what is chart of accounts

[Former Member]

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Dear All,

can any one tell me why do we need to have a chart of accounts, i know it is a list of G/L accounts, otherthan this there seems a lot, pls let me know.

Regards,

Suresh Patipati.

[Former Member]

Hi Suresh

A Chart of Accounts basically categorises all G/L accounts into Assets, Liabilities, Incomes and Expenses. Hence to forms the back-bone for generating the Balance Sheets and Profit and Loss Accounts.

If you do not have a COA, then you would just have a list of all G/L accounts and computation of profit and losses would be have to done manually which may lead to errors.

I hope this helps.

Regards

Kavitha

[Former Member]

Hi Suresh,

chart of accounts:

Chart of accounts is a grouping of GL accounts that used to post transaction from cross modules and FI modules. These can be further used for reporting like Balance Sheet, P&L, and Trial Balance etc...Chart of accounts are usually very specific to an organization and you will not find the same chart of account across two different companies. SAP does give you standard set of accounts that can be used as template but it usually requires detail discussion with accounts so a list can be finalized.

types of Chart of Account:

There can be only one primary chart of account per company code in SAP. You can have a different set of chart of account that can be used for Group Account and one for Alternative accounts.

Three types of Chart of Account .

1.Operative Chart of account

It is the COA you are opering for COA defines the Ledger account.

2.Country Chart of Account

You can use this COA for the legal requirement for the country specific.

3.Group of Chart of Account

Supposes for the same company , which uses different COA for their purposes, they can be grouped into Group of Chart of Accounts.

alternative chart of accounts:

Alternative chart of accounts is secondary grouping of account that is generally used for statuary reporting. For example you might have a company chart of account but due to statutory nature (for countries like Russia and China to name a few), you have to report your account activity in an account range that has been provided by the company stature. In this case you have a primary chart of account as explained above and alternative chart of account. Postings should always be made in the primary chart of account and in the GL account setup these primary accounts should be associated to alternative chart of accounts. This way updates can be made to both primary and alternative chart simultaneously.

COA:

A group chart of account is way to group your primary accounts. For example from an operation perspective you can have several cash accounts but from a group reporting perspective you might want to group all cash activity under one account. These are usually used for Consolidation reporting. Tips by : Jayaraman

we create our own COA from scratch (not copy from a std. version)

the procedure is:

IMG side

1) Create Chart of acount (OB13)

2) Create account groups as per ur own list of GL's and give no range (OBD4)

3) Asign Chart of account to ur company code (OB62)

4) Define retained earning account (OB53)

After, for creation in Chart of account segment FSP0

- for Company code segment FSS0

- for central creation FS00

Best Regards,

Amit.

[Former Member]

HI,

FI is the backbone of all process in SAP. Many process leads to accounting entry. for that we required to have GL accounts. if there is no GL accounts (COA) then none of the MM, SD, PP etc process will run.

Moreover, we need to report all the financials to the legal authorities. These data r stored in GLs

Regards,

Kiran

[Former Member]

Hi,

Chart of Accounts

Definition

This is a list of all G/L accounts used by one or several company codes.

For each G/L account, the chart of accounts contains the account number, account name, and the information that controls how an account functions and how a G/L account is created in a company code.

Use

You have to assign a chart of accounts to each company code. This chart of accounts is the operating chart of accounts and is used for the daily postings in this company code.

You have the following options when using multiple company codes:

You can use the same chart of accounts for all company codes

If the company codes all have the same requirements for the chart of accounts set up, assign all of the individual company codes to the same chart of accounts. This could be the case if all company codes are in the same country.

In addition to the operating chart of accounts, you can use two additional charts of accounts

If the individual company codes need different charts of accounts, you can assign up to two charts of accounts in addition to the operating chart of accounts. This could be the case if company codes lie in multiple countries.

The use of different charts of accounts has no effect on the balance sheet and profit and loss statement. When creating the balance sheet or the profit and loss statement, you can choose whether to balance the company codes which use different charts of accounts together or separately.

Structure

Charts of accounts can have three different functions in the system:

Operating chart of accounts

The operating chart of accounts contains the G/L accounts that you use for posting in your company code during daily activities. Financial Accounting and Controlling both use this chart of accounts.

You have to assign an operating chart of accounts to a company code.

Group chart of accounts

The group chart of accounts contains the G/L accounts that are used by the entire corporate group. This allows the company to provide reports for the entire corporate group.

The assigning of an corporate group chart of accounts to a company code is optional.

Country-specific chart of accounts

The country-specific chart of accounts contains the G/L accounts needed to meet the country's legal requirements. This allows you to provide statements for the country's legal requirements.

The assigning of an country-specific chart of accounts to a company code is optional

Integration

The operating chart of accounts is shared by Financial Accounting as well as Controlling. The accounts in a chart of accounts can be both expense or revenue accounts in Financial Accounting and cost or revenue elements in cost/revenue accounting.

Regards,

Kiran

[Former Member]

hi

chart of accounts are 3 types

operational chart of account _ day to day transactions

group chart of accoutns---- consolidation purpose

country chart of accounts------ taxation purpose

out of which operational chart of accouts are mandatory

Thanks & regards

phaneendra

[Former Member]

Dear Phaneendra,

I know this, why do we need to have chart of accounts, what will happen if we dont have.

Regards,

Suresh