Introduction to SAP

FLEXIBLE REAL ESTATE MANAGEMENT (RE-FX)

Purpose of RE-FX:

• This component fulfills the requirements of real estate management by

providing a comprehensive view of all business transactions related to it.

• It’s a separate module in ECC system

• RE-FX stands for FLEXIBLE REAL ESTATE MANAGEMENT

Agenda

• Introduction of SAP RE-FX Module

• Business process scope covered
• Business Process: Contract Management
• Overview of the solution
• Contract Life Cycle
• IFRS 16
• Periodic Posting for Contract
• Valuation Posting
• Modules Integrated with RE-FX
• REFX-PM Integration process
Introduction to RE-FX
• Real Estate Management is a part of SAP Financials
• Contract management
• Space management
• Lease-in / Lease out
• Management of Real Estate
• Control of business processes relevant to real estate
• IFRS 16
Business process scope covered
Lease and space management

Standardize and automate recurring lease administration activities, such as rent

escalation, renewals, and periodic postings to save time and effort and free up
capacity for more strategic tasks.

Accelerate leasing processes and elevate occupancy and tenant retention rates
and their associated revenues.
Real Estate Industry – Functional overview

Technical & System & Real

Commercial Real Estate
Infrastructure Estate
Management Controlling
Management Infrastructure
◼ Contract ◼ Space ◼ Object ◼ Organization
Management Management Controlling Structure
◼ Rental ◼ Planned ◼ Responsibility ◼ Master Data
Accounting Maintenance Accounting with Objects
◼ Rent Adjustment ◼ Repairs & Profit ◼ Partner &
Modernization Centers Address
◼ Service Charge
Settlement ◼ Procurement of ◼ Overhead Cost Management
◼ Corporate Real External Services Controlling ◼ Graphical
Estate Interface
Management ◼ Reporting

RE Business Analytics
 Key Objects/Views in RE Module
Architectural View Usage View
Company code

Business entity

Land/Building
Building/Tower

PS Gr. Fl. + 2nd Fl.

Sales Units

Block
Floor level
BlockSales
A and RentalB Units PS 3rd Fl. B1 Rental spaces

Gr. floor 2nd floor 3rd floor Gr. floor 2nd floor 3rd floor

PS 3rd Fl. B2 Rental

Rentalspaces
spaces
Rental spaces

Room Room Room Area 1 Area 2

• Country, Regional Location, Zones etc at each object level will be maintained
 Master data objects in RE Module

Usage View
Company code

Business entity

Land/Building

Rental Object

• Country, Regional Location, Zones etc at each object level will be maintained
Master Data in REFX
• Business Entity
• Building
• Rental Unit

• Business Partner
Transactional Data in REFX
Transaction data are data describing an event (the change as a result of a transaction) and
is usually described with verbs. Transaction data always has a time dimension, a
numerical value and refers to one or more objects (i.e. the reference data).

REFX Transactional data :

• Enquiry
• Contract offers
• Contracts
• Renewals
Definitions
Rental Object Types
Business Partner Roles in REFX
You can create a business partner in different business partner roles. During the
course of the business relationship, the business partner can assume
other business partner roles.

Various BP Roles:
• Agent
• Applicant
• Tenant
• Occupant
• Landlord
Contract management

The real estate contract lets you manage all contracts related to your real estate portfolio:

• Real estate contracts of the lease-in category (such as, commercial, internal, residential)
• Real estate contracts of the lease-out category (such as, commercial, internal, residential)
• General customer contracts (such as, service contracts with the tenant)
• General vendor contracts (such as, maintenance contracts with a service provider)
• G/L account contracts (such as, for posting reserves for service charges)
• Security deposit agreements
• You can assign any number of rental objects from different business entities, buildings or company codes to
any one contract. When defining conditions and other contract terms, you can group the assigned objects
together into object groups .
Contractual Relationship
Contract Life Cycle (for Lease in & Lease out)
Rental object
Create Contract
inspection

Activate Contract

Notice
Change Contract
Details/terms
Contract Renewal
Change Contract
Conditions

Change Partner
Assignment
Rent adjustment

Create correspondence
Clear open items

Collect Rental charges Review dates & terms

VAT (Value added Tax)
• We can calculate the VAT for all the transactions (lease-in and Lease-
out) at contract level for each and every charges/conditions we are
using in our transactions as per the Local law.
Advantages of REFX Contracts
❑ Projection of Cash flow based on the REFX Contract validity.
❑ Flexible in terms of Contract termination ,Renewal ,Notices –
Reminders.
❑ Rental Object wise revenue tracking.
❑ Business Partner wise reporting assigned for multiple Rental
Objects/Contracts.
❑ Vacancy & Occupancy reports against the Rental Objects.
❑ Postings are flexible against the REFX Contracts –
Monthly,Quaterly,Yearly
Periodic (Invoice) Posting for Contract
• Invoice posting process helps us to get the connectivity with REFX-FI
module.
• This process is applicable for both lease in & Lease out contracts to
post the customer / vendor based invoices based on REFX contracts.
Print Forms
The below listed forms are very much required, We can develop the
same from REFX for lease out process. For lease in Vendor may
provide.

• Contract Offer form

• Contract Form (Lease agreement)
• Contract Renewal Letters
• Cash Receipt
• Invoices
Periodic Posting Contract
Overview of the solution

With the SAP Real Estate Management rapid-deployment solution, you can quickly and
affordably implement and automate real estate related business processes.

You can effectively align cross-functional stakeholders to manage real estate in a

collaborative way and deliver on strategic goals.
Service Charge Settlement -Process
MODULES INTEGRATED WITH RE-FX

❑ FINANCIAL ACCOUNTING
❑ CONTROLLING
❑ ASSET ACCOUNTING
❑ PLANT MAINTENANCE
❑ PROJECT SYSTEMS
❑ SALES AND DISTRIBUTION
❑ MATERIALS MANAGEMENT ETC
Integration with FI-CO module

SAP REFX is tightly integrated with FI-CO module which will help us to track all the expenses and
revenue against all the Real estate objects.
Accounting
• In accounting, the conditions that are entered on the contract (or the rental object) are transferred to
Financial Accounting, for example, using the periodic posting function, and then invoiced to the
contract partner. In the case of vacancies, they are debited or credited to the vacancy cost center. In
addition, accruals and deferrals are used to post rents and operating costs to the correct periods as
the revenue is earned or benefits received from the expense. Accounting also provides all functions
normally needed for payment transactions, for open items and for dunning.

Controlling
• This function contains, for example, manual CO planning, CO assessment, and CO settlement on
real estate objects.
IFRS 16

• IFRS 16 is an International Financial Reporting Standard promulgated by the International

Accounting Standards Board providing guidance on accounting for leases. IFRS 16 was issued in
January 2016 and will be effective for most companies that report under IFRS in 2019.

• With IFRS 16, it is no longer required to treat financial and operational leases differently from an
accounting perspective and therefore this new leasing standard eliminates nearly all “off-balance”
sheet accounting for leases. The goal of the new lease accounting rules is to increase transparency
and to enable the users of financial statements to assess the impact of their organization’s leases
on the financial position and cash flow directly from its balance sheet. To meet that objective, a
lessee should recognize assets and liabilities arising from a lease.
IFRS 16 Contract screen shot from REFX Contract
IFRS 16 Contract screen shot from REFX Contract
IFRS 16 Contract screen shot from REFX Contract
IFRS 16 Contract screen shot from REFX Contract
IFRS 16 Contract screen shot from REFX Contract
IFRS 16 Contract screen shot from REFX Contract
IFRS 16 Contract screen shot from REFX Contract
IFRS 16 Contract screen shot from REFX Contract
IFRS 16 Contract screen shot from REFX Contract
IFRS 16 Contract screen shot from REFX Contract
IFRS 16 Contract screen shot from REFX Contract
IFRS 16 Contract screen shot from REFX Contract
IFRS 16 Contract screen shot from REFX Contract
IFRS 16 Contract screen shot from REFX Contract
Valuation Posting for Contract
• Valuation posting process helps us to get the connectivity with REFX-
FI module.
• This process is applicable for both lease in & Lease out contracts to
post the customer / vendor based valuations based on REFX
contracts.
• For lease in contracts IFRS 16 based Asset accounting (asset &
Interest) can be posted to finance
• For lease out contracts Revenue Reorganization can be posted by
using the valuation posting process.
Integration with PM module - Highlights

• SAP REFX can be integrated with Plant maintenance module tightly to manage the
leasing and facility management process with complete 360 degree view at any point
of time by each building and unit wise.

• Also we can automate the procurement process WRT to REFX & PM so that all the
procurement activities will also get link to real estate objects.

• One more benefit is we can track/drill down all the maintenance expenses against
each property wise and tenant wise.

• The costs of a PM task are collected on the maintenance order that serves as a cost
object and these are passed on to Cost Center Accounting or Asset Accounting
Integration with Plant Maintenance (PM)

Use
• The Plant Maintenance (PM) and Customer Service (CS) components
enable you to plan and carry out all services, plant maintenance tasks,
preventative maintenance in your Real Estate objects.

Some examples of these tasks are: cleaning offices, repairing PROPERT,

preventative maintenance of elevators, and renovating an office / building
floor.
• You use the PM component to manage Real Estate objects used by your
own company.
• However, the master data objects of both components are basically the
same.
Integration with Plant Maintenance (PM)

Integration
• These components are integrated with the RE-FX component by
assigning functional locations of the PM components to the Real
Estate objects in the usage or architectural view.
• The functional location from the PM components describes the fixed,
unchangeable parts of real estate such as maintenance groups or
rooms.
Prerequisites
• REFX & Plant maintenance modules should be implemented in S4
HANA.
Integration with Plant Maintenance (PM)

Use
• Plant maintenance is for the planning and implementation of
scheduled and non-scheduled plant maintenance tasks (PM tasks) in
the area of real estate management.
• You assign functional locations to Real Estate objects in order to link
to the Plant Maintenance component.
• The Real Estate object represents the facility manager’s view.
• The functional location represents the specific geographical location
or the description of the plant maintenance task.
• The equipment master records represent the objects that are
maintained at a functional location.
Reports
• SAP RE-FX is having good reporting facility to get the information for each
property wise to know
• The occupancy status
• Validity status of the property
• Type of contract (Lease / Sale, Commercial, residential)
• Renewal’s made for the property
• Payment made against contracts
• Accruals / Deferrals
• Security deposit made against the contract..etc
• Open items
Q&A