GL in S4HANA – Chart of Accounts in SAP with Examples & Configuration | how to create GL in SAP ?

General Ledger (GL) is the heart of financial accounting in SAP S4HANA. It holds all financial transactions and integrates directly with modules like MM, SD, and Asset Accounting. In this post, you’ll learn about the types of Chart of Accounts, GL master data, posting flows, and key configuration settings required in SAP Finance.

How to Create a General Ledger Chart of Accounts in SAP S/4HANA

SAP S/4HANA is a powerful enterprise resource planning (ERP) system that helps businesses manage their financial accounting processes efficiently. One of the core components of SAP S/4HANA's Financial Accounting (FI) module is the General Ledger (GL) and its Chart of Accounts (COA). The Chart of Accounts is a structured list of all General Ledger accounts used by a company to record financial transactions. This article provides a step-by-step guide to creating a Chart of Accounts and General Ledger accounts in SAP S/4HANA in simple language, tailored for beginners and intermediate users. By the end, you'll understand the process, key concepts, and best practices.

Understanding Key Concepts

Before diving into the steps, let’s clarify some essential terms in SAP S/4HANA:

• Chart of Accounts (COA): A COA is a complete list of all General Ledger accounts used by a company to record financial transactions. It organizes accounts into categories like assets, liabilities, revenue, and expenses.
• General Ledger (GL): The GL is a subset of accounts from the COA that a specific company code uses to post financial transactions. It’s the backbone of financial reporting.
• Company Code: A company code represents a legal entity in SAP, and all financial transactions are recorded at this level.
• GL Account: A GL account is an individual account within the COA, such as "Cash Account" or "Travel Expense," used to record specific types of transactions.
• Universal Journal: In SAP S/4HANA, the Universal Journal (table ACDOCA) combines financial accounting (FI) and controlling (CO) data into a single source, simplifying reporting.

Note: In SAP S/4HANA, the integration of General Ledger and Cost Elements is a significant change from the older SAP ECC system. Cost elements are now created as GL accounts, and transactions like KA01 are obsolete, redirecting to FS00.

Types of Chart of Accounts in SAP S/4HANA

SAP S/4HANA supports different types of COAs to meet various reporting needs:

Type of COA	Description
Operational COA	Mandatory for each company code. Used for daily financial transactions and reporting.
Group COA	Optional. Used for consolidated reporting across multiple company codes in a corporate group.
Country COA	Optional. Used to meet country-specific accounting standards when the operational COA is insufficient.

Prerequisites for Creating a Chart of Accounts

Before creating a COA or GL accounts, ensure the following configurations are in place:

1. Define Company and Company Code: Set up the company and company code in SAP using transaction code SPRO.
2. Configure Fiscal Year Variant: Define the fiscal year and posting periods for financial reporting.
3. Assign Controlling Area: Link the company code to a controlling area for management accounting.
4. Access SAP System: Ensure you have the necessary authorization to access configuration transactions like OB13 and FS00.

Step-by-Step Guide to Creating a Chart of Accounts

Creating a Chart of Accounts in SAP S/4HANA involves defining the COA and assigning it to a company code. Follow these steps using transaction code OB13:

Step 1: Access the Chart of Accounts Configuration

1. Log in to the SAP S/4HANA system.
2. Enter transaction code OB13 in the command field or navigate via the SAP IMG path:
   SPRO > SAP Customizing Implementation Guide > Financial Accounting > General Ledger Accounting > Master Data > G/L Accounts > Preparations > Edit Chart of Accounts List.
3. Press Enter to access the "List of All Chart of Accounts" screen.

Step 2: Create a New Chart of Accounts

1. Click the New Entries button on the overview screen.
2. Enter the following details:
   • Chart of Accounts: Enter a unique four-character identifier (e.g., "ZCOA").
   • Description: Provide a descriptive name (e.g., "Operational COA for XYZ Corp").
   • Maintenance Language: Select the language for account descriptions (e.g., English).
   • Length of G/L Account Number: Specify the length (1–10 digits, typically 6–8).
   • Group Chart of Accounts (Optional): If using a group COA for consolidation, enter its key.
   • Blocked: Leave unchecked unless you want to block the COA temporarily.
3. Click Save to create the COA. A customizing request popup may appear; select or create a request to save the changes.

Note: The COA identifier (e.g., "ZCOA") must be unique and is used across all company codes assigned to this COA.

Step 3: Assign the Chart of Accounts to a Company Code

1. Go to transaction code OB62 or navigate via:
   SPRO > SAP Customizing Implementation Guide > Financial Accounting > General Ledger Accounting > Master Data > G/L Accounts > Preparations > Assign Company Codes to Chart of Accounts.
2. Select the company code (e.g., "1000") and assign the COA key (e.g., "ZCOA").
3. Save the changes with a customizing request.

Creating General Ledger Accounts

Once the COA is defined and assigned, you can create GL accounts. GL accounts are created at two levels: the Chart of Accounts level (valid for all company codes) and the Company Code level (specific to each company code). Use transaction code FS00 for centralized creation.

Step 1: Access the GL Account Creation Screen

1. Enter transaction code FS00 in the command field.
2. Click Create or select an existing account to copy (for faster setup).

Step 2: Enter Chart of Accounts Data

Fill in the details in the Chart of Accounts segment:

Field	Description	Example
G/L Account Number	A unique number within the COA (e.g., 100100).	100100 (Cash Account)
G/L Account Type	Choose from Balance Sheet, Primary Costs or Revenue, Secondary Costs, or Non-operating Expense/Income.	Balance Sheet
Account Group	Groups similar accounts (e.g., Assets, Liabilities).	Asset Accounts
Description	A short and long description of the account.	Cash Account

Step 3: Enter Company Code Data

Extend the GL account to the specific company code:

• Company Code: Enter the company code (e.g., "1000").
• Account Currency: Set the currency (defaults to company code currency).
• Reconciliation Account Type: Select if it’s a reconciliation account (e.g., for vendors, customers, or assets).
• Open Item Management: Enable for accounts requiring clearing (e.g., bank accounts).
• Line Item Display: Automatically enabled in S/4HANA for all accounts.
• Field Status Group: Controls which fields are mandatory or optional during posting.

Note: In S/4HANA, the "Line Item Display" indicator is no longer needed as all postings are stored on a line-item basis in the Universal Journal (ACDOCA).

Step 4: Save the GL Account

Click Save to create the GL account. Repeat the process for all required accounts (e.g., Cash, Sales, Expenses).

Best Practices for Creating GL Accounts

• Plan Account Structure: Use a logical numbering system (e.g., assets start with 1xxxxx, liabilities with 2xxxxx).
• Use Account Groups: Group similar accounts for better management and reporting.
• Minimize Manual Postings: Use reconciliation accounts for subledgers (e.g., Accounts Payable, Accounts Receivable).
• Test Configurations: Test GL account postings in a sandbox environment before going live.
• Leverage Fiori Apps: Use the "Manage G/L Account Master Data" Fiori app for a user-friendly interface.

Changes in SAP S/4HANA Compared to SAP ECC

SAP S/4HANA introduces several changes to GL accounting:

1. Merged GL and Cost Elements: Cost elements are now created as GL accounts, eliminating transactions like KA01.
2. Universal Journal (ACDOCA): Combines FI and CO data, removing the need for aggregate tables like FAGLFLEXA.
3. Real-Time Reporting: In-memory HANA database enables faster, line-item-based reporting.
4. Extension Ledgers: Support parallel accounting for internal management reporting.

Common Transaction Codes

Transaction Code	Purpose
OB13	Define Chart of Accounts
OB62	Assign COA to Company Code
FS00	Create/Edit GL Account
FSP0	Edit COA Data for GL Account
FSS0	Edit Company Code Data for GL Account

Troubleshooting Common Issues

• Error: "G/L account does not exist in company code": Ensure the GL account is extended to the company code using FSS0.
• Error: "Account blocked for posting": Check if the COA or GL account is blocked in OB13 or FS00.
• Incorrect Reporting: Verify the GL account type and account group assignments.

Conclusion

Creating a Chart of Accounts and General Ledger accounts in SAP S/4HANA is a foundational step for effective financial accounting. By following the steps outlined—defining the COA, assigning it to a company code, and creating GL accounts—you can set up a robust financial system. Understanding the integration of FI and CO, leveraging the Universal Journal, and adhering to best practices ensure accurate and efficient financial reporting. For further exploration, consider using SAP Fiori apps for streamlined GL management or consult the SAP Help Portal for detailed configurations.

References: SAP Community, SAP Online Tutorials, SAP Help Portal

[](https://community.sap.com/t5/technology-blog-posts-by-members/managing-general-ledger-accounts-in-sap-s-4-hana/ba-p/13348270)[](https://www.saponlinetutorials.com/general-ledger-accounting-in-sap-hana/)[](https://www.saponlinetutorials.com/define-chart-of-accounts-in-sap-hana/)

📘 Also read: SAP FI-MM Integration in S4HANA – Real-time Posting Guide