Finance (FI) Introduction

The SAP solution offers adaptability, flexibility and saleability and with ERP ECC 6.0 they have improved many areas, built on the Netweaver platform the
Enterprise Resource Planning is a services enabled ERP solution, offering all future upgrades through Enhancement Packages (EHP), which means
implementing new innovations in business and industry solution more quickly. Enhancement packages give you the benefit of improving and extending your
current SAP solution without the major costs of a upgrade for example you could use SAP Master Data Governance which is delivered in a enchantment
package, this helps govern financial master data used in consolidation and operational charts of accounts.

SAP is based on service-oriented architecture (SOA) allows you to control the entire administrative and operations environment which can be shown in the
diagram below
 can help you realize meaningful business value by streamlining business processes as well as by controlling costs and
risks, in the following areas

health and safety

asset management

SAP ERP Corporate global trade services

Services
project and portfolio management

quality management

real estate management

travel management

SAP ERP Financial's

this will address all you financial needs which include

performance management

management reporting

financial effectiveness

local and group closing

 corporate governance

Because SAP is modular you can customize your solution to meet your specific business needs in core accounting (FI),
including reporting, financial supply chain management (FSCM), shared services and treasury.

helps executives, human resources professional and line-of-business leaders to forecast, plan and hire the best people and
train their work force. Fully integrated and modular it supports shared services and business process outsourcing that will
reduce the cost of operations of your business, you can fully automate the following

service delivery
SAP ERP Human Capital
Management (SAP ERP talent management
HCM)
workforce deployment

workforce process management

workforce analytics

SAP ERP Operations

is the backbone of the organization which helps in the keys areas of

procurement and logistics execution

product development and manufacturing

sales and service

 You can use SAP to streamline your day-to-day operations in order to reduce costs, increase revenues, maximize
profitability and improve customer service.

SAP ERP Financial's

Using ERP Financial's you can accurately manage liquidity and cash, streamline processes and reduce costs. SAP ERP aims to give you tools to support the
following areas

Enables company-wide control and integration of financial information that will be used for strategic decision making. Besides
Financial complying with international accounting standards such as US Generally Accepted Accounting Principles (GAAP) and
Accounting International Financial Reporting Standards (FRS) it also fulfils local legal requirements of many countries and reflects the legal
and accounting changes resulting from European market and currency unification.

Also known as Controlling (CO), helps analysts and managers by using the same data which can then be used for financial
Management
reporting, cost and revenue reporting. Key functions include investment management, master data governance, revenue and cost
Accounting
planning (contract, profit center, project, product cost, profitability and cost center accounting) and transfer pricing.

Provides help to internals teams that deal with managing receivables, analyzing root causes of late payments, customer disputes.
The supply chain module is made up of the following functions

Credit Management
Financial Supply
Chain Finance Billers Direct

Dispute Management

Collections Management
Treasury Enables your treasury and cash managers to gain insight and control over hedging transactions, pooling and allocating cash
Management globally, enabling straight-through processing of banking, corporate treasury and financial accounting processes.

SAP ERP Financial Accounting

Financial accounting enables you to track financial accounting data within an international framework of multiple companies, languages, currencies and chart
of accounts, it will met all international financial requirements that must be met by the financial accounting department of an organization. SAP uses a
document principle to record all transactions; this means that postings made in sub-ledgers always generate a corresponding posting in the G/L, making
separate reconciliation unnecessary.

The current FI functions look like the below diagram

Lets discuss each function in detail

 this eliminates the need for multiple ledgers, it also improves financial accounting and reporting through rule-based, real-time
allocations between business units and automates the reconciliation of journal entries across multiple units. The new G/L
New Unified G/L
provides you with the flexibility to create multiple ledgers (for example cost-of-sales ledger, consolidation-staging ledger,
segment ledgers and profit-center accounting) all within a single application.
The new G/L offers multiple parallel accounting that supports diverse currencies and financial reporting standards (such as
Parallel Accounting IFRS, country-specific regulations like GAAP. Parallel ledgers are updated via a single posting transaction using defined
business rules governing how transaction are recorded and reported according to different accounting rules.
The new G/L also offers you the option to perform a "online split" of a document when making journal entry, this streamlines
the processing of transactions and allocating them to different cost or profit centers while at the same time making allocations
Document Splitting
for specific cost objects. You could for example use the document splitting functionality for customer-defined and industry
specific fields. You can apply this not only to individual documents but also throughout the entire document chain.
Single Reconciled
The new G/L allows you to create multiple ledgers which reconcile up to a single leading ledger.
Database
Real-Time
Through a common reconcile database, special-ledger postings roll up to the G/L without the need for manual or automated
reconciliation and
reconciliation. As a result the managerial and financial accounting is always reconciled within the G/L.
Integration
The new G/L now offers a faster closing cycle of the posting period and automate several period-end activities such as accruals
Fast Close
and journal entries because the data source is common and always reconciled.

The FI components are as follows

Account Payable used to record and administer accounting data for all your vendors. Postings are simultaneously recorded in various G/L accounts
(FI-A/P) based on the transaction involved.

again used to record and administer accounting data for all your customers. Postings are again simultaneously recorded in various
G/L accounts based on the transaction involved.
Account Receivable
(FI-A/R)
There are tools that allow you to monitor the open items, you can use dunning to remind customers of payments, credit
management, etc.
Asset Accounting A subsidiary ledger to the G/L, FI-AA is used to manage the fixed assets of a company, you can pass on depreciation and interest
(FI-AA) directly to FI and CO components.
Enables bank master-data management and cash-balance management besides processing incoming and outgoing payments. You
Bank Accounting
can define all country-specific characteristics such as the specifications for manual and automatic payment procedures, payment
(FI-BL)
forms or data media.
the G/L's central task is to provide a comprehensive picture of external accounting and accounts. It records all business
General Ledger transactions (primary postings as well as settlements from internal accounting) in the system, it ensures that accounting data is
(FI-G/L) always complete, accurate and reconciled. FI-G/L also fulfills modern accounting requirements such as parallel accounting,
segment reporting, integration of legal and management reporting and cost-of-sales accounting.
with FI-TV you can manage all business trips within the company, integrated with settlement, taxation and payment process. You
Travel Management
can request, plan and book trips, create travel expense reports and transfer expense data to other functional areas. It is also
(FI-TV)
possible to independently use the FI-TV from the rest of the SAP application.
Lease Accounting you can carry out and display the accounting-relevant aspect of a leasing deal encompassing all the postings needed in FI-AA, the
(FI-LA) execution of contract related accrual postings in FI-G/L and one-time postings that are made for a lease.
you can define ledgers for reporting purposes, you can keep these user-defined ledgers as G/L or sudsidery-ledgers with various
Special-Purpose
account assignment objects that can either be from various applications such as account, cost center, business area or profit
Ledgers (FI-SL)
center). With the G/L this function may not even be used any more.