We, SAP FICO Users, often hear about Data, explained in IT perspective, records, rows, fields and so on. It is interesting to look at Accounting & System Perspective of Data!
Relax and read on …
Transactions in an organization, say sales, purchases, expenses are all recorded in the system. These system entries in the system constitute transaction data. Every transaction data is tied up with one or more master data sets. Sales with Customer Master Data and General Ledger Sales Account master data. Transaction data are associated with a specific period of time, say sales on 15th Mar 2014.
Master data is the data that remains constant over a period of time. Examples are Customers and Supplier name and contact details. In Material Management name and specifications of materials are master data. In General Ledger, Account codes are master data.
Line Item & Statement of Account
Every transaction recorded in the system has two line items. One for debit and another for credit. When you want to study the transactions recorded under a GL account for a given period you run statement of account report for that account. The statement of account is the listing of line items.
In Accounting perspective period is usually calendar month. Period closing is a procedure of freezing data entry for the period. This is done in the system, so analysis can be done with the transaction data pertaining to a period. In order to convert the data for a period into the useful information much elaborate procedure is followed as part of period closing. Simple examples could be depreciation of fixed assets calculation and post them in the respective GL accounts, making provisions for expenses incurred and yet to be paid such as utility bills etc. In real time scenario and in systems like SAP it is a dedicated procedure involving multiple system components and departments.
Data integrity is data reliability, different reports run correlate and not contradict each other. E.g supplier control account balance as extracted from GL report should always match with the grand total of individual suppliers accounts as extracted from Supplier Sub Ledger.
To ensure data integrity, system design should enable data capture only once in the system. An example can be when sales are recorded in Sales and Distribution component of a system, the same sales should not be entered in GL Sales account. Instead, the SD component should populate necessary sales transaction data to GL accounts.
Posting, Posted and Un-posted Transactions
Posting a transaction takes the data to the database, storing them in tables. Once a transaction is posted it is available in reports. Usually, systems provide for two stages of transaction entry. The first stage, un-posted (SAP parlance – Parked) and the second stage posted. When the transaction that is being captured need to be verified it is kept in un-posted mode. It is ‘posted’ after verification. Once posted it can not be changed to unposted mode. If the posted data is found to be incorrect it can be corrected through another entry, say a correction or reversal entry depending on system design.
Once the period closing is done, no transactions are allowed in that period. Any correction required can be done only in the next period.
It is a process of establishing the relationship between two different data sources. A good example is bank reconciliation, balance as per company is related to balance as shown on the bank statement. In a non-integrated system environment, this task will be a huge one. An ERP system ensures an integrated environment and thus the requirement for reconciliation is to the minimum.
In system perspective automated and secured connectivity of two otherwise independent components of a system makes an Integrated System. The sap is an integrated system. Integration enables transaction and master data captured in one component available in other components where and when required. Integration enables and facilitates seamless data flow between system components. An example is customer master data entered into Sales and Distribution is available in Financial Accounting. Purchase transaction captured in Materials Management flows to Financial Accounting. Fully integrated components make an ERP system.
Recurring Journal Voucher
This can be explained well through an example – you have to make entry, debit rent and credit rent payable. This entry every month. There is no change in GL Account code and amount. Here you can define recurring JV in the system with a ‘from’ and ‘to’ dates, say for one year. Any number of such entries can be grouped and defined as recurring JVs. You need to run a recurring JV program beginning of a month, the system passes all the entries for you.
Let us see an example, here again, some organizations want to charge interest for the amount used in the business, though no money is borrowed from outside parties. This is called imputed interest. In such a scenario you can use reversal entry. Entry to debit interest, credit imputed interest is passed in one period. Beginning of next period the entry is reversed. Through reversal entry functionality this can be automated in the system.
You are required to record say, utility bills every month, end of the first week of the period. Here essentially the debits and credits flow to the same respective GL Accounts. Only the amount varies from month to month. In this scenario, you can use JV template. During data entry use the template to insert the amounts only and post or forward to the next level for checking and posting. This saves time in data entry.
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