This is Part 3 of the Global Bicycle Inc. (GBI 2.0) story, as related by an intern. The full series begins with Global Bicycle Inc.: An Intern Adventure.
The Search for Master Data: General Ledger & Chart of Accounts
The next task on the agenda was to create the General Ledger and the Chart of Accounts for GBI. These are two separate yet interconnected items in SAP that allow the Financial Accounting Functions to be carried out. We basically had to determine which accounts GBI would use, what they would be called, the numbering schema, the data needed in the system, etc.
As part of the creation of SSB (as first referenced in Global Bicycle Inc.: An Intern Adventure. Part 2.1), a General Ledger was developed. We went to the Case Story developed for SSB and got a list of all of those accounts. We then received a list from the GBI Steering Committee of the accounts that were used in GBI 1.0. Subsequently we reconciled the two lists so no account occurred more than once (we accomplished this in yet another excel sheet). We now had a list of approximately 75 accounts. The next step was to standardize the names of the accounts, group them together (all payables next to each other, all receivables next to each other, etc), and give all of the accounts numbers. The Balance Sheet accounts began at 100000 and go up to 330000 in increments of 100. Similarly, the Profit and Loss accounts begin at 600000 and go up to 780000, also in increments of 100. At first glance, this numbering schema might seem a bit peculiar; however, a very legitimate reason exists.
As GBI is a training environment for students with the goal of learning the business process, it is more often than not helpful for them (indeed it was helpful to me) to trace and follow the financials as they move through the exercises. In fact, when we created exercises as part of GBI (discussed in a later posting) we have students check the financial statements often (sometimes after each step) as this allows them to see exactly which accounts are debited and which accounts are credited, and when exactly this happens in the business process.
In the Single Company Code (SCC) version of GBI, and those exercises, students all post to the same accounts. If the class is small, this poses no issue as it is not that difficult to drill down through the financial statement to the actual transaction to determine who posted what. If, however, the class is large or several classes are using the same SAP client with the same accounts with many people making transactions to the same few accounts, it becomes more problematic for students to easily follow their individual financial postings. Thus if the professor wishes, (s)he could create multiple versions of the same account. For example, account 100000 is the Bank Account for GBI. The professor could create an account numbered 100001 and this could be the Bank Account for student #1, with 100002 as the Bank Account for student #2, etc. For this specific reason the last two digits of each account were left as 00.
GBI is an ever expanding simulated company. As such, as new business processes are configured and different variation of exercises are created, it may be necessary to create new accounts. This was experienced firsthand when we configured Enterprise Asset Management (EAM) as we had to create several new accounts. With this in mind a large gap in the numbering schema was left between the Balance Sheet accounts (ending at 330000) and the Profit and Loss accounts (beginning at 600000) to allow new accounts to be created in the future as the need arises.
As before, the next task was to log into the SAP system to determine what fields needed to be filled in to be able to create these accounts in the system. We followed the same steps outlined in Global Bicycle Inc.: An Intern Adventure. Part 2.1 to accomplish this task. This resulted in us creating another beautiful master data spreadsheet.
The theory of this numbering schema was utilized throughout the rest of the project any time something had to be numbered. Materials, cost centers, accounts (as just stated), work centers, employee numbers for Human Resources, etc. I understood the relevance of our numbering schema for GBI, but as to how relevant it was to “real world” applications, I was not so sure. It was not until I was in class at a later date (Operations Management if I recall correctly) and an example was given from industry of when this was not followed and all the issues the company had, that I understood that our numbering schema was not just unique to GBI, it was how it should be done in the real world, and woe unto them that did not follow it. You would simply be creating a big mess and confusion for yourself to deal with later.
It was after class as I was devouring a slice of pizza that I realized the important connection I had made. Once this connection manifested itself unto me, I began to realize the true value of that internship, and the GBI project. Because of my involvement with the GBI project, I began to draw connections BETWEEN classes. I began to see how Finance connected to Accounting, how Accounting interacted with Operations, how Operations was influenced by Marketing, how Human Resources was attached to Operations and Accounting, and how Information Technology sat right in the center of it all. In short, the other interns and I began to see the integration points across the business concept.
I wish I had the GBI project at the beginning of my college career, rather than at the end of it. I could have achieved so much more value from my classes. Too often in college classes, as I have seen also in my short time in the corporate world with projects, they get “silo-ed.” The classes, due to lack of time or whatever the reason may be, are concerned with only that class. Not how it connects to other classes. How it connects is the truly valuable information to be gleaned, and understanding of this makes the student that much better off. As an added bonus, if you understand how a class or concept connects to a different class or concept, it makes it that much easier to understand. If I had only known this at the beginning, I might have paid just a little bit more attention in accounting. Maybe, but probably not.