Chart of Accounts in SAP S/4 HANA
- Govind
- 5 days ago
- 4 min read
The chart of accounts is a variant that contains the structured list and basic information of a general ledger accounts.
It is used by an organization to record financial transactions in the accounting system.
It acts as the backbone of the financial accounting system, helping to organize and report financial data accurately.
The chart of accounts must be assigned to every company code.
Basic Structure of Chart of Accounts
For Example: Chart of Accounts COA1
1xxxx: Assets
10000: Cash
11000: Bank
12000: Accounts Receivable
13000: Inventory
2xxxx: Liabilities
20000: Accounts Payable
21000: Loans Payable
3xxxx: Equity
30000: Share Capital
31000: Retained Earnings
4xxxx: Revenue
40000: Sales Revenue
41000: Interest Income
5xxxx: Expenses
50000: Cost of Goods Sold
51000: Salaries Expense
52000: Rent Expense
Basic Settings of Define Chart of Accounts
STEP 1: Define chart of accounts
Go to T-code : OB13 or
Navigation: SPRO-SAP reference IMG - financial accounting - general ledger
accounting - master data - GL accounts - preparations - edit chart of
accounts list
Click on new entries
Enter the below following details :
A chart of accounts is defined with a 4-character ID and has the following components:
Chart of accounts key
Enter Four digit key.
Name of the chart of accounts
Enter a descriptive name for the chart of accounts.
Maintenance language
The maintenance language is the language in which account descriptions are maintained.
Length of the G/L account number
The account number of a G/L account can range from 1 to 10 digits in length.
Group chart of accounts (Consolidation)
You can assign a group account number to each G/L account. This account number is used for cross-company code reporting if the company codes use different charts of accounts.
Block indicator
An incomplete chart of accounts can be blocked. In the blocked state, no company code can use the chart of accounts.
Once all the details entered, click on save button then Press Enter to save in your customizing request number. Now chart of account is created.
STEP 2: Assigning the chart of account
Once the chart of account created, the next step is to assign a company code to the chart of account. Assigning company code to chart of account is mandatory. In accordance with the variant principle, it is possible to assign one chart of accounts to several company codes.
Go to T-code: OB62 or
Navigation: SPRO-SAP reference IMG - financial accounting - general ledger
accounting - master data - GL accounts - preparations - Assign
Company Code to Chart of Accounts
Search your company code by clicking on position button.
Enter the chart of account for the respective company in the Chrt/Accts column and Alt. COA column, if required and then Click on save.
Types of chart of accounts
Operational chart of accounts
Group chart of accounts
Country specific chart of accounts
Operational chart of accounts
The operational chart of accounts called as the primary chart of accounts. It can be called as primary general ledgers accounts.
All the data entry will posted directly only against the operational chart of account G/L accounts.
The operating chart of accounts contains the G/L accounts that you use for daily posting in your company code.
Financial Accounting and Controlling both use this chart of accounts.
Group chart of accounts
The purpose of the group chart of account is for consolidation purpose.
It allows the company to provide report for the entire corporate group
Not possible to post the data entry directly against the group general ledger account.
It contains the general ledger account that are used by the entire corporate group.
A corporate group chart of account assigned to a company code is optional.
To Use a group Chart of Accounts for a Consolidated Financial Statement
Create a group chart of accounts that contains all of the group accounts.
Assign the group chart of accounts to each operational chart of accounts
Once this is done, the field Group account number in the chart of account segment of the operational charts of accounts becomes a required entry field. (T-code-OB13)
Use a financial statement version for the group chart of accounts.
No inter-company code controlling can be performed because the company codes use different operational charts of accounts.
Country-specific chart of accounts
In addition to the group chart of accounts, SAP S/4HANA offers the possibility of assigning a country chart of accounts.
With use of a local chart of accounts, assign the same operating chart of accounts to all company codes without the need for a separate group chart of accounts.
The account number of the country chart of accounts (an alternative account number) is entered in every operational G/L account company code segment. This account number can only be assigned once.
It allows to provide statements for the country’s legal requirements.
A country specific chart of account assigned to a company code is optional.
Cross-company code controlling is possible because all company codes post to the same operational chart of accounts.
Conclusion:
Group chart of account linked to the operational chart of account.
Operational chart of account linked to the company code.
Country specific chart of account which is linked to the company code.
In SAP, the Chart of Accounts (COA) is defined at the client level and assigned to each company code.
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