What is Fiscal year in SAP
According to SAP, financial accounting year is referred as “Fiscal Year”. In SAP fiscal year contains total 16 posting periods, out of these 12 are normal posting periods and 4 are special posting periods.
Every organization records business transaction in set of books and they have to close the books in certain period. It may depends on the company and the country’s policy. For e.g. all companies in US have to close their books on 31st December every year and all companies in India have to close their books on 31st March every year.
- Indian companies follow fiscal year from April to March with 12 normal posting periods and 4 special periods.
- US companies January to December with 12 normal posting periods and 4 special periods.
- Normal posting periods are used to post day to day company transactions and special periods are used for the purpose of adjustments and auditors rectification entries.
Fiscal year in SAP can be classified as
- Year Dependent : – Year dependent fiscal year refer as the fiscal year is only applicable to particular year such as 2015 or 2016. If you select year dependent check box in fiscal year variant, than you need to create conversion for every year.
- Year Independent : – Year Independent fiscal year refer as the fiscal year is applicable to all the financial account year.
- Calendar Year : – In calendar fiscal year, posting period start from 1st January and ends on last day of the year 31st December.
- Shortened fiscal year: – Shortened fiscal year contains fewer normal posting periods. Startup companies and new SAP implemented companies may follow the shortened fiscal year.
How to define fiscal year variant in SAP