From the course: SAP Financials Essential Training

SAP general ledger accounting process

From the course: SAP Financials Essential Training

Start my 1-month free trial Buy for my team

SAP general ledger accounting process

“

- [Instructor] Accurate recording of financial transactions are required by every business to ensure they comply with regulations and can report taxes properly. The general ledger is the full record of financial transactions at our companies. Let's look now at the typical flow for general ledger accounting in SAP. Some companies using SAP can have very complex accounting processes. But at a high level, general ledger accounting contains these key elements. This flow is often referred to as the record to report process. The general ledger process starts by maintaining master data in the chart of accounts and in company codes. General ledger accounts can be added, changed, blocked, unblocked, or flagged to be deleted. With all necessary general ledger accounts in good order, the next step in the process is to record pending journal entries. These pending entries can be for things like expenses, invoices, or intercompany transactions. Next journal entries are reviewed and approved. Items are cleared when an offset value is posted so that the resulting balance of the two items is zero. Some open items can be automatically cleared when SAP's clearing program is run and this is usually done on a weekly basis. Other items need to be manually reviewed especially when an entry is greater than a predetermined amount. Next, adjustments are made in recorded as a result of things like accruals, advanced payments, or bad debt. Once all adjustments are completed, the GL accounting period is closed. Finally, after closing the fiscal period, both external and high level management reporting is executed. General reporting and financial inquiries are conducted on a daily basis throughout each phase of this process. Organizations with intricate business models may require slight alterations, but in general, these are the key activities in the record to report process.

Contents