SAP Finance/Controlling Overview

Financial Accounting

GL

AM
FI

AR AP
Special Ledger

CON

AppLabs confidential and restricted circulation

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.

AppLabs confidential and restricted circulation

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.

AppLabs confidential and restricted circulation

Financial Applications
TR FI CO

Cash Management

General Ledger

Controlling

AppLabs confidential and restricted circulation

Financial Accounting Components

The FI Module comprises several sub-modules as follows:

General Ledger
Accounts Receivables Accounts Payable Asset Accounting Bank Accounting

AppLabs confidential and restricted circulation

Financial Accounting
G/L Reporting

Legal or external reporting Balance sheet Income Statement Statement of Financial Position

AppLabs confidential and restricted circulation

Financial Accounting

External Accounting Financial Position Profit & Loss Balance Sheet Bankers, Lenders

Stockholders

External Auditors IRS, Taxing Authority

AppLabs confidential and restricted circulation

SEC
8

FI and CO comparison
FI
Legal or external reporting Reports by accounts Balance Sheet Income Statement

CO
Internal management reporting Reports by cost centers and cost elements Cost Center Reports

AppLabs confidential and restricted circulation

FI/CO Organizational Structures

Client Company Chart of Accounts Company Code Business Area Credit Control Area Controlling Area

AppLabs confidential and restricted circulation

10

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

AppLabs confidential and restricted circulation

11

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

AppLabs confidential and restricted circulation

13

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

AppLabs confidential and restricted circulation

14

Fiscal Year

AppLabs confidential and restricted circulation

15

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.

AppLabs confidential and restricted circulation

16

Account Groups GL

In Order to organize and maintain large number of GL accounts better, they are arranged in accounts groups

AppLabs confidential and restricted circulation

17

Account Groups GL
Fixed Assets Account 999999

Liquid Fund Account

General G/L Account Materials Management accounts Profit and Loss accounts Reconciliation accounts

999999
999999 999999 999999 999999

AppLabs confidential and restricted circulation

18

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

AppLabs confidential and restricted circulation

19

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)

AppLabs confidential and restricted circulation

20

Customer Master Account Group

AppLabs confidential and restricted circulation

21

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.

AppLabs confidential and restricted circulation

22

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)

AppLabs confidential and restricted circulation

23

Vendor Master Account Groups

AppLabs confidential and restricted circulation

24

Bank Accounting
Bank Accounting allows for management of bank transactions in the system including cash management.

AppLabs confidential and restricted circulation

25

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

AppLabs confidential and restricted circulation

26

Bank Master Data

AppLabs confidential and restricted circulation

27

Asset Accounting
Asset Accounting is utilized for managing your companys Fixed Assets. SAP allows you to categorize assets and to set values for depreciation calculations in each asset class.

AppLabs confidential and restricted circulation

28

Asset Master Asset Classes

AppLabs confidential and restricted circulation

29

Standard Assets
Land Buildings Vehicles Office Equipment Computer Equipment Software Communication Equip. Furniture & Fittings Asset Under Construction

AppLabs confidential and restricted circulation

30

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

AppLabs confidential and restricted circulation

31

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

AppLabs confidential and restricted circulation

32

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).

AppLabs confidential and restricted circulation

33

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.

AppLabs confidential and restricted circulation

34

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.

AppLabs confidential and restricted circulation

35

CO/EC Overview
COMPONENT Cost Center Acctg - CO-CCA Internal Orders CO-OPA Projects - PS VIEW Costs Costs Costs ROLE Cost Tracking Small Projects Large Projects

Product Costing - CO-PC

Activity Based Costing Profitability Analysis-CO-PA

Costs
Costs Profits

Product Costing
Cost Management Margin by multi-cuts

Profit Center Acctg-EC-PCA

Executive Info. System-EC-EIS

Profits
Any data

Profit & Loss Responses

Cross-module reports

AppLabs confidential and restricted circulation

36

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

AppLabs confidential and restricted circulation

37

Business Process Integration

Check Availability Purchase Requisition Purchase Order Goods Receipt Procurement Process

Run MRP

Sales Order Entry

Pick Sales Order Materials Process

Receipt of Payment Post Goods Issue

Invoice Receipt

Invoice Customer
AppLabs confidential and restricted circulation

Payment to Vendor

38

Sales Process Order to Cash

Check Availability Sales Order Entry Pick Materials

Receipt of Customer Payment

Pack Materials

Invoice Customer
AppLabs confidential and restricted circulation

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

Goods Receipt
40