Governance, Risk, and Compliance, almost always referred to as GRC, is the latest addition to the parade of three-letter acronyms that are used to describe the processes and software that run the business world. The goal of GRC is to help a company efficiently put policies and controls in place to address all its compliance obligations while at the same time gathering information that helps proactively run the business. Done properly, GRC creates a central nervous system that helps you manage your business more effectively. You also derive a competitive advantage from understanding risks and choosing opportunities wisely. In other words, GRC helps you make sure that you do things the right way: It keeps track of what you are doing and raises an alert when things start to go off track or when risks appear.

GRC is not just about complying with requirements for one quarter or one year. Rather, those who are serious about GRC, meaning just about everyone these days, seek to create a system and culture so that compliance with external regulations, enforcement of internal policies, and risk management are automated as much as possible and can evolve in an orderly fashion as business and compliance needs change. That’s why some would say that the C in GRC should stand for controls: controls that help make the process of compliance orderly and make process monitoring and improvement easier.

Some parts of the domain of GRC — measures to prevent financial fraud, for example — are as old as business itself. Making sure that money isn’t leaking out of a company and ensuring that financial reports are accurate have always been key goals in most businesses—only recently have they attained new urgency.

Other parts of GRC related to trade compliance, risk management, and environmental, health, and safety regulations are somewhat newer activities that have become more important because of globalization, security concerns, and increased need to find and mitigate risks. For example, to ship goods overseas, you must know that the recipient is not on a list of prohibited companies. These lists change daily. Growing concern about global warming and other pressures to reduce environmental impact and use energy efficiently have increased regulations that demand reporting, tracking, and other forms of sociopolitical compliance. Companies are also interested in sustainability reporting, measuring areas such as diversity in the workplace, the number of employees who volunteer, and environmental efforts, so that companies can provide data about corporate social responsibility. Financial markets punish companies that report unexpected bad news due to poor risk management.

One simple goal of GRC is to keep the CFO out of jail, but that description is too narrow to capture all of the activity that falls under the umbrella of GRC. (It’s also an exaggeration; the truth is that simple noncompliance is more likely to result in big fines rather than a long trip to the big house. But, that said, most executives prefer to leave no stone unturned rather than risk breaking rocks in the hot sun.) Most companies now face demands from regulators, shareholders, and other stakeholders. Financial regulations like Sarbanes-Oxley (SOX) in the United States and similar laws around the world mean that senior executives could face criminal penalties if financial reports have material errors. All of this means a lot more testing and checking, which is costly without some form of automation.

The question every company must answer is the following: Will we do the bare minimum to make sure that we stay out of trouble, or can GRC become an opportunity for us to find new ways of running our business better?

Assign Posting Period Variant to Company Code

This SAP FICO article will guide you all about how to Assign Posting Period Variant to Company Code. In this activity you assign the same Posting Variant Key to the company codes .

Transaction code for Assign Posting period Variant to Company Code :- OBBP

IMG Menu Path :- SPRO > Implementation Guide for R/3 Customizing (IMG) –> Finance Accounting –> Finance Accounting Global Settings –> Documents –> Posting Period –> Assign Variants to Company code

Steps to Assign Posting Period Variant to Company Code

Step 1 :- Enter transaction code SPRO in the SAP Command field and press enter

Step 2 :- Select SAP Reference IMG

Step 3 :- In next screen follow the path

• Menu Path :- SAP Customizing Implementation Guide -> Financial Accounting -> Financial Accounting Golbal Settings -> Document –> Posting Periods –> Assign Variants to Company code

Step 4 :- Click on Position button in the page

Step 5 :- After clicks on position enter the company code and press enter on key board

Step 6 :- In next screen update Posting Period variant Code AD06 in the Variant field

Step 7:- After inputting Posting period variant Click on Save icon to assign the variant to company code.

Now, we have successfully assigned Posting Period Variant “AD06″ to Company Code .

Define Variant for Open and Close Posting Periods

This SAP FICO article will guide you all about how to Define Variant for Open and Close Posting Periods

Purpose of Open and Close Posting periods Configuration:- The posting periods can be maintained as per account type and the year which is to be open & which is to closed. The Posting Period Variant is used to control which accounting period is to be open for posting and ensuring that closed periods are remain balanced and reconciled

Path for Define open and close posting periods:-  Implementation Guide for R/3 Customizing (IMG) –> Finance Accounting –> Finance Accounting Global Settings –> Documents –> Posting Period –> open and close posting periods

Transaction code open and close posting periods :- OB52

Steps to create Variant for Open and Close Posting Periods

Step 1 :- Type “SPRO” in the Command Field of the SAP Easy Access Menu Screen and press Enter

Step 2 :- Click SAP Reference IMG

Step 3 :- In next screen follow the menu path to Define Variant for open and close posting periods

• Menu Path :- SAP Customizing Implementation Guide -> Financial Accounting -> Financial Accounting Golbal Settings -> Documents –> Posting Period –> Open and Close Posting Periods

Step 4 :- Click on New entries to Define Variant for Open and Close Posting Periods

Step 5 :- In Next screen update the required data as described below

1.Variant:- Enter four-character alphanumeric Posting Period variant Code

2. A:- Select Account Type ( A )

+ = Valid for all Account Types (masking)

A = Assets

D = Customers (A/R)

K = Vendors (A/P)

M = Materials

S = General Ledger Accounts.

3.From Account:- Keep Blank

4.To Account:- Update Account

5. From Period 1:- Enter Starting Period

6.Year:- Enter Year

7.To Period:- Enter Ending Period

8.Year:- Enter Year

9.From Period 2:- Enter First Special Period

10.Year:- Enter Year

11.To Period:- Enter Special Period

12.Year:- Enter Year

13.Authorization group ( AuGr ):- You can assign authorization groups in which some periods can only be opened for particular users

14. Click on save icon to save the defined open and close posting periods

Now, we have configured Open and Close Posting Periods successfully in SAP.

Define Variants for Open Posting Periods

This article will guide you all about how to Define Variants for Open Posting Periods, which 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. we can assign posting period variants to one or more company codes.

Posting Periods are opened and closed for all company codes in SAP by the PPV.

Steps to Create Variants for Open Posting Periods in SAP

Step 1 :- In the command field of the SAP Easy Access Menu Screen input “SPRO” and press Enter key on the Keyboard.

Step 2 :- Click SAP Reference IMG Icon

Step 3 :- In next screen follow the menu path to create posting period variant

• IMG Menu Path :- SPRO > Implementation Guide for R/3 Customizing (IMG) –> Finance Accounting –> Finance Accounting Global Settings –> Documents –> Posting Periods –> Define variants for open posting periods

Step 4 :- The define posting period variants screen is displayed, Click on new entries to create SAP PPV

Step 5:- Enter four-character alphanumeric code in the Variant field, update variant name in the name field. Here we are going to create posting period Variant ADO6

Step 6 :- After updating posting period variant and name fields click on save icon to save the data.

Now, we have defined Open Posting Period Variant AD06.

Fiscal Year Variant in SAP

Definition Fiscal year :- Usually Fiscal year is a period of twelve months for which a company regularly creates financial statements and checks inventories. A fiscal year is divided in to number of posting periods and each posting period in a accounting period is defined by a start date and end date

Fiscal year in SAP can be defined as Year dependent or Year Independent

1. Year independent – Same number and dates for the periods every year


2. Year dependent – Periods can be different from year to year

Define Fiscal year Variant :- Fiscal year variant is used to define the fiscal year. The fiscal year variant contains the number of posting periods in the fiscal year and the number of special periods. A Fiscal year variant contains the 12 normal posting periods and 4 special periods. We can define maximum 16 posting periods for each year. Special periods are used for Year end activities

Steps to configure Fiscal Year Variant

Step 1 :- Enter Transaction Code “SPRO” in the SAP Command field and press enter

Step 2 :- In the next screen select SAP Reference Img

Step 3 :- In the next screen Display Img , follow the Menu path

• Menu Path:- SAP Reference IMG –> Financial Accounting –> Global Settings –> Fiscal Year –>Maintain Fiscal Year Variant

Step 4 :- In the next screen select New Entries to create Fiscal year

Step 5 :- New entries to Create fiscal year variant screen, update the following information.

1. FV – In the field Fiscal year variant FV enter the two digits unique code

2. Description – In the description field update the name of Fiscal year Variant

3. Year – Select the year-Dependent option if the Periods are different from year to year

4. Calendar yr – Select Calendar yr option if same number and dates for the periods of every year

5. Number of Posting periods – Update 12 in this field

6. No. of Special Periods – Update 4 in this field

After updating the required data and click on save icon

Step 6 :- Block Fiscal Year Variant AD and Double Click on Periods folder

Step 7 :- Select New Entries Button

Step 8 :- Maintain the Periods for the Fiscal Year

1. First Column – Month


2. Second Coumn – Day


3. Third Column – Period


4. Fourth column – Year Shift

After Maintain Fiscal Year Variant Periods, Click and Save icon.

Now, we have created Fiscal Year Variant.

Preconditions to assign Company Code to Credit Control Area in SAP

• You must have already created a company code using “Define Company Code” option


• You must have already created a credit control area using “Define Credit Control Area” option

Steps for Assign company code to credit control area

IMG Menu Path :- SPRO > Implementation Guide > Enterprise Structure > Assignment > Financial Accounting > Assign company code to credit Control Area

Step 1 :- Enter T-Code SPRO in the Command field and press enter

Step 2 :- Click on SAP Reference IMG ( short cut key F5 )

Step 3 :- Follow the menu path for Assigning Company Code to Credit Control Area

• Path :- SAP Customizing Implementation Guide ->Enterprise Structure->Assignment->Financial Accounting->Assign Company Code to Credit Control Area

Step 4 :- In next screen click on Position icon and update the company code and press enter

Step 5 :- In next screen, update the four-character alphanumeric credit control code in the CCAr field

Step 6 :- After updating credit control code click on save icon

Now, we have assigned a company code successfully to a credit control area.

Definition of Credit Control Area

Credit Control Area is an organizational unit that specifies and checks a credit limit for customers. It represents the area where customer credit is awarded and monitored. This organizational unit can either be a single or several company codes, if credit control is performed across several company codes. One credit control area contains credit control information for each customer

Steps to define Credit Control Area

Transaction Code to Define Credit Control Area – OB45

IMG Menu Path :- SPRO –> Implementation Guide –> Enterprise Structure –> Definition –> Financial Accounting –> Define Credit Control Area

Step 1 :- Enter T-Code “SPRO” in the Command Field and press enter

Step 2 :- Click SAP Reference IMG

Step 3 :- Follow the IMG Menu path

Step 4 :- In next screen click on new entries

Step 5 :- Update the required data

1. Credit Control area :- Enter four-character alphanumeric credit control area code

2. Currency :- Update currency of the credit control area

3. Credit limit :- Update credit limit amount for the customers

Step 6 :- Click on save icon to save the new credit control area

Now, we have created a Credit Control Area successfully using SAP.

Functional Area in SAP

Definition of Functional Area in SAP :- Functional Area is a organisational unit in accounting. It maps the functional structure especially the expenditures of an organization and describes how the funds are used.

Uses of Functional Area :-

TheFunctional area in SAP is use to create P&L A/C in Financial Accounting using cost of sales accounting and used to analyse the cost of sales accounting

Examples of Functional Area are :-

1. Administration


2. sales and distribution


3. Manufacture


4. Production


5. Research and development

Transaction code :- OKBD

SAP Menu Path :- SPRO > SAP Reference IMG > Financial Accounting > Financial Accounting Global Settings > Company Code > Cost of Sales Accounting > Activate Cost of Sales Accounting for Preparation

Steps to create Functional Area in SAP

Step 1 :- Enter T-Code “OKBD” in the commend filed

Step 2 :- Click “New Entries” button in the next screen

Step 3 :- Enter four-character alphanumeric Functional area code in the Functional Area column and update names of the Functional Areas in the name column.

Now, we have created two Functional Areas ADPR, ADSO using SAP.

Define Business Area in SAP

Definition of Business area :- Business Area is an organizational unit within financial accounting. It is a separate area of operations or responsibilities of organizational units of financial accounting that is used for internal and external reporting. Different divisions of each business with in a legal entity are created as Business areas for reporting of each operational areas. So Financial statements can be created for each business area and this financial statements can be used for internal reporting purpose.

Business areas are not assigned to any company codes.

Menu Path :- Enterprise Structure –> Definition –> Financial Accounting –> Define Business Area

Transaction Code for Creation of Business Area in SAP :- OX03

Steps for defining new Business Area in SAP

Step 1 :- Input transaction code SPRO in the commend field

Step 2 :- Select SAP Reference IMG ( Shortcut key F5 )

Step 3 :- After selecting SAP Reference IMG, follow the below structure to configure the Business areas

• Path :- SAP Customizing Implementation Guide ->Enterprise Structure->Definition->Financial Accounting->Define Business Area


• 

Step 4 :- After Selecting Define Business Area, Select new entries to configure new Business areas

Step 5 :- Enter the four-character alphanumeric key in the business area field and enter the name of business areas in the description field and save the settings.

Now we have create 3 Business Areas ADKA, ADHY, ADMU using SAP FICO .

Assign company code to company

Menu Path :- SPRO –> IMG Reference –> Enterprise Structure –> Assignment –> Financial Accounting –> Assign Company Code To Company

Transaction Code :- OX16

Steps to assign company code to company

Step 1 :- Enter the T-Code SPRO in the commend field

Step 2 :- Click SAP Reference IMG

Step 3 :- Follow the Path as per below screen shot

• Path :- SAP Customizing Implementation Guide ->Enterprise Structure->Assignment->Financial Accounting->Assign Company Code to Company

Step 4 :- Click Position

• Input your Company-Code on the pop-up window and hit enter

Step 5 :- Under the column “Company” against your Company-Code, enter the six-character identifier for your company and click on Save

Now the company code “AD06″ was assigned to the company “ADARSH”