SAP Finance/Controlling Overview
Financial Accounting
GL
AM
AR FI
CON
AP Special Ledger
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FI Introduction The SAP FI Module has the capability of meeting all the accounting and financial needs of an organization. It is within this module that Financial Managers as well as other Managers within your business can review the financial position of the company in real time as compared to legacy systems which often requires overnight updates before financial statements can be generated and run for management review.
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FI Introduction,. cont.. The real-time functionality of SAP modules allows for better decision making and strategic planning. The FI (Financial Accounting) Module integrates with other SAP Modules such as MM (Materials Management), PP (Production Planning), SD (Sales and Distribution), PM (Plant Maintenance)and PS (Project Systems). The FI Module also integrates with HR(Human Resources) which includes PM (Personnel Management), Time Management, Travel Management and Payroll. Document transactions occurring within the specific modules generate account postings via account determination tables.
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Financial Applications TR
Cash Management
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FI
General Ledger
CO
Controlling
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Financial Accounting Components The FI Module comprises several sub-modules as follows:
• General Ledger •Accounts Receivables •Accounts Payable •Asset Accounting •Bank Accounting
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Financial Accounting G/L Reporting
Legal or external reporting • Balance sheet • Income Statement • Statement of Financial Position
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Financial Accounting
External Accounting
Stockholders
Financial Position Profit & Loss Balance Sheet
Bankers, Lenders
External Auditors IRS, Taxing Authority AppLabs confidential and restricted circulation
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FI and CO comparison FI Legal or external reporting Reports by accounts Balance Sheet Income Statement
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CO Internal management reporting Reports by cost centers and cost elements Cost Center Reports
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FI/CO Organizational Structures • Client • Company • Chart of Accounts • Company Code • Business Area • Credit Control Area • Controlling Area
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Company Code A BALANCED SET OF BOOKS
•A required structure •A legally independent entity •The smallest organizational unit for which accounting can be carried out • The level where business transactions are processed • The level where accounts are managed • The level where legal individual financial statements, such as the balance sheet and the profit and loss statement are created
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Chart Of Accounts
Operating COA
Company Code 1000 AppLabs confidential and restricted circulation
Company Code 2000
Company Code 3000 12
Credit Control Area •An organizational unit or area of responsibility created to control customer credit limits •A company code is assigned to one and only one credit control area •Multiple company codes can be assigned to one credit control area
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Controlling Area • An organizational unit defining the company's cost/ managerial accounting operations • A company code is assigned to one and only one controlling area • A controlling area can have multiple company codes assigned to it - This allows cross company cost allocations and reporting
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Fiscal Year
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General Ledger General Ledger is fully integrated with the other SAP Modules. It is within the General Ledger that all accounting postings are recorded. These postings are displayed in real-time providing up-to-date visibility of the financial accounts.
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Account Groups GL
In Order to organize and maintain large number of GL accounts better, they are arranged in accounts groups
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Account Groups GL • Fixed Assets Account
999999
• Liquid Fund Account
999999
• General G/L Account
999999
• Materials Management accounts
999999
• Profit and Loss accounts
999999
• Reconciliation accounts
999999
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Account Receivables Accounts Receivables records all account postings generated as a result of Customer sales activity. These postings are automatically updated in the General Ledger . It is within the Accounts Receivables Module that you can monitor aging of the receivables and generate customer analysis. The Accounts Receivable Module also integrates with the General ledger, Sales and Distribution, and Cash Management Modules
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Customer Master – Account Group Customer accounts can be combined in various account groups so that they can be organized and managed more easily Accounts in all groups will have similar characteristics. • • • •
Trade Debtors Affiliated companies Other Debtors One time customers (ext. number assignment)
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Customer Master – Account Group
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Accounts Payables Accounts Payable records account postings generated as a result of Vendor purchasing activity. Automatic postings are generated in the General Ledger as well. Payment programs within SAP enables the payment of payable documents by check, EDI, or transfers.
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Vendor Master – Account Groups Vendor accounts can be combined in various account groups so that they can be organized and managed easily Accounts in all groups will have similar characteristics. • • • •
Trade Vendors Affiliated companies Other Creditors One-time Vendors (int. number assignment)
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Vendor Master – Account Groups
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Bank Accounting Bank Accounting allows for management of bank transactions in the system including cash management.
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Bank Master Data The banks used by the company, are known as House banks.
Each Bank account is represented by a combination of House Bank ID and Account ID. House Bank used …example CITI bank
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Bank Master Data
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Asset Accounting Asset Accounting is utilized for managing your company’s Fixed Assets. SAP allows you to categorize assets and to set values for depreciation calculations in each asset class.
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Asset Master – Asset Classes
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Standard Assets • Land • Buildings • Vehicles • Office Equipment • Computer Equipment • Software • Communication Equip. • Furniture & Fittings • Asset Under Construction
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Depreciation Areas and Methods Depreciation Areas •Book Depreciation in Company Code Currency •Book Depreciation in Group Currency Straight Line Method Depreciation No Depreciation in Acquisition year Full Depreciation in Retirement year
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Controlling Introduction The SAP CO (Controlling) Module provides supporting information to Management for the purpose of planning, reporting, as well as monitoring the operations of their business. Management decision-making can be achieved with the level of information provided by this module. Some of the components of the CO(Controlling) Module are as follows • • • • • •
Cost Element Accounting Cost Center Accounting Internal Orders Product Cost Controlling Profitability Analysis Profit Center Accounting
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Controlling Profit Center Accounting All departments need to be defined as profit center. Apart from department wise profit centers, the company needs to define one corporate profit center where common costs like Admin, marketing etc. will be captured. Cost Center Accounting A cost center can be defined as a cost capturing unit under each profit center. Common costs will be collected under a cost center that will be allocated to respective department at the period end Cost Element Accounting Component provides information which includes the costs and revenue for an organization. These postings are automatically updated from FI (Financial Accounting) to CO (Controlling).
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Controlling Internal Orders Provide a mean of tracking costs of a specific job , service, or task. Internal Orders are used as a method to collect those costs and business transactions related to the task. This level of monitoring can be very detailed but allows management the ability to review Internal Order activity for better-decision making purposes.
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Controlling Product Cost Controlling Allows management the ability to analyze their product costs and to make decisions on the optimal price(s) to market their products. Sub-components of the module are: • Product Cost Planning which includes Material Costing( Cost estimates with Quantity structure, Cost estimates without quantity structure, Master data for Mixed Cost Estimates, Production lot Cost Estimates) • Cost Object Controlling includes Product Cost by Period, Product Cost by Order, Product Costs by Sales Orders, Intangible Goods and Services, and CRM Service Processes. • Actual Costing/Material Ledger includes Periodic Material valuation, Actual Costing and Price Changes.
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CO/EC Overview COMPONENT
VIEW
ROLE
Cost Center Acctg - CO-CCA
Costs
Cost Tracking
Internal Orders CO-OPA
Costs
Small Projects
Projects - PS
Costs
Large Projects
Product Costing - CO-PC
Costs
Product Costing
Activity Based Costing
Costs
Cost Management
Profitability Analysis-CO-PA
Profits
Margin by multi-cuts
Profit Center Acctg-EC-PCA
Profits
Profit & Loss Responses
Executive Info. System-EC-EIS
Any data
Cross-module reports
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Controlling CO Reporting Internal management reporting Reports by cost centers or other cost “objects” and cost elements
• Cost centers • Orders and Projects • Budget/plan • Actual vs. plan
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Business Process Integration Check Availability
Purchase Requisition
Purchase Order
Run MRP
Sales Order Entry
Pick Sales Order Materials Process
Goods Receipt Procurement Process
Invoice Receipt
Receipt of Payment
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Post Goods Issue
Payment to Vendor
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Sales Process – Order to Cash Check Availability Sales Order Entry Pick Materials
Receipt of Customer Payment
Pack Materials
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Post Goods Issue 39
Procurement process – Procure to Pay Purchase Requisition
Purchase Order
Notify Vendor
Payment to Vendor
Vendor Shipment
Invoice Receipt AppLabs confidential and restricted circulation
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