WELCOME TO SAP

WELCOME TO FICO FINANCE & CONTROLLING MODULE

Pioneers of SAP
In 1972 - 5 IBM professionals by name:

Dietmar Hopp H.W. Hector Husso Platner Claus Tchira

Klas Reitherman ventured into ERP by name SAP - Systems, Applications, Products in data processing

Their first version of SAP is of Finance Module

Financial Applications

EC

Enterprise Controlling
TR
Cash management and forecast Treasury Management Cash Management

FI

CO

General Ledger Accounting Subsidiary ledgers

Overhead cost accounting Product cost accounting Profitability analysis

IM

Investment Management

PS

Project System

RE

Real Estate

SAP AG 1999

Data Flow in FI
S D P P M M H R

Sales Revenues Production Orders Purchase Orders Payroll

G/ L A/ R A/ P Accounts Receivable Accounts Payable

Data Flow in FI

FI
A A Asset Accounting

SL Special Ledger

Overview Diagram

CO

FIBL

FITV

FIAA

MM

FIAP

FIGL

General ledger

FIAR

SD

Balance sheet ... P&L ... ...

SAP AG 1999

Finance Sub-Modules
Foreign Exchange Management Business Analysis

Finance Information System Executive Information System G/L Information System

Cash Management and Forecast

Multiledger

Accounts Payable
Invoice Verification

Bank Accounts Payables General Ledger Extended General Ledger

Accounts Receivable
Credit Management

Consolidation

FI Trail/Audit Trail
Balance Sheet Balance Sheet

Voucher

Profit & Loss A/c Journal Entry

- Check credit

Consolidation of All Ledger A/cs

Trial Balance

Ledger Accounts

The R/3-FI-Document

Overview Document Number Company Code Fiscal Year Document Date Posting Date Period Currency ... ... .. Items 001 PK Acct Description 002 PK Acct Description . . . . . . . . . . . . Amount + Amount . . .

Detail Document Header DT

Account Line Item 1 / PK Amount Tax Code Additional Details Business Area Cost Center Text ...

SAP AG 1999

Basic FI Posting: Additional Line Items

Transaction
Basic Data

Invoice
Tax Details Notes

Balance

$0

Payment

Customer Invoice date Posting date Reference Amount Tax Amount Text Company Code

Account # 06.06.2000 06.06.2000 5 000 USD I0 AP Tax Exempt

Customer:

Doc. type

DR

Isis T. Greaca 230 Sterling Ave Chicago IL 60610 United States

IDES Company Code

Bank Account: 994885992

G/L Acct. 475000

Short Text Expense Acct

D/C Debit Debit Debit ...

Doc. Curr. Amt 5 000

Tax Code... I0

SAP AG 1999

Chart of Accounts

Each general ledger is set up according to a chart of accounts. The chart of accounts contains the definitions of all G/L accounts in an ordered form. The definitions consist mainly of the account number, account name, and the type of G/L account, that is, whether the account is a P&L type account or a balance sheet type account. You can define an unlimited number of charts of accounts

Charts of Accounts

INT

CAUS

GKR

1000

10000

1000

... and as many additional charts as needed!

2000

20000

2000

SAP AG 1999

Account Groups
Account Groups for G/L Accounts

Cash accounts

Account Group Controls Number Range and Status of flds in Co.Cd segment of master records. You could, for example, have an account group for cash accounts, one for expense accounts, one for revenue accounts, and one for other balance sheet accounts, etc To better understand Assets/ Liabilities; Expenses/ Income; Inventory; Reconciliation accounts are segregated as groups

Cash
000000-099999

General ledger

C
100000-199999

Company code specific settings Account definition in chart of accounts

Asset
200000-299999

Material
300000-399999

P/L
400000-499999

Account groups

Account 001111

Liab.
500000-599999

n ccou A 000000-099999 oup gr

Cash

...
600000-699999

SAP AG 1999

Reconciliation A/cs

The subsidiary ledgers which are connected to the general ledger via reconciliation accounts are the A/P, A/R, and asset ledgers. Reconciliation accounts are
general ledger accounts assigned to the business partner master records to record all transactions in the sub-ledger. This means that a posting to a subsidiary ledger also posts to the corresponding reconciliation account in the general ledger at the same time.

Pages of the Customer/Vendor Account

Each account segment consists of several pages with different groups of fields:
Customer 1000 1000 Address Control Data Paym. Trans.

General Data
Address Control Data Payment Transactions + Texts

Customer

Customer 1000 Customer 1000 Company Code 0001 Acc. Info.

Company Data
Accounting Information Payment Transactions Correspondence Insurance Withholding Tax + Texts

Customer 1000 Paym. Trans. Company Code 0001 Customer 1000 Correspondence Company Code 0001 Customer 1000 Company Code 0001 Customer 1000 Company Code 0001 Group 1 ... Group 2 ... Insurance Withholding Tax.

SAP AG 1999

Document Control

Overview Document Header

Document Types Document Number Ranges

Line Items

Posting Keys Field Status in Posting Keys Field Status Groups

Posting Periods Posting Authorizations Basic FI Documents

SAP AG 1999

The R/3-FI-Document

Overview Document Number Company Code Fiscal Year Document Date Posting Date Period Currency ... ... .. Items 001 PK Acct Description 002 PK Acct Description . . . . . . . . . . . . Amount + Amount . . .

Detail Document Header DT

Account Line Item 1 / PK Amount Tax Code Additional Details Business Area Cost Center Text ...

SAP AG 1999

Important Standard Document Types

omer Cust es c Invoi

omer Cust it Cred s o Mem

omer Cust ents Paym

nt ccou G/L a gs n Posti

DG

DR

ral Gene ents m Docu t or ne Vend es c invoi edit r and c s o mem

or Vend ces Invoi

or Vend it Cred s o Mem

AB

or Vend nts e Paym

KG

KR

SAP AG 1999

KN

KZ

SA

DZ

Document Types

mer Custo ts n Payme 00000 00000 999 99 09999

Customer Payment

DZ

0000123456

Items Customer G/L

DZ

Original Documents Vendor Invoice No. 1112

R/3 Documents KR 1000234567 Ref. No. 1112 Items Vendor G/L

r Vendo s Invoice 00 00 100000 99 99 199999

KR

1000234567

SAP AG 1999

Functions of the Posting Keys (4)

Detail view Account 1. S, D, K, A, M ?

Line Item 1 / PK Amount 2. debit, Tax Code credit ? Additional Details Business Area Cost Center 3. Field Status ? Text ...

The Posting Key has control functions within the line items. It controls: 1. on which type of account the line item can be posted to 2. if the item is posted as a debit or credit 3. the field status of additional details

SAP AG 1999

The Fiscal Year

13

14

15

16

The fiscal year can be defined as...

12 11 10 09 08 07 06 01 02 03 04 05

Year-independent

==> the same number and dates for the periods every year

Year-dependent

==> periods can be differ from year to year

SAP AG 1999

Two Period Ranges

Open posting periods during the closing procedure open 13 14 15 16 Range 2 Range 1 Optional: Authorization Group restricts posting authority to special users

en op

12 11 10 09 08

01

02 03 04 05 07 06

SAP AG 1999

Taxes
When posting an invoice SAP allows for: Taxes to be levied on the invoice amount as Value-added tax Tax on Purchases Additional tax Withholding tax with the provision for two taxation types: Federal/country level State/jurisdictional level

SAP AG 1999

Maximum Amounts

The maximum amounts are defined per company code in tolerance groups. This is also where the processing of payment differences is controlled.
Group Company Code Currency Upper limits for posting procedures Amount per document Amount per open item account item Cash discount per line item Permitted payment differences ...

SAP AG 1999

Simplifying FI Postings
Reversal of Posted Transaction Petty Cash Transactions Cross Company Transactions Clearing Recurring Entries Accruals Sample Voucher Account Assignment Model Document Parking Cross Company Code Transactions

Simplifying Postings

Reference document Number 087234098 Line items:

PK 40 50 50 Account 123000 345560 907902 Amount 5000 2000 3000

Sample document Sample doc. No. 255 Line items:

PK 40 50 50 Account 123000 345560 907902 Amount 5000 2000 3000

Hold/Set data Header & line items:

Co.Code: 0001 01/23/95 PK 40 Account 123000 Amount 5000

Header:
PK 40 50 50

23.01.1995
Account 123000 345560 907902 Amount 5000 2000 3000

Comp. code: 0001

Line items: Posted document

SAP AG 1999

Standard Reversal Postings, Negative Postings

Standard reversal posting Incorrect posting Account 1 2050 2050 0 Negative posting Account 1 2050 2050 -2050 0
SAP AG 1999

Account 1 2050 2050 2050 2050

Account 2 2050 2050 2050 2050

Account 2 2050 0 2050

Account 2 2050 2050 2050 -2050

2050

Petty Cash
Accounting Transactions Types
Cash X Cash X Cash X Cash X Cash X Cash X
SAP AG 1999

Expense X Revenue X Bank X Bank X AR X X AP X X X X

Expense (E)

Revenue (R)

Cash transfer from cash journal to bank (B)

Cash transfer from bank to cash journal (C)

Customers-incoming/outgoing payment (D)

Vendors-outgoing/incoming payment (K)

Posting with Clearing (4)

Clearing account 5000

Clearing document
1. Entered manually 2. selected Open item account 2000 3000 1000 5000 Items D Clearing account 5000 C Open item account 5000

3. Created automatically

4. cleared
SAP AG 1999

The Recurring Entry Program

Template: Recurring entry original document First posting Last posting Next posting Interval in Months: Line items 001 40 Expense 002 31 Vendor 01.01.XX 12.01.XX 02.01.XX 1 1000 1000Batch input session Recurring entry program Settlement period: 02.01.XX - 02.29.XX

Actual posting Expense 1000 Vendor 1000

Next posting on 03.01.XX

SAP AG 1999

Accruals
Reference: Recurring entry original document First posting 01/01/XX Last posting 06/01/XX Next posting 02/01/XX Interval in months: 1 Line items 40 Expense 10 50 Other payables /reserves 10Recurring entry program Accounting period: 01.02.XX - 29.02.XX

Batch input

Actual posting Expense 10 Other payables/res. 10 10 ...

Next posting on 03/.01.XX

from 01/01/XX from 02/01/XX

SAP AG 1999

What is Document Parking?

Document parking is an alternative way to enter transaction documents in R/3. Unlike "regular" posted documents:

Transaction figures are not updated A user can review, change, and then repark the document The document will eventually be posted or deleted

Unlike "held" documents:

Parking a document generates a document number Parked data can be evaluated in various R3 reports

SAP AG 1999

Documents You Can Park

Customer accounts (invoices and credit memos) Vendor accounts (invoices and credit memos) General ledger accounts (G/L postings)

SAP AG 1999

Different Types of Business Transactions

Down payment request Down payment Bill of exchange request Bill of exchange Check/bill exchange Ind. value adjustment Security deposit Interest User-defined
SAP AG 1999

With down payments

With bills of exchange

Other

Bill of Exchange Example (Without Charges)

Reconciliation account Customer
(1) 10000 10000 (2) (2) (2) 09W 10000 10000 (5) (1) 10000 10000 (2)

Bill of exchange rec.

10000 10000 (5)

Revenue
8695.65 (1)

Output tax
1304.35 (1)

Bank Bank bill collection

(3) 10000 10000 (4) (5)
SAP AG 1999

(4)

10000

Bill collection clearing

10000 10000 (3)

Archiving and Retrieval

SAP R/3 Archiving

Documents

Archive management
Master records

Info. per archiving/ retrieval run

\usr\sap\...

Retrieval

SAP AG 1999

Special facilities

Automatic Payment Program Automatic Dunning Credit Management Clearing Customer cum Vendor Foreign Currency Valuations

Automatic Payments: Business Scenario

Accounts payable invoices have to be paid on time to receive possible discounts A consistently high volume of invoices have to be processed. The accounting department wishes to perform this processing of invoices automatically, twice per week.

SAP AG 1999

Automatic Dunning

Automatic Dunning Overview Dunning Program Configuration Parameters Dunning Run Editing a Proposal Printing Dunning Notices

SAP AG 1999

Credit Control Process

Sales order

Credit control

Rejection

Order block

Review Further processing No

SAP AG 1999

Release?

Yes

Delivery

Billing d ...

Foreign Currency Valuation

P&L
Unrealized Loss Expense
...

Balance Sheet (loc.crcy UNI)

Liabilities & equity

100 UNI

- Payables

1100 UNI Payables 500 USD 1000 UNI

Vendor 500 USD 1000 UNI

Valuation difference

FX Adjustment account 100 UNI

100 UNI
SAP AG 1999

Periodic Processes

Month End Operations Year End Operations Balance Carry forward

Month-End Closing Process

Old Month MM Maintain GR/IR FI Accruals/ deferrals, recurring entries HR Payroll expenses SD Goods issues, invoices FI Open new
periods
SAP AG 1999

New Month MM FI Valuations

Foreign currency valuations

CO Reconciliation postings

CO Orders/ projects AA AUC settlement, depreciation, interest CO Cost centers CO Product cost contr.

FI Financial statement adjustment

Documentation

FI

CO Profitab. analysis MM Month-end closing FI

Taxes on sales/purchases Bal. sheet/ P&L

CO Internal reports
Close AR/AP

FI

Close G/L

Technical steps

Year-End Closing Process

Old Year MM Physical inventory PP Product costing New Year MM Lowest value, LIFO/FIFO FI GR/IR analysis, regrouping of receivables/ payables, other adjustments

AA

Valuations, investment grant FI FI Account bals: Old FY to new FY

Documentation Taxes on sales/purchases Asset history sheet Bal. Sheet/ P&L Cum. bal. audit trail

FI Balance confirm. FI Open new year AA Fiscal year change

AA Close old
year

CO Internal reports FI

FI Balance carryfoward
SAP AG 1999

FI

Close FY for AR/AP

Close FY for G/L

Technical steps

Balance Carryfoward
Example: G/L accounts (SAPFGVTR)

Old Fiscal Year Balance sheet account CB 120 Balance sheet account CB 100 P&L account CB 20

New Fiscal Year Balance sheet account CF 120 Balance sheet account CF 100 Ret. earnings account CF 20
CB = Closing balance
SAP AG 1999

CF = Bal.carried fwd

Financial Statements

Layout of Balance Sheet Layout of Profit & Loss A/C

* Flexible Layout * User Defined Texts * Pre-configured Functions for Totals & for Groupings * Option for Drill Down Reporting
Financial Statement Versions
List of financial statement versions
Maint.language Item keys auto. Chart of accounts Group account number Functional area permitted
EN

INT

Financial statement items

Financial statement version Hierarchy level 1 1 2 3 4 ASSETS LIABILITIES Profit and loss Accounts not assigned XXXX Balance sheet acc. to country legislation

SAP AG 1999

Create item

Assign accounts

The Balance Sheet Section of a Financial Statement Version

Fin. statement version XXXX Level 1 ASSETS Subscribed equity Fixed assets Current assets LIABILITIES Equity Reserve funds

Level 2

Level 3

Intang. fixed assets

Tangible assets

Financial assets

Level 4

Real estate

Technical assets

Machinery and equipment

Down payment made for asset under constr.

Level 5 ... max. 10

Acquisition value

Value adjustment

SAP AG 1999

The Profit and Loss Section of a Financial Statement Version

Profit/loss Profit for the year before tax Results of business transactions Financial result Extraord. profit/loss Approp.of net income

Level 1

Operating result

Taxes

Level 2

Net sales revenue

Material expenses

Personnel expenses

Level 3

Gross sales revenue

Sales deductions

SAP AG 1999

FI - MM

INTEGRATION

Purchase Procedure: PR > Quotation > PO > GR > IR > Payment

Standard Three-Way Match

Goods Receipt Purchase Order MM

Purchase order Material Document Goods receipt
Document
Items Material GR/IR

Material Stock or Consumption

1

MM
PO amount

FI GR/IR
2 1

FI No document

Invoice Receipt
Invoice Verification Document
Document
Items GR/IR Vendor Tax

Vendor
2

MM
SAP AG 1999

FI

FI SD

INTEGRATION

Sales Process
SD Sales
Sales order

FI No document

Shipping Delivery
Delivery

Warehouse transfer order

Picking

Goods Issue
Goods Issue
Document
Items ... ...

SD SD Billing
Billing document

MM FI
Invoice
Items ... ...

SAP AG 1999

FI - HR

Integration

Asset Accounting
Tab Pages
General General Time-Depend. Allocations Allocations Time-Depend. Origin Origin

General Data

Ass et M aste r Re Posting Information cor d

SAP AG 1999

Chart of Accounts - Chart of Depreciation

Client
Chart of deprec . deprec.
Country A Book deprec. Tax Depr. Cost-acct.depr. Group

Chart of Accounts

...
Company code 1000 Chrt of acts. INT

Company code 2000 Chrt of acts. INT

Company code 3000 Chrt of acts. CAUS

Company code ???? Chrt of acts. ????

Chart of depr. 1DE

SAP AG 1999

Chart of depr. 1GB

Chart of depr. 1US

Chart of depr. 1??

Depreciation Areas

Asset xy in year 2000

Balance sheet vals Depreciation Net book value

Book deprec. Taxdepr. Cost acct. depr. Parallel deprec.

100 000

40 000

60 000

100 000

40 000

60 000

100 000

10 000

90 000

100 000

10 000

90 000

SAP AG 1999

Asset Class and the Asset Master Record

Asset 001111

1000

Class:
1000
000000-099999

000000-099999

t Asse s Clas

Buildings

Asset Accounting

C
100000-199999

2000
200000-299999

Machines Fixtures and fittings

Asset 200003

2000
200000-299999

3000
300000-399999

t Asse s Clas

4000
400000-499999

Assets under construction Low-value assets

5000
500000-599999

...
600000-699999

SAP AG 1999

Asset Acquisition - Integration

Assets Accounts Payable

Fixed asset 100

Vendor 100

Asset transaction integrated with Accounts Receivable or Accounts Payable

Assets

General Ledger

Fixed asset 100

Clrg Acct 100

Asset transaction posted using clearing account (not integrated)

Assets

Accounts Payable

Fixed asset 100

Vendor 100

MM

Asset transaction posted from Materials Management (MM)

SAP AG 1999

Asset Transfer

Asset Posting Date Transaction Type

XXXX MMDDYYYY 300 (320) Asset:

Transfer Transfer to to ZZZZ MMDDYYYY 4

(May need to create master record in the transaction)

Asset value date: Transfer variant:

Automatic determination and posting of proportional value adjustments

Specifications for partial transfers

SAP AG 1999

Legacy Data Transfer: Transfer Date

At year end or during fiscal year?

Legacy system

12/31/YYYY-1 12/31/YYYY 12/31/YYYY-1 (1)

03/31/YYYY (1 + 2)

Date of actual transfer

FI-AA
(1) (2)

(1) Master data, cumulative values

(2) Depreciation posted, transactions

SAP AG 1999

Organizational Structure in Controlling

Operating Concern

Client 010

Controlling Area

Company Code 1000

Company Code 2000

Company Code 3000

Business Area

Business Area

Business Area 1000

Controlling

Data Flow in CO
FI M M S D P P A M H P FI

G/L Expenses Purchase Orders Billing Production Cost Asset Accounting Personnel Cost
C O C OC C A Overhead Cost Controlling

Data Flow in CO

Controlling
C OP C C OP A C OP C Profitability A Analysis

Product Costing

Controlling

Controlling

Components of Controlling
Overhead Cost Controlling
Cost Centers

Product Costing

Profitability Analysis
PA
Market Segment Reporting

Cost of sales
PCA
Internal orders
Business Unit Profits

Different Methods Batch Mass Process Make to order

Cost of Period

Controlling

CO Organization and Master Data

CONTROLLING AREA: ACTIVITY TYPES:
Productive output from a cost CENTRE (labor hours, machine time and equipment setup)

PROFIT CENTRES:

COST CENTRES:
Areas of responsibility in the company that incur costs

INTERNAL ORDERS:

STATISTICAL KEY FIGURES:

Numerical measures (number of employees, sq. ft. of heated space in a building)

COST ELEMENTS:
Classification of costs in CO

FI Accounts vs. CO Cost Elements

FI
Balance Sheet Accounts Profit and Loss Accounts

CO

Primary Cost Elements

Secondary Cost Elements

FI & Cost Center Accountin

FI - Expenses

Actual expense posting

Production Cost Center

Wages
Salaries Bonus PF Contrb. Welfare Exp. Rent Insurance Selling Exp. Bank Exp. Interest Depreciation
Canteen Cost Center
Maintenance Cost Center

Internal Orders
Internal orders are used to collect, monitor and settle the direct and indirect costs incurred by a specific project. They are cost collectors that have a more dynamic nature than cost or profit CENTRES.

Profit CENTREs G/L

Cost CENTREs

INTERNAL ORDERS
Publicity Event 1997 Production Order 146 Research Project 883 Item # 125-96 Sales Order 146 Maintenance Request

Internal orders are used for various detailed reporting needs.

Q&A

Question Time

Thanks

Venkata Ramana