01_Financials

8/2/2019 01_Financials

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Chart of Accounts

Journal Entries

Posting Tools

Budgeting

Fixed Assets

Cost Accounting

Contents:

Financials


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Maintain the chart of accounts

Post journal entries manually

Create journal vouchers

Use posting templates

Use recurring postings

Use budgeting Monitor your projects and profit centers

At the conclusion of this unit, you will be able to:

Financials: Unit Objectives


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Due to legal requirements and businessreasons, all transactions that lead to a changein a company's net worth, equity capital, andexternal capital must be documented inaccounting records. These records are used atthe end of an accounting period to prepare thecompany's financial statements.

Financials: Business Scenario


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Change the chart of accounts for your company

Create, delete, and change G/L accounts

Define a control account

Define the currencies the systems uses to managea G/L account balance

Use account segmentation for reporting purposes

At the conclusion of this topic, you will be able to:

Chart of Accounts: Topic Objectives


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Account Types in the General Ledger

Balance Sheet

Accounts

Income Statement

AccountsAsset

AccountsLiabilityAccounts

RevenueAccounts

ExpenseAccounts

Balance Sheet Profit & Loss Statement

Revenue

./. Expenses

= Profit/Loss

Equity

Assets Liabilities

EquityAccounts

In the General Ledger, we distinguish between Balance Sheet Accounts and Income StatementAccounts, also called Profit and Loss accounts

There are three types of Balance Sheet Accounts:

Asset accounts

Liability accounts

Equity accounts

After the end of the fiscal year, the balances of the asset accounts will be displayed on the active sideof the balance sheet. The balances of the liability accounts and the equity accounts will be displayed on

the passive side of the balance sheet.

There are two types of income statement accounts:

Revenue accounts

Expense accounts

After the end of the fiscal year, the balances of the expense accounts will be subtracted from thebalances of the revenue accounts to come up with the profit or the loss for the fiscal year. The profit orloss will either increase or decrease the equity on the balance sheet.


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Structure of the Chart of Accounts

FixedAssets

CurrentAssets

...

TangibleAssets

IntangibleAssets

Land& Buildings

Plant &Machinery

FormationExpenses

Patents,and so on

FreeholdLand

Buildings

...

...

...

...

Title

ActiveAccount

Level 2 Level 3 Level 4 Level 5

GeneralLedger

Level 1

Assets

Liabilities

Cap. + Res.

Turnover

Cost of Sales

Operating C.

Non-Operating

Tax + Extr.

A chart of accounts arranges a company's general ledger accounts in a hierarchical structure. The toplevel in the structure (level 1) consists of several account groups for accounts of different types (assets,liabilities, capital and reserves, turnover, and so on). The number of account groups depends on thecompany localization of which it was created and cannot be modified by the user.

ChooseFinancials Chart of Accounts to create and maintain G/L accounts. All changes in thedefinition of an account are logged in a log of changes under Tools Change Log.

ChooseFinancials Edit Chart of Accounts to maintain the structure of the chart of accounts.

Levels 2 through 4 can contain either active accounts or titles that combine several active accounts.Level 5 only contains active accounts.

The system displays the group (cabinet drawer as shown in the figure) titles in black with a bluebackground. You cannot change these titles. The system displays all other titles in blue and normalactive accounts in black. Accounts that you have entered in the G/L account determination (primaryaccounts) are displayed in green.

When you do the system initialization, you can either use one of the charts of accounts shipped with

the system as a template and adjust it to your needs, create your own chart of accounts or import itfrom your legacy system

ChooseAdministration System Initialization Company Details and choose a template in theChart of Accounts Template field on theBasic Initialization tab. Another option is to import a chart ofaccounts using the data transfer workbench. If you wish to create your own chart of account, leave the

option User Defined.


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Control Accounts

Customers

Vendors

GeneralLedger

aa bb

Control accounts for

payables and receivables

Businesspartners

aa bb

aa bb

Control accounts

aa bb

Control accounts

SpecialTransaction

types

StandardTransactions

You can define a G/L account as a control account.

A control account links the business partner accounts to the general ledger. You must enter a controlaccount in every business partner master record. Whenever you post a document to a businesspartner account, the system automatically adds a journal entry to the general ledger, which posts thereceivables or payables to this control account.

Some transactions, such as transactions with bills of exchange, must be posted to special controlaccounts. Therefore, you can assign these special accounts to predefined transaction types, such asOpen Debts, Assets Account, Down Payments Receivable/Payable or other (country-dependent).

You can also enter default control accounts underAdministrationSetup Financials G/L

Account Determination. These accounts appear by default whenever you create a new businesspartner.

The system displays the total account balance in the business partner master record. From there youcan navigate to the line item display of the account. In the line item display, the system displays thedebit values in black and the credit values in green and in parentheses.

If you are working with several control accounts, the system can display the business partner balances

separately for every control account. To activate this, chooseAdministration System InitializationGeneral Settings and select theDisplay Accounts Balance by Control Accounts indicator on theBPtab.

You must have the proper authorization to view the accounts and balances.


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Accounting Currencies

SAP

BW

mySAPBusiness

Suite

Currency:USD

SAP

BusinessOne

Local Currency:EUR

System Currency:USD

SAP

BusinessOne

Local Currency:USD

System Currency:USD

SAP

BusinessOne

Local Currency:JPY

System Currency:USD

Microsoft

Excel

SAP Business One can handle accounting in two parallel currencies: the local currency and the systemcurrency.

The local currency is the currency in which the company is legally required to keep its books.

The system currency may be a different currency than the local currency and is especially useful forsubsidiaries of global companies whose head office uses a different currency than the subsidiaries (forexample, EUR () in the subsidiary and USD ($) in the head office). In this case, the systemautomatically calculates all postings in the local currency and manages an additional account balancein the system currency. This makes it easier to have aggregated reporting on all the subsidiaries andallows for better integration with the system of the head office. For example, you could export the

financial data in system currency from the SAP Business One systems of the subsidiaries to themySAP Business Suite or the SAP Business Information Warehouse of the head office. Alternatively,financial consolidation can be done with Microsoft Excel or any other product based on the financialdata in system currency.

ChooseAdministration System Initialization Company Details to define the local currency andthe system currency on theBasic Initialization tab.


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Account Currencies

Local Currency System Currency

Local Currency Any Foreign

Currency

Account Currency= Multi-Currency

Local Currency System Currency Specified Foreign

Currency

Local Currency Specified Foreign

Currency

Account Currency= Specific Foreign

Currency

Local Currency System Currency

Local CurrencyAccount Currency= Local Currency

Currencies of the

Account Balance

Currencies for

Entering JournalEntries

You must specify an account currency for each business partner master record and each G/L accountto specify the following:

The currencies in which line items to this account can be entered

The currencies in which the system manages the account balance

If you enter the local currency in the Currency field, you can enter line items in the local currency andthe system manages the account balance in the local currency and the system currency in parallel.

If you enter any specific foreign currency in the Currency field, you can enter line items in thespecified foreign currency or the local currency. The system then manages the account balance in the

specified foreign currency, the local currency, and the system currency in parallel. If you enter multi-currency in the Currency field, you can post line items to this account or business

partner in any currency. The system, however, manages the account balance only in the local andsystem currencies. In other words, it does not manage the balance in the currencies in which the itemswere entered. . For Multi currency accounts, you can only conduct external bank reconciliations in thelocal currency. Take this fact into account when working with multi currency accounts, since it may bedifficult to reconcile it properly.

You can define default currency for new G/L account creation onn theDefault Account Currency field

on theBasic Initialization tab underAdministration System Initialization Company Details.

At any point, you can change an account currency to be multiple currencies, but you will not be able tochange it back once you update.

The G/L Accounts and Business Partners report produces a list of all accounts, including their name,account group, and balances. To run the G/L Accounts and Business Partners report, choose

Financials Financial Reports Accounting G/L Accounts and Business Partners.


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Some G/L Account Definition

Balance Confidential

Account Type

Cash Account

Alternative Account Name

External Code

Code for Exporting

Active or On Hold

The system displays the account balance in the account master record. From there you can go to theline item display of the account. In the line item display, the system displays the debit values in blackand the credit values in green and in parentheses.

For viewing the accounts and the balances you need the right authorization. You can define G/Laccounts as confidential. You can use and display confidential accounts only if you have the necessaryauthorizations.

In theAccount Type field, you define an income statement account as revenue account (sales) orexpense account (expenditure). All other accounts should have the account type other.

Accounts that you defined as Cash Accounts appear as cash accounts in the Cash Flow report.

Generally, all your bank accounts should be defined as cash accounts.

In theExternal Code field or the Code for Exporting field, you can enter alternative codes for theaccount. The alternative codes can be used by external programs that you integrated with SAPBusiness One.

In theDetails area, you can enter additional information about the account:

You can define anAlternative Account Name for the account. This can be useful when your companyworks in different languages.

You can set a G/L account asActive or On Holdfor a certain period of time

Additional definitions will be discussed later on


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Account Segmentation

-

Division

Regio

n

Department

--

Sales

Purch

asing

Produ

ction

NorthSouth

West

Clothing

Equipment

Food

Natural Account Division(Food)

Department(Sales)

Region(North)

Segment

The accounts in SAP Business One can be subdivided into segments if you activate the accountsegmentation. A segment is built from the values of up to nine segment dimensions. The account codeis therefore composed of the values for the following segment dimensions for example:

Region

Department

Division

Because this example uses only three segment dimensions, a segment can be pictured as a cube.

When using account segmentation, you do not just post to an account but also to a segment. By doing

this, you classify the posting as belonging to a certain division (for example, Food), department (forexample, Sales) and region (for example, North).

Account segmentation is very important for financial reporting in the USA.


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Definition of Account Segmentation

Natural Account - Division Region Department- -

Account Segment Separator

North

South

West

Sales

Purchasing

Production

Clothing

Equipment

Segment Dimensions

SegmentCharacteristics

You decide on the company level whether you want to use account segmentation or not. Afteraccounts with segments are created, you are not able to change back.

ChooseAdministration System Initialization Company Details and then select the UseSegmentation Accounts indicator on theBasic Initialization tab to switch on the account segmentation.

The system displays an account segment separator between the characteristics of a segment. You can

specify the account segment separator underAdministration System Initialization GeneralSettings in theAccount Segment Separatorfield on theDisplay tab. This field is available only if theaccount segmentation is switched on in the company details.

If you want to use account segmentation, you must define how many and which segment dimensions

you need. Up to nine dimensions are possible. You can freely choose the names of the segmentdimensions, for example, division, region, department, cost center, business area, functional area, andso on. You also define the length and the type (numeric or alphanumeric) of the segmentcharacteristics.

The first segment is always the natural account.

By default, upon creation of a new database, 4 segments are created, including the natural account, butyou can remove, add or change its name and number of characters.

For every segment dimension, you define the possible segment characteristics, for example, clothingand equipment as segment characteristics for the segment dimension division.

To define the segment dimensions and the segment characteristics, chooseAdministrationSetup Financials Define Account Segmentation. This path is available only if the account segmentationis switched on in the company details.

When defining the segment dimensions and segment characteristics, keep in mind that the number ofsegments increases dramatically with every segment dimension and every segment characteristic.

If you import your chart of account, make sure you define the different segments first.


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Account Code Generator

Natural Account10000000

Region

North

South

West

Department

Sales

Purchasing

Production

Clothing

Equipment

Division

AccountCode

Generator

Sales

P

urcha

sing

Produ

ction

NorthSouth

West

C

lothing

Eq

uipment

Food

Natural account: 10000000

with three segments

You can use the account code generator to create the segments. In the account code generator, youspecify the natural account and its properties, as well as the segment characteristics for which you wantthe system to generate segments.

You must enter the codes of the segment characteristics to specify a segment. The system displays theshort names of the segment characteristics in the description of the segment.

You find the account code generator underFinancials Account Code Generator. This path isavailable only if the account segmentation is switched on in the company details.


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Journal Entries: Topic Objectives

Post journal entries manually

Use the functions for displaying documents

Explain how journal entries and originaldocuments are related

Post journal entries in foreign currencies



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Journal Entry

Journal Entry

Add Cancel Cancel Template

Expanded Editing Mode for a Line Item

Line Items Table

Display FC Display SC

Document Header Data

Name Debit CreditG/L Acc./BP No

Form Settings

Tax Group Tax Amount

1000 Expenses 100,00 A2 16,00

1775 VAT 16,00

To enter a journal entry, chooseFinancials Journal Entry. The screen for entering journal entriesmanually is divided into three areas: document header data, extended editing mode for an item, and theitems table.

The system automatically enters a number in the document header. This number is incremented withevery transaction. You can define numbering series for journal entries on the Document Numbering

screen, under theAdministration system initialization

The system proposes the current date as theDue Date, Posting date, and document date. The postingdate must always fall into the posting period set as current. The current period is determined by theposting date range of SAP Business One the server. If you want to post into another period than the

current one, you can set the other period as current for your own user by double-clicking that period onthe Posting Periods tab underAdministration System Initialization General Settings.

TheRef. 1 andRef. 2 fields can contain references to associated actual documents.

You can also classify the document using a transaction code, for example, as an accrual/deferral

document, depreciation document, or value adjustment document. ChooseAdministrationSetup

Financials Transaction Codes to maintain the transaction codes. The system copies the descriptionof the transaction code to theDetails field.

You can show or hide the expand editing mode. The mode always refers to the item that is currentlyselected and displays all the item fields for you to enter the relevant data. The Ref. 1, Ref. 2, Project,andDetails fields are usually filled with the content of the fields with the same name in the header.

In the settings, you can define which columns are displayed in the items table. Furthermore, you canstore values in the settings that the system uses as default values when you enter a journal entry.


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Automatic Tax Line Items

100V216Tax Account

BaseAmount

GrossValue

TaxAmount

TaxGroup

CreditDebit

11616V2100G/L Account

Based oneach other

Defaulted from G/L Account(or entered manually)

Calculated basedon tax group

Line addedautomatically

You can enter a tax group in any G/L account line item. The system then automatically calculates thetax for this line item and creates an additional line item which posts the tax to the correct account. Youcannot change or delete this tax line item manually. It is purely based on the G/L account line throughwhich it was created. It automatically gets deleted if you delete the G/L account line.

In the G/L account line item you can either enter the net amount in the normalDebitor Creditfields or

the gross amount in the Gross Value field. Either way, the system calculates the other value and the taxamount based on the definition of the tax group.

You can also enter aDefault VAT Group in the G/L account master record and specify whether theuser is allowed to change the tax group when entering a manual journal entry or not by selecting the

Permit Other VAT Group indicator in the G/L Account Details. You cannot manually post to a tax account.


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Origin Documents

A/RInvoices

IN

A/PInvoices

PU

Journal

Entries

JEJournal

Entries

Referenceto Origin

DocumentType and

OriginDocument

Number

All journal entries refer to the type and number of the origin document (for example, IN for customerinvoices) in case it was created as a result of adding another document. The origin documents ofmanual journal entries are the journal entries themselves. For this reason, they refer to themselves andare of type JE (journal entry). Most journal entries refers to other document types (for example, IN forcustomer invoices or PU for AP invoices).

The Transaction Journal Reportshows all the journal entries of a certain origin type in chronologicalorder, sorted by transaction number. From here, you can go directly to the origin document for the

posting. To run the Transaction Journal Report, chooseFinancials Financial ReportsAccounting Transaction Journal Report or choose the icon on the upper tool bar.

TheDocument Journal report is a similar report. Here you can use more options to select and tailor theoutput. To run theDocument Journal, chooseFinancials Financial Reports Accounting

Document Journal.

The General Ledgerreport provides a view of the selected general ledger and business partneraccounts and lists all line items that you have posted to the account. To run the General Ledgerreport,

chooseFinancials Financial Reports Accounting General Ledger.


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Reverse Transactions

Account 1

2050

Account 2

2050

Account 1

2050

Account 2

2050

Account 1

2050

Account 2

2050

2050 2050

2050 2050 2050 2050

-2050 -2050

Incorrect Posting

0 0 0 0

2050

2050 0

0

Standard Reverse Transaction

Reverse Transactions withNegative Amounts

Increase in Totals

Reset of Totals

0

0

Users can make input errors. As a result, the journal entry created may contain incorrect information.To provide an audit of the correction, the user must first reverse the journal entry in error, and thencapture the document correctly.

You can specify whether reversal transactions are performed:

As standard reverse transactions

As reverse transactions with negative amounts

The standard reverse transaction causes the system to post the debit in error as a credit and the creditin error as a debit. This corrects the balance of the accounts. However, the standard reverse transaction

causes an additional increase in the totals on the debit and credit sides, which might be misleading. The reverse transaction with negative amounts causes the system to post the debit in error as a

negative debit and the credit in error as a negative credit. This not only corrects the balance of theaccounts but also the totals.

It depends on the country whether standard reverse transactions or reverse transactions with negative

amounts are required. ChooseAdministration System Initialization Company Details and selectthe Use Negative Amount for Reverse Transaction field on theBasic Initialization tab to switch on thereverse transaction with negative amounts.


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Display of Debit and Credit

Account with Debit Balance

CreditPostings(100.00)

DebitPostings

130.00

DebitBalance

30.00

Account with Credit Balance

CreditPostings(130.00)

DebitPostings

100.00

CreditBalance-30.00

When you enter the line item display of any account (G/L account or business partner), the systemdisplays the debit and credit amounts the following way:

Debit Postings: Black amount, for example, 130.00

Credit Postings: Green amount in parentheses, for example, (100.00)

The amounts are usually positive. There may be negative amounts if you selected the Use Negative

Amount for Reverse Transaction indicator underAdministrationSystem Initialization CompanyDetails on theBasic Initialization tab. These negative amounts indicate reversal postings.

The balance is the difference between the sum of all credit postings and the sum of all debit postings.

If the sum of the debit postings is greater than the sum of the credit postings, there is a debitbalance.

If the sum of the credit postings is greater than the sum of the debit postings, there is a creditbalance.

Usually, the system displays a credit balance with a negative sign because the credit balance representsliabilities in an asset account. If you want this type of display, make sure that theDisplay Credit

Balance with Negative Sign indicator is selected. ChooseAdministration System Initialization Company Details and theBasic Initialization tab.


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Postings in Foreign Currencies

36,-USD

30,-EUR

21,-Account inMultipleCurrencies

24,-USD

20,-EUR

2000Account in

Foreign Currency(e.g. )

Credit(SC)

Debit(SC)

CreditDebitCredit(FC)

Debit(FC)

12,-USD

10,-EUR

Account in LocalCurrency (EUR)

System

Currency

Local

Currency

Foreign

Currency

Currency Conversion by Rate from Exchange Rates Table

Display FC Display SC

Entered manually

JPY

GBP

JPY

The system displays the amounts in the local currency in the items table of the journal entry. You canalso display the amounts in the system currency by selecting theDisplay SCindicator.

To enter amounts in foreign currencies you need to activate additional fields by selecting theDisplayFCindicator.

When you make journal entries in foreign currencies to a foreign currency account, you do not need tospecify the currency because it is stored in the account and added to the amount by the system.

When you make journal entries to an account that is managed in multiple currencies, you must specifythe currency codes by entering them manually together with the amount.

The system uses the exchange rate in the exchange rates table to convert the amounts from theforeign to the local and then to the system currency. You can modify the foreign and local amounts

manually, in case they dont match the rate you have entered. ChooseAdministration ExchangeRates and indexes to update the exchange rates table. You can also specify exchange rates for certainperiods of time by choosing Set Rate for Selection Criteria.

You can configure the system so that the entry window is displayed automatically as soon as you log

on. ChooseAdministration System Initialization General Settings and select the OpenExchange Rates Table indicator on the Services tab to activate this service for your user.

If the exchange rates table has not been maintained, it is opened automatically when you enter an itemin a foreign currency.

You can define whether to allow or block un balances Journal Entry in FC and whether to allow multi

currency journal entry. This can be done on the Administration System Initialization DocumentSettings Per document Journal Entry


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Use journal vouchers

Use posting templates

Use recurring postings


Posting Tools: Topic Objectives


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JournalEntries

Journal Vouchers

Create JournalVoucher

Correct andUpdate

Entries inJournalVoucher

Journal Voucher(Folder of JournalEntry Drafts)

SAP Business One offers a two-stage procedure for creating journal entries. You can create the journalentries as drafts first, correct and post them later.

When you are creating ajournal voucher it is used for storing several journal entry drafts. You canchange journal voucher as long as they have not been posted yet. Your colleague, for example, canthen access the journal voucher, make any necessary corrections, and then post the entire journal

voucher. You do not have to post each journal entry individually. If you do want to post the journalentries individually, however, you must create a separate journal voucher for each journal entry draft.

You can save journal vouchers as not balanced as long as it is in the draft mode.

To create, change, and post journal vouchers, chooseFinancials Journal Vouchers.


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Journal Entry

Template Type: PercentageTemplate: Bonus

Posting Template with Percentages

Add Cancel

Add Cancel

CancelTemplate

20Annual Bonus4200

100Salaries andWages

4100

120Employee

Account (BP)

Credit%Debit%G/L Account/BPName

G/L Account/BPNo.

Code: Bonus Description: Annual Bonus

You can create posting templates for journal entries that have a very similar structure. Thesetemplates can contain account numbers but you can also just specify an account description in a lineitem if you do not yet know which exact account will be used for this line item. Instead of fixedamounts, only percentages are entered here. These percentages indicate how the total amount isdistributed among the line items.

The illustration shows a simplified example of how you can add an annual bonus of 20% to the lastsalary posting for an employee. In the posting template shown, the business partner account for theemployee, for example, is not known yet because you want to use this posting template for differentemployees.

The posting template is stored under a code and with a description. ChooseFinancials PostingTemplates to enter and maintain posting templates.

When you enter a journal entry manually, choose Percentage in the Template Type field and enter thetemplate code in the Template field or press tab and choose it from a list.


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Recurring Postings

1000Girobank

Account

161000

1000Property Rent620000

CreditDebitG/L Account/BP

Name

G/L Account/BP

No.

Code: Rent Description: Rental Payment

Frequency: Monthly On 1

Next Execution: 10/01/04

Daily

Weekly

Monthly

Quarterly

Half Yearly

Annually

One Time

Not Executed YetTemplate

FrequencyList For Manual Journal Entries

Template Type: RecurringPosting

Inactive

Valid to

09/30/05

SAP Business One features a recurring postings function for journal entries created on a regular

basis. ChooseFinancials Recurring Postings to enter and maintain recurring postings.

Recurring postings use a template that is stored with a code and a description. In this template, youdefine (among other things) the frequency in which the journal entry is supposed to be created anduntil when the recurring posting is valid. The possible entries in the Frequency field include:

Daily, Weekly, Monthly, Quarterly, Half Yearly, Annually: You must also specify the nextexecution date for these entries.

One time: Although a one-time recurring posting seems a bit odd, it serves a special purpose.With this you can schedule a journal entry for a specific date.

Template: Journal entries that you need repeatedly but not on a regular basis can be created asthis type. You can access these templates from the manual journal entry. To do so, you mustspecifyRecurring Posting in the Template Type field.

Not executed yet: If you do not need the recurring posting at present, you can turn it off with thisentry.

In the Valid To field, you can enter a date until which the recurring posting is valid and will beexecuted by the system.

The system duplicates the original recurring posting (instance 0) every time the execution datearrives. Once you use this instance and add it to the system, it will be deleted.

You can display a list of all the recurring postings in the system. You can then adjust these postingsand confirm them. You can also configure the system so that the execution list is displayed

automatically as soon as you log on. ChooseAdministrationSystem Initialization GeneralSettings and select theDisplay Recurring Postings on Execution indicator on the Services tab toactivate this service for your user.


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Budgeting: Topic Objectives

Define budget scenarios

Define budget distribution methods

Define budgets

Run the budget report


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Budget Scenarios

Budget

Account100000

Account200000

Account300000

Account400000

Account500000

OptimisticBudget

PessimisticBudget

Main Budget

In SAP Business One, you can decide if you want to use a budget restriction that does not allow anyexceeding over budget or if you want to just get an alert if there is a deviation. In this case, you need tohave certain authorizations to confirm the deviation before you can go on. You must also specify atwhich point in the process the system performs the budget check (when entering purchase orders,

goods receipts PO, or A/P invoices and Journal Entries). Choose Administration SystemInitialization General Settings and then theBudgettab define when and how the system isperforming the validation for any budget deviations.

Using SAP Business One, you can use several budget scenarios, which can be independent or may be

based on one another. ChooseFinancials Budget Budget Scenarios to define your budgetscenarios.

The system however will only perform the validation against the main budget scenario, and all theothers are for reporting purposes only.

An example for an additional scenario could be an optimistic one that would be relevant when yourbusiness runs better than expected and you have more money to spend. Another example could be apessimistic scenario that would be relevant when your business runs worse than expected and you haveless money to spend.


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Definition of Budgets

Budget may becalculated aspercentage ofother budget

Jan.

Feb.Mar.Apr.MayJuneJulyAug.Sept.Oct.Nov.Dec.

Desc.12

1110987654321

anyx

xxxxxxxxxxx

monthlydistributio

nAccounts must be

marked asRelevant to Budget

Asc.1

23456789101112

Equal1

11111111111

Actual: current balanceActual Future:open purchase orders plusopen good receipts PO

Budget is entered

on debit side forexpenses

If you want to use the budget functionality, you must switch it on in the general settings. The systemthen automatically marks all profit or loss accounts asRelevant to Budget. You can manually removethe selection or set it also for balance sheet accounts.

ChooseFinancials Budget Define Budget to manually enter an annual budget for every accountmarked asRelevant to Budget. The budget is entered on the debit side (expense side). Only a debitbudget is checked by the system.

The system breaks down the annual budget into monthly budgets by using aBudget DistributionMethod. Three budget distribution methods are preconfigured:

Equal: Every month receives an equal share of the annual budget.

Ascending: The annual budget is distributed by using ascending weights from 1 to 12.

Descending: The annual budget is distributed by using descending weights from 12 to 1.

Of course, you can define additional methods, for example, a seasonal distribution method. Choose

Financials Budget Define Budget Distribution Method.

You can manually change the monthly distribution if you double-click an account row number whenyou define the budget.

Instead of manually entering an annual budget, you can enter a parent account and a percentage. Thesystem then derives the budget of the child account as the percentage of the annual budget of the parentaccount. Note that the child amount is added in addition to the parent one.

The system also displays the current balances of the accounts.


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Create fixed asset master records and assetclasses

Describe the purpose of depreciation areas,create and maintain them

Post acquisitions, retirements, and transfersfor fixed assets

Post manual and automatic depreciations

Perform the period-end preparations for fixedassets


Fixed Assets: Topic Objectives


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Asset Classes and Fixed Asset Master Data

C

F

ixedAssets

1000

3000

4000

5000

...

000000-099999

100000-199999

200000-299999

300000-399999

400000-499999

500000-599999

600000-699999

Fixed AssetMaster Data

Fixtures

1000

Asset 001111

000000-099999 Asset

Class

2000

Fittings

Low Value Assets (LVA)

Real Estate

Machinesnormal Assets

In SAP Business One, various asset classes are available for classifying fixed assets according tobusiness and legal requirements. Each asset is assigned to exactly one asset class. In every asset classyou can define various control parameters and default values.

The asset classes are defined as items and appear in the item master data. Consequently, some items inyour system represent asset classes. Edit asset classes solely in the definitions of Fixed Assets. Do notchange the asset classes in the item master data.

There are two types of asset classes:

General

Low Value asset For low value assets you can enter an upper value limit for the acquisition value.

You must assign a number range to every asset class. The system automatically assigns a number fromthat number range if you create a fixed asset master record with this asset class.

ChooseAdministrationDefinitionsFixed AssetsDefine Asset Classes to define andmaintain asset classes.

ChooseAdministrationDefinitionsFixed AssetsNumbering to define and maintain numberranges that you can assign to the asset classes.

ChooseFinancialsFixed AssetsFixed Assets Master Data to define and maintain master datafor fixed assets. You can also import fixed assets master data by choosingAdministration

DefinitionsFixed AssetsImport Fixed Assets Master Data. Before you can import fixed assetsmaster data, you need to switch the Fixed Asset Mode to Transfer in the basic initialization.


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DerivedArea

Postingto G/L

Depreciation Areas

AdditionalArea

Asset X

AssetClass

AccountDetermination

DepreciationAreas

AdditionalAreaAdditional

Area

DepreciationType

DepreciationType

DepreciationType

DepreciationType

Ordinary and specialdepreciation

No specialdepreciation

In Fixed Assets for SAP Business One, you can use different depreciation areas for showing the valueof fixed assets for a specific purpose (e.g. balances for tax purposes or management accountingvalues). The system distinguished the following depreciation area types:

Posting to G/L: A depreciation area of this type forwards its values as postings to the general ledgerand is also called the leading depreciation area. Only one leading depreciation area is possible. In theasset class definition, you must assign a G/L account determination to this depreciation area.

Derived Area: The system automatically creates this derived depreciation area that you can use incase of a special depreciation. If a special depreciation is calculated, the derived area will not reflectit so that it allows you to monitor the values for ordinary depreciation without special depreciation.

This area is only used for information purposes; no asset postings are carried out in general ledger.Only one derived depreciation area is possible.

Additional Area: This area is only used for information purposes; no asset postings are carried out ingeneral ledger. You can create unlimited additional areas.

In the asset class definition, you must assign a depreciation type to each depreciation area. This

depreciation type defines the depreciation method (straight line, declining balance, multilevel,immediate write-off, special depreciation) and the depreciation begin.

For each asset, you can assign a leading depreciation area and a derived area. The parameters for thederived depreciation area are copied from the leading area. You cannot modify these parameters.

SAP Business One stores the asset values separately for every depreciation area and different

transaction types, like acquisition, retirement, transfer, and so on.

ChooseAdministrationDefinitionsFixed AssetsDefine Depreciation Areas to define andmaintain depreciation areas.


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Depreciation Types

XSpecialDepreciation

--XUnplannedDepreciation

XOrdinaryDepreciation

Automatic

Depreciation

Manual

Depreciation

Straight-LineDepreciation

Declining-BalanceMethod

MultilevelMethod

Fixed Assets for SAP Business One offers a number of depreciation types to classify depreciationbased on the reason for the value adjustment. The system supports the following forms of depreciation:

Ordinary Depreciation

Ordinary depreciation refers to planned depreciation for ordinary use of a fixed asset.

Unplanned Depreciation

Unplanned influences or incidents, such as damages, that lead to a lasting decrease in value of thefixed asset are entered in the system using an unplanned depreciation.

Special Depreciation

In Fixed Assets for SAP Business One, special depreciation is always calculated in addition to

ordinary depreciation.

Ordinary and special depreciations can be calculated, planned and posted automatically. To calculatethe depreciation, you need to create depreciation types first. The depreciation types can use thefollowing methods:

Straight-line: The periodic depreciation amounts are equal to the acquisition and production costs(APC) divided by the entire useful life.

Declining-balance: Each year, depreciation is calculated using the same constant percentage rate ofthe remaining net book value.

Multilevel: You can specify the rate of depreciation and the validity period to determine a course ofdepreciation that changes in levels over time (usually decreasing).

All three forms of depreciation can be done manually by choosingFinancialsFixed AssetsManual Depreciation. To do a manual special depreciation, you need to create a depreciation typewith theManual depreciation method first.


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Vendor

1000

Clearing Account

Asset Acquisition*

1000

Asset Account

1000

Asset Account

1000

Acquisitions

Acquisitionwithout vendor

Acquisitionwith vendor

* For example, opening balance account

You need an asset master data before you can book an acquisition. You can create this asset masterdata directly within the acquisition transaction. You can also copy an existing one.

ChooseFinancials Fixed Assets Acquisition to post an acquisition. You can enter acquisitions ofseveral fixed assets into one acquisition document provided that you have bought them from the samevendor. You also can include invoice lines that you post to an expense account.

You can choose betweenAcquisition with VendorandAcquisition Without Vendor. In both cases, thesystem posts the net price to the debit side of the asset account that you have entered in the BalanceSheet of Asset Accountfield in the G/L account determination.

If you have selectedAcquisition with Vendorthe system posts the offsetting entry to the credit side

of the vendor account.

If you have selectedAcquisition without Vendorthe system posts the offsetting entry to the creditside of the clearing account that you have entered in the Clearing Account Asset Acquisition field inthe G/L account determination. This document type is useful if you want to post asset values forasset that you already own. The offsetting account is this case is the opening balances account.

Optionally, you can enter a quantity for the items. Maintaining items by quantity can be useful for low-value assets or gifts. You can enter additional asset information in theReference field. Thisinformation will be transferred to theReference 2 (Ref. 2) field of the journal entry.

A credit memo, which reduces the acquisition and production costs of an asset, essentially represents

the opposite of an invoice for a purchased asset. ChooseFinancialsFixed Assets Credit Memo

to post a credit memo. In the Credit Memo transaction, you can enter a partial credit memo for anexisting invoice. The system corrects the value of the corresponding fixed asset automatically.


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Asset Account

1000 1000

Leave with ExpenseNet Book Value*

1000

Revenue

800

Customer

800

Retirement (Gross Procedure)

Retirement Scrapping Sales with

Customer

Additional posting for

Sale with Customer

* Or Leave with Revenue Net Book Valueif asset was sold with a gain

An asset retirement is a reduction of an object from fixed assets. In the definition of the depreciationarea, you decide if the system shall post the retirement with the gross procedure or the net procedure.The figure displays the postings according to the gross procedure.

You can choose between Sale with Customerand Scrapping. In both cases, the system posts theretirement amount to the debit side of an expense account and the credit side of the asset account. The

system retrieves the expense account from the G/L account determination from the Leave with ExpenseNet Book Value account field (if you scrapped the asset or sold it with a loss) or from the Leave withRevenue Net Book Value account field (if you sold the asset with a gain). If you post the retirement as asale, the system also posts receivables to the customer account and revenues to a revenue account.

ChooseFinancialsFixed AssetsRetirement to post a retirement. A retirement can refer to an entire asset (complete retirement) or part of an asset (partial retirement).

You can trigger the partial retirement of an asset by the following ways:

You can enter deductible acquisition and production costs (APCs). When you enter deductibleacquisition and production costs, the system determines the percentage that is deducted from the

asset. From the entered APCs, the system calculates a percentage for the leading depreciation area.For each depreciation area, it calculates the amounts to be written off with this percentage.

If an asset is maintained by quantity, you can enter the quantity that retires. The percentage to bewritten off is calculated from the entered quantity.

The reference date for the retirement is marked in the asset master record. After the retirement of an

asset, subsequent postings with a reference date before the last retirement can no longer be posted.


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Asset Retirementwith Exp. Net

200

Revenue for Asset

Retirement Net

200

Sales Revenue for

Asset Sales Net

1200

Sales Revenue forAsset Sales Net

1000 200

Asset Account

Retirement (Net Procedure)

Asset Account

1000

1000

1000

1000

Sale with loss of 200

Sale with gain of 200

The figure displays the postings according to the net procedure.

If you scrap the asset or sell it with a loss, the system posts the retirement amount to a Sales Revenuefor Asset Sales Netaccount. It posts the loss to anAsset Retirement with Expense Netaccount.

If you sell the asset with a gain, the system also posts the retirement amount to a Sales Revenue forAsset Sales Netaccount. It posts the gain to aRevenue for Asset Retirement Netaccount.

The accounts are retrieved from the G/L account determination.


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Transfers

Asset Account(sending)

Asset Account(receiving)

Transfer

1000 1000 1000

Fixed Assets allows you to transfer a fixed asset or part of a fixed asset to a different asset masterrecord. This may be necessary if you want to

Assign a different asset account to an assetIf you need to change the G/L accounts for a certain asset, transferring the asset to an asset with adifferent G/L account determination offers an easy alternative to creating a completely new asset.

Create several different asset master records for the same assetIf you use a certain type of asset in different locations, it may be necessary to maintain differentmaster data for this asset. Transferring the asset enables you to move the asset data from one masterrecord to the other.

Change the asset class for an asset for which bookings have already be carried out

ChooseFinancialsFixed Assets Transfer to post an asset transfer.

As a result, all depreciation data are copied to the new asset. For assets that are assigned to differentG/L accounts, the system creates the respective posting documents in the general ledger. If bookingshave been made for the old asset, the system will use the depreciation type and start date of the new

asset during the next depreciation run. Planned depreciations for the current year will be cancelled forthe old asset and added for the new one. If no bookings exist, the system will copy the deprecationparameter of the old asset.

Transfers are booked as total transfer per beginning of the fiscal year. You can transfer the completeasset value or only a part of it. Transferring a part may be useful if equipment parts of an asset are

moved to another asset. If you want to transfer only part of the asset value, select Yes in the Partialcolumn. Enter the amount or the quantity that should be transferred.


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Manual Depreciation (Direct)

OrdinaryDepreciation

UnplannedDepreciation

Manual ordinarydepreciation

Manualunplanneddepreciation

SpecialDepreciation

Asset Account

Manual specialdepreciation

1000 100

100

100

100

100

100

Usually the system uses the saved depreciation types to automatically determine the planneddepreciation for the current fiscal year. In some cases however, you may want to manually depreciatecertain assets, for example, if there is an unexpected permanent reduction in the value of the asset, forexample caused by an accident or if there are special depreciations that you only want to use partially.

ChooseFinancialsFixed AssetsManual Depreciation to post a manual depreciation. Incontrast to the automatic depreciation that is not posted before you do the depreciation run, the manualdepreciations are posted immediately.

The following document types are available:

Ordinary Depreciation

If you use this document type the system posts the depreciation to the account that you have enteredin the Ordinary Depreciation Accountfield in the G/L account determination.

Unplanned DepreciationIf you use this document type the system posts the depreciation to the account that you have enteredin the Unplanned Depreciation Accountfield in the G/L account determination.

Special DepreciationsYou can define document types for special depreciations by defining depreciation types with themethod manual depreciation.If you use this document type the system posts the depreciation to the account that you have enteredin the Special Depreciation Accountfield in the G/L account determination. These depreciations also

show up as special depreciations in the fixed assets master data. The figure shows the direct depreciation method which means that the depreciations are posted directly

to the credit side of the asset account.


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Acc. OrdinaryDepreciation

Acc. UnplannedDepreciation

Acc. SpecialDepreciation

100

100

100

Manual Depreciation (Indirect)

OrdinaryDepreciation

UnplannedDepreciation

Manual ordinarydepreciation

Manual unplanneddepreciation

SpecialDepreciation

Manual specialdepreciation

100

100

100

If you are using the indirect depreciation method the system posts the depreciations not directly to theasset account but instead to an account for accumulated depreciations. In the balance sheet you mustput this account under the same title with the asset account so that its balance is subtracted from theasset accounts balance.

You can decide in the definition of the leading depreciation area, if you want to use direct or indirect

depreciation.


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Depreciation Run

5012

5011

5010

509

508

507

506

505

504

503

502

501

Planned

Depreciation

Period

012

011

010

0908

07

3006

05

04

03

02

01

PostedDepreciation

Period

DepreciationRun

Date: 06/30

1 journal entryper asset class

Each single asset transaction leads to a change in planned depreciation, but not to a depreciationposting to the relevant general ledger accounts. Only when you execute a depreciation run does thesystem carry out all depreciations planned up to the specified date and posts them in FinancialAccounting.

The depreciation run only covers automatic depreciation. When using manual depreciation, theassociated values are immediately posted in Financial Accounting.

A depreciation run can be repeated as often as necessary, provided no depreciation run has beenexecuted for the following periods. A repeat depreciation run may be necessary, if the asset valueshave changed once again after posting planned or if the depreciation terms were changed for individual

assets. When repeating a depreciation run, only the value differences to the postings of the lastdepreciation run are considered.

In depreciation runs, unposted planned depreciation is always posted using the catch-up method. In thecatch-up method, the system gathers any planned depreciation that has not been posted yet for theentire depreciation period and then creates a collective posting. Therefore, the resulting posting canalso include planned depreciation from several periods.

In order to keep the number of Financials documents to a minimum, we recommend that you carry outonly one depreciation run per fiscal year.

ChooseFinancialsFixed AssetsDepreciation Run to start a depreciation run.

You can view a depreciation forecast for every fixed asset and every depreciation area by choosing

FinancialsFixed AssetsDepreciation Forecast.


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Period-End Preparations for Fixed Assets

1. Create new posting periods in SAP Business One.

2. Refresh fiscal year in Fixed Assets.

3. Ensure all postings are made (includingdepreciations).

4. Perform fiscal year change.

5. Create asset history sheet for old year.

Fixed Assets uses the fiscal years defined in SAP Business One together with the correspondingposting periods. However, unlike in the general ledger you need to do a fiscal year change in the fixedassets add-on to open a new fiscal year. Proceed as follows:

You first have to define the next fiscal year in SAP Business One. To do so, chooseAdministration

System Initialization General Settings and select the Posting Periods tab. ChooseNew Periodand add the desired fiscal year.

ChooseAdministration Definitions Fixed Assets Fiscal Years and chooseRefresh tomatch the fiscal year in SAP Business One with the fiscal year in Fixed Assets.

Ensure that all postings have been made in the old year including the depreciation run postings.

ChooseFinancials Fixed Assets Fiscal Year Change to perform a fiscal year change and toclose the old year in Fixed Assets. When changing a fiscal year, the system performs the followingcalculations:

For each asset the system calculates the year-end values of all asset transactions. These values aresaved in the asset data and serve as start values for the new fiscal year.

For each asset the system recalculates the planned depreciation for the new fiscal year.

Finally, you can create the asset history sheet and export it to Microsoft Excel to add it to you balance

sheet. ChooseFinancials Fixed Assets Asset History Sheet to create an asset history sheet.


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Cost Accounting: Topic Objectives

Create and group profit centers

Define distribution rules and assign them toaccounts

Run the profit center report

Define and evaluate projects



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Profit Centers and Sort Codes

Hiking

Center_z

Golfing Biking Paragliding

Alpineskiing

Iceskating

Cross-countryskiing

Profit Center

Summer Sports

Winter Sports

Sort Code

To use the cost accounting functions in SAP Business One, you must define the cost centers ordepartments in your company as profit centers. You can then compile a profit and loss statement foreach profit center in every period.

You can combine your profit centers into groups by using a sort code.

ChooseFinancials Cost Accounting Profit Centers to define and maintain profit centers.

The system automatically creates a center zero profit center (Center_z) that collects the costs andrevenues that cannot be clearly distributed to other profit centers because not enough information isavailable. The Center_z profit center can also record costs that are not to be reported in internal costaccounting. For example, if you want to show only 80% of your rental expenses as costs, you can

assign the remaining 20% to Center_z.

The Center_Z is used when defining distribution rules


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Distribution Rules

684220Employees

2002001000500Area

100000100PC 3

010000100PC 2

001000100PC 1

PC 3PC 2PC 1Center_zTotalProfit Center

Dist. Rule

DistributionRules forDIRECTCosts andRevenues

DistributionRules forINDIRECTCosts andRevenues

Distribution rules define how the costs or revenues posted for an account are distributed to the profitcenters.

When you create a profit center, the system automatically creates a distribution rule with the samename. This rule (which cannot be changed) is configured so that the system posts all the costs orrevenues to the relevant profit center. In other words, the system does not split the amounts. You can

use these distribution rules for direct costs and revenues, which you can assign uniquely and in full toa specific profit center.

You cannot assign indirect costs and revenues directly to a specific profit center. Instead, you mustdistribute them to the profit centers on a cause basis. You must define distribution rules manually for

these costs and revenues. For example, you can distribute heating costs to the profit centers inaccordance with the size of the heated areas. Similarly, you can distribute voluntary employee benefitsamong the number of employees.

If you cannot define a distribution rule precisely (because you do not have enough information on thedistribution keys), any costs or revenues that cannot be assigned are allocated to the Center_z profitcenter. When you finally have the information you need, you can change the distribution rule so thatthe system corrects the distribution accordingly.

ChooseFinancials Cost Accounting Distribution Rules to define and maintain distributionrules.

ChooseFinancials Cost Accounting Table of Profit Centers and Distribution Rules to get a

table display on all distribution rules.


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Link Between General Ledger and Cost Accounting

Heating Costs

Distribution RuleX area

Profit Center 1 Profit Center 2 Profit Center 3

Journal Entry

1000Heating Costs

Distr. Rule area

For costs to be included in cost accounting, you must enter a distribution rule into the journal entry forevery line item that posts to a revenue or expense account. As soon as you make a posting to anaccount with a distribution rule, the system distributes the costs or revenues to the profit centers asdescribed in the rule.

To avoid having to enter the distribution rule manually, you can enter a distribution rule into theaccounts master record. This distribution rule will then be used as a default value.

As well when you create any type of marketing document, you can assign a distribution rule in the rowlevel. This rule will be recorded in the journal entry

You can use the Profit Centerreport to display an overview of the posted costs and revenues. Choose

Financials Cost Accounting Profit Center Report.


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Projects

AccountingDocuments

Project:

....

Original Documents

Project:

....

Project A

TrialReport -BudgetReport

P&L

TransactionReport

General LedgerTrial

Report-

BudgetReport

Trial Report -

BudgetReport

P&LBudgetReport

P&L

TransactionReport

General LedgerTrial

Report-

BudgetReport

P&LBudgetReport

Project B

You can use projects in SAP Business One to monitor your company's larger key projects and their

economic success. To do so, you first define projects in the system. ChooseAdministration SetupFinancials Projects. You can then enter these directly in the relevant line items or the journalentry or marketing document.

You can also enter projects in general ledger accounts or business partners. The relevant project is thenautomatically entered in the documents you post to these accounts.

The Transaction Report by Projects lists all postings that you have made for a selected project. Choose

Financials Financial Reports Accounting Transaction Report by Projects.

You can often limit your reports to a specific project, for example, to generate a profit & loss statement

for the project.


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Purchase Accounts Posting System

100

VendorVendor

Purchase

Order

GoodsReceipt PO

A/PInvoice

100

StockStock

AccountAccount

100

AllocationAllocation

Costs AccountCosts Account

100

Allocation Costs AccountAllocation Costs Account

Use Purchase Accounts Posting Systems

100

PPurchaseurchase

AccountAccount

100

PA OffsetPA Offset

AccountAccount

To allow better budget and cost controlling, you can activate the purchase accounts posting system.

You do this before any inventory postings have been made by choosing Administration SystemInitialization Company Details. Then, select the Use Purchase Accounts Posting System indicatoron theBasic Initialization tab.

After you activate the purchase accounts posting system, the G/L account determination contains threeadditional accounts: purchase account, PA offset account, and PA return account.

Whenever you post a document that is an inventory receipt result in a purchase document, (goodsreceipts PO and A/P invoice not based on a goods receipt PO), and the system adds two additional lineitems. One line item posts the stock posting amount to the debit side of the purchase account. The

system posts the offsetting line item to the credit side of the PA offset account. When you post a goods return or a credit memo, the system also adds two additional line items. The

system posts the stock posting to the credit side of the PA return account and the offsetting line item tothe debit side of the PA offset account.

Purchase accounts offer these advantages:

The purchase account allows you to control the purchasing budget. Goods receipts to a warehouseare usually not posted to an expense account, therefore, you cannot enter a purchasing budget. If youmake the purchase account an expense account, you can create a budget for it. This is relevant whenperpetual inventory is used.

If items, item groups, or warehouses belong to special profit centers, you can assign special purchase

accounts to their G/L account determination and enter the distribution rule (direct distribution to theprofit center) in the definition of the purchase account. This automatically assigns the purchasingexpenses to the correct profit center.


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Financials: Unit Summary

You are now able to:

Create your Chart of Accounts

Post Journal Entries and Journal Vouchers

Use the Posting Tools

Activate and use the Budget

Use the Fixed Assets Add-on

Monitor your projects and profit centers