Lesson 4 of 6
Finance master data
7 min
Every logistics transaction that has a value ends up as a journal entry. The accounts and objects that journal entry posts to come from finance master data. Business users rarely maintain it, but they constantly rely on it, and testers need to recognize it on a journal entry.
G/L accounts
A G/L account is a line in the chart of accounts: inventory, revenue, cost of goods sold, freight expense. Its master record has two parts. The chart of accounts segment holds data shared by every company code using that chart, such as the account name and the account type. The company code segment holds data specific to company code 1710, such as the account currency, whether open items are managed and whether only automatic postings are allowed.
In SAP GUI you maintain G/L accounts centrally with transaction FS00. In Fiori, the Manage G/L Account Master Data app does the same job.
Cost elements are now G/L accounts
In ECC, controlling had its own master record, the cost element, created separately with transactions like KA01 and KA06. In SAP S/4HANA those transactions are gone. Cost elements are G/L accounts. When you create a profit and loss account in FS00, you set its G/L account type, and if the account is relevant to controlling you also set a cost element category.
| G/L account type | Used for | Contoso example |
|---|---|---|
| Balance sheet account | Assets, liabilities, equity | Finished goods inventory, GR/IR clearing |
| Nonoperating expense or income | P&L accounts that do not go to controlling | Certain interest or tax-related accounts |
| Primary costs or revenue | P&L accounts that do flow to controlling (a primary cost element) | Revenue from alternator sales; cost of goods sold |
| Secondary costs | Accounts used only inside controlling (allocations, settlements) | Assessment of IT costs to production cost centers |
G/L account types in SAP S/4HANA.
Why should a business user care? Because "cost element missing" errors, which used to be a separate controlling problem, are now G/L account master data problems. And because a single account now carries both its financial and its controlling behavior, one wrong setting affects both.
Cost centers and profit centers
A cost center is a place in the organization where costs are incurred and someone is responsible for them: Contoso's Detroit maintenance team, the Chicago warehouse, the IT department. Expense postings such as office supplies or overtime normally need a cost center so management can see who spent what.
A profit center is a slice of the business for which you want to see results: a product line, a region, a plant. Contoso might use one profit center for alternators and one for starter motors. Most postings in SAP S/4HANA carry a profit center, taken from the product, the cost center or a substitution rule. Profit centers are also usually assigned to a segment, which supports segment reporting.
- Product CMC-ALT-100Plant view holds profit center for alternators
- Cost centerEach cost center is assigned one profit center
- Profit centerAssigned to a segment
- Journal entry lineCarries account, cost center or product, profit center and segment together
| Object | SAP GUI | Fiori app |
|---|---|---|
| G/L account (including former cost elements) | FS00 | Manage G/L Account Master Data |
| Cost center | KS01 / KS02 / KS03 | Manage Cost Centers |
| Profit center | KE51 / KE52 / KE53 | Manage Profit Centers |
Where finance master data is maintained.
What would you do?
A Contoso tester posts a freight invoice and the journal entry shows the right account and amount, but no profit center. The process owner says every P&L line must have a profit center for plant reporting. What should the tester do?
- G/L accounts have a chart of accounts segment and a company code segment; maintain them with FS00 or Manage G/L Account Master Data.
- In SAP S/4HANA, cost elements are G/L accounts with a G/L account type and a cost element category.
- Cost centers collect costs by responsibility; profit centers measure results by business slice.
- Profit center and segment travel onto journal entry lines from master data.
- Cost centers and profit centers are time-dependent, so check validity dates.
Check your understanding · not graded
Lesson check
1. How are primary cost elements maintained in SAP S/4HANA?
2. Which object would Contoso use to see results for its alternator product line?
3. Which G/L account type is used only for allocations inside controlling?
4. A back-dated posting fails because the cost center is "not valid". What is the likely cause?