SAP FICO ( EPISODE - 24 )

Nilkamal: - Ok, now someone tell me the answer of a very simple question? What is the meaning of tolerances?

Arindam: - a maximum limit, beyond which the standard value should not vary.

Nilkamal: - to some extent, you are right, but you should use the exact terms in your definition. In a simple sentence, the word Tolerance means, accepted deviation from specified values. Here, we have to deal with two types of tolerances. The first one is to ‘Define Tolerance Groups for G/L accounts’ and the second one is to ‘Define Tolerance Groups for employees’. The path for the defining 1^st tolerance group is:- SPRO -> SAP Reference IMG -> Financial Accounting -> G/L Accounting -> Business Transactions -> Open Item Clearing -> Clearing Differences -> Define Tolerance Groups for G/L Accounts. The transaction code is OBAO. The transaction code for defining the 2^nd tolerance group is OBA4. Select the ‘New Entries’ button and then select the company code. What are you seeing in your screen?

Suhash: - Sir, a form appears with three rows: - ‘Amount per document’, ‘Amount per item account’ and ‘Cash discount per item’.

Nilkamal: - Yeah, ok. Enter the value 999,999.00 in the first row and second row. Enter cash discount per item as 5% as of now. Now, press the ‘Save’ button. The settings for tolerance groups are completed.

Ravi: - Why have you given 5% for cash discount? It can be 10% or 15% also.

Nilkamal: - No, no, it is not a vague assumption at all. This is basically the open item payments and open item receipts. In a company, for any sales people, maximum discount limit is only 5%. This entire setting can be seen in a Table. The table name is T043T.

Sarita: - Sir, our brains are not working at all. We are learning about ‘settings’ in these classes. It was so boring.

Nilkamal: - Ha ha ha…you are learning SAP for the first time, so, it will be not so easy to grasp it at the first go. Anyway, now, let me start with the General Ledger module. We will take the other settings at a later stage. Hey, Chaitanya, can you tell me the activities involved, when a sales take place in a company to the top management getting the report about that sales in the form of a MIS report?

Chaitanya: - Hmm…When a sales take place, it is recorded as a business transaction.

Nilkamal: - Ok, but how are you going to record a business transaction?

Manoj: - Very simple, Sir. We will use a Journal Entry.

Nilkamal: - Oh! Come on. In a Journal entry, there is no scope of applying the golden rules of accounting.

Suhash: - The Journal Entries flow to General Ledger account, Sir.

Nilkamal: - Are the figures of both sides always in balanced form?

Dulal: - We try balance the figures in the Trial Balance. From this Trial Balance, we will get the P&L accounts and Balance Sheet at the next stage. The combination of the Balance Sheet and P&L Account will help us to generate the desired MIS report.

Nilkamal: - So, the water started its course from Gangotri, flowed through the land in the form of Ganges River and ultimately reached the Bay of Bengal. Therefore, the activities are:- Sales of an item -> Business Transaction -> Journal Entry -> General Ledger -> Trial Balance -> P& L Account + Balance Sheet -> MIS Report (Financial report only). Today, we will end here. Next day, we will learn to open a G/L account in SAP FI module.