KDS DOCUMENT

S.NO TABLE OF CONTENTS PAGE NO.

1. CLIENT 2
2. COMPANY 2
3. COMPANY CODE 2
4. CREDIT CONTROL AREA 3
5. DEFINE BUSINESS AREA 3
6. FISCAL YEAR VARIANT 3
7. POSTING PERIOD VARIANT 4
8. POSTING KEYS AND POSTING PERIOD INTERVALS 4
9. DOCUMENT TYEPS AND NUMBER RANGES 6
10. FIELD STATUS VARAIANT 7
11. TOLERANCE GROUP FOR EMPLOYESS 8
12. CURRENCY 8
13. GENERAL INDICATORS 9
14. SCREEN VARIANT FOR ENTRY SCREEN 10
15. CHART OF ACCOUNTS 10
16. ACCOUNTS GROUP 11
17. RETAINED EARNINGS 12
18. GENERAL LEDGER MASTER RECORD 13
19. AUTOMATIC POSTINGS 14
20. KEY INTEGRATION ISSUES 14
21. REPORTING CONSIDERATIONS 14
22. LIST OF TRANSACTIONS CODES 14
23. CLOSING OPERATIONS 15
24. PROCESS FLOW 16
25. DAY END CLOSING 16
26. MONTH END/ QUATERLY CLOSING 16
27. YEARLY CLOSING 17
28. EXPLANATIONS OF FUNCTIONS/EVENTS 17
29. ORGANIZATIONAL IMPACT 26

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1. Client:
A client is a self-contained unit with separate master records and a complete set of tables.
A client key is used in all master records, which ensures that they are stored per client. Two
clients will be utilized in the implementation of the Sap Fico software package for japan
technologies.
Client ----- will be used for the configuration settings
While client --- will be used for testing.

2. Company
Company is an Organisational unit in accounting which represents a business
organisation for which individual financial statements can be drawn according to the relevant
commercial law followed in that particular country. Japan technologies will be defined in our
configuration setting as
T Code OX15
Company Description

( Character Code)
JAPAN Japan Technologies

3. Company Code
The company code is the central organizational unit for which a complete set of financial
statements can be drawn up for purposes of external reporting. Single company codes will be
defined in our configuration settings: Japan technologies located in Coimbatore Tamil Nadu.
T Code OX02
Company Code Description

(4 Char Code)
JT01 Japan Technologies

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4. Credit Control Area

Explanation/Requirement

A credit control area is an organizational unit that represents an area responsible for
granting and monitoring credit. This organizational unit is either a single company code or
several company codes. Credit control area is used to control and set the credit limit for a
particular company. Credit information can be made available per customer within a credit
control area.

T Code OB45
Credit control area Description

(4 Char Code)
JT01 Japan Technologies

5. Business area
Business area refers to the number of branches a company maintains in different
locations. We will assign this business area with consolidated business area. But in japan
technologies there is only one branch for which we have already created the company
code so there is no necessity to create business area.

6. Fiscal Year Variant

The Fiscal year variant is used to define the fiscal year. It is a time period used to prepare
the financial statements in organizations. Fiscal Year variant in SAP or known as
FY Variant is used at the client level and assigned back to the company code. It's divided
into posting periods and each posting period is defined by a start and finish date.

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T Code OB29

Fiscal Year Variant Description

(2 Char Code)
JT Japan Technologies

7. Posting period variant

Posting Period Variant is accountable for the opening and closing of periods in a Fiscal
Year for postings to take place. The Posting Period Variants (PPV) in SAP is used to control
which accounting period is open for postings and ensuring that closed period remain balanced
and reconciled.

Specification
A posting period variant JT01 will be defined for Japan technologies assigned to
company code JT01
T Code OBBO

Posting period variant Description

(4 Char Code)
JT Japan Technologies

8. Posting keys and posting period intervals

Posting keys
Posting keys are two-character numerical keys that control the entry of line items. Posting
keys determines the debit/credit postings and the layout of entry keys. Posting keys are
differentiated by customer, vendor and posting key for G/L accounts. Apart from the General

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Ledger Accounting (FI-GL) and Accounts Receivable and Payable (FI-AR/AP) components,
there are also posting keys for assets and material accounts. Posting keys are defined at client
level and therefore apply to all company codes. It determines how an item is posted, the data that
can be entered in the line item, how posted data is processed, and how the system updates data
posted.

Specification
Japan Technologies company code will utilize the predefined posting keys delivered
within the standard Sap system.

The following table lists some of the posting keys in the standard system.

Posting Key Description

40 G/L account debit posting
50 G/L account credit posting
1 Customer invoice
11 Customer credit memo
21 Vendor credit memo
25 Vendor payment
31 Vendor invoice

Posting period intervals

In this step we will define whether the company is following accounting year or calendar
year \which consist of twelve months and special periods will also be mention which is four
months. We will also mention the opening and closing posting period here.

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Specification
Japan Technologies company code will follow the calendar year from jan 2017 to dec
2017 this is specified in t code ob52

9. Document types and number ranges

It allows you to differentiate between the business transactions to be posted. The
document type tells you what sort of a business transaction it is. It allows you to control how
postings are made to account types (vendor, customer, or G/L accounts). The document type
determines the account types to which postings can be made with that document type. It
allows you to assign document numbers.

A number range is assigned to every document type. The numbers for the documents you
create are taken from this number range. The original documents from one number range
should be stored together. In this way, the document type controls document storage.

The standard document types and number ranges contained in the Sap system will be used in the
configuration process for japan technologies and will be applied to company code.

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The following is a list of some of the standard document types in the Sap system

Types Description Number Sequence Module :

AB ACCOUNTING DOCUMENT 01000XXXXX FI
CI COMPASS INTERFACE 01000XXXXX MM

DR CUSTOMER INVOICE 18000XXXXX AR

DZ CUSTOMER PMT 14000XXXXX AR
FO PO's FRAMEWORK 7508000XXX MM
KA VENDOR INV REVERSAL REVERSAL AP
KG VENDOR CREDIT MEMO 17000XXXXX AP
KR NON PO INVOICE 19000XXXXX AP
ML ML SETTLEMENT FI
PY PAYROLL POSTING FI
RE PO INVOICE 54000XXXXX AP
RR RECURRING ENTRY DOC AP
SA G/L ACCOUNT DOC- JE 01000XXXXX FI
STO STOCK TRANSPORT 9508000XXX MM
PAYROLL POSTING
TI 3RD PARTY 190000XXXX FI
WA GOODS ISSUE 49000XXXXX MM
WE GOODS RECEIPT 50000XXXXX MM
WI INVENTORY DOC 01000XXXXX MM
WK SAP VALUE CONTRACT 4600000XXX MM
WL GOODS DELIVERY 8000XXXXXX MM
ZP PMT POSTING 20000XXXXX AP
ZP CHECK# 00000200XXXX AP
ZP ACH PMT# 20000XXXXX AP
RV CROSS INVOICE 542000XXXXX AR

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10. Field status variant

Field status variant is used to define the fields which are used for input like cost center,
profit center, plant. It consists of several field status groups. The field status group specifies
which fields are ready for input, which field must be filled, or which fields are suppressed when
entering documents. A field status variant will be defined for Japan technologies and assigned to
its company codes.

T Code OBC4
Field status Variant Description

(4 Char Code)
0001 Japan Technologies

11.Tolerance group for employees

The term tolerance group refers to a way to make sure that employees do not exceed
their authority in financial transactions in an Enterprise resource planning system. Usually this is
done by setting limits on the size of transaction an employee can process. As part of the
configuration process, a company can define any number of tolerance groups with a range of
limits and can then assign employees to these tolerance groups.

Configuration allows the company setting the tolerance groups the flexibility to further tailor this
methodology of placing limits on an employee.

Specification
In Japan Technologies we are following the below procedure for employees tolerance
limit in the T code OBA4

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The maximum document amount the employee is authorised to post.

The maximum amount the employee can enter as a line item in a vendor/customer account.
The maximum cash discount percentage the employee can grant in a line item.
The maximum acceptable tolerances for payment differences for the employee.

12.Currency
In Financial Accounting, you have to specify for each of your company codes, in
which currency ledgers should be managed. This currency is the national currency of the
company code, that is, the local currency. From a company code view, all
other currencies are then foreign currencies. The currency code represents the legal means of
exchange for business transactions in a country. In the Sap system, each monetary amount
entered must be specified in a currency. This currency is specified for each of the company
codes in the configuration settings for each entity in which currency ledgers should be
managed.

Specifications
The configuration settings for Japan Technologies will involve the specification of the
Indian (INR) as the currency code for the company.

13.General Indicators
Special G/L transactions are special transactions in accounts receivable and accounts payable
that are displayed separately in the general ledger and the sub ledger. This may be necessary for
reporting or for internal reasons. For example, down payments must not be balanced with
receivables and payables for goods and services. Consequently, they are treated as special G/L
transactions in the General Ledger Accounts Payable, and Accounts Receivable application
components. Special G/L transactions are already available in the standard system. The Sap
system is configured to include the alternate G/L Reconciliation Account to which the
transaction should be posted. Posting keys and Special G/L Indicators are predefined in the

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system and do not need to be defined in advance. However, you can change the specifications or
define your own special G/L transactions.
The Sap system configuration settings for Japan Technologies. Will be carried out to
enable special GL indicators to identify and post special GL transactions to alternate GL
reconciliation accounts in order for these transactions to be reported separately on the balance
sheet. The system will be configured to enable functionalities that provide reconfigured
programs and screens that use the Special G/L Transaction Functionality to meet these
requirements.

These special General Ledger Transactions can be grouped into 3 basic categories.
Down Payment Related: for requests, receipt and application of down payments in the
A/R or A/P modules.
Other: Other miscellaneous types of business transactions that require Special G/L
Transactions Functionality.
T Codes:
Create special GL indicator FBKP
Down payment received from customers OBXR
Other GL transactions OBXY
Down payment to vendors OBYR
Other special GL transactions OBXT
14. Screen variant for document entry

It can be used to hide fields, menu functions, screens, to supply individual fields with
default values or to change the ready for input status of one or more fields. This document
describes the step by step process to create a transaction variant for standard SAP transaction.
The screen variant is specified for each company code, addresses special screens for documents
for several specific functions in SAP. The screen variant defined in Sap configuration is
dependent on the specific requirement of a company code.

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Specification
The screen variant for document entry will be defined for japan technologies based on the
specific requirement of an organization. It will be assigned to transactions and end users
functioning to restrict complete document entry area to the entry fields required.

T Code SHDO

15.Chart of Accounts
A chart of accounts (COA) is a financial organizational tool that provides a complete
listing of all general ledger in accounting system. An account is a unique record for each type of
asset, liability, equity, revenue and expense. It defines the language, length of GL accounts, and
enhances integration with the controlling sub module.
Specification
Japan technologies will use the operating chart of accounts in creating and maintaining its
General ledger accounts.

T Code OB13
Chart of accounts Description

(4 Char Code)
JT01 Japan Technologies

The chart of account JT01 will be assigned to company code JT01

16. Account group

The account group is a summary of characteristics that controls the creation of master
records. General ledger accounts will be maintained under various accounts heading like Capital,

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Liabilities, Income, Expenditure, Creditors, and Debtors Ledgers. Same list of general ledger
accounts will be used for the two company codes.

The following account groups will be used in posting the daily transactions of JAPAN
TECHNOLOGIES to the relevant books of accounts:

Assets: Fixed assets, investments, current assets, loans and advances.

Liabilities: Share capital, Reserves & surplus, secured loans, unsecured loans, current
liabilities& provisions.
Incomes: Sales revenue, discount received, sale of fixed asset, and other income.
Expenditures: purchase of raw materials, plant maintenance, wages & salaries, sales and
distribution expenses, audit fees, bank charges etc.
The following table contains the list of account groups and number ranges for manufacturing
company and company code

ACCOUNT GROUP NUMBER RANGE NUMBER RANGE (TO)

NAME (FROM)
ACCUMULATED 100000 200000
DEPRECIATION
ADMINISTRATION 200001 300000
EXPENSES
CURRENT ASSET 300001 400000
CURRENT LIABILITIES 400001 500000
DEPRECIATION 500001 600000
DUTIES & TAXES 600001 700000
FIXED ASSETS 700001 800000
GENERAL LEDGER 800001 900000
GENERAL
INCOME 900001 1000000
INTEGRATION 1000001 1100000
INTEREST 1100001 1200000
MANUFACTURING COST 1200001 1300000
MISCELLANEOUS 1300001 1400000
EXPENSES

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PERSONAL EXPENSES 1400001 1500000

PREPAID EXPENSES 1500001 1600000
RESERVES AND 1600001 1700000
SURPLUS
SECURED LOAN 1700001 1800000
SHARECAPITAL 1800001 1900000
SUSPENSE ACCOUNT 1900001 2000000
UNSECURED LOAN 2000001 2100000

Specifications/Improvements
The following specifications will be defined for JAPAN TECHNOLOGIES during the
configuration:
List of General ledger accounts, account groups and document posting.
Account groups and number ranges to be created based on the nature of the account
General ledger account numbers will be assigned externally
Field status groups will be created for controlling transactions processing
Reconciliation accounts will be identified
Open item accounts will be identified
Accounts where line item display is required will be identified
Cost elements for profit & loss accounts will be created in controlling module
General ledger accounts will be recognized by description and number ranges

17. Retained earnings

Retained earnings account contains the residual of all undistributed earnings after taxes
and dividend payout. Balances in the profit & loss account are transferred to the retained
earnings account as part of the periodic end closing activities.

Specifications
One retained earnings account will be created with General ledger account 1700000 and profit &
loss account type X.

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18. General ledger master records

The General Ledger master records for JAPAN TECHNOLOGIES Company and company
code will consist of two segments:
Charts of accounts segment
Company code segment
The General Ledger master record will be maintained for each General Ledger account.
Each General ledger master record will be identified by a number and text.
Process Flow T CODE: FS00, OBY7, OBY2

General Explanation/Improvements
The implementation of the SAP Application package for Spin Draft Company will enable the
organization to streamline its business operations with full integration between the functional
areas.
Inventory, Consumption, Expenses (PO Based) and Revenue related transactions will
flow to General Ledger from Logistics PP, MM and SD.
Entries for transactions in Assets will be posted into the GL account using specified
documents and relevant GL accounts from the FI module.
Reconciliation between the sub ledgers and the GL will not be required since the system
will provide a Simultaneous updates of sub-ledger like AR, AP and AM and Main
Ledger.
Other Expenses related entries will be accounted for through Cash / bank transactions or
through appropriate period end provisions.
All other entries will be passed through manual GL account posting for japan
technologies and its company codes.

Explanations of Functions and Events

For Japan technologies and it`s company codes, the following transactions will have direct
posting to GL.

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19. Automatic posting

Which is said to be AAD (AUTOMATIC ACCOUNT DETERMINATION)
BSX INVENTORIES
WRX GOODS RECEIPT CLEARING
GBB DIFFERENCE IN INVENTORIES
UMB TO POST REVENUE/INCOME AFTER REVALUATION
FRE FREIGHT CHARGES
PRD COST PRICE DIFFERENCE

20. Key integration areas

PP module for booking of consumption,
MM module for pricing of inventory
SD module for transfer of materials
HR Module for Payroll Transfer

21. Reporting considerations

Listing of all accounts and balance.
List of all manual entries.

22. List of transaction codes

The following list of documents and transaction codes will be frequently used by end users in
posting business transactions to the General Ledger of JAPAN TECHNOLOGIES and its
company codes.
FB50 - Enter G/L Account Document
FV50 - Edit or Park G/L Document
F-02 - General Posting in General Ledger

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FKMT - Account Assignment Model

FBD1 - Recurring Document
F.14 Execute Recurring Document
F.15 Lists Recurring Document
F-01 - Sample Document
F-65 - General Document Parking
FB02 Change Document
FB09 - Change Line Items of Document
FB03 Display Document
FB04 - Display Changes in Document
FB08 - Individual Reversal of Documents
FBV0 - Post/Delete Parked Document
FBV2 Change Parked Document
FBV5 - Display Changes made in the document
FBV6 Refuse (Reject parked document)
FS00 Centrally create Master
FSP0 Create data In Chart of Accounts
FSS0 Create data in Company Code
OB_GLACC11 - Chart of Accounts Data (collective processing)
OB_GLACC12 - Company Code Data (collective processing)
OB_GLACC13 Changing the Descriptions collectively in Master
FS04 Display changes centrally

23. Closing operations:

Closing operations is required to address true and fair reporting under statute. It should
be able to give a detailed transaction listing of activities that needs to be done on periodic basis
to ensure that all the data are captured to enable online availability of Balance Sheet, P&L and
any other reporting requirements.

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24. Process Flow

Period end activities may be either daily, monthly, quarterly or yearly. Various
locations (Plants / HO / District Offices, segment areas etc.) will be doing the period end
activities at their respective location pertaining to their area of operations to ensure that all the
data are captured.

25. Day-end closing

Includes all activities required at the end of the day to check that business transactions
posted have been correctly processed. No additional postings are required for day-end closing.

Following valuations can be used for day-end closing:

Correspondence with customers / vendors
Document journal

26. Month-end /Quarterly closing

Month-end closing comprises all activities involved in closing a posting period.
Following activities will be carried out as a part of month-end closing for JAPAN
TECHNOLOGIES and company code:
Open and close posting periods
Create external reports viz. Financial Statements etc.
For audit trail following reports needs to be generated at every period end.
Compact journal Document wise analysis of all accounting data
Account balances
Open item list

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27. Yearly closing

Year-end closing is split into two phases:
At the beginning of the new fiscal year, open the new posting periods and carry forward
the balances from the previous year.
Prepare and create the financial statements, document the business transactions using the
balance audit trail for previous years.
As with month-end closing, SAP can create all the external reports required, document the
posting data, and carry out the internal evaluations.

28. Explanations of Functions and Events

Sl. No. Closing Activities Periodicity Reference

1. Regrouping of Customer Balances : Quarterly /
The credit balances in customer accounts at the Annual
year-end will be transferred to Current
Liabilities.

2. Regrouping of Vendor Balances : Quarterly /

Similarly, all debit balances in vendor accounts Annually
will be transferred to Current Assets.

3. Transfer of Receivables more than 180 Days :

This is a year-end activity. New GL account will Yearly
be opened for this. Transfer will take place from
customer receivable to this account without
affecting the customer sub-ledger based on the
logic defined in the system.

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Sl. No. Closing Activities Periodicity Reference

4. Foreign Currency Re-valuation :
Based on guidelines prescribed in AS-11 Monthly/
Reversal will be made for all monthly Quarterly/
transactions except year closing. Annually

5. Carry Forward of year end balances :

Using this process the profit and loss accounts Annually
are carried forward to one or more retained
earnings accounts. The balances on the balance
sheet accounts are simply carried forward into
the new fiscal year.

Impact of Transfers
If the transfer is done on 31st march, (last day of
the previous financial year) then every time any
updating takes place in previous year then carry
forward need to be executed again.

If the transfer is done on 1st April, (in any day of

new financial year) any postings made in the
previous fiscal year automatically adjust the
relevant carry-forward balance.

In the new financial year till the carry forward is

done, no open items pertaining to previous
financial year will be available either for
Payment or Receipt.

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Sl. No. Closing Activities Periodicity Reference

Hence, as an ideal situation, the transfer should
be on the 1st day of the new financial year.

6. Settlement of Asset Under Construction- Monthly/

inclusive of certain expenses viz. Interest, salary, Annually
travelling etc.
This activity will be performed as at when the
capitalization is done, but during period ends,
special checks need to be established for all open
item for which commissioning has taken place
but capitalization is due.

7. Stock Valuation :
Since all the transactions will be automatic and Monthly /
no manual entries can be posted, a separate Quarterly /
pricing procedure will be maintained to change Annually
the prices manually, in case of material
difference in SAP calculation vs. outside SAP
calculation
Material Price change process needs to be
selected for effecting the change. The same
should be done at the earliest to effect change in
MAP.

8. Depreciation Run :
Unique feature of SAP is for any change in rates Monthly /
from retrospective effect; system will Quarterly /
automatically capture the revised depreciation Annually

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Sl. No. Closing Activities Periodicity Reference

accordingly and account for the difference.

9. Close FI period for stock accounts, vendor

accounts and sales accounts :
In SAP at any given point of time multiple Monthly
periods can be opened in FI. However in MM
maximum two periods can be open at any
particular point of time.

Unique feature of closing is when FI period is

close, no transaction can take place either in FI
or in MM. The reverse however is not true i.e. if
MM closes their period, they cannot block FI
transaction for previous period.

10. Verification and posting of all pending

/parked/held documents : Daily /
Monthly
Based on the periodicity time all the parked /
pending / and blocked documents should be
verified and posted before processing month end
reports.

Parked documents
Vouchers are prepared and parked for
authorizations. Once authorized the same will be
posted. Parked documents do not have any
accounting effect unless posted.

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Sl. No. Closing Activities Periodicity Reference

Important
The document number will always be continuous
and common. Whenever a document is parked an
automatic continuous serial number is generated
and at the time of posting the same document
number will be reflected.
Thus, it may happen that if documents are parked
for a longer period of time, then the posting date
of subsequent document numbers will be earlier
than the parked one.

11. Complete Bank Posting :

Wherever CMS facility is there, daily upload of Daily /

bank statement will be done for automatic Weekly /
reconciliation of remittance accounts. Monthly

For Non CMS Banks, reconciliation will be done

on Weekly / monthly basis.

12. Financial Statement Version Report :

Monthly/
At the period end, it should be checked that all Quarterly/
the GL accounts are assigned in the desired FSV Annually
format.

However, while framing FSV it is suggested to

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Sl. No. Closing Activities Periodicity Reference

assign ranges so that any new GL account
creation will automatically update FSV.

13. Payroll Upload :

Till the time HR Module is implemented, the Monthly
payroll will be generated by an External Payroll
Package. External Payroll package will generate
and forward data in SAP in pre-defined Excel
Format. After implementation of HR Module,
payroll data will be automatically transferred/
posted to Financial Accounting through Payroll
Run.

14. TDS Chelan Updating / Certificate Printing / Monthly/

Annual Return Yearly
15. Other Statutory Reporting Monthly /
Quarterly /
Annually

16. Post Recurring Entries

In the beginning of the particular Agreement Monthly /
fixed amount can be mentioned and system will Quarterly
post the entry automatically for subsequent
postings.

17. Physical inventory : Half Yearly

On periodic intervals, physical verification of / Annually
inventory will be done and results of such

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Sl. No. Closing Activities Periodicity Reference

verification will be posted to SAP by giving
effect to Inventory and Gain/ Loss on Physical
inventory verification.

18. Audit Trail last document :

A list to be generated giving details of last Annually
documents number of each document type.

19. Post Provision Entries : Monthly /

Details of items at a broader level have been Quarterly /
highlighted separately in provisions. Annually

20. Year-end closing/technical year change :

This is purely a technical transaction and is Annually
expected to be performed for Asset reporting in
the new fiscal year without closing previous
financial year.

21. JV for Appropriation Entries :

All these entries will be handled through manual Annually
JVs and will be period end activities. These
values will be calculated externally.

22. Capital Commitments :

To facilitate in preparation of Notes to accounts. Annually
This will be done through report development
where all the details will be tracked from internal
order raised for capital expenditure giving details

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Sl. No. Closing Activities Periodicity Reference

of Total budget, Actual expenses, Committed
expenditure and pending PO etc.

23. Analysis of clearing accounts :

This activity needs to be performed periodically Daily
to ensure zero balance wherever possible.

E.g. Whenever an incoming payment is received

from a customer, account clearing needs to be
executed to adjust the same against the invoice
so that both debit and credit are removed. This
will also facilitate in automatic computing
Prompt Payment Discount (PDD)

24. Release of Billing Documents to Accounts

Subsequent to Delivery, Billing Document need Daily

to be created in Sales and Distribution and
releasing of such Billing document will result in
accounting document. One has to check on
frequent intervals, verify pending Billing
documents for on line accounting basically to
analyses problems in billing document on
account of Master Data Problems.

25. Generation of Credit Notes :

Through Scheme Development in SD. These Monthly /

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Sl. No. Closing Activities Periodicity Reference

need to be processed as per the terms of the Quarterly /
scheme to automatically update to sub-ledger Annually
accounts of customer.

26. Profit Center Regrouping of Receivables and

Payables :
These need to be executed on daily basis to Daily
update all the transactions of receivables and
payables records profit center wise.

29. Special Organizational Considerations the following

Carry forward of year-end balances should be done on 1st of January every year.
Special care need to be exercised while closing FI periods as it may effect Vendor
accounts, Sales accounts and Stock accounts.
Documents parking for longer period should not be encouraged (Except Accounts
Receivable for incoming payments)
All open items should be cleared at periodic intervals to give an accurate picture of
Customer and Vendor accounts.
All the billed documents should be released on daily basis for accounting in FI.
Profit center regrouping of payables and receivables should be done on daily basis to
update the records.

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