Financial company
The main function of a financial company is to register all accounting transactions that result from the activities carried out in the enterprise units that are linked to the financial company.
These activities consist of the operational and logistical transactions that result from a logistic goods flow and from production, service, warehousing, and support activities.
A financial company contains these LN packages:
- Common. This includes Taxation and Currency Initialization.
- Invoicing.
- Financials
To register the accounting transactions, Financials transforms the logistical data about activities and goods transactions into accounting data.
Other functions of a financial company are to register the purchase and sales invoices created in the Order Management, Warehousing, Service, Project, and Manufacturing packages.
These invoices are registered in Invoicing. Financials also includes a large number of functions for purely financial activities, such as cash management, credit management, overhead cost interpretation and allocation, fixed asset registration, and financial reporting. These functions only occasionally pass on information to the logistic company.
Local currency
One of the currencies a financial company uses is marked as the local currency. LN uses the local currency to perform the accounting and tax reporting in a country’s local currency. You are legally required to perform a business’s accounting for each country. Therefore, financial companies are restricted to one currency area.
Time zone
LN records document dates in Financials in the local time, according to the financial company’s time zone, which is required for posting the financial data to the correct financial periods. Therefore, a financial company is also restricted to one time zone.
The only hierarchy among financial companies is via the financial group company.