56694321 FICO Material Santhosh 1 Kaparthi[1]

Mr.K.Santhosh KumarSAP FICO Consultant

FICO Overview

FIAP

ARAMGL

CON Specia

lLedger


How to enter into System:

Double click on SAP Logon on desktop

Click on Log on

Client : 800

User : SAPUSER

Password : india123

Language : EN (English)

Enter

Note: SAP Package was developed in 41 languages

Note: If you don't enter language, Default language is English

Home screen of SAP is SAP Easy Access

SAP Package was developed in screen wise. Each screen has its own name

that is called Transaction code (Tcode)

Menu bar, Name bar and Application tool bar will be changed screen to

screen.

Standard tool bar is same in every screen, but based on the screen

requirement some buttons are active and some buttons are disabled.

SAP has given two screens

1. End user screen (SAP Easy Access)

2. Consultant screen (Tcode: SPRO)


1. Define Company (Group Company)

Definition: Company is an independent organizational unit, which is

registered under commercial law. Under company, we can generate

consolidated financial statements. Financial statements mean profit and loss

account and balance sheet.

Ex: TATA Group, Birla Group, Reliance Group etc.

Path: SPRO - SAP Reference IMG- Enterprise Structure- Definition- Financial

Accounting - Define Company (Tcode: OX15)

Execute

Click on New Entries (F5)

Company :

Company name :

Street :

Postal code :

City :

Country : IN (India)

Language key : EN (English)

Currency : INR (Indian Rupees)

Save (Ctrl+S) and enter


2. Define Company Code

Definition: Company code is an independent organizational unit, which is

registered under Companies Act, 1956. Under company code, we can

generate Financial Statements. Financial statements mean profit and loss

account and balance sheet.

Ex: TATA Motors, TATA Steel, TATA Chemicals, TATA Power etc.

Path: SPRO- SAP Reference IMG- Enterprise Structure- Definition- Financial

Accounting- Edit, copy, Delete, check Company Code (Tcode:OX02)

Execute

Double click on Edit Company Code Data


Company Code :

Company Name :

City :

0Country : IN (India)

Currency : INR (Indian rupees)

Language : EN (English)

Save (Ctrl+S)

Title : Company

Name :

Street :

House number :

Postal code :

City :

Country : IN (India)

Enter and enter


3. Define Business Area

Definition: Business area nothing but branch. Under business area, we can

generate Branch Financial statements. Financial statements mean profit and

loss account and balance sheet. Branch Financial statements will be useful

for internal reporting.

Path: SPRO - SAP Reference IMG- Enterprise Structure- Definition- Financial

Accounting- Define Business Area (Tcode: OX03)

Execute


Business Area Description

______ Hyderabad Branch

______ Mumbai Branch

______ Bangalore Branch

______ Chennai Branch

Save and enter

4. Assign Company Code to Company

Path: SPRO- SAP Reference IMG- Enterprise Structure- Assignment- Financial

Accounting - Assign Company Code to Company (Tcode: OX16)

Execute

Go to position button

Company Code :

Enter

Company :

Save and enter

5. Define Fiscal Year Variant


Definition: Fiscal year means financial year. It consists of 12 months and 4

Special periods. Special periods mean Adjustment accounts after closing the

financial year. System can't understand other than calendar year. For Ex:

2009-2010. We need to convert to one year. 9 months will come under 2009

year (April to Dec) and 3 months will come under 2010 (Jan to March). 3

months of 2010 to 2009, this is called year shift.

Path: SPRO- SAP Reference IMG-Financial Accounting (New) - Financial

Accounting Global Settings (New) – Ledgers- Fiscal Year and Posting Periods-

Maintain Fiscal Year Variant (Maintain Shortened Fisc. Year) (Tcode: OB29)

Execute


FV :

Description : April to March

Number of posting periods : 12

No. of special periods : 4

Enter

Select SK

Double click on Periods


Month Day Period Year shift

4 30 1 0

5 31 2 0

6 30 3 0

7 31 4 0

8 31 5 0

9 30 6 0

10 31 7 0

11 30 8 0


12 31 9 0

1 31 10 -1

2 28 11 -1

3 31 12 -1

Double click on Period texts


Lang Period Txt Text

EN 1 APR April

EN 2 MAY May

EN 3 JUN June

EN 4 JUL July

EN 5 AUG August

EN 6 SEP September

EN 7 OCT October

EN 8 NOV November

EN 9 DEC December

EN 10 JAN January

EN 11 FEB February

EN 12 MAR March

Save and enter

6. Assign Company Code to a Fiscal Year Variant

Path: Same path (Tcode: OB37)


Execute

Go to Position button

Ignore warning messages

Company Code :

Enter

Fiscal year variant :

Save


Enter

7. Define Variants for Open Posting Periods

Path: SPRO- SAP Reference IMG- Financial Accounting (New)- Financial

Accounting Global Settings (New)- Ledgers- Fiscal Year and Posting Periods-

Posting Periods- Define Variants for Open Posting Periods (Tcode: OBBO)

Execute


Variant :

Name : Variant for

Save and enter

8. Assign Variants to Company Code


Path: Same path (Tcode: OBBP)

Execute


Company Code :

Enter

Variant :

Save and enter

9. Open and Close Posting Periods


Execute


Var. :

A : +

From per.1 : 1

Year :

To period : 12

Year :

Save and enter

10. Define Document Types

Definition: Document type means to differentiate business transactions.

Business transactions are Customer invoice, Vendor Invoice, Customer


incoming payment, Vendor outgoing payments, General posting, etc.

Document type controls Number ranges and account types.


Accounting Global Settings (New)- Document- Define Document Types -

Define Document Types for Entry View (Tcode:OBA7)

Execute


Document type : SA

Enter

Select SA

Click on Details (Ctrl+Shift+F2)

Click on Number range information

Company Code :

Note: Display Interval- It shows what intervals we created

Status button- we can see, how many numbers we used

Change intervals- Create new interval and Change existing intervals

Click on Change Interval

Click on Insert Interval (Shift+F1)

No : 01

Year : 2009

From number : 0100000000

To Number : 0199999999

Enter

Save and enter

Note: Number ranges can’t be transferred to production client

11. Define Field Status Variants


Definition: Field status variant controls transactional data. Field status

variant consists of Field status groups. Field status groups consist of Fields.

Field status variant assigned to company code.

At the time entry the system gives 70 fields

Ex: Quantity, Business area, value date

You can make any field as

1. Suppress field – Field will not be visible.

2. Required field – To enter the values.

3. Optional field – Choice to enter or not enter.


Accounting Global Settings (New)- Ledgers- Fields - Define Field Status

Variants (Tcode:OBC4)

Execute

Select 0001

Click on Copy as (F6)

Replace 0001 to ______

Enter

Click on Copy All

Enter

Save and enter

Select ______

Double click on field status Groups

Double click on G001

Double click on General data

Observe fields and don’t disturb the fields

12. Assign Company Code to Field Status Variants

Path: Same path (Tcode: OBC5)


Execute


Company Code : ______

Enter

Fld.stat.var. ______

Save and enter

13. Edit Chart of Accounts List

Definition: Chart of Accounts means list of G/L Accounts.

Path: SPRO- SAP Reference IMG- Financial Accounting (New)- General

Ledger Accounting (New) - Master Data- - G/L Accounts - Preparations- Edit

Chart of Accounts List (Tcode:OB13)

Execute


Chart of accounts : ______

Description : Chart of Accounts for

Maint.language : EN English

Length of G/L Account number : 6

Save and enter

14. Assign Company Code to Chart of Accounts

Path: SPRO- SAP Reference IMG- Financial Accounting (New) - General

Ledger Accounting- G/L Accounts- Master Data- Preparations- Assign

Company Code to Chart of Accounts (Tcode:OB13)


Execute


Company Code :

Enter

Chrt/Accts :

Save and enter

15. Define Account Group


Ledger Accounting (New)- Master Data- G/L Accounts- Preparations- Define

Account Group (Tcode: OBD4)

Execute


Chrt/Accts Acct Group Name from acct to Account

______ LIAB Liabilities 100000 199999

______ ASST Assets 200000 299999

______ INCO Incomes 300000 399999

______ EXPN Expenses 400000 499999

Save and enter

16. Define Retained Earnings Account

Definition: It is a bridge to flow the profit or loss to the balance sheet.



Execute

Chart of accounts :______

Enter

P&L statmt acct type : X

Account : 100100

Save

It gives the Message, Account 100100 not created in chart of Accounts ______


Enter

17. Define Tolerance Groups for G/L Accounts

Definition: Tolerance Groups means authorizations to post transactions.


Path: SPRO- SAP Reference IMG- Financial Accounting (New)- General Ledger

Accounting (New)- Business Transactions- Open Item Clearing- Clearing

Differences- Define Tolerance Groups for G/L Accounts (Tcode:OBA0)

Execute


Company Code :______

Save and enter

18. Define Tolerance Groups for Employees

Path: Same path (Tcode: OBA4)

Execute


Execute


Amount per document : 99999999

Amount per open item account item : 99999999

Cash discount per line item:3

Save and enter

19. Creation of G/L Master Records

Path: Accounting - Financial Accounting - General Ledger - Master Records -

G/L Accounts - Individual Processing - FS00 - Centrally (Tcode:FS00)

Double click on FS00 - Centrally


19.1. Share Capital A/C

G/L Account : 100000


Click on Create

Go to Type/Description Tab

Account Group : LIAB Liabilities

Select Balance Sheet Account

Short Text : Share Capital A/C

G/L Acct Long Text : Share Capital Account

Go to Control Data Tab

Select Only Balances in local crcy

Select Line item display

Sort Key : 001

Go to Create/bank/interest Tab

Field Status Group : G001

Save

19.2. Bank Account



Click on Create



Account Group : ASST Assets


Short Text : Bank A/C

G/L Acct Long Text : Bank Account




Sort Key : 001



Save

Posting key controls whether it is debit or credit, account types and fields

Note: In general ledger component, Posting keys are,

Posting Key 40: Debit

Posting key 50: Credit

20. General Posting

Path: Accounting - Financial Accounting - General Ledger - Posting - F-02 -

General Posting (Tcode: F-02)

Double click on F-02 - General Posting

Enter header data (Type SA)


PstKy : 40

Account : 290100 (Bank A/C)

Enter

Amount : 25000

Business Area : TCSH

Value Date :

PstKy : 50

Account : 100000 (Share Capital A/C)

Enter

Amount : *

Click on More

Business area : TCSH

Enter

Go to Menu bar

Document - Simulate

Save

20.1. Document Display

Path: Accounting - Financial Accounting - General Ledger - Document - FB03

- Display (Tcode: FB03)

Double click on FB03 - Display

Click on Document list (Shift+F8)



Document type :SA

Execute (F8)

Double click on document no.

20.2. Display ledger balances

Path: Accounting - Financial Accounting - General Ledger - Account - FS10N

- Display Balances (Tcode: FS10N)

Double click on FS10N - Display Balances



Fiscal year : 2009

Execute (F8)

21. Hold Documents

If you don't have time to verify document or any hesitations with Document,

discuss with senior and confirm it is called Hold document.

21.1. Create Hold Document (Tcode:F-02)



PstKy : 40 (Debit)


Enter

Amount : 25000

Business Area : TCSH

Value date :

PstKy : 50 (Credit)

Account : 100000 (Share Capital A/C)

Enter

Amount :*

Click on More


Enter

Go to Menu bar

Document - Hold

Temporary Document number : Venkat

Enter

21.2. Post held Documents (Tcode:F-02)

Click on Held Document (F5)

Temporary Document number : Venkat

User : SAPUSER

Enter

Save

22. Parking document


Definition: If you don't have authorization to post the document, just park the

document before your superior.

22.1. Creation of Park Document (Tcode:F-02)


PstKy : 40


Enter

Amount : 30000

Value date :

PstKy : 50

Account : 100000

Enter

Amount :*

Go to Menu bar

Document – Park

22.2. Post/Delete/Change parked documents

Path: Accounting - Financial Accounting - General Ledger - Document -

Parked Documents - FBV0 - Post/Delete (Tcode: FBV0)

Double click on FBV0 - Post/Delete

22.2.1. Post Parked Documents

Company Code :

Doc.Number :

Fiscal year :


Enter

Save

22.2.2. Delete parked Documents

Company Code :

Doc.Number :

Fiscal year :

Enter

Go to Menu bar

Document – Delete

22.2.3. Change parked Documents

Company Code :

Doc.Number :

Fiscal year :

Enter

Double click on Line item

Amount : 24000

Save

22.2.4. Again park document before his superior

Company Code :

Doc.Number :

Fiscal year :

Enter

Go to Menu bar

Document - Park Document

23. Account Assignment Model

Definition: This is a template to post the documents


23.1. Create Account Assignment Model

Path: Accounting - Financial Accounting - General Ledger - Posting -

Reference Documents - FKMT - Account Assignment Model (Tcode: FKMT)

Double click on FKMT - Account Assignment Model

Acct assignment model :

Click on Create (F5)

Currency : INR

Click on Line items (Shift+F8)

PK CoCd Account BusA

40 ______ 290100 _______

50 ______ 100000 _______

Save

23.2. Post with Account Assignment Model (Tcode:F-02)



Enter Header Data (Type SA)

Click on Acct Model (F7)

Acct assignment model : Venkat

Enter

Amount : 25000

Save

24. Fast Data Entry (Tcode:F-02)




Double click on F-02 - General Posting (Tcode: F-02)

Enter Header data (Type SA)

Click on Fast Data Entry (Shift+F8)

PK Account Amount BusA

40 290100 25000 TCSH

50 100000 * TCSH

Enter

Save

25. Sample documents

25.1. Maintain number ranges for Sample documents


Accounting Global Settings (New)- Document- Document Number Ranges-

Documents in Entry View- Define Document Number Ranges for Entry View

(Tcode: FBN1)

Execute

Company Code :

Click on change interval

Click on Insert interval (Shift+F1)

No : X2

Year : 2009

From Number : 0002000000

To Number : 0002999999

Enter


Save and enter

25.2. Create Sample documents


Reference Documents - F-01 - Sample Document (Tcode:F-01)

Enter header data (Type AB)

Double click on F-01 - Sample Document

PstKy : 40

Account : 290100

Enter

Amount : 30000

Business area :

PstKy : 50

Account : 100000

Enter

Amount : *

Click on More


Enter

Save

25.3. Post Sample documents (Tcode: F-02)

Enter header data

Click on Post with reference (Shift+F9)

Document number : 2000000

Company code :______

Enter and enter

Save and enter


26. Recurring Documents

Definition: Recurring documents means regular transactions.

26.1. Maintain number ranges for recurring document

(Tcode: FBN1)




No : X1

Year : 2009


To Number : 0001999999

Enter

Save and enter


26.2. Create Recurring documents


Reference Documents - FBD1 - Recurring Document (Tcode: FBD1)

Company Code :

First run on :

Last run on :

Interval in months :1

Document type : SA

PstKy : 40

Account : 290100

Enter

Amount : 25000

PstKy : 50

Account : 100000

Enter

Amount : *

Save


26.3. Post recurring documents

Path: Accounting - Financial Accounting - General Ledger - Periodic

Processing - Recurring Entries - F.14 - Execute (Tcode: F.14)

Company Code :


Settlement period :

Batch input session name : Venkat

Execute (F8)

Go to Menu bar

System - services - Batch Input - sessions

Select Venkat

Click on process (F8)

Select display errors

Select Extended log

Enter

Click on Exit Batch input


27. Balance Interest Calculation

27.1. Define Interest Calculation Types

Path: SPRO- SAP Reference IMG- Financial Accounting(New)- General Ledger

Accounting(New)- Business Transactions- Bank Account Interest Calculation-

Interest Calculation Global Settings- Define Interest Calculation Types

(Tcode:OB46)

Execute


Int ID :

Name : 10% Interest

Int calc.type : S Balance Interest Calcula

Save and enter

27.2. Prepare Account Balance Interest Calculation

Path: Same path (Tcode: OBAA)

Execute



Int.calc.Indicator :

Interest calc.freq. : 1

Calendar type : G

Select Balance plus int

Save and enter

27.3. Define Reference Interest Rates

Path: SPRO- SAP Reference IMG- Financial Accounting (New) - General

Ledger Accounting (New) - Business Transactions- Bank Account Interest

Calculation- Interest Calculation- Define Reference Interest Rates

(Tcode: OBAC)

Execute


Ref.int.rate :

Long Text : 10% Interest

Description : 10% Interest

Date from :

Currency : INR

Save and enter


27.4. Define Time-Dependent Terms


Execute


Int.calc.indicator :

Currency key : INR

Eff.from :

Sequential number : 1

Term : Credit interest: balance interest

calc.

Ref.interest rate : IM_USD_1

Save and enter

Click on Next Entry (F8)

Int.calc.indicator :

Currency key : INR

Eff.from :


Term : Debit interest: balance interest

calc.


Ref.interest rate : IM_USD_1

Save and enter

27.5. Enter Interest Values

Path: same path (Tcode: OB83)

Execute


Reference :

Valid from :

Int.rate : 10

Save and enter

27.6. Creation of G/L Accounts (Tcode:FS00)

27.6.1. Interest Expense A/C


Company Code :

Click on Create


Account Group : EXPN Expense

Select P&L statement acct

Short Text : Interest Paid A/C


G/L Acct Long Text : Interest Paid Account

Go to Control data Tab

Select only balances in local crcy


Sort Key : 001

Go to Create/Bank/Interest Tab

Field status group : G001

Save

27.6.2. Loan Account


Company Code :

Click on Create



Select Balance sheet Account

Short Text : Loan A/C

G/L Acct Long Text : Loan Account


Select only balances in local currency


Sort Key : 001



Interest Indicator : SK

Save


27.7. Assign G/L Accounts

Path: SPRO- SAP Reference IMG- Financial Accounting(New)- General Ledger

Accounting(New)- Business Transactions- Bank Account Interest Calculation-

Interest Posting- Prepare G/L Account Balance Interest Calculation

(Tcode:OBV4)

Execute

Click on Accounts (F7)

Chart of accts :

Enter

Acct symbol Currency G/L acct

0002 INR 400080

2000 INR 100500

Save and enter

27.8. Post Loan Taken from bank (Tcode:F-02)


PstKy : 40


Enter

Amount : 100000

PstKy : 50

Account : 100500 (Loan A/C)


Enter

Amount :*

Go to Menu bar

Document - simulate

Save

27.9. Interest calculation

Path: Accounting - Financial Accounting - General Ledger - Periodic

Processing - Interest Calculation - F.52 - Balance Interest Calculation

(Tcode: F.52)

Chart of accounts :

G/L Account : 100500 (Loan Account)

Company Code :

Calculation period :_________ __________

Select post interest settlement

Select post also if Val. date in past

Select update master record

Session name : Venkat

Execute

Go to Menu bar

System - services- batch input - sessions

Select Venkat


Select display errors

Select Extended log

Enter

Click on Exit batch input


27.10. Document display (Tcode: FB03)

27.11. Display ledger (Tcode: FS10N

27.12. Define Reasons for Reversal


Accounting (New)- Business Transactions- Adjustment Posting/Reversal-

Define Reasons for Reversal

Execute


Reason :

Name : Wrong Entry posted

Select Alt.pos.dt

Save (Ctrl+S) and enter

28. Reversal of Documents

Path: Accounting - Financial Accounting - General Ledger - Document -

Reverse - FB08 - Individual Reversal (Tcode: FB03)


Company Code :

Fiscal year : 2009

Reversal reason :

Save

28.1. Document display (Tcode: FB03)


29. Report Layout and Sort filter Command (Tcode: FS10N)

29.1. Report Layout


Company code :

Fiscal year :

Execute (F8)

Double click on Amount

Click on Change Layout (Ctrl+F8)

Select Posting date

Select Posting key

Click on Show Selected fields

Enter

29.2. Sort filter Commands


Company code :

Fiscal year :

Execute (F8)

Double click on Amount

Click on Doc.Date

Click on Set Filter (Ctrl+Shift+F2)

Document date :

Enter

System will display only __________ Date transactions


30. Open items processing

Entries:

a. Posting out standing Expenses

Rent A/C

To O/S Expenses A/C

b. Clearing out Standing Expenses

O/S Expense A/C

To Bank A/C

30.1. Create Outstanding Expenses G/L A/C (Tcode: FS00)


Company Code :

Click on Create


Account group : LIAB Liabilities


Short Text : O/S Expenses A/C

G/L Acct Long Text : Out Standing Expense A/C



Select Open Item Management


Sort key : 001


Field Status group : G001

Save


30.2. Post out standing expenses (Tcode: F-02)

Enter Header (Type SA)

PstKy : 40

Account : 400090 (Expense A/C)

Enter

Amount : 25000

Click on More

Business area :

PstKy : 50

Account : 190600 (Out Standing Expense A/C)

Enter

Amount : *

Click on More

Business area :

Go to Menu Bar

Document - simulate

Save

30.3.Report

Path: Accounting- Financial Accounting- General Ledger- Account- FBL3N -

Display/Change Line Items (Tcode: FBL3N)

G/L Account : 190600 (Out Standing Expense A/C)

Company code :

Select Open items

Execute


30.4.Clear Out standing expense

Path: Same path (Tcode: F-07)

Account : 190600

Company code :

Select None

Click on Process open items (Shift+F4)

Click on Document Overview (Shift+F2)

PstKy : 50


Enter

Amount : 25000

Click on More

Business area :

Enter


Go to Menu bar

Document – simulate

Save

30.5. Report (Tcode: FBL3N)

G/L account : 190600 (Out Standing Expenses A/C)

Company code :

Select cleared items

Execute (F8)

31. Prepaid Expenses

Entries:

a. Posting of prepaid Expenses

Prepaid Expense A/C

To Bank A/C

b. Clearing of prepaid Expenses


Rent A/C

To Prepaid expenses A/C

31.1. Create prepaid Expense G/L Account (Tcode: FS00)


Company code :

Click on create




Short text : Prepaid Ex. A/C

G/L Acct Long Text : Prepaid expense Account



Select open item management

Select line item display

Sort key : 001



Save

31.2. Post prepaid expenses (Tcode: F-02)


PstKy : 40

Account : 290400 (Prepaid Expenses A/C)

Enter

Amount : 25000

Click on More

Business Area :

Enter

PstKy : 50



Enter

Amount : *

Click on More

Business area :

Enter

Go to Menu bar

Document – Simulate

Save


G/L Account : 290400 (Prepaid Expense A/C)

Company code :

Select Open items

Execute (F8)

31.4. Clear prepaid expense (Tcode: F-03)

Path: Accounting- Financial Accounting- General Ledger- Account- F-03 –

Clear (Tcode: F-03)

Account : 290400 (Prepaid Expense A/C)

Company code :

Select None

Click on Process Open Items (Shift+F4)

Click on Document overview (Shift+F2)

PstKy : 40

Account : 400090 (Rent A/C)

Enter

Amount : 25000

Click on process open items (Shift+F4)

Go to Menu bar


Save



G/L Account : 290400 (Prepaid Expense A/C)

Company code :

Select Cleared items

Execute (F8)

Postings:

Foreign currency postings:

1. Check exchange rate types;

Bank buying – Export – G TypeBank Setting – Imports/Expenditure – B TypeAverage Rate: Used by MM/SD People – M Type

Path: SPRO General settings Currencies Check exchange rate types.

Select position buttonExchange rate type: BEnter

Define transaction ratios for currency transaction

Path: SPRO General settings Currencies Define translation ratio for currency translation.

This defines the conversion factory between two currencies.

USD 1 : INR 1 Japanese year 100 : INR 1 Europe 1 : INR 1

Once we follow one conversion factory, follow continuously the same for all the year.This is at client level

Path: SPRO SAP Net weaver- General settings Currencies Define translation ratio for currency translation.

Ignore the message select “yes” buttonSelect new entries buttonExchange rate type from to valid (from) ratio (from) ratio (to)G (Bank buying) USD INR 01.04.2010 1 1B (Bank selling) USD INR 01.04.2010 1 1


M (Average rate) USD INR 01.04.2010 1 1Save (or) (ctrl + s)Save in your request

Enter exchange rates:

Path: SPRO General settings Currencies Enter exchange rates

Select new entries button

Exchange rate type: G (Bank buying)

Valid date: 25-07-2006

From Currency: USD

To select: INR

Direct quotation: 44/-

Enter

Exchange rate type: Select B

Valid date: 25-07-2006

From currency: USD

To currency: INR


Exchange rate type: M

Valid from: 25-07-2006From currency: USD

To currency: INR


SaveSave in your request

You can enter each type for each day only Path for forex rates at user level


Accounting Financial Accounting General Ledger Environment

Current settings Events translation rates (S_BCE_68000174)

When the rate is not given:

It takes the rates from forex table

It takes the latest date rate

To enter default exchange rate

Type based on document type

G/L Posting – SA b (Bank selling)

Purchase invoice posting G (Bank buying)(If we don’t specify it takes ‘M’ type by default. ‘M Average rate’

To enter default exchange rate type ‘B’ (Bank selling) for document type – ‘SA’

(Use the transaction code (OBA7).

Select position button

Give the document type ‘SA’

Enter

Select document type ‘SA’.

Select details button

Under default values exchange rate type for foreign currency documents

Enter B

Select save button (or) (ctrl + s)

Postings

When the rate is not given When the rate is given


Save in your request

Foreign Currency Posting (F-02)

Document date 02-08-2006

Type: SA

Company code: AML

Currency: USD

Posting key: 40

Give account No. 400100 (Salaries account)

Enter

Give the amount 1000$

Business area: AMH

Text: Salary payment

Enter

Posting key: 50

Account No. 200100 (Cash account)

Enter

Amount: ‘*’

Business area: AMH

Text: ‘+’

Document Simulate

To view in INR Select display currency button.

Select save button (or) (ctrl + s).

When the rate is given at the time of posting


Use the transaction code (F-02)

Give the document date: 02-08-2006

Type: SA

Company code: AML

Currency: USD

Give the rate: 48/-

Posting key: 40

Account: 400100 (Salaries Account)

Enter

It gives message

Exchange rate: 48$ deviate the increase 4.38%

Ignore message and Enter

Give the amount: 1000$

Business area: AMH

Text: Salary payment

Press: Enter

Posting key: 50

Give the account no: 200100 (Cash account)

Enter

Amount: *.

Business area: AMH

Text: +Documents Simulate & save.


Accounts payables:


This component will deal with vendors, Terms and conditions, Invoices,

outgoing payments, Advance to vendors, Etc. Vendors are subsidiary

ledgers. AP component integrates with General ledger component.

Define Account Groups

Definition: It controls fields in master record and number range intervals.

Path: SPRO- Financial Accounting(New)- Accounts Receivable and Accounts

Payable- Vendor Accounts- Master Data- Preparations for Creating Vendor

Master Data- Define Account Groups with Screen Layout (Vendors)

(Tcode:OBD3)

Execute


Account Group :

Name : Dom.Vendors

Save and enter

Create Number Ranges for Vendor Accounts


Path: Same path (Tcode: XKN1)

Execute

Click on Change interval

Click on Insert interval (shift+S)

No :

From Number :

To Number :

Enter

Save and enter

Assign Number Ranges to Vendor Account Groups

Path: same path (Tcode: OBAS)

Execute


Account group :

Enter

Number range :

Save and enter

Define Tolerances (Vendors)


Path: SPRO- Financial Accounting(New)- Accounts Receivable and Accounts

Payable- Business Transactions- Outgoing Payments- Manual Outgoing

Payments- Define Tolerances (Vendors) (Tcode:OBA3)

Execute


Company code :

Save and enter


Maintain Number ranges 19, 15, 17 for KR, KZ, KA document types respectively (KR: Vendor Invoice, KZ: Vendor payment, KA: Vendor Document)


Accounting Global Settings (New) - Document- Document Number Ranges-

Documents in Entry View- Define Document Number Ranges for Entry View

(Tcode:FBN1)

Execute

Company Code :



No : 19

Year : 2009


To Number : 1999999999

Enter


No : 15

Year : 2009


To Number : 1599999999

Enter


No : 17

Year : 2009


To Number : 1799999999

Enter

Save and enter


Create Vendor Reconciliation Account (Tcode: FS00)


Company Code :

Click on create




Short Text : Dom. Vendors A/C

G/L Acct Long Text : Domestic Vendors Account


Recon. Account for Acct type : K Vendors


Sort Key : 012 (Vendor Number)

Go to Create/Bank/Interest tab


Save


Create Vendor Master Record

Path: Accounting - Financial Accounting - Accounts Payable - Master Records

- FK01 - Create (Tcode: FK01)

Company Code :

Account Group :

Enter

Title : Company

Name : OMC

Search Term : Hyderabad

Street :

House number :

Postal code : 500020

City : Hyderabad

Country : IN

Enter, enter and enter

Recon. Account : 190100

Sort Key : 012

Cash mgmnt group : A1

Enter

Pay terms : 0001 (Immediately)

Save


Create Service G/L Master Record (Tcode: FS00)


Company Code :

Click on create



Select P&L Statement acct

Short Text : Service A/C

G/L Acct Long Text : Service Account




Sort Key : 001



Save


Enter Vendor Invoice

Path: Accounting - Financial Accounting - Accounts Payable - Document Entry

- F-43 - Invoice - General (Tcode: F-43)

Enter header data (Type KR)

PstKy : 31 (Credit)

Account : __________ (Vendor Number)

Enter

Amount : 25000

Business Area :

PstKy : 40 (Debit)

Account : 400100 (Service G/L)

Enter

Amount :*

Click on More

Business Area :

Enter

Go to menu bar

Document - simulate

Save


Vendor Line item report

Path: Accounting - Financial Accounting - Accounts Payable - Account -

FBL1N - Display/Change Line Items (Tcode: FBL1N)

Vendor Account :

Company Code :

Select open items

Execute (F8)


Outgoing payments


- Outgoing Payment - F-53 - Post (Tcode: F-53)

Enter Header Data (Type KZ)


Amount : 25000

Account :__________ (Vendor Number)

Enter

Note: Select Invoice amount against which invoice we are paying, Deselect

Remaining invoices. Select means Blue color and Deselect means block

color.

Note: Amount entered and Assigned amount should be same

See Report (Tcode: FBL1N)

Partial payments (Tcode: F-53)

Enter header data (Type KZ)

Account 290100 (Bank A/C)

Amount 10000

Account : _________ (Vendor Number)

Enter

Go to Partial pmt Tab

Payment amount : 10000

Save



Residual items (Tcode:F-53)

Definition: In Residual items, system will re determine terms of payments.


Account : 290100

Amount : 5000

Account :

Enter

Go to Res.items Tab

Residual items : 30000-

Enter

Go to Menu bar

Document - simulate

Double click on blue color line item

Text : Being Residual items

Payment terms : 0002

One time go back

Save


Automation of Bank Charges and Cash discount

Creation of Bank Charges G/L Account (Tcode: FS00)



Company Code :

Click on create


Account Group : EXPN Expenses


Short Text : Bank Charges A/C

G/L Acct Long Text : Bank Charges Account




Sort Key : 001

Go to Create/bank/Interest Tab


Save

15. Creation of Cash Discount Taken G/L Account (Tcode: FS00)



Company Code :

Click on create


Account Group : INCO Incomes


Short Text : Cash Dis.Taken A/C

G/L Acct Long Text : Cash Discount Taken Account




Sort Key : 001

Go to Create/bank/Interest Tab


Save

Creation Accounts for Cash Discount Taken

Path: SPRO- SAP Reference IMG- Financial Accounting (New)- Accounts

Receivable and Accounts Payable- Business Transactions- Outgoing

Payments- Outgoing Payments Global Settings- Define Accounts for Cash

Discount Taken

(Tcode: OBXU)

Execute

Chart of Accounts :

Enter

Save

Account : 300010


Save and enter

Define Accounts for Bank Charges (Vendors)

Path: Same path (Tcode: OBXK)

Execute

Double click on Bank Charges BSP

Chart of Accounts :

Enter

Account : 400020

Save and enter

Outgoing payment to vendor with bank charges and cash discount (Tcode: F-53)


Account : 290100

Amount :

Bank charges :

Account : 400000

Enter

Cash Discnt : 500

Go to Menu bar

Document - Simulate


Save

Down payments (Advance To vendors)

Create Advance to Vendor G/L Account (Tcode: FS00)


Company Code :

Click on create




Short Text : Adv. to Vendors A/C

G/L Acct Long Text : Advance to Vendors Account


Recon. account for acct type : K Vendors

Select Line item Display

Sort Key : 012



Save

Assign Adv. to Vendor Account


Receivable and Accounts Payable- Business Transactions- Down Payment

Made- Define Alternative Reconciliation Account for Down Payments (Tcode:

OBYR)

Execute

Double click on


K A Dwn pmt Down payment on current assets

Chart of Accounts :

Enter

Recon.acct : 190100

Special G/L Account : 290200

Save and enter

Scenario 1

Advance to Vendor :Rs 100000

Service :Rs 100000

Advance to Vendor


- Down Payment - F-48 - Down Payment (Tcode:F-48)


Account :

Special G/L Ind. : A


Account : 290100

Amount : 100000

Enter

Amount :*

Go to Menu bar

Document - simulate

Save


Service Invoice (Tcode: F-43)

Enter Header data (Type KR)

PstKy : 31

Account :

Enter

Amount : 100000

PstKy : 40

Account : 400100


Enter

Amount :*

Go to Menu bar

Document - simulate

Save


Clearing advance against Invoice


- Other - F-51 - With Clearing (Tcode: F-51)


Select transfer posting with clearing

Choose open items (F6)

Company Code :

Account :

special G/L Ind. : A

Enter

Save


Scenario 2

Advance to Vendor :Rs 100000

Invoice : Rs 50000

Advance to vendor (Tcode:F-48): Rs100000





Account :


Account : 290100

Amount : 100000

Enter

Amount :*

Go to Menu bar

Document - simulate

Save


Invoice (Tcode:F-43): Rs50000


PstKy : 31

Account :

Enter

Amount : 50000

PstKy : 40

Account : 400100

Enter

Amount :*

Go to Menu bar

Document - simulate

Save


Transfer posting



- Down Payment - F-54 - Clearing (Tcode:F-54)

Enter header data (Type KA)

Account :

Keep blank invoice Field

Text : Being Transfer posting

Enter

Transfer posting : 50000

Save

Clear Advance against Invoice (Tcode: F-51)


Select transfer posting with clearing

Choose open items (F6)

Company Code :

Account :

Enter

Save


Scenario 3

Advance To Vendor : Rs 100000

Invoice : Rs 150000

Advance to Vendor (Tcode: F-48): Rs100000





Account :


Account : 290100

Amount : 100000

Enter

Amount :*

Go to Menu bar

Document - simulate

Save


Invoice (Tcode: F-43): Rs150000


PstKy : 31

Account :

Enter

Amount : 150000

PstKy : 40

Account : 400100

Enter

Amount :*

Go to Menu bar

Document - simulate

Save



Transfer posting (Tcode: F-54): Rs100000


- Down Payment - F-54 - Clearing (Tcode:F-54)


Account :

Keep blank invoice Field

Text : Being Transfer posting

Enter


Save

Outgoing payment (Tcode: F-53): Rs 50000

Automatic payment program (APP)

Creation of House Banks

Path: SPRO- SAP Reference IMG- Financial Accounting (New) - Bank

Accounting - Bank Accounts - Define House Banks (Tcode: FI12)

Execute

Company Code :


Enter


House Bank :

Bank Country : IN

Bank Key : 123456

Click on create

Bank name : ICICI Bank

Street : Ameerpet

City : Hyderabad

Bank Branch : Ameerpet Branch

Enter

Double click on bank Accounts


Account ID : ICICC

Description : ICICI Current Account

Bank Account : 1234567

G/L : 290100

Currency : INR

Save and enter

Maintain Check Leaves

Path: Accounting - Financial Accounting - Accounts Payable - Periodic

Processing - F110 - Payments (Tcode: F110)

Go to Menu bar

Environment - Check Information - Number ranges

Paying company Code :

House bank :

Account ID :

Click on Change (Shift+F5)


Click on Create (Shift+F5)

Lot Number : 1

Check number : 100100

To : 100199

Short Info. : ______ Bank Check lots

Purchasing date :

Enter

Save

3. Set up Payment Methods per Country for Payment Transactions

Path: SPRO- SAP Reference IMG- Financial Accounting (New) - Accounts


Payments- Automatic Outgoing Payments- Payment Method/Bank Selection

for Payment Program- Set Up Payment Methods per Country for Payment

Transactions

Execute


Country : IN

Pymt Method : C

Description : Check

Select Outgoing payments

Select Check

Select Allowed for Personnel payments

Select Street, P.O.box or P.O.box postcode

Document type for payment : ZP

Clearing document type : ZV

Payment medium program : RFFOUS_C

Save and enter


4. Set up Payment Methods per Company Code for Payment

Transactions

Path: Same path

Execute

Click on New entries (F5)

Paying co. code :

Pymt Method : C

Minimum amount : 100

Maximum amount : 99999999

Go to Form data

Form for the payment medium : F110_IN_CHECK

Drawer on the form : On _______ bank

Save and enter

5. Set Up Paying Company Codes for Payment Transactions

Path: Same path

Execute


Paying co. code :

Minimum amount for incoming payment : 100

Minimum amount for outgoing paymen : 100

Click on forms

Form for the payment advice : F110_IN_AVIS

Click on Sender details

Text ID : ST

Letter header : F_0001_HEADER

Footer : F_0001_FOOTER

Sender : F_0001_SENDER

Save and enter


6. Set Up All Company Codes for Payment Transactions

Path: Same path

Execute


Paying company code :

Sp. G/L transactions to be paid : A

Save and enter

7. Set Up Bank Determination for Payment Transactions

Path: Same path

Execute


Paying co.code :

Enter

Select _______

Double click on ranking order


PM : C

Crcy : INR

Rank order : 1

House BK : ICICI

Double click on Bank Accounts


House bank : ICICI

Pay.method : C

Currency : INR


Account ID : ICICC

Bank Subaccount : 290100

Double click on Available amounts


House bank : ICICI

Account ID : ICICC

Days : 999

Currency : INR

Available for outgoing payments : 99999999

Save and enter

8. Maintain number ranges 20 for Document type ZP (Tcode: FBN1)

Company Code :



No : 20

Year : 2009


To Number : 2099999999

Enter

Save and enter

9. Maintain Term of payments, Payment method and house bank in

vendor master record (Tcode: FK02)

Vendor :

Company Code :

Select payment transactions

Enter

Payt Terms : 0001


Payment methods : C

House bank :

Save

10. Run Automatic payment program

Path: Accounting - Financial Accounting - Accounts Payable - Periodic

Processing - F110 - Payments (Tcode: F110)

Run Date :

Identification :

Go to Parameter tab

Company Codes :

Pmt meths : C

Next p/date :

Vendor :

Save

Go to Status Tab

Observe Status is Parameters have been entered

Go to Additional log tab

Select Due date check

Select payment selection in all cases

Select line items of the payment documents

Vendor :

Save

Go to Status Tab

Click on proposal (Shift+F1)

Select Start Immediately

Enter

Keep on enter until Status is Payment proposal has been created

Click on Edit proposal (Shift+F4)


Enter

Go to printout/data medium Tab

RFFOUS_C :

Click on Maintain variants (F5)

Select For all Selection screens

Enter

Programs run date :

Identification feature :

Paying Company Code :

House bank :

Account Id :

Check lot number :

Select Print checks

Select Print payment advice notes

Select Print payment summary

Printer : LP01

Printer : LP01

Printer : LP01

Select Print immediately



Keep blank Number of sample printouts field

One time go back

Enter

Meaning : variant for ______

Save

One time go back

Save

Go to Status Tab

Click on Pmnt run (F7)

Select start immediately


Select Create payment medium

Enter

Keep on Enter until Status is Payment run has been carried out and Posting

orders: ___ generated, _____ completed

Go to menu bar

System- Services - output control

Execute (F8)

Select spool no.

Click on Display Contents (F6)

Accounts Receivables:

AR deals with customers, terms and conditions with customers, customer

invoice, customer incoming payments, Advance from customers and item

interest calculation.

1. Define Account Groups with Screen Layout (Customers)

Path: SPRO- Financial Accounting- Accounts Receivable and Accounts

Payable- Customer Accounts- Master Data- Preparations for Creating

Customer Master Data- Define Account Groups with Screen Layout

(Customers) (Tcode:OBD2)

Execute


Account Group :

Name :Domestic Customers

Save and enter


2. Create Number Ranges for Customer Accounts

Path: Same path (Tcode:XDN1)

Execute



No :

From number :

To Number :

Enter

Save and enter

3. Assign Number Ranges to Customer Account Groups

Path: Same path (Tcode: OBAR)

Execute


Account Group :

Enter

Number range :

Save and enter

4. Creation of Reconciliation G/L Master record (Tcode:FS00)


Company Code :

Click on create




Select balance sheet Account

Short Text : Dom.Customers A/C

G/L Acct Long Text : Domestic Customers A/C


Recon.Acct for Account type : D Customers


Sort Key : 031


Field status Group : G067

Save

5. Creation of customer master Record

Path: Accounting - Financial Accounting - Accounts Receivable - Master

Records - FD01 - Create (Tcode: FD01)

Account Group :______ Domestic Customers

Company Code :

Enter


Title : Company

Name :

Street : Begumpet

House Number : 590

Postal code :

City : Hyderabad

Country : IN

Click on Company Code Data (Ctrl+F2)

Recon.Account :290300

Sort key : 031

Save

6. Creation of Service Revenue A/C (Tcode:FS00)


Company Code :

Click on Create




Short Text :Ser.Revenue A/C


G/L Acct Long Text : Service Revenue Account

Go to control data Tab



Sort Key : 001



Save

7. Maintain number ranges 18, 14 and 16 for DR, DZ and DA

Respectively (Tcode: FBN1)

Company Code :

Click on Change Interval

click on Insert Interval (Shift+F1)

No : 18

Year :


To Number : 1899999999

Enter


No : 14

Year :


To Number : 1499999999

Enter

click on Insert Interval (Shift+F1)

No : 16

Year :


To Number : 1699999999


Enter

Save and enter

8. Create Customer Invoice

Path: Accounting - Financial Accounting - Accounts Receivable - Document

Entry - F-22 - Invoice - General (Tcode:F-22)

Enter header Data (Type DR)

PstKy : 01 (Debit)

Account :__________ (Customer Number)

Enter

Amount : 25000

PstKy : 50 (Credit)

Account : 300100 (Service Revenue A/C)

Enter

Amount :*

Go to Menu bar

Document - simulate

Save

9. Customer Line items

Path: Accounting - Financial Accounting - Accounts Receivable - Account -

FBL5N - Display/Change Line Items (Tcode: FBL5N)

Customer Account :

Company Code :

Select open items

Execute (F8)


10. Incoming payments


Entry - F-28 - Incoming Payments (Tcode:F-28)

Enter header data (Type DZ)


Amount : 25000

Account :________ (Customer A/C)

Enter

Go to Menu bar

Document - simulate

Save


11. Partial payments (Tcode:F-28)



Amount : 5000

Account :___________ (Customer A/C)

Enter

Go to partial pmt Tab

Payment amount : 5000

Go to Menu bar

Document - simulate

Save



12. Residual items (Tcode:F-28)

Definition: In Residual items, system will re determine terms of payments.



Amount : 10000

Account :____________ (Customer A/C)

Enter

Go to Res.items Tab

Residual items : 10000 (Remaining amount to be paid)

Go to menu bar

Document - simulate


13. Automation of Bank Charges and Cash discount given

13.1 Creation of Cash Discount Given A/C (Tcode: FS00)


Company Code :

Click on Create



Select P&L Statement Acct

Short Text : Cash Dis. Given A/C

G/L Acct Long Text : Cash Discount Given Account



Select line items tab


Sort Key : 001



Save

13.2 Assign Cash Discount Given A/C


Payable- Business Transactions- Incoming Payments- Incoming Payments

Global Settings- Define Accounts for Cash Discount Granted (Tcode: OBXI)

Execute

Chart of Accounts :

Enter

Save

Account : 400030

Save and enter


14. Incoming payment with bank Charges and Cash discount given

(Tcode:F-28)



Amount : 9700

Bank Charges : 100

Account :__________( Customer A/C)

Enter

Cash discnt : 200

Go to Menu bar

Document - simulate

Save

15. Advance from customers

15.1. Create Advance from Customers G/L Master Record (Tcode:

FS00)


Company Code :

Click on Create




Short Text : Adv.From Customer A/C

G/L Acct Long Text : Advance from Customers A/C



Recon.Account for Acct type : D Customers


Sort Key :031

Go to Create/Bank/interest Tab


Save

15.2. Assign Advance from Customers Account


Payable- Business Transactions- Down Payment Received- Define

Reconciliation Accounts for Customer Down Payments (Tcode: OBXR)

Execute

Double click on

D A Dwn pmt Down payment

Chart of Accounts :

Enter

Recon.acct : 290300

Special G/L account : 190200

Save and enter


16. Scenario 1

Advance From Customer : 100000

Customer Invoice : 100000

16.1. Advance from Customer


Entry -Down Payment - F-29 - Down Payment (Tcode: F-29)


Account :__________ (Customer number)

Special G/L Ind : A


Amount : 100000

Enter

Amount :*

Save


16.2. Create Customer Invoice (Tcode:F-22)

Enter Header data (Type DR)

PstKy : 01

Account :

Enter

Amount : 100000

PstKy : 50

Account : 300100

Enter

Amount :*


Go to Menu bar

Document - simulate

Save


16.3. Clear Down payment against Invoice


Entry - Other - F-30 - Transfer with Clearing (Tcode: F-30)

Enter header data (Type DA)

Select Transfer posting with clearing

Click on Choose open items (F6)

Company code :

Account :

Special G/L Ind : A


Save

17. Scenario 2

Advance from customer : 100000


17.1. Create Advance from customer (Tcode: F-29)

17.2. Customer Invoice (Tcode: F-22)

17.3. Transfer posting


Entry - Down Payment - F-39 - Clearing (Tcode: F-39)



Account :________ (Customer number)

Keep blank Invoice ref. field

Enter


Go to Menu bar

Document - simulate

Save

17.4. Clear Invoice against Down payment (Tcode: F-30)


Select Transfer posting with clearing

Click on Choose open items (F6)

Company code :

Account :


Save

18. Scenario 3

Advance from customer : 100000


18.1. Advance from customer (Tcode: F-29): Rs100000

18.2. Customer Invoice (Tcode: F-22): Rs150000


18.3. Transfer posting (Tcode: F-39): Rs100000

18.4. Reciept of Remaining amount (Tcode: F-28): Rs50000

19. Item Interest Calculation

Definition: System will calculate interest on Customer overdue invoices.

System will calculate interest each invoice wise, which is called item interest

calculation.

19.1. Define Interest Calculation Types (Tcode: OB46)

Path: SPRO - SAP Reference IMG- Financial Accounting- Accounts Receivable

and Accounts Payable- Business Transactions- Interest Calculation- Interest

Calculation Global Settings- Define Interest Calculation Types (Tcode:OB46)

Execute


Int ID :

Name : Item interest

Int calc.type : P (Item Interest Calculation)

Save and enter

19.2. Prepare Item Interest Calculation

Path: Same path

Execute



Interest Ind. :

Ref.Date : 2 (Document date)

Calendar type : G

Select calculate interest on items before due date

Select only calculate interest on debit items

Select post interest

Save and enter

19.3. Define Reference Interest Rates

Definition: Reference interest rate nothing but interest rate

Path: SPRO- SAP Reference IMG- Financial Accounting- Accounts Receivable


Calculation- Define Reference Interest Rates (Tcode: OBAC)

Execute


Ref.int.rate :

Long text : 10% Interest

Description : 10% Interest

Date from :

Currency : INR

Save and enter

19.4. Define Time-Based Terms



Execute


Int.Calc.Indicator :

Currency Key : INR

Eff.From :


Term : Debit interest: arrears interest calc.

Ref. interest rate : IM_USD_1

Save and enter

19.5. Enter Interest Values

Path: Same path (Tcode:OB83)

Execute


Reference :

Valid from :

Int.Rate :10

Save and enter

19.6. Create Interest Income G/L Master Record (Tcode: FS00)


Company Code :

Click on Create





Short text : Interest Income

G/L Acct Long Text : Interest Income




Sort Key : 001



Save

19.7. Assign Interest income and masking



Posting- A/R: Calculation of Interest on Arrears (Tcode:OBV1)

Execute

Click on Accounts (F7)

Chart of accounts :

Enter

Acct symbol Currency G/L Acct

0003 INR 300020

1000 INR ++++++++

Save and enter

19.8. Maintain Reference Interest rate in customer master record

(Tcode: FD02)


Customer :

Company Code :

Enter

Click on Company Code data (Ctrl+F2)

Interest Indic. :

Save

19.9. Post customer invoice with one month back date (Tcode:F-22)

19.10. Calculate item interest

Path: Accounting - Financial Accounting - Accounts Receivable - Periodic

Processing - Interest Calculation - Item Interest Calculation - FINT - Item

Interest Calculation (Tcode: FINT)

Customer Account : 1 9999999999

Company code :

Interest Indicator :

Select Test Run

Execute (F8)

Observe whether interest calculated properly or not

One time go back

Deselect Text run

Execute

Enter

19.11. Customer line item report (Tcode: FBL5N)

Observe customer is updated with interest or not


19.12. Display document (Tcode: FB03)

20. Dunning procedure

Definition: If the business partners may fail behind on payments you can

send them a payment reminder or a dunning notice to remind them of their

outstanding debts

20.1. Define Dunning procedure

Definition: The Dunning procedure controls how dunning carried out by the

system. We can define as many dunning procedures as we like.


Receivable and Accounts Payable- Business Transactions- Dunning- Dunning

Procedure- Define Dunning Procedures (Tcode: FBMP)

Execute

Click on New procedure (F9)

Dunn.Procedure :

Name : Dunning procedure for _______

Dunning interval in days : 5

No. of dunning levels : 5

Select Standard transaction dunning

Ref. Dunning procedure for Texts :

Click on Dunning levels (F5)


1 2 3 4 5

Calculate interest - - - - -

Always dun - - - - -

Print all items - - - - -

Click on Charges (F6)

Currency : INR

Enter

Dunn.Level Dunn.charges

1 300


2 400

3 500

4 600

5 1000

Click on minimum amounts (F7)

Currency : INR

Enter

Dun Minimum amounts

1 10000

2 20000

3 30000

4 40000

5 50000

Click on Dunning Texts (F8)

Company code :

Select Customer

Enter

Click on New Company code (F9)

Company code :

Enter

Select Dunning by dunning area

Select Separate notice per dunning level

Save and enter

Click on Dunning Texts

Click on Dunning form

Click on Language EN Active original language

Dun Form

1 F150_BE_DUNN_01

2 F150_BE_DUNN_01

3 F150_BE_DUNN_01

4 F150_BE_DUNN_01


5 F150_BE_DUNN_01

One time go back

Save and enter

20.2. Assign dunning to customer master (Tcode: FD02/ XD02)

Customer :

Company code :

Enter

Click on company code data (Ctrl+F2)

Go to Correspondence Tab

Dunn.Procedure :

Save

20.3. Run the Dunning procedure

Path: Accounting- Financial Accounting- Accounts Receivable- Periodic

Processing- F150 – Dunning (Tcode: F150)

Run Date :

Identification :

Go to Parameter Tab

Dunning date :

Docmnts posted up to :

Company code :

Customers : 1 9999999999

Save

Go to Status Tab

Status is Parameters were maintained

Click on Schedule (F7)

Select Start Immediately

Click on Schedule (F5)

Keep enter until status is Dun. Selection is complete

Click on dunning list (Shift+F6)

Enter


One time go back

Click on Dunning print out (F6)

Enter

Keep on enter until status is dun.Printout is complete

Click on Dunn.history (Shift+F9)

Account type : D

Company code :

Customer : 1 9999999999

Execute (F8)

Select ______

Click on Display dunning notice (Shift+F4)

Click on Print preview

We can see Dunning notice 1

Three times go back

Click on Indiv.Dunn.notice

Company code :

Customer :

Click on Print out (F6)

Click on yes

Go to Menu bar

System – Services – Output Control

Select spool number

Credit Memo to vendors:

Path: Accounting- Financial Accounting- Accounts Payable- Document Entry-

F-41 - Credit Memo – General (Tcode: F-41)

Enter header data (Type KG)

PstKy : 21 (Debit)

Account : __________ (vendor Account)


Enter

Amount : 20000

PstKy : 50 (Credit)

Account : 400100 (Service Account)

Enter

Amount : *

Go to Menu bar


Save


Miscellaneous Concepts in Accounts payables and Accounts

Receivables

Define Industries

Definition: You can group together your vendors or Customers by industry.

The industry field is located in the general area of the vendor master record

and Customer Master Record. You specify what industry a business partner

belongs to by entering an industry key in its master record. You can use this

information for evaluations, for example, to create a vendor list and

customer list according to industry.


Receivable and Accounts Payable- Vendor Accounts- Master Data-

Preparations for Creating Vendor Master Data- Define Industries

(Tcode:OB44)

Execute


Indus. Description

_____ Steel Industry

_____ IT Industry

_____ Manufacturing Indust

Save and enter

Assign Industry in Vendor Master Record (Tcode:FK02) and

Customer Master Record (Tcode:FD02)

1.1.1. Assign Industry in Vendor Master Record (Tcode: FK02)

Vendor :


Company code :

Select Control

Enter

Industry :

Save

Assign Industry in Customer Master Record (Tcode:FD02)

Customer :

Company Code :

Enter


Industry :

Save

Vendor and Customer Evaluation list (Tcode: FBL1N)

Vendor Evaluation List (Tcode: FBL1N)

Click on Dynamic selections (Shift+F4)

Industry :

Execute (F8)

Customer Evaluation list (Tcode:FBL5N)

Click on Dynamic selections (Shift+F4)

Industry :

Execute (F8)


Define Accounting Clerks

Definition: you define the names of the accounting clerks under a name

identification code. You enter the identification code in the vendor master

records and customer master records which the accounting clerk supervises.

You can use this information for evaluations and for correspondence.


Execute


Company Code :

Clerk :

Name of accounting clerk : Venkat

Office User : Accountant

Save and enter

2.1. Assign accounting clerk in Vendor Master Record (Tcode: FK02)

Vendor :

Company code :

Select Correspondence

Enter

Acctg Clerk :

Save


2.2. Assign Accounting Clerk in Customer Master Record (Tcode:

FD02)

Customer :

Company Code :

Enter

Click on Company code Data (Ctrl+F2)

Go to Correspondence Tab

Acctg clerk :

Save

2.2.1. Vendor Line item report (Tcode: FBL1N)

Click on Dynamic Selections (Shift+F4)

Accounting clerk :

Execute (F8)

2.2.2. Customer Line Item Report (Tcode: FBL5N)

Click on Dynamic Selections (Shift+F4)

Accounting clerk :

Execute (F8)

Define Screen layout per Company Code (Customers)



Receivable and Accounts Payable- Customer Accounts- Master Data-

Preparations for Creating Customer Master Data- Define Screen Layout per

Company Code (Customers) (Tcode:OB21)

Execute


Company code :

Select _____

Click on Edit field status (F2)

Double click on Account management

Select Head office field is suppress

Save

3.1. Creation of Customer Master Record (Tcode: FD01)

We can’t see head office field in master record of respective Company Code

4. Define Screen Layout per Company Code (Vendors)



Preparations for Creating Vendor Master Data- Preparations for Creating

Vendor Master Data- Define Screen Layout per Company Code (Vendors)

(Tcode:OB24)

Execute



Company code :

Select _____

Click on Edit field status (F2)


Select Head office field is suppress

Save

4.1. Creation of Vendor Master Record (Tcode: FK01)

We can’t see head office field in master record of respective Company Code

5. Define Screen Layout per Activity (Vendors)

Path: SPRO – SAP Reference IMG- Financial Accounting (New)- Accounts


Preparations for Creating Vendor Master Data- Define Screen Layout per

Activity (Vendors) (Tcode:OB23)

Execute

Double click on Change Vendor (Accounting)

Double click on Company Code Data


Select Sort Key Display

Save

5.1. Change Vendor Master Record (Tcode: FK02)

We can’t Change Sort key field in vendor master record, which is display

mode


6. Define Screen Layout per Activity (Customers)


and Accounts Payable- Customer Accounts- Master Data- Preparations for

Creating Customer Master Data- Define Screen Layout per Activity

(Customers) (Tcode: OB20)

Execute

Double click on Change Customer (Accounting)

Double click on Company Code Data


Select Sort Key Display

Save

6.1. Change Customer Master Record (Tcode: FD02)

We can’t Change Sort key field in customer master record, which is display

mode

7. Assign G/L Account for down payment request


Receivable and Accounts Payable- Business Transactions- Down Payment

Made- Define Alternative Reconciliation Account for Down Payments (Tcode:

OBYR)

Execute

Double click on K F Pmt req Down payment request

Chart of accounts :

Enter

Recon.Acct : 190100


Special G/L Account : 290200

Save and enter

7.1. Create Down payment request


Down Payment- F-47 – Request


Account :

Trg.sp.G/L ind. : A

Enter

Amount : 25000

Due on :

Save

Down payment request number :

7.2. Vendor line item report (Tcode: FBL1N)

Vendor Account :

Company Code :

Select open items

Select noted items

Execute (F8)

7.3. Down payment Against Request (Tcode: F-48)


Account :

Special G/L ind : A


Account : 290100

Amount :

Click on request (F6)

Select Request number

Click on Create down payments (Shift+F1)

Save

8. Define Reason codes

Definition: Reason codes will be useful for outgoing payment differences



Payments- Manual Outgoing Payments- Overpayment/Underpayment- Define

Reason Codes (Manual Outgoing Payments) (Tcode: OBBE)

Execute

Company code :

Enter


RCD : R1

Short text : Payment differences

Long text : Payment differences

Save and enter

8.1. Create Payment difference G/L Account (Tcode: FS00)


Company code :

Click on create




Short Text : Payment diff. A/C

G/L Acct Long Text : Payment Difference Account

Go to Control data tab




Sort Key : 001



Save

8.1.1 Assign payment difference account:



Payments- Manual Outgoing Payments- Overpayment/Under payment-

Define Accounts for payment differences (Manual Outgoing Payments)

Execute

Chart of Accounts :

Transactions : ZDI

Select Reason code :

Excute

Reason code Account

10 400095

Save and enter

8.2. Post payment differences (Tcode: F-53)

Enter Header data (Type KZ)


Amount : 49999

Account :

Enter

Reason code : R1

Click on Charge off diff. (F7)

PstKy : 50

Account : 400040 (Payment diff. A/C)


Enter

Amount : 1


Go to Menu bar


Save

9. Correspondence

Definition: Correspondence nothing but notice or statements

Path: Accounting- Financial Accounting- Accounts Payable- Account-

Correspondence- FB12 – Request (Tcode: FB12)

Company Code :

Enter

Double click on SAP06 Account statements

Vendor :

Enter

Postings from :

Posting to :

Enter

9.1. See Account statement

Path: same path (Tcode: F.64)

Company code :

Execute (F8)

Double click on Vendor number


Enter

Bill discounting: 2 types.

1. Fund based limits:

Cash credits Local sales Bank over draft Packing creditsBill discounting Export sales order


2. Non fund based limits:

Bank guarantee (B/G)Letter of Credit (L/C)

Example:

30 days creditAML Discount with SBI J. K. Synthetics Liability is unclear (Contingent liability)It should shown in schedule VI – balance sheet as notes to be accounts

Bill discount entries normal package & SAP:

Normal A/C:a. Sales Customer A/C Dr

To sales A/C

b. Bill of exchange payment:No Entry

c. Bill discounting Bank current A/C Dr Interest A/C Dr To Bank bill discountd) Report to view customer wise, Bill wise due data wise and bank wise out standing available in SAP

e) Contingent liability Bank bill discount A/C Dr

To Customer A/C

SAP: a)Customer A/C Dr Sundry Debtors A/C Dr

To Sales A/C

b) Customer special G/L (W) A/C Dr (Bill of Exchange)To Customer with clearing A/C (Sundry Debtors)

Bank A/C Dr Interest A/C Dr

To Bank Bill discount A/C


The above 2 entries together Bank Bill Discount Dr (with clearing) To customer special (w) with clearing

(Sundry Debtors bill of exchange)

Presentation to balance sheet (in SAP)

Sundry Debtors = Sundry DebtorsSundry Debtors Bill of exchange – Debit | Net zero.Bank Bill Discounting – Credit |

Customization:

1. Creation of 2 G/L Accounts:

a) Sundry Debtors Bill of exchange – Under current assets loans and advances. b) SBI Bill discounting: - Under secured Loans

Path: use the transaction code: (FS00)

Give the G/L Account No: 200111 (Current Assets, Loans & Advances)

Company code: AML

Select with template button

Give the G/L A/C No: 200110 (Sundry Debtors)

Company code: AML

Enter

Change short text to Sundry Debtors (B/E)

Change G/L long text: Sundry Debtors (Bills of exchange)

Other fields are same

Save (or) (Ctrl + s)

2) G/L Account No: 100301Company code: AMLSelect with template button


Select G/L Account No: 100300 (SBI Rupee term loan)Company Code: AMLEnter

Change the short text and G/L Account long text to SBI Bill discountingSelect control data tabSelect open item management check box

Select create/bank/interest tab

Select post automatically only check box

Save

c) Link between Sundry Debtors and Sundry debtors Bill of exchange:

Path: SPRO Financial Accounting Bank Accounting Business transactions Bill of exchange transactions Bill of exchange receivable

Post bill of exchange receivable define alternative reconciliation account for bills of exchange receivable (Transactions Code OBYN)

Double click on bill of exchange receivable/wGive the chart of accounts: AML

Enter

Reconciliation A/C 200110

Special G/L A/C 200111

Save


d) Link for Sundry Debtors Bank Current Account and Bank Bill discounting A/C:

Path: SPRO Financial Accounting Bank Accounting Business transactions Bill of exchange transactions Bills of exchange receivable Present bill of exchange receivable at bank define bank sub accounts (Transaction Code OBYK)

Select new entries button

Give the chart of accounts: AML


Bank A/C: 200105 (SBI Current Account)

Usage: Select discounting

Special G/L Integrator: W

Customer’s reconciliation Account: 200110

Sub sub account for Liability: 100302 (SBI Bill discount)

Save


Sales posting: (F-22)

Document date: 30.08.2006

Type: DR

Company Code: AML

Posting key: 01

Accounts: 6200001

Enter

Amount: 9999

Business area: AMH

Payment Terms: set NT 30 – Net 30

Text: Sales posting

Enter

Ignore the warning message, press enter

Posting key: 50

Account No: 300000 (Sales Account)


Enter

Amount: ‘*’

Business area: AMH

Text: ‘+’

Document Simulate and save

Bill exchange payment:

Path: Accounting Financial Accounting account receivable document entry bill of exchange Payment (F-36)

Document date: 30.08.2006

Type: DZ

Company code: AML

Posting key: 09 (special G/L Debit)

Give the customer A/C: 6200001

Special G/L Indicator: WEnter

Give the amount: 9999

Business Area: AMH

Text: bill of exchange payment

Due on: 29.09.2006

Planned usage: Select, discounting

Domicile: SBI


Central bank location: Main branch, Hyderabad

Select choose open items button

Select process open items button

Double click on receivable amount: 9999

Save

Note down document no: 500003

Bill of exchange discounting:

Same path: (F-33)

Give the document date: 30.08.2006Type: DACompany code: AMLGive the bank account: 200105 (SBI Current assets)Business area: AMHAmount: 9000Text: SBI Bill discountingPosting key: 40Give the account No: 400400 (Interest A/C)EnterAmount: 999Business area: AMHText: ‘+’Press select bill of exchange buttonGive the document No: 500003Document Simulate and save

Report to view customers wise, bill wise, due date wise, and bank wise out standings:

Path: Accounting Financial accounting Accounts receivable Periodic processing Bill of Exchange processing Korea Bill of exchange management (S _ ALR _ 87012213)


Give the chart of Accounts: AML

G/L Account No: 200111

Company Code: AML

Special G/L Indicator: W

Usage: Select D (Discounting)

Select discounted/collected radio button

Execute

Select current lay out button

Keep the fieldsDue date, document No, customer, received from document date

Domicile, amount in local currency

Select copy button, select save lay out button

Select lay out name: AML

Description: AML lay out Select save

Reverse contingent liability:

Path: Accounting Financial accounting Accounts receivable document entry Bill of Exchange reverse contingent liability (F-20)

Document date& posting: 27.09.2006

Type: DA

Company code: AML

Currency: INR

G/L Account No: 200111 (Sundry Debtors bill of exchange)


Usage: Select discounting

Due by date: 30.09.2006

Customer: 6200001

Select edit line items button

Ignore warning messages: Press enter

Select drop down button for currency field+ is set item to active++ set items in block to active- set items not inactive-- set items in blocks to inactiveSelect + set items to activeSaveFrom the menu select document display.If bill is dishonored: If bill is dishonored your contingent liability becomes actual liability

Pass the all the entries previous and pass entries (F-22)

01 Customer A/C Dr50 SBI Current A/C

Credit Memo to vendors:


F-41 - Credit Memo – General (Tcode: F-41)

Enter header data (Type KG)

PstKy : 21 (Debit)

Account : __________ (vendor Account)

Enter

Amount : 20000

PstKy : 50 (Credit)

Account : 400100 (Service Account)

Enter


Amount : *

Go to Menu bar


Save

Credit Memo to Customer

Path: Accounting- Financial Accounting- Accounts Receivable- Document

Entry- F-27 - Credit Memo – General (Tcode: F-27)

Enter header data (Type DG)

PstKy : 11 (Credit)

Account : ___________ (Customer account)

Enter

Amount : 20000

PstKy : 40 (Debit)

Account : 300100 (Service Revenue Account)

Enter

Amount : *

Go to Menu bar


Save

Withholding Tax:

Withholding Tax nothing but TDS (Tax Deduct at Source)

Withholding tax is an income tax which is deducted at the source of the

revenue. The party that is subject to tax does not remit the withholding tax

to the Tax authorities himself.

Check withholding Tax countries



Accounting Global Settings (New)- Withholding Tax- Extended Withholding

Tax- Basic Settings- Check Withholding Tax Countries

Execute


Cty : IN

WCty : IN

Description : India

Save and enter

Define Withholding Tax Keys

Definition: If national tax authorities use official withholding tax keys to

identify the different with holding tax types

Ex: Salaries, Contractors, Interest on deposits, Professional and technical

services, Commission and brokerage etc

Path: same path

Execute

Country Key : IN

Enter


Off. Key Name

192 TDS on Salaries

193 TDS on Interest on securities

194A TDS on interest other than securities

194C TDS on payments to contractors

194H TDS on Commission and brokerage

194I TDS on rent

194J TDS on prof & Tech Services

Save and enter

Define Reasons for exemption

Definition: we define reasons for exemption from withholding tax.

Path: same path


Execute

Country key : IN


Exempt. resn : ZE

Text : Exempt from withholding tax

Save and enter

Maintain Types of Recipient

Path: SPRO- SAP Reference IMG- Financial Accounting (New) - Financial

Accounting Global Settings (New)- Withholding Tax- Withholding Tax- Basic

Settings- Maintain Types of Recipient (Tcode: OB97)

Execute


Cty Rec.ty Description

IN ____ Company

IN ____ Other than Company

Save and enter

Define Withholding Tax Type for Invoice Posting

Definition: withholding tax code only controls the percentage rate of the

withholding tax



Tax- Calculation- Withholding Tax Type- Define Withholding Tax Type for

Invoice Posting

Execute

Country key : IN

Enter


Withhld tax type : _____ Withholding tax type for Invoice

posting

Select Gross amount

Save and enter


Define Withholding Tax Type for Payment Posting

Path: Same path

Execute

Country key : IN

Enter


Withhld tax type : ____ Withholding tax type for payment

posting

Select Gross amount

Select W/tax pmnts

Save and enter

Check Recipient Types

Definition: This is required to categorize vendor


Accounting Global Settings (New) - Withholding Tax- Extended Withholding

Tax- Basic Settings- Check Recipient Types

Execute

Country key : IN

Enter

Wth.t.typeRec.ty Name

___ CO Company

___ CO Company

___ OT Other

___ OT Other

Save and enter

Define business places

Definition: Business places are the location where tax is deducted. A

company has various offices at head office, regional offices etc. Tax can be

deducted at any these places. Withholding tax tracking is thus done based

on business place.




Tax- Basic Settings- India- Define Business Places

Execute


Company code :

Sect. Code :

Name1 : Head office

Enter

Name : Head office

Street : Ameerpet

House number : 234


City : Hyderabad

Country : IN

Enter

Save and enter

Withholding tax codes

Definition: the withholding tax codes determines the withholding tax

percentage



Tax- Calculation- Withholding Tax Codes- Define Withholding Tax Codes

Execute

Country key : IN

Enter


Withhld tax type :

W/tax code :


Off. W/Tax Key : 194C

Description : 194C 2% TDS on contractors

Percentage subject to tax : 100

Post.indic : 1

With/tax rate : 2

Save and enter

Assign withholding tax types to Company codes



Tax- Company Code- Assign Withholding Tax Types to Company Codes

Execute


Company code :

Withhld tax type :

Recipient type : CO

Select with/tax agent

W/tax obligated frm : 01.04.2009

Oblig.to w/tax until : 31.03.2010

Select Subject to tax

Select Self-withhldg tax

Save and enter

Activate Extended Withholding Tax

Path: Same path

Execute


Company code :

Enter

Select Ext.w/tax

Save and enter

Creation of TDS on Contractors A/C (Tcode: FS00)



Company code :

Click on create



Select Balance sheet account

Short Text : TDS on Contr. A/C

G/L Acct Long Text : TDS on Contractors Account




Sort Key : 001



Save

Define Accounts for Withholding Tax to be Paid Over



Tax- Postings- Accounts for Withholding Tax- Define Accounts for

Withholding Tax to be Paid Over

Execute

Chart of accounts :

Enter

Select withholding tax code

Select withholding tax type

Save

Withholding tax type :

Withholding tax code : I1

Account : 190300

Save and enter

Change Vendor Master Record (Tcode: FK02)


Vendor :

Company Code :

Select withholding tax

Enter

WH Tax Country : IN

With. T. type :

W/Tax Code : I1

Select liable

Rec.ty : Co

Save


Vendor Invoice (Tcode: F-43)


PstKy : 31 (Credit)

Account : _____________ (Vendor Number)

Enter

Amount : 100000

Sectn : HO

PstKy : 40 (Debit)

Account : 400100 (Service A/C)

Enter and enter

Amount :*

Go to Menu bar


Save


Asset Accounting:

Asset Accounting Component supports Monitoring of Assets or tracking of

assets. This Component supports Purchase of asset, Sale of asset, Profit on

sale of asset, loss on sale of asset, Scrapping of asset, depreciation on asset

etc.

1. Maintain Chart of Depreciaton

Definition: Chart of depreciation means list of depreciation areas.

Depreciation Area means one set of book keeping.

Path: SPRO- SAP Reference IMG- Financial Accounting (New)- Asset

Accounting- Organizational Structures- Copy Reference Chart of

Depreciation/Depreciation Areas (Tcode:OAP1)

Execute

Double click on Copy Reference Chart of Depreciation

Click on Copy org.object (F6)

From chart of dep. : 0DE

To chart of dep. :

Enter, Enter, Enter and enter


One time go back

Double click on Specify Description of Chart of Depreciation


Chart of Dep. :

Enter

Description : Chart of Depreciation for

Save and enter

One time go back

Double click on Copy/Delete Depreciation Areas

Chart of Dep. :

Enter

Select 2,3,10,15,20,30,31,32,41 and 51 (Select all depreciation areas except

1)

Click on Delete (Shift+F2)

Save and enter and enter

2. Assign Input Tax Indicator for Non-Taxable Acquisitions

Path: SPRO- Financial Accounting (New) - Asset Accounting- Integration with

the General Ledger- Assign Input Tax Indicator for Non-Taxable Acquisitions

Execute


Company Code :

Enter

Input Tax : V0

Output Tax : A0

Save and enter

3. Assign Chart of Depreciation to Company Code


Path: SPRO- Financial Accounting (New) - Asset Accounting- Organizational

Structures- Assign Chart of Depreciation to Company Code (Tcode:OAB1)

Execute


Company code :

Enter

Chrt Dep :

Save and enter

4. Specify Account Determination

Definition: Account Determination is a bridge to flow the asset values to

General ledger accounting (This is integration point between General ledger

and Asset accounting)

Path: SPRO- Financial Accounting (New) - Asset Accounting- Organizational

Structures- Asset Classes- Specify Account Determination

Execute


Acct.determ. Name of account determination

_____ Buildings

_____ Machinery

_____ Computers

Save and enter

5. Create Screen Layout Rules

Definition: Screen layout controls Fields in Asset Master record.


Path: Same path

Execute

Select 1010, 2000 and 3000

Click on copy as (F6)

_____ Buildings

_____ Computers

_____ General machines

Save and enter

6. Define Number Range Interval

Path: Same path

Company Code :



No : 01


To number : 199999

Enter


No : 02


To number : 299999

Enter


No : 03


To number : 399999

Enter

Save and enter


7. Define Asset Classes

Definition: Asset class means which are having same characteristic features.

Path: same path

Execute


Asset Class : _____ Buildings

Short Text : Buildings

Account determ. :

Scr.layout rule :

Number range : 01

Save and enter

8. Determine Depreciation Areas in the Asset Class

Path: SPRO- Financial Accounting- Asset Accounting- Valuation- Determine

Depreciation Areas in the Asset Class

Execute

ChDep :

Enter


Asset Class :

Enter

Select _______

Double click on Depreciation Areas

Screen layout : 2000

Deselect Area deact.


Save and enter

9. Maintain Depreciation Key

Definition: Depreciation keys nothing but Depreciation rate.

Path: SPRO- Financial Accounting- Asset Accounting- Depreciation- Valuation

Methods- Depreciation Key- Maintain Depreciation Key

Execute

Click on Select All (F7)

Click on Activate (Ctrl+F3)

Enter

Save and enter

10. Create G/L Master records (FS00)

10.1. Building A/C


Company Code :

Click on Create


Account group : ASST Assets


Short Text : Buildings A/C

G/L Acct Long Text : Buidlings Account


Recon acct for Account type : A Assets



Sort Key : 018 (Asset Number)



Save

10.2. Sale of Asset


Company Code :

Click on Create


Account group : INCO Incomes


Short Text : Sale of Asset A/C

G/L Acct Long Text : Sale of Asset Account




Sort Key : 001



Save

10.3. Profit on sale of Asset


Company Code :

Click on Create


Account group : INCO Incomes



Short Text : Pr.Sale of Asset A/C

G/L Acct Long Text : Profit on Sale of Asset Account




Sort Key : 001



Save

10.4. Loss on Sale of Asset


Company Code :

Click on Create


Account group : EXPN Expenses


Short Text : LS.Sale of Asset A/C

G/L Acct Long Text : Loss on Sale of Asset Account


Select Only balances in local crcy


Sort Key : 001



Save

10.5. Scrap on Assets



Company Code :

Click on Create




Short Text : Scrap on Asset A/C

G/L Acct Long Text : Scrap on Asset Account




Sort Key : 001



Save

10.6. Depreciation A/C


Company Code :

Click on Create




Short Text : Depreciation A/C

G/L Acct Long Text : Depreciation Account


Select Only balances in local crcy


Sort Key : 001



Save


10.7. Acc.Dep Account


Company Code :

Click on Create


Account group : LIAB Liabilities


Short Text : Acc.Dep A/C

G/L Acct Long Text : Accumulated Depreciation Account


Recon.account for acct type : A Assets


Sort Key : 001



Save

11. Assign G/L Accounts

Path: SPRO- SAP Reference IMG- Financial Accounting (New) - Asset

Accounting- Integration with the General Ledger- Assign G/L Accounts

Execute

ChDep :

Enter

Select Chrt/Accts

Double click on Account determination


Account Determ. :

Enter


Select _____

Double click on Balance sheet accounts

Acquisition:Acquis. and production costs : 200100

Loss made on asset retirement w/o reven. : 400050

Clearing acct. revenue from asset sale : 300030

Gain from asset sale : 300040

Loss from asset sale : 400040

Double click on Depreciation

Acc.dep. accnt.for ordinary depreciation : 110000

Expense account for ordinary depreciat. : 400060


12. Maintain Number ranges for Depreciation posting (Tcode: FBN1)

Company code :



No : 04

Year :


To Number : 0499999999

Enter

Save and enter

13. Screen layout Rule

Definition: Screen layout rule controls fields in Asset Master Record

Path: SPRO- Financial Accounting (New) - Asset Accounting- Master Data-

Screen Layout- Define Screen Layout for Asset Master Data

Execute


Double click on Define Screen Layout for Asset Master Data


Screen layout :

Enter

Select _____

Double click on Logical Field groups

Select 3 Time dependent data

Double click on Field Group rules

Select Cost center optional

Save and enter

14. Creation of Asset Master Record

Path: Accounting- Financial Accounting- Fixed Assets- Asset- Create- AS01-

Asset (Tcode: AS01)

Asset Class :

Company Code :

Enter

Go to General data Tab

Description : Building/Ameerpet

Capitalized on :

Go to Deprec.Areas Tab

DKey : DG20

Useful life : 50

Odep.start : 12.01.2010

Save

15. Purchase of Asset


15.1. With Bank (Tcode: F-02)


PstKy : 70

Account : ______-__ (Asset Number)

TType : 100

Enter

Amount : 10000000

PstKy : 50


Enter

Amount : *

Go to Menu bar

Document - simulate

Save

15.2. With Vendor

path: Accounting - Financial Accounting - Fixed Assets - Posting - Acquisition

- External Acquisition - F-90 - With Vendor (Tcode:F-90)

Enter header data (Type KR)

PstKy : 31

Account : __________ (Vendor Number)

Enter

Amount : 20000000

PstKy : 70

Account :

TType : 100

Enter

Amount :*


Go to Menu bar

Document - simulate

Save

16. Sale of asset

16.1. With Bank (Tcode: F-02)


PstKy : 40

Account : 290100

Enter

Amount :

PstKy : 50

Account : 300030

Enter

Amount : *

Select Asset Retirement

Go to Menu bar

Document - simulate

Asset Number :

Select Complete retirement

Enter

Save


16.2. With Customer

Path: Accounting - Financial Accounting - Fixed Assets - Posting - Retirement

- Retirement w/Revenue - F-92 - With Customer (Tcode:F-92)

Enter Header data (Type DR)

PstKy :

Account :

Enter

Amount :

PstKy :

Account :

Enter

Amount :*

Select Asset retirement

Go to Menu Bar

Document - simulate

Asset number :

Sub number :

Asset value date :

Select Complete Retirement

Enter

Save


17. Takeover of existing assets (Tcode: AS91)

Asset Class :

Company Code :

Enter

Description :

Capitalized on : 01.01.2000

Go to Deprec.Areas Tab

DKey : DG20

Use life : 30

Click on Takeover values (Shift+F8)

Cum.acquis.val. 2000000

Accm.ord.deprec : 500000

Enter

Save and enter

18.Scrap on asset:

Path: Accounting - Financial Accounting - Fixed Assets - Posting - Retirement

– ABAVN-Asset retirement by scrapping (Tcode: ABAVN)

Execute

Click on change company code

Company code : Scrap on asset a\c Dr.

Asset : Accumulate depreciation a\c Dr.

Go to transation data tab To Asset a\c

Document date :

Asset value date :


Click on simulate

Save and enter

19.Asset transfer

19.1 Asset transfer with in company code: (Business area to

business area)

Path: Accounting - Financial Accounting - Fixed Assets - Posting - Transfer –

ABUMN-Transfer with in company code (Tcode:ABUMN)

excute

Asset : (Giver area asset number)

Goto transaction data tab

Document date :

Asset value date :

Select Existing asset : (Receiver area asset number)

19.2Asset transfer for Inter company code:

Path : Same path (Tcode: ABT1N)

Company code : (Giver company code)

Asset : (Giver area asset number)

Go to transaction data tab

Company code : (Receiver company code)

Existing asset : (Receiver area asset number)

Note : you can go to Assign G/L Accounts and you can give to

receiver company clearing account number(FS00) in giver Assign

G/L Accounts.

And you can give to giver company clearing account number(FS00)

in receiver Assign G/L Accounts


17. Depreciation run

Path: Accounting - Financial Accounting - Fixed Assets - Periodic Processing -

Depreciation Run - AFAB - Execute (Tcode: AFAB)

Company Code :


Fiscal year :

Posting period : 1

Select Test run

Select Error analysis

Execute

Note: If there is any errors, Click on Error list (F7)

One time go back

Deselect Test run

Go to menu bar

Program - Execute in background

Output device : LP01

Number copies : 1

Enter

Click on Immediate

Save (Ctrl+S)

Go to Menu bar

System -services - output Control

Execute (F8)

Select Spool no.

Display contents (F6)

18. Document display (Tcode: FB03)

Click on Document list (Shift+F8)

Company Code :

Document type : AF

Execute


19. Asset explorer

Path: Accounting- Financial Accounting- Fixed Assets- Asset- AW01N - Asset

Explorer (Tcode: AW01N)

Company code :

Asset : _________ ____

Enter

MM Integration

1. Define plant

Definition: Plant is an operational area.

Path: SPRO- SAP Reference IMG- Enterprise Structure- Definition- Logistics -

General- Define copy, delete, check plant (Tcode: OX10)


Execute

Double click on Copy, delete, check plant

Click on copy org.object (F6)

From plant : 1000

To plant :

Enter, Enter, enter and enter

One time go back

Double click on Define Plant


Plant :

Enter

Select ______

Click on Detail (Ctrl+Shift+F2)

Name1 : Bollaram Plant

Click on Address (Shift+F5)

Name : Bollaram Plant

Street : Bollaram

House number : 1-234


City : Hyderabad

Country : IN

Enter

Save and enter

2. Maintain storage location

Definition: A storage location is the place where stock is physically kept

within a plant.

Path: SPRO- SAP Reference IMG- Enterprise Structure- Definition- Materials

Management- Maintain storage location (Tcode: OX09)


Execute

Plant :

Enter

Click on Select all (F7)

Click on Delete (Shift+F2)

Enter


SLoc Description

_____ Raw Material

_____ Semi Finished

_____ Finished Goods

Save and enter

3. Maintain purchasing organization

Definition: the purchasing organization is responsible for all purchasing

activities (including the processing of requests for quotations and purchase

orders.

Path: Same path (Tcode: OX08)

Execute


Purch.Organization :

purch.Org.Descr. : Pur. Org for ______

Save and Enter

4. Assign plant to company code


Path: SPRO- SAP Reference IMG- Enterprise Structure- Assignment- Logistics

- General- Assign plant to company code (Tcode:OX18)

Execute


CoCd :

Plnt :

Save and enter

5. Assign purchasing organization to company code

Path: SPRO- SAP Reference IMG- Enterprise Structure- Assignment- Materials

Management- Assign purchasing organization to company code

(Tcode:OX01)

Execute


Purchasing Org. :

Enter

CoCd :

Save and enter

6. Assign purchasing organization to plant

Path: same path (Tcode: OX17)

Execute


POrg. :

Plant :

Save and enter


7. Define Attributes of Material Types

Definition: Whenever you create a material master record, you must assign it

to a material type.

Path: SPRO- SAP Reference IMG- Logistics General- Material Master- Basic

Settings- Material Types- Define Attributes of Material Types (Tcode: OMS2)

Execute


Material type : ROH

Enter

Select ROH

Double click on Quantity/Value updating


Valuation Area :

Material type : ROH

Select Qty updating

Select Value update

Save and enter

8. Maintain Company Codes for Materials Management

Path: SPRO - SAP Reference IMG- Logistics General- Material Master- Basic

Settings- Maintain Company Codes for Materials Management (Tcode: OMSY)

Execute



Company code :

Enter

Year :

Period :

Select ABp

Save and enter

9. Set Tolerance Limits for Price Variance

Path: SPRO- SAP Reference IMG- Materials Management- Purchasing-

Purchase Order- Set Tolerance Limits for Price Variance (Tcode: OMEU)

Execute

Select

CoCd TlKy

0001 PE

0001 SE


Company code :

Enter

Company Code :

Enter

Save and enter

10. Set Tolerance Limits

Path: SPRO- SAP Reference IMG- Materials Management- Inventory

Management and Physical Inventory- Goods Receipt- Set Tolerance Limits

(Tcode: OMC0)

Execute


Select

CoCd TlKy

0005 B1

0005 B2


Company code :

Enter

Company Code :

Enter

Save and enter

11. Maintain Default Values for Tax Codes

Path: SPRO- SAP Reference IMG- Materials Management- Logistics Invoice

Verification- Incoming Invoice- Maintain Default Values for Tax Codes

(Tcode:OMR2)

Execute


Company Code :

Save and enter

12. Edit PO Supplement Text in Invoice Verification

Path: Same path (Tcode: OMR8)

Execute

Click on order Text: general


CoCd :

Select PO Text


Save and enter

Two Time go back

Click on notifiable order text types


CoCd ID

_____ F03

_____ F07

Save and enter

13. Set Tolerance Limits

Path: SPRO- Materials Management- Logistics Invoice Verification- Invoice

Block- Set Tolerance Limits (Tcode: OMR6)

Execute

Select

CoCd TlKy

0005 AN

0005 AP

0005 BD

0005 BR


0005 BW

0005 DQ

0005 KW

0005 LA

0005 LD

0005 PP

0005 PS

0005 ST

0005 VP

Click on Copy As (F6)

Company Code :

Enter

Company Code :

Enter

Company Code :

Enter

Company Code :

Enter

Company Code :

Enter

Company Code :

Enter

Company Code :

Enter

Company Code :

Enter

Company Code :

Enter

Company Code :

Enter

Company Code :


Enter

Company Code :

Enter

Company Code :

Enter

Save and enter

14. Define Valuation Control

Definition: we can group together valuation areas by activating the

valuation grouping code.

Path: SPRO- Materials Management- Valuation and Account Assignment-

Account Determination- Account Determination Without Wizard- Define

Valuation Control (Tcode: OMWM)

Execute

Select valuation grouping active

Save and enter

15. Group Together Valuation Areas

Path: Same path (Tcode: OMWD)

Execute


Valuation area :

Enter


Val.Grpg.code :0001

Save and enter

16. Define Valuation Classes

Definition: you define which valuation classes are allowed for a material

type. The valuation class is a group of materials with the same account

determination. If a transaction is to be posted to different accounts

depending on the valuation class, create an account determination for each

valuation class in the step Create automatic postings.

Path: Same path (Tcode: OMSK)

Execute

Click on Valuation class

Valcl ARef

3000 0001

3001 0001

3002 0001

3003 0001

Save and enter

One time go back

Click on Material type/Account category reference


Material type : ROH

ARef : 0001

Save and enter

17. Create G/L Master Records (Tcode: FS00)

17.1. Raw Material A/C



Company Code :

Click on create

Go to Type/description Tab



Short Text : Raw Material A/C

G/L Acct Long Text : Raw Material Account




Sort Key : 001



Select post automatically only

Save

17.2. GR/IR Clearing A/C


Company Code :

Click on Create




Short Text : GR/IR Clearing A/C

G/L Acct Long Text : GR/IR clearing Account




Tax Category : *

Select Posting without tax allowed


Sort Key : 001



Save

For MM Integration, Tax procedure and Tax Codes required

18. Tax procedure

Definition: Tax procedure will be developed country wise. Tax procedure is

assigned to country

18.1 Check Calculation Procedure

Path: SPRO- Financial Accounting- Financial Accounting Global Settings- Tax

on Sales/Purchases- Basic Settings- Check Calculation Procedure (Tcode:

OBYZ)

Execute

Double click on Define Procedures


Procedure :

Description :

Enter

Select _____

Double click on Control data


Step CType Fro To AcctKey


100 BASB

110 MWVS 100 100 VST

120 MWAS 100 100 MWS

Save and enter

18.2 Assign Country to Calculation Procedure

Path: Same path (Tcode: OBBG)

Execute


Country : IN

Enter

Proc. :

Save and enter

18.3. Define Tax Codes for Sales and Purchases

Definition: Tax Codes nothing but tax rates


on Sales/Purchases- Calculation- Define Tax Codes for Sales and Purchases

(Tcode: FTXP)

Execute

Country : IN

Enter

Tax Code :

Tax Code : 4% Input Tax

Tax Type : V (Input Tax)

Enter

Input Tax VST 4.000 110 100 MWVS


Save

Tax Code : M4

Tax Code : 4% Output Tax

Tax Type : A (Output Tax)

Enter

Output Tax MWS 4.000 120 100 MWAS

Save

18.4. Creation of G/L Master Records (Tcode: FS00)

18.4.1. Input Tax A/C


Company Code :

Click on Create




Short Text : Input Tax A/C

G/L Acct Long Text : Input Tax Account




Sort Key : 001




Save

18.4.2. Output Tax A/C


Company Code :

Click on Create




Short Text : Output Tax A/C

G/L Acct Long Text : Output Tax Account




Sort Key : 001



Save

18.5. Define Tax Accounts


on Sales/Purchases- Posting- Define Tax Accounts (Tcode: OB40)

Execute

Double click on Input Tax VST

Chart of accounts :

Enter

Select Tax code


Save

Tax code :

Account : 290400

Save and enter

One time go back

Double click on Output Tax MWS

Select Tax code

Save

Tax Code :

Account : 190400

Save and enter

18.6. Maintain Tax Category * and Select posting without Tax

allowed in Service account and Service Revenue A/C G/L Master

Records in control data Tab. (Tcode:FS00)

19. Configure Automatic Postings

Path: SPRO- SAP Reference IMG- Materials Management- Valuation and

Account Assignment- Account Determination- Account Determination

Without Wizard- Configure Automatic Postings (Tcode: OMWB)

Execute

Click on Cancel (F12)

Click on Account Assignment (Shift+F4)

Double click on Inventory posting BSX

Chart of Accounts :

Enter

Select Valuation Modif.

Select Valuation

Save


Valuation modif. : 0001 (Valuation Grouping Code)

Valuation class : 3000

Account : 290500 (Raw Material Account)

Save and enter

One time go back

Double click on GR/IR clearing account WRX

Save

Account : 190500

Save and enter

20. Create Material Master Record

Path: Logistics - Materials Management - Material Master - Material - Create

(General) - MM01 - Immediately (Tcode:MM01)

Material :

Industry Sector : C Chemical industry

Material type : ROH Raw Material

Enter

Select Basic Data 1

Select purchasing

Select General Plant Data / Storage 1

Select Accounting 1

Plant :

Stor.location :

Enter

Material :

Base Unit of measure :

Material Group : 0001

Enter

Purchasing Group : 004


Enter and enter

Valuation Class : 3000

Price Control : V

Moving price :

Save

21. Vendor Master Record

Path: Accounting- Financial Accounting - Accounts Payable - Master Records -

Maintain Centrally - XK01 - Create (Tcode: XK01)

Vendor :

Company Code :

Purchasing organization :

Account Group : 0001

Enter

Title : Company

Name :

Search Term :

Street :

House number :

Postal code :

City : Hyderabad

Country : IN


Recon. Account : 190100

Sort key : 012

Cash mgmnt group : A1



Order currency : INR

Terms of payments : 0001

Inco terms : EXW

Select GR-based Inv.verif.

Purchasing group : 004

Planned deliv.time : 1

Save

22. Procure to process (P2P)

22.1. Purchase Requisition

Path: Logistics - Materials Management - Purchasing - Purchase Requisition -

ME51N - Create (Tcode: ME51N)

Go to Items

Material :

Quantity :

Delivery Date :


Plant :

Stor.Loc. :

Click on Check (Ctrl+Shift+F3)

Save

Requisition number :

22.2. Request for Quotation (RFQ)

Path: Logistics - Materials Management - Purchasing - RFQ/Quotation -

Request for Quotation - ME41 - Create (Tcode: ME41)


RFQ Type : AN

Language key : EN

RFQ Date :

Quotation deadline :



Plant :

Storage Location :

Material group :

Req.Tracking number : Venkat

Enter

Coll.no :100

Enter

Material :

RFQ Quantity :

Deliv.time :

Enter

Click on Vendor Address (F7)

Vendor :

Enter

Save

22.3. Maintain Quotation

Path: Logistics - Materials Management - Purchasing - RFQ/Quotation -

Quotation - ME47 - Maintain (Tcode: ME47)

RFQ :

Enter

Net price :


Save

22.4. Price Comparison

Path: Same path (Tcode: ME49)


Collecting RFQ :

Execute (F8)

22.5. Purchase order

Path: Logistics - Materials Management - Purchasing - Purchase Order -

Create - ME21N - Vendor/Supplying Plant Known (Tcode: ME21N)

Click on Selection variant

Choose Request for quotations

Plant :

Storage location :

Material group :



Company Code :

Keep blank Vendor Field

Execute (F8)

22.5.1. Pick and drop method


Hold left click on mouse to shopping cart.

22.5.2. Adopt purc.Document

Select Purch.Doc.

Click on Adopt

Go to Item details

Go to Invoice Tab

Tax Code : R4

Click on Check (Ctrl+Shift+F3)

Save

PO Number :

22.6. Maintain number ranges 50 and 51 for Document types

WE (Goods Receipt) and RE (Invoice Verification) (Tcode: FBN1)

22.7. Goods Receipt

Path: Logistics - Materials Management - Inventory Management - Goods

Movement - MIGO - Goods Movement (MIGO) (Tcode: MIGO)

A01 Goods Receipt R01 purchase order:

Enter

Select Item OK

Click on check (F7)

Click on post (Shift+F11)

A04 Display

Enter

Go to Header data


Go to Doc.Info Tab

Click on FI Documents

22.8. Invoice Verification

Path: Logistics - Materials Management - Logistics Invoice Verification -

Document Entry - MIRO - Enter Invoice (Tcode: MIRO)

Invoice date :

Purchase order/Scheduling agreement: 4500017174

Enter

Select calculate Tax

Copy Balance Field amount to amount field

Click on Simulate (Ctrl+Shift+F7)

Click on post or save


22.9. Outgoing payments (Tcode: F-53)


SD Integration

1. Define sales organization

Definition: Sales organization nothing but sales department.

Legally, a sales organization is included in exactly one company code. You

can assign one or more plants to one sales organization. The sales

organization has an address.

Path: SPRO- SAP Reference IMG- Enterprise Structure- Definition- Sales and

Distribution- Define, copy, delete, check sales organization (Tcode: OVX5)

Execute

Double click on Copy, delete, check sales organization

Click on copy org.object (F6)

From sales org. : 1000

To sales org. :

Enter, enter, enter and enter

One time go back

Double click on Define Sales Organization


Sales org. :

Enter

Select



Sales organization : Hyderabad

Click on Address (Shift+F5)

Name : Hyderabad

Street : Ameerpet

House number : 1-234


City : Hyderabad

Country : IN

Region : AP

Language : EN English


Save and enter

2. Define Shipping point

Definition: The shipping point is the top level in the organization for shipping.

A shipping point can be allocated to several plants. A shipping point can be

divided into several loading points.

Path: SPRO- SAP Reference IMG- Enterprise Structure- Definition- Logistics

Execution- Define, copy, delete, check shipping point (Tcode: OVXD)

Execute

Double click on Copy, delete, check shipping point

Click on Copy org.object (F6)

From shipping point : 1000

To Shipping point :

Enter, enter, enter and enter

One time go back

Double click on Define shipping point



Shipping point :

Enter

Select ______


Click on address (Shift+F5)

Name : Shipping point for

Street : Ameerpet

House number : 234


City : Hyderabad

Country : IN

Transportation zone : 0000000001

Enter

Save and enter

3. Assign sales organization to company code

Path: SPRO- SAP Reference IMG- Enterprise Structure- Assignment- Sales and

Distribution- Assign sales organization to company code (Tcode: OVX3)

Execute


Sales org. :

Enter

CoCd :

Save and enter


4. Assign Shipping Points

Path: SPRO- SAP Reference IMG- Logistics Execution- Shipping- Basic

Shipping Functions- Shipping Point and Goods Receiving Point

Determination- Assign Shipping Points (Tcode: OVL2)

Execute

Shift+F7

Shipping cond. : 01

Loading group : 0001

Plant :

Enter

PrShP :

Save and enter

5. Creation of G/L Master Records (Tcode: FS00)

5.1. Cost of Goods Sold A/C


Company Code :

Click on Create



Select P&L statement Acct

Short Text : COGS A/C

G/L Acct Long Text : Cost of Goods Sold A/C





Sort Key : 001

Go to create/Bank/Interest Tab


Save

5.2. Finished Goods A/C


Company Code :

Click on create




Short Text : Finished Goods A/C

G/L Acct Long Text : Finished Goods Account




Sort Key : 001



Select post automatically only

Save

5.3. Sales Account


Company Code :

Click on Create




Select P&L statement Acct

Short Text : Sales A/C

G/L Acct Long Text : Sales Account



Tax Category :*

Select posting without tax allowed


Sort Key : 001

Go to create/Bank/Interest Tab


Save

6. Integration of COGS A/C and Finished goods Account (Tcode:

OMWB)

Click on Cancel (F12)

Click on Account Assignment (Shift+F4)

Double click on Offsetting entry for inventory posting GBB

Chart of Accounts :

Enter

Select General modification

Select valuation modif.

Select valuation class

Save

valuation modif. : 0001

General modification : VAX


Account : 400070

valuation modif. : 0001

General modification : BSA



Account : 400070

Save and enter

One time go back

Double click on Inventory posting BSX

Valuation modif. : 0001


Account : 290600

Save and enter

7. Assign Sales G/L Account

Path: SPRO- SAP Reference IMG- Sales and Distribution- Basic Functions-

Account Assignment/Costing- Revenue Account Determination- Assign G/L

Accounts

(Tcode: VKOA)

Execute

Double click on Cust.Grp/MaterialGrp/AcctKey


App : V

CndTy. : KOFI

ChAc. :

SOrg. :

AAG : 01

AAG : 03

ActKy : ERL

Account : 300100

Save and enter


8. Maintain number ranges for 49 (Tcode: FBN1)

Company code :



No : 49

Year : 2009


To Number : 4999999999

Enter

Save and enter

9. Create Material master record (Tcode: MM01)

Material :

Industry Sector : C Chemical Industry

Material type : FERT Finished Goods

Enter

Select

Basic Data 1

Sales: Sales Org. Data 1

Sales: Sales Org. Data 2

Sales: General/Plant Data

General Plant Data / Storage 1

Accounting 1

Enter

Plant :

Stor.Location :

Sales org. :


Distr.Channel :10

Enter

Material :

Base Unit of measure : TO


Division : 00

Gross Weight : 10000

Net Weight : 10000

Enter

Delivering Plant :

T : 1

Click on conditions

Scal Quantity Amount

1 100000

10 95000

100 90000

One time go back

Enter

Acct assignment grp : 03

Enter

Trans.Grp : 0001

Loading Grp : 0001

Enter and enter

Valuation Class : 7920

Price Control : S (Standard price)

Standard price : 100000

Save


10. Create Customer Master Records

Path: Accounting - Financial Accounting - Accounts Receivable - Master

Records - Maintain Centrally - XD01 - Create (Tcode: XD01)

Account Group : 0001

Customer :

Company Code :

Sales organization :

Distribution channel : 10

Division : 00

Enter

Title : Company

Name :

Search Term :

Street :

House Number :

Postal code :

City :

Country : IN

Region : 01

Transportation Zone : 0000000001

Click on Company Code Data (Ctrl+F2)

Recon.Account : 290300

Sort Key : 031

Click on Sales area data (Ctrl+F3)

Go to Shipping Tab

Delivery priority : 01

Shipping conditions : 01

Delivering plant :

Go to Billing documents tab


Incoterms : EXW

Terms of payments : 0001

Acct assgmt group : 01

Tax classification : 1

Save

11. Initial Stock posting

Path: Logistics - Materials Management - Inventory Management - Goods

Movement - Goods Receipt - MB1C - Other (Tcode: MB1C)

Movement type : 561

Plant :

Storage Location :

Enter

Material :

Quantity :

Enter

Save

Go to Menu bar

Other Goods Receipts- Display

Enter

Click on Accounting Document (F7)

11.1. Maintain Condition Records

Path: Logistics- Sales and Distribution- Master Data- Conditions- Select Using

Condition Type- VK11 – Create (Tcode: VK11)

Condition type : MWST (Output Tax)

Enter

Select Domestic Taxes

Enter

Country : IN


T : 1 (This is maintained in Customer Master)

T : 1 (This is maintained in Material master)

Tax code : M4

Save

12. Creation of Sales order

Path: Logistics - Sales and Distribution - Sales - Order - VA01 - Create (Tcode:

VA01)

Order type : OR

Sales organization :

Distribution Chennel : 10

Division : 00

Enter

Sold to party :_________ (Customer Number)

PO Number : 10

Go to Sales Tab

Material :

Order Quantity : 10

Enter

Double click on Material

Go to Conditions Tab

Save

Sales order N

13. Goods Issue to customer

Path: Logistics - Sales and Distribution - Shipping and Transportation -

Outbound Delivery - Create - Single Document - VL01N - With Reference to

Sales Order

(Tcode: VL01N)


Shipping point :

Selection Date :

Order :

Enter

Go to Picking Tab

SLoc :

Picked Qty : 10

Enter

Click on post goods issue (Shift+F8)

Go to Menu bar

Outbound delivery - Display

Outbound Delivery :

Enter

Go to Menu bar

Environment - Document Flow

Select GD Goods Issue:Delivy

Click on Display Document (F8)

Click on Accounting Documents (F7)

Delivery Document No: 80015175

14. Customer invoice

Path: Logistics - Sales and Distribution - Billing - Billing Document - VF01 -

Create (Tcode: VF01)

Document :

Enter

Save


Go to Menu bar

Billing Document - Display

Billing Document number :

Click on Accounting (F6)

Period end and year end process

1. Financial statements version


Ledger Accounting (New)- Master Data- G/L Accounts- Define Financial

Statement Versions (Tcode: OB58)

Execute


Fin.Stmt.version :

Name : Financial Statements


Maint.Language : EN (English)

Select Item keys auto.

Chart of accounts :

Save and enter

Click on Fin. statement Items (Shift+F8)

Click on create items (F5)

Liabilities

Assets

Incomes

Expenses

Enter

Select Liabilities

Click on Assign Accounts (F6)

From Acct To Account D C

100000 199999 - -

Enter

Select Assets


From Acct to Account D C

200000 299999 - -

Enter

Select Incomes



300000 399999 - -

Enter

Select Expense



400000 499999 - -

Enter


Save and enter

1.1. Financial Statements Report

Path: Information Systems- Accounting- Financial Accounting- General

Ledger- F.01 - Balance Sheet (Tcode: F.01)

Controlling Area:

Controlling area nothing but costing or Cost Accounting

1. Maintain Controlling Area

Path: SPRO- SAP Reference IMG- Controlling- General Controlling- Organization- Maintain Controlling Area (Tcode: OKKP)Execute

Double click on Maintain Controlling AreaClick on New Entries (F5)Controlling Area : Click on CO Area=Code


Company Code : EnterCoCd->CO Area : Controlling area same as company

CodeCCtr Std. Hierarchy : Document type : SASave and enter and enterDouble click on Assignment of Company Code(S)Click on New Entries (F5)CoCd : SaveDouble click on Activate components/Control indicatorsClick on New Entries (F5)Fiscal Year : Cost Centers : 1 component activeSelect AA: Activity typeOrder management : 1 component activeCommit. Management : 1 component activeSelect Profit center AcctgSelect projectsSelect Sales ordersSelect Cost objectSelect W.Commit.MgtSelect VariancesSave and enter

2. Maintain Number Ranges for Controlling Documents

Path: Same path (Tcode: KANK)Execute

Click on Copy (F7)From..... : 0001To..... : Enter and enter

3. Maintain Versions

Definition: Versions enable you to have independent sets of planning and actual data

Path: Same path (Tcode: OKEQ)Execute


Select 0 Plan/actual versionDouble click on Settings for Profit Center AccountingControlling area : EnterClick on New entries (F5)Year : Select online transferSelect Line itemsExRateType : MSave and EnterTwo times go backSelect 0 Plan/actual versionDouble click on Controlling Area settingsSelect 0 Plan/Act - VersionDouble click on Settings for Each fiscal yearClick on New Entries (F5)Fiscal year : Select Copying allowedExchange rate type : MSave

4. Maintain Standard Hierarchy

Path: Accounting - Controlling - Cost Center Accounting - Master Data - Standard Hierarchy - OKEON - Change (Tcode: OKEON)

Controlling area :EnterGroup Name : Hierarchy for EnterSelect ______Click on CreateChoose Lower-level GroupGroup Name : 100000 IndiaEnterSelect 100000


Click on CreateChoose Lower-Level GroupGroup Name : 110000 MumbaiEnterSelect 110000Click on CreateChoose Lower-Level GroupGroup Name : 111000 LalabaghEnterSelect 110000Click on CreateChoose Lower-Level GroupGroup Name : 112000 Andheri EastEnterSelect 111000Click on CreateChoose Lower-Level GroupGroup Name : 111100 BuildingEnterSelect 111100Click on CreateChoose Lower Level GroupGroup Name : 111110 Floor1EnterSelect 111100Click on CreateChoose Lower Level GroupGroup Name : 111120 Floor2EnterSelect 112000Click on CreateChoose Lower-Level GroupGroup Name : 112100 BuildingEnterSelect 112100Click on CreateChoose Lower-Level GroupGroup Name : 112110 Floor1Enter

5. Create Cost Center

Definition: Wherever Cost Incurs is called cost centers.

Path: Accounting - Controlling - Cost Center Accounting - Master Data - Cost Center - Individual Processing - KS01 - Create (Tcode:KS01)


Cost Center : 111111Valid From : EnterName : FICO ClassDescription : FICO ClassPerson Responsible : VenkataraoCost Center Category : 1Hierarchy Area : 111110 Currency : INRSaveIgnore warning message

6. Creation of Cost Element

Definition: Cost element is a bridge to flow cost to the cost center

6.1. Through G/L Master (Tcode:FS00)

G/L Account : 400010Company Code : Click on Edit Cost Element (F8)Valid From : EnterCElem category : 1Save

6.2. Through Path

Path: Accounting - Controlling - Cost Element Accounting - Master Data - Cost Element - Individual Processing - KA01 - Create Primary (Tcode:KA01)


Double click on KA01 - Create Primary Cost Element : 400020Valid From : 01.04.2009EnterCElem Category : 1Save

7. Change Field Status Group G001 to G004 in G/L Master records of Expense G/L's (Tcode:FS00)

8. Postings to Cost centers (Tcode:F-02)

Enter Header data (Type SA)PstKy : 40Account : 400010EnterAmount : 25000Cost Center : 111115PstKy : 50Account : 290100EnterAmount : *Go to Menu barDocument - SimulateSaveCost Center line item report

Path: Accounting - Controlling - Cost Center Accounting - Information System - Reports for Cost Center Accounting - Line items - KSB1 - Cost Centers: Actual Line Items (Tcode:KSB1)

Cost Center : 111115Execute (F8)

9. Planning

Maintain planning profile

Definition: Planning profile is a facilitator to plan the cost elements and revenue elements

Path: SPRO- SAP Reference IMG- Controlling- Cost Center Accounting- Planning- Manual Planning- Define User Defined Planner Profiles (Tcode:KP34)Execute


Click on New Entries (F5)Profile : Description : Planning of Revenue and cost

elementsEnterSelect Double click on general controllingClick on New Entries (F5)Planning area : Cost ctrs: Cost element/activity

inputsSelect Cost ctrs: Cost element/activity inputsDouble click on Layouts for controllingClick on New Entries (F5)Layout : 1-103Save

Set planner profile

Path: Accounting - Controlling - Cost Center Accounting - Planning - KP04 - Set Planner Profile (Tcode: KP04)

Planner profile : EnterPlanning of cost elements and revenue elements

Path: Accounting - Controlling - Cost Center Accounting - Planning - Cost and Activity Inputs - KP06 - Change (Tcode:KP06)

Version : 0From period : 1To Period : 12Fiscal Year : Group : Cost elements : 400010Click on Overview screen (F5)Total plan costs : 100000Click on next combination (Ctrl+F2)Total plant costs : 120000EtcSave


Report

Path: Accounting - Controlling - Cost Center Accounting - Information System - Reports for Cost Center Accounting - Plan/Actual Comparisons - S_ALR_87013611 - Cost Centers: Actual/Plan/Variance (Tcode:S_ALR_87013611)

Controlling area : Fiscal year : 2009From period : 1To period : 12Plan version : 0Cost center group : Execute (F8)

10. Budgets

Maintain Budgets

Path: Accounting - Controlling - Cost Center Accounting - Planning - Cost Center Budgets - KPZ2 - Change (Tcode:KPZ2)

Profile : COST00Cost Center Group : EnterCost center INR111111 FICO Class 10,000.00111112 MM Class 20,000.00Save

Report

Path: Accounting - Controlling - Cost Center Accounting - Information System - Reports for Cost Center Accounting - More Reports - S_ALR_87013648 - Range: Actual/Budget/Commitments (Tcode:S_ALR_87013648)

Controlling area : Fiscal year : 2009Cost center group : Execute (F8)


11. Reposting of line items

Definition: If cost center provides services to other cost centers. Service cost center costs will be distributed to other service receiver cost center.

Path: Accounting - Controlling - Cost Center Accounting - Actual Postings - Manual Reposting of Costs - KB11N - Enter (Tcode: KB11N)

CCtr(Old) Cost Elem Amount CCtr(New)111111 400010 10000 111112111111 400010 5000 111113111111 400010 3000 111114EnterSave

Cost Center report (Tcode: KSB1)

12. Distribution of costs

Definition: Distribution of costs of service cost center to other Receiver cost center

Create distribution cycle

Path: Accounting - Controlling - Cost Center Accounting - Period-End Closing - Current Settings - S_ALR_87005757 - Define Distribution (Tcode:S_ALR_87005757)

Cycle : Start date : 01.01.2010EnterText : DistributionClick on Attach Segment (Shift+F8)Segment name : _______ Distribution of FICO classGo to Segment header TabReceiver rule : 3 Fixed percentagesGo to Senders/Receivers tabSenderCost Center : 111111Cost Element : 400000 499999ReceiverCost Center : 111112 111114Go to Receiver Tracing factor tabCost Ctr Percent111112 20


111113 30111114 50Save and enterOne time go backSave and enterOne time go backSave and enter

Run distribution cycle

Path: Accounting - Controlling - Cost Center Accounting - Period-End Closing - Single Functions - Allocations - KSV5 - Distribution (Tcode:KSV5)

Period : 10Fiscal year : 2009Select Test RunSelect Detail listCycle : Execute (F8)Click on Sender (Shift+F4)Observe Sender values (Should be in Minus)One time go backClick on Receiver (Shift+F5)Observe Receiver values (Should be in Plus)Two Time go backEnterDeselect Test runExecute (F8)

13. Assessment

Definition: In Assessment, system will distribute accumulated amounts of Sender Cost center to Receiver cost center.In Distribution, system will distribute each cost element amount of Sender cost center to receiver cost center.

Create assessment cost element

Path: Accounting - Controlling - Cost Element Accounting - Master Data - Cost Element - Individual Processing - KA06 - Create Secondary (Tcode:KA06)

Controlling area : EnterCost element : AssessmentValid from : 01.04.2009Enter


Name : AssessmentDescription : Assessment cost elementCElem category : 42Save

Create Assessment Cycle

Path: Accounting - Controlling - Cost Center Accounting - Period-End Closing - Current Settings - S_ALR_87005742 - Define Assessment (Tcode:S_ALR_87005742)

Cycle : Start date : EnterText : AssessmentClick on attach segment (Shift+F8)Segment name : ______ Assessment of FICOGo to Segment Header TabAssessment cEle : AssessmentReceiver Rule : 3 Fixed percentagesGo to Sender/Receivers TabSenderCost center : 111111Cost Element : 400000 499999ReceiverCost center : 111112 111114Go to Receiver Tracing factor TabCost Ctr Percent111112 30111113 25111114 45Save and enterOne time go backSave and enterOne time go backSave and enter

Run assessment cycle

Path: Accounting - Controlling - Cost Center Accounting - Period-End Closing - Single Functions - Allocations - KSU5 - Assessment (Tcode:KSU5)

Period : Fiscal year : Select Test Run


Select Details listCycle : Start date : Execute (F8)Click on Sender (Shift+F4)Observe valuesOne time go backClick on Receivers (Shift+F5)Observe valuesTwo times go backDeselect Test runExecute (F8)

Profit Center Accounting

Revenue : XXXXXCost : XXXX

________Profit XXXX

________

1. Maintain Controlling Area Settings

Path: SPRO- SAP Reference IMG- Controlling- Profit Center Accounting- Basic Settings- Controlling Area Settings- Maintain Controlling Area Settings (Tcode:0KE5)Execute

Standard Hierarchy : Select Elim.of int.business Vol.PCtr Local Currency Type : 20Select Store Transaction currencySave and enter

Note: Whenever you enter into system, we should do set controlling area (Tcode: OKKS)

2. Define Standard Hierarchy

Path: SPRO- SAP Reference IMG- Controlling- Profit Center Accounting- Master Data- Profit Center- Define Standard Hierarchy (Tcode: KCH4)Execute


______ : Standard Hierarchy for Save and enter

3. Copy Cost Center Groups

Path: SPRO- SAP Reference IMG- Controlling- Profit Center Accounting- Master Data- Profit Center- Copy Cost Center Groups (Tcode: 2KEU)Execute

Cost Center Group : Select Copy Standard HierarchyExecute (F8)Save

4. Create Dummy Profit Center

Path: SPRO- SAP Reference IMG- Controlling- Profit Center Accounting- Master Data- Profit Center- Create Dummy Profit Center (Tcode: KE59)Execute

Double click on EC-PCA: Create Dummy Profit CenterDummy profit center : DUMMY_USHAEnterClick on Basic data (F5)Name : Dummy profit CenterDescription : Dummy profit CenterProfit Center Group : Save

5. Set Control Parameters for Actual Data

Path: SPRO- SAP Reference IMG- Controlling- Profit Center Accounting- Basic Settings- Controlling Area Settings- Activate Direct Postings- Set Control Parameters for Actual Data (Tcode: 1KEF)Execute

Click on New Entries (F5)From Year : Select Line itemsSelect online transferSave

6. Create Revenue Elements (Tcode: KA01)

Definition: It is a bridge to flow revenues to profit centerCost Element : 300100


Valid From : EnterCElem Category : 11 RevenuesSave

7. Copy Cost Centers

Path: SPRO- SAP Reference IMG- Controlling- Profit Center Accounting- Master Data- Profit Center- Copy Cost Centers (Tcode: 2KEV)Execute

Cost Center Group : Execute (F8)

8. Create profit center

Path: Accounting - Controlling - Profit Center Accounting - Master Data - Profit Center - Individual Processing - KE51 - Create (Tcode: KE51)

Profit Center : 111115EnterName : HR ClassLong text : HR ClassPerson Response. : VenkataProfit Ctr Group : 111110Click on Activate (Shift+F1)

9. Assign Profit Centers in Cost Centers (Tcode: KS02)Cost Center : 11111EnterProfit Center : 11111SaveIgnore Warning messages

10. Postings (Tcode: F-02)

Enter Header data (Type SA)PstKy : 40Account : 400010


EnterAmount : 25000Cost Center : 111111PstKy : 50Account : 290100EnterAmount : *Save

Document display (Tcode: FB03)

Document number : 100000027Company Code : EnterGo to Menu barEnvironment- Document Environment- Accounting Documents

11. Change field status group G001 to G029 in revenue G/L Accounts (Tcode:FS00)

G/L Account : 300100Company Code : Click on ChangeGo to Create/Bank/Interest TabField Status Group : G029Save

12. Post Revenues to profit centers (Tcode:F-02)

Enter Header data (Type SA)PstKy : 40Account : 290100EnterAmount : 35000PstKy : 50Account : 300100EnterAmount : *Profit Center : 111111Save


Profit Center Line item report

Path: Accounting - Controlling - Profit Center Accounting - Information System - Reports for Profit Center Accounting - Line Item Reports - KE5Z - Profit Center: Actual Line Items (Tcode: KE5Z)

Record type : 0Version : 0Controlling area : Company Code : Posting period : 10Fiscal year : 2009Profit center : 111111Execute (F8)


Internal orders

Definition: Internal order is tool to gather the costs. At period end,

we need to close the order.

Note: Set controlling area (Tcode: OKKS)

Controlling area :

Enter

1. Create internal Settlement Cost Element (Tcode: KA06)

Cost Element : Settlement

Valid From :

Enter

Name : Settlement

Description : Settlement cost element

CElem category : 21

Save

2. Maintain Allocation Structures

During settlement, costs incurred under the primary and secondary cost

elements by a sender are allocated to one or more receivers. When you

settle by cost element, you settle using the appropriate original cost

element.


Path: SPRO- SAP Reference IMG- Controlling- Internal Orders- Actual

Postings- Settlement- Maintain Allocation Structures (Tcode:OKO6)

Execute

Select A1 Co allocation structure

Double click on assignments

Select 025 Settlements

Double click on Source

From Cost El . : 400000

To cost elem. : 499999

Double click on Settlement cost elements


Receiver Cat. : CTR

Settlement cost elem. : Settlement

Save and enter

3. Create internal order

Path: Accounting- Controlling - Internal Orders - Master Data - Special

Functions - Order - KO01 - Create (Tcode:KO01)

Order type : 150

Enter

Controlling area :

Enter

Click on Settelement rule (Shift+F5)

Cat Setle Rec. Percent

CTR 111112 MM Class 30.00

CTR 111113 SD Class 20.00

CTR 111114 ABAP Class 50.00

Save



Order number :

Note: Order should be Release mode. In create mode, we can’t post

costs to internal order.

4. Change internal order (Tcode: KO02)

Order :

Enter

Goto Control data Tab

click on release

Save


5. Posting to Internal order (Tcode: F-02)


PstKy : 40

Account : 400010

Enter

Amount : 100000

Order :

PstKy : 50

Account : 290100

Enter

Amount :*

Go to Menu bar

Document - simulate

Save


6. Internal order report

Path: Accounting - Controlling - Internal Orders - Information System -

Reports for Internal Orders - Line Items - KOB1 - Orders: Actual Line Items

(Tcode:KOB1)

Order :

Execute (F8)

7. Planning

Path: Accounting - Controlling - Internal Orders - Planning - Cost and Activity

Inputs - KPF6 - Change (Tcode: KPF6)

Version : 0

From period : 1

To period : 12

Fiscal year : 2009

Order :

Cost element : 400000

To : 499999

Click on Overview screen (F5)

Cost element Total Plan Costs

400010 Rent A/C 200,000.00

400020 Bank Charges A/C 50,000.00

400030 Cash Dis. Given A/C 75,000.00

400040 LS.Sale of Asset A/C 105,000.00

400050 Scrap on Asset A/C 125,000.00

400060 Depreciation A/C 35,000.00


400100 Service A/C 100,000.00

Save

8. Internal order comparison report (Variance report)

Path: Accounting - Controlling - Internal Orders - Information System -

Reports for Internal Orders - Plan/Actual Comparisons - S_ALR_87012993 -

Orders: Actual/Plan/Variance (Tcode:S_ALR_87012993)

Controlling area :

Fiscal year :

From period : 1

To period : 12

Plan version : 0

Value (S) :

Execute (F8)

9. Internal order budgets

Path: Accounting -Controlling - Internal Orders - Budgeting - Original Budget - KO22 - Change

(Tcode: KO22)

Order :

Enter

Overall : 300000

2009 :300000

Save


10. Internal order Budget report

Path: Accounting - Controlling - Internal Orders - Information System - Reports for Internal

Orders - More Reports - S_ALR_87013019 - List: Budget/Actual/Commitments

(Tcode:S_ALR_87013019)

Controlling area :

Value(S) :

Execute (F8)

11. Change Internal order (Tcode: KO02)

Order :

Enter


Click on Tech.Comple

Save

12. Maintain Number ranges for Internal order settlement document

Path: SPRO - SAP Reference IMG- Controlling- Internal Orders- Actual Postings- Settlement-

Maintain Number Ranges for Settlement Documents (Tcode:KO8N)

Execute

Click on Maintain groups (F6)

Select Standard Accounting document

Double click on

Click on Element/Group (F5)


Save and enter

13. Settlement of internal order

Path: Accounting - Controlling - Internal Orders - Period-End Closing - Single Functions -

Settlement - KO88 - Individual Processing (Tcode:KO88)

Order :

Settlement period :

Fiscal year :

Select Test run

Execute

Click on Details list (Ctrl+Shift+F3)

Two time go back

Deselect Test run

Execute

14. Close Internal order (Tcode: KO02)

Order :

Enter

Go to control data Tab

Click on close

Save

Hence:

Internal order creation: We can’t post documents to internal order

Internal order release: We can post documents to internal order and settlement the order

Technically Complete: We can post documents and Settle the order

Internal order close: We can’t post documents to internal orders


Profitability analysis

______________________

Definition: Profitability analysis is a reporting tool, We can develop reports in

this tool

1. Maintain Operating Concern

Path: SPRO- SAP Reference IMG- Controlling- Profitability Analysis-

Structures- Define Operating Concern- Maintain Operating Concern

(Tcode: KEA0)

Execute

Operating concern :

Click on Create (F5)

Description : Operating concern for _____

Select Costing-Based

Go to Attributes Tab

Operating concern currency : INR

Select Company Code Currency

Fiscal year variant :

Go to Data Structure Tab

Save

Click on Create data structure

Select LAND1 Country

Click on Transfer fields

Go to value fields tab

Select VV010 Revenue

Select VV140 Cost of Goods sold


Click on Transfer fields

Click on Activate (Ctrl+F3)

Save (Ctrl+S)

One time go back

Click on Yes

Enter

Note: Status should be Green Color

2. Assign controlling area to operating concern

Path: SPRO - SAP Reference IMG- Enterprise Structure- Assignment-

Controlling- Assign controlling area to operating concern (Tcode: KEKK)

Execute


CO Area :

Enter

OpCo :

Save and enter

3. Activate Profitability Analysis


Path: SPRO- SAP Reference IMG- Controlling- Profitability Analysis- Flows of

Actual Values- Activate Profitability Analysis (Tcode: KEKE)

Execute


CO Area :

Enter

Active Status : 2


4. Assign Value Fields

Path: SPRO- SAP Reference IMG- Controlling- Profitability Analysis- Flows of

Actual Values- Transfer of Billing Documents- Assign Value Fields

(Tcode: KE41)

Execute

Double click on Maintain Assignment of SD Conditions to CO-PA Value Fields

Operating Concern :

Enter


CTyp Val.fld

PR00 VV010

VPRS VV140

Save and enter

5. Assign G/L Accounts (Tcode: OBYC)


Double click on Offsetting entry for inventory posting GBB

Chart of accounts :

Enter

Valuation modif. : 0001

General modification : VAY


Account : 400070

Save and enter

6. Create Cost elements For COGS A/C (Tcode: KA01)

7. Change Material master record (Tcode: MM02)

Material :

Enter

Select Sales: General/Plant Data

Enter

Plant :

Sales org. :

Distr.Chennel : 10

Enter

Profit Center : DUMMY_______

Save

8. Creation of Sales order (Tcode: VA01)

9. Goods Issue (Tcode: VL01N)


10. Billing (Tcode: VF01)

11. Define key figure schemes

Definition: Key figure schemes are defined for information system

Path: SPRO- SAP Reference IMG- Controlling- Profitability Analysis-

Information System- Report Components- Define Key Figure Schemes

(Tcode: KER1)

Execute


Key Figure scheme :

Medium-length text : Key figure Schemes

Double click on Elements of key figure schemes


Element number : 1000

Quantity/Value : VV Value field


Short Text : Revenue

Medium-Length text : Revenue

Long Text : Revenue

Click on Basic Formula

+- : +

Element : 9001

Enter



Quantity/Value : VV Value field

Short Text : COGS

Medium-Length text : Cost of Goods Sold

Long Text : Cost of Goods Sold


+- : +

Element : 9002

Enter



Short Text : Profit

Medium-Length text : Profit

Long Text : Profit


+- Element

+ 9001

- 9002

Enter

One time go back

Save and enter

12. Define Report


Path: Accounting - Controlling - Profitability Analysis - Information System -

Define Report - KE31 - Create Profitability Report (Tcode: KE31)

Report :

Enter and enter

Go to Characteristics Tab

Select Country, Customer, Distribution channels, Division, Plant, Product,

and Profit Center etc.

Click on Add Char.

Go to Key Figures Tab

Key figure scheme :

Select Revenue, Cost of Goods sold and profit

Save and enter

13. Execute Report

Path: Accounting - Controlling - Profitability Analysis - Information System -

KE30 - Execute Report (Tcode: KE30)

Select Report

Execute (F8)

Period From :

Period to :

Plan/Act.Indicator : 0

Execute (F8)

Enter and enter

New General Ledger Accounting

1. Define Ledgers for General Ledger Accounting


Definition: you define the ledgers that you use in General Ledger Accounting. The ledgers are based on a totals table. SAP recommends using the delivered standard totals table FAGLFLEXT.

Leading ledger:

The leading ledger is based on the same accounting principle as that of the consolidated financial statement. It is integrated with all subsidiary ledgers and is updated in all company codes. You must designate one ledger as the leading ledger.In each company code, the leading ledger automatically receives the settings that apply to that company code: the currencies, the fiscal year variant, and the variant of the posting periods.

Non-leading ledger:

The non-leading ledgers are parallel ledgers to the leading ledger. They can be based for example on local accounting principles such as German Commercial Code.You must activate a non-leading ledger by company code.For each ledger that you create, a ledger group of the same name is automatically created.

Path: SPRO- SAP Reference IMG- Financial Accounting (New)- Financial Accounting Global Settings (New)- Ledgers- Ledger- Define Ledgers for General Ledger AccountingExecute

Ld : L7Ledger Name : USA GAAPTotals table : FAGLFLEXTEnterSave and enter

2. Creation of Zero balance A/C (Tcode:FS00)

G/L Account : 400095Company code : Click on CreateGo to Type/description Tab

sapevent:DOCU_LINK%5CDS:GLOS.A2B9B9BAA083B24795F23DAAFCA715E5


Account Group : EXPN ExpensesSelect P&L Statement acctShort Text : Zero Balance A/CG/L Acct Long Text : Zero Balance AccountGo to Control data TabSelect only balances in local crcySelect line item displaySort key : 001Go to Create/bank/interest TabField status group : G001Save

3. Define Account Determination for Real-Time Integration

Path: SPRO – SAP Reference IMG- Financial Accounting (New)- Financial Accounting Global Settings (New)- Ledgers- Real-Time Integration of Controlling with Financial Accounting- Account Determination for Real-Time Integration- Define Account Determination for Real-Time IntegrationExecute

Controlling Area : Click on change account determinationSaveAccount : 400095Save and enter

4. Define Variants for Real-Time Integration

Path: SPRO – SAP Reference IMG- Financial Accounting (New)- Financial Accounting Global Settings (New)- Ledgers- Real-Time Integration of Controlling with Financial Accounting- Define Variants for Real-Time IntegrationExecute

Click on New Entries (F5)Var.for R-T Integ. : Select R.-Time integ:ActiveDocument type : ABSelect Cross business areaSave

5. Assign Variants for Real-Time Integration to Company Codes

Path: Same pathExecute


Click on New Entries (F5)Company code : Variant for Real-Time integration :Save and enter

6. Classify G/L Accounts for Document Splitting

Path: SPRO- SAP Reference IMG- Financial Accounting (New)- General Ledger Accounting (New)- Business Transactions- Document Splitting- Classify G/L Accounts for Document SplittingExecuteChart of Accounts : EnterAcct from Account to Cat290100 290100 04000400010 400090 20000400095 400095 01001Save and enter

7. Define Zero – Balance Clearing Account

Path: Same pathExecuteSelect 000Double click on AccountsChart of accounts : EnterClick on New Entries (F5)G/L Account : 400095Save

8. Activate Document Splitting

Path: same pathExecuteSelect Document SplittingSave and enter

9. Activate Assign Business areas in Cost Centers (Tcode: KS02)10. Cost Center : 11111911. Valid from : 01.04.200912. Enter13. Name : New G/L 114. Description : New G/L 1


15. Person Responsible : Basha16. Cost Center category : 117. Hierarchy Area : 11111018. Business area : KIRH19. Currency : INR20. Profit center : 11111121. Save22.23. Cost Center : 111111024. Valid from : 01.04.200925. Enter26. Name : New G/L 227. Description : New G/L 228. Person Responsible : Venkat29. Cost Center category : 130. Hierarchy Area : 11111031. Business area : KIRM32. Currency : INR33. Profit center : 11111134. Save

Period end and year end process

1. Save and enter Financial Statement Version

Path: SPRO- SAP Reference IMG- Financial Accounting (New)- General Ledger Accounting (New)- Master Data- G/L Accounts- Define Financial Statement Versions (Tcode: OB58)Execute


Fin.Stmt.version :

Name : Financial Statements

Maint.Language : EN (English)

Select Item keys auto.

Chart of accounts :

Save and enter

Click on Fin.statement Items (Shift+F8)

Click on create items (F5)

Liabilities

Assets

Incomes


Expenses

Enter

Select Liabilities



100000 199999 - -

Enter

Select Assets



200000 299999 - -

Enter

Select Incomes



300000 399999 - -

Enter

Select Expense



400000 499999 - -

Enter

Save and enter

2. Postings to cost centers (Tcode: F-02)Enter header data (Type SA)PstKy : 40Account : 400100EnterAmount : 50000Cost center : 111119PstKy : 50Account : 290100


EnterAmount : *Click on moreBusiness area : KIRHSave

3. Financial statements (Tcode: F.01)Chart of accounts : KIRNCompany code : KIRNBusiness area : KIRHFinancial statement version : KIRNExecute

4. Reposting of costs from 111119 Cost center to 1111110 cost center (Tcode: KB11N)CCtr : 111119Cost Elem. : 400100Amount : 10000CCtr : 1111110Save

5. Financial statement version (Tcode: F.01)

6. Parallel Books of Accounts

16.1. Maintain currencies for non leading ledgersPath: SPRO- SAP Reference IMG- Financial Accounting (New)- Financial Accounting Global Settings (New)- Ledgers- Ledger- Define and Activate Non-Leading LedgersExecuteLedger : L9EnterClick on New Entries (F5)CoCd : KIRNSave and enter

16.3. Define Document Types for Entry View in a LedgerPath: SPRO- SAP Reference IMG- Financial Accounting (New)- Financial Accounting Global Settings (New)- Document- Document Types- Define Document Types for Entry View in a LedgerExecute

16.2. Postings to non leading ledger


Path: Accounting - Financial Accounting - General Ledger - Posting - FB01L - Enter General Posting for Ledger Group (Tcode: FB01L)Enter header data (Type SA)Ledger Group : L8 (Non leading ledger)PstKy : 40Account : 290100Enter Amount : 25000Click on MoreBusiness area : KIRMPstKy : 50Account : 100000EnterAmount : *Click on MoreBusiness area : KIRMSave

17.Financial statements (Tcode: F.01)Chart of accounts : KIRNCompany code : KIRNBusiness area : KIRHFinancial statement version : KIRNExecute

18.Maintain Plan Periods: Path: Accounting - Financial Accounting new - General Ledger new- planning – define plan periods (Tcode: GCP5)Click on new entriesVar From Year To Year1100 1 2009 12 2010

Enter and save

19.Balance sheet and P&L a/c Statement Structure:Carry Forward Process: Path: Accounting - Financial Accounting new - General Ledger new- periodic processing- closing- carry forward-FAGLGVTR-Balance carry forward(new)Ledger : OLCompany code : 1100Carry forward to fiscal year : 2010Deselect test runSelect balance is retain earning accountexcute


1.2. Create Profit and loss account (Tcode: FS00)


Company code :

Click on create



Select Balance sheet account

Short text : Profit and loss A/C

G/L Acct Long Text : Profit and loss account

Go to control data tab



Sort key : 001

Go to Create/Bank/interest Tab


Save

1.3. Open New Year (Tcode: OB52)


Pstg Per.Var. :

Enter

Enter New Year

Save and enter

1.4. Carry ford Balances to next year

Path: Accounting- Financial Accounting- General Ledger- Periodic Processing-

Closing- Carry Forward- FAGLGVTR - Balance Carry forward (New) (Tcode:

FAGLGVTR)

Ledger : 0L

Company code :

Carry forward to fiscal year : 2010

Deselect Test run


Select Balances in Retain. earng.acct

Execute (F8)

1.3. Financial Statements Report

Path: Information Systems- Accounting- Financial Accounting- General

Ledger- F.01 - Balance Sheet (Tcode: F.01)

Chart of accounts :

Company code :

Financial statement version :

Reporting year :

Reporting periods : 1

Execute

Foreign Currency Valuation

1. Check Exchange rate types

Path: SPRO- SAP Reference IMG- SAP NetWeaver- General Settings-

Currencies- Check Exchange Rate Types (Tcode: OB07)

Execute

Note: M: Average Rate, G: Bank Buying Rate and B: Bank Selling Rate.


ExRt Usage

______ Average Rate Select Inv.

______ Bank Buying rate Select Inv.

______ Bank Selling rate Select Inv.

Save and enter

Note:

Direct quot.:- One unit of foreign currency equal to how many local currency

units.

Indirect quot.:- One unit of local currency equal to how many foreign

currency units.

2. Enter Exchange Rates



Execute


ExRt Valid From From Dir.quot. To

_____ ___________ USD ____ INR

_____ ___________ USD ____ INR

_____ ___________ USD ____ INR

Enter and enter

Save

3. Maintain Exchange rates in document types (Tcode: OBA7)


Document type : SA

Enter

Double click on SA

Ex.rate type for forgn crncy docs:

Save and enter

4. Exchange Difference Accounts

4.1. Create G/L master Records (Tcode: FS00)

4.1.1. Exchange Loss A/C


Company Code :

Click on Create




Short Text : Exchange Loss A/C

G/L Acct Long Text : Exchange Loss Account





Sort Key : 001



Save

4.1.2. Exchange Gain A/C


Company Code :

Click on Create




Short Text : Exchange Gain A/C

G/L Acct Long Text : Exchange Gain Account




Sort Key : 001



Save

4.2. Determine Accounts for Exchange


Accounting (New) - Business Transactions- Open Item Clearing- Define

Accounts for Exchange Rate Differences (Tcode: OB09)

Execute

Chart of Accounts :

Enter



G/L Account : 190100 (Vendor Recon. A/C)

Currency : USD

Currency type : 10

Loss : 400085

Gain : 300050

Save

5. General posting with Dollars (Tcode: F-02)

Enter header data (Type SA and Currency USD)

PstKy : 40 (Debit)

Account :

Enter

Amount : 1000

PstKy : 50 (Credit)

Account :

Enter

Amount :*

Go to Menu bar

Document - simulate

Click on Display currency (F8)

Observe Amounts

Save

Posting keys controls

1. Creation of posting keys

Definition: Posting key controls fields in transactional data and posting key

decides whether it is debit or credit. It controls account types.


Accounting Global Settings (New) - Document - Define Posting Keys

(Tcode: OB41)

Execute


Click on create (F6)

Posting key :

Name of posting key : Debit

Select Debit

Select G/L Account

Save and enter

Legacy System Migration Workbench (Tcode: LSMW)

Project : GLS

Subproject : GLS

Object : GLS

Click on create (Shift+F1)

Description : Uploading GLS

Enter


Enter


Enter

Execute (F8)

Select Maintain Object Attributes

Execute (Ctrl+F8)

Note: If Screen is display mode, click on Display->Change (Shift+F1)

Select Batch Input Recording

Recording : Venkat

Go to Menu bar

Go to - Recordings overview

Click on create recording (Ctrl+F1)

Recording : Venkat



Enter

Transaction code : FS00

Enter

Note: We should not use mouse, until recording complete


Company code : RELP

Click on create

Go to Type/Description tab



Short Text : Bank Account

G/L Acct Long Text : Bank Account

Go to Control data Tab (Ctrl+F11)

Account Currency: INR

Select Balances in local crcy


Sort key : 001

Go to Create/Bank/Interest Tab (Ctrl+F11)


Save

Click on Default all (Ctrl+F2)

Save

Go to Menu Bar

System - List - save - local file

Select Spread sheet

Save on desktop

Open Excel sheet which is saved on desktop

Delete Up to H column

Note: We should keep the items, which we entered in G/L Master data

Delete repeated rows


Select only data cells and copy

Keep cursor in "A1" cell and Right click on - paste special

Choose values and transpose

Enter

Note: Change the sort key column (field name "ZUAWA") Select Entire

column and right click on mouse-choose format cells

Go to Number tab-Double click on text

Enter G/L Accounts which are going to be uploading

Delete 1 & 3 rows

Select the data cells in spread sheet and copied into note pad

Press the Back space

Save note pad on desktop

Go to SAP Create Recording screen

Two times go back

Save

One time go back

Select Maintain Source Structures

Execute (Ctrl+F8)


Click on create a structure (Ctrl+F4)

Source Structure : Venkat1

Description : Upload GLS

Enter

Save

One time go back

Select Maintain Source Fields

Execute (Ctrl+F8)


Go to Menu bar

Source fields - Copy fields

Select From data file (Field Name in 1. line)


Number of fields : 9999

Max.record length : 99999

Enter and enter

Choose the note pad from desk top

Save

One time Go Back

Select Maintain Structure Relations

Execute (Ctrl+F8)

Note: If Screen is display mode, Click on Display->Change (Shift+F1)

Save

One time Go Back

Select Maintain Field Mapping and Conversion Rules

Execute (Ctrl+f8)

Note: If Screen is display mode, Click on Display->Change (Shift+F1)

Go to Menu bar

Extras - Auto field mapping

Select No confirmation

Enter and enter

Save

One time Go Back

Skip Maintain Fixed Values, Translations, User-Defined Routines step

Select Specify Files

Execute (Ctrl+F8)


Select Legacy data

Click on Add Entry (Ctrl+f2)

Give path of note pad

Name : Venkat

Select Tabulator

Select Field names at start of files

Enter


Save

One time Go Back

Select Assign Files

Execute (Ctrl+F8)


Save

One time Go Back

Select Read Data

Execute (Ctrl+F8)

Execute

Two times Go Back

Select Display Read Data

Execute (Ctrl+F8)

Enter

One time Go Back

Select Convert Data

Execute (Ctrl+f8)

Execute

Two times Go Back

Select Display Converted Data

Execute

Enter

One time Go Back

Select Create Batch Input Session

Execute (Ctrl+F8)

Execute

Enter

Select Run Batch Input Session

Execute (Ctrl+F8)

Select GLS



Select Display Errors only

Select Extended log

Enter

Click on Exit batch input

Validations:

Path: SPRO- Financial Accounting- Financial Accounting Global Settings-

Document- Line Item- Define Validations for Posting (Tcode:OB28)

Execute


CoCd :

CallPnt :1

Validation : Venkat

Double click on Venkat

Click on Yes

Select Venkat

Click on Step (Ctrl+Shift+F5)

Click on Prerequisite

Double click on Accounting Document Header

Click on Find

Search Term : User name

Enter

Double click on User name

Click on =

Click on constant

User name : SAPUSER

Enter

Click on Check

Double click on Accounting Document Header

Click on find

Search term : Document date

Enter


Double click on Document date

Click on =

Click on find

Search term : posting date

Double click on posting date

Click on message

Message number : 002

Save

1. Explain ‘ASAP Roadmap’ Phases.

Project preparation is the first and initial phase of the ASAP roadmap

where you are just starting the project. You will perform activities such

as preparation of the initial scope, high-level timelines and plans,

project charters, identification of project team members, project kick-

off, etc.

Business blueprint is the second phase in the implementation where

you will try, identify, and document business requirements and goals

to prepare the foundation for future stages of the project. Ideally, you

http://skillport.books24x7.com/viewer.asp?bkid=24729&destid=993#993



will organize ‘business requirement gathering’ workshops with the

various business/functional users of the company, lead them through

the discussion with structured business functionality questionnaires,

understand their existing business processes, and identify and

document their requirements in the wake of this new implementation.

A ‘sign-off’ at the end of the phase ensures an agreement to move

forward outlining the scope of the project. It is understood that

whatever is explicitly stated in the business blueprint document is the

only scope; no implied scope will be considered for system

configuration in the next phase.

Realization is the third phase where the implementing team breaks

down the business processes identified in the second phase and

configures the SAP settings. Initially, you will do a Baseline

Configuration, test the system functionality and if necessary make

changes to the baseline configuration, and close the phase with Final

Configuration, signaling that all the business processes have been

captured and configured in the system.

Final Preparation is the penultimate phase in the project. This phase

also serves to all crucial open issues. A ‘go-live check’ is also

conducted to analyze whether the system has been properly

configured. This phase is marked by the following activities:

End-to-testing of the configured system (User Acceptance Test—

UAT)

Training of the end users (Usually follows the concept ‘Train-the-

Trainer’)

System management activities (creation of users, user profiles,

allocation of roles to profiles, etc.)

Cut-over (data migration activities)








An ‘internal help desk’ should be staffed and supported mainly by

employees of the enterprise. Setting up a help desk involves, among

other things, installing office and technical equipment and defining

OSS users. Problems that cannot be solved by this internal help desk

are forwarded to SAP via the SAPNet/OSS system.

On successful completion of this phase, you are ready to run your

business in your production system.

Go-Live and Support is the final and fifth phase of the project where

the configured system is declared ‘live’ for day-to-day business use.

Users make productive (live) business transactions in the system and

all the issues cropping up in the wake of going live are supported and

resolved by a support team immediately.

2. Explain ‘ASAP BPML.’

‘ASAP BPMLs (Business Process Master Lists)’ are MS-Excel

Sheets generated by the ASAP Q&A Database for facilitating

configuration and testing of the system, and development of end-user

documentation. These lists become the central repository from which

you build the individual master lists to manage the initial configuration,

final configuration, final end-user integration testing, and any other

end-user procedures including the documentation.

3. What are ‘BPPs’ in ASAP?

‘ASAP BPP (Business Process and Procedures)’ are templates

that typically walk you through a transaction in SAP and help you

document them. The templates are replete with Best Practices or

Standard Procedures for completing a particular transaction, which you

can customize for end-user training. You will assign ASAP BPPS to the

ASAP BPML.



4. Within FI, from Which FI-GL Gets Simultaneous Postings.

Accounts Receivable (FI-AR)

Accounts Payable (FI-AP)

Asset Accounting (FI-AA)

5. Name Three Distinct Characteristics of FI-GL.

Multi-currency capability

Flexible real-time reporting

Real-time transaction entries

6. What do you mean by ‘Organizational Units’ in SAP?

The ‘Organizational Units’ in SAP are the elements or structures

representing business functions, and are used in reporting. For

example, Client (across the various modules) Company Code (FI),

Controlling Area (CO), Plant (logistics), Sales Organization (SD),

Purchasing Organization (MM), Employee Group (HR), etc.

7. What are the Important ‘Organizational Units’ in FI?

1. Company

2. Company Code

3. Business area

8. What is a ‘Company’?

A ‘Company’ in SAP is represented by a 5-character alphanumeric

code and usually represents the enterprise or the group company. A

Company can include one or more Company Codes. The creation of a

Company, in SAP, is optional.


9. What is a ‘Company Code,’ and how is this different from a

‘Company’?

A ‘Company Code’ in SAP is the smallest organizational unit for which

you can draw individual Financial Statements (Balance Sheet and Profit

& Loss Account) for your external statutory reporting. It is denoted by a

4-character alphanumeric code. The creation of a Company Code is

mandatory; you need to have at least one Company Code defined in

the system, for implementing FI.

10. What are the Important ‘Global Settings’ for a Company

Code?

General data:

Company Code

Company Name

City

Address

Currency

Country

Language

Global data:

Chart of Accounts

Credit Control Area

Fiscal Year Variant

Field Status Variant

Posting Period Variant

11. Can you assign more than One ‘Company Code’ to a

‘Company’?


All the Company Codes within a Company should use the same Chart

of Accounts and the same Financial Year, though they all can have

different Local Currencies.

12. What is a ‘Business Area’?

‘Business Areas’ correspond to specific business segments of a

company, and may cut across different Company Codes (for example,

product lines). They can also represent different responsibility areas

(for example, branch units). The Business Areas are optional in SAP.

The financial statements drawn per business area are for internal

reporting purposes. You need to put a check in the check box in the

configuration for the company for which you want to enable business

area financial statements. When transactions are posted in FI, you

have the option of assigning the same to a Business Area so that the

values are properly captured for internal financial statements.

13. Can You Attach a ‘Business Area’ to a Transaction?

Yes. The Business Area can also be derived from other account

assignments; for example, cost center. But to do this, you need to

define the Business Area in the master record of that particular cost

center.

14. What is a ‘Chart of Accounts’?

A ‘Chart of Accounts’ is the list of GL accounts used in one or more

Company Codes. All the GL accounts in a chart of accounts will have an


account number, account name, and some control information. The

control information decides how the GL account can be created.

15. What are all the Major Components of a ‘Chart of

Accounts’?

A ‘Chart of Accounts’ includes the following components:

Chart of account key

Name

Maintenance language

The GL Account Number

Controlling integration

Group chart of accounts (consolidation)

Block indicator

16. What is an ‘Operating Chart of Accounts’?

This chart is used for day-to-day postings and is also known as an

‘Operative’ or ‘Standard’ chart of accounts. Both FI and CO use a

chart of accounts. It is mandatory that the chart of accounts be

assigned to a Company Code.

17. How does ‘Group Chart of Accounts’ Differ from

‘Operating Chart of Accounts’?

The ‘Group Chart of Accounts,’ also known as the Corporate Chart

of Accounts, is used for consolidating all Company Codes (with a

dissimilar Operative Chart of Accounts) falling under a Company. This

is the ‘universe’ of all-inclusive GL accounts from where the Operative

Chart of Accounts is derived. A Company Code is not mandatory.


18. What is a ‘Country Chart of Accounts’? Why do you need

this?

This chart of accounts, also known as an Alternate Chart of

Accounts, contains the GL accounts necessary to meet the specific

statutory/legal requirements of a company from which a Company

Code operates. The assignment of this chart of accounts to a Company

Code is also optional. It is possible that both the operative and the

country chart of accounts are one and the same. In this case, you will

not need two different charts of accounts.

In cases where the operative and country chart of accounts are

different, a link needs to be established by entering the GL account

number from the ‘Country Chart of Accounts’ in the GL master record

(under the Company Code section) of the ‘Operative Chart of Accounts’

in the field ‘Alternate Account Number.’

19. Can one ‘Chart of Accounts’ be Assigned to Several

Company Codes?

Yes. One chart of accounts can be assigned to several Company Codes.

However, the reverse is not possible; i.e., you will not be able assign

more than one chart of accounts to a single Company Code.

20. What is a ‘Fiscal Year’ and ‘Fiscal Year Variant’?

A ‘fiscal year’ is the accounting period, which normally spreads over 12

months. Financial statements are drawn for a fiscal year. The fiscal

year, in SAP, is defined as a ‘Fiscal Year Variant.’ All Calendar Year

Fiscal Year Variants, in standard SAP, are denoted usually as K1, K2,

etc.


The fiscal year may or may not correspond to the calendar year. In the

standard SAP system, the Non-Calendar Fiscal Year Variants are

denoted V1, V2, etc.

It is also possible that the fiscal year may be shorter than 12 months,

and this is called a ‘Shortened Fiscal Year’.

21. What is a ‘Posting Period’?

A fiscal year, in SAP, is divided into various ‘Posting Periods,’ with a

start and end date defined for each of these periods. Any document

posting is possible only when the ‘posting periods’ are in place in the

system. Normally there will be 12 posting periods. A posting period

consists of a month and year.

22. How does the System identify a ‘Posting Period’?

Based on the posting date entered into the system while posting a

document, the system automatically determines the period by looking

at the document date and the year. However, for this to occur you

should have properly defined the fiscal year variant.

23. What Happens when You Post to Year 2006 when you are

in 2007?

First of all, to post a document relating to a previous year, say 2006

when you are in 2007, the relevant posting period should be ‘open’ in

the system. When such a posting is done, the system makes some

adjustments in the background:

One: the carry-forward balances of the current year, already done, are

updated in case the posting affects balance sheet items.


Two: if the posting is going to affect the Profit & Loss accounts, then

the system adjusts the carried forward profit or loss balances to the

Retained Earnings account(s).

24. What do you mean by ‘Opening/Closing’ Posting Periods?

Postings in SAP are controlled by the ‘opening’ or ‘closing’ of posting

periods. Normally, the current posting period is open for document

posting and all other periods are closed. At the end of the period

(month), this posting period is closed and the new one is opened for

postings. This way it provides better control.

It is, however, possible to keep all the periods or select periods open.

25. What is a ‘Posting Period Variant’?

A ‘Posting Period Variant’ is useful in ‘opening/closing’ posting

periods across many Company Codes at one time. You define a posting

period variant and assign it to various Company Codes. Since the

posting period variant is cross-Company Code, the opening and closing

of the posting period is made simple. Instead of opening and closing

individually for different Company Codes, you just need to open or

close the posting period variant.

26. Can You Selectively ‘Open’ and ‘Close’ accounts?


Yes. It is possible to selectively control the ‘opening’ and ‘closing’ for

various types of accounts. Usually, a ‘+’ is mentioned in the top-most

entry indicating that all the account types are allowed for posting.

Now, for the GL(S) accounts, you will need to specify the period which

needs to be opened. This ensures that all the account types are open

for the current period, indicated by ‘+,’ and only the GL accounts are

open for the previous period.

Select account types can also be opened or closed for a specific period;

select accounts within an account type can also be opened or closed.

27. Why is it not Possible to Post to a Customer A/C in a

Previously Closed ‘Period’?

When you want to selectively ‘close’ or ‘open’ the posting period of

some accounts (account range), there will be no problem with that if

you are doing it for GL accounts. But, if it is a sub ledger account (such

as the customer), it has to be achieved via opening or closing the

account interval of the ‘reconciliation account’ of that account type.

28. Can You Open a ‘Posting Period’ only for a Particular

User?

Yes. SAP allows you to open or close the posting period only for specific

users. This can be achieved by maintaining an authorization group

at the document header level.



29. What is a ‘Special Period’? When do you Use it?

Besides the normal posting periods, SAP allows for defining a

maximum four more posting periods, which are known as ‘Special

Periods’ as these are used for year-end closing activities. This is

achieved by dividing the last posting period into more than one

(maximum four) period. However, all the postings in these special

periods should fall within the last posting period.

The special periods cannot be determined automatically by the system

based on the posting date of the document. The special period needs

to be manually entered into the ‘posting period’ field in the document

header.

30. What is the Maximum Number of ‘Posting Periods’ in

SAP?

Under GL accounting, you can have a maximum of 16 posting periods

(12 regular plus 4 Special Periods).

31. What is known as ‘Year Shift/Displacement’ in a Fiscal

Year?

When the fiscal year is not the same as the calendar year, we need to

define a ‘displacement factor’ for each of the posting periods to

correctly identify the number of posting periods.

For example, consider the fiscal year variant V3. The fiscal year starts

on April 1st and ends on March 31st of the next calendar year so the

displacement factor or year shift from April to December is ‘0,’ and for

January to March, it will be ‘−1’. By defining it this way, the system is


able to recognize the correct posting period. A posting made on

January 25th, 2006 will then be interpreted as the 10th posting period in

fiscal year 2005.

32. What is a ‘Year-dependent’ Fiscal Year?

A calendar year fiscal variant, when defined as ‘year-dependent,’ is

relevant and valid only for that year.

33. What Precautions should you take while defining a

‘Shortened Fiscal Year’?

Note that the ‘Shortened Fiscal Year’ is always year-dependent. This

has to be followed or preceded by a full fiscal year (12 months). Both

the shortened and the full fiscal year, in this case, have to be defined

using a single fiscal year variant.

34. Tell me more about a ‘Shortened Fiscal Year.’

As mentioned already, a ‘Shortened Fiscal Year’ is one containing

less than 12 months. This kind of fiscal year is required when you are

in the process of setting up a company, or when you switch over one

fiscal year (e.g., calendar year) to another type of fiscal year (non-

calendar).

35. How do you open a new ‘Fiscal Year’ in the System?

You do not need to ‘open’ the new fiscal year as a separate activity.

Once you make a posting into the new fiscal year, the new fiscal year

is automatically opened. Or, the new fiscal year is automatically

opened when you run the ‘balance carry-forward’ program.

However, you need to have (1) the relevant posting period already

open in the new fiscal year, (2) completed the document number range


assignment if you are following a year-dependent number range

assignment, and (3) defined a new fiscal year variant if you follow the

year-dependent fiscal year variant.

36. How do you ‘Carry-Forward’ Account Balances?

If you have already posted into the new fiscal year, you do not need to

‘carry-forward’ the balances manually. But you can use the various

‘carry-forward’ programs supplied by SAP for this task.

37. Can You Explain how ‘Carry-Forward’ Happens in SAP?

Sure. For all the Balance Sheet items, the balances of these accounts

are just carried forward to the new fiscal year, along with account

assignments if any. This also true for customer and vendor accounts.

In the case of Profit & Loss accounts, the system carries forward the

profit or loss (in the local currency) to the Retained Earnings account,

and the balances of these accounts are set to ‘0.’ No additional

account assignments are transferred.

38. Is there a Prerequisite for ‘Carry-Forward’ Activity?

Yes, for Profit & Loss accounts, you should have defined the Retained

Earnings account in the system. Additionally, you should have also

specified the ‘Profit & Loss Account Type’ in the master record of

each of these for Profit & Loss accounts.

There are no such requirements for GL accounts, customer and vendor

accounts.



39. How many ‘Retained Earnings’ A/C can be defined?

You can define as many ‘Retained Earnings Accounts’ as you need.

But normally, companies use only one retained earnings account.

Remember, to define more than one, you should use the profit & loss

account type.

40. Can you have Multiple ‘Retained Earnings’ A/C?

Normally it is sufficient if you use one ‘retained earnings’ account.

However, if you are configuring for a multinational company where the

legal requirements require treating some of the tax provisions

differently from other countries, then you will need more than one

retained earnings account.

41. What is a ‘Local Currency’?

When you define a Company Code, you also need to mention in which

currency you will be maintaining the accounts/ledgers in financial

accounting. This currency is called the ‘Local Currency.’ This is also

known as ‘Company Code Currency.’

42. What is an ‘Account Currency’?

When defining the GL accounts in the system, you are required to

define a currency in which an account will be maintained, and this is

called the ‘Account Currency.’ This is defined in the ‘Company Code’



area of the GL master record, and is used for postings and account

balance display.

43. What are all the Prerequisites for Posting in a ‘Foreign

Currency’?

The following are the prerequisites you need to consider before posting

in a foreign currency:

Local currency already defined for the Company Code (in the global

parameters)

Foreign currency defined in the currency code Table

Exchange rate defined for the foreign currency and the local currency

Translation Ratio maintained for the local and foreign currency

44. How are ‘Exchange Rates’ Maintained in SAP?

An ‘Exchange Rate’ is defined for each pair of currencies, and for

each ‘exchange rate type’ defined in the system. The exchange rate is

defined at the document header level.

45. What is an ‘Exchange Rate Type’? List some of them.

The ‘Exchange Rate Type’ is defined according to various purposes

such as valuation, translation, planning, conversion, etc. The

commonly used exchange rate types include:


46. What is known as the ‘Translation Factor’?

The relation between a pair of currencies per ‘exchange rate type’ is

known as the ‘Translation Factor.’ For example, the translation

factor is 1 when you define the exchange rate for the currencies USD

and INR:

47. How is ‘Master Data’ different from ‘Transaction Data’?

There are three kinds of data residing in any SAP system:

Table Data

Transaction Data

Master Data

Table Data refers to the customized information for a particular

Client. This includes data such as payment terms, discounts, pricing,

tolerance limits, etc., which you do not normally change on a day-to-

day basis.

Transaction Data is the day-to-day recording of business information

such as purchase orders, sales returns, invoices, payments, collections,

etc. This includes both system-generated data (tax, discount, etc.,

automatically calculated by the system during document posting) as

well as user-generated data.


Master Data is the control information required to decide how

transaction data gets posted into various accounts (such as customers,

vendors, GL, etc.). The master data is usually shared across modules

(for example, customer master records are common both to FI and SD

in SAP) obviating the need for defining it in various application areas.

The master data remains in the system for fairly a long period.

48. Can You Post an A/C Document if the ‘Credit’ is not Equal

to the ‘Debit’?

In general, unless the ‘debits’ equal the ‘credits’ in a document, you

will not be able to post the document. However, the system allows you

to post some of the documents, even if this not true, which includes

the following:

Noted items: this will contain only a debit or credit. Since there is no

updating of accounting entries, the system will allow you to go ahead

with the posting of these items.

General Ledger Accounting

1. What is a ‘Document’ in SAP?

SAP is based on the ‘document principle’ meaning that a document

is created out of every business transaction in the system. The

Document is the result of a posting in accounting in SAP, and is the

connecting link between various business operations. There are two

types of documents:

Original Documents: these documents relate to the origin of

business transactions such as invoices, receipts, statement of

accounts from bank, etc.



Processing Documents: These include ‘accounting documents’

generated from postings in the system, ‘reference documents,’

‘sample documents,’ etc. The processing documents other than

the accounting ones are also known as ‘special documents’ and

they aid in the simplification of document entry in the system.

Every document consists of:

A Document Header

Two or more Line Items

Before attempting to enter a document, call up the relevant document

entry function as the system provides a variety of ready-made

document entry templates suited to different transactions such as

regular GL entry, customer invoice posting, etc. The details entered in

a document can be simulated and displayed before the document is

actually posted in the system. You may also choose to ‘park’ the

document and post it later.

2. What is a ‘Document Header’?

The ‘Document Header’ contains information that is valid for the

whole document such as:

Document Date

Document Type (Control Information)

Document Number

Posting Date

Posting Period

Company Code

Besides the above, the document header also has information

(editable, later on) such as (a) trading partner, (b) document header

text, (c) reference, (d) cross-Company Code number, etc.


3. What is a ‘Document Type’?

SAP comes delivered with a number of ‘Document Types,’ which are

used in various postings. The document type helps to classify an

accounting transaction within the system, and is used to control the

entire transaction and determine the account types a particular

document type can post to. For example, the document type ‘AB’

allows you to post to all the accounts, whereas type ‘DZ’ allows you to

post only the customer payments. Every document type is assigned a

number range.

4. How is ‘Account Type’ Connected to ‘Document Type’?

The ‘Document Type’ is characterized by a 2-character code such as

AA, DG, etc., whereas an ‘Account Type’ is denoted by a 1-character

code such as A, D, etc., specifying which accounts a particular

document can be posted to. The common account types include:

A Assets

D Customer (Debtor)

K Vendor (Creditor)

M Materials

S GL

5. Explain the Various ‘Reference Methods.’

SAP recommends ‘Reference Methods’ as a ‘document entry tool’ to

facilitate faster and easier document entry into the system, when you

are required to enter the same data time and again. Besides making

the document entry process less time-consuming, this also helps in

error-free document entry.

The various Reference Methods used in SAP include:


Reference Documents

Account Assignment Models

Sample Documents

6. What is the ‘Document Change Rule’?

The functionality ‘Document Change Rules’ configured in the

system maintains the information relating to ‘what fields can be

changed?’ and ‘under what circumstances?.’ As you are already aware,

SAP’s document principle does not allow changing the ‘relevant’

fields once a document is posted; any changes can only be achieved

through ‘Reversal’ or additional postings. Fields such as company

code, business area, account number, posting key, amount, currency,

etc., can never be changed once the document is posted. However,

SAP allows changing some of the fields in the line items such as

payment method, payment block, house bank, dunning level, dunning

block, etc. These can be changed document by document or by using

‘mass change’ for a number of documents in a single step.

The changes to ‘master data’ are tracked and stored per user for an

‘audit trail.’

7. Differentiate between ‘Account Assignment Model,’

‘Recurring Entries,’ and ‘Sample Document,’

‘Account Assignment Model’ is a ‘reference method’ used in

document entry when the same distribution of amounts to several

Company Codes, cost centers, accounts, etc., is frequently used.



Instead of manually distributing the amount among accounts or

Company Codes, you may use equivalence numbers for distributing

both the credit and debit amounts. A cross-Company Code account

assignment model can also be created.

The account assignment model may contain any number of GL

accounts. The GL account items need not be complete. The model can

be used across several Company Codes, and can even include

Company Codes from non-SAP systems.

You can use the account assignment model while ‘parking’ a

document (but you cannot use a ‘reference document’ for

‘parking’).

The use of account assignment models is limited to GL accounts.

Unlike a ‘Sample Document,’ an account assignment model may be

incomplete and can be completed during document entry by adding or

deleting or changing the data already saved in the model.

The ‘Recurring Entry’ original document is used by the system as a

‘reference document’ for enabling posting of periodically recurring

postings such as loan repayments, insurance premium payments, rent,

etc. Since this document is not an accounting document, the account

balances are not affected. In a recurring entry original document, you

will not be able to change the (a) posting key, (b) account, and (c)

amount. The recurring entry documents are defined with a special

number range (X1). Unlike an account assignment model, these

documents cannot be used for cross-Company Code postings.

The recurring entry document does not update transaction figures,

per se, but acts only as a reference and as the basis for creating

accounting documents. The SAP program SAPF120 creates the

accounting documents from the recurring entry original document.




There are two ways to set the exact date when this document should

be posted to:

Posting frequency: enter the day of the month and the period

(in months) between two postings.

Scheduled run: configure the ‘run schedule’ specifying the

calendar days on which the program should post these

documents.

A Sample Document is like a template, which is created and stored

so that the information contained therein can be easily copied into new

documents and posted in the system. But once a sample document is

created note that you will not be able to change the ‘line items’

already contained in that document; all you can do is change the

amounts in that sample document. But you can overcome this by

defining a new sample document that can contain other line items or

you may add new line items to the FI document, which is created by

copying from the original sample document.

Sample documents have separate number ranges (X2).

8. What is a ‘Line Item’?

The ‘Line Items’ contain information relating to account number,

amount, debit/ credit, tax code, amount, etc. SAP allows a maximum of

999 line items in a single document. Besides the one entered by you

during an document entry, the system may also create its own line

items called ‘system generated line items,’ such as tax deductions,

etc. Irrespective of the number of line items entered, ensure that the

total of these is always zero (that is, total debits should equal total

credits). Otherwise, the system will not allow you to post the

document.

9. What is a ‘Posting Key’?



A ‘Posting Key’ in SAP is a 2-digit alphanumeric key that controls the

entry of line items. SAP comes with many posting keys for meeting the

different business transaction requirements: 40 (GL debit), 50 (GL

credit), 01 (customer invoice), 11 (customer credit memo), 21 (vendor

credit memo), 31 (vendor payment), etc.

The posting key determines:

What account can be posted to

Which side of the account (debit or credit) to be posted to, and

What ‘layout’ screen needs to be used for that particular

transaction?

It is a normal practice not to change any of the default posting keys in

the system, as you would very rarely require additional posting keys.

10. Differentiate between the ‘Parking’ and the ‘Holding’ of

Documents.

The ‘Parking of a Document’ in SAP is one of the two preliminary

postings (the other being the ‘Holding’ of documents) in the system

and refers to the storing of incomplete documents in the system.

These documents can later be called on for completion and posting.

While ‘parking’ a document, the system does not carry out the

mandatory ‘validity checking.’ The system does not also carry out any

automatic postings (such as creating tax line items) or ‘balance

checks.’ As a result, the transaction figures (account balances) are not

updated. This is true in the case of all financial transactions except in

the area of TR-CM (Cash management) where ‘parked’ documents

will update the transactions.


The parking of documents can be used to ‘park’ data relating to

customers, vendors, or assets (acquisition only). When a cross-

Company Code document is ‘parked,’ only one document is created in

the initial Company Code; when this ‘parked’ document is posted all

other documents relevant for all other Company Codes will also be

created. However, it is to be noted that substitution functionality

cannot be used with document ‘parking,’ as substitution is activated

only on transaction processing.

The added advantage is that a document ‘parked’ by an accounting

clerk can be called on for completion by someone else. The ‘parked’

documents can be displayed individually or as a list from where the

required document can be selected for completion and posting. The

number of the ‘parked’ document is transferred to the posted

document. The original ‘parked’ document, if necessary, can be

displayed even after it has been posted to.

During a transaction when you do not have a piece of required

information, you can ‘Hold the Document’ and complete it later. As

in the case of ‘parked’ documents, here also the document does not

update the transaction figures.

The essential difference between these two types of preliminary

postings can be summarized as follows:



Open table as

spreadsheet

Attribute

‘Park’

document

‘Hold’ document

View the

document in

‘Account

Display’?

Yes No

Changes to the

document?

Any user can

access, view,

and/change

the document

No other user, except

the creator, will be

able to access, view,

and/change the

document

Document

number?

System

assigned

Manually entered by

the user

Use of data in

the document

for evaluation

purposes?

Possible Not possible

11. Explain ‘Reversal of Documents’ in SAP.

If you need to change some of the accounting information relating to

an already posted document, you can only achieve this by

‘Reversing’ the original document and posting a new one with the

correct information. However, reversal is possible only when:

The origin of the document is in FI (not through SD or MM, etc.)

The information such as business area, cost center, etc., is still

valid (that you have not deleted these business objects)

The original document has no cleared items

The document relates only to the line items of

customer/vendor/GL

http://skillport.books24x7.com/book/id_24729/outputobject.asp?bookid=24729&chunkid=731782039&objectid=nr-N816&objecttype=spreadsheet



While reversing, the system automatically selects the appropriate

document type for the reversal, and defaults the relevant posting keys.

(Remember that the document type for the reversal document would

have already been configured when the document type was defined in

the configuration.) Also note that if you do not specify the posting date

for the reversal document, the system defaults to the posting date of

the original document.

12. What is ‘Fast Entry’?

Instead of the regular document entry screens, SAP provides ‘Fast

Entry’ screens for facilitating a quick way of entering repetitive line

items in a transaction. For achieving this, you need to define a Fast

Entry Screen Layout, which will specify what fields you will require

for data entry, and in what order. You may configure these fast entry

screen layouts for GL account line items, credit memos, and

customer/vendor invoices. Each of these fast entry screen layouts will

be denoted by a 5-character screen variant in the system. Fast entry

screens are used in complex (general) postings.

SAP’s enjoy postings are also meant for similar data entry screens,

but the difference is that in the case of ‘fast entry’ you will start from

scratch when identifying the fields, positioning them in the line item,

etc., whereas in enjoy postings, the system comes with all the fields

activated and you will select the fields that you do not want to be

made available for data entry.

13. How do you Create ‘GL Account Master Data’?

‘GL Account Master Data’ can be created using any one of the

following methods:


Manually

Creating with reference

Through Data Transfer Workbench

Copying from existing GL accounts

The Manual Creation of GL account master records is both laborious

and time consuming. You will resort to this only when you can’t create

master records using any of the other methods listed above.

You will follow the second method, Creating With Reference, when

you are already in SAP and have an existing Company Code (Reference

Company Code) from which you can copy these records to a new

Company Code (Target Company Code). You will be able to do this by

accessing the Menu: ‘General Ledger Accounting>GL Accounts>Master

Data>GL Account Creation> Create GL Accounts with Reference.’

While doing this, you can copy the ‘account assignments’ as well

ensuring that the integration of GL with other applications is intact.

SAP facilitates so that you can (i) limit the number of GL records thus

copied to the target Company Code, (if) create new records if

necessary, and (iii) change the account number/name.

When your GL accounts are in a non-SAP system and you feel that

these accounts will meet your requirements you will then use the

‘Data Transfer Workbench’ of SAP to transfer these records into

SAP, and change them to suit the SAP environment. Since this will not

have ‘Account Assignment’ logic as defined in SAP, you need to be

careful when defining these assignments.

You will resort to the last option of Copying from Existing GL

Accounts only when you feel that there is a Chart of Accounts in the

system that meets your requirements 100%. Otherwise, follow the

second method described above.


14. Is it Possible to Change an Existing B/S GL A/C to the P&L

Type?

Technically, you will be able to change all the fields, except the

account number, of a GL account in the Chart of Accounts area.

However, in this particular instance when you change the ‘GL account

type’ from ‘B/S’ to ‘P&L,’ make sure that you again run the ‘balance

carry-forward’ program after saving the changes so that the system

corrects the account balances suitably.

15. What is an ‘Account Group’?

The ‘Account Group’ (or GL Account Group), a 4-character

alphanumeric key, controls how the GL account master records are

created in the system. This helps to ‘group’ GL accounts according to

the ‘functional areas’ to which they must belong. Account group is

mandatory for creating a master record. The same account groups can

be used by more than one more Company Code if they all use the

same Chart of Accounts. Each GL account is assigned to only one

account group.

The Account Group determines:

The number interval that is to be used while creating the

master record.

The screen layout that is to be used while creating the master

record in the Company Code area.

While defining the account groups in the system, you also need to

define the corresponding field status for each of these groups.

Otherwise, you will not be able to see any fields as all these would be

hidden by default.

SAP comes delivered with a number of ‘account groups’ such as:


SAKO (GL accounts general)

MAT. (Materials Management accounts)

FIN. (Liquid Funds accounts)

In most situations, you will not require additional groups other than the

ones already available in the standard system. However, if you need to

create a new one, it is easier to copy an existing one and make

modifications to it instead of creating one from scratch.

16. Describe ‘Number Range Interval.’

A ‘Number Range’ refers to a number interval defined in the system so

that when documents are posted, the system assigns a number from

this range. You will define different number ranges for different

document types. Each document in SAP is uniquely identified by the

combination of (a) document number, (b) company code, and (c) fiscal

year.

The number range for a document type can be defined:

Per fiscal year or

Until a fiscal year in future.

If defined to last only one fiscal year, then the number range needs to

be defined every year. When number ranges are defined every year,

the system starts from the first number in the range for that particular

year, which helps to prevent reaching the upper limit too fast.


If you specify the fiscal year as ‘9999,’ then the document number

range is valid forever (well, almost!) and you do not have to do this

exercise of maintaining number ranges every fiscal year. But every

year the system starts from the last number used up in the previous

year and if a small number range is defined for a document type, you

could easily run out of the number range fast.

The document numbers can either be:

Internally assigned by the system or

Externally input when the same is created.

The number ranges can be defined in such a way that the system

generates the number automatically when a document is created. This

is known as ‘internal number assignment.’ Under this, the system

stores the ‘last number’ used for a document in the ‘Current Number’

field and will bring up the next number when another document is

created.

If ‘external numbering’ is used, the user needs to input a document

number every time a document is created in the system. Since the

user supplies the number every time, the subsequent numbering may

not be sequential. Unlike an internal numbering, the system does not

store the ‘last number’ in the ‘Current Number’ field.

The numbers in a number range can either be numeric or

alphanumeric. If numbers are numeric, the system will prefix the

number with the required zeros to make the number length uniform at

10 digits. If you are using alphanumeric numbering, then the number is

padded with zeros from the right. If you are following ‘year-specific’

numbering, it is better not to mix numeric and alphanumeric

numbering for a particular document type in various fiscal years.



The system creates a minimum of one document when a transaction is

created/completed. SAP recommends ‘filing’ original documents (under

the number of the processing document (the document generated in

SAP)). The best practice is to enter the (external) number of the

‘original document’ in the ‘Reference’ field of the document created in

the SAP system. For easy cross-reference, the SAP document number

thus created needs to be noted on the ‘original document.’

The following are the activities you need to complete for configuring

the number ranges properly in the system:

Defining the number ranges

Copying the number ranges to Company Code(s)

Copying the number ranges to fiscal year(s)

17. What is a ‘Screen Layout’?

The ‘account group’ determines which ‘Screen Layout’ should be

used while creating a GL account master record. For each of the

account groups, you can define different screen layouts, which

essentially determine the ‘Field Status’ of a field.

The field status refers to whether the field is:

Suppressed (field is invisible, hidden from display)

Required (display on, entry mandatory)

Optional (display on, entry not mandatory)


All the above three are shown as ‘radio buttons’ against each of the

fields in the screen layout, and you should select any one to set the

status to that field; by default all the fields are ‘suppressed.’

There are two levels of controls of field status:

Field status at the account group level

Field status at the activity (create/change/display) level (i.e., at

the transaction level).

You may also have the field status defined for posting keys (40-debit

and 50-credit for the GL account postings). Also remember to define

the field status for ‘reconciliation accounts’ as you will not be able to

define any such status in the sub ledger accounts (for example,

customer or vendor).

SAP has built-in rules, called link rules, to link these two levels and to

decide the final status of a field in the ‘screen layout.’ The link rules

also help to overcome the field-status setting differences arising out of

different settings at the Client level (field status for posting keys) and

the Company Code level (field status settings at the account group

level).

18. What is a ‘Field Status Group’?

The ‘field status’ of an individual field or a group of fields is marked in

a ‘Field Status Group,’ which is then assigned to individual GL

account master records. You may attach field status groups to a field

status variant so that the ‘field status groups’ are used in various

Company Codes.

The Field Status Variant is named similar to the Company Code. For


example, if your Company Code is 1000, the field status variant is also

named 1000, and it is assigned to the Company Code.

19. What do You mean by ‘Balances in Local Currency’ Only?

When you create GL account master records, it is necessary to decide

whether you want an account to have the transactions updated only in

local currency. You will set this indicator accordingly in the ‘Company

Code area’ of the master record. Make sure to set this indicator for

clearing accounts such as:

Cash discount clearing accounts

GR/IR clearing accounts

Note that you need to set this indicator ‘on’ for all the ‘clearing

accounts’ where you use the local currency to clear the line items in

various currencies so that the transactions are posted without posting

any exchange rate difference that otherwise might arise.

Example: Consider an invoice for USD 1,000, which on that day

translates into an amount of INR 45,000 with an exchange rate of I

USD=INR 45. Imagine that when the goods are received, the exchange

rate was 1 USD=INR 44.

If the indicator is set, the system ignores the exchange rate as if

the line items have been maintained only in the local currency

(INR), and the items are cleared.

If the indicator is NOT set, the system makes a posting for the

‘exchange rate difference’ (INR 1, 000) before clearing the two

line items.


20. What is ‘Line Item Display’?

To display line items of an account, you need to set the indicator ‘Line

Item Display’ to ‘on’ in that account’s master record. This is

mandatory for customer and vendor accounts. The line items can be

displayed using the classical display or the SAP List Viewer (ALV). You

can also use several ‘display variants’ to display various fields when

you feel that the Standard Variant is not meeting your requirements.

21. Tell me the two uses of ‘Blocking’ an Account.

You may use ‘Blocking’ to:

Block an account from further postings.

Block the creation of the account itself (at the Company Code

level or Chart of Accounts area).

Accounts Payables

1. Explain the ‘Account Payables’ Submodule.

‘Accounts Payables,’ a submodule under Financial Accounting (FI),

takes care of vendor-related transactions as the module is tightly

integrated with the purchasing transactions arising from the

‘Procurement Cycle.’ The module helps in processing outgoing

payments either manually or automatically through the ‘Automatic

Payment Program.’ It also helps in ‘Vendor Evaluations.’

0.15.1 What Documents Result from ‘Procurement Processes’?

In Materials Management (MM):



PR: Purchase Requisition (manual or automatic using MRP)

PO: Purchase Order

In Financial Accounting (FI):

Invoice Verification

Vendor Payment (manual or automatic)

Both MM and FI areas:

Goods Receipt

You may also group these documents into (1) Order documents, (2) GR

(Goods Receipt) documents, and (3) IR (Invoice Receipt) documents.

While GR/IR documents can be displayed both in MM and FI views, the

order documents can only be viewed in MM view.

2. Describe a ‘Purchase Cycle.’

A ‘Purchase Cycle or Procurement Cycle’ encompasses all

activities including purchase requisition, purchase order, goods

movement, goods receipt, invoicing, invoice verification, payment to

vendors, and ends with the updating of vendor account balances.


3. What is a ‘Purchase Requisition’ (PR)?

A ‘Purchase Requisition,’ PR, is the document that outlines a

company’s purchasing needs of a material/service from vendor(s). A

PR, typically an internal document that can be created automatically or

manually, identifies the demand for a product and authorizes the

purchasing department to procure it. In the automatic creation of a PR,

this is done as a result of MRP (Material Requirements Planning).

The PR, after identifying the vendor, is processed further to result in a

RFQ (Request for Quotation) or directly to a Purchase Order

(PO).

4. What is a ‘Request for Quotation’ (RFQ)?

A ‘RFQ (Request for Quotation),’ which can be created directly or

with reference to another RFQ or a PR or an Outline Agreement, is

actually an invitation to vendor(s) to submit a ‘quotation’ for supplying

a material or service. The RFQ will contain the terms and conditions for

supply. You may send the RFQ to single or multiple vendors, and you

can monitor it by sending reminders to those who have not responded

to the RFQ.

5. What is an ‘Outline Agreement’?

An ‘Outline Agreement,’ a declaration binding both the buyer and

seller, is the buyer’s intention to purchase a material/service with

certain terms and conditions agreed to by both parties. The essential

difference between the ‘outline agreement’ and ‘quotation’ is that the

outline agreement does not contain details such as delivery schedule





or quantities. Outline agreements can be contracts or scheduling

agreements.

6. What is a ‘Contract’?

A ‘Contract,’ also referred to as a ‘Blanket Order,’ is a long-term

legal agreement between the buyer and the seller for procurement of

materials or services over a period of time. The contract, created

directly or with reference to a PR/RFQ or another contract, is valid for a

certain period of time with start and end dates clearly mentioned.

There are two types of contracts: Quantity Contracts and Value

Contracts.

7. What is a ‘Quotation?

A ‘Quotation’ contains information relating to the price and other

conditions for supply of a material or a service by a vendor, and is the

vendor’s willingness to supply the same based on those conditions.

You will be able to compare the data from quotations using a Price

Comparison List and will help in identifying the most reasonable

vendor for supply of that item(s). After you receive the quotations, you

will typically enter the quotation data (pricing/delivery) in RFQ. The

SAP system can easily be configured to automatically print

‘Rejections’ for vendors whose quotation are not selected.

8. What is a ‘Purchase Order’ (PO)?

A ‘Purchase Order’ (PO) is a legal contract between a vendor and a

buyer concerning the material/service to be purchased/procured on

certain terms and conditions. The order mentions, among other things,

the quantity to be purchased, price per unit, delivery related

conditions, payment/pricing information, etc.



A PO can be created:

Directly or

With reference to a PR/RFQ/contract or another PO. Remember,

all items on a PO should relate to the same Company Code.

9. What is a ‘PO History’?

The ‘Purchase Order History’ (PO History) lists all the transactions

for all the items in a PO such as the GR/IR document numbers.

10. Will the FI Document be Created with the Purchase Order

(PO)?

No. There will not be any document created on the FI side during

creation of a PO. However, there can be a document for posting a

‘commitment’ to a Cost Center in CO. (The offsetting entry is posted at

the time of GR.)

11. Explain FI-MM Integration.

FI-MM Integration is based on the following:

Movement Types

Valuation Class

Transaction Keys

Material Type

The Movement Type is the ‘classification key’ indicating the type of

material movement (for example, goods receipt, goods issue, physical



stock transfer). The movement type enables the system to find pre-

defined posting rules determining how the accounts in FI (stock and

consumption accounts) are to be posted and how the stock fields in the

material master record are to be updated.

The Valuation Class refers to the assignment of a material to a group

of GL accounts. Along with other factors, the valuation class

determines the GL accounts that are updated as a result of a valuation-

relevant transaction or event, such as a goods movement. The

valuation class makes it possible to:

Post the stock values of materials of the same material type to

different GL accounts.

Post the stock values of materials of different material types to

the same GL account.

The Transaction Key (also known as the ‘Event Key or Process

Key’) allows users to differentiate between various transactions and

events (such as physical inventory transactions and goods

movements) that occur within the area of inventory management. The

transaction/event type controls the filing/storage of documents and the

assignment of document numbers.

The Material Type groups together materials with the same basic

attributes, for example, raw materials, semi-finished products, or

finished products. When creating a material master record, you must

assign the material to a material type. The material type determines:



Whether the material is intended for a specific purpose, for

example, as a Configurable Material or Process Material.

Whether the material number can be assigned internally or

externally.

The Number Range from which the material number is drawn.

Which screens appear and in what sequence.

Which user department data you may enter.

What Procurement Type the material has; that is, whether it is

manufactured in-house or procured externally, or both.

Together with the plant, the material type determines the material’s

inventory management requirement, that is:

Whether changes in quantity are updated in the material master

record.

Whether changes in value are also updated in the stock accounts

in financial accounting.

12. What Happens, in SAP, when You Post a ‘Goods Receipt’?

When you post a ‘Goods Receipt’ (GR), the stock account is debited

(stock quantity increases) and the credit goes to the GR/IR Clearing

Account, which is the intermediate processing account, before you

actually process the vendor invoice or payments to the vendor:

Debit: Inventory Account

Credit: GR/IR Clearing Account

During this:

A material document is created,

An accounting document to update the relevant GL account is

created,

PO order history is updated, and finally

The system enables you to print the GR slip.


13. Explain ‘Invoice Verification’ (IV) in SAP.

‘Invoice Verification’ involves:

Validating the accuracy of the invoices (quantity, value,

etc.).

Checking for ‘blocked’ invoices (which vary to a great

extent from that of the PO).

Matching of invoices received from vendors with that of the

Purchase Order/ Goods Receipt. At this point in time, the PO

History is updated for the corresponding PO Line Item(s) of the

matched invoice.

Passing of matched invoices to the FI module. The system

posts the following entries:

1. Debit: GR/IR Clearing Account

2. Credit: Vendor a/c (Accounts Payable open line item)

3. Credit: GL Reconciliation Account

The different scenarios in invoice verification include:


GR-based Invoice Verification indicator is not set in the PO

detail screen: Although this setting enables you to post the

invoice referenced to a PO prior to making a GR, the system will

block the invoice for payment (this kind of posting results in a

Quantity Variance as there has not been a GR).

GR-based Invoice Verification indicator is set in the PO

detail screen: When the PO number is referenced the system

brings up all the unmatched items of GR in the selection screen.

You will not be able to post the invoice for its full value, unless

the PO has been fully received.

14. Explain ‘Automatic Payment Program.’

The ‘Automatic Payment Program’ in SAP helps to process payment

transactions both with customers and vendors. AR/AP/TR/Bank

Accounting uses the payment program.

The ‘automatic payment program’ helps in determining:

What is to be paid? To do this, you specify rules according to

which the open items to be paid are selected and grouped for

payment.

When is payment to be carried out? The due date of the

open items determines when payment is carried out. However,

you can specify the payment deadline in more detail via

configuration.

To whom the payment is made? You specify the payee (the

vendor or the alternate payee as the case may be).

How the payment is made? You determine rules that are used

to select a payment method.

From where the payment is made? You determine rules that

are used to select a bank and a bank account for the payment.

15. Explain ‘Automatic Payment Program’ Configuration.



Before you are ready to run the ‘Automatic Payment Program,’ the

following should have been defined/configured in the system:

House Bank and the corresponding bank accounts.

Payment Methods to be used for the Company Code. SAP

comes with predefined payment methods, both for AR and AP.

The following payment methods are available for you to select

from depending on the requirements:

1. Accounts Payable

Check (S)/Transfer/Bill of exchange

2. Accounts Receivable

Bank collection/Bank direct debit/Refund by check/Refund by

bank transfer/BE payment request

Bank Chain defined, if necessary. Bank chains are used to make

payment via more than one bank, for example, via the

correspondence banks of the house bank, the recipient bank, or

the intermediary banks. You can define up to three banks.

Payment Forms defined. SAP delivers standard forms, which

can be modified, or new forms can be created for use.

You may do most of the configurations by using the Transaction Code

FBZP and branching to individual sections thereon. Or you may use

the following Transaction Codes for individually doing it:

(Sending) Company Code specifications

Sending the Company Code—if Company Code ‘A’ is making payments

on behalf of ‘B,’ then ‘B’ is the Sending Company Code. Otherwise, the

sending Company Code is considered the paying Company Code (both

are one and the same).

Paying Company Code specifications




Minimum amounts for incoming and outgoing payments.

Forms for payment advice and EDI.

Bill of exchange parameters

Payment Methods/Country and Bank determination

Payment Methods/Country

Payment Method for outgoing/incoming?

Payment Method classification

Master data requirements

Posting details—document types

Payment medium details—Print programs

Permitted currencies (leave blank to allow all currencies)

Bank Determination

Ranking Order

Per Payment Method:

Which bank should be used first, second, etc.

Currency

Bill of Exchange

Bank accounts

Available amounts

Per House Bank and Payment Method combination:

Offset a/c for sub ledger posting

Available funds in each bank

Clearing accounts for Bill of Exchange

Value date

Charge


Payment methods per Company Code

For each Payment Method and Company Code you need to define:

Minimum/maximum payment amounts

Whether payment abroad or in foreign currency is allowed

Payment Media

Bank optimization

House Bank

0.15.2 16. How do you execute an ‘Automatic Payment Program’?

The following are the series of events happening in the system when

you try to execute an ‘Automatic Payment Program’:

Maintain Payment Parameters

To start with, you need to maintain the parameters required such as

date of execution of ‘payment run,’ ‘payment run identifier,’ etc. Once

this is done, you need to specify the ‘posting date’ of these payments,

the ‘document date’ up to which the program should consider the

items, the paying Company Code, payment methods to be considered,

the ‘next posting date,’ is there certain accounts which need to be

excluded from the run, etc. The payment run then needs to be

scheduled either immediately or at a specified time/date.

Payment Proposal

The system creates a ‘payment proposal’ based on the payment

parameters maintained in (1) above. The system selects the eligible

Open Items based on the following sequence:

Due date is determined via the Base Line Date and the Terms of

Payment for each of the line items.

Program calculates the Cash Discount Period and due date for the

Net Payment.



Grace Periods are then added to this due date.

Which Special GL accounts are to be included, based on what you

have already maintained as the parameters in (1) above?

The system will determine whether to include an item during the

current run or for the future one based on the specifications you made

in (1).

Blocking an item.

The payment proposal can be displayed for further processing; the

‘log’ can be checked to see the system messages, and the exception

list can be generated for further evaluation.

Payment Proposal

With the payment proposal available, you can now edit the proposal to:

Change House Bank, from what was maintained earlier

Change Payment Method, if necessary

Change Payment Due Date to relax or restrict certain open items

Block/Unblock line items

Payment Run

After the payment proposal has been edited, you can run the

Payment Program that creates the payment documents and

prepares the data for printing the forms or creating the tape or disk.

Before printing the forms, check the logs to determine that the

payment program run was successful.

Print Run



Payment Medium Programs use the data prepared by the payment

program to create forms (payment advice, EDI accompanying sheet,

etc.) or files for the data media. The data created by the payment

program is stored in the following tables:

You need to define Variants for print programs, which need to be

defined:

Per Payment Method per country->assign a Print Program

To run the Print Program->at least one Variant per Print Program per

Payment Method

17. Can You Pay a Vendor in a Currency Other than

the Invoice Currency?

With release 4.5A, you can pay a vendor in a currency that is different

from that of the transaction/invoice currency. This is achieved by

entering the required currency code directly in the open item. Prior to

this release, to pay in a different currency, you had to manually

process the payment.

18. What is a ‘Payment Block’?

A ‘Payment Block’ prevents you from paying an open item of a

vendor. The payment block is entered in the ‘Payment Block’ field in

a vendor master record or directly in the open line item.


Use the payment ‘Block Indicators’ to define the ‘Payment Block

Reasons.’ You may use the SAP delivered payment block indicators

(A, B, I, R, etc.) or create your own. An indicator such as ‘*’ is used

when you want to skip the particular account, and a blank indicator

indicates that the account/item is free for payment. However, for each

of these ‘block indicators,’ you need to configure whether changes

would be allowed while processing the payment proposal. Then, it is

also possible to block a payment or release a blocked one while

processing the ‘Payment Proposal.’

You may also propose a ‘payment block indicator’ while defining Terms

of Payment.

19. How do You Release ‘Blocked Invoices for

Payments’?

The system will block an invoice if it comes across with an item with

a ‘Blocking Reason.’ The blocking reason may be due to variances or

inspection-related issues. When the system blocks an invoice for

payment, the ‘payment block’ field is checked by the system.

You will use an ‘Invoice Release Transaction’ to select the blocked

invoices for processing further. The ‘release’ of blocked invoices for

payments can be handled either manually or automatically.

20. What is a ‘Credit Memo’?

A ‘Credit Memo’ is issued by a vendor who has earlier supplied you

some services or materials. The occasion is necessitated when the

delivered goods are damaged or you have returned some of the goods

back to the vendor. The system treats both the invoices and the credit

memo in the same way, except that the postings are done with the

opposite sign.


If the credit memo is for the entire invoiced quantity, the system

generates the credit memo automatically. However, if the credit memo

relates to a portion of the invoiced quantity, you need to process it

manually in the system.

21. What are ‘Special GL Transactions’?

‘Special GL Transactions’ are not directly posted to the GL

(Reconciliation Accounts) though these are related to sub ledger

accounts such as AR/AP. The transactions to these accounts are shown

separately in the balance sheet. There are specific posting

keys/indicators defined in the system to regulate the postings to these

items. You need to specify a Special GL Indicator (such as a F-Down

Payment Request, A-Down Payment) for processing such a transaction.

And the system will make use of the specially defined posting keys (09-

customer debit, 19-customer credit, 29-vendor debit, and 39-vendor

credit) for posting these special GL transactions.

There are three types of Special GL transactions:

Free Offsetting Entries (Down Payment)

Statistical Postings (Guarantee)

Noted Items (Down Payment Request)


General Controlling

Explain ‘Controlling (CO)’ in SAP.

SAP calls managerial accounting ‘Controlling’ and the module is

commonly known as ‘CO.’ The CO module is, thus, primarily oriented

towards managing and reporting cost/revenue and is mainly used in

‘internal’ decision-making. As with any other module, this module also has

configuration set-up and application functionality.

The controlling module focuses on internal users and helps management by

providing reports on cost centers, profit centers, contribution margins and

profitability, etc.

What are the Important ‘Organizational Elements of CO’?

The important organizational structure of controlling includes:

Operating Concern (the top-most reporting level for profitability

analysis and sales and marketing controlling).

Controlling Area (central organization in ‘controlling,’ structuring

internal accounting operations).

Cost Centers (lower-most organizational units where costs are

incurred and transferred).

What is a ‘Controlling Area’? How is it Related to a Company

Code?

A ‘Controlling Area’ is the central organizational structure in ‘controlling’

(CO) and is used in cost accounting. The controlling area, as in the case of a




Company Code, is a self-contained cost accounting entity for internal

reporting purposes. The controlling area is assigned to one or more Company

Codes to ensure that the necessary transactions, posted in FI, are

transferred to controlling for cost accounting processing.

One controlling area can be assigned one or more Company Codes.

One chart of accounts can be assigned to one or more controlling

areas.

One or more controlling areas can be assigned to an operating

concern.

One Client can have one or more controlling areas.

Outline ‘Company Code—Controlling Area’ Assignments.

There are two types of assignments possible between the Company Code

and a controlling area:

One-to-one: Here, one Company Code corresponds to one controlling

area.

Many-to-one: More than one Company Code is assigned to a single

controlling area.

0.15.3 292. Explain the Different Types of ‘Controlling

Area/Company Code’ assignments.

Open table as

spreadsheet

Controlling

area-Company

Code

assignment

1:1 assignment 1: many assignments (cross-

Company Code cost

accounting)

Chart of The chart of The ‘operative chart of accounts’




Open table as

spreadsheet

Controlling

area-Company

Code

assignment


Company Code cost

accounting)

accounts accounts should be

the same between

the controlling area

and the Company

Code.

of the Company Codes, and the

controlling area should be the

same.

Fiscal year

variant (special

and posting

periods)

The number of special periods may be different

between the Company Code and the controlling area,

but the number of posting periods should be the same.

Also, the period limits of posting periods should be

identical.

Controlling area

currency

Same as the

Company Code

currency.

You may use the same currency

as that of the Company Code.

You may also use another

currency in controlling

Object currency Additional

currency, besides

the controlling area

currency, can be

used for each

account

assignment objects

in CO.

You can choose any object

currency if all the assigned

Company Codes have the same

currency that are the same as

the controlling area currency.

Otherwise, the system

automatically assigns the

Company Code currency to the

account assignment object as an


Open table as

spreadsheet

Controlling

area-Company

Code

assignment


Company Code cost

accounting)

object currency.

Transaction currency

Documents are posted in CO in the transaction currency.

Allocations Cross-Company Code cost allocation in CO is not possible.

Cross-Company Code allocation in CO is possible.

What are the ‘Components of Controlling’?

There are three major submodules in CO and each of these submodules has

many components as detailed below:

Figure 74: Controlling Module’s Components

Cost Element Accounting

Cost Controlling

Cost Center Accounting

Internal Orders


Activity-Based Costing

Product Cost Controlling

Profitability Analysis

Profit Center Accounting

Why do You Need ‘Cost Element Accounting’?

‘Cost Element Accounting’ (CO-OM-CEL) helps you to classify

costs/revenues posted to CO. It also provides you the ability to reconcile the

costs between FI and CO. CO-OM-CEL provides the structure for assignment

of CO data in the form of cost/revenue carriers called cost elements or

revenue elements.

Explain ‘Cost Center Accounting.’

‘Cost Center Accounting’ deals with the difficult task of managing

‘overheads’ within your organization. Since overhead costs are something

that you cannot directly associate with a product or service, which can be

difficult to control, cost center accounting provides you with the necessary

tools to achieve this.

What is ‘Activity-Based Costing’?

‘Activity-Based Costing,’ popularly known as ABC, helps you to view

overhead costs from the point of business processes. The result is you will be

able to optimize costs for the entire business process. As a single business

process, activity-based costing will cut across several cost centers and will

give you an enhanced view of the costs incurred.

What is ‘Product Cost Controlling’ (CO-PC)?


‘Product Cost Controlling’ (CO-PC) deals with estimating the costs to

produce a product/service. CO-PC is divided into two major areas:

i. Cost of materials

ii. Cost of processing

With CO-PC, you can calculate:

a. Cost of goods manufactured (COGM)

b. Cost of goods sold (COGS)

CO-PC is tightly integrated with Production Planning (PP) and Materials

Management (MM), in addition to FI. The functionality helps to:

Calculate Standard Costs of manufactured goods

Calculate the Work-in-Progress (WIP)

Calculate the Variances, at period-end

Finalize settlement of product costs

Note that CO-PC deals only with production costs as it deals only with the

production.

What is ‘Profitability Analysis’ (CO-PA)?

‘Profitability Analysis’ (CO-PA) helps you determine how profitable

(denoted by the ‘contribution margin’) your market segments are. The

analysis is on the external side of the market. You will be able to define what

segments, such as customer, product, geography, sales organization, etc., of

the market are required for analyzing ‘operating results/profits.’ With multi-

dimensional ‘drill-down’ capability, you have all the flexibility you need for

reporting.

How is ‘Profit Center Accounting’ (EC-PCA) Different from

CO-PA?


Unlike CO-PA where the focus is on external market segments’ profitability,

‘Profit Center Accounting’ (EC-PCA) focuses on profitability of internal

areas (profit centers) of the enterprise. Profit center accounting is used to

draw internal balance sheets and profit & loss statements. You may use EC-

PCA in place of business area accounting.

Open table as

spreadsheet Attribute

Profitability

Analysis (CO-PA)

Profit Center

Accounting (EC-PCA)

Focus External market

segments

Internal responsibility

centers

Reporting Any point of time During period-end

Margin reporting Profit & Loss statements

Accounting Cost of sales Period-based

Both CO-PA and EC-PCA serve different purposes, and are not mutually

exclusive. You may need them both in your organization.

Explain ‘Integration of CO’ with its Components and Other

SAP Modules.

The CO module is integrated with FI, AA, SD, MM, PP, and HR:

FI is the main source of data for CO. All expenses, posted in FI, flow to

CO through the ‘primary cost elements’ to the appropriate ‘cost centers.’

Similarly, postings in Asset Accounting (such as depreciations) are also

passed on to CO.

Revenue postings in FI would result in postings in CO-PA and also in

EC-PCA.

The SD, MM, and PP modules have many integration points in CO.

Goods issue (GI) to a controlling object or goods receipt (GR) from a

‘production order’ are some examples of integration. These modules are

tightly integrated as consumption activities, cost of goods issued,

overhead charges, material costs, etc., which are passed on to production







objects such as PP production order or sales order. The WIP (Work-in-

Progress) and the variances, at period ends, are settled to CO-PA, CO-

PCA, and also to FI. Revenues are directly posted when you generate

billing documents in SD, if the sales order is a cost object item.

The HR module generates various types of costs to be posted in CO.

Planned HR costs can also be passed on for CO planning.

The following table illustrates how the various components of CO are

integrated:

CO-

OM

Overhead Cost Controlling

External costs can be posted to cost centers/internal orders from

other SAP modules.

Cost centers can then allocate costs to other cost centers, orders,

and business processes in Activity-Based Costing (ABC).

Internal orders can settle costs to cost centers, other internal

orders, and to business processes in ABC.

ABC, in turn, can pass on costs to cost centers and orders.

CO-

PC

Product Cost Controlling

Direct postings from FI to cost objects (such as production orders).

Costs from cost centers can be posted to the production orders as

overhead cost allocation.

Costs settled from internal orders can be passed on to production

orders.

CO-

PA

Statistical cost postings from all CO components

Cost assessments from cost centers/ABC.

Costs settled from internal orders.

Production variances from CO-PC.Open table as spreadsheet





What is a ‘Cost Object’?

A ‘Cost Object,’ also known as a CO Account Assignment Object, in SAP

denotes a unit to which you can assign objects. It is something like a

repository in which you collect costs, and, if necessary, move the costs from

one object to another. All the components of CO have their own cost objects

such as cost centers, internal orders, etc.

The cost objects decide the nature of postings as to whether they are real

postings or statistical postings. All the objects that are identified as statistical

postings are not considered cost objects (for example, profit centers).

Differentiate Between ‘Real’ and ‘Statistical Postings’ in CO.

The CO account assignment objects decide the type of postings allowed.

They can be real or statistical postings.

‘Real Postings’ allow you to further allocate/settle those costs to any other

cost object in CO, either as ‘senders’ or as ‘receivers.’ The objects that are

allowed to have real postings include:

Cost Centers

Internal Orders (Real)

Projects (Real)

Networks

Profitability Segments

PP—Production Orders (make-to-order)

‘Statistical Postings,’ on the other hand, are only for information

purposes. You will not be able to further allocate/settle these statistical costs

to other cost objects. Examples of such objects include:

Statistical (Internal) Orders

Statistical Projects

Profit Centers


How do You Define ‘Number Ranges’ in CO?

You will be required to define, for each of the controlling areas, the ‘Number

Ranges’ for all transactions that will generate documents in CO. Once done

for a controlling area, you may copy from one controlling area to other

controlling areas when you have more than one such area.

To avoid too many documents, SAP recommends grouping multiple but

similar transactions, and then assigning number ranges to this group.

Further, you may create different number ranges for plan and actual data. As

in FI, the number ranges can be internal or external. The document

number ranges in CO are independent of fiscal years.

How Does ‘Master Data’ Differ from ‘Transaction Data’ in

CO?

The ‘Master Data’ remain unchanged over a long period, whereas

‘Transaction Data’ are short-term. The transaction data are assigned to

the master data.

Though you normally create the master data from transactions, note that

you will be able to create these records from the configuration side as well.

When you need to create a large number of master data, you may use the

‘collective processing’ option to create related master records in one step.

SAP puts master data in ‘groups’ for easy maintenance.


Figure 77: Master and Transaction Data in CO

In the case of master data of cost center/cost elements/activity types, once

they are created, you will not be able to change the date. SAP calls this

feature the ‘time dependency’ of master data. If necessary, you can

extend the ‘time’ by creating a new one and attaching it to the existing

objects. In the case of resources, the master data are time-dependent and

the system will allow you to delete these objects. Statistical Key Figures

(SKF) are not time-dependent; once defined they are available in the system

forever.

Cost Element Accounting

What is a ‘Cost Element’?

‘Cost Elements’ represent the origin of costs. There are two types of cost

elements:

Primary Cost Elements

Secondary Cost Elements

What is a ‘Primary Cost Element’?

‘Primary Cost Elements’ represent the consumption of production factors

such as raw materials, human resources, utilities, etc. Primary cost elements

have their corresponding GL accounts in FI. All the expense/revenue

accounts in FI correspond to the primary cost elements in CO. Before you can


create the primary cost elements in CO, you first need to create them in FI as

GL accounts.

Note that SAP treats revenue elements also as primary cost elements in

CO processing. The only difference is that all the revenue elements are

identified with a negative sign while posting in CO. The revenue elements

correspond to the revenue accounts in FI and they fall under the cost

element category, category 01/11.

What is a ‘Secondary Cost Element’?

‘Secondary Cost Elements’ represent the consumption of production

factors provided internally by the enterprise itself, and are present only in

the CO. They are actually like cost carriers, and are used in allocations and

settlements in CO. While creating these elements, you need to mention the

cost element category, which can be any of the following:

Category 21, used in internal settlements

Category 42, used in assessments

Category 43, used in internal activity allocation

What is a ‘Cost Element Category’?

All the cost elements need to be assigned to a ‘Cost Element Category,’ to

determine the transactions for which you can use the cost elements.

Example:

Category 01, known as the ‘general primary cost elements,’ is

used in standard primary postings from FI or MM into CO.

Category 22 is used to settle order/project costs, or cost object costs to

objects outside of CO (such as assets, materials, GL accounts, etc.).

How do you Automatically Create ‘Cost Elements’?





You will be able to create ‘cost elements’ automatically by specifying the

cost element, the cost element interval, and the cost element category for

the cost elements. All these are achieved by creating default settings. The

creation of cost elements is done in the background.

The primary cost elements can be created only when you have the

corresponding GL accounts in the chart of accounts of the Company Code.

Even though the GL account names are used as the names of the primary

cost elements thus created by the system, you have the option of changing

these names in CO. All the secondary cost elements are created in CO;

the name of these cost elements comes from the cost element category.

Cost Center Accounting

Define ‘Cost Center Accounting (CO-OM-CCA).’

‘Cost Center Accounting (CO-OM-CCA)’ helps you to track where costs

are incurred in your enterprise. All the costs, such as salary and wages, rent,

water charges, etc., incurred are either assigned or posted to a cost center.

What is a ‘Cost Center’?

A ‘Cost Center’ is an organizational element within a controlling area.

You may define cost centers according to your specific needs; the most

common approach is to define a cost center for each of the bottom-most

organizational units that are supposed to manage their costs. So, typical cost

centers could be canteen, telephone, power, human resources, production,

etc.

There are other ways of designing cost centers; you may create cost centers

representing geographical requirements or responsibility areas or

activities/services produced, etc.




After defining individual cost centers, you will assign each one of the cost

centers to one of the cost center categories. All cost centers of a

controlling area are assigned to a standard hierarchy.

What is a ‘Cost Center Category’?

A ‘Cost Center Category’ is an indicator in the cost center master record

that identifies what kind of activities a particular cost center performs. SAP

comes delivered with default categories such as administration, production,

logistics, marketing, development, management, etc. If necessary, as in

other cases, you may create your own categories. The categorization is

useful for assigning certain standard characteristics to a group of cost

centers performing similar activities.

SAP also allows you to store special indicators (such as lock indicators)

for each of the cost center categories. These special indicators serve as

defaults when you create a new cost center.

What is a ‘Standard Hierarchy?

A tree-like hierarchy structure grouping all the cost centers (of all the

Company Codes belonging to a single controlling area) so defined is known

as the ‘Standard Hierarchy’ in CO. This is the SAP method of grouping all

the cost centers in a controlling area, which helps in analyzing the cost

summary at the end of the nodes of the hierarchy (cost center or cost center

groups or at the top level). A cost center can be attached to any number of

cost center groups, but you cannot assign the same cost center more than

once within a cost center group.




The standard hierarchy helps in easy maintenance of the cost centers/cost

center groups for creation of new ones or changing existing ones. It supports

drag-drop functionality.

You may use alternate hierarchies to group cost centers according to your

internal reporting requirements. You can have any number of alternate

hierarchies but it is mandatory that you have one standard hierarchy. The

alternate hierarchy is also known as the master data group.

Explain Posting of Costs to ‘Cost Centers.’

When you create accounting transitions in FI/FI-AA/MM, you typically post to

one or more GL accounts. While doing so, provided you have already

configured in such a way, you also require the user to input the cost center

for that transaction, so that when the transaction is posted the values (costs)

flow not only to the GL but also to CO to the appropriate cost center. The

system will create two posting documents: one for FI and another for CO.

Additionally, you will also be able to post non-financial information such as

direct labor hours from HR or PP modules to cost centers in CO.

What is an ‘Activity Type’?

‘Activity Type’ helps you do define the service/action (for example, human

labor, machine labor, repair hours, etc.) performed or provided by a cost

center. It forms the ‘basis’ for allocating costs to other cost centers or

internal orders, etc. You may assign an activity type to an operation so that

they are reflected in PP; a CO document is created with the costs of the

operation allocated from the cost center that produced the operation to a

production order, when the operation is completed in PP.

You may group activity types into activity type groups for easy

maintenance.


You need to arrive at the activity price, which needs to be attached to that

particular activity type for planning or recording the actual. The activity price

is calculated by dividing the total costs by the total planned/actual activity

quantity (hours, units, etc.).

It is not necessary that all the cost centers have activity types associated

with them. If there is no output from a cost center, then there will be no

activity type for that cost center.

Where do You Assign Activity Type in Cost Centers?

There is no direct assignment. You plan the output for a cost center first by

using Transaction KP26. Then, plan the value of that cost center with the

budget for a period in Transaction KP06. ‘Planned Activity

expenditure’/‘Planned Activity Quantity’ gives the ‘planned activity rate,’

which you can use to valuate your activity confirmations in manufacturing

orders. You can also define your activity prices on your own, but you have to

run the ‘price revaluation’ if you want to revaluate your actual activity prices.

What is a ‘Resource’ in CO?

‘Resources’ are goods/services, consumed by CO objects such as cost

center/internal order/WBS element, which are supplied (internally or

externally) to an organization in order to produce business activities. The

resources are used only in planning and not for tracking the actual.

There are three types of resources:

Type B (used in base planning object)

Type M (refers to a material)


Type R (exists only in CO-OM)

What is a ‘Statistical Key Figure’ (SKF)?

The ‘Statistical Key Figure (SKF)’ is used as the basis (tracing factor)

for making allocations (assessments/distributions). They are the

statistical data such as number of employees, area in square meters, etc.

You will make use of a SKF when you are faced with a situation where it is

not possible to use any other conventional method or measure to arrive at

the share of costs to be allocated to cost centers.

Suppose that you are incurring a monthly expense of USD 5,000 in the cost

center cafeteria, the cost of which needs to be allocated to other cost

centers. You can achieve this by the SKF. Imagine that you want this to be

allocated based on the ‘number of employees’ working in each of the other

cost centers such as administrative office (50 employees) and the factory

(200 employees). You will now use the number of employees as the SKF for

allocating the costs. The following illustration helps you to understand how

SKF is used:

In SKF allocation, you have the flexibility of using two different SKF

Categories; namely, Total value or Fixed value. You will use fixed values

in situations where the SKF does not change very often, as in the case of the

number of employees, area, etc. You will use total values in situations where

the value is expected to change every now and then, as in the case of power

use or water consumption and the like.

Explain the ‘Planning’ steps in CO-OM-CCA.


The three steps involved in planning in cost center accounting include:

Configuration required for planning

o Configure a Plan Version

o Create or Copy Plan Layouts

o Create Plan Profile

o Insert Plan Layouts into Plan Profile

Inputting the planned data

Completing the planning activity

What is a ‘Plan Version’?

A ‘Plan Version’ is a collection of planning data. The version controls

whether the user will maintain plan data or actual data or both. You may

create as many versions as you need, though SAP provides you with the

necessary versions in the standard system.

Each version has information stored in the system per fiscal year period. The

version ‘000’ is automatically created for a period horizon of five years, and

is normally the final version as this allows for storing actual information as

well. You will be using the data in version ‘000' for all the planned activity

price calculation. Once planning is completed, you need to ‘lock’ that version

so that no one will be able to modify the plan data.

What is ‘Integrated Planning’ in CO-OM-CCA?

‘Integrated Planning’ helps you to transfer data from other SAP modules

such as PP, HR, FI-AA, etc. If you have planned data in these modules and

just transfer these into CO, without making any changes, then you do not

need plan again in cost center accounting. Before using integrated planning,

you need to activate the integration in the planning menu.

Note that integrated planning is possible only when there has been no data

planned on that version before activating the integrated planning.



Explain ‘Plan Layout.’

A ‘Plan Layout’ is nothing but a data entry screen or template that you use

to input plan data.

In most situations, it would be more than sufficient to use SAP supplied

planning layouts; however, you may create your own by copying one of the

existing layouts and altering it with the help of report painter. While

creating a custom layout, note that you have the flexibility to create up to

nine lead columns (giving the details the nature of the data associated with

the value columns), and any number of value columns (plan data such as

amount, unit, etc., corresponding to the lead column).

You also have the option of using MS-Excel spreadsheets as the data input

screen in lieu of the SAP plan layouts; but to achieve this you need to

activate the ‘integrating with Excel option’ while assigning the layout(s) to a

planner profile in IMG.

You need to define a plan layout for each of the three planning areas in CO,

namely:

i. Primary Cost and Activity Inputs

ii. Activity Output/Prices

iii. Statistical Key Figures

Explain a ‘Plan Profile.’

A ‘Plan Profile’ (or Planning Profile) helps in controlling the whole

process of planning by logically grouping the various plan layouts together. It

determines the timeline for planning. You can have more than one planning

layout per plan profile.




Before you actually start inputting the data, you need to set the plan profile

so that the system knows what layout needs to be used for the planning

exercise.

How do You Copy ‘Plan Data’ from one period to another?

SAP allows you to copy planning data, created manually earlier, from one

fiscal year to the other or from one period to a different period within the

same fiscal year. You have the option of copying existing plan data to a

future period as new plan data or copying actual data from one period to

another as plan data.

What is the recommended Planning Sequence, in CO?

SAP recommends three steps in the planning. In all three steps, the planning

can be carried out manually or automatically. You may use assessment,

distribution, and indirect activity allocation or inputted costs for planning.

You can also have centralized planning (cost element planning for all the

cost centers) and decentralized planning (planning for individual cost

centers) in your organization.

What are the two options for entering Plan Data?

SAP provides you with a choice of two options to enter your plan data. You

may use Form-based entry or Free entry.

In form-based entry, all you need to do is fill in the plan data in the rows

corresponding to the characteristic values (cost centers, cost element, etc.)

displayed on the screen. But, in free entry, you have the freedom of

inputting even the characteristic values.

What are ‘Distribution Keys’?


The SAP system uses ‘Distribution Keys’ to distribute planned values

across various periods. With the standard distribution keys supplied by SAP,

you will be able to achieve the type of distribution you need:

DK1 (equal distribution)

DK2 (distribution as done earlier)

DK5 (copy values to period where there is no value)

For example, if you have a planned annual value of 12,000, by using DK1

you will be able to distribute 1,000 each as the monthly values. If you had

plan values for last year which were something like 1,000 for January to June,

500 for July, 1,500 for August, and 1,000 each for September to December,

then by using DK2, you will be able to copy the same amounts to the next

fiscal year. DK5 will copy values to future periods only if there are no values

already available for those periods.

Differentiate ‘Activity-Dependent ‘and ‘Activity-

Independent’ Costs.

As you might be aware of already, there are two types of costs; namely,

variable costs and fixed costs.

Variable Costs, such as material costs, factory labor, etc., are always

dependent on an activity, and will vary depending on the activity. The higher

the activity the more will be the expenditure towards variable costs. In short,

these costs are directly proportional to the level of activity. In SAP CO, these

costs are known as ‘Activity-Dependent Costs.’

In contrast to the variable costs, ‘Activity-Independent Costs’ or fixed

costs do not usually vary with the level of activity. And you may need to

incur these costs irrespective of whether there is an activity. Costs such as


costs towards security, insurance premiums, etc., fall under the category of

fixed costs.

What is a ‘Mixed Cost’?

There are instances where you will come across a costing situation where the

costs cannot be strictly segregated into either fixed or variable costs. These

costs are known as semi-fixed costs or semi-variable costs or mixed

costs, because a portion of the total costs is fixed and the remaining portion

is a variable cost.

The classic example is the charges for electricity in a production

environment, where there is a basic minimum charge payable to the

electricity provider (or towards heating requirements of the buildings) which

remains fixed whether there is some production activity or not. When there

is production, you will use more electricity, which varies with the level of

production. Explain ‘Manual Primary Cost Planning.’

‘Manual Primary Cost Planning’ is used to plan for costs associated with

the external procurement of goods and services. You will plan both fixed and

variable costs, and also mixed costs, if necessary. You will plan costs such as

salaries, wages, etc., as activity-dependent costs; the costs towards security,

etc., will be planned as activity-independent costs.

You need to note that planning fixed primary costs is not vastly different

from that of planning for variable primary costs. When you plan for the

variable primary costs you need to mention the activity type associated with

that. You may further break down this cost into fixed and variable

proportions. The ‘fixed primary costs’ or ‘activity-independent primary costs’

are planned using the primary cost elements on various cost centers, based

on the activity performed on a particular cost center.


You may use any of the following SAP supplied planning layouts:

1–101— Activity-independent or activity-dependent primary costs

1–103— Activity-independent costs

1–152— Activity-independent costs (on a quarterly basis)

1–153— Cost-element planning (two versions simultaneously)

1–154— Cost-element planning (previous year’s actual displayed in

the lead column)

1–156— Central planning (Cost element planning from Cost center

perspective)

0.15.4 331. Explain ‘Automatic Primary Cost Planning.’

SAP provides you with two ways of handling Primary Costs Planning;

namely:

Inputted Costs Calculation

Distribution

Inputted Costs Calculation is used to smooth one-time costs (bonus,

incentives, etc.) incurred by spreading them over a period of time though it

is posted on the FI side at the end of the year. You again have two methods

of processing these costs: (i) when there is no corresponding costs

equivalent on the FI side such as the inputted family labor or inputted rent,

etc., and (ii) when there is a corresponding cost equivalent on the FI side

such as festival bonus, etc.

Distribution helps in planning primary costs from one cost center to the

other. The cost center from where the costs are distributed is known as the

sender (or pooled cost center or clearing cost center) and the other

cost centers to which the costs are distributed or where the costs are

received are known as receivers.



Note that you will be able to distribute planned/actual primary costs only.

Also note that the pooled cost center does not incur any of these costs but

acts only as the ‘clearing center’ for distribution to other cost centers. During

the process, you will use the SKF or the regular percentage method as the

distribution rule for achieving the distribution. The distribution cycle

helps to carry out the whole planning exercise.

Explain ‘Manual Secondary Cost Planning.’

‘Manual Secondary Cost Planning’ is required when you need to plan

consumption quantities of a sender cost center’s planned activity from the

point of view of the receiving cost center. The activity inputs may be planned

either as the activity-dependent costs (variable) or as activity-independent

costs (fixed).

The ‘activity-dependent primary cost planning’ is used only when you need

the services such as repair hours on a specified activity type. On the other

hand, you will use ‘activity-independent primary cost planning’ when you

need services such as maintenance hours, which are not restricted to a

particular activity.

The system uses the ‘planned calculated activity price’ for posting the

secondary cost. It is possible to carry out ‘manual secondary cost planning’

for activity types categorized as Category-1 (manual entry/manual

allocation). Note that it is important that you perform reconciliation of

planned consumption of an activity at the receiver cost center to the volume

planned at the sender’s level; otherwise, you will get a warning message

when the system calculates the activity price.

Explain ‘Assessment’ in Secondary Cost Planning.

‘Assessment’ is one of the methods used in ‘automatic planning of

secondary costs’ in cost center accounting. You will typically use this method



when you need to allocate costs from one cost center to other cost centers.

The original costs, even if they are primary, from the cost center are grouped

and reclassified as secondary while allocating the same to other cost centers

(imagine that you are collecting primary costs such as postage, telephone,

courier expenses, fax charges, etc., into a cost center called 1000, now

group these costs for assessment using a secondary cost element to receiver

cost centers: 2000 and 3000).

You need to define an assessment rule (either ‘percentage’ or ‘SKFs’ or

‘fixed amounts’) for affecting assessment. You would have now noticed that

this is similar to the distribution used in ‘primary cost planning.’

So, why do you need an assessment? Assessment is required when you need

to allocate secondary costs, and when you do not need the details you would

otherwise get from distribution.

What is an ‘Allocation Structure’?

You need to define or use a secondary cost element, called the ‘assessment

cost element,’ while you carry out the ‘assessment’ in ‘automatic secondary

cost planning.’ Instead of defining individual assessment elements (for a

group of primary cost elements) in individual segments, every now and then,

you may define various assessment elements in an ‘Allocation Structure,’

and use them repeatedly.

Explain ‘Segments’ and ‘Cycles.’

A ‘Segment’ is one processing unit required to complete an automated

allocation of distribution or assessment or reposting of planned/actual costs

in controlling in SAP. A segment is made up of (a) allocation characteristics—

to identify the sender/receiver, (b) values of the sender—plan/actual, type of

costs to be allocated, and (c) values of the receiver—the basis for allocation,

for example, the tracing factor such as SKF, percentages, etc.



When you combine multiple segments into a single process, then you call

that the ‘Cycle.’ A Cycle helps you to process various segments in a chain-

like fashion one after another. A Cycle consists of header data (valid for all

Segments in a Cycle) and one or more Segments, with summarized rules and

settings enabling allocation. The Segments within a ‘cycle’ can be processed

iteratively (one segment waits for the results of another) or non-iteratively

(all the segments are processed independently) or cumulatively (to take care

of variations in receiver Tracing Factors or sender amounts).

Typically, when you start the cycles you will start them in a ‘test’ mode to

see the allocations before actual postings. Technically, you can run the

cycles in ‘production’ mode at any point of time, but the system will carry

out the allocation postings only on the first day of a period. The utility of the

cycle lies in the fact that you can run these period after period.

What is ‘Iterative Processing’ of Cycles?

‘Iterative Processing’ is nothing but the repetitive processing of

sender/receiver relationships until the sender’s entire cost is transferred to

the receiver(s). During iterative processing, you will not be able to use ‘fixed

amounts’ as the ‘sender rules’; you will also not be able to define a

percentage to remain on the sender. You will be able to use both plan and

actual data while using the iteration.. What is ‘Splitting’? Explain the

‘Splitting Structure.’

‘Splitting’ is a process used to assign ‘activity-independent’ plans/actual

costs, both primary and secondary, of a cost center to the individual activity

types within that cost center. But the important requirement is that you will

use this when there is no account assignment to the activity types.

You may either use the Splitting rules or the Equivalence number to

achieve this. When you split the costs from a cost center, the cost center

temporarily becomes more than one cost center for the purpose of allocation


but again becomes a single cost center when posting happens in the

subsequent period.

If you need to assign different cost elements or cost element groups to

activities in more than one way, then you need to define a ‘Splitting

Structure’ containing ‘splitting rules’ to determine the criteria of splitting

‘activity-independent’ costs to an activity type. If you have created the

splitting structure in customizing and assigned the same to a cost center,

then the system uses the splitting structure for cost apportioning; otherwise,

it will use the equivalence number.

The ‘splitting rules’ determine the amount or the proportion of costs to be

allocated to various activity types of a cost center and is based on the

consumption of these activity types. The costs thus allocated may be a fixed

sum, or a percentage, or it can even be based on the tracing factors or SKFs.

The ‘equivalence number’ is a basic method for splitting the costs when

you manually plan for each of the activity types. By this, you will plan all

activity-independent costs according to the equivalence numbers (the

default is 1).

What is an ‘Activity Price Calculation’?

You will be completing the planning process only when you perform the

‘Activity Price Calculation,’ which is based on planned activities and

costs. By doing this you are valuating the planned secondary costs at

receiving cost centers. If you do not want to use activity price thus

calculated, you are free to use the political price for the activity type.

As you are aware, the activity price is used for planned/actual allocation and

is determined by using either the political price or the system-calculated

activity price.

How does the System Calculate the ‘Activity Price’?


The system calculates the ‘Activity Price,’ for each activity type and cost

center, by following the underlying rule:

Note that the system will continue to calculate the activity price even if you

have set the price indicator of an activity type to the ‘political price.’

You need to input the activity quantity, sender/receiver cost center and date

to enable the system to allocate the costs; the system will automatically

determine the allocation cost element and the activity price (either the

planned price or the actual price). The system multiplies the activity

consumed with that of the activity price to arrive at the allocated cost.

AS – IS Document

(An ISO 9001:2000 Certified Company)



Revision History

Revisio

n

Numbe

r

Revision

date

Summary of Changes Updated

by

Changes

marked

Rev 1.0 18/09/2007 First Release for General

Review

N

Reviewers: This document has been reviewed by

Name Title SignatureMr. T Ramakrishna Accounts Manager - VenkatMr. M Rajeswara

Rao

Project Manager -

Approvals: This document requires the following approvals

Name/Signature Title SignatureMr. P Srinivas Rao CEO - VenkatMr. S H Premanand Vice President (O) - Venkat


Distribution: This document has been distributed to

Name/Signature Title Signature


Table Of Contents

1 INTRODUCTION................................................................4

1.1 Introduction................................................................4

1.2 Scope of the document................................................4

1.3 Terms and Definitions.................................................5

1.4 References.................................................................5

2 FINANCE FUNCTION OVERVIEW.........................................6

2.1 As Is Process:..............................................................6

3 GENERAL LEDGER BUSINESS PROCESS............................10

3.1 As Is Process:............................................................10

4 ACCOUNTS RECEIVABLE BUSINESS PROCESS....................13

4.1 As Is Process:............................................................13

5 ACCOUNTS PAYABLE BUSINESS PROCESS........................16

5.1 As Is Process:............................................................16

6 ASSET MANAGEMENT BUSINESS PROCESS.......................19

6.1 As Is Process:............................................................19

7 REPORTING...................................................................23

7.1 As Is Process:............................................................23


8 REFERENCE TO FIGURES.................................................24

9 SCOPE FOR IMPROVEMENT.............................................25


1 1.....................Introduction

1.1 Introduction

Finance is a key area which helps in generating external reports,

according to the laws of the land, from the day-to-day financial activities

of Venkat and also takes care of judicious and cost effective accessibility

of Funds.

Costing (Controlling in SAP) is a key area for generating various MIS

internal reports from the day-to-day activities of the company. The data

from various modules is analyzed, assessed and redistributed using

statistical reasoning to conclude the cost of each

process/product/activity.

The primary goal of this document is to map the crucial business

processes in the Financial Business process, in the state as it is being

currently practised inside Venkat. Understanding of the key business

processes as they exist inside Venkat is a key pre-requisite for

formulating any new business process changes. The documented current

practices will serve as a benchmark and measure, against whom the

efficacy of new business processes shall be measured. In the context of

the above goal, for ‘As Is Business Process Mapping’ the objectives are:

1 Establish the overview of the currently established business processes

2 Understand the limitations of the current business processes

3 Understand the areas of improvement in current business processes

4 Understand the minimum requirements of the current business processes

which must be met by a new re-design.

5 Establish the current processes as a benchmark against which new

processes can be evaluated


1.2 Scope of the document

Following items belong to the scope of the document

1 Financial Business Processes: The document includes all the processes

which deal with Accounting Process in Venkat. This includes General

Expenses, Receipts, Payments, Assets Management as well as Closing

of Books of Accounts

2 Corporate Office: The DRUCK Project Team had access to Corporate

Office of Venkat located in Jubilee Hills, Hyderabad. Consequently the

processes mapped out belong to this Office with various plants

(Bollaram & Kondapur) / Departments / Business Units

Following items do not belong to the scope of the document

1 Level of details: The business processes are documented at

sufficient details so as to meet the objectives of the document

(see above).

2 Sites: The document does not cover the Kolkata and Tirupati

manufacturing locations of Venkat


1.3 Terms and Definitions

FI/C

O

Finance and

Controlling

Which takes care of all Financial Business

Processes, Internal and External Reporting

as well as decision making purpose

GLGeneral

Expenses

Process of General Expenses in line with

Accounting Principles

APAccounts

PayablesProcess of Payments to the Suppliers

ARAccounts

ReceivablesProcess of Receipts from the Customers

AAAsset

Accounting

Systematic Asset Management in

Accounting point of view

1.4 References


1 Annual report (2005-06)

2 Annual report (2006-07)

3 Venkat Organogram


Finance Function Overview

2.1 As Is Process

3 Organisation Structure: The Finance Dept. comprised of Finance

Manager, Accounts Officer & Accounts Executive. The Finance

Manager reports to the Top Management. Finance Manager is

assisted by Accounts Officers who looks after sales invoices,

stock journal entries, MIS and employee salaries. Accounts

Executive who looks after accounting of purchases, journal

entries and statutory compliances

4 Functions:

o The Finance Dept. deals with Accounting Process in Venkat.

This includes accounting of General Expenses, Receipts,

Payments, Asset Management, as well as Closing the Books

of Accounts

o Financial activities of Plants (Bollaram & Kondapur) /

Departments / Business Units are dealt in Corporate Office of

Venkat located at Jubilee Hills, Hyderabad

5 Accounting Package: The Finance Dept. performs the Accounting

Process in Tally Accounting Package. (Version:5.4)

6 Data Synchronization: Stock related quantity entries are made by

Stores Dept./Plants in tally accounting software in respect of

stocks received/issued. Currently data synchronization in tally

accounting software is not taking place between Plants and

Finance Dept. of Venkat. Periodically Finance Dept. receives the

hard copy of quantitative stock data, re-enters accounting

information into tally accounting software

7 Documents Flow: The financial documents which are forwarded

by the various Departments / Business Units will be processed in


Finance Dept. Such documents will be forwarded to the Vice-

Chairman / Chairman for approval. Subsequently the documents

will be accounted in the books of accounts

8 Venkat has achieved a turnover of Rs. 30 Crores during the

financial year 2006-07. Venkat has ambitious growth plans in

near future

9 Banks & Mode of Payment: Venkat has got strategic banking

alliance with Canara Bank and HDFC Bank (Electronic-Bank

account). Payments towards expenses are made by Cheques and

Cash. Currently no electronic payments are involved, but

electronic deposits from various parties are accepted

10 Funds Management: Funds Management is being monitored by

the Finance Dept. at Corporate Office on daily basis by

performing the Bank Reconciliation in Accounting package

11 The Finance Dept is responsible to serve working capital

requirements & general expenses of Venkat with prior approval

of the Chairman

12 Imprest Cash: To facilitate regular expenses at plant and

department level, Venkat has the system of allotting imprest

cash (petty cash) to meet the miscellaneous expenditure.

Currently, in books of accounts imprest cash is maintained in the

name of person responsible for expenses

13 Sales Process: Sales process takes place through Centralised

Billing at Registered Office located at Bollaram, Hyderabad

14 Scrap Sale: There is no concept of scrap sale in Venkat. Since

Venkat deals with secure prints and any scrap arises should be

burnt/destroyed as per guidelines


15 Customers: Finance Dept. is responsible for defining the Terms of

Payment with Customers. For accounting purposes Customers

are grouped based on business lines such as Sundry Debtors-

Banks, IPOs, Lotteries, and others. Recently Venkat has served

the external markets outside India with considerable amount of

export orders

16 Vendors: Finance Dept. is responsible for defining the Terms of

Payment with Vendors. For accounting purposes Vendors are

grouped into Sundry Creditors-Capital Goods, Chemicals,

Contractors, Inks, Packing materials, Paper, Services, Stores &

Others. Venkat have their band of vendors to import various

forms of material, inks, chemicals & spare parts for machinery

17 Production Process: Venkat possess ISO 9001:2000 Certification

confirming the Companies commitment to the cause of Quality

Management

o Materials are currently procured centrally for all plants by

Registered Office located at Bollaram, Hyderabad

o Design & Development process currently taking place at

Bollaram Plant, Hyderabad

o Labour force has blend of employees who are on payrolls of

Venkat and Contract Labourers (around 200 regular

employees & 150-300 contract labourers)

18 Approvals & Authorisations: Approval of Quotations, Invoices and

Expenses for acquiring Capital Assets are vested with Vice-

Chairman & Chairman. Such requisitions are from Vendors,

Customers & Strategic Business Units respectively

19 Asset Management: Venkat is equipped with state of art

technology for their operations. The asset base includes Plants,


Machinery (including imported) and other facilities. These assets

are being maintained at cost less depreciation value. Finance

Dept. is adopting straight-line method of depreciation for

Accounting purposes

20 Internal Reporting: Finance Dept. prepares reports like Monthly

MIS, Funds Availability Statement, Bank Reconciliation

Statements, Age Analysis Statements of Customers that provide

useful information to support management decision process

21 Budgeting: Currently Venkat is not following Budgeting process

for their operations.

22 External Reporting: Finance Dept. at Venkat has an obligation to

prepare and submit the Financial Reports annually for the

compliance of statutory obligations

23 Statutory Payments: Finance Dept. process the various Statutory

obligations (like Income Tax, TDS, FBT, ESI, EPF, Sales Tax, VAT)

of Venkat. Such obligations are complied periodically to the

statutory bodies and payments are made accordingly

24 Cost Records: Currently Venkat is not maintaining any sort of

Cost records. Since the Central Government has not prescribed

for the maintenance of cost records under Sec 209 (1)(d) of the

Companies Act, 1956 for any of the products of the Venkat.

Central Excise Tax is not applicable to Venkat



2 3 General Ledger Business

Process

3.1 As Is Process:

25 Functions: In Venkat, General Ledger Process involves the

Finance Dept. which deals with accounting and account closure

processes

26 Method of Accounting: Venkat adopts accounts compiled on

mercantile system of accounting on accrual basis

Revenue Accounting:

27 Revenue Accounting: Venkat generates operational revenues

through printing process, sale of paper (computer stationery)

and job works both in the form of indigenous and exports. Venkat

revenues includes other income like interest income

28 Bank Reconciliation Process: Funds Management is being monitored by

the Finance Dept. at Corporate Office on daily basis by performing the

Bank Reconciliation in Accounting package. Payments towards

expenses are made through Cheques and Cash

29 Other Income: In Venkat, ‘other income’ is the consolidated

transportation charges collected from various customers. This revenue

is set-off item against the transport charges paid to transport vendors

Expenses Accounting:

30 Employee related costs: Employee related costs infer Salaries to

employees on Venkat payrolls. HR Department of Venkat

performs the payroll process and forwards the relevant

documents to Finance Dept.. Subsequently Finance Dept.

verifies the documents in respect of statutory deductions made

towards PF, ESI, recovery of advances, other deductions from


individual employee entitlement. Finance Dept. pass necessary

journal entries into accounting package and performs funds

availability check. Finance Dept. with prior approval of Chairman

prepares disbursement statement and forwards to bank for

payment transfer to individual employee bank accounts. CEO

Salary, Directors remuneration has been dealt separately from

Employees payroll system

31 Statutory Payments: Statutory payments like ESI, EPF, TDS, Service

tax, Sales tax and Professional tax are processed for payments by

Finance Dept. with prior approval of Chairman

32 Taxes on Sales: Venkat is liable to collect and pay tax on

domestic sales revenue. For Sales tax purposes Venkat sales

revenue has been categorised into:

o Receipts from Printing (Venkat paper used for printing): Taxable

o Job work Receipts (Paper supplied by Customer): Non-Taxable

Sales Tax / Works Contract Tax / VAT is applicable on Category

‘Receipts from Printing’:

1) With in the state: At 4% on Total Invoice Value (Composite

method)

2) Outside the state: on 60% of Invoice Value at

a) Govt Customers : 4%

b) Non-Govt Customers with ‘C’ Form : 3%

c) Non-Govt Customers without ‘C’ Form : 12.5%

33 Tax Deducted at Source (TDS): As per Income Tax Act, 1961

Venkat is liable to deduct & pay to Income Tax Dept. Current

applicable rates are:

Contractors 2.266%


Consultancy fee 11.33%

Commission 11.33%

Rent (Companies) 22.66%

Rent (Individuals) 16.995%

Interest (Companies) 22.66%

Interest (Individuals) 11.33%

34 Imports: At Venkat currently there is no direct import of raw

materials instead procuring through indigenous agencies, who

are paid in local currency (INR)

35 Loans & Advances: For accounting purposes loans and advances

comprises of advance payments to vendors, advances to employees,

deposits (EMDs, Security Deposits), TDS and interest receivables

36 Recurring Expenses: Periodical payments like rent (based on

agreements), power, insurance & communication (telephone /

mobile / Fax / internet) are met by the Finance Dept with prior

approval of Chairman

37 Guarantees & EMDs: Finance Dept is responsible for tracking of EMDs

(Earnest Money Deposits), Security Deposits and Bank Guarantees on

regular basis and generates age wise reports for internal reporting

38 Discounts allowed: Finance Dept. does not identify discounts

allowed on sales to customers into accounts. Net sales after discount is

directly considered into accounts with prior approval of Chairman. Taxes

are computed on net sales

39 Bad Debts written-off: Finance Dept. writes off debts, which have

been identified as non recoverable by the Management


40 Interest Expenses: For accounting purposes interest expense

includes interest on term loan, interest on working capital and others

41 Profit/Loss on sale of assets: Finance Dept. arrives the profit/loss on

assets transferred with prior approval of management and considers it into

accounts after necessary accounting treatment with respect to depreciation

charged on the asset

Period end closing:

42 Finance Dept. performs the period end activities in accounting after

meeting the recurring expenditure

43 Provisions: For accounting purpose provisions are provided for

o Salaries and Wages

o Gratuity

o Income tax

o Proposed dividend – if any – (year end process)

o Fringe Benefit Tax

o Provident Fund

o Expenses not booked (rent / electricity / communication cost

etc)

o Prepaid Expenses / Advances

44 Closing Stock: For accounting purpose, closing stocks of raw materials

are valued at cost and finished goods at cost or market value

whichever is lower. Inventory issues are valued at weighted average

method. Consumable Stores are charged off on purchase

45 Operational WIP: Currently operational WIP is not reflected in books of

accounts. But for valuation & reporting purposes valued at estimated

cost

46 Capital WIP: For accounting purpose, capital WIP is valued at estimated

cost with respect to capital projects


47 Term Loan Interest: KL Hi -Tech has taken two term loans from ICICI

Bank for acquiring Vehicles. Loan repayments are being paid in the

form of Equal Monthly Instalments (which includes principal & interest

elements) through ECS on agreed dates as per loan repayment

schedule. The interest element is identified as per loan repayment

schedule documents and accounted accordingly

48 Reporting:

o Finance Dept. prepares reports like monthly profitability

statements, bank reconciliation statements, customer

balances vendor balances, Total payables periodically to the

Chairman

o Venkat is responsible to submit the Quarterly e-TDS report to

the income tax authorities in a prescribed format

For TDS on salaries (From-24)

For TDS other than salaries (Form-26).

Remittance Challan (for Bank payments)

Form 16 (to Employees)

Form 16A (to Vendors)


3 4 Accounts Receivable

Business Process

4.1 As Is Process:

49 Organisation Structure: The Finance Dept. comprises of Finance

Manager and assisted by two Finance Executives. The Finance

Manager reports to the Top Management

50 Functions:

o Sales Order: Sales & Marketing department functions from

Regd. Office situated at Bollaram, Mumbai, Chennai and Delhi

prepare Sales Order against the Purchase Orders received

from various customers, with due authorisation from

chairman and forwards it to the Production Manager for

carrying out the production process

o Production, Delivery & Billing: Production orders are

processed only based on the purchase order received from

the customer. After execution of production Order at Plant

level Venkat delivers the stocks to respective customer

destinations. Venkat generates 6 copies of Delivery challans.

Acknowledged Delivery challan is verified before generating

the Sales invoice in Venkat. Sales Billing is carried out

centrally for all sales orders only from Regd. Office at

Bollaram

51 Document Flow: Sales department at Registered office sends one copy

of Invoice along with a copy of delivery challan to the customer as well

as to the Finance Dept. at Jubilee Hills for Accounting Purpose

52 Accounting:


o Finance Dept. verifies the Sales Invoice in respect of Qty.,

Rate and Terms & Conditions and enters into Accounting

Package

o Venkat has grouped its customers into 4 types namely,

Customers-Bank, Customers-IPO’s, Customers-Lotteries and

Customers-Others for Accounting and reporting purposes

o Venkat also has customers situated outside India. Finance

Dept. is able to generate revenue statements for exports and

domestic business separately for statutory & internal

reporting purposes

o For reporting the revenues, Venkat has grouped sales into 1)

Job works 2) Sale of Paper and 3) Works Contract.

o Finance Dept. updates the customer account balances and

clears customer accounts by entering the incoming payments

from customers using Tally accounting software. Finance

Dept. also updates a manual register for cheque receipts and

simultaneously updates the same into Receipts and

Payments statement in Excel

53 Terms & Conditions: Venkat is maintaining different payment terms

based on the relationship and type of Customers. Terms like Advance

Payments, Payment against delivery and Payment after billing are

normally followed. However for Strategic customers like Govt., Banks,

and Major Industrial Groups, it is not possible to follow strict norms.

Discounts are allowed to certain customers on case-to-case basis

54 Banking & Mode of Payment receipt: Venkat has got strategic banking

alliance with Canara Bank and HDFC Bank (Electronic-Bank account). In

collection process Venkat using the services of some of their business

partners and associates located at various locations. Electronic

deposits from various parties are accepted


55 Statutory Payments: Venkat has Service Tax Registration for the

purpose of Goods Transport Authority (GTA) and making payment of

service tax (GTA) on periodical basis. Venkat has obligation of paying

Works Contract Tax for the specific work orders executed. Separate

Accounts are being maintained for Works Contract Tax collected and

paid

56 Receivables: Finance Dept. is responsible for defining the terms of

payment with customers. For accounting purposes customers are

grouped based on business lines such as Sundry Debtors-Banks, IPOs,

Lotteries, and others. Finance Dept. with the help of Sales & Marketing

department manages the receivables

57 For delayed payments from customers, sales people visit the

customers in person for collection. Currently there is no system of

written correspondence (dunning) in the process of collections from

the customers

58 Reporting:

o Finance Dept. prepares reports like receivables, age-wise

analysis, customers balances, total receivables periodically

and reports to the Chairman

o Sales and Marketing Executives checks the credit position of

the customers and outstanding balances in consultation with

Finance Dept. and updates to chairman for further order

acceptance from the customers

o For Balance Sheet purpose, Finance Dept. is reporting

outstanding customers in two groups namely 1) Debts

outstanding more than 6 months and Other Debts

(Considered good)


Finance Dept receives the multiple documents (S ales Invoice, Delivery Challan

from Marketing /Plants

START

ACCOUNTS RECEIVABLE BUSINESS PROCESS @ FINANCE DEPT. (Corporate Office)

Multiple Supporting

Docs

Accounting

Finance Dept confirms the documents received to the

respective Depts on case to case basis

`

Accounting in Tally

Doc Verification

Finance Dept . segregates the invoices & supporting

documents for prudence

Accounting the transaction in Tally Software by

Finance Dept

Finance Dept reconciles Bank & closes the Customer

Accounts in Tally Software

`

Accounting in Tally

END

Telecommunicat ion

Finance Dept. receives the Cheques from the

Customers on due date

CHEQUES

Finance Dept update the Funds Statement (i n Excel)Funds

Flow Stmt

Finance Dept drops the Cheques into the Bank

$

BANK

Figure 4-1 Accounts Receivable Business Process


4 5 Accounts Payable Business

Process

5.1 As Is Process:

59 Organisation Structure & Functions: Purchase Department and the

Finance Dept are involved in Accounts Payable Process of Venkat. The

Finance Dept. deals with accounting and payments process

60Documents Flow & Approvals:

o Purchase order is originated by the purchase department for

materials to meet the production requirement. Currently

materials are procured centrally for all plants by purchase

department located at Registered Office, Bollaram,

Hyderabad

o Vendor selection process happens in purchase department

with prior approval of Vice President and the CEO.

Subsequently Purchase Order will be released to the vendor

o Purchase department classifies vendor groups into the

following lines:

Material Vendors Service Vendors

Paper Subcontractor

Inks Transport

Chemicals Service providers

Packing Material

Stores & Others

Capital Goods


o With reference to Material, Purchase Department verifies and

forwards the vendor invoice along with a copy of purchase

order to Finance Dept. with goods receipt note

o With reference to Services, the Plant In-charge certifies and

forwards the vendor invoice along with a copy of service

order to Finance Dept

61 Terms & Conditions: Based on category of vendors, Venkat is

maintaining different payment terms, terms of advance payments on

case to case basis. Finance Dept. is responsible for defining the Terms

of Payment to Vendors. Payment against delivery and payment after

billing are normally followed

62Accounting:

o Finance Dept. vouches the documents in respect of quantity,

rate and terms & conditions. This is to ensure that vendor

invoice to be in line with purchase/service order for prudence.

o Finance Dept. enter the vendor invoice in Accounting

package.

63Payment Process:

o On periodical basis Finance Dept. performs the age analysis

of vendors. On due date, Finance Dept. forwards the

documents for approval of the V.P./ Chairman for making

payments to vendors

o After approval of the V.P / Chairman, Finance Dept. performs

the Funds availability check through bank reconciliation in

Accounting package

o Finance Dept. prepares cheques for payment and forwards

them for authentication of the Chairman. Currently vendor

payments are made by cheques


o Finance Dept. delivers the signed cheques to the vendors

o Statutory Payments: Vendor payments in respect of sub

contractors, service providers, transport vendors are made

after deducting TDS

64Reporting:

o Finance Dept. prepares reports like age-wise analysis, vendor

balances, total payables periodically to the Chairman

o For Accounting purpose, vendors groups into Sundry

Creditors-Capital Goods, Chemicals, Contractors, Inks,

Packing materials, Paper, Services, Stores & Others. VENKAT

have their band of vendors to import various forms of

materials, inks, chemicals & spare parts for machinery


Fi nance Dept receives the multiple documents from

Purchase Dept ./Plants

START

ACCOUNTS PAYABLE BUSINESS PROCESS @ FINANCE DEPT. (Corporate Office)

Multiple Supporting

Docs

Accounting

Finance Dept confirms the documents received to the

respective Depts on case to case basis

Finance Dept. place the supporting documents for approval of V .P/Chairman

Management

`

Accounting in Tally

Finance Dept performs the Funds availability check

Funds Availablity

Check

Doc Verification

Finance Dept . vouches supporting documents for

prudence

Accounting the transaction in Tally Software by

Finance Dept

Finance Dept closes the Accounts in Tally Software

`

Account ing in Tally

END

Telecommunicat ion

Finance Dept releases cheques to Vendors after Chairman’s Authorisation

Accounts Payable

Figure 5-1 Accounts Payable Business Process


5 6 Asset Management Business

Process

6.1 As Is Process:

65 Over View: Asset Accounting Covers the procurement, maintenance,

retirement and other related transactions involved in the life of Fixed

Assets in Venkat

66 At Venkat for acquiring any asset there must be an approval from top

management. Subsequently purchase department and Finance Dept.

act accordingly

67 As on 31.03.2007 Venkat has gross value of Fixed Assets of Rs.15.57

Crs. and its book value as on the date is Rs.4.42 Cr. Venkat has

categorized its total Fixed Assets broadly into Land, Buildings, Plant &

Machinery, Computers, Furniture & Fixtures, Vehicles, Office

Equipment and Other Assets categories based on their nature

68 Venkat is conducting periodical physical verification of Fixed Assets

located at various Plants, Corporate Office and Marketing Offices.

Venkat has not been practicing the revaluation of assets for any

purpose of accounting and valuation. Venkat is not maintaining the

asset inventory identification no. at individual asset level. Currently

Venkat is not maintaining Asset records based on location

69 Asset Acquisition Process:

o Decision Process: Top Management performs the decision

process for acquiring the Assets for the use of Venkat for the

purpose of expansion and or replacement of existing Assets.

Based on the management decision purchase department

identifies and selects the vendor in consultation with top

management and places order to the vendor for supply of

such Capital Assets


o Advance Payment for Asset: Purchase Department forwards

the Purchase order copy to Finance Dept., which verifies and

processes the advance payment with prior permission from

Chairman. Finance Dept. maintains the vendor account in

Tally accounting software and updates with the advance

payment made to the vendor after due verification with PO

issued

o Asset Acquisition: Currently Assets are being procured from

Bollaram (Regd.) Office and Suppliers bills and Delivery

Challan is being forwarded to Finance Dept. at Jubilee Hills

Corporate Office. Asset Check will be checked by purchase

department in all respects at Regd. Office once the Asset

comes in. On receipt of bills from Purchase department,

Finance Dept. enters into Tally accounting software with due

verification with PO and Delivery challan and Updates the

Asset Ledger and supplier ledger

o Internal Asset Acquisition: Buildings of Venkat has been

procured internally and capitalized as the construction work

was completed. Currently there is no Capital Work In Process

at Venkat

o Payment/Final Payment Against Asset: As per the terms of

payment with the supplier, Finance Dept. processes the

payment to the vendors for supply of Assets also along with

the other regular vendor payments with prior permission from

chairman. Finance Dept. prepares the cheque and sends it to

the supplier after through check of funds availability and

updates the bank books and vendor ledger. Finance Dept.

also in parallel updates a manual register for cheque

payments and simultaneously updates the same into

Receipts and Payments file in Excel


70 Depreciation: Venkat is adopting the Straight Line Method of

depreciation on Fixed Assets other than Land for recording the books

of accounts as per the Companies Act. For the purpose of computation

of Income Tax the Written Down Value Method is being followed. At the

end of financial year Finance Dept. enters the values into Tally

accounting Software for the purpose of closing books of accounts and

generating Year end Financial Statements

71 At present Venkat has categorized its Fixed Assets into 9 categories for

reporting to Registrar of Companies (ROC) and Income Tax authorities.

The following rates of Depreciation is applicable as per Indian

Companies Act, 1956 and Indian Income Tax Act,1961.

Sl.

No.Asset Category

Depreciation

% as per

Companies

Act

Depreciation %

as per Income

Tax Act

1 Land 0 0

2 Buildings 3.34 10

3Plant &

Machinery7.07 15

4 Computers 16.21 60

5Furniture &

fixtures6.33 10

6 Vehicles 11.30 15

7 Office Equipment 6.33 15

8Capital WIP-

Builidngs0 0

9 Other Assets 6.33 15

1 Additional Depreciation: Additional Depreciation of 20% [Total 35%

(15+20)] is allowed as per Income Tax Act on additions to Plant &


Machinery, if the additions during the year are within first 6 months.

Elsewhere Additional Depreciation of 10% is allowed if the additions

during the year are during second 6 months of the financial year

2 Retirement: Asset retirement has been done on the basis of

management decision and due effect for depreciation provision and

accounting of profit/loss on sale is being accounted on asset

retirements

3 Reporting:

o Assets Register: Finance Dept. is separately maintaining

Fixed Assets Register as per Companies Act manually and

updating at the time of asset procurement and retirements

o Schedule VI format: Finance Dept. is responsible for

calculating depreciation, accounting and preparing Schedule

VI format for the purpose of Balance Sheet preparation at the

financial year closure. o


Finance Dept receives the multiple documents from

Purchase Dept ./Plants

START

A SSET MANAGEMENT BUSINESS PROCESS @ FINANCE DEPT. (Corporate Off ice)

Multiple Support ing

D ocs

Accounting

Finance Dept. place the supporting documents for approval of V .P/Chairman

Management

`

Accounting in Tally

Finance Dept performs the Funds availability check Funds

Availablity Check

Doc Verification

Finance Dept . vouches supporting documents for

prudence

Finance Dept enters transaction & Capi talises the

Asset in Tally Software

Finance Dept closes the Accounts in Tally Software

`

Accounting in Tally

END

On Management Approval , Purchase Dept . procures the

Assets (Machinery )

Finance Dept releases cheques to Venors after

Chairman’s Authorisation

Accounts Payable

Figure 6-1 Asset Management Business Process


6 7 Reporting

7.1 As Is Process:

74 Functions: Finance Dept. is responsible for maintenance of books of

accounts in accounting package and to prepare Financial Statements

75 Preparation of Trial Balance, Preparation of Profit & Loss Account

and Balance Sheet in Tally Accounting Package. Presenting the Profit

& Loss Account and Balance Sheet to V.P. for approval

76 Statutory Compliances: Venkat complies with statutory obligations

in respect of various Statutes. Accordingly prepares reports for the

same


7 8 Reference to Figures

Figure 4-1 Accounts Receivable Business Process

Figure 5-1 Accounts Payable Business Process

Figure 6-1 Asset Management Business Process


8 9 Scope for Improvement

77 Seamless integration across all the departments/functions with in

the organization is possible

78 Approval process can be streamlined. Authorization levels can be

defined as per Management hierarchy

79 Various MIS reports can be generated for effective and timely

Management decision making process

80 Costing system can be setup for recording the transactions and

better Cost analysis

81 Through put time required to close the books of accounts will be

reduced

82 Through integration automatic posting from SD at the time of

delivery, billing to Finance & Controlling is possible

83 Facilitation of automatic postings to Finance & Controlling

(Accounts & Costing) from Material Management at the time of

goods receipt, issue to production

84 One point of data entry eliminates duplication of data & chances of

human errors

85 Better control on valuation of raw materials, WIP and finished goods

86 Petty Cash (Cash Journal) accounts can be maintained with ease

87 Documents requiring approval can be parked before postings are

made in the Books of accounts

88 Calculation and posting of Interest on loans/deposits can be

automated


89 Online control of Credits to Customers by maintaining Credit

Control Area

90 Automatic maintenance of payment terms for customers and

vendors

91 System automates Bank Reconciliation process with ease

92 Better Asset management is possible through online maintenance

of detailed asset register

93 Automatic periodic depreciation postings can be done

94 Asset values and depreciation can be maintained simultaneously to

serve different purposes like Companies Act, Income Tax Act, Cost

Accounting.

95 Real-time report on individual assets can be viewed

FINANCIAL ACCOUNTING

BUSINESS BLUEPRINT

Submitted to

VENKAT GLOBAL SOLUTIONS LIMITED

By

Ltd.

Version 1.0


DOCUMENT APPROVALS

DOCUMENT INFORMATION

DOCUMENT HISTORY


TABLE OF CONTENTS

Define Account Groups........................................................................................49 Create Number Ranges for Vendor Accounts.....................................................49 Assign Number Ranges to Vendor Account Groups...........................................50 Define Tolerances (Vendors)...............................................................................50 Maintain Number ranges 19, 15, 17 for KR, KZ, KA document types respectively (KR: Vendor Invoice, KZ: Vendor payment, KA: Vendor Document)...........................52 Create Vendor Reconciliation Account (Tcode: FS00).......................................53 Create Vendor Master Record ............................................................................54 Create Service G/L Master Record (Tcode: FS00).............................................55 Enter Vendor Invoice ..........................................................................................56 ..............................................................................................................................57 Vendor Line item report.......................................................................................57 Partial payments (Tcode: F-53)..........................................................................58 Residual items (Tcode:F-53)..............................................................................59 Automation of Bank Charges and Cash discount...............................................59

Creation of Bank Charges G/L Account (Tcode: FS00)...........................................................5915. Creation of Cash Discount Taken G/L Account (Tcode: FS00)..........................................60 Creation Accounts for Cash Discount Taken............................................................................61 Define Accounts for Bank Charges (Vendors).........................................................................62 Outgoing payment to vendor with bank charges and cash discount (Tcode: F-53)..................62

Down payments (Advance To vendors)..............................................................................................................................63

1. Explain ‘ASAP Roadmap’ Phases. ................................................................................2352. Explain ‘ASAP BPML.’.................................................................................................2373. What are ‘BPPs’ in ASAP?............................................................................................2374. Within FI, from Which FI-GL Gets Simultaneous Postings.........................................2385. Name Three Distinct Characteristics of FI-GL..............................................................2387. What are the Important ‘Organizational Units’ in FI?...................................................2388. What is a ‘Company’?....................................................................................................2389. What is a ‘Company Code,’ and how is this different from a ‘Company’?...................23910. What are the Important ‘Global Settings’ for a Company Code?................................23911. Can you assign more than One ‘Company Code’ to a ‘Company’?............................23912. What is a ‘Business Area’?...........................................................................................24013. Can You Attach a ‘Business Area’ to a Transaction?..................................................24014. What is a ‘Chart of Accounts’?....................................................................................24015. What are all the Major Components of a ‘Chart of Accounts’?...................................24116. What is an ‘Operating Chart of Accounts’?.................................................................24117. How does ‘Group Chart of Accounts’ Differ from ‘Operating Chart of Accounts’?. .24118. What is a ‘Country Chart of Accounts’? Why do you need this?................................24219. Can one ‘Chart of Accounts’ be Assigned to Several Company Codes?.....................24220. What is a ‘Fiscal Year’ and ‘Fiscal Year Variant’?.....................................................242


21. What is a ‘Posting Period’?..........................................................................................24322. How does the System identify a ‘Posting Period’?......................................................24323. What Happens when You Post to Year 2006 when you are in 2007?..........................24324. What do you mean by ‘Opening/Closing’ Posting Periods?........................................24425. What is a ‘Posting Period Variant’?.............................................................................24426. Can You Selectively ‘Open’ and ‘Close’ accounts?....................................................24427. Why is it not Possible to Post to a Customer A/C in a Previously Closed ‘Period’?...24528. Can You Open a ‘Posting Period’ only for a Particular User?.....................................24529. What is a ‘Special Period’? When do you Use it?........................................................24630. What is the Maximum Number of ‘Posting Periods’ in SAP?.....................................24631. What is known as ‘Year Shift/Displacement’ in a Fiscal Year?..................................24632. What is a ‘Year-dependent’ Fiscal Year?.....................................................................24733. What Precautions should you take while defining a ‘Shortened Fiscal Year’?...........24734. Tell me more about a ‘Shortened Fiscal Year.’............................................................24735. How do you open a new ‘Fiscal Year’ in the System?.................................................24736. How do you ‘Carry-Forward’ Account Balances?.......................................................24837. Can You Explain how ‘Carry-Forward’ Happens in SAP?..........................................24838. Is there a Prerequisite for ‘Carry-Forward’ Activity?..................................................24839. How many ‘Retained Earnings’ A/C can be defined?..................................................24940. Can you have Multiple ‘Retained Earnings’ A/C?.......................................................24941. What is a ‘Local Currency’?.........................................................................................24942. What is an ‘Account Currency’?..................................................................................24943. What are all the Prerequisites for Posting in a ‘Foreign Currency’?............................25044. How are ‘Exchange Rates’ Maintained in SAP?..........................................................25045. What is an ‘Exchange Rate Type’? List some of them................................................25046. What is known as the ‘Translation Factor’?.................................................................25147. How is ‘Master Data’ different from ‘Transaction Data’?...........................................25148. Can You Post an A/C Document if the ‘Credit’ is not Equal to the ‘Debit’?..............252

General Ledger Accounting....................................................................................................2521. What is a ‘Document’ in SAP?......................................................................................2522. What is a ‘Document Header’?......................................................................................2533. What is a ‘Document Type’?..........................................................................................2544. How is ‘Account Type’ Connected to ‘Document Type’?.............................................2545. Explain the Various ‘Reference Methods.’....................................................................2546. What is the ‘Document Change Rule’?..........................................................................2557. Differentiate between ‘Account Assignment Model,’ ‘Recurring Entries,’ and ‘Sample Document,’.........................................................................................................................2558. What is a ‘Line Item’?....................................................................................................2579. What is a ‘Posting Key’?................................................................................................25710. Differentiate between the ‘Parking’ and the ‘Holding’ of Documents........................25811. Explain ‘Reversal of Documents’ in SAP....................................................................26012. What is ‘Fast Entry’?....................................................................................................26113. How do you Create ‘GL Account Master Data’?.........................................................26114. Is it Possible to Change an Existing B/S GL A/C to the P&L Type?..........................26315. What is an ‘Account Group’?.......................................................................................26316. Describe ‘Number Range Interval.’.............................................................................264


17. What is a ‘Screen Layout’?..........................................................................................26618. What is a ‘Field Status Group’?...................................................................................26719. What do You mean by ‘Balances in Local Currency’ Only?.......................................26820. What is ‘Line Item Display’?.......................................................................................26921. Tell me the two uses of ‘Blocking’ an Account...........................................................269

Accounts Payables..................................................................................................................2691. Explain the ‘Account Payables’ Submodule..................................................................2690.15.1 What Documents Result from ‘Procurement Processes’?.......................................2692. Describe a ‘Purchase Cycle.’..........................................................................................2703. What is a ‘Purchase Requisition’ (PR)?.........................................................................2714. What is a ‘Request for Quotation’ (RFQ)?.....................................................................2715. What is an ‘Outline Agreement’? ..................................................................................2716. What is a ‘Contract’?......................................................................................................2727. What is a ‘Quotation?.....................................................................................................2728. What is a ‘Purchase Order’ (PO)?..................................................................................2729. What is a ‘PO History’?.................................................................................................27310. Will the FI Document be Created with the Purchase Order (PO)?..............................27311. Explain FI-MM Integration..........................................................................................27312. What Happens, in SAP, when You Post a ‘Goods Receipt’?.......................................27513. Explain ‘Invoice Verification’ (IV) in SAP.................................................................27614. Explain ‘Automatic Payment Program.’......................................................................27715. Explain ‘Automatic Payment Program’ Configuration................................................2770.15.2 16. How do you execute an ‘Automatic Payment Program’?.................................28017. Can You Pay a Vendor in a Currency Other than the Invoice Currency?....................28218. What is a ‘Payment Block’?.........................................................................................28219. How do You Release ‘Blocked Invoices for Payments’?............................................28320. What is a ‘Credit Memo’?............................................................................................283 21. What are ‘Special GL Transactions’?..........................................................................284

General Controlling................................................................................................................285 Explain ‘Controlling (CO)’ in SAP...................................................................................285 What are the Important ‘Organizational Elements of CO’?.............................................285 What is a ‘Controlling Area’? How is it Related to a Company Code?............................285 Outline ‘Company Code—Controlling Area’ Assignments..............................................2860.15.3 292. Explain the Different Types of ‘Controlling Area/Company Code’ assignments.........................................................................................................................286 What are the ‘Components of Controlling’?.....................................................................288 Why do You Need ‘Cost Element Accounting’?..............................................................289 Explain ‘Cost Center Accounting.’...................................................................................289 What is ‘Activity-Based Costing’?....................................................................................289 What is ‘Product Cost Controlling’ (CO-PC)?..................................................................289 What is ‘Profitability Analysis’ (CO-PA)?.......................................................................290 How is ‘Profit Center Accounting’ (EC-PCA) Different from CO-PA?..........................290 Explain ‘Integration of CO’ with its Components and Other SAP Modules....................291 What is a ‘Cost Object’?....................................................................................................293 Differentiate Between ‘Real’ and ‘Statistical Postings’ in CO.........................................293 How do You Define ‘Number Ranges’ in CO?.................................................................294


How Does ‘Master Data’ Differ from ‘Transaction Data’ in CO?....................................294 Cost Element Accounting.......................................................................................................295

What is a ‘Cost Element’?.................................................................................................295 What is a ‘Primary Cost Element’?...................................................................................295 What is a ‘Secondary Cost Element’?...............................................................................296 What is a ‘Cost Element Category’?.................................................................................296 How do you Automatically Create ‘Cost Elements’?.......................................................296

Cost Center Accounting..........................................................................................................297 Define ‘Cost Center Accounting (CO-OM-CCA).’..........................................................297 What is a ‘Cost Center’?....................................................................................................297 What is a ‘Cost Center Category’?....................................................................................298 What is a ‘Standard Hierarchy?.........................................................................................298 Explain Posting of Costs to ‘Cost Centers.’......................................................................299 What is an ‘Activity Type’?..............................................................................................299 Where do You Assign Activity Type in Cost Centers?.....................................................300 What is a ‘Resource’ in CO?............................................................................................300 What is a ‘Statistical Key Figure’ (SKF)?.........................................................................301 Explain the ‘Planning’ steps in CO-OM-CCA.................................................................301 What is a ‘Plan Version’?..................................................................................................302 What is ‘Integrated Planning’ in CO-OM-CCA?.............................................................302 Explain ‘Plan Layout.’......................................................................................................303 Explain a ‘Plan Profile.’....................................................................................................303 How do You Copy ‘Plan Data’ from one period to another?............................................304 What is the recommended Planning Sequence, in CO?....................................................304 What are the two options for entering Plan Data?.............................................................304 What are ‘Distribution Keys’?...........................................................................................304 Differentiate ‘Activity-Dependent ‘and ‘Activity-Independent’ Costs.............................305 What is a ‘Mixed Cost’?....................................................................................................3060.15.4 331. Explain ‘Automatic Primary Cost Planning.’..................................................307 Explain ‘Manual Secondary Cost Planning.’....................................................................308 Explain ‘Assessment’ in Secondary Cost Planning...........................................................308 What is an ‘Allocation Structure’?....................................................................................309 Explain ‘Segments’ and ‘Cycles.’.....................................................................................309 What is ‘Iterative Processing’ of Cycles?.........................................................................310 What is an ‘Activity Price Calculation’?...........................................................................311 How does the System Calculate the ‘Activity Price’?.......................................................311

1 1 Introduction...................................................................................................317 Finance Function Overview...............................................................................3212 3 General Ledger Business Process...............................................................3263 4 Accounts Receivable Business Process......................................................3314 5 Accounts Payable Business Process...........................................................3355 6 Asset Management Business Process.........................................................3396 7 Reporting......................................................................................................3447 8 Reference to Figures....................................................................................3458 9 Scope for Improvement................................................................................346 TABLE OF CONTENTS.....................................................................................349


1 EXECUTIVE SUMMARY................................................................................354 1.1 Background.......................................................................................................................354 1.2 Business Blueprint Overview...........................................................................................354 1.3 Financial Accounting........................................................................................................356 1.4 Implementation Scope......................................................................................................359 1.5 Module Integration............................................................................................................360

2 ORGANISATION STRUCTURE.....................................................................363 2.1 Organizational Structures..................................................................................................363 2.2 Client.................................................................................................................................363 2.3 Company...........................................................................................................................364 2.4 Credit Control area............................................................................................................364 2.5 Company Code..................................................................................................................364 2.6 Chart of Accounts.............................................................................................................365 2.6 Cost Center........................................................................................................................366 2.7 Profit Center......................................................................................................................367

3 MASTER DATA..............................................................................................368 3.1 General Ledger Master Data.............................................................................................368 3.2 Vendor Master Data..........................................................................................................370 3.3 Customer Master Data......................................................................................................372 3.4 Asset Master Data.............................................................................................................373

4 BUSINESS PROCESSES..............................................................................375 4.1 Basic Settings....................................................................................................................375 4.2 General Ledger Accounting..............................................................................................381 4.3 Accounts Payable..............................................................................................................387 4.4 Bank Accounting..............................................................................................................400 4.5 Accounts Receivable.........................................................................................................404 4.6 Asset Accounting..............................................................................................................408 4.7 Accounting of Taxes.........................................................................................................414 4.8 New GL Accounting.........................................................................................................415

5.0 MODULE INTEGRATION............................................................................419 5.1 Material Purchase accounting & Accounts Payable.........................................................419 5.2 Material Valuation............................................................................................................423 5.4 New GL Accounting.........................................................................................................424

6 STANDARD INFORMATION SYSTEM..........................................................426


1 EXECUTIVE SUMMARY

1.1 Background

Introduction:

VENKAT Global Solutions Limited (henceforth referred to as “1000”) has

started its operations in the year 2000 with a vision to be a globally

preferred business partner for the international players for innovative

outsourcing solutions company. Sooner in 2003 1000 has become a major

player in the insurance and telecom sectors. 1000 wishes to implement SAP

as its front end system for the organizational needs of the resource planning

and recording. 1000 has chosen Consulting as its implementing partner for

the Indian and global operations.

The SAP ECC 6.00 is being implemented taking into the global company

operations with the following application areas Modules

• FICO Financial Accounting and Controlling

• MM Materials Management

• Financial Consolidation at the corporate level

1.2 Business Blueprint Overview

This document summarizes the findings of the consulting team and 1000

team with respect to SAP processes to be implemented in 1000.

Following activities were carried out during different phases of the project.

CSBP-Current State Business Process Mapping

GAP Analysis

Stakeholders Workshop


The information was gathered through above activities carried out during

different phases of projects i.e. reviews of business processes with the

business process owners, business procedures AS-IS at the time of study,

template documentation and relevant reports

The purpose of Business Blueprint document is to prepare to move forward

with the implementation of SAP R/3 system in 1000. At the conclusion of the

blueprint, the consultants will determine the SAP functionality required to

run the 1000 business.

The Blueprint and its associated appendices present a summarized

perspective of all functional business processes that will be implemented. As

such, the Blueprint document will serve – from this point forward the dual

role of both official project scope as well as system acceptance criteria.

The body of this document describes the organizational structure, Master

Data, and R/3 functional process flows to be implemented at 1000.

Generally, requirements that can be met using standard R/3 functionality

through routine configuration tasks are not explicitly documented. However,

certain key requirements are explicitly identified and summarized to

highlight their importance to 1000 and to document the approach proposed

to meet the requirement.

One section of the document summarizes identified gaps between

requirement and the template. The project team has discussed this list with

agreement on the approach going forward. Acceptable approaches may

require:

• Additional programming or technical effort


• Recognition and acceptance of procedural changes ("Workarounds")

using standard R/3 Additional resource commitment

• Simply the recognition and acceptance of a limitation.

The Blueprint reiterates the R/3 organizational structures that have been

identified and will serve as the basis for the initial configuration activities. No

significant configuration and customization choices have been identified that

will prevent the future implementation of additional capabilities within the

R/3 environment.

The information gathered and documented in the Blueprint is sufficient for

the team to go forward into the Realization phase. However, it is critical that

both the and 1000 team agree on the scope of the project as presented in

this document. Acceptance - by both teams - is required to move the project

into the next phase.

1.3 Financial Accounting

1.3.1 Overview of the Financial Accounting setup

Purpose

The Financial Accounting (FI) module components address the requirements

of the financial accounting department of an organization. It provides the

following features:

• Management and representation of accounting data: All business

transactions are recorded with an unbroken audit trail from the

financial statements to the individual documents.


• Open and integrated data flow: Data is available in real time within

Financial Accounting and Controlling area for internal reporting

purposes. Postings made in the sub ledgers always generate a

corresponding posting in the General Ledger.

• All accounting-relevant transactions made in Material Management

(MM) are posted real-time to Financial Accounting (FI) by means of

automatic account determination. This data can also be passed on to

Controlling (CO). This ensures that logistical goods movements (such

as goods receipts and goods issues) are exactly reflected in the value-

based updates in accounting.

FINANCIAL ACCOUNTING (FI):

The Financial Accounting (FI) application component fulfils all the external

reporting requirements that must be met by the organization whether

national or international. The SAP FI application provides the following

features, which shall be used in 1000.

General Ledger:

The central task of G/L accounting is to provide a comprehensive picture for

external accounting and accounts. Recording all business transactions

(primary postings as well as settlements from internal accounting) in the R/3

system that is fully integrated with all the other operational areas of 1000

ensures that the accounting data is always complete and accurate.

Accounts Payable:

The Accounts Payable application component records and manages

accounting data for all vendors with respect to 1000 as a whole. It is also an


integral part of the purchasing system: Deliveries and invoices are managed

according to vendors. The system automatically triggers postings in

response to the operative transactions in MM.

Accounts Receivable:

The Accounts Receivable application component records and manages

accounting data of all customers with respect to 1000. It is also an integral

part of revenue management. All postings in Accounts Receivable are also

recorded directly in the General Ledger. Different G/L accounts are updated

depending on the transactions involved (for example, receivables, down

payments).

Bank Accounting:

This component is used to handle accounting transactions that 1000

processes with its banks. It includes the management of bank master data;

cash management and the creation and processing of incoming and outgoing

payments.

Asset Accounting:

The Asset Accounting component is used for managing and supervising fixed

assets with the SAP R/3 System. In SAP R/3 Financial Accounting, it serves as

a subsidiary ledger to the FI General Ledger, providing detailed information

on transactions involving fixed assets with respect to 1000.

Country Version India

Most of the country-specific functions for India relate to Financials and

Materials Management. The main areas are as follows:

• Service Tax.

• Withholding tax (also known as tax deducted at source)

The above features are required in 1000 with respect to Excise duty,

Withholding tax (TDS in India).


Withholding tax (TDS in India):

Country Version India uses the standard functions for calculating and

collecting withholding taxes. However, Withholding Tax come with additional

functions for tax remittance, journal vouchers, creating withholding tax

certificates, and preparing annual returns which will be useful to 1000.

The SAP System handles these using tax jurisdiction codes. 1000 can make

use of this component to define different CST / VAT required with respect to

the states 1000 is dealing with. For VAT input credit the calculation of ratio is

going to be manual process and it will be a formula based. Based on the

calculated ratio the input credit has to be availed.

Service tax transactions are posted using the Materials Management (MM).

The system calculates the excise duty in these components and creates the

appropriate line items in Financial Accounting (FI).

1.4 Implementation Scope

1.4.1 Geographical Coverage

The following units are within the scope of SAP Implementation at 1000:

Units in SAP Scope Locations 1000, India Bangalore - House Bangalore - Chambers

Bangalore - STPI, Electronic

City Bangalore - Center Mumbai - Incenter, Andheri Mumbai - Infotech Park, Vashi Mumbai - Vashi 2 Chennai - Nungambakkam


Chennai - Guindy Hyderabad - Somajigudda Hyderabad - Kukuttapalli Hyderabad - Ashok Chambers Mysore - Gokulam Durgapur - Moven pick 1000, Manila Quezon City Ortigas 1000, Canada Toronto 1000, USA New Jersey 1000, Mauritius Rose Hill, Mauritius Affina, USA OPM, Peoria Waterloo St. Luis El Paso Affina, Canada Montreal Source 1 VENKAT Inc. New Jersey VENKAT Europe London VENKAT France Paris Pacific Horizon Port Luis, Mauritius Customer Contact Center

Inc. Quezon City C-Cubed NV,

Netherlands Antilles, Netherlands C-Cubed BV,

Netherlands Antilles, Netherlands

1.4.2 Functional Scope

In 1000, following are the implementation scope in SAP FI Module

• General Ledger

• Accounts Receivable

• Accounts Payable

• Banks

• Cash Journal

• Fixed Assets

1.5 Module Integration


In addition to financial application area, following application area integration

is required. Integration in SAP is the pivotal role and involves lot of updating

with other application areas. The basic concept of SAP integration is

document once entered should not be entered twice anywhere in other areas

of application. As FI application area is the important involving monetary

issues whether external or internal, all the documents in other application

areas pertaining to accounting document will be automatically updated in FI

area. The following is a partial list of some of the integrations: -

Materials Management (MM):

All accounting-relevant transactions with respect to the following will be

made automatically in FI.

Goods Receipt (GR) against the Purchase Order.

Finished Goods Receipt.

Valuation of material from time to time.

Invoice verification

Billing:

All accounting-relevant transactions with respect to the following will be

made automatically in FI.

Billing document that will passed as a JV in the financial accounting

with each invoice as a line item for each customer.

Integration within financial accounting (with respect to FI and CO):

Every posting that is made in the sub ledgers generates a corresponding

posting to the assigned G/L accounts. This ensures that the sub ledgers are

always reconciled with the general ledger. Controlling (CO) and Financial


Accounting (FI) are independent components in the SAP system. The data

flow between the two components takes place on a regular basis.

Therefore, all the data relevant to cost flows automatically to Controlling

from Financial Accounting.


2 ORGANISATION STRUCTURE

2.1 Organizational Structures

In the R/3 System the user can use several structures to represent the

organizational structure of the entity from the point of view of Financial

Accounting, Controlling, and Materials Management.

The organizational structures form a framework in which all business

transactions can be processed. An organizational structure consists of

several organizational levels, which are used by different functional groups

within an organization. The organizational levels relevant to Financial

Accounting (FI) are annexed herewith in Annexure1.

2.2 Client

The client is the highest hierarchical level in the SAP R/3 System.

Specifications that you have to make or data that you enter at this level are

valid for all company codes and for all other organizational structures, such

as purchase organization. Consequently, these specifications are to be

entered only once.

Central maintenance ensures standardized data. For example, Customer’s

addresses are stored at client level so that all company codes can access

this central data. Different functional areas also use this data like the

Customer’s address used for sending out an order confirmation as well as for

printing a dunning notice (reminder letter).

Each client is a self-contained unit with separate master records and a

complete set of tables.


A client key is used in all master records, which ensures that they are stored

per client. Each user must specify a client key when he or she logs on to the

system. By doing this, the user specifies the client in which he or she wishes

to work.

All entries are stored per client. Data processing and analysis are carried out

per client. For example, it is not possible to produce a report on customer

Accounts from different clients in one dunning notice run. Access

authorization is assigned per client. A user master record must be created

for each user in the client where he or she wishes to work.

2.3 Company

A Company represents a group of entities (one or more Company codes) in

SAP.

This entity is used for consolidation of accounts of multiple entities

(Company Codes).

All company codes within a company must use the same transaction Chart of

accounts and the same Fiscal Year breakdown.

However, the company code currencies can be different.

2.4 Credit Control area

Credit control area is an organizational unit that represents an area

responsible for granting and monitoring credit.

This organizational unit is either a single company code or, if credit control is

performed across several company codes, multiple company codes. Credit

information can be made available per customer within a credit control area.

2.5 Company Code


A Company Code represents an independent legal accounting entity in SAP.

Balance Sheets and Profit/Loss statements required by law will be created at

the Company Code level. In other words, the organizational unit for which a

complete self contained set of accounts can be drawn up for external

reporting purpose.

The process of external reporting involves recording all relevant transactions

and generating all supporting documents required for financial statements.

The Company Codes pre fixed with a four digit numerical code:

Company Codes of 1000 1000 - 1000, India 1100 - 1000, Manila 1200 - 1000, Canada 1300 - 1000, USA 1400 - 1000, Mauritius 2100 - Affina, USA 2200 - Affina, Canada 2000 - Source 1 VENKAT

Inc. 2300 - VENKAT Europe 2400 - VENKAT France 3000 - Pacific Horizon 3100 - Customer Contact

Center Inc. 3200 - C-Cubed NV,

Netherlands 3300 - C-Cubed BV,

Netherlands

1000, India will use Indian Rupee (INR) as the Company Code Currency.

2.6 Chart of Accounts


A Chart of Accounts is a classification consisting of a group of General Ledger

(G/L) accounts under a Client.

• It provides a framework for the recording of values, in order to

ensure an orderly rendering of accounting data.

• The chart of accounts contains the definitions of all G/L

accounts in an ordered form.

• The definitions consist mainly of the account number, account

name, and the type of G/L account, that is, whether the

account is a P&L type account or a balance sheet type account.

• One or more Chart of Accounts can be created for the same

Client.

• A Chart of Accounts can be used by one or more Company

Codes.

• Chart of Accounts “1000” will be used by 1000 as Operational

Chart of Accounts.

• Chart of Accounts “1000” will be used by 1000 as Group Chart

of Accounts.

2.6 Cost Center

An organizational unit within a controlling area that represents a defined

location of cost incurrence.

The definition can be based on:

• Functional requirements

• Allocation criteria

• Physical location

• Responsibility for costs


The cost center naming will be numerical up to 10 digits and the hierarchy

names as 1000STDHRCY

2.7 Profit Center

An organizational unit in Controlling / Accounting that reflects a

management-oriented structure of the organization for the purpose of

internal control.

Profit center will represent the organizational entity that will be used to

report P&L and other performance reports for a responsibility center.

Operating results for a profit center can be analyzed using either the cost of

sales approach or the period accounting approach.

The Profit center naming will be numerical up to 10 digits with the standard

named as 1000PCHRCY


3 MASTER DATA

3.1 General Ledger Master Data

Transactions will be processed in the FI module using G/L accounts grouped

under Chart of Accounts.

1000 will use “1000” as Operational Chart of Accounts, to post the

daily transactions.

1000 will use “1000” as Group Chart of Accounts, to do Group

consolidation.

There are two segments in the General Ledger Master record:

• Chart of Accounts Segment

• Company Code segment

• Chart of Accounts Segment In this segment, specifications that

apply to the entire G/L account master record are captured. These

include:

♦ The G/L account number and G/L account name

♦ Whether the account is a balance sheet account or an income

statement account

♦ Data that controls the creation of a master record in a

company code, such as the account group.

• Company Code Segment In this segment, the information which is

specific to a particular Company, is maintained in the Company code

segment of the General Ledger Master record.


This data controls how one enters and processes business transaction

data in the appropriate account as well as how the account is managed

within a company code. The following are some of the specifications

which will be made for each G/L account:

♦ Alternative Account Number

♦ Currency: account currency

♦ Reconciliation Account for Account Type - to specify the

control accounts for the sub ledgers

♦ Open Item Management - will be maintained for accounts that

required open item management.

e.g.: Bank sub-accounts, GR/IR Clearing account, etc., are

maintained in Open Item Management.

♦ Line Item Display - will be retained for accounts for which line

items are to be stored separately. Ex: Bank main accounts, all

expense accounts, all balance sheet accounts, excepting

accounts which are of the nature of reconciliation accounts.

The Operational COA & Group COA is still to be mapped with Legacy.

The following points have to be considered with respect to G/L accounts:

• Master records for each Operational and Group G/L account

will be created and maintained by the Template Owners. The

Alternative GL account has to be created & maintained locally

• The master record contains information and controlling

parameters which control the entry and processing of business

transactions in that G/L account


• G/L accounts will also be used for posting transactions from

other modules of SAP

3.2 Vendor Master Data

• The vendor master contains the data of all vendors with which a

company conducts business. The Vendor master record contains the

information necessary for any contact with a certain vendor, in

particular for conducting business transactions.

• The Vendor Master record is created and maintained by both the FI and

MM modules. The Information maintained in a record consists of

General data, Company code data and Purchase organization data.

• The Material Suppliers, Freight service renders and Employees are

considered as Vendors.

• Even the statutory organizations like Customs Commissioner are going

to be created as vendors. The Plants which are all created for Stock

movement will also be created as vendors.

The Account groups: The account group (Vendor account group)

determines:

♦ The data that is relevant for the master record

♦ A number range from which numbers are selected for the

master records

Several vendor groups will be designed and used based on the domestic

group/Import group/local group and based on other criteria.

Vendor Reconciliation Account


Vendor Reconciliation account is the G/L account for a group of vendors in FI-

AP module. The number of Vendor Reconciliation accounts will depend on

the grouping of the vendor in FI.

When you post items to a subsidiary ledger, the system automatically posts

the same data to the general ledger. These reconciliation accounts ensure

that the difference balance of G/L accounts and subsidiary ledger is always

zero. This means that you can draw up balance sheets at any time without

having to transfer totals from the sub ledgers to the general ledger.

You have to specify a reconciliation account in every vendor master record

The Following are the reconciliation accounts used in 1000 SAP

implementation,

Vendor Recon Accounts Description

SUNDRY CREDITORS (SUPPLIERS & CONTRACTORS)

SUNDRY CREDITORS - CAPITAL

SUNDRY CREDITORS - PROJECT

SUNDRY CREDITORS - ADVT. & PUBLICITY

SUNDRY CREDITORS - EMPLOYEE BALANCES

SUNDRY CREDITORS - SERVICE COMMISSION PAYABLE A/C

With Holding Tax Codes (TDS).

TDS tax codes will be assigned to the individual vendors, wherever

applicable, for processing invoices/payment and relevant tax deductions.

Multiple Tax details can also be assigned to a Vendor. Relevant tax code will

be selected at the time of posting of the individual line item.

The TDS tax codes are given in detail in the Business process.

Vendor Payment terms


Payment terms will be defined in SAP and assigned to individual Vendors.

These payment terms will be defined by the process owners and finalized.

3.3 Customer Master Data

All business transactions are posted to and managed by means of accounts.

You have to create a master record for each customer account that you

need. The master record contains data that controls how business

transactions are entered in the account and how posting data is processed.

In the master record, you can also store all the data that you need for

conducting business with the customer.

Customer master records are used by both the financial accounting

department (accounts receivable processing) in 1000.

For Ex:- ZCPD One-time customer Internal

Customer Reconciliation Account

Customer Reconciliation account is the G/L account for a group of customers

in FI-AR module.

The number of Customer Reconciliation accounts will depend on the

grouping of the customers in FI.

The following are the reconciliation accounts to be used by 1000 - SAP

implementation.

Customer Recon Account Description

SUNDRY DEBTORS - DOMESTIC

SUNDRY DEBTORS - EXPORTS

SUNDRY DEBTORS - AFFILIATED


INCENTIVES PAYABLE IN KIND

ADVANCE FROM CUSTOMERS

RETENTION MONEY-DEBTORS

3.4 Asset Master Data

In order to make it easier for the user to create, maintain and evaluate

master data, varied individual information is structured according to its area

of use and the relevant functions in the system.

The asset master record consists of two main parts: General Master Data

& Data for Calculating Asset Values

a) General Master Data

This part of the master record contains concrete information about the fixed

asset.

The following field groups exist:

General information (description, quantity, etc)

Posting information (for example, capitalization date)

Time-dependent assignments (for example, cost center)

Information on the origins of the asset

Physical inventory data

Insurance data

b) Data for Calculating Asset Values

You can specify depreciation terms in the asset master record for each

depreciation area in the chart of depreciation. In order to make these

specifications, the master record contains an overview of the depreciation

areas. In addition, there is a detailed display available for each depreciation


area. If the depreciation areas that are not needed for a specific asset, it is

possible to deactivate these depreciation areas at the asset level.

Fixed assets can be structured or classified in the Asset Accounting

component using asset classes. The items in the balance sheet are generally

used to define these asset classes. Asset classes are defined for all clients

and contain key control parameters, such as number assignment, account

determination, and screen layout. The following asset classes are defined in

the system:

The following are the asset classes identified for 1000 Implementation,

Asset Classes:

Land Land lease hold

Buildings – Corporate P&M equipment

Buildings- Factory Vehicles- cars & Motor cycles

Buildings-Non factory & Roads Furniture & Fittings

P&M E.D.P. (Computers) Office equipment

Electrical Machinery Asset under construction


4 BUSINESS PROCESSES

4.1 Basic Settings

The purpose of this chapter is to document the global configuration settings

in Financial Accounting for the 1000 - SAP implementation. These settings

control the transaction entry and the dependant controls in SAP across all

the modules.

Parameter Settings: Posting of transactions in SAP require the following

settings

• Currency

• Fiscal Year in which the transaction is to be posted

• Fiscal year variant for determining the posting periods

• Document Types

• Document Numbering

• Document Posting Keys (debit/credit)

• Posting Period Variant to determine the open and close

periods

• Sales and Purchase Tax, Excise duty

• Tax Deducted at Source (Extended Withholding Tax)

4.1.1 Currency

For each company code a currency must be specified. Accounts are

managed in the company code currency. All other currencies are indicated

as foreign. The system converts the amounts posted in a foreign currency

into this currency. The currency defined in the company code is known as

the local currency within SAP.


• 1000 - SAP implementation will use Indian Rupee (INR) as their

Company Code Currency.

4.1.2 Fiscal Year and Fiscal Year Variant

To separate business transactions into different periods, a fiscal year with

posting periods has to be defined.

• The fiscal year is defined as a variant which is assigned to the

company code.

• Standard fiscal year variants are already defined in the SAP System

and can be used as templates.

• The fiscal year variant contains the definition of posting periods and

special periods. Special periods are used for postings which are not

assigned to time periods, but to the process of year-end closing.

• A fiscal year will consist of maximum of 12 posting periods and

maximum 4 special periods.

1000-1000, India has the fiscal year from April to March; therefore

variant – H3 will be used.

For Tax Accounting and for marinating books of accounts as per Indian

Accounting Practice, we need to use parallel ledger accounting using the

New GL Concept.

4.1.3 Document Types


The document type controls the document header and is used to

differentiate the business transactions to be posted, e.g. customer invoice,

vendor payments, etc.

• Document types are required in SAP to create and post financial

documents (e.g. Bank Payment Voucher, Receipt Voucher etc.).

• Document types are defined at the client level and are therefore valid

for all company codes.

• The standard system is delivered with document types which can be

used, changed, or copied.

Convergence system has defined the Document Types, which will be

adopted for 1000 – SAP implementation.

Document Number Range:

The document number range defines the allowable range in which a

document number must be positioned and cannot overlap.

• The document number range has to be defined for the year in which it

is used.

• The system stores the last used document number from the number

range in the field “current number” and takes the subsequent number

for the next document

Standard SAP allows a single Document Number range for each document

type only at the company code level.

4.1.4 Posting Key

Posting Key controls Debit or Credit account indicator for each line item.


• The posting key also describes the type of transaction that is entered

in a line item and allowable account type, which will be entered for the

respective line item.

• SAP provides certain predefined posting keys. These predefined

posting keys will be used wherever applicable. For every posting key,

properties control the entry of the line item.

• For each Posting Key, a reversal-posting key may be defined. The

reversal-posting key is used to reverse a document posted in financial

accounting.

Standard Account Types in SAP are as follows:

• S - General Ledger

• A - Assets

• K - Vendors

• D - Customers

• M - Materials

4.1.5 Account Groups

Since a chart of accounts contains many different types of accounts, they

can be bundled into different “account groups”.

Account group is a logical grouping of accounts, which have got similar

properties and the same tasks within the General Ledger


• The Account code of an account depends upon the number

range that is assigned to that Account group.

• The account group has to be entered in the chart of accounts-

segment and controls the appearance of the company code

segment of a G/L account.

We will be using the Account groups prescribed by the Convergence system.

4.1.6 Field Status Group

The field status group is a logical grouping of various field status

combinations. The field status influences the appearance and creation of an

account's master data.

Sl.No. Field Status Function

1 Suppressed No Display

2 Display Can be viewed, but not changed

s(even in change mode)

3 Required Entry is mandatory

4 Optional Entry can be made if required

For 1000 - 1000, Field status variant – 1000 will be assigned to

Company code

4.1.7 Extended Withholding Tax (TDS)

As SAP standard system allow defining two different tax types in withholding

tax namely one for invoice posting and one for payment posting, the

customer requirement can be achieved with SAP standard functionality.


The tax collected will be deposited in a separate GL accounts and can be

made automatic assignment, so at the time of posting automatically tax

account will be updated.

All the withholding settings can be done by using Country India version so

that the requisite forms will be automatically updated and available for

printing.

In the 1000 implementation the following Section of Income tax will be

covered in Extended Withholding Tax of SAP:

Section Description

194A Interest paid, other than Interest on securities

194C Payment to contractors

194I Rent

194J Prof/Technical services

195 Payment to foreign nationals

194H Brokerage & commission

192 Salary to a resident / non-resident

206C Tax Collected at Source


4.2 General Ledger Accounting

General ledger is a comprehensive financial management solution that

dramatically enhances financials controls, data collection, information access

and financial reporting through the organization. General ledger is the

central repository of all the accounting information of the organization. Most

of the transactions will be handled in respective sub-ledgers and

subsequently consolidated and posted to General Ledger. However the

module shall provide specific functions of passing journal entries (Manual,

Provisional, Recurring and Reversal Journals) and posting them, which will be

purely rectification and provisional in nature.

4.2.1 Purpose

The central task of G/L accounting is to provide a comprehensive picture for

external accounting and accounts. Recording all business transactions

(primary postings as well as settlements from internal accounting) in a

software system that is fully integrated with all the other operational areas of

a company ensures that the accounting data is always complete and

accurate.

4.2.2 Features to 1000

The SAP FI General Ledger has the following features:

• Automatic and simultaneous posting of all sub-ledger items in

the appropriate general ledger accounts (reconciliation

accounts)


• Simultaneous updating of general ledger and cost accounting

areas

• Real-time evaluation of and reporting on current accounting

data, in the form of account displays, financial statements

with different financial statement versions and additional

analyses.

Essentially, the general ledger serves as a complete record of all business

transactions of. Actual individual transactions can be checked at any time in

real-time processing by displaying the original documents, line items, and

transaction figures at various levels such as:

• Account information

• Journals

• Totals / transaction figures

• Balance sheet / profit and loss evaluations

• Parked documents

An incomplete document may be parked and then posted at a later date; this

may be done by the same or a different user.

Generally the documents are parked when the user is waiting for an approval

from his superior. Subsequently the user can book the same as a G/L

document.

One advantage of parking is that you can evaluate the data in documents

online for reporting purposes from the moment they are parked, rather than

having to wait until they have been completed and posted.


• A list of parked documents can be generated in the SAP for the

benefit of the supervisor/manager. The document can then be

checked and corrected by the user.

• This document can then be posted in the General ledger.

Parked documents can be modified or deleted before post.

The Information of the sub-ledger cannot be captured from the expenditure

GL account. This analysis cannot be done on a list basis, but to identify in a

particular transaction which is the sub-ledger account got affected. It can be

tracked through the document overview option.

4.2.2.1 GR / IR Clearing account:

A) Goods Receipt / Invoice Receipt account treatment (GR / IR)

Since the GR/IR account needs to be split and differentiated by purchases of

stock, services and investments the following strategy will be used in order

to fulfill this requirement:

Valuation class will be used in order to allocate a specific GR/IR account for

purchases of stock.

The rest of the purchases (services, investments, etc) will use a different

GR/IR Clearing account by not fulfilling the field with any valuation class.

In order to split the investment from the other transactions, FI substitutions

will be used. As a first approach, the idea is to recognize the investment

transactions by the assignment of the WBS elements within the goods

receipt. Further investigations, within the realization phase, will be done in

order to finish describing this process.

This account will also be set up with the purchase order sort key for

matching purposes and within its master records, it will be set up as

automatic posting only.


4.2.2.2 Recurring Entries

For postings that recur on a regular basis, such as payments for rent, legal

fees, and property taxes, the recurring entry program can be used to have

the necessary documents generated automatically.

The recurring business transactions must be stored in the system

as recurring entry original documents.

Each recurring entry original document contains the date of the

first and last posting, the frequency at which posting should

be made, and the date of the next planned posting.

The recurring entry program must be started at regular intervals

within a specified period. The program selects all recurring

entry original documents in which the date of the next posting

falls within the specified period, and then generates a batch

input session.

When the session is processed, an FI document that corresponds

to the original document is posted, and the date of the next

posting is changed accordingly in the recurring entry original

document.

1000 will use this option for booking expenses for Monthly

rentals.

4.2.2.4 Document Reversals

It is possible for a user to make an input error. As a result, the document

created will contain incorrect information. In order to provide an audit of the

correction, the user must first reverse the document in error, and then

capture the document correctly.


• The system provides a function to reverse G/L, A/R and A/P

documents both individually or in mass.

• When reversing a document, a reversal reason code must be

entered to explain the reversal. The reason code also controls

if the reversal date is allowed to be different from the original

posting date.

• Documents with cleared items cannot be reversed. The

document must first be reset.

• Any open document can be reversed, except the cross module

documents like Sale Invoice, Vendor Invoice posted with

reference to Purchase order.

• We can reset and reverse the documents those got cleared.

• However, it needs to be noted that reversal of any document

will effect the allocation cycles in case if these processes are

completed. It will be required to re-run all these cycles once

again after reversing the document.

4.2.2.5 Closing Procedures

The closing operations are to be performed on a monthly or quarterly or

yearly basis which will be discussed in detail in the Operational Manual.

Some of the Closing Procedures are explained below:

• Foreign Currency Valuation for Open Items

• Accruals and Reversal of provisions

• Closing & opening of posting periods

• Balance carried forward

• GR/R regrouping

4.2.2.6.1 Foreign Currency Valuation for Open Items


This process performs the revaluation of all foreign currency open items,

primarily in customer and vendor accounts, using the month end rate.

This process (program SAPF100) carries out foreign currency valuation for

accounts managed on an open item basis. Valuation takes place according to

the single valuation principle. This means that individual open item on the

key date only are taken into consideration for the valuation.

SAP selects open items for customers, vendors, and G/L accounts posted in

foreign currencies.

Based on the exchange rate on the key date, exchange rate difference is

calculated automatically and valuation document is posted.

The balance of the foreign currency balance sheet accounts, i.e., the balance

of the G/L account managed in a foreign currency forms the basis of the

valuation. The exchange rate profit or loss from the valuation is posted to a

separate expense or revenue account for exchange rate differences.

4.2.2.6.2 Closing of Open Periods (Monthly and Yearly)

1000 can open and close these posting periods using the posting period

variant 1000.

Usually, only the current posting period is open for posting, all other posting

periods are\ closed.

At the end of this posting period, the period is closed, and the next posting

period is opened.

Special periods can be open for closing postings during the period-end

closing.

4.2.2.6.3 Closing the Fiscal year for asset accounting

The program blocks the current fiscal year to further posting to assets.

4.2.2.6.4 Balance Carried Forward


Account balances are carried forwarded from one fiscal year to the next

fiscal year by using the standard SAP carry forward program after the

accounts are finalized.

The balance sheet accounts are carried forward onto themselves. The

income statement accounts are carried forward into retained earnings

accounts.

4.3 Accounts Payable

Accounts payable module streamlines the procure-to-pay process while

providing financial controls and information. It supports booking of invoices,

matching of invoices against purchase orders and approval of invoices. It

facilitates recording of debit memos as well as payments. It helps monitor

supplier invoices and creates supplier balance overviews.

The employee related functionality, which covers employee advances,

recoveries and reimbursements, is included within the Accounts Payable

module.

4.3.1 Purpose

The Accounts Payable application component records and administers

accounting data for all vendors. It is also an integral part of the purchasing

system: Deliveries and invoices are managed according to vendors. The

system automatically makes postings in response to the operative

transactions. In the same way, the system supplies the Cash Management

application component with figures from invoices in order to optimize

liquidity planning.

4.3.2 Master Data

Vendor Master Data


4.3.3 Features to 1000 - SAP Implementation.

In 1000 business:

Payables are paid with the automatic and manual payment

program.

Dunning notices can be created for outstanding payable.

Postings made in Accounts Payable are simultaneously recorded

in the General Ledger where different G/L accounts are

updated based on the transaction involved (For e.g.: Payables

and down payments)

Balance confirmations, account statements, and other forms of

reports to suit your requirements in business correspondence

with vendors.

4.3.4 Business Process

4.3.4.1 Vendor Down payment

Advance payments will be made according to the terms of payments with

the vendor.

The advance payments made to the vendor will be tracked as distinct from

the normal payments made to the vendor. The posting for down payments

will be carried out to a G/L account other than the standard General Ledger

account for the vendor called as special G/L account.

The following types of Advances to vendors will be tracked separately using

special GL indicator.

Vendor Recon Accounts Description

PAYABLES - RECOVERIES FROM EMPLYOEES

SECURITY DEPOSIT FROM STOCKISTS / CONSINGNMENT AGE

SECURITY DEPOSIT FROM SUPPLIERS

ADVANCE TO STAFF - LTA


ADVANCE TO STAFF - T.A

ADVANCE TO STAFF - MEDICLAIM

ADVANCE TO STAFF - HOUSE RENT ADVANCE

ADVANCE TO STAFF - OTHERS

ADVANCE TO STAFF - IMPREST

ADVANCE TO STAFF - HOUSING LOAN

ADVANCE TO STAFF - FURNITURE LOAN

ADVANCE TO STAFF - VEHICLES LOAN

ADVANCE TO STAFF - MARRIAGE LOAN

ADVANCE TO STAFF - EDUCATION LOAN

Down payment request and Payment of Advance

A Down Payment request is raised by the authorized person requesting for

payment. Based on the request, a down payment may be released to the

particular vendor and request item is cleared. Down payment request is a

noted item in special General Ledger account which will not be displayed in

the Balance Sheet.

The accounting entry for making the down payment will be:

Vendor account (Spl. G/L: Down Payment) Dr

Bank –Check Outward A/c Cr

4.3.4.2 Vendor Invoice verification.

Vendor invoices will be processed based on the invoices received from the

vendors. In invoice verification, vendor invoices are compared with the

purchase order and the goods receipt, and are checked for the price and

quantity


• When an invoice is entered with reference to a purchase order,

the system suggests data from the purchase order and the

goods receipts for the purchase order (for example, vendor,

material, quantity still to be invoiced, terms of payment, and

so on).

• The posting of the invoice completes the invoice verification

process. The system updates the purchase order history and

Financial Accounting initiates payment for the open invoice

items. Invoice Verification creates a link between Materials

Management and accounting document.

Vendor Invoice Processing is discussed under the following heads:

• Domestic Purchases (Raw Material, Packing Material,

Consumables and Finished goods)

• C&F Expenditure reimbursements

• Imports

• Service Vendor Invoices

• Service Commission Agent bills

Invoice Verification of Domestic Purchases

Invoice verification will be performed by referring the PO with the vendor

invoice. On posting the document with the Vendor Invoice value, the

following entry is automatically generated.

GR/IR Clearing account Dr

Cenvat Clearing Account Dr

Vendor account Cr


Invoice Verification of Freight Vendor

On receipt of the invoice from the freight vendor, invoice verification will be

done by referring the PO with the vendor invoice and the following entry is

automatically generated.

Freight clearing account Dr

Service Tax Clearing Account Dr

Freight Vendor account Cr

Freight Vendor will be assigned in the PO as a condition record, if the vendor

is different from the material vendor.

If freight charges are not part of PO, and then freight charges are booked by

the finance department using the FB60 transaction.

Invoice Verification for Imported Goods

• Vendor Invoice verification in respect of imported goods is discussed as

under:

♦ Invoice verification for Foreign vendor

♦ Invoice verification for Custom vendor

♦ Invoice verification for Freight / Clearing agent

Based on the Purchase order and the quantity as per the vendor delivery

note, a Goods Receipts (GR) will be raised in MM module. The following

accounting entry gets automatically passed in the Financial Accounts.

Invoice Verification for Foreign Vendor


On receipt of the vendor, Invoice verification will be done and the following

entry gets passed:

GR/IR Account Dr

Cenvat Clearing a/c Cr

Vendor Account Cr

Whenever the import vendor invoice is getting entered, the order currency

has to be entered first before the goods receipt of imported item. The Invoice

verification for customs duty has to be completed.

Invoice Verification for Custom vendor

Customs Clearing Account Dr


Vendor A/c (Customs Authority) Cr

Invoice Verification for Freight / Clearing Agent

Freight Clearing Account Dr

Vendor A/c (Freight / Clearing Agent) Cr

Invoice Verification for Clearing and Forwarding Agent -

Reimbursement

Dr. Warehouse handling Exp

Dr. Standardization Exp

Dr. C&F Service Charges

Dr. Secondary freight from Rail head to Godown Exp

Dr. Secondary freight from godown/railhead to customer exp

Dr. Service Tax input credit a/c (for service Tax claims)

Cr. Tax deducted at source - contractors a/c


Cr. Sundry Creditor a/c

Processing Of Service Vendors Invoice

Vendor Invoices for Services will be processed at the respective locations

using service entry sheet in MM module. TDS will be calculated and

deducted.

The following entry will be passed on preparation of service entry sheet:

Expenses Account Dr

GR/IR Account Cr

Processing Of Service Vendors Invoice

In this scenario, whatever commission got accrued by the sale’s invoice, will

be credited. Service Dealer is entitled to a Service Commission for the sale

canvassed for Non Trade customers.

Commission is fixed on Quantity basis. i.e. Commission @ Rs. xx / pmt.

The Accrual A/c Dr

The With holding tax payable Dr

To Service commission agent A/c Cr

The following entry is passed, during Invoice Verification

GR/IR Account Dr

Vendor Account Cr

TDS Account Cr

Whenever there is price change, after the Invoice verification has been

completed for the PO,


GR/IR clearing accounts Dr

Inventory account Dr (With Price Difference)

To Vendor acct Cr

To Stock variation acct (6111X) Cr

When the goods have been consumed, the entry will be similar, but the price

difference will not go to the inventory, instead it goes to the stock variation

account.

4.3.4.3 Clearing of Vendor invoice and advance.

The concept of authorizing the document entry can be achieved by the

standard SAP functionality creating and authorizing the payment request.

Payment request will be created by one person and authorized by another

person to keep the control. It is also possible to post invoices from FI (FB60)

without the necessity of purchase order. That can be used to fulfill the

requirement of postings like miscellaneous payments, employee related

payments, travel agent payments, hotel bills, school subsidy and consultancy

payments. We can also maintain the templates with the help of sample

document function (f-01).

The various taxes, which must be calculated, based on vendor transactions

are Excise duty, sales tax, entry tax, customs and TCS, and at the time of

vendor payment TDS and ST TDS will be calculated. Defining the different

tax types and codes will be done using COUNTRY INDIA VERSION and

different tax types and tax codes will be attached with the vendor master

record.

An information message will be flashed at the time of invoice booking that a

down payment exists for the particular vendor.


Settlement of down payments to the vendor account and clearing of Invoice

against Down Payment

Vendor A/c Dr

Vendor account (Spl. G/L: Down Payment) Cr

Wherever, TDS is applicable, the TDS will be deducted at the time of down-

payment to the vendor and will be adjusted at the time of settlement of

advances. Using transaction code F-51.

4.3.4.4 Tax Deducted at Source (TDS) (Other than salaries)

TDS procedures will be implemented using withholding tax functionality of

standard SAP including CIN. The aspects related to TDS are discussed under

the following heads:

• Location for TDS Processing

TDS processing, accounting will takes place in the respective regions and

Payments will be done at corporate office.

• Information required to Process TDS Calculation

Vendor account will be assigned with one TDS code, if applicable. This TDS

code will be the default TDS code for all the transactions with the vendor. A

user can however, change the TDS code during the transaction entry. This is

provided to ensure correct deduction of tax in cases where more than one

TDS rate is applicable to the same vendor due to different nature of

transactions.

• Time of Tax deduction

As per Income Tax Act, TDS is required to be deducted on accrual of

expenses or payment whichever is earlier. Accordingly, TDS has to be

deducted at the time of bill passing. In respect of Advances given to vendors,


TDS will be deducted while making payment. TDS will be deducted on a

transaction-to-transaction basis.

TDS will be deducted on all the transactions with a vendor once a TDS code

is defined in master record of such vendor.

Each of these TDS codes will be defined separately for deduction at the time

of booking the expenses or at the time of payment.

• Printing of TDS Certificates

TDS Certificates can be printed vendor wise at Corporate Office or location.

Once TDS certificate has been generated at corporate or location, system

will not allow to print TDS certificate, only duplicate copy can be printed.

System will provide for generation of Annual Return on a yearly basis.

• Printing of Annual Return.

Classifying the Vendors for calculating with holding tax, whether Individual,

Company, Partnership firm, etc 01 & 02. Standard SAP has only two

classifications, Individual & Company. There is no separate classification as

Partnership firm.

4.3.4.5 Advances/Loans To Employees And Travel Expenses

Generally the Advances to Employees are tracked separately using the

Accounts Payable sub ledger. For this purpose employee will be created as a

vendor. The employee advances will be tracked separately with Special G/L

Indicators:

All the employee payments can be captured by using special GL accounts

and special GL indicators for each type of employee advances like travel


advance, medical advance etc., and all employees will be created as Vendors

accounts.

The Following are the Loans and advances provided to the employees -

1000_FSBP_13_01 & 1000_FSBP_14_01.

ADVANCE TO STAFF – LTA

ADVANCE TO STAFF - T.A

ADVANCE TO STAFF – MEDICLAIM

ADVANCE TO STAFF - HOUSE RENT ADVANCE

ADVANCE TO STAFF – OTHERS

ADVANCE TO STAFF – IMPREST

ADVANCE TO STAFF - HOUSING LOAN

ADVANCE TO STAFF - FURNITURE LOAN

ADVANCE TO STAFF - VEHICLES LOAN

ADVANCE TO STAFF - MARRIAGE LOAN

ADVANCE TO STAFF - EDUCATION LOAN

4.3.4.5.1 Employee Travel and Advances

The travel plan of the employee has to be confirmed by the head of the

department.

Then only he will be eligible to avail advances for the travel. Once the travel

has been completed the employee has to submit the travel bills. The travel

bills will be adjusted towards the advances, after duly booking the

expenditure.

If there is any balance in the travel bill either the debit or credit. It will be

debited or credited to the employee. The Debits are recovered through their

salary. The recovery has to take place through the external payroll system.

And no salary related posting is allowed. The Entry has to be passed

separately to recover the amount from the employee.


4.3.4.5.2 Salary Accounting

The Accounting and processing of salaries are classified in two,

Salary to management Staff

Salary to regular employees

The process of salary to management staff & regular employees is by

personnel department (external to the SAP). The detail of the salary of

individual is provided by the pay roll department of 1000. The details for

accounting the same are provided by the personnel department.

At the end of the month the salary is uploaded through a Batch data

program.

.

4.3.4.5.4 Employee Welfare Accounting

1000 maintains staff clubs. The Employee will contribute some amount from

their salary and company will contribute 2.5 times of the employee

contribution to these welfare clubs. As explained in 4.3.4.5.1 Employee travel

advances, it has to be passed separately.

Every month these expenditures are deducted in proportion, from the

employee salary.

Following are the expenditures, recovered from the employee salary every

month,

- Canteen expenditure


- Electricity charges for house.

When it exceeds the limits as per HR policies.

4.3.4.6 Vendor Payment

By using the SAP standard functionality all the cheque payments can be

managed. The typical procedure under SAP with respect to cheque will be

a) Defining the cheque lots for each and every house bank of 1000

(assuming 1000 will have house bank number)

b) Entering the vendor invoice

c) Entering the vendor payment by clearing the open item created by

invoice.

d) Attach cheque to the payment document number generated in step (c)

e) Check the cheque register to see the cheque updating.

R/3 Business Blueprint for ACE

Vendor Payments can be manual or automatic. The general aspects related

to vendor payment are Terms of Payment, Method / Media of Payment,

manual payment & Automatic Payment.

4.3.4.6.1 Method/ Mode of Payment

The payment methods used in 1000 - SAP implementation are as follows:

C = Cheque

E = ECS

T = Bank Transfer

A = Cash

D = Demand Draft / Pay Order. (Needs to be created for 1000 -

SAP).

4.3.4.6.2 Automatic Payments


Automatic payments are configured to make vendor payments based on

payment terms. The due date wise / vendor invoice wise payment proposal

will be generated and this proposal can be edited to make the selective

payments.

After the payment list has been finalized, the payment run will be executed

and accounting entry will be posted automatically. Payment Advice and

cheque will be printed through system.

4.3.4.6.3 Manual Payments

Manual Payments are those payments, where the user selects vendor and

invoices to be paid. This selection can be used for cheque printing or other

methods of payment (like Instruction to bank). Usually this procedure is

preferred where the number of selection/payments is less.

4.4 Bank Accounting

4.4.1 Maintenance of Bank Master

A House Bank is a combination of a Bank and a Branch. Account id is the

account number. A house bank can have multiple account IDs. Each house

bank and account ID combination will have one main General Ledger

account. Bank Account

Master Data will be maintained by the Finance Department centrally.

In 1000 - SAP Implementation, for Automatic Reconciliation purpose, the

following intermediate G/L accounts are created for each house bank and

account ID combination,

House Bank: 00

Cheques Out: 02

Transfers Out:03

Direct Debit Out : 04


Financial Operation : 06

Financial Cost : 07

Foreign Currency Variance : 08

Unpaid : 09

Cheques In : 10

Transfers In

Entries are initially posted to the bank sub-account. From sub-account the

entries are automatically posted to the main account based on matching of

the entries with the bank statement.

The Following are the house banks ,

UTI Bank (AXIS Bank)

HDFC

Canara Bank

IndusInd Bank

HSBC Bank

LaSalle Bank

China Trust Bank

Union Bank of Philippines

4.4.3 Manual Bank Reconciliation

Where ever 1000 not able to receive the soft copy of bank statements, they

can use the Manual bank reconciliation statement. Using transaction code

FF67, we can post the reconciliation entries.


4.4.4 Cheque Management/ Cheque Printing cum Advice

The function of cheque management will enable printing of cheque through

SAP. Cheque series will be defined for a combination of a Company code and

Bank Account. Cheque numbering will be sequential order.

Cheque series for automatic payment has to be in sequential order. Cheque

printing facility will be available for the bank account.

4.4.4.1 Clearing of Cheques Printed

It is also a way of reconciling the bank transactions. When ever the Cheque

is issued automatically from the system, it can be cleared from the Cheque

issued account (As part of reconciliation) to the bank main ledger account.

The user has to feed in the information manually about the clearing date of

the Cheque. So that system will pass the below entry

Cheque Issued A/c Dr

To Bank Main Ledger account.

4.4.5 Cash Journals (Cash Transactions )

By setting the cash balance at the beginning of the day, the cash journal

shows the cash balance at any time by adding the cash receipts and

deducting the cash payment. The cash journal also serves as a basis for

entries in the general ledger and thereby represents the "Cash" G/L account.

The cash journal is a single-screen transaction. This means that you can

enter, display, and change cash journal documents on one screen.

You have the following options:

• Entering, saving, and posting cash journal entries

You can save cash journal entries locally in the cash journal. The system also

calculates the balances. The cash journal entries saved then posted to the

general ledger.


For a cash journal document, you can carry out CO account assignments,

and have taxes, including withholding taxes, calculated by the system with

reference to business transactions, taking account of tax jurisdiction codes,

for example.

Displaying follow-on documents

You can also display the follow-on documents arising for the cash journal

entries posted.

Defining cash journal business transactions

As well as defining cash journal business transactions in Customizing, you

can also, if necessary, define a new business transaction while you are

making entries in the cash journal.

Printing the cash journal

You can print the entire cash journal entries posted in the time period

displayed. You select the print form in Customizing.

Printing receipts

You can print the cash journal entries saved. You select the print form in

Customizing.

Deleting cash journal entries saved

If you have the appropriate authorization, you can delete cash journal entries

that have been saved.

Displaying all cash journal documents that have been deleted

You can display all the cash journal documents that have been deleted within

a specific time period.

Changing the cash journal

You can change the cash journal and the company code while you are

processing entries.

As per 1000 requirement, following are the Cash Journal.


1) Corporate Office

2) RMO- Bangalore

3) RMO-Chennai

4) RMO-Hyderabad

5) RMO-Cochin

As per 1000 requirement, following are the Cash Journal.

1). Corporate Office: Cash Transactions will mainly represent transactions

relating to Reimbursement of Staff Welfare Expenses, Petrol, Conveyance,

Medical Expenses, Travel Advances, Postage and Reimbursement of

Residential Telephone Expenses.

Cash Transactions will be recorded based on an authorized payment

document received by the Cashier. Separate Document Type will be used for

recording the Cash Transactions.

4.5 Accounts Receivable

The accounts receivable module handles processing of sales invoices and

credit memos. It helps monitor, sales invoices, track receivables and create

statement of accounts for each customer. It includes aging analysis, the

ability to create reminder letters and statements of account, which tell

customers about their open invoices.

4.5.1 Purpose


The Accounts Receivable application component records and administers

accounting data of all customers. It is also an integral part of sales

management.

All postings in Accounts Receivable are also recorded directly in the General

Ledger.

Different G/L accounts are updated depending on the transaction involved

(for example, receivables, down payments, and bills of exchange).

The system contains a range of tools that you can use to monitor open

items, such as account analyses, due date lists, and a flexible dunning

program.

The correspondence of payment notices, balance confirmations, account

statements, and interest calculations.

4.5.2 Master Data

Customer Master Data

4.5.3 Features to 1000 - SAP Implementation

• Serves as a complete record of business transactions with Customers.

• Accounting of Receipts Manually and also automatic clearing of

payments.

• When drawing up financial statements, the items in foreign currency

are revalued.

• The credit memo can be entered in any of the currency, for which the

exchange rates are available. The credit memo details are stored in

the entered currency but the ledgers are posted in the local currency.


• Simultaneous posting to appropriate general ledger accounts

(reconciliation accounts).Dunning, Balance confirmation etc

• Range of tools that you can use to monitor open items, such as

account analyses, due date lists


4.5.4.1 Customer Down Payment

SAP gives a facility to work with customer down payments. If the customer

pays by cheque / Demand Draft as a down payment it can be captured in a

separate GL account ‘Advance from customers’ and can be adjusted against

the invoice.

The following are the Special GL indicator for the 1000 - SAP implementation,

Customer Recon Account Description

Group GL Operational GL Alternative GL

INCENTIVES PAYABLE IN KIND

ADVANCE FROM CUSTOMERS

RETENTION MONEY-DEBTORS

Customer Payment Terms

The Customers can be classified broadly as Trade Customer and Non Trade

customer.

For the Non trade customer the payment terms is immediately due.

For the Trade customers the payment terms are based on the qty taken by

the customer.

As mentioned in the CSBP document, it is not possible to provide

the cash discounts based on the quantity taken by the customer.


There is no solution in the convergence system as well as SAP

system.

4.5.4.2 Customer Incoming Payment

This function allows the AR user to record receipts, from customers in the

system and adjusts them against invoices and debit memos.

In the case of receipts received against invoices, the user can enter the

invoices to be adjusted. Else, he can record the receipt as an “On Account”

receipt, and link to one or more invoices later Invoices, advances and debit

memos can be settled to the extent of the outstanding amount.

Invoices, advances and debit memos can be partially settled.

In case the receipt currency is not the local currency, the same is converted

into local currency for accounting purposes. The rates as on the value date

will be used for conversion. However, the receipt details are stored in the

entered currency; the balances are stored both in the document currency

and also in the ledger currency.

A receipt number is generated and the user can print the receipt. This can be

sent across to the customer, as an acknowledgement.

4.5.4.5 Clearing of Invoices and Advances.

Account clearing process is used to clear one or more open line items within

one account. On clearing open items, system will create a clearing

document. (E.g. vendor payment can be cleared against vendor invoice

posting). Clearing process may be manual or automatic.

The prerequisite for the clearing process of an account is that the account

should be created as open item management in the master.


While seeing the customer account all accounts based on document type will

be displayed, which will be cleared by selecting them. Here we can see the

credit notes given, overdue balances by sorting the fields and select line

items based on the sorting.

4.5.4.7 Accounting of Debit/Credit Memo’s

The Debit memos are processed for Bank charges, sharing of cost for

Common expenditures. (Trade customers only).

The Credit memos are processed for the price differences, wrong billing,

excess billing in terms of price, whenever there is a retrospective

pricing effects.

4.5.4.8 Sales Realization – Provisions

Each Regional office is doing this provisional entry activity at the end of

the month.

They calculate the provisional value of the S&D expenditure, Primary

freight and Secondary freight

4.5.4.10 Correspondence with customer

The account statement and balance confirmations can be sent to customers

periodically.

Reminder notice can be sent to all customers whose payments are overdue.

This is possible by using the SAP standard functionality.

4.6 Asset Accounting


The Fixed Asset module is an integrated asset management solution for

additions, updating, tracking, depreciation and administrative purposes.

Assets are depreciated periodically to arrive at their current net value. Once

an asset is capitalized, it can be transferred between locations, cost centers.

Assets can be removed from the Assets Ledger by disposing them.

A subsidiary ledger accounting module in Financial Accounting

The Fixed Assets Module will provide following functions:

New Asset addition

Add to an existing asset

Modify Asset details

Asset Transfer

Asset Disposal

Depreciation

4.6.1 Purpose

The Asset Accounting (FI-AA) component is used for managing and

supervising fixed assets with the SAP R/3 System. In SAP R/3 Financial

Accounting, it serves as a subsidiary ledger to the FI General Ledger,

providing detailed information on transactions involving fixed assets.

4.6.2 Master Data

Asset Master Data is in the process of preparation

4.6.3 Features of 1000 - SAP Implementation

• Drill down for a particular asset to view the transaction history for that

asset.


• Depreciation is run only once for each period. The system will record

the last period for which depreciation was run. The user can only run

the depreciation program for the next period.

• Asset that is depreciated, the system automatically generates a journal

and posts it to the Fixed Asset sub ledger for the depreciation amount.

• When posting the depreciation expense for an asset the cost centre of

the asset at the time of depreciation run is considered.


4.6.4.1 Asset Acquisition and capitalization of Asset under

construction

All Asset purchases would be routed through Materials Management in the

form of a Purchase order. The Accounts section will create the Asset Master

record before Purchase Order is raised through MM Module. Assets

purchased in 1000 in the nature of Office Equipment, Computer Equipment,

Furniture and Fixtures and Vehicles will be capitalized directly without

routing it through Capital Work in Progress (CWIP) to make it capitalized on a

stand alone basis.

R/3 Business Blueprint for ACE

Fixed Assets as per 1000 group

Main group master (two digits) is created based on the 1000 classification

with life and depreciation rates.

Sub group master (4 digits) is created based on the 1000 classification with

life and depreciation rates.

The Additions as per financial/Calendar year for the period will be circulated

to users for identifying them with 1000 grouping. The assets identified as

1000 will be updated with 1000 depreciation rate and for other assets


NORMAL rate will be applied. These additions will be directly uploaded to

1000 FAR at the month end from financial year FAR.

The deletions will be uploaded from Financial Year FAR to 1000 FAR at the

month end.

Depreciation calculation will be done based on the rates provided in the

1000 FAR.

Schedule of Fixed Assets will be generated at the month end. Schedule of

additions also will be generated.

Reconciliation of Gross block will be done between 1000 FAR and Financial

FAR.

4.6.4.2 Asset Depreciation

Different depreciation rates are configured using different depreciation keys

and they will be attached with the asset masters at the time of creating an

asset master.

Depreciation as per the Companies Act will be handled by creating ’Book

Depreciation’,

SAP gives a functionality of Depreciation Forecast Report wherein one can

analyze the Depreciation of the Asset over a period of years.

The planned depreciation is posted to the general ledger at the time of the

monthly depreciation posting run. This posting run uses a batch input

session to post the planned depreciation for each posting level for each

individual asset as a lump sum amount.


The depreciation posting cycle is determined by entering the length of time

(in posting periods) between two depreciation-posting runs. This means that

a setting of 1 indicates monthly posting, 3 means quarterly posting, 6 means

semi-annual, and 12 means annual (for a fiscal year version with 12 posting

periods). When a depreciation-posting run is started, one has to enter the

period for which one wants it to be carried out.

For 1000 - SAP Implementation there would be monthly posting for Book

Depreciation.

A batch input session will be run called ‘depreciation run’ for posting

depreciation using periodic execution functionality. The required posting

documents are created once this is run; this will be run as a background job

every period end to post the depreciation postings to the general ledger.

4.6.4.3 Capitalization of Asset under construction

Assets under construction:

For capitalized maintenance, the flow is different. We use CWIP for each

asset class as account assignment in purchase order requisition.

GL accounts used are different, because the work order is to be charged on a

cost GL account.

The following postings will be generated during PO receipt

Posting Key Account number Description Amount

40 20181XXXXX Fixed AUC transit acct

50 GR/IR


CWIP will accumulate all the costs of the WIP for each asset class and

subsequently based on the asset capitalization date the settlement can be

done to the asset concerned.

4.6.4.4 Asset Retirement and transfer

The asset retirement consists of any of the following:

Sale of asset with customer, without customer

Scrapping of an asset

Transferring of an asset

Posting revenue / loss on asset sale

Version 2.0

The above mentioned items can be done by using SAP standard functionality.

Transfer of assets:

Asset transfer within a company code is made mainly for 2 reasons

a) Wrong Asset Class: In case, the asset was created under a wrong asset

class then a new asset has to be created in a New Asset Class and an “Intra

Company Transfer” will to be executed. During the Asset transfer, SAP

transfers Acquisition Value, Accumulated

Depreciation as of the day of the Transfer from the Old Asset to the New

Asset.

Depreciation will be prospectively calculated with the new rate.

However we can use the transaction for ‘unplanned depreciation transaction’

, to make a unplanned posting of previous depreciation.

b) Change in Location (Business Area): In case of a change in location

(Business Area) of the asset, the master record is to be changed.


4.6.4.5 Closing operation

A. The year-end closing program is used to close the fiscal year for one or

more company codes from an accounting perspective. Once the fiscal year is

closed, one can no longer post or change values within Asset accounting (for

example, by recalculating depreciation). The fiscal year that is closed is

always the year following the last closed fiscal year.

b. At the time of closing the period system performs the following checks.

The system found no errors during the calculation of depreciation (such as,

incorrectly defined calculation keys)

The planned depreciation from the automatic posting area has been

completely posted to the general ledger.

All incomplete assets (master records) have been completed, since this

check does not make sense for assets under construction, we can prevent

this check from being made for assets under construction.

4.7 Accounting of Taxes

Tax Calculation Procedure TAXINN will be used for calculating the taxes on

sales and purchases. This tax procedure will be assigned to Country IN

(India).

Tax calculation procedure will list down condition types that will distinguish

between different tax types such as Basic Excise Duty, Additional Excise

Duty, Special Excise Duty, Sales Tax on Purchases, Excise Duty on stock

movement, State Tax on sales, VAT etc.

Account determination will be maintained in the tax codes for automatic

posting of tax amounts.


Tax Code & Tax Account Determination

The tax code is entered when the document is posted and it is the main link

to the tax calculation.

Tax codes will be created for the individual rates and it will be used in the

MM module for maintaining the input tax table. Similarly, tax codes will be

created for the individual rates which will be used in the SD module for

maintaining the output tax table. G/L accounts will be maintained for both

input and output taxes along with break up of the taxes like basic rate,

surcharge, additional and so on.

4.8 New GL Accounting

The traditional general ledger accounting records all business transactions

and provides information for external accounting and accounts. From the

Latest version of SAP i.e. ECC 6.0 onwards SAP GL ledger accounting fulfills

the modern accounting also.

The New Ledger accounting contains the options like, Parallel accounting,

Integration of Legal and Management Reporting etc.

4.8.1 The Parallel accounting: Parallel enables you to perform valuations

and closing preparations for a company code according to the accounting

principles of the group as well as other accounting principles, such as local

accounting principles.

In parallel Ledger Accounting, you can use several ledgers and they are

broadly classified as Leading Legers and Non Leading Ledgers. This allows

you to produce financial statements according to different accounting


principles, for example. You create a ledger for each of the general ledgers

you need.

4.8.1.1 Leading Ledger:

The leading ledger is based on the same accounting principle as that of the

consolidated financial statements. In each company code, the leading ledger

receives exactly the same settings that apply to that company code: the

currencies, the fiscal year variant, and the variant of the posting periods. You

can define a second and third parallel currency for your leading ledger for

each company code.

That means for the future consolidation purpose we can have the

Group currency as company code currency (INR) and as Second

currency as INR. So once the exchange rates are maintained, using

parallel currencies we can see the balances in the ledgers parallel.

Any how the Domain owners has to confirm this whether to have

Group currency as company code’s First Currency (EUR) and Second

Currency of the company code as Local currency (INR).

1000 and 1000 is going to have OL as the Leading Ledger.

4.8.1.2 Non-leading ledger:

The non-leading ledgers are parallel ledgers to the leading ledger. They can

be based on a local accounting principle, for example. You have to activate a

non-leading ledger for the individual company codes.

Non-leading ledgers can have different fiscal year variants and different

posting period variants per company code to the leading ledger of this

company code. The second and third currency of the non-leading ledger

must be a currency that is managed as second or third currency in the


respective company code. However, you do not have to have a second and

third currency in the parallel ledgers; these are optional.

Based on the group decision and domain owners decision on Second

and Third currency we may have one more non leading ledger for

consolidation.

4.8.2 Real-Time Integration of Controlling with Financial Accounting:

During allocations in Controlling, most of the postings created do not affect

Financial Accounting. These postings do not update any G/L account

transaction figures; they are postings within Controlling. If, however, an

allocation in Controlling leads to a change in the functional area or any other

characteristic (such as Profit Center) that is relevant for evaluations in

Financial Accounting, a shift occurs between the affected items in the profit

and loss statement.

For this reason, this information has to be transferred to Financial

Accounting. This reconciliation between Controlling and Financial Accounting

takes place by means of real-time integration.

As a result of real-time integration, all Controlling documents that are

relevant for General Ledger Accounting are transferred from Controlling to

General Ledger Accounting in real time.

This means that Financial Accounting is always reconciled with Controlling.

A document is created in Financial Accounting for each posting in

Controlling. This means that the detailed information contained in the CO

documents is always available in reports in New General Ledger Accounting.


4.8.3.1 Document Splitting

The document splitting procedure is to split up line items for selected

dimensions (such as receivable lines by profit center) or to effect a zero

balance setting in the document for selected dimensions (such as segment).

This generates additional clearing lines in the document.

Examples of a Unique Business Process with Document Splitting

Example 1: Invoice

A vendor invoice is entered with the following items:

Posting Key Account Profit Center Amount

31 Payables 100.00-

40 Expense 0001 40.00

40 Expense 0002 60.00

Document splitting then creates the following document in the general

ledger view:

Posting Key Account Profit Center Amount

31 Payables 0001 40.00-

31 Payables 0002 60.00-

40 Expense 0001 40.00

40 Expense 0002 60.00

Based on the profit centers the document can be splitt into different line

items. For posting to different ledgers itself apart from the Leading ledger,

we need to spit the document itself. And this splitting is possible only for the

FI transactions.


5.0 MODULE INTEGRATION

5.1 Material Purchase accounting & Accounts Payable

Purchase Order will be raised in the MM module. Accounting of purchases will

be configured using account determination in MM module of SAP. The

determination will be made using following parameters:

Company Code

Valuation Class

Valuation Class is basically the broad classification of materials like Raw

Material, Semi-finished, Finished goods, Trading goods, etc. which are

assigned in the Material Master.

The valuation class determines the G/L accounts that are updated as a result

of a transaction or event, such as a goods movement. The Accounting entries

from MM Module are passed based on the type of transaction and the

valuation class.

The Details of Valuation class is included in the MM Blue print document.

For all stock accounting documents generated from MM, PP and SD, the

below mentioned

Document Types and Posting keys are automatically defaulted.

• Document Types

♦ RE - Invoice receipt - MM

♦ WA - Goods issue

♦ WE - Goods receipt


• Posting keys for inventory depending on the transaction

♦ 89 - Stock Dr

♦ 99 - Stock Cr

5.1.1 Good Receipt

Based on the Purchase order and the actual quantity received, a Goods

Receipts (GR) will be raised in MM module. The following accounting entry

gets automatically passed in the Financial Accounts

In 1000 - SAP project implementation, we will be activating the purchase

accounting. It is followed in the convergence system. As per the purchase

accounting concept, the goods receipt accounting will be as follows,

Goods receipt

Inventory account Dr

GR/IR clearing account Cr

Purchasing account (631X1) Dr

Stock variation acct (6111X) Cr

Purchase accounts can be updated in two ways:

At the receipt value

In this case the exact amount posted at goods receipt or at invoice receipt is

posted to the purchase account.

At the delivered (cost) value

In this case the exact amount posted at goods receipt to the GR/IR clearing

account is posted to the purchase account.

Goods receipt along with freight condition.


There are two accounting ways of managing the freight purchase:

• To have a dedicated account for freight on purchase

• To include it in the purchase account

Ex1: With Dedicated freight account



Freight Account Dr

Purchasing account (631X1 ) Dr


Ex2: With Purchase account






Goods receipt





Excise Posting

On receipt of the excise invoice cum gate pass, Excise Invoice will be created

in CIN module with reference to GRIR document. This will automatically post

accounting entries in the system.


Accounting entry:

1. For Domestic procurement of Raw Material/Packing Material

CENVAT Input BED Dr

CENVAT Input ECS Dr

CENVAT clearing Cr

2. For Domestic procurement of Capital Goods / Spares and consumables

CENVAT Capital Account Dr (50%)

CENVAT On-hold Account Dr (50%)

CENVAT Clearing Account Cr

3. Subsequent financial year of procurement of Capital Goods / Spares and

consumables

CENVAT Account Dr. (50%)

CENVAT On-hold Cr. (50%)

4. For Import Procurement of Raw Material

CENVAT Account Dr.

Custom Clearing Cr.

5. Payment of excise duty in PLA Account (TR6C Challan)

PLA Account on Hold Dr.

Bank Account Cr.

PLA Account Dr.

PLA Account on Hold Cr.

Material Return to Vendor

There will be instances where material purchased from vendor may be

returned for various operations reasons.

Material return may originate from a Factory or Depot.

Material returned to Vendor will be recorded in SAP with reference to Goods

Receipt or Purchase Order in MM.


Excise invoice will be created in CIN with reference to the material return

document, where material is returned from a factory.

The accounting entries will be:

Stock Returns

GR/IR Account Dr

Stock Account Cr

Excise Reversal Entry (In case of returns from Factory)


Cenvat BED Account Cr

Cenvat ECS Account Cr

5.2 Material Valuation

Material Valuation will be at a plant level i.e. Stock-able materials will be

valuated at the plant level (depot/factory/loan license manufacturer).

Valuation of goods depends on the price control procedure set in the

material master record.

In the SAP System, material valuation can be carried out on the basis of

either of the following two methods: Moving Average Price, or Standard Price


Moving Average Price

In the moving average price procedure (denoted as “V”), the system

valuates goods receipts with the purchase order price and goods issues with

the current moving average price.

The system automatically calculates the goods issues upon every goods

movement by dividing the total value by the total stock quantity

Standard Price

In the standard price procedure (price control “S”), the system carries out all

stock postings at a price defined in the material master. Variances are

posted to Price Difference account.

Material Valuation

The material valuation is influenced by the costing tool box.

5.4 New GL Accounting

To record all business transactions (primary postings as well as settlements

from internal accounting) in software system that is fully integrated with all

the other operational areas of a company ensures that the accounting data is

always complete and accurate.

Beyond fulfilling the legal requirements, General Ledger Accounting also

fulfills other requirements for modern accounting:

Parallel Accounting

General Ledger Accounting allows you to perform parallel accounting by

managing several parallel ledgers for different accounting principles.

Integration of Legal and Management Reporting


In General Ledger Accounting, you can perform internal management

reporting in parallel with legal reporting. For this purpose, the profit center

accounting functions are integrated with General Ledger Accounting.

Furthermore, you can generate financial statements for any dimension (such

as profit center).

Segment Reporting

General Ledger Accounting supports the segment reports required by the

accounting principles IFRS (International Financial Reporting Standards) and

US GAAP (Generally Accepted Accounting Principles). For this purpose,

General Ledger Accounting contains the segment dimension.

Based on the above functionalities, the 1000 - SAP implementation

requirements have been mapped. We have made certain assumptions also,

and these assumptions have to be confirmed by the domain owners.

The following are the requirements mapped for the 1000 - SAP project,

• Splitting of Document for different Fiscal Year

• Splitting of Document for different Ledger currencies (Assume that

Group will have requirement)

• Splitting of Document for Group Consolidation Assume that Group will

have requirement)

• Splitting of Document for IFRS Reporting.


6 STANDARD INFORMATION

SYSTEM

Report Description Code

Trial Balance – Company Code wise, Business area wise, Consolidated

BA Trial Balance.

S_ALR_87012284

Balance Sheet as per companies act 1956 (Schedule VI) -

Company Code wise, Business area wise

F.01

Compact Document Journal S_ALR_87012289

GL Account Analysis FS10N

GL Account Balances and Totals S_ALR_87012301

GL Account Line Items S_ALR_87012282

List of GL Accounts S_ALR_87012328

Chart of Accounts F.10

Customer Sales S_ALR_87012186

Customer Due Date Analysis for Open Items S_ALR_87012168

Customer Balance Line item wise FBL5N

Customer List S_ALR_87012179

Vendor Due Date Analysis for Open Items S_ALR_87012078

Vendor balance line item wise FBL1N

Vendor List S_ALR_87012086

Check Register S_P99_41000101/FCHN

Asset balance by Asset Class S_ALR_87011964

Asset balance by Business area S_ALR_87011965

Asset balance by Cost center S_ALR_87011966

Asset balance by Plant S_ALR_87011967


Assets wise Monthly, Quarterly, Half Yearly And Yearly and as

and

When required Report containing Gross value, Accumulated

Depreciation, Depreciation for the year, Net Value.

AR01

Depreciation Values AR03

Depreciation Simulation – forecast S_ALR_87012936

Asset History S_ALR_87012075

Year-end IT depreciation report for India J1IQ

Monthly TDS Due, TDS remitted, TDS certificated issued. J1INMIS

Display Plant Stock Availability MB53

Stock in transit CC MB5T

Purchase Orders by Vendor ME2L

Purchase Orders by Material ME2M

SC Stock Monitoring (Vendor) ME2O

Plant Anal. Selection: Stock MC.1

Plant Anal. Selection, Receipt/Issue MC.2

Analysis of Slow-Moving Items MC46

56694321 FICO Material Santhosh 1 Kaparthi[1]

Documents

strategic

prudencedoc

menu bar environment

acct long

multiple retained

exit batch

pooled cost

menu bar document