Introduction to Accounting Master Data...contains the master data types required for external reporting purposes. Module 02 will cover these types in more detail. CO contains the master

NSW DEPARTMENT OF EDUCATION WWW.DEC.NSW.GOV.AU

eLearning

Introduction to Accounting Master DataFIN0018


Course Introduction

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Welcome to the Introduction to Accounting Master Data

(FIN0018) eLearning course.

Having completed this course, you will be able to:

describe the overall DoE enterprise structure

describe the Financial Accounting (FI) and Controlling

(CO) areas in SAP FICO

explain the purpose of each accounting master

data type in FI and CO

explain the purpose of funds management master

data in Funds Management (FM).

Course Duration: 60 minutes

Course Pre-requisite: Nil.

Course Introduction

DoE Enterprise Structure

Financial Accounting Master Data

Controlling Master Data

Course Summary

Funds Management Master Data



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Having completed this module, you will be able to:

explain the following components of the DoE

enterprise structure:

Controlling area

Company code

Operational Entity Code (school code).

explain the concept of master data

explain the difference between the controlling (CO)

and the financial accounting (FI) areas in the SAP

Finance module (FICO).

Course Introduction




Course Summary



The Department of Education and Communities (DoE) is responsible for the management of NSW Government Schools and TAFE. DoE also has a corporate body which has a diverse range of functions across finance, information technology, human resources and strategic planning.

DoE’s organisational structure is mirrored in the DoE enterprise structure that has been configured in SAP. This diagram is an overview of the DoE enterprise structure and its components, which will be discussed in detail throughout this course.


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Roll your cursor over each of the red boxes for more information.


The controlling area is at the highest level of the enterprise structure. In SAP, the controlling area represents a whole management area.

In this diagram, it can be seen that the controlling area is NSW DoE Controlling Area (1000), and that schools, TAFE and corporate are arranged underneath.

This mirrors the organisational structure of DoE in reality.

Controlling Area

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The purpose of setting up an enterprise structure in SAP with a controlling area at the highest level of hierarchy is to facilitate management reporting.

Because the enterprise structure in SAP closely mirrors the organisation’s structure, accurate reporting on certain areas of responsibility (e.g. all schools) is made possible.


Company Code

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All schools are managed within one company code.

The rationale for this decision was to simplify the overall DoE enterprise structure and to allow for reporting on schools as a whole.

Underneath the controlling area, four-digit company codes are used to represent schools, TAFE and corporate.

The company code for NSW Government Schools is 1060.

NSW DEPARTMENT OF EDUCATION WWW.DEC.NSW.GOV.AU 7

Although there is only one company code for all schools, each school or college has its own four-digit school code e.g. 1002 for Aberdeen Public School.

The school code is also referred to as an operational entity codein SAP.

School Type Local Government Area Statistical Local Area School Specialty Types School Division

Federal Electorate State Electorate Selective School Pre-School.

The four-digit school code allows for reporting on a number of characteristics at a school level, including:

School Code (Operational Entity Code)


SAP Finance and Master Data The controlling area and company codes form the “framework” of the DoE enterprise structure in SAP. Once these have been set up in SAP, they are not likely to change.

As mentioned, this framework allows for management reporting to take place. This is achieved through the use of master data. Master data is the data stored in the DoE enterprise structure in SAP and is used to perform various transactions.

Examples of master data include cost centres and general ledger (GL) accounts.Different transactions will utilise different types of master data.

It is important to understand the purpose of each type of master data, as well as the relationship between different types of master data to ensure that a transaction is processed correctly.


To recognise the way different types of master data works, it is important to understand that the SAP Finance module (FICO) is split up into two areas – Financial Accounting (FI) and Controlling (CO), which are closely integrated.

FI contains the master data types required for external reporting purposes. Module 02 will cover these types in more detail.

CO contains the master data types relevant for management (internal) reporting purposes. Module 03 will cover these types in more detail, as well explaining the relationship between master data in FI and CO.

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SAP FICO

Controlling (CO)• Management (internal)

reporting • Cost centres• Primary cost elements

Financial Accounting (FI)• External reporting • Chart of Accounts • General Ledger

Accounts

SAP Finance and Master Data



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explain the purpose of financial accounting (FI)

master data



General Ledger Accounts

General Ledger Account Groups

Chart of Accounts.

Course Introduction




Course Summary



Financial Accounting (FI)

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While, there is a strong relationship between FI and CO, it is necessary to have these separate areas in SAP because they are configured to meet different reporting needs.

As such, it is important to understand the relationship between FI and CO as well as what information each type of master data captures.

Financial Accounting (FI)

Contains the master data types required for external reporting (full balance sheet reporting) purposes

External reporting is reporting which is necessary for the organisation to meet its statutory obligations and key stakeholder expectations

SAP FICO

Controlling (CO)Financial

Accounting (FI)


One of the main types of master data that you will be dealing with in FI are general ledger (GL) accounts.

GL accounts are used to classify and record transactions relating to a company’s assets, liabilities, expenses and revenue. GL accounts will be used by corporate finance in statutory reporting – e.g. preparing balance sheets and tax reports.

All schools will post to the same GL accounts which are set up at the company code level – i.e. each school will not have their own set of GL accounts.

General Ledger Accounts

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GL accounts are numbered within certain number ranges according to their account type. This allows users to easily identify what account type a GL account is. Examples: 105100 – Operating Bank Account is an asset account 200100 – Borrowings – Current is a liability account 420010 – Subject Contributions is a revenue account 526436 – Electricity is a expense account .

General Ledger Accounts: Numbering Convention (1/2)

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Within each account type,

accounts may be grouped into

Account groups.

General Ledger Accounts: Numbering Convention (2/2)

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Example: Account group 4200 – School Generated Revenue

From the screen shot, it can be seen that any accounts with a number in the range 420000 to 424999 belongs to the School Generated Revenue account group.

The Hire of Facilities (420003) account number falls in the range 420000 to 424999 and therefore belongs to the School Generated Revenue (4200) account group.

NSW DEPARTMENT OF EDUCATION WWW.DEC.NSW.GOV.AU 15

The CoA lists all the General Ledger (GL) accounts used by a company code.

DoE has two CoAs – Operating (1000) and Group (2000). The operating CoA contains the GL accounts that you will post to on a daily basis. The group CoA is used by corporate finance for reporting.

Each GL account in the operating CoA is linked to a GL account in the group CoA.

Sometimes, several GL accounts in the operating CoA may be consolidated into one GL account in the group CoA.

E.g. the Mobile Telephones expense account and the Postage expense account in the operating CoA is consolidated into the Postage and Telephone expense account in the group CoA.

Chart of Accounts (CoA)

Operating Chart of Accounts

Group Chart of Accounts



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Course Introduction




Course Summary



explain the purpose of controlling (CO) master data



cost centres and profit centres

standard hierarchies

internal orders: real and statistical

explain the relationship between master data in FI

and CO.


Controlling (CO)

Contains the master data types required for internal accountingpurposes

Internal accounting allows the school to see their financial position and report on it in different ways, according to their needs

Controlling (CO)

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SAP FICO

Controlling (CO)Financial Accounting (FI)

As previously mentioned, although there is a strong relationship between FI and CO, it is necessary to have these separate areas in SAP because they are configured to meet different reporting needs.

This module covers the relationship between FI and CO, as well as what information CO master data captures.


An important master data type is the profit centre. Profit centres are used to manage costs, revenue and balance sheet items at a high level so that schools can keep track of their expenditure and financial position.

Each school has at least one profit centre (operational profit centre). Schools with deductible gift recipient (DGR) funding (e.g. donations) will have two profit centres – an operational profit centre and a DGR profit centre.

Profit Centres

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1. Operational profit centreOperating cost, revenue and balance sheet transactions taking place at the cost centre level are consolidated into the operational profit centre.

2. DGR profit centreDGR profit centres work like the operational profit centre, but are used to separate DGR funding (e.g. library and building funds) from other funding for tax and reporting purposes.


The profit centre number is nine digits long and is composed of the following:

Digit 1-4: Company code i.e. 1060. Digit 5: Either a 0 (if it is a operational profit centre) or a 1 (if it is a DGR profit centre). Digit 6-9: 4-digit operational entity code (i.e. school code).

Profit Centres: Numbering Convention

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Examples:

Operational profit centre for Artarmon Public School: 106001061

DGR profit centre for Artarmon Public School: 106011061


The profit centre standard hierarchy for DoE groups all the profit centres belonging to a controlling area. Within the standard hierarchy, profit centres are grouped into profit centre groups.

Profit centre groups are displayed through the use of nodes. Generally, each profit centre group contains all the profit centres for a particular school or college.

Profit Centre: Standard Hierarchy

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Node

Profit Centre


Cost Centres

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Another important master data type in CO are cost centres. They are used to record and manage costs incurred by schools within certain areas of responsibility e.g. English or Administration.

When cost centres are set up, they are linked to either the school’s operational or DGR profit centres. By consolidating all cost centre information into two profit centres, the profit centres can be used to provide a high level overview of a school’s financial position.

In the example below, the cost centres in green link to the operational profit centre. The DGR cost centre in blue links to the DGR profit centre.


The cost centre number is eight digits long:Digit 1: Number ‘6’ identifies this cost centre as a schools cost centreDigit 2-5: 4-digit operational entity code (i.e. school code) Digit 6: One-digit School / Intensive English Centre / DGR indicator (see table)Digit 7-8: Sequential numbering in the range 00 - 99

Cost Centres: Numbering Convention

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School / IEC / DGR Indicator:1 = School – Educational2 = School – Administration3 = School - Staffing5 = IEC – Educational6 = IEC – Administration7 = IEC – Staffing8 = DGR

Example: Year 5 and Year 6 cost centre for Artarmon Public School

61061183 School

CC number

School or College Code

School / IEC / DGR indicator

Sequential number

from 00-99


The cost centre standard hierarchy for DoE groups all the cost centres belonging to a controlling area. Within the standard hierarchy cost centres are grouped into cost centre groups, and this grouping is displayed through the use of nodes.

Generally, each cost centre group contains all the cost centres for a particular school or collect.

Cost Centre: Standard Hierarchy

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Node

Cost Centre


A school keeps track of the cost of a specific activity by creating an internal order.

They can be used for short-term activities (e.g. an excursion) or longer-term activities (e.g. school band, interschool sport or Duke of Edinburgh).

Internal Orders (1/2)

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E.g. An internal order (1000103) is being used to track costs for a Year 3 Zoo Excursion.

Although the costs settle to different GL accounts, and cost centres, the internal order can be used as a ‘filter’to extract and display information on all costs related to the activity.


Internal Orders (2/2)

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There are two types of internal orders that are available for schools – real internal orders and statistical internal orders. The order type is selected when an internal order is being created.

Statistical internal orders track incoming expenses against an activity (see example on previous page). As income can also be tracked against a statistical internal order, the financial status of an activity can be reviewed at any point in time (e.g. excursion fees collected are enough to cover excursion costs).

Real internal orders are created to keep track of money that the school collects on behalf of another organisation – e.g. if a school has a mufti day to raise money for Stewart House, the donations collected would be tracked in a real internal order until it was transferred to Stewart House.

Note: For more information on internal orders (including how to request for a new one to be created) refer to FIN0006 Internal Orders.



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Course Introduction




Course Summary


Having completed this module, you will be able to: explain the purpose of funds management (FM)

master data explain the following components of the DoE

enterprise structure: fund fund group fund centre funded program commitment item

explain the relationship between master data in FM and FICO.


Introduction: Funding for Schools

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In addition to the Financial Accounting (FI) and Controlling (CO) areas in SAP, schools will also come across the Funds Management (FM) area in SAP.

DoE uses various sources of funding to deliver high-quality education to NSW Government schools. Schools will be able to use SAP to keep track of their funding.

SAP allows schools to see: where funds are coming

from how they are being used.


Similar funds are grouped into fund groups to simplify reporting – e.g. the three DGR funds are grouped into a DGR fund group.

This table shows all the fund codes available to schools, and how they are grouped.

By allocating a fund code to each type of fund, it is possible to report on each source of funding. The school is able to view the current balance of a source of funding, and review how it is being spent.

This is a list of all the fund codes that are available for NSW Government schools in SAP.

Fund Codes and Fund Groups

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Fund centres are set up in SAP to control the distribution of funds across NSW Government Schools. Each school will have two funds centres.

Operational Funds CentreAll cost centres for a school linked to this funds centre (i.e. it acts as the ‘source’ of funds for the costs recording in all cost centres).

Control Funds CentreThis funds centre is set above the operational funds centre. This is where the rules for the release and distribution of funds are maintained by Corporate Finance.

Funds Centres

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Numbering Convention:

Operational Funds Centre – 6SSSS100

Control Funds Centre – 6SSSS000

SSSS = School Code (e.g. 1061 for Artarmon Public School)


Funded Program

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A program is a planned series of future events, items or performances e.g. Local, State-Wide and National Partnership Programs.

A funded program is a collective managed fund source shared across all schools e.g. National Partnership. In SAP, a funded program is a cost object that links to a work breakdown structure (WBS) to track spending for that funded program. For more information on WBS, please refer to FIN0021 Projects).

Example:

The Low Socio-Economic School Communities National Partnership is an example of a Commonwealth-funded National Partnership program.

All spending needs to be tracked e.g. the cost of hiring additional Learning Support Officers or Community Liaison Officers to provide individualised support to students who require it.


Commitment items in SAP are used in the FM area in SAP to reserve funds that will be used at a future date so that you may accurately report and manage your funds. They will be used to post entries in GL accounts.

The structure of commitment items in FM reflects the structure of GL accounts in FI. While GL accounts record expense and revenue transactions in FI, commitment items record revenue and expenditure line items in FM.

Commitment items are linked to GL accounts so that when the cost is incurred (i.e. after the goods and service have been delivered), the transaction is posted to the relevant GL accounts.

Commitment Items

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Course Summary

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You have completed the Accounting Master Data

(FIN0018) eLearning course.

Having completed this course, you will be able to:

describe the overall DoE enterprise structure

describe the Financial Accounting (FI) and

Controlling (CO) areas in SAP FICO

explain the purpose of each accounting master

data type in FI and CO

explain the purpose of funds management master

data in Funds Management (FM).

Course Introduction




Course Summary



Additional Reference Materials

Reference MaterialLMBR intranet page: https://education.nsw.gov.au/lmbr/training

Additional SupportEDConnect intranet page: https://education.nsw.gov.au/sap-financeEDConnect helpline: 1300 323232

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https://education.nsw.gov.au/lmbr/training

https://education.nsw.gov.au/sap-finance

Documents

Introduction to Accounting Master Data...contains the master data types required for external reporting purposes. Module 02 will cover these types in more detail. CO contains the master