Branch Accounting

[Former Member]

Dear all,

I am in a client place. Here they want branch accounting. Please tell me how

branch accounting can be done in SAP. Here, they have 18 branches, and 4

units. They want Balance sheet and profit and loss account for all the 18

branches and 4 units. They also want to have a consolidated balance sheet.

Here, on behalf of all the branches, only the head office makes the

payment. All the branches are allowed to maintain only minimum balance of

10000 rupees. Can we prepare a trial balance, balance sheet and profit and

balance for all the branches and units? Will it tally?

I request you to kindly suggest me on how to deal with the above requirement.

Thanks & Regards,

A.Anandarajan.

[Former Member]

Hello Anandarajan

Branch Accounting concept is well conceived & realised in SAP system, via Business Area (BA).

In short it meets all of your requirements u2013 such as

1) G/L Balances, (The word trail balance is already outdated with introduction of ERP),

2) Balance Sheet & P&L for all or any of the combinations of branches (Here you said unit what does it mean, what do they do? Do they manufacture?

3) Tally: Of course, yes

Each branch will be one BA, (About Unit u2013 the purpose is not clear, hence I can not suggest, but I need more information).

Good luck !

Ambadas

[Former Member]

Hello Kodam AV,

Thanks a lot for your prompt reply. Here I mean to say unit as "plant". As per my idea the transaction can be done in the following way:

Expense of Branch a/c dr (business area of branch will be filled)

To bank of HO a/c cr (business area of HO)

When this transaction is passed, the gl balance of branch a/c and the bank a/c of HO will not get tallied.

How it can be tallied?

Any configuration is required?

What is the purpose of f.5e, f.fd?

Please suggest.

Thanks & Regards,

A.Anandarajan.

[Former Member]

Hello Anandarajan,

Accounting is not just debit to some account & credit to another account.

Plants will have to be treated as business area. (Be careful in defining relations between plant and other business areas) Even HO will be one business area.

Coming back to your example u2013 journal entry, it seems that you do not understand branch accounting. If it is so, get the help of experienced accountant who can define proper business processes if you decide to use u201CBusiness Areau201D.

As part of period end closing some adjustments need to be made through F.5D, F.5E, F.5F and etc

It is not just what but lot of configuration is required to realise branch accounting via BA.

I would like to reiterate that Business Area (BA) is not just another field to be added to a line item in the document, rather it is second (first one being company code) most powerful organizational element in the SAP system.

Last but not least, working in an environment of business area is really interesting & wonder full experience.

Ambadas

[Former Member]

Hi,

Branch accounting concept is not there in SAP. You have to create Profit Centers & Cost Centers for all branches and units and maintain seperate cash journal for each location under one chart of accounts.

Profit center wise B/S & P&L available in standard SAP.

Regards

Sarma BH