERP. This makes them accessible to several company codes in the system.
As part of customizing opening and closing periods, the following items are defined:
 Define variants for open posting periods
Path: IMG ➤ Financial Accounting (New) ➤ Financial Accounting Global Settings
(New) ➤ Ledgers ➤ Fiscal Year and posting Periods ➤ Posting Periods ➤ Define
Variants for Open Posting Periods
T code; OBBO.

 Assign variants to company codes

Path: IMG: Financial Accounting (New) ➤ Financial Accounting Global Settings
(New) ➤ Ledgers ➤ Fiscal Year and Posting Periods ➤ Posting Periods ➤ Assign
Variants to Company Code.
T code; OBBP.

 Specify open and close posting periods

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 Path: IMG: Financial Accounting (New) ➤ Financial Accounting Global Settings
(New) ➤ Ledgers ➤ Fiscal Year and Posting Periods ➤ Posting Periods ➤ Open
and Close Posting Periods
T code; OB52.

2.3. Field status variant

Field Status Variant is copied from standard SAP with 47 field status groups. The
Field Status group defines the status of the fields while making posting to the GL
accounts.

Path; IMG ➤ Financial Accounting ➤ Financial Accounting Global Settings ➤

Ledgers ➤ Fields ➤ Define Field Status Variant.
T Code: OBC4

Field Status variant is assigned to Company Code.

Path; IMG ➤ Financial Accounting (New) ➤ Financial Accounting Global Settings

(New) ➤ Ledgers ➤ Fields ➤ Assign company code to field status variants.
T Code: OBC5

3.5 Tolerance groups

A tolerance group for GL Accounts is created in each Company Code. In Tolerance

groups, the permissible amounts for accounts and line items are specified.

Path; IMG ➤ Financial Accounting ➤ General Ledger Accounting ➤ Business

transactions ➤ Open Item Clearing ➤ Clearing Differences ➤ Define Tolerance
groups for G/L Accounts.
T Code: OBA0

A tolerance group for employees is created in each Company Code. This group defines
different amount limits for your employees. It determines The maximum amount for
which an employee is permitted to post a document. The maximum line item amount
an employee is permitted to enter in a customer, vendor or general ledger account. The
percentage amount related to cash discount. The maximum permitted payment
differences.

Path; IMG ➤ Financial A/C ➤ G/L Accounting ➤ Business transactions ➤ Open Item
Clearing ➤ Clearing Differences ➤ Define tolerance group for employees
T Code: OBA4

A tolerance group for (vendor/customer) is created for each company code. In the
tolerance group limits for vendor/customer payment differences are defined. The
tolerance group determines Limits to which differences in payments are posted
automatically to expense or revenue accounts when clearing open items. Terms of
payment are used for settling the invoices.
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 Path: IMG ➤ Financial Accounting ➤ Accounts Receivable and Accounts Payable ➤
Business transactions ➤ Manual payment receipt ➤ Define customer tolerances.
T Code: OBA3

3. Documents
3.1. Document types

Every transaction is recorded in Journal at the first and separate journals are
maintained for cash, sales daybook, sales returns, and purchase daybook, purchase
returns. Standard SAP Document Types are used to classify the transactions.
Document number intervals are maintained for each document type. From this
number interval, the system picks and assigns a number to each transaction in SA.

Path; IMG ➤ Financial Accounting ➤ Financial Accounting Global Settings ➤

Document ➤ Document Types ➤ Define Document Types for Entry View
T Code: OBA7

Document number range interval Number intervals

Path; IMG ➤ Financial Accounting ➤ Financial Accounting Global Setting ➤
Document ➤ Define Document Number Ranges
T Code: FBN1

Posting Keys
Standard posting keys defined in SAP are used. The posting key controls the
following:
 The account to be posted
 Whether the line item should be posted as a debit or a credit
 How data you entered in the system is updated

Path; IMG ➤ Financial Accounting (New) ➤ Financial Accounting Global Settings

(New) ➤ Document ➤ Define Posting Keys
T Code: OB41

4. General Ledger Accounting

4.1. Chart of Accounts

A chart of accounts is a fundamental financial tool in SAP ERP. It contains the list of
general ledgers (G/L) accounts used by a company code or several company codes for
posting daily financial activities and for reporting financial performance to the
financial statement and balance sheet. Transactions are classified by transaction type
in the chart of accounts. It holds basic information about the structure of general
ledger accounts.

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 Steps involved in customizing a chart of accounts.

 Define the chart of account.

Path; IMG ➤ Financial Accounting (New) ➤ General Ledger Accounting (New) ➤

Master Data ➤ G/L Accounts ➤ Preparations ➤ Edit Chart of Accounts List.
T code; OB13

 Assign chart of account to company code.

Path; IMG ➤ Financial Accounting (New) ➤ General Ledger Accounting (New)
➤ Master Data ➤ G/L Accounts ➤ Preparations ➤ Assign Company Code to
Chart of Accounts.
T code; OB62.

4.2. Account groups

A chart of accounts holds a large number of account types, and they determine how
G/L accounts are created in SAP ERP. For proper management, accounts are
systematically classified into appropriate account groups by grouping accounts with
similar tasks together in the same general ledger.

Importance of account group;

 They determine the number ranges assigned to an account when creating a G/L
account.
 They determine the screen layout for creating G/L accounts in the company
code area.

Path; IMG ➤ Financial Accounting (New) ➤ General Ledger Accounting (New) ➤

Master Data ➤ G/L Accounts ➤ Preparations ➤ Define Account Group
T code; OBD4.

4.3. Retained earnings Account

In accounting, a portion of the profits is held back at the end of a fiscal year as retained
earnings (net profit) after distributing dividends to the shareholders in proportion to
their investment in a corporation. Normally, the net profit or net loss figure is carried
forward to retained earnings on the balance sheet The amount carried forward is
either added to the shareholders’ equity, if profit is realized, or deducted from the
shareholders’ equity, if a loss is incurred. This indicates the profit position of a
corporation.

Path; IMG ➤ Financial Accounting (New) ➤ General Ledger Accounting (New) ➤

Master Data ➤ G/L Accounts ➤ Preparations ➤ Define Retained Earnings Account.
T code; OB53.

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 4.4. G/L Master records

Path; IMG ➤ Financial Accounting ➤ General Ledger accounting ➤ Master Records

➤ G/L Accounts ➤ G/L account creation and processing ➤ Create G/L Accounts with
Reference.
T code FS00.

5. Bank Accounting
5.1. House Bank

Path; IMG: Financial Accounting (New) ➤ Bank Accounting ➤ Bank Accounts ➤

Define House Bank.
T code F112.

5.2. Cash Journal

When you’re setting up a new cash journal, the following items must be defined:
 The company code that will use the cash journal
 Identification key (usually a four-digit code) that identifies your cash journal
 The name of the cash journal (short text describing your cash journal)
 The general ledger accounts where the cash transactions are posted
 The currency used in your cash journal
 The document type for the following items:
o General ledger postings
o Outgoing payments to vendors
o Incoming payments from vendors
o Outgoing payments to customers
o Incoming payments from customers

Path; IMG ➤ Financial Accounting ➤ General Ledger accounting ➤ Master Records

➤ G/L Accounts ➤ G/L account creation and processing ➤ Create G/L Accounts with
Reference.
T code FS00.

Specify the Amount Limit for a Cash Journal

Path; IMG ➤ Financial Accounting (New) ➤ Bank Accounts ➤ Business Transaction

➤ Cash Journal ➤ Amount Limit.

Define Number Range Intervals for Cash Journal Documents

Path; IMG ➤ Financial Accounting (New) ➤ Banking ➤ Business Transactions ➤

Cash Journal ➤ Define Number Range Intervals for Cash Journal Documents.
T code; FBCJC1.

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 Set Up the Cash Journal

path: IMG ➤Financial Accounting (New) ➤ Banking ➤ Business Transactions ➤

Cash Journal ➤ Set Up Cash Journal.
T code FBCJC0.

Create, Change, and Delete Business Transactions

Path; IMG ➤ Financial Accounting (New) ➤ Banking ➤ Business Transactions ➤

Cash Journal ➤ Create, Change, Delete Business Transactions.
T code FBCJC2.

Set Up Print Parameters for the Cash Journal

Path; IMG ➤ Financial Accounting (New) ➤ Banking ➤ Business Transactions ➤

Cash Journal ➤ Set Up Print ➤ Parameters for Cash Journal.
T code; FBCJC3.

6. Accounts payable and Account Receivable

Accounts Payable and Accounts Receivable simply represent Customer and Vendor
Accounts, respectively. A customer is usually referred to as a debtor and a vendor is
called a creditor.

6.1. Define Account Groups with Screen Layout (Customer)

Customer account groups control the customer hierarchy containing the customer
master record.

path: IMG: Financial Accounting (New) ➤ Accounts Receivable and Accounts Payable
➤ Customer Accounts ➤ Master Data ➤ Preparations for Creating Customer Master
Data ➤ Define Accounts Groups with Screen Layout (Customers).
T code OBD2.

Maintain the Field Status Group for the General Data of the Customer Account Group

6.2. Create number ranges for customer account groups

Path; IMG ➤ Financial Accounting (New) ➤ Accounts Receivable and Accounts

Payable ➤ Customer Accounts ➤ Master Data ➤ Preparations for Creating Customer
Master Data ➤ Create Number Ranges for Customer Accounts.
T code; XDN1.

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 6.3. Assign Number Ranges to Customer Account Groups

Path; IMG ➤ Financial Accounting (New) ➤ Accounts Receivable and Accounts

Payable ➤ Customer Accounts ➤ Master Data ➤ Preparations for Creating Customer
Master Data ➤ Assign Number Ranges to Customer Account Groups.
T code; OBAR.

6.4. Define Account Groups with Screen Layout (Vendors)

Path; IMG ➤ Financial Accounting (New) ➤ Accounts Receivable and

Accounts Payable ➤ Vendor Accounts ➤ Master Data ➤ Preparations for
Creating Vendor Master Data ➤ Define Account Groups with Screen Layout
(Vendors).

6.5. Create number ranges for Vendor account groups

Path; IMG ➤ Financial Accounting (New) ➤ Accounts Receivable and Accounts

Payable ➤ Vendor Accounts ➤ Master Data ➤ Preparations for Creating Customer
Master Data ➤ Create Number Ranges for Customer Accounts.
T code; XDN1.

6.6. Assign Number Ranges to Vendor Account Groups

Path; IMG ➤ Financial Accounting (New) ➤ Accounts Receivable and Accounts

Payable ➤ Vendor Accounts ➤ Master Data ➤ Preparations for Creating Vendor
Master Data ➤ Assign Number Ranges to Vendor Account Groups.
T code; OBAS

7. Terms of Payments
7.1. Maintaining Terms of Payment (Customer)

Path; IMG: Financial Accounting (New) ➤ Account Receivable and Accounts Payable
➤ Business Transaction ➤ Outgoing Invoices/Credit Memos ➤ Maintain Terms of
Payment.
T code OBB8.

7.2. Defining the Payment Terms for Instalment Payments

Path: IMG: Financial Accounting (New) ➤ Account Receivable and Accounts Payable
➤ Business Transaction ➤ Incoming Invoices/Credit Memos ➤ Define Terms of
Payment for Instalment Payments.
T code OBB9.

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8. Dunning procedure and correspondence
8.1. Dunning

It is normal business practice for business partners to fall behind when paying
invoices. A customer may forget that an invoice is outstanding and need to be
reminded to pay. Dunning is the automatic process of sending notices to business
partners based on defined criteria about overdue invoices or outstanding debt. The
dunning program ensures that the mechanism for sending reminders is in place.

8.1.1. Define the Dunning Area

Path; IMG: Financial Accounting (New) ➤ Account Receivable and Accounts

Payable ➤ Business Transaction ➤ Dunning ➤ Basic Settings for Dunning ➤
Define Dunning Area.

8.1.2. Define the Dunning Procedures

There is no restriction to the number of procedures that you can define. The
account that you want to include in your dunning process must have a dunning
procedure assigned to it. Dunning procedures are applicable to standard and
special G/L transactions. When maintaining a dunning procedure, you can specify
the following items:

o Dunning levels
o Charges
o Minimum amounts
o Dunning text
o Special G/L indicator

Path; IMG: Financial Accounting (New) ➤ Account Receivable and Accounts

Payable ➤ Business Transaction ➤ Dunning ➤ Dunning Procedure ➤ Define
Dunning Procedures.
T code; FBMP.

8.2. Correspondence

It is customary business practice to communicate with business partners through

some form of correspondence during the normal course of business. This enables you
to generate ad-hoc correspondence.

Examples of correspondence types include:

o Payment notices
o Account statements
o Open item lists

8.2.1. Define Correspondence Types

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 Problem: Your client wants to be able to generate account statements for their
business partners. You have been asked to define a correspondence type for an
account statement.

path: IMG: Financial Accounting (New) ➤ Financial Accounting Global Settings

➤ Correspondence ➤ Define Correspondence Types.
T code OB77.

8.2.2. Assign Programs to the Correspondence Types

Path; IMG: Financial Accounting (New) ➤ Financial Accounting Global Settings

➤ Correspondence ➤ Assign Programs for Correspondence Types.
T code; OB78.

8.2.3. Define Sender Details for a Correspondence Form

Path; IMG: Financial Accounting (New) ➤ Financial Accounting Global Settings

➤ Correspondence ➤ Define Sender details for Correspondence Form.
T code; OBB1

8.2.4. Determine Call-Up Functions

Call-up functions allow you to determine the correspondence type used online to
activate the following functions:

o DocEnt (document entry)

o Pmnt (payment settlement)
o DocDsp (document display)
o AccDsp (account balance display and line item processing)

Path; IMG: Financial Accounting (New) ➤ Financial Accounting Global Settings

➤ Correspondence ➤ Determine Call-Up Functions.
T code OB79

8.2.5. Define Reply Addresses for Balance Confirmation

Path; IMG: Financial Accounting (New) ➤ Accounts Receivable and Accounts

Payable ➤ Business Transactions ➤ Closing ➤ Count ➤ Balance Confirmation
Correspondence ➤ Define Reply Address for Balance Confirmation.

9. Taxation
9.1. Basic Settings
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 Path; IMG: Financial Accounting (New) ➤ Financial Accounting Global Settings
(New) ➤ Tax on Sales/Purchases ➤ Basic Settings ➤ Check Calculation Procedure.
T code OBYZ.

Once you have checked your country’s calculation procedure, the next step is to assign
your country to the calculation procedure.

Follow this menu path to check your country: IMG: Financial Accounting (New) ➤
Financial Accounting Global Settings (New) ➤ Tax on Sales/Purchases ➤ Basic
Settings ➤ Basic Settings ➤ Assign Country to Calculation Procedure.
T code OBBG.

9.2. Define Tax Codes for Sales

Path; IMG: Financial Accounting (New) ➤ Financial Accounting Global Settings

(New) ➤ Tax on Sales/Purchases ➤ Calculation ➤ Define Tax Codes for Sales and
Purchases
T code FTXP.

9.3. Define Tax Accounts for Sales

Path; IMG: Financial Accounting (New) ➤ Financial Accounting Global Settings

(New) ➤ Tax on Sales/Purchases ➤ Posting ➤ Define Tax Accounts.
T code; ON40

9.4. Define Tax Codes for Purchases

Path; IMG: Financial Accounting (New) ➤ Financial Accounting Global Settings

(New) ➤ Tax on Sales/Purchases ➤ Calculation ➤ Define Tax codes for Sales and
Purchases.
T code FTXP

9.5. Define Tax Accounts for Purchases

Path; IMG: Financial Accounting (New) ➤ Financial Accounting Global Settings

(New) ➤ Tax on Sales/Purchases ➤ Posting ➤ Define Tax Accounts.
T code OB40.

9.6. Assign Taxable Codes to Non-Taxable Transactions

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 Path; IMG: Financial Accounting (New) ➤ Financial Accounting Global Settings
(New) ➤ Tax on Sales/Purchases ➤ Posting ➤ Assign Tax Codes for Non-Taxable
Transactions.
T code; OBCL.

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