SAP ERP FI Accounting vs.

CO Accounting

© SAP AG 1 Page 5-1

 SAP ERP FI and CO

 CC
 Chart of Accounts
 General Ledger
 Implications of the Sarbanes-Oxley Act

 Controlling Area
 Cost object
- Cost Center
- Profit Center
- Etc…

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Materials Management / Inventory
Management

© SAP AG
 SAP ERP MM - Functionality

 Inventory Management
 Physical Inventory
 Valuation
 Purchasing
 Invoice Verification
 Product Catalogs

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 SAP ERP Unit Overview

 MM Organizational Structure
 MM Master Data
 MM Processes
- Procure-to-Pay Process

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 SAP ERP Organizational Structures

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 SAP ERP MM Organizational Structure (Materials Mgmt.)

 Client
- An independent environment in the system
 Company Code
- Smallest org unit for which you can maintain a legal set of books

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 SAP ERP Organizational Structures: Plant

 Plant
- Operating area or branch within a company
• Manufacturing, distribution, purchasing or maintenance facility

 Lowest valuation area

 Organizational level where Material Requirements (MRP) runs
 May be a physical or logical unit

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 SAP ERP Organizational Structures: Valuation Area

 The valuation area determines at which level a material is valuated

(inventory value is established)
 SAP allows valuation at the company code or plant level, but
recommends valuation area be set at the plant level.
 Means each plant can have its own material prices and account
determination

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 SAP ERP Organizational Structures: Storage Location

 Subdivision of a plant
 There may be one or more storage locations within a plant.
 Where materials are managed (inventory management)
- Raw Materials
- Maintenance, Repair, and Other (MRO)
- Finished Product
 Physical inventories are carried out at storage location level.

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 SAP ERP

 The plant is embedded in the organizational structure as follows:

 The plant is assigned to a single company code. A company code
can have several plants.
 Several storage locations in which material stocks are managed
can belong to a plant.

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 SAP ERP GBI 2.0 Structure for Materials Management

Global Bike Client

Company
Global Bike Inc. Global Bike Germany GmbH Code

Dallas San Diego Miami Heidelberg Hamburg Plant

Raw Materials Trading Goods Trading Goods Raw Materials Trading Goods
Storage
Semi-fin. Goods Finished Goods Finished Goods Semi-fin. Goods Finished Goods Location
Finished Goods Miscellaneous Miscellaneous Finished Goods Miscellaneous

Miscellaneous Miscellaneous

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 SAP ERP MM Organizational Structure (Purchasing)

 Purchasing Organization
- The buying activity for a plant takes place at the purchasing
organization
- PO can provide services for one or more plants
- Enterprise has one or more POs
- Organization unit responsible for procuring services and materials
- Negotiates conditions of the purchase with the vendors
 Purchasing Group
- Key that represents the buyer or group of buyers who are responsible
for certain purchasing activities

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 SAP ERP GBI Enterprise Structure in SAP ERP (Logistics)

Shipping Point DL00 MI00 SD00 TO00 HD00 HH00 PE00

RM00 TG00 TG00 TG00 RM00 TG00 TG00

Storage SF00 FG00 FG00 FG00 SF00 FG00 FG00
Location
FG00 MI00 MI00 MI00 FG00 MI00 MI00
MI00 MI00

Central Purchasing Organization (global) GL00

Purchasing Org. US00 CA00 PO DE00 AU00

Purchasing Group North America PGr Europe Asia

N00 E00 A00

Dallas Miami S. Diego Toronto Heidelb. Hamburg Perth Plant

DL00 MI00 SD00 TO00 HD00 HH00 PE00
CC US00 CA00 CC DE00 AU00 Company Code

Client GBI

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 SAP ERP Vendor Master Data

 Vendor Master
- Contains all the necessary
information needed to business
with an external supplier
- Used and maintained primarily by
the Purchasing and Accounting
Departments
- Every vendor MUST have a
master record

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 SAP ERP Material Master Data

 Material Master
- Contains all the information a
company needs to manage about
a material
- It is used by most components
within the SAP system
• Sales and Distribution
• Materials Management
• Production
• Plant Maintenance
• Accounting/Controlling
• Quality Management
- Material master data is stored in
functional segments called Views

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 SAP ERP Material Master Views

Sales Data

Basic Data Purchasing Data

Mat. Plan. Data

Material Master Forecasting Data

Storage Data

Controlling Data Quality Data

Accounting Data

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 SAP ERP Material Master

General Information relevant for the entire organization:

Name
Weight
Client XXX Unit of Measure

Sales specific information: Storage Location specific information:

Delivering Plant Stock Qty

Loading Grp
Sales Org. UW00 Storage Loc. FG00

Sales Org. UE00 Storage Loc. TG00

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 purchasing info record

info record

prices
terms & cond.
PO statistics
tolerance levels

quotation outline
agreement
order
 SAP ERP Purchasing Information Record

 Allows buyers to quickly determine:

- Which vendors have offered or supplied specific materials
 Info Records contain:
- Data on pricing and conditions
- Last purchase order
- Tolerance limits for deliveries
- Specific lead times
- Availability periods
- Vendor Evaluation data
 Serves as default information for Purchase Orders

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 SAP ERP Master Data in Use

Purchase
Order

45......01

Material Master Vendor Master

Purchasing
Information Record

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MM – interdependencies to other modules

PP MM SD
production sales and
planning distrib.
material master

purchasing

requirements plan.
QM inventory mgmt. PM
quality plant
invoice verification maintenance
management

FI CO AM
financial acc. controlling fixed assets mgmt.
 SAP ERP Procure-To-Pay Process

Purchase Vendor
Requisition Selection
Purchase
Order

Notify
Payment Vendor
to Vendor

Invoice Vendor
Receipt Shipment
Goods
Receipt

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 SAP ERP Purchase Requisition

 Internal Document instructing the purchasing department to

request a specific good or service for a specified time
 Requisitions can be created two ways:
- Directly - Manually
• person creating determines: what, how much, and when
- Indirectly - Automatically
• MRP
• Production Orders
• Maintenance Orders
• Sales Orders

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 SAP ERP Source List

 A source list is a record that specifies the allowed means for

procuring a material for a certain plant within a given time period.
- If the list contains a sole source the system will assign the vendor to
the requisition.
- If several options exist the system will display a list of vendors for you
to choose from.
- If no source has been established the system will revert to search
information records and outline agreements.

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 SAP ERP Request for Quotation

 If nothing exist in the system we may need to submit a request for

quotation to our vendors. An RFQ is an invitation to a vendor by a
Purchasing Organization to submit a bid for the supply of materials
or services
- The accepted quotations will generate Purchasing Information Records
- Perform Quotation Price Comparisons
- Finally Select a Quotation

P.O.
Quote 45…12
Vendor
Pur generate 1
RFQ Quote Eval.
Req.
Vendor
2 Reject
Quote Letter
Vendor
3

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 SAP ERP Quotation from Vendor

 The quotation received by your company is a legally binding offer,

should decide to do business with the vendor, containing price’s
and conditions for the materials specified in the RFQ (request for
quote)for a predefined period of time.
- In SAP the RFQ and the Quotation will be become a single document,
you will enter the vendor’s response in the RFQ you created.

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 SAP ERP Purchase Order

 A purchase order is a formal request to a vendor for a specific

material or service under the stated conditions
 Purchase Orders can be created manually
- Reference a Purchase Order
- Reference a Purchase Requisition
- Reference a RFQ/Quotation
- Without Reference
 Purchase Orders can be create automatically

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 SAP ERP Purchase Order Structure

Header

Vendor Date
Doc. Number Currency
Terms of Payment PO Price
Item Overview

Purchase Materials Price/UofM

Order Quantities
Delivery Date
45......01 Line Item
PO History Tolerances
Line Price
Delivery Schedule

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 SAP ERP Purchase Order Output

 Once a Purchase Order has been created the vendor needs to be

notified
- Printed
- E-mail
- EDI
- Fax
- XML
 There are a variety of forms that aid in the purchasing process and
are generated from the Purchase Order
- Purchase Order Output
- Order Acknowledgement Forms
- Reminders
- Schedule Agreements

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 SAP ERP Electronic Data Interchange

 EDI - Electronic Data Interchange

 Is the electronic transfer of information between two trading
partner’s systems using a set of transactions that have been
adopted as a national or international standard for the particular
business function.

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 SAP ERP The Transcript Trail

Print
Transcrip
t Re-key
Data

Receive
U.S. Transcrip
Mail t

Student
Information
System

Recipient’
s Student
Request Informatio
Transcript n 5-32
Page System
© SAP AG
 SAP ERP The Transcript Trail with EDI

Print
Transcrip
t Re-key
Data

Receive
U.S. Transcrip
Mail t
Student
Information
System

EDI

Recipient’
s Student
Request Informatio
Transcript n 5-33
Page System
© SAP AG
 SAP ERP Goods Receipt

Purchase
Order
45......01

Notify Vendor

Vendor

Goods
Receipt Shipment

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 SAP ERP Goods Receipt

 Goods movement in which we accept goods into our system

 If materials are delivered against a Purchase Order we will
reference that Order
- Determine if we got what we ordered
- System can purpose data for us from the PO
• Material, quantity
- Purchase Order History is update with the receipt
- Updates Physical Inventory
- Updates Inventory G/L Account

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 SAP ERP Invoice Processing

 When an invoice is saved it applies the liability from the Goods

Receipt of our Purchase Order to a Vendor

 Upon verification the:

- Purchase Order is updated
- Material Master is Updated (MAP)
- Accounting Document is created

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 SAP ERP Invoice Processing

 Incoming Invoices are reference against a Purchase Order to verify

their content, prices, and arithmetic.
 If discrepancies arise between the purchase order or goods receipt
and the invoice the system with generate a warning or an error
- Depending on system configuration the difference could cause the
system to Block the Invoice
Purchase order
- Target quantity
- Target price

Invoice receipt Goods receipt

- Actual price - Actual quantity

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 SAP ERP Payment to Vendor

 Can be done automatically or manually

- Post Outgoing Payment vs. Payment Program

 Elements of the Payment Transaction:

- Payment Method
- Bank from which they get paid
- Items to be Paid
- Calculate Payment Amount
- Print Payment Medium

 Process will create a financial accounting document to record the

transaction

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 Goods Receipt / Invoice Receipt
SAP ERP
Reconciliation Account

Purchase requisition No impact on

Financial Accounting (FI)
Purchase order
Materials Management (MM)
and Financial Accounting (FI)
Goods receipt via automatic account
assignment

Inventory GR / IR
Dr Cr Dr Cr
$100 $100

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 Goods Receipt / Invoice Receipt
SAP ERP
Reconciliation Account

Amount owed is
Invoice receipt assigned and transferred to
vendor account payable

GR / IR Vendor A/P
Dr Cr Dr Cr
$100 $100

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 SAP ERP Vendor Payment

Amount owed is paid to

Bank vendor and account payable
is reduced

Bank Vendor A/P

Dr Cr Dr Cr

$100 $100

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 SAP ERP FI – MM Integration Point

Goods Invoice Payment

Receipt Receipt Program
AP
Inventory GR / IR (Vendor) Bank
Dr Cr Dr Cr Dr Cr Dr Cr

$100 $100 $100 $100 $100 $100

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