Chart of Accounts is set of Accounts or Account Group. This chart of accounts, also known as an Alternate Chart of Accounts, contains the GL accounts necessary to meet the specific statutory/legal requirements of a company from which a Company Code operates. The assignment of this chart of accounts to a Company Code is also optional. It is possible that both the operative and the country chart of accounts are one and the same. In this case, you will not need two different charts of accounts.
A Chart of accounts is a whole list of a business’s classification groups for accounting purposes. Because everything revolves around them the chart of accounts may be the anchor of an accounting system. Every report chosen has a basis for tracking that particular accounting advice.
The Chart of Accounts may be the basis for a company’s financial accounting system. It’s useful for recording transactions within the general ledger to be able to supply better comprehension of the fiscal well-being of the company and also to aid the company comply with financial reporting standards. In other words, the Graph of Accounts is listing of all individual accounts within the General Ledger which are utilized to arrange your monetary transactions.
It’s an index of all reports where the firm files away its financial advice. Before you create your general ledger you create a graph of accounts. There are lots of things to consider when making your chart of accounts such as the kind of industry your firm is really in. Each industry has standard accounts especially picked to help track the regions that matter for a firm in that industry. Once these accounts are chosen you need to establish safeguards in position to make sure they remain the same and new accounts aren’t created unless approved. Creating sub accounts can become a fantastic method for businesses to break up how they monitor specific accounting information instead of creating every time to a fresh report.
In cases where the operative and country chart of accounts are different, a link needs to be established by entering the GL account number from the Country Chart of Accounts in the GL master record (under the Company Code section) of the Operative Chart of Accounts in the field Alternate Account Number.
Structure of Account creation: Chart of Account>Account Group> Accounts
This is a list of all general ledger used by one or several company code. For each GL account it contains the account number, account name and the information that controls how an account functions and how a GL account is created in the company coed. The same chart of accounts has to be assigned one or more company codes.(Its operating chart of accounts)
Operating Chart of Accounts:
The chart of Accounts contains the GL accounts that you use for posting in the company code during daily activities. Financial Accounting and Controlling both use this chart of accounts.
Group Chart of Accounts:
The group chart of accounts contains the GL accounts. That is used by the corporate group. The assignment of group chart of accounts to company code is optional.
Country specific chart of Accounts:
The country specific chart of accounts contains all GL accounts needed to meet the country’s legal requirement. This is allows you to provide statements for the country’s legal requirement (It is optional).
Create Chart of Accounts
Path: SPRO >Financial Accounting>General Ledger Accounting>G/L Accounts>Master Data>Preparations>Edit Chart of Accounts List
- Select IMG Activity button T-code: OB13
- Click on New Entries Button
- Chart of Accounts : SSCL
- Description : Chart of Accounts for SSCL
- Maint. Language : English
- Length of G/L account Number : 6 max10 (we are taking 6 digit)
- Controlling integration : Manual creation of cost element
If we go for the second option we define group chart of account We are follow 1st option Click on save button and press the enter to save in your request. We get a message Data was saved.
Assign the company code to Chart of accounts
Path: SPRO>Financial Accounting>General Ledger Accounting>G/L Accounts>Master Data>Preparations>Assign Company Code to Chart of Accounts
- Select IMG activity button T-Code: OB62
- GO to Position button
- Select Company code(SSCL) from drop down enter
- Select Chart of account from drop down SSCL
- save press enter to save in your request. We get a message Data was saved.