Base Line 2doc

SAP ECC 6.0 EhP4

March 2010

English

SAP Best Practices Baseline Package (U.S.)

SAP Best Practices SAP Best Practices Baseline Package: Solution Scope

ContentsSAP Best Practices Baseline Package – Solution Scope....................................................................5

1 Purpose........................................................................................................................................ 5

2 Functional Scope – Supported Business Processes or Scenarios...............................................5

2.1 External Financial Accounting............................................................................................5

2.2 Asset Accounting..............................................................................................................12

2.3 Planning........................................................................................................................... 15

2.4 Period End Closing and Actual Postings..........................................................................23

2.5 Sales and Distribution.......................................................................................................29

2.6 Materials Management.....................................................................................................34

2.7 Production Planning & Control.........................................................................................39

2.8 Logistics General / QM / PLM...........................................................................................43

2.9 Service............................................................................................................................. 45

2.10 Master Data Generation Descriptions and Reporting.......................................................49

3 Functional Scope – Functions....................................................................................................55

3.1 Financials......................................................................................................................... 55

3.2 Analytics........................................................................................................................... 58

3.3 Human Capital Management............................................................................................59

3.4 Procurement and Logistics Execution..............................................................................60

3.5 Product Manufacturing.....................................................................................................64

3.6 Sales and Service............................................................................................................65

3.7 Corporate Services...........................................................................................................69

© SAP AG Page 2 of 65


SAP Best Practices Baseline Package – Solution Scope

1 PurposeThis solution scope provides an overview of the processes and functions covered by the SAP Best Practices Baseline Package for U.S. It describes the functions and explains their business purposes.

In the section Functional Scope – Supported Business Processes or Scenarios, you find a scenario-based view of the functions. In the section Functional Scope – Functions, you find a view arranged according to groups of functions and based on the relevant SAP Solution Map.

The solution scope does not provide technical explanations of how to use the functions. For details on this topic, see the Business Process Documentation.

Displaying the Document Journal

Displaying G/L Balances (List)

Carrying Out Recurring Entries

Account Maintenance: Automatic and Manual Clearing

Key Points Provides a comprehensive picture of external accounting and accounts

Records all business transactions in a software system that is fully integrated

Ensures that the accounting data is always complete and accurate

Automatic and simultaneous posting of all subledger 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

Financial statements with different versions and additional analyses

Actual individual transactions can be checked at any time in real-time processing

1.1.1 Accounts Receivable

PurposeThis

Manual and automatic clearing of open items

Post down payments using the payment program

Post manual and automatic outgoing payments.



Key Points When posting data in Accounts Receivable, the system creates a document and passes the

data to the general ledger

Profit, Loss and customer accounts are updated according to the transaction concerned customer payment activities

All business transactions are posted to accounts

All business transactions are managed by means of accounts and for this customer master records are created

One time Customers are used for avoiding building up of huge master data volume

1.1.2 Cash Management

PurposeCash Management in SAP ERP Financials provides three basic functions:

Quickly and reliably transfers all cash-relevant information from internal and external sources into the cash management system (inbound data)

Performs analysis and reporting of current and future cash flows to help you make cash management decisions (analysis and decision)

Communicates with banks and other business partners based on the results of the decision process (outbound data)

The cash position overview provides information on the current financial state of the bank accounts. It is the starting point for cash concentration in which the balances from various bank accounts are concentrated in one target account, taking minimum balances and payment optimization into consideration.

Process Flow Cash Management Status Analysis

Cash Concentration

Key Points Posting of a vendor invoice in local and foreign currency.

Posting of a customer invoice in local currency (from a sales order).

Posting of planning items and memo records.

Execution of the report showing cash position and the liquidity forecast.

After posting a manual bank statement, the flow between the planning levels is demonstrated.

Automatically archiving memo records



The cash concentration function identifies the relevant amount and transfers them from one account to another.

Period End Closing Activities

o Cash Position & Liquidity Forecast

1.1.3 Cost of Sales Accounting

PurposeCost of sales accounting compares the sales revenue for an accounting period with the manufacturing costs of the activity. The expenses are allocated to the commercial functional areas (manufacturing, sales and distribution, administration, and so on). Expenses and revenues that cannot be assigned to the functional areas are reported in further profit and loss items, sorted according to expense and revenue type.

With this type of grouping, cost of sales accounting identifies where costs originate in a company. It therefore portrays the commercial purpose of the expense.

Process Flow Functional area in chart of accounts

Functional area in posting key

Cost center categories

Line item reporting (Cost object reassignment)

Balance Sheets and P&L Statements

Cost of Sales Accounting – P&L Statements.

Key Points Compares the sales revenue for an accounting period with the manufacturing costs of the

activity

Cost of sales accounting identifies where costs originate in a company

Cost of sales accounting portrays the commercial purpose of the expense

The expenses are allocated to the commercial functional areas (manufacturing, sales and distribution, administration, and so on).

Expenses/revenues that cannot be assigned to functional areas are reported in further profit and loss items


o Reposting of unassigned Functional area



1.1.4 Segment Reporting

PurposeThe purpose of segment reporting is to make the profit and risk situation of individual enterprise areas (segments) transparent.

Process Flow Posting G/L Account Documents with different segments

Allocation of un-allocable segment at the period end

Balance Sheets and P&L Statements

Cost of Sales Accounting – P&L Statements

Receivables and Payables by segment.

Key Points In accordance with IAS/IFRS, segment reporting is required for product-related enterprise

areas.

Making the profit and risk situation of individual enterprise areas transparent.

1.1.5 Activate Document Splitting

PurposeDocument splitting enables a complex display of documents. It ensures that you can draw up complete financial statements for the selected dimensions at any time.

Using the document splitting procedure, you can also create a segmented display of a (partial) balance sheet, according to a legal requirement (for example, IAS), or according to areas of responsibility.

The Segment field is a standard field in the totals table for New General Ledger Accounting (FAGLFLEXT) New FI drilldown reporting functions let you create segment financial statements. Document splitting is only relevant for the general ledger; it does not need to be visible from within the sub ledgers.

Process FlowThe following functions are provided to support this building block:

Passive split: During clearing (during a payment, for example), the account assignments of the items to clear are inherited to the clearing line item[s] (such as payables line item[s]).

Active (rule-based) split: The system splits documents on the basis of (delivered or custom) document splitting rules. Document splitting rules can be configured.

Clearing lines or zero balance formation: the system creates clearing lines automatically to obtain a split. You can control this process with the zero balance indicator.



Key Points Extensibility and flexibility – to add new fields, you can create management reports,

supplementary balance sheets, and profit–and–loss statement for industry–specific and enterprise–specific purposes.

Increased data quality – the results of the document split are visible in the document itself. This eliminates the need for additional check steps in alternative lists, and improves data quality.

Accelerated closing – The elimination of additional periodic splitting programs significantly speeds up the closing process.

1.2 Asset Accounting

1.2.1 Asset Accounting

PurposeThe functions for Tangible Asset Handling enable illustration and documentation of the development of fixed assets for accounting purposes.

Asset accounting is a subsidiary ledger of the general ledger and is used to manage and document in detail fixed asset transactions. In general ledger accounting, it is possible to update depreciation and changes to asset balance sheet values in asset accounting. It is also possible also make various account assignments to cost accounting for these transactions.

As a result of the integration in SAP ERP, Asset Accounting (FI-AA) transfers data directly to and from other SAP ECC components, for example posting from the Material Management (MM) component directly to FI-AA. When purchasing an asset or produce an asset in-house, directly posting the invoice receipt or goods receipt is possible, or the withdrawal from the warehouse to assets in the Asset Accounting component. At the same time, you can pass on depreciation and interest directly to the Financial Accounting (FI) and Cost Accounting (CO) components. From the Plant Maintenance (PM) component, maintenance activities that require capitalization to assets are available.

To handle tangible assets, the business functions of the following system components are accessible:

Component Functions

Financial Accounting (FI)

Integration with the general ledger and other subsidiary ledgers

Asset Accounting (FI-AA)

Valuation of fixed assets and settlement of assets under construction

Cost Accounting (CO) Posting cost-accounting depreciation

Process Flow Acquisition from purchase with vendor



Acquisition with Automatic Offsetting Entry

Retirement with revenue

Asset Sale without customer

Post-Capitalization

Write-Ups

Settlement Assets Under Construction

Down Payment Request for Assets under Construction

Depreciation Posting Run

Posting Acquisition and Production Costs Values

Depreciation Simulation/Primary Cost Planning

Key Points Entire lifetime of the asset from purchase order or the initial acquisition (possibly managed

as an asset under construction) through its retirement

Calculate values for depreciation and interest

Depreciation forecast

1.2.2 Asset Acquisition through Direct Capitalization

PurposeTo purchase asset investments that do not have an asset under construction (AuC) phase, it is necessary to capitalize the asset directly in Asset Accounting. The need for a new asset is requested and approved by the cost center manager, purchased through the purchasing department, and the costs associated with the purchase order are capitalized when the Vendor invoice is processed.

Process Flow Create quote for make-to-stock item

Convert quote to order

Pick and ship items

Invoice customer

Receive payment

Key Points Purchasing an asset investment that does not have an asset under construction phase

through capitalizing the asset directly

The need for a new asset is requested and approved by the cost center manager

Asset purchased through the purchasing department



The costs associated with the purchase order are capitalized when the vendor invoice is processed


o Order Settlement (Asset Under Construction)

o Depreciation Simulation /Run

o Posting Acquisition and Product Cost Values

o Open and Close FI Period Asset

o Recalculating Values

o Fiscal Year Change

o Account Reconciliation

o Year-end closing Asset Accounting

1.2.3 Asset Acquisition for Constructed Assets

PurposeAssets under construction (AUC) are a special form of tangible assets. They are displayed as a separate balance sheet item and therefore require a separate account determination and their own asset classes. During the construction phase of an asset, all actual postings are assigned to the AUC. Once the asset is completed, a transfer is made to the final fixed asset.

The recommendation of using Investment orders to capture the costs of AUC assets during the period and month-end processing will ‘settle’ the costs from the Investment order to the AUC. This is done so that budget information can be entered for the AUC and tracking of the actual-to-budget can be performed. Once the AUC is completed, the final asset is created in the appropriate asset class, and the Investment order is set to ‘complete’ so that the next settlement will transfer the AUC asset value to the completed asset.

Process Flow Create Investment order with asset under construction

Create Budget for asset

Release Investment order

Post invoice to Investment order

Monitor order

Asset under Construction settlement

Complete order

Key Points Transparent view of an asset for acquisition

Automated efficient processing



1.3 Planning

1.3.1 Revenue Planning

PurposeA manufacturer of many product groups runs an SAP system in one sales organization. The organization has one central Controlling department that calculates and plans the sales quantities and the revenues.

Process Flow Revenue planning on basis of historical data

Cost calculation

Transfer to SOP

Key Point Integration to Sales, Financials, Controlling, and Production

Use of automated functionality for planning

Data could be planned in Spreadsheet

1.3.2 SOP through Long Term Planning Transfer to LIS/PIS/Capacity

PurposeBusinesses typically have an annual planning exercise known as Annual Operating Planning (AOP). In this planning all aspects of the business are planned, namely: revenue, production, direct procurement, and indirect procurement, capacity, and product/overhead costs.

The AOP planning is also sometimes referred to as the Annual budget. The plan is prepared for the next fiscal year and data collection for the plan / budget usually starts in the last quarter of the current fiscal year.

The AOP exercise begins with forecasting the sales quantities and revenue for the coming fiscal year.

The sales mangers review and adjust the sales quantities based on their information and judgment. The revised sales quantity plans are loaded into CO-PA. The sales quantities are again reviewed, adjusted manually if necessary and then valuated. This results in valuated sales revenue and cost of sales for the planned sales quantities.

The current business process description deals with the process steps starting from this point of the AOP process.

The accepted sales quantities are then transferred to Sales and Operations Planning (SOP). In SOP rough cut capacity planning of the budget sales quantities occurs to verify whether the goods to be sold can run through the company’s bottleneck resources that are needed to produce these goods.



After the production plan has been roughly proven feasible by SOP, it is transferred to a planning scenario in Long Term Planning module (LTP) by creating planned independent requirements (PIR), which reflect the production plan generated by SOP.

Based on these PIRs Materials requirements planning (MRP) is run in a simulated mode to create and review planned requirements for all the materials (components, raw materials) and all resources required to execute the production plan created in SOP. Simulation of MRP also allows review of capacities of the plants. Capacity leveling can then be carried out to smooth out the bottlenecks in the capacities.

After having run MRP as described above, the prerequisites are given to carry out one of the key objectives of the logistics part of AOP: to calculate the total utilization of the activity types assigned to the manufacturing work centers that are allocated by the production plan. The utilization is based on the consumption of activity types being defined in the routings of the (semi finished and finished) products being derived from the production plan.

The aggregated utilization of the work center’s activity types is the basis for the budgeting process of the manufacturing cost centers.

Process Flow Create sales plan and transfer to SOP (Sales and Operations Planning)

Rough matching of budgeted sales quantities and production resources in SOP

Create planning scenario in Long Term Planning to simulate production planning for the budgeted sales quantities

Based on simulated production and operative production data (bills of material, routings),work center capacity and material requirements are calculated

Use material requirements for AOP – purchase material price planning

Use work centers capacity in AOP – general cost center planning

Key Points Forecasting the sales quantities and revenue

Sales mangers review and adjust the sales quantities

Sales quantity plans are loaded into CO-PA are then transferred to Sales and Operations Planning

Rough matching of budgeted sales quantities and production resources in SOP

Creating planned independent requirements

Based on PIRs, Materials Requirements Planning is simulated to create and review planned requirements for materials and resources

Calculating the total utilization of the activity types assigned to the manufacturing work centers needed to produce the budgeted sales quantities



1.3.3 Purchased Material Price Planning

PurposeStandard costs for purchased materials need to be periodically reviewed and updated, if necessary, to match the current market conditions and negotiated prices.

The process begins with transferring the quantities of materials required from long term planning and downloading the latest purchase prices. The material requirements valuated with the latest purchase prices are reviewed by the buyers to compare with the current standards.

The buyers update the spreadsheet with the prices that they determine should be the new standard. The updated prices are then uploaded as the new planned prices. These planned prices are used by the product costing run to valuate the semifinished and finished goods to come up with the standard cost of goods sold for the final products.

Process Flow Transfer long term planning scenario to purchase information system

Download purchased materials for budget purchase price update

Review data and negotiate with vendors

Change materials planned price1 (material master)

Key Points Transferring the quantities of materials required from long term planning

Downloading the latest purchase prices

Material requirements valuated with the latest purchase prices

Planned prices used by product costing run to valuate the goods to come up with the standard cost

Standard costs are used as the new planned prices

1.3.4 General Cost Center Planning

PurposeDuring the annual budgeting process, the managers of nonoperational cost centers such as sales, marketing, administrative, research and development, and so on, plan the costs for various cost types/elements for their respective cost centers. The usual starting point for development of these plans is the actual data for the current/previous year.

In this process, the previous year’s actual expenses for these cost centers are copied into an AOP (annual operative planning) budget version in cost center accounting. As an alternative the previous year’s budget data can also be used as a starting point for the exercise. The data in this version is downloaded into spreadsheets by each cost element and cost center. The respective cost center



managers review and update the budget values according to their requirements and plans. Then these plans are uploaded back into SAP. The plans in SAP are reviewed and finalized.

The planned depreciation on fixed assets is transferred separately to the cost center plan version. The system calculates the planned depreciation on assets by cost center based on the asset values posted on the cost centers. In the case of cost centers having machinery, the depreciation is planned based on cost center and activity type.

Process Flow Copy previous year’s actuals or budget as a basis for planning

Transfer planned depreciation from assets

Download cost elements to spreadsheet for income/expense budget

Update budget values for income and expense excluding operations

Upload cost elements for income and expense excluding operations

Plan accrual costs, statistical key figures, assessments

Confirm non-operating cost center budget

Copy AOP version to actual version 0 and lock both versions for planning

Key Points Copying the previous year’s actual expenses for the cost centers into an AOP budget

version

Changing copied data

Depreciation transferred separately into AOP

Downloading data to spreadsheets by each cost element and cost center

Uploading the adjusted data into SAP

The cost center planning in SAP is reviewed and finalized (accrued costs, statistical key figures, assessments)

Activating the planned data of the AOP version

1.3.5 Manufacturing Cost Center Planning

PurposeDuring the annual budgeting process, the managers of manufacturing cost centers plan the costs for various cost types/elements for their respective cost centers. The usual starting point for development of these plans is the actual data for the current/previous year.

In this process, the previous year’s actual expenses for these cost centers are copied into an AOP (annual operative planning) budget version in cost center accounting. As an alternative the previous year’s budget data can also be used as a starting point for the exercise. The data in this version is downloaded into spreadsheets by each cost element and cost center. The respective cost center managers review and update the budget values according to their requirements and plans. Then these plans are uploaded back into the system. The plans in the system are reviewed and finalized.



The planned depreciation on fixed assets is transferred separately to the cost center plan version. The system calculates the planned depreciation on assets by cost center based on the asset values posted on the cost centers. In the case of cost centers having machinery, the depreciation is planned based on cost center and activity type.

The resource requirements in the form of planned activity quantities are transferred from Sales and Operations planning to the cost centers as planned activity consumption. Plan reconciliation between the SOP activity requirements and manually planned requirements on the operational cost centers is carried out. Once the activity quantities and budget amounts are finalized, planned activity prices are calculated in the system.

Process Flow Download of cost center budget into spreadsheets, revision by cost center managers,

upload of revised data

Transfer of planned activity requirements from production (SOP)

Manual completion of planned data

Calculation of planned activity prices (input for AOP Standard Cost Calculation)

Key Points Copying the previous year’s actual expenses for the cost centers into an AOP budget

version

Changing copied data

Depreciation transferred separately into AOP

Downloading data to spreadsheets by each cost element and cost center

Uploading the adjusted data into SAP

The cost center planning in SAP is reviewed and finalized (accrued costs, statistical key figures, assessments)

Activating the planned data of the AOP version

1.3.6 Internal Order R&D Planning

PurposeVarious internal projects consume resources and incur costs or expenses. Usually the purpose of these projects is the future development of products. The product lines are generally determinable for such projects. The costs of these projects need to be tracked for various purposes such as cost control, return on investment calculations, tax reporting, and so on.

This process makes use of SAP’s internal order functionality to track costs and status. For every project undertaken, an internal order is created using the R&D order type (Y100). Cost planning is carried out on this order. When the project is approved, the order is released. Costs incurred for the project can then be posted on the order. Periodically, the costs collected on the order are settled to the assigned R&D cost center or to CO-PA (if CO-PA is activated). When the project is complete, and fully settled, the order is then closed by setting the appropriate status.



Process Flow R&D internal order

Set planner profile

Plan costs for R&D internal order

Settle planned costs for R&D internal order

Confirm correct settlement

Reporting

Key Points For every project an internal order is created

Cost planning is carried out on this order

The planned costs can also be settled to the assigned R&D cost center or to CO-PA

1.3.7 Internal Order for Marketing and Other Overhead Planning


This process makes use of SAP’s internal order functionality to track costs and status.

In case of marketing projects an internal order is created by using the marketing order type. Marketing orders are created as statistical orders. This means that costs are posted to the assigned cost center and additionally as statistical costs to the internal order. The order does not need settlement since the real costs are assigned to the cost center.

In case of other overhead projects internal orders can be created by using the overhead order type. In this case a responsible cost center is assigned. The internal orders are to be settled to this cost center.

Process Flow Creation of internal orders

Cost element planning on internal orders

Settlement of internal orders (planned costs)

Key Points After creating the internal order, you set a planner profile and plan costs at cost element

level. Revenues can also be planned if the order is with revenues.



It is also possible to assign budgets to an internal order. Budgets are lump sums that are not broken down in cost elements.

After checking the settlement rules, you execute the settlement of planned costs to the receivers.

You can use standard reports to confirm correct settlement and the budgets assigned to the orders.

The planned and actual costs of these projects can be tracked for various purposes such as cost control, return on investment calculations, tax reporting, and so on.

1.3.8 Standard Cost Calculation

PurposeAnnually, the standard costs for products are updated as part of the annual operations planning (AOP). This is necessary to reflect the changes in the prices of purchased parts, change in labor and overhead costs and change in bills of materials and operations needed to manufacture the semifinished and finished goods.

Once the planned prices for purchased parts are updated and planned activity prices are calculated, a costing run is done to calculate the new standard planned prices of the materials. The calculated standards are checked. The responsible persons are asked to make necessary corrections, for example in master data. Once the calculations are considered to be correct, the prices are updated as future planned costs in the respective material master records.

When the current year is closed, the marked cost estimates are released. This results in a revaluation of existing inventory to the new standard prices.

Process Flow Create and execute costing run

Analyze proposed standard prices

Repeat annual operating plan scenarios

Edit cost run and execute

AOP – revenue cost of sales transfer

Create frozen costing run / Execute costing run

Mark as future planned price

Release standard cost estimate and revalue stock at start of new fiscal year

Key Points Standard costs for products are updated as part of the annual operations planning

Costing run is done to calculate the new standard planned prices of the materials

Responsible persons are asked to make necessary corrections

Prices are updated as future planned costs in material master records

Once the current year is closed, the marked cost estimates are released



Revaluation of existing inventory to the new standard prices


o Costing Run

1.3.9 Quarterly Plan – Sales Quantity Forecast with CO-PA

PurposeA manufacturer of many product groups runs an SAP system in one sales organization. The organization has one central Controlling department that calculates and plans the sales quantities and the revenues.

Process Flow Sales quantity planning on basis of actual data

Transfer to SOP



1.3.10 Reference and Simulation Costing

PurposeReference and Simulation Costing is a tool for planning costs and setting prices, with which you manually enter the costing items in spreadsheet form in a unit cost estimate.

With this component, you can create base planning objects. A base planning object is a reference object of Product Cost Planning, which you create in Reference and Simulation Costing to plan costs for a new product or service and simulate changes to existing cost estimates. If you plan a new product for which there is no master data in the SAP ERP, you can perform initial planning and cost projections by creating a Base Planning Object using Reference and Simulation Costing. Using this method, you manually plan the costs for an item.

When the first material master data is created in the SAP ERP, you can use the Material Cost Estimate without Quantity Structure to manually plan the cost of goods manufactured and the cost of goods sold for the product. You can use the base object cost estimate as a reference for this. Two methods are available for material cost estimate planning without quantity structure, multilevel unit costing and single-level unit costing. Multilevel unit costing enables you to plan cost at the assembly level without requiring production bills of material.

Process Flow Create and cost Base Planning Object

Analyze Results

Change Base Planning Object

Report from Information System

Key Points Reference and Simulation Costing

Base Planning Object

o After creation and costing, the base planning object can be monitored and analyzed.

Reporting from Information System

o Monitoring the base planning object

1.4 Period End Closing and Actual Postings

1.4.1 Period End Closing General Plant

PurposeThe Plant/Central closing process is done to make sure that all financial postings are made to represent the plant activity for the period. Daily activity in the plant is posting various financial documents into the general ledger and cost-controlling module. This process ensures that all activity in the plant is shown correctly, and that no financial postings are missing. Some data (total stock



value, total stock, valuation class, price control indicator, and price unit) are managed by period. For these values, and goods movements, to be posted to the correct period, the period must be set whenever a new period starts. Management reporting needs to receive plant information with reference to variances, WIP, and scrap to allow for the correct reporting of these figures. The production/process orders that are no longer active need to be flagged as closed so that future postings will not be allowed. This process ends by flowing into the Central Closing process that finishes the financial reporting of the company.

Period end closing “general” Plant covers the closing for product cost controlling by period and product cost controlling by order. The procedures for Product Cost by Order are the same regardless of whether a manufacturer uses process orders or production orders

Process Flow Run assessment cycle for quality costs

Ensure goods movements and production transactions are complete

Open new MM period

Period-end closing for production orders (overheads, WIP calculation, variances calculation, settlement of production orders)

Close completed production orders

Data collection for summarization hierarchy (reporting)

Run actual assessment of all cost center costs to profitability analysis (COPA)

Run profitability report

Key Points Run assessment cycle for quality costs

Ensure goods movements and production transactions are complete

Open new MM period

Period-end closing for production orders (overheads, WIP calculation, variances calculation, settlement of production orders)

Close completed production orders

Data collection for summarization hierarchy (reporting)

Run actual assessment of all cost center costs to profitability analysis (COPA)

Run profitability report



1.4.2 Inventory Valuation for Year End Closing

PurposeThis component encircles the process of inventory valuation – balance sheet valuation at the end of the year. This provides users with an example process description that they can use as a template for their own valuation processes.

The business process documentations include the following process steps:

Stock valuation, using lowest value principle for raw materials, packaging materials and trading goods.

Additional devaluations by movement rate

Inventory costing for finished and semifinished products, in accordance with the lowest possible value principle

Stock value reporting in the form of a comparison analysis

Manual stock value adjustment posting in the Financial Accounting component

These Business Process Documentations can be used by all companies that are running an SAP ERP system that integrates the Materials Management (MM), Production Planning (PP), Financial Accounting (FI), and Controlling (CO) components.

The inventory cost estimate calculates tax-based or commercial prices for semifinished and finished products. After the inventory is costed, the costing results are transferred to the material master as tax-based and commercial prices.

Inventory valuation is carried out in accordance with local legislation (such as the German Commercial Code), including settings for the overhead structure, valuation variant, and stock valuation with devaluation on the basis of movement rate.

Process Flow Stock valuation, using lowest value principle for raw materials, packaging materials and

trading goods.

Additional devaluations by movement rate.

Inventory costing for finished and semifinished products, in accordance with the lowest possible value principle.

Stock value reporting in the form of a comparison analysis.

Manual stock value adjustment posting in the Financial Accounting component.

Key Points Stock valuation for raw materials, packaging materials and trading goods on base of lowest

possible value

Inventory valuation for semifinished and finished materials on base of local requirements for valuation approaches

Stock value adjustment



1.4.3 Overhead Cost Controlling Actual

PurposeThis part describes the transaction-based actual postings that are used in Overhead Cost Controlling.

For an explanation of the activities that are performed at the end of the period, refer to the Period-End Closing section.

Process Flow Actual posting for a cost center

o For primary costs the related cost center is posted

o Cost center update with the correct values

o Posting of statistical key figures

Periodic and year end activities

o Comparison between the actual and the planned costs for the cost center

o Allocation of primary and secondary costs using an assessment cost element

o Posting of accruals for payroll fringe costs on a monthly basis

o Maintaining the controlling version

o Lock period

Key Points Process a G/L document for various purposes

Necessary steps for preparation of periodic and year end activities

1.4.4 Internal Order R&D Actual


This process makes use of SAP’s internal order functionality to track costs and status. For every project undertaken, an internal order is created using the R&D order type (Y100). Cost planning is carried out on this order. When the project is approved, the order is released. Costs incurred for the project can then be posted on the order. Periodically, the costs collected on the order are settled to the assigned R&D cost center or to CO-PA (if CO-PA is activated). When the project is complete, and fully settled, the order is then closed by setting the appropriate status.



Process Flow Create R&D internal order

Consumable purchasing

Post goods issues to R&D internal order

Settle internal order

Key Points Transparent view of outstanding orders, shipments, and inventory

Automated efficient processing

1.4.5 Internal Order for Marketing and Other Overhead Actual


This process makes use of SAP’s internal order functionality to track costs and status.

In case of marketing projects an internal order is created by using the marketing order type. Marketing orders are created as statistical orders. This means that costs are posted to the assigned cost center and additionally as statistical costs to the internal order. The order does not need settlement since the real costs are assigned to the cost center.

In case of other overhead projects internal orders can be created by using the overhead order type. In this case a responsible cost center is assigned. The internal orders are to be settled to this cost center.

Process Flow Create internal order

Post general ledger account

Check settlement rule

Check settlement

Check actual budget

Key Points This process makes use of SAP’s internal order functionality to track costs and status.

It gives a transparent view of an internal order

It allows automated efficient processing



1.4.6 Period End Closing Financial Accounting

PurposeClosing operations are periodic tasks and can be subdivided in FI as follows:

Day-end closing

Month-end closing

Year-end closing

The closing operations component helps preparing and carrying out the activities required for day-end, month-end, and year-end closing. For this purpose, the system provides a series of standard reports that can be used to generate evaluations and analyses directly from all of the posted account balance. The system helps carrying out the following:

Creating the balance sheets and P&L statements

Document the posting data

No additional postings are required for day-end closing.

Using the following evaluations for day-end closing and for documenting the posting data is possible:

Compact-Document journal

Evaluation of the documents that have not been posted

To carry out the closing operations in G/L accounting, it is necessary to carry out the closing operations in the subledger accounting areas you are using. These include:

Accounts receivable and accounts payable accounting

Inventory accounting

Asset accounting

Year-end closing is split into two phases:

At the beginning of the new fiscal year, you open new posting periods and carry forward the balances from the previous year

You then prepare and create the financial statements and document the business transactions using the balance audit trail

The SAP system offers a range of reports, which can carry forward balances into the new fiscal year. During this process, the profit and loss accounts are carried forward to one or more retained earnings accounts. The balances of the balance sheet accounts are simply carried forward into the new fiscal year. It is not necessary to create special opening financial statements.

Any postings done in the old fiscal year automatically adjust the relevant carry-forward balance. Closing the old fiscal year and carrying out the closing postings before opening the new fiscal year is not necessary.

As with month-end closing, you can create all the external reports required, document the posting data, and carry out the internal evaluations.



Process Flow day-end closing

month-end closing

year-end closing

Key Points Updating Exchange Rates

Gaps in Document Number Assignment

Invoice Numbers Allocated Twice

Displaying the compact document journal

1.5 Sales and Distribution

1.5.1 Sales Processing using Third Party (w. Shipping Notification)In third-party order processing, your company does not deliver the items requested by a customer. Instead, you pass the order along to a third-party vendor who then ships the goods directly to the customer and bills you. The standard sales order automatically creates a purchase requisition for the materials to be delivered by the third-party vendor.

In this scenario, the vendor sends a shipping notification. After that a statistical goods receipt is posted. The incoming invoice from the vendor updates the billing quantity, so that the customer-billing document can only be created after entering the invoice from the vendor.

.

1.5.2 Credit ManagementA credit limit check can be carried out when sales documents are created or changed. The check is carried out by the system within one credit control area. If you change quantities or values in a document, the check is repeated. A credit control area consists of one or more company codes. A sales document belongs to one credit control area depending on the allocation of the sales organization to a company code. The SAP System checks the credit limit that was granted to the customer in this credit control area. The credit control areas and the credit limit of a customer are defined in financial accounting and entered in the customer master record. During the check, the SAP System totals the receivables, the open items, and the net value of the sales order for every item of a sales document. The open items take into account obligations bound by contract that are not recorded for accounting purposes but involve expenses through diverse business transactions. After that, it compares the total with the credit limit. If the limit is exceeded, the system responds in the way defined by you in the configuration menu.

We are using automatic credit control in this solution. During the automatic credit control, you can configure a system reaction ('A' warning, 'B' error, 'C' like A, + value by which the credit limit is exceeded. and ‘D’ - like B, + value by which the credit limit is exceeded) when the credit limit is exceeded, we have chosen to use option ‘C’ (warning + value by which the credit limit is exceeded).



The system provides a transaction to list all sales documents that have been blocked for delivery, with information about what has caused the block. The customer’s current credit situation is manually reviewed by the credit department, and when the sales order is approved, the delivery block is removed from the sales order. You can jump directly from the list to an individual document.

1.5.3 Sales Order Processing: Sale from StockThis scenario describes the entire process sequence for a standard sales process (sale from stock) with a customer. The business process encompasses all steps from creating an order to the clearing of a customer account after payment is received.

The process starts with the creation of a customer's standard sales order. Depending on the customer and the material, various special events take place during the order entry, such as customer/material pricing, insertion of applicable discounts, checking the availability of the materials, and checking the customer‘s credit history.

It is checked whether enough material exists in the required storage location. If not, a stock movement takes place. Then, the picking slips are generated to the warehouse clerks to stage the product for shipment to the customer.

Once picked, the physically shipped quantity has to be registered in the system to ensure that there are no differences between the sales order and the delivery document. In the case of actual differences, this can also be documented and ensures correct postings.

After the completion of picking, the warehouse clerk has to systematically relieve the inventory. This relief of inventory is the actual recording of the physical quantity that is being shipped to the customer. These results in the recording of the cost of goods sold in financial accounting.

Once the inventory has been relieved, the delivery can be invoiced and the revenue together with the cost of goods sold is recorded in management accounting. This step signifies the end of the business transaction in Sales and Distribution.

1.5.4 Free of Charge DeliveryThis scenario describes the process of providing goods to a customer at no cost. A unique sales order type is created that is non-billing relevant. The order is confirmed based on the availability of goods. A delivery is then created; the goods are subsequently picked, confirmed, and delivered to the customer.

1.5.5 Returns and ComplaintsThis scenario describes sales order returns processing. The process starts a return sales order with reference to the original invoice for the goods. An RMA document is printed, and forwarded to the customer to be attached to the incoming goods. The goods are shipped back, a return delivery is created with reference to the RMA, and the material is received into return stock. The return stock location is set to be non-MRP relevant. The goods are inspected, resulting in a disposition to either return them to stock, or scrap. A credit memo is created from the billing run, and posted to the customers account.

1.5.6 Sales QuotationThis scenario describes the process for a standard sales quotation. The process starts when a request for quotation (RFQ) is received from a customer. In response to the customer’s RFQ, a



quotation is created in the SAP system. After that the customer can either accept the quotation or reject it.

1.5.7 Sales Order Processing for ProspectIn this scenario, you process sales order documents without first looking up the customer’s information.

A dummy customer is used when your sales order processors need to investigate an order without first looking up the customer’s account number. The sales order can be saved but remains incomplete until a valid customer account number has been entered in the sales order. This function is particularly useful for companies that take phone orders. For example, a customer calls and requests pricing and information on a catalog item. The order processor can build the entire order without needing the customer’s account number until the end. Once the customer’s account number has been entered, all of the customer-specific information is transferred from the customer master and other customer-specific records.

1.5.8 Sales Processing Using Third Party (Without Shipping Notification)In third-party order processing, your company does not deliver the items requested by a customer. Instead, you pass the order along to a third-party vendor who then ships the goods directly to the customer and bills you. The standard sales order automatically creates a purchase requisition for the materials to be delivered by the third-party vendor.

The incoming invoice from the vendor updates the billing quantity, so that the customer-billing document can only be created after entering the invoice from the vendor.

1.5.9 Sales of Nonstock Item with Order Specific ProcurementIn this scenario a customer orders a material that is currently not in stock. The material is therefore procured from an external supplier. Example:

Customer 100003 orders 100 PC of material H14 at the sales organization 1000.

The material is not in stock and must be procured through an external supplier.

When you create the sales order, a purchase requisition is generated. In the next step, the purchase requisition is converted into a purchase order for the supplier 300000.

The goods receipt is created on a customer’s special stock for the customer 100003. The delivery and the invoice follow from here. Finally the invoice verification for the goods receipt is created.

For the customer 100003 credit management is activated.

1.5.10 Debit Memo ProcessingThe Debit Memo process is used for applying a debit to a customer account once a determination has been made that a customer has been undercharged as a result of a pricing or sales tax rate error. An Invoice Increase Request is then created with the amount to be debited, and placed on a billing block for review. It must then be released to become billing-relevant, and to appear on the billing due list. Periodic billing process creates a debit memo to be sent to the customer, and posts an accounting document.



1.5.11 Foreign Trade Export ProcessingWith markets becoming increasingly global and business structures more complex, the need for accuracy in handling the foreign trade needs of a business is gaining rapidly in importance. SAP’s Foreign Trade/Customs application (FT) provides the tools that you need to compete effectively in today’s fast-paced market. It is designed to help you meet the rapidly changing foreign trade requirements of your business.

This scenario describes the steps involved in receiving customs forms and how the system performs incompleteness checks to make sure that all essential information is in the system.

The document explains how easy reporting is with Intrastat and Extrastat, once you have maintained the necessary settings and master data.

1.5.12 Customer Consignment ProcessingThis scenario describes how finished products and trading goods are handled within a consignment process. The products shipped to the customer are still owned by the company until they are sold by the customer to a third party. The materials, which are usually stored in the customer’s store or warehouse, are posted in a stock (consignment stock) that is assigned to the corresponding customer. This allows the customer’s current stock to be viewed at any time.

1.5.13 Returnables ProcessingStandard pallets belong to the manufacturer and are handled either as returnable goods or as packaging material. This scenario shows the shipment of standard pallets and their returns.

This scenario uses the pallet L001 with material type LEIH, which is handled as returnable material.

1.5.14 Cross-Company Sales Order Processing*This scenario shows how sales are processed across company codes.

A customer orders goods from their vendor’s sales organization. The vendor has a production / warehouse plant that belongs to a different company code. The goods are produced / contained here and delivered from the production/warehouse plant directly to the customer.

Focus:

Delivering plant belongs to a different company code

Direct delivery from delivering plant to customer

Customer invoice and intercompany billing document

Internal transfer prices

Customer 100009 sends a purchase order to their vendor’s sales organization. A standard order is created here with the production/warehouse plant from a different company code as a delivering plant.

The goods are delivered from the production/warehouse plant directly to the customer.

The delivery is billed twice: once to create the customer invoice and again to carry out intercompany billing.



The customer pays their invoice by transferring the amount to the bank account. A manual account statement is posted, and the open item on the customer’s account is cleared.

1.5.15 Sales Order Processing with Customer Down PaymentIn business, especially in a make-to-order environment, customers will often be required to pay some amount in advance before delivery of goods. This process is used to create requests for down payment, record the receipt of the down payment, create a final invoice after the deduction of the down payment received and a receipt of the final amount due on the invoice.

The process makes use of the billing plan functionality. The integrated process allows for a proper document flow to be maintained between the sales and financial transactions.

1.5.16 Sales: Period End Closing OperationsThis scenario describes the collection of periodic activities in Sales & Distribution such as day ending activities or legal requirements like Intrastat and Extrastat reporting.

1.5.17 Credit Memo ProcessingThe Credit Memo process is used to apply a credit to a customer account once you have determined that a customer has been overcharged as a result of a pricing or sales tax rate error. An Invoice Correction Request is then created with the amount to be credited, and placed on a billing block for review. It must then be released to become billing relevant, and appear on the billing due list. The periodic billing process creates a credit memo to be sent to the customer, and posts an accounting document.

1.5.18 Rebate Processing: Free GoodsThis scenario describes the entire process sequence for a standard sales process (sale from stock) with a customer including free goods. The free goods are inclusive, which means that the customer receives the ordered quantity but only has to pay for a part of the ordered quantity. The business process encompasses all steps from creating an order to the clearing of a customer account after payment is received.

The process starts with the creation of a customer's standard sales order. A free goods condition record has been created for the used material. So the customer receives a certain amount of free goods depending on the ordered quantity.

It is checked whether enough material exists in the required storage location. If not, a stock movement takes place. Then, the picking slips are generated to the warehouse clerks to stage the product for shipment to the customer.

Once picked, the physically shipped quantity has to be registered in the system to ensure that there are no differences between the sales order and the delivery document. In the case of actual differences, this can also be documented and ensures correct postings.

After the completion of picking, the warehouse clerk has to systematically relieve the inventory. This relief of inventory is the actual recording of the physical quantity that is being shipped to the customer. These results in the recording of the cost of goods sold in financial accounting.

Once the inventory has been relieved, the delivery can be invoiced and the revenue together with the cost of goods sold is recorded in management accounting. This step signifies the end of the business transaction in Sales and Distribution.



1.5.19 Sales Order Processing with Collective BillingThis scenario describes how to use the standard sales processing (sale from stock) for mass-processing.

The process starts with the creation of some standard sales orders.

In periodical intervals all sales orders due to deliver and with availability of the material are selected and deliveries are created. For optimization of shipping costs all sales orders, which are delivered to the same customer, are packed into one delivery document. For lean-WM-storage locations WM-transport orders and picking documents for picking are automatically created.

The materials are picked and the actual amount of picking is noted in the delivery. The goods receipts are booked and delivery notes are created. In the background the goods usage is booked to accounting. The materials can leave the company.

In periodical intervals all deliveries are selected for billing. For cost-optimization all deliveries due to invoice to the same customer are packed into one invoice-document. In the background the revenue is posted to accounting.

1.6 Materials Management

1.6.1 Lean Warehouse ManagementLean Warehouse Management is used to have a picking document in the shipping process.

A picking document is printed when a delivery is created for a storage location which is assigned to a warehouse. This is done automatically. There is no need for a user to deal with transport orders from the warehouse management.

1.6.2 Quotation for ProcurementThe request for quotation (RFQ) process starts with a request for material from vendors. The RFQ process includes a price comparison for the selection of the best source. The buyer evaluates the vendor responses to determine the best source of supply. The accepted quotation is converted into a purchase order and a rejection letter is sent to the vendors whose quotations were rejected.

Material-specific information including vendor pricing and lead-time from the quotation are captured within ERP master data records.

1.6.3 Consumable PurchasingThis scenario deals with purchase order creation activities during the procurement process. Furthermore it describes the additional process steps of a purchase order approval, goods receipt of consumables, approval of service entry sheets and invoice receipts by line item. The process also covers the related processing of outgoing payments and period-end plant and period-end closing.

Consumable items (goods or services) are entered without material number but rather a short text description as the main identifiable characteristic. The purchase order is subject to approval based on predefined parameters prior to being issued to a vendor.

For consumable goods, there is no inventory in the system. By posting a goods receipt the value of the goods is expensed to a cost center or another cost element.



When the invoices are received from the vendor, they are entered with reference to a purchase order and item, providing a three way match of purchase order value, goods receipt value, and invoice value. If there are any variances between invoice and purchase order value, the invoice is blocked and forwarded to the Buyer for approval. Checks to vendors are generated based on the net term condition reflected on the invoice, derived from the vendor master. Variances due to deviations from standard price are collected in the purchasing cost center and allocated to product line level based on a predefined percentage.

Procurement of a consumable service follows the same general process. The difference is that the consumable service is not posted by means of a goods receipt, but with a service entry sheet. The invoice follows the same rules in both cases.

1.6.4 Procurement without QMThe purchasing process may start with a request for quotation by which a purchasing organization employee requests a quotation for the supply of materials from a vendor. The RFQ process includes offer comparisons to select the best source. The buyer evaluates the responses from the vendor and determines the best source of supply. The agreed material cost is captured on the material master and forms part of inventory valuation, based upon a released standard cost. To work with Quotations, run the Business Process Documentation Quotation for Procurement (128).

Material-specific information including vendor pricing and lead-time from the quotation is captured within SAP master data records, namely info records, and can be linked to transactional requisitions and purchase orders via an SAP lookup called a source list. Info records and source lists can have one or more vendors associated with the material; however, one vendor is designated as the primary source for the material.

A purchase requisition is either generated via the material requirements planning process or manually by a requestor. A buyer validates the accuracy of the purchase requisition and converts the purchase requisition into a purchase order. The purchase order is subject to approval, based on a predefined amount prior to being issued to a vendor.

Goods are shipped from the vendor and received to the purchase order referenced on the document from the vendor. Inventory is received into a location based on fixed parameters proposed from the material master that can be changed at the time of the transactional data capture that is purchase order creation or goods receipt.

The invoice is received from the vendor. Invoices are entered with reference to a purchase order and item, providing a three way match, purchase order value, goods receipt value, and invoice value. If there are any variances between invoice and purchase order value, the invoice is blocked and forwarded to the buyer for approval. Checks to vendors are generated based on the net term condition reflected on the invoice, defaulted from the vendor master. Variances due to deviations from standard price are collected in the purchasing cost center and allocated to product line level based on a predefined percentage as determined by the business.

1.6.5 Stock Handling: Scrap and Blocked Stock, DevalueThis scenario is triggered by the following different processes:

Returns from Customer

Rework from production

Other logistic processes and reasons

Devalue material to another material number and then rework the devaluated material



1.6.6 Procurement ContractThe process to create a contract begins with the need to secure a large number of supplies as well as reducing procurement costs. The creation of a contract can start if the following issues have been clarified:

Number/amount of material or services

Validity start / validity end

Payment terms

Quantity of each contract material/service,

Price of each position in the contract

Location to where the goods/services are delivered.

A contract is signed by a purchasing manager or a buyer.

After the creation of a contract, purchase requisitions and purchase orders can be performed with relation to the contract.

1.6.7 Stock Transfer with DeliveryThe stock transfer process begins with a requirement to transfer material from one plant to another within the same company code. This request, in form of a stock transfer requisition, may be created in the procuring plant automatically by MRP or manually by a buyer.

Nevertheless, the process also works without MRP. In that case the buyer creates the stock transport order directly.

There are no master data requirements beyond the material master to support the stock transfer process. The material master must exist in both the procuring (receiving) plant and the providing (issuing) plant. Stock transfer purchase orders are not subject to approval like other purchase orders.

A buyer validates the accuracy of the stock transfer purchase requisition and convert it into a stock transfer purchase order. Or, without MRP, the buyer creates the stock transfer purchase order directly.

A warehouse clerk at the issuing plant monitors the materials due to be shipped and creates deliveries as necessary. Once a delivery is created, a pick list is generated for the materials. A warehouse clerk gathers the materials and confirms the picked quantities. Once the delivery is complete, the delivery quantities are issued, appropriate documentation is generated, and the shipment is sent, ending the process for the issuing plant.

Goods are received at the receiving plant referencing the delivery number on the shipping documents. Inventory is received into a location based on fixed parameters proposed from the material master which can be changed at time of transactional data capture that is, Purchase Order creation or goods receipt.

A stock transfer process is designed from plant A to plant B, but works as well in the opposite direction.

1.6.8 Stock Transfer without DeliveryThis configuration guide provides the information you need to set up the configuration of this building block manually.



If you do not want to configure manually and prefer an automated installation process using BC Sets and other tools, refer to the installation guide of this building block.

1.6.9 Return to VendorThe return to vendor process begins with a requirement to return an item to a vendor. The initial activity is to request a Returns Material Authorization (RMA) from the vendor. This is a manual step and the RMA number is entered into a text field in the return purchase order. The buyer then creates a return purchase order in the system. The return purchase order is similar to a standard purchase order except for the return flag which sets up the return delivery to enable shipment of the items back to the vendor.

The return purchase order confirmation goes to the vendor and the return Delivery is sent to the shipping department where the items are picked and shipped back along with a delivery note. When the shipping department creates the delivery the items are relieved from inventory. A credit memo is generated which relieves the liability to the vendor.

1.6.10 Physical Inventory / Inventory Count and AdjustmentThis scenario covers the periodic process making necessary adjustments to stock on hand after a physical count.

The process begins with the generation of the inventory count sheets. Furthermore, materials can be blocked here for posting during the physical inventory. Once the inventory sheets are printed out, the actual physical inventory count occurs for the given materials. Next, the count is entered in the system and then any discrepancies against the system quantities are reviewed. The inventory may be recounted until final counts are accepted and inventory differences are posted.

1.6.11 SubcontractingThe MM Subcontracting process involves sending raw components to a vendor for specific manufacturing processes and receiving the value-added finished material back into inventory.

A Subcontract Purchase Requisition is either generated via the Material Requirements Planning process or manually by a requestor. A Buyer validates the accuracy of the Purchase Requisition and convert it into a Purchase Order. The purchase order is subject to approval based on predefined parameters prior to being issued to a vendor.

The consumption of sent components is recorded upon receipt of the value-added finished material. The vendor sends the invoice for the services provided which is paid during the normal payment cycle.

A customer orders goods from the specified vendor (3000XX) as a subcontractor based on a specific Production Plan as Make to Stock process or based on a Material Requirements Planning Scenario (MRP-Scenario).

On goods delivery,

The scenario focuses on the following activities:

Create purchase order based on a scheduled purchase requisition created by last MRP-run.

Optional: Create purchase order manually.

Approve purchase order (if needed)



Create Outbound Delivery document.

Post goods issue for delivery and shipping to subcontractor.

On goods receipt, the scenario focuses on the following activities:

Goods receipt based on purchase order delivered by subcontractor.

Posting of component reservations and consumption of component quantities as provision of material.

Invoice receipt by line item

Invoice verification and validation of tax expenses.

Process of outgoing payment.

1.6.12 Procurement & Consumption of Consigned InventoryIn consignment processing, the vendor provides materials and stores them on your premises. The vendor remains the legal owner of the material until you withdraw materials from the consignment stores. Only then the vendor requires payment. The invoice is due at set periods of time, for example, monthly. In addition, you can also arrange with the vendor that you take over ownership of the remaining consignment material after a certain period of time.

The daily MRP run creates purchase requisitions with item category ‘K’ for parts that are to be procured on a consignment basis.

1.6.13 Internal Procurement: Cross-Company Stock TransferThis section describes the stock transfer between two plants with different company codes. The process uses a Purchase Order with a Supplying Plant as a Vendor. In the Purchase Order, you can fix the Price and Conditions for the vendor (Supplying Plant).

The materials required are located in the stock available at the supplying plant. The stock quantity for material RAW20(R20) in the supplying plant (production PLANT1(1000)) and storage location (1030) is created by a simple MM posting (transaction MB1C, movement type 501 or 561).

1.7 Production Planning & Control

1.7.1 Logistics PlanningThe purpose of logistics planning is to make sure that future demand can be satisfied by your company’s available resources and to point out situations where demand cannot be met in time or in the desired quantities.

This process sometimes is called Sales and Operations Planning. The process takes place in a simulative mode and at an aggregated (usually product group) level. Once a feasible production plan is found that satisfies demand it can be used as the basis for operational production planning (MRP and Detailed Capacity Scheduling).

The Best Practice scenarios in this section cover the following planning workflow:

Planning/forecasting of future demand



Aggregated production planning including capacity check, to check at product group level if demand can be satisfied (using the SOP functionality)

Transfer of results to Long Term Planning (using the LTP module) to enable simulation of material requirements, based on the production plans

Planning takes place in separate (simulative) planning versions within LTP

Review and adjustments of planned requirements as needed

Once the simulated requirements are accepted, the demand (independent requirements) is then transferred to active demand management for detailed MRP and Production Planning / Scheduling in the active version.

1.7.2 Make-to-Stock Production – Discrete IndustryThe scenario Make-to-Stock (MTS) Production focuses on:

Sales-order-independent production using MTS (Make-to-stock) production / production order processing.

Planned independent requirements

Production triggered by a production plan

Make-to-stock production - Two-level-production for subassembly and finished part

Use of production versions

Optional enhancement: Serial number for finish product

Optional enhancement: External processing

Optional enhancement: Batch management processing

References to different procurement scenarios for raw materials

The product manufactured anonymously and delivered to the warehouse is a Finished Good MTS.

1.7.3 Make-to-Stock Production – Process IndustryThe scenario Make-to-Stock Production – Process Industry focuses on:

Sales-order-independent production using MTS (Make-to-stock) production / process order processing.

MRP planning with planned independent requirements gives planned orders for production as well as purchase requisitions for raw materials.

Planned orders are converted into process orders.

Components are staged to the shop floor location.

Batch-management components are issued at production start immediately, semifinished and finished products produced, in conjunction with batch management.

Backflushing is used for the packaging material (without batch management) at finished product confirmation.

Process order confirmation triggers order controlling and settlement.

Planned Independent Requirements Creation

The process can be started with two different starting points:



o start with SOP (Sales Operation Planning) → proceed Scenario XXX (AOP – SOP LTP) and XXX (Logistics Planning) and start XXX (Make to Stock – Process Industry) with the second step: Material Requirements Planning (MRP)

o start with creating Independent Requirements manually → proceed XXX (Make to Stock – Process Industry) with the first step

Irrespective of the starting point you choose, the result is independent requirements for your BOM header material, which are then used as input for MRP planning.

Material Requirements Planning (MRP)

The daily MRP run generates replenishment elements at each low-level code. The system automatically generates purchase requisitions for purchased parts within the 3-month opening period for the planned order. The system uses planned orders to implement receipt elements, which are also required.

The system also creates planned orders for parts that are produced internally. When the planned opening date has been reached, these planned orders are converted to production orders by the production planner. As a result, the system reserves all of the required components.

Capacity requirements have been created for planned orders and process orders, allowing capacity evaluation for the required resources at each level. Order schedules may be changed in case of capacity overload, requiring MRP run again to reschedule dependent material requirements.

Some materials (for example, the Raw Material Batch 3 (R30)) are planned on a consumption basis. Since these materials do not have storage restrictions due to shelf-life-management, larger quantities of this material can be stored in the warehouse. Replenishment orders are triggered as soon as a specified reorder point is reached.

Make-to-stock production for semifinished and finished products

The production planner converts the planned orders with selection of start date. It is assumed that material availability at the plant is assured due to prior MRP planning. The components are stored at the general warehouse location, and staged to the shop floor level as requested for daily production.

To ensure data consistency (batch-managed components such as ingredients are issued with the same batch number as physically used), goods issue with order reference is posted at production start. Backflushing can be used for non-batch-managed components such as packaging materials.

While the semifinished material production still is running, it is already handed over to the next line as input material for the finished product. Therefore the goods receipt postings are done for partial quantities already, allowing their immediate consumption for the next production step and also ensuring batch traceability.

Once the daily production run for the semifinished product is finished, the sum of the produced quantity (as well as the additional scrap quantity) is transferred into the final order confirmation. Generally, only the last operation phase is confirmed, confirming prior operation phases via milestone confirmation. Only in case of exceptions such as unplanned scrap earlier operation phases may be confirmed step by step.

Final confirmation updates process order status automatically, then triggering production controlling. Variance analysis and order settlement may be performed distinctively for every finished order, or as part of period end closing, dependent on reporting requirements.



1.7.4 Make-to-Order Production with Variant ConfigurationThe MTO - Sales Order Processing with Variant Configuration scenario demonstrates sales order processing with materials with preselected characteristic values (material variants) and components that are produced according to sales quantities planned for these variants. If the sales order configuration is not available as a material variant, then customer service can configure the material on the order by choosing the required characteristic values. A sales order cost estimate is created on saving the order, which is subsequently used to valuate the cost of goods sold.

The process is triggered when an order for a configurable material is received from the customer. The customer order is recognized in the MRP run resulting in planned order for production of the material. If insufficient warehouse stock is available, purchase requisitions are created for the raw materials required.

When the production order is created, target costs are calculated for the order lot size (preliminary costing). During the production process, costs incurred are updated on the order, which enables you to keep track of and compare target costs and actual costs at any time.

Period-end-closing activities are applied to the order. This includes Work In Progress calculation and variance calculation. After this, Work in Progress is settled to financial accounting and production variances are settled to management and financial accounting. Production variances are settled to profitability analysis with the sales order as one of the characteristics.

1.7.5 Make-to-Order Production w/o Variant ConfigurationThis scenario describes the entire process sequence for a standard sales process (Make-to-Order) with a customer. The business process encompasses all steps from the customer quotation to the clearing of a customer account after payment is received.

Quotation processing is the first stage of the production process. The scenario starts with an incoming request for quotation. A quotation is then created in the SAP system in response to the customer's RFQ. The customer requests a change to the quotation and a follow-on quotation is created. Finally, the customer accepts the second quotation and a referenced sales order is created. An order confirmation is sent to the customer and production process is started. Now, the customer requests a technical change. Sales order and bill of material are therefore recalculated. The process ends with the delivery and the billing of the produced goods.

The process can be enhanced individually by executing optional steps, like serial number creation, subcontracting, QM in production, credit management, and plant- and company closing.

1.7.6 Repetitive ManufacturingRepetitive Manufacturing is commonly used when a production process meets the following criteria: The same or similar products are produced over a lengthy period of time. The products produced are not manufactured in individually defined lots. Instead, total quantity is produced over a certain period at a certain rate per part-period. The products produced always follow the same sequence through the machines and work centers in production. Routings tend to be simple and do not vary much.

1.7.7 Production Subcontracting (External Processing)During the Manufacturing process when a Planned Order for Production is converted to a Production Order, the system will check to see if there are any routing/work-center operations that require external processing. External processing means that you have individual Production steps



(operations or suboperations) that are performed outside of your company by a vendor. This type of processing is particularly important for subcontracting. It can also provide a company with a feasible alternative to in-house processing, if capacity bottlenecks occur.

When a Production Order is scheduled, external operations need to be taken into account. The duration of an external operation is calculated either by using the planned delivery time or using the standard values. The system automatically creates a Purchase Requisition for the operation or suboperation that requires external processing. The Production scheduler should inform the buyer they need to check the workload for Requisitions that require external processing.

When data is maintained for an external activity, a cost element is specified. The cost element determines how the external activity is to be valuated. A decision needs to be made as to whether an operation or suboperation is processed externally via its control key. In the control key it is determined whether externally processed operations are scheduled on the basis of their standard values or the planned delivery time. This information is needed to settle externally processed operations and suboperations that have been marked as relevant for costing in their control keys

Purchasing should not convert the Purchase Requisition until the external processing is required. The reason for this is that any quantity changes on the Production Order automatically update the Requisition.

Once the Purchase Order is created it is printed and sent to the vendor. The Purchase Order informs the vendor which service is required.

In the SAP standard, the output of the subcontracting order via printer / EDI is performed by the purchasing department. Since the production process for the finished product is ongoing (not stock relevant), a material provision by the warehouse manager via delivery note or goods movement is not possible in the standard system.

If it is necessary to have a delivery note in addition to the subcontracting order, the Buyer / Planner / Scheduler creates a manual shipping document. The planner provides the shipping department with information on what components need to be gathered for the external processing and ships the components to the vendor.

Another alternative (not part of this scenario) is that you can customize an additional output type with a special output form only for operations within the operation control key for external processing in production orders. In the output form, designed as delivery note for the external processed operation, it is useful to put the number of the purchase order and the production order.

When the vendor has completed the external processing the material is shipped back. The warehouse clerk receives the externally processed goods back into the warehouse. The vendor service is reflected on the Production Order via an operation confirmation. The Purchase Order and the Production Order show the quantity received.

1.7.8 Rework Processing (Stock-Manufactured Material)This process focuses on rework activities and material postings after production execution for the original material (including goods receipt of the product), with an additional rework production order.

In real business case issues with the produced material are dealt with after it has been posted into inventory. For realization of this process there are several possibilities:

After execution of a material transfer posting from the original product onto a dedicated rework material, a new production order is raised. The rework material is then used as a component, the product again is the original material. Material valuation of the rework material should reflect the finished product value minus rework costs. Costs are collected within the new production order and settled into controlling as production variances. Additionally the financial posting triggered from the material transfer posting covers the average rework costs.

Since material transfer posting is not always accepted, it is not part of this scenario.



In this scenario the rework process of stock manufactured material is realized with creating a new production order, using the material that has to be reworked as input and getting the same material again as output. Costs are collected within the new production order and settled into controlling as production variances. Input component and product have the same material number.

1.7.9 Rework Processing (Work-in-Process)This scenario focuses on a rework process within production. All required rework activities are related to the parent production order. For this reason errors are recognized and corrections initiated such as insertion of a rework operation within the same production order. The additional rework operation is confirmed and settled within the original production order, causing production variances within controlling and price differences for the dedicated product.

1.8 Logistics General / QM / PLM

1.8.1 Batch ManagementIf materials are handled in batches it might be necessary to change batch master data or to find out where a batch was used, for example, to perform a batch recall or report to government.

1.8.2 Batch RecallIn this scenario, a defect batch is identified and must be recalled from customers and prospects who have received the batch.

A program is executed to identify all customers who received a defect batch. The user then chooses the addresses of the appropriate contact persons, and the system prints a standard letter to each customer to inform them of the recall. The subsequent activities for each customer are stored in the system. Return deliveries are also entered and documented, if necessary.

To ensure that you contact all customers affected by a defect batch, you must identify if subsequent batches are affected by the defect batch. For this purpose, you can use the standard system function Batch where-used list that is described in detail in the standard SAP ERP documentation. This scenario recalls a batch from a finished product or wholesale product. Therefore you can simply find all customers who received these products. However, a vendor could report that a raw, semifinished, trading, or other material used in your production, does not meet quality standards. In this case, you must determine which finished or trading materials were produced with these defect batches.

1.8.3 Quality Management for Procurement with vendor EvaluationThis scenario deals with quality inspection activities during the procurement process.

A customer orders goods from specified vendor 300001. On goods receipt, an inspection lot is generated according to the defined material specification. A usage decision is then made as to whether to accept or reject the material, based on the inspection result (in this scenario, the rejection is made). Subsequent processes such as quality notification and vendor evaluation then follow.

The scenario focuses on the following activities:

Goods Receipt based on Purchase Order



Inspection Defects Recording

Usage Decision after inspection

Quality Notification creation and completion

Goods return to vendor and return delivery creation

Vendor Evaluation process

1.8.4 Internal Product Development (with PS)In this scenario, the company wants to design a new product requested by the internal marketing department in the form of a product specification. The internal design department sets up a design proposal for the new product.

This scenario also introduces the merging of document management in SAP ERP and also SAP Easy Document Management.

The company uses the project management function to collect all costs and documents for product development. The project provides a central structure for cost collection and documentation management.

The new material master and material BOM are created in the back-end system. Later, the production scheduling department creates routing as a basis for production and calculation of the product.

To check the price level specified from the marketing department for the new product, the production scheduling department calculates material costs using the BOM and routing. Since the estimated price exceeds the specified price limit, a component of the new product BOM is exchanged for a less expensive component using change management. The design department issues an engineering change master to collect and document all changes according the specification document.

Following a second costing run (cost estimate), the price meets the budget. Now the development status of the new product can be fixed by assigning a revision level.

At the end of the scenario, the internal design department records the activities it executed during the project, and finally closes the project.

The manufacturer creates a production BOM (by copying the engineering BOM (usage type 2) to the production BOM (usage type 1).

Document Management (Easy Document Management)

o Assign a document (KPR) to the material masters of the finished product

Project Management

o Create a project based on a template

Product Data Management with ECM

o Create a change number for the design project

o Display the BOM of the new product

o Redisplay the BOM (effects of change number)

o BOM status management

o Assign revision level to the material master of the new product

Product Cost Controlling



o Material cost estimate for the new product before and after BOM changes (effects of change on price is shown)

o Material calculation

Project Closing

o Record development (engineering) activities

1.9 Service

1.9.1 Period End Closing Service Orders This scenario covers the closing operations for service orders and helps you prepare and carry out the activities required.

1.9.2 Travel ManagementThe purpose of this process is to provide fully integrated management of all incurred travel expenses – from the planning/approval stage right through to the point at which the travel expenses are posted to Financial Accounting and allocated on a cause basis in Cost Accounting.

1.9.3 Internal Maintenance The business scenario deals with the internal maintenance of the piece of equipment triggered by an employee.

1.9.4 Spot Consulting with Fixed Price BillingThis business scenario addresses a spot consulting engagement with fixed price billing. The sales order is the focal point of the process as it formalizes the customer's requirements, collects labor and travel costs and serves as a basis for fixed price billing. This scenario would typically apply to a consulting arrangement of short duration where detailed work planning and execution are not necessary.

The scenario starts with the creation of a sales order.

After the employees involved in the consulting arrangement have carried out their work, they record the hours worked and their trip costs, whereas the sales order is the receiving cost object. Finally the customer is billed on a fixed price basis. On a periodic basis, a results analysis is carried out on the sales order, after which the accrued data is being settled to CO-PA and FI.

1.9.5 Sales Order with Fixed Price and T&M BillingThis business scenario addresses a project cycle from quotation to completion where one part of the billing is agreed on a fix price basis. The other part is billed based on the actual work performed. The sales document in form of a sales order is the focal point of the process as it formalizes the customer’s requirements, collects labor costs, and generates billing time and material. This scenario would typically apply to a consulting arrangement where detailed work planning and execution are not necessary.



1.9.6 Project with Fixed Price and T&M BillingThis business scenario addresses the typical business processes of an engineering or industrial design company. An agreement with a customer for a design project requires a down payment and billing based on performance of defined milestones. The design company sets up a project structure and assigns employees to specific activities based on skill sets and availability. The project is automatically created from the sales order using a predefined project structure template.

1.9.7 Internal ProjectIn any professional service firm a considerable amount of time is spent with internal work, such as proposal work, or training or development of new service offerings. It is desirable to capture the times and expenses incurred on such tasks with the same tools as used for external work.

The setup of codes for internal projects might be different as no sales order is required. The data capture should follow the same logic as for external work. Subsequent treatment in accounting and reporting is then different, but should result in an overall complete picture.

The process described here covers:

Creating the code to collect costs

Capturing costs (time, expense, purchases)

Periodic processing

Closing the code for further postings

Sundry billing from internal projects to recover overheads is also possible but not covered here.

1.9.8 Service with Time & Material based BillingDocumenting a customer request for quotation (RFQ) for services, a notification is created in the system to document and classify the required work. An optional activity lets the service responsible call the customer again to complete the information required to prepare the quotation.

The quotation is created in referring to the service portfolio offered by the service provider. This is represented through a range of service products. The prices being offered to the customer for the quoted services are based on time and material. The negotiation process leads to changes in the final price. The final informative quotation is sent to the customer for approval.

If the quotation is rejected, a reason for rejection is set in the sales document to proceed to its cancellation and the process concludes. In case the customer accepts the quotation, a sales order is created and automatically a service order. The service order contains the resources, time, and material, included in the quoted services.

The sales order is billed one or more times during the execution of the service. The amount billed is determined on a time and materials basis, the billing method used is resource-related billing. The actual revenue in this case is given by the work actually performed and can be different to the quotation estimate.

In this scenario, settlement to Profitability Analysis takes place independently from the service order (actual costs) and from the sales order (actual revenues). Analysis for service profitability is carried out in CO-PA reporting.

This situation describes the case of small or quoted services (typically those that conform a service catalog) and that do not need to be individually analyzed in terms of profit and loss. Actual cost and revenues meet only in CO-PA, and the analysis takes place in bulk according to characteristics such



as time period, customer, sales area, supplier cost center, service or service type provided, and so on.

1.9.9 Service Contract with Periodic BillingA service provider has a service contract with a customer.

The business process starts with a notification and a service order.

The costs (fee, spare parts, and travel expenses) resulting from the service order are account assigned to the service order and billed to the customer by Contract Periodic Billing. The services provided are represented in the sales order per units of service, so the service can be divided and billed into discrete units.

The price of the service unit is not calculated by the system in this example, but updated manually in the sales order by the service provider after negotiating it with the customer.

If necessary, spare parts are ordered and purchased.

1.9.10 Service with Fixed Price BillingDocumenting a customer RFQ for services, a notification is created in the system to document and classify the required work.

The quotation is created in referring to the service portfolio offered by the service provider. This is represented through a range of service products. The prices being offered to the customer consider fixed prices for the quoted services. The negotiation process leads to changes in the final price. The final informative quotation is sent to the customer for approval.

If the quotation is rejected, a reason for rejection is set in the sales document to proceed to its cancellation and the process concludes. In case the customer accepts the quotation, a sales order is created and automatically a service order. The service order contains the resources, time, and material, included in the quoted services.

The sales order is billed one time at the final delivery of the services by the total amount accepted in the binding quotation.

In this scenario, settlement to Profitability Analysis takes place independently from the service order (actual costs) and from the sales order (actual revenues). Analysis for service profitability is carried out in CO-PA reporting.

This situation describes the case of small or quoted services (typically those that conform a service catalog) and that do not need to be individually analyzed in terms of profit and loss. Actual cost and revenues meet only in CO-PA, and the analysis takes place in bulk according to characteristics such as time period, customer, sales area, supplier cost center, service or service type provided, and so on.

1.9.11 Period End Closing ProjectsThis scenario covers the closing operations for projects and helps you prepare and carry out the activities required.

1.9.12 Procurement of Third-party resourcesThe service provider is in need of a service from a 3rd party.



The business process starts with a purchase order. It is possible to create a purchase order without reference or with reference to a purchase requisition.

The goods receipt is booked with the incoming delivery. The invoice is booked with reference to the purchase order.

1.9.13 External Procurement of ServicesThe service provider is in need of a service from a 3rd party.

The business process starts with a purchase order. It is possible to create a purchase order without reference or with reference to a purchase requisition.

The service entry is booked to confirm the service performed. The invoice is booked with reference to the purchase order.

1.9.14 HCM / Time RecordingThe Cross-Application Time Sheet (CATS) is the tool used for recording time worked by an employee on a certain assignment. Working time can be recorded on a sales order, internal order, service order, or a project. Additionally you can switch over to travel management for reimbursement and posting of travel expenses.

1.9.15 Sales of Planned ServicesA customer has signed a long-term contract with a service provider. The service provider carries out services on a frequent basis. Typically, such contracts are service level agreements between the service provider and the customer.

The business process starts with a customer who requests frequent or permanent services from a service provider. Therefore, a maintenance plan is created, subsequently a service order is generated automatically, and the necessary material parts are ordered.

The costs (fee, spare parts, and travel expenses) resulting from the service order are entered to the service order and billed to the customer resource-related, according to the corresponding effort and expenses.

1.9.16 Depot RepairThis scenario covers the processing of a service case from the initial reporting of the problem by the customer up to billing the customer, when service activities are carried out at plant.

The business process starts with a customer reporting a problem with a notebook. A service agent creates a service notification in the system. The service notification number is used as a return material authorization (RMA) number in the remainder of the repair process. The service agent carries out a warranty check on the service notification and then creates a service contract. The service center informs the customer that they must send the notebook to the central service center. The service notification number (RMA) must be specified on the shipping documents; otherwise the notebook is rejected by the service center. If the necessary spare parts are not in stock, they have to be ordered. A repair order is then created from the service notification so that the entire repair process can be controlled and settled. In the repair order, the damaged notebook is automatically assigned by the returns items created. A service order is automatically generated using an item proposal to enable the repairs to be carried out. Once the repairs have been carried out, the costs (for hourly fees and spare parts) are confirmed to the service order. The repaired notebook is



delivered to the customer and the final repair status can be displayed. The service center creates a billing request. This appears in the repair order as an additional item and is not a separate document (unlike the billing request in the on-site service process). Subsequently, the repair order is billed. On a periodic basis the costs and revenues incurred on the service order are being settled to the repair order, where they can be evaluated.

1.10 Master Data Generation Descriptions and Reporting

1.10.1 Master Data Generation DescriptionsThe SAP Best Practices Baseline Package covers various descriptions on how to create master data.

These descriptions are:

Create Accounts and Account Groups

Create Assets

Segments and Profit Center Maintenance

Functional Areas Maintenance

Create Cost Center and Cost Center Group

Maintain Cost Center Hierarchy

Create Cost Element and Cost Element Group

Create Cost Collector

Maintain Assessment Cycles

Create Standard Cost for Individual Material

Create Activity Type / Groups

Create Internal Order

Maintain Vendor Evaluation

Create Vendor Master

Create Purchasing Info Record

Create Source List

Create Purchasing Contract

Create Customer Master

Create Sales Price Condition

Maintain Capacity

Create Work Center

Maintain Work Center Hierarchy

Create Resources for Process Industry

Create Product Group

Create Raw (ROH) Material

Create Semifinished Good (HALB) Material



Create Trading Good (HAWA) Material

Create Finished Good (FERT) Material (non configurable)

Create Finished Good (FERT) Material (configurable)

Create Configurable Material Variant

Create Engineering Change Number

Create Production Version

Maintain Material Plant Extension

Maintain Material Storage Location Extension

Create Serial/Equipment Number

Maintain Material Sales Organization Extension

Create New Bill of Material

Maintain Bill of Material - Configurable Material Link

Create Routing

Create Reference Operation Set

Maintain Material Scheduling via Routing

Create Master Recipe

Attach Material Variants Routing to Parent Material Routing

Create Configuration Profile

Create Variant Classification

Load BOM Dependencies

Create Standard Work Breakdown Structure (WBS)

Create Standard Network

Maintain Network Parameters for Sales Order

Create Output Conditions SD

Create Tax Conditions SD

Create Material determination info record

Create Free Good determination info record

Maintain Catalogs – Create Code Groups and Codes

Maintain Catalogs – Create Selected Sets and Selected Set Codes

Create Master Inspection Characteristic

Maintain Material Specification

Create Batch Classification

Maintain Material Master Extensions

Create Employee

Create Sales Representative

Create Task List

Create Service Master



Create Service Product

Create Warranty

Create Service (DIEN) Material

1.10.2 SAP ERP Reporting In SAP ERP various reports can be used to monitor and control your company processes. SAP Best Practices focuses on the following reports:

General Ledger

Recurring Entry Documents

G/L Account Statements

Financial Statement

Financial Statement: Actual/Actual Comparison

Compact Document Journal

Line Item Journal

Recurring Entry Documents

EC Sales List

Advance Return for Tax Sales/Purchases

Chart of Accounts

Fixed Asset

Fixed Asset Reporting by Cost Center

Fixed Asset Reporting by Asset Class

Asset Balances

Asset Transactions

Asset Acquisitions

Asset Retirements

Cost Element Accounting

Controlling Documents: Actual Costs

Internal Orders: Master Data Report

Cost Center Accounting

Cost Centers: Actual/Plan/Variance

Range: Cost Centers

Range: Cost Elements

Cost Centers: Planning Overview

Range: Actual/Budget Commitments

Cost Centers: Activity Prices

Internal Orders

Orders: Actual Line Items



Orders: Commitment Line Items

List: Orders

Orders: Actual/Plan Variance

Order: Planning Overview

List: Budget/Actual/Commitments

Product Costing

Multilevel BOM: Value / Amount / Status

Cost Component

Itemization

Cost Elements

Analyze/Compare Material Cost Estimates

Analyze Product Cost Collector

Analyze Product Order

Profitability Analysis

Execute Report

Information System

Costs/Revenues/Expenditures/Receipts

Actual Costs/Revenues

General Logistic

MRP List

List Display of Purchase Requisitions

Stock Overview

Outbound delivery monitor

Sales and Distribution

List of Sales Orders

Sales Order Selection

Analyze Sales Orders

Actual Cost Line Items for Sales Documents

List Billing Documents

Release Billing Documents for Accounting

Incomplete SD Documents

SD Documents blocked for Delivery

SD Incomplete Documents

Purchase Requisition per Account Assignment

Purchase Orders by Account Assignment

Quotation List

Expiring Quotations



Expired Quotations

Completed Quotations

Credit Overview

Customers With Missing Credit Data

Credit Memos

License: Assigned documents

Check of Customer Master Regarding Legal Control

Backorders

Sales Support Monitor

Returns

Materials Management and Procurement

General Analyses: Purchase Orders, Contracts, and Scheduling Agreements, Quotation

List of Notifications

Analysis of Purchase Order Values

Purchase Order by Material

Purchase Order by Vendor

Purchase Order by Document Number

Purchasing Group Analysis

Release Purchasing Documents

Assign and Process Purchase Requisitions

Stock Requirement List

SC Stock Monitoring for Vendor

Vendor Analysis

Mass Activation of Planned Changes for Vendor

Material Document List

Display Warehouse Stocks of Material

Accounting Documents for Material

Material Documents with Reason for Movement

Batch Analysis

Availability Overview

Plant Analysis

Material Analysis

Consignment and Pipeline Settlement

Collective Conversion

Service

Service Notifications

Service and Maintenance Orders



Equipment list

Cost Analysis

Scheduling Overview

Production

Production Order Information System

Missing Parts Info System

Capacity Planning

Long-Term Capacity Planning

Long-Term Planning: MRP List

Change Plan

Evaluation of Product Group Planning

Selection: Plan/Actual/Variance

Costs/Revenues/Expenditures/Receipts

Actual/Plan/Variance Absolute/ Variance %

Order Progress Report

Display Production Order Confirmation

1.10.3 Reporting with SAP Business ExplorerThe SAP Business Explorer Analyzer is the analysis and reporting tool of the SAP Business Explorer that is embedded in Microsoft Excel. Using the SAP NetWeaver Business Client you have the possibility to show lists with the SAP Business Explorer Analyzer.

2 Functional Scope – FunctionsSAP Best Practices are the easiest way to set up a business solution that provides unlimited scalability, best-of-breed functionality, complete integration, and easy collaboration for every business. With SAP Best Practices you can reap business benefits quickly and eliminate as much risk as possible. It provides you with the combined benefits of a powerful solution and proven business expertise that stems from collaborative efforts between SAP and its partners.

SAP Best Practices Baseline Package (U.S.) quickly turns your SAP software into a live system that handles all your specific business requirements. Preconfigured business scenarios help you rapidly realize business benefits without extensive configuration. Use it to evaluate your specific business solution. And use it to implement this solution so that you can realize all its benefits faster, with less effort, and less expensively than ever before.

SAP Best Practices can be used by midsized enterprises that need rapid implementation or by large companies that need to create a corporate template for their subsidiaries. It can be easily applied to existing customer solutions.

SAP Best Practices are built in a way that customers can easily use them. Three different components are included:

o Detailed, step-by-step implementation procedure including automated activities.



o Extensive reusable documentation that you can use for self-study, evaluation, and for project team and user training.

o Complete preconfiguration settings that give you everything you need to run integrated key processes out of the box with reduced installation effort. The configuration is fully documented including preconfigured business processes, training material, and user roles. It is built using the latest technology, so you can adapt it quickly and easily.

2.1 Financials

2.1.1 Financial AccountingThe Financial Accounting component supports the valuation and reporting of your inventory according to different regulations.

The Material Ledger component enables you to carry inventory values in two additional currencies/valuations. Therefore, all goods movements in the Material Ledger are performed in up to three currencies or valuations. Currency amounts are translated into foreign currencies at historical exchange rates at the time of posting.

Actual Costing supports the determination of actual costs (compared to standard costs) for externally procured materials and materials produced in-house. This can be used to valuate material inventories, such as raw materials as well as semifinished and finished products, accordingly.

The following business goals and objectives can be achieved through the implementation of these processes:

A reduction in operating costs and an increase in efficiency.

A reduction in administration, and an improvement in the business processes

2.1.1.1 General Ledger This function provides a comprehensive picture for external accounting and accounts. It records 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. This ensures that the accounting data is always complete and accurate.

2.1.1.2 Accounts Receivable Records and manages customer accounting data via the Accounts Receivable (AR) component. The function connects AR directly to the G/L using a special reconciliation account.

2.1.1.3 Accounts Payable Records and manages vendor accounting data via the Accounts Payable (AP) component. The function connects AP directly to the G/L using a special reconciliation account.



2.1.1.4 Fixed Assets Accounting Maintains and analyzes fixed assets according to generally accepted rules in the company's country. Delivers country templates with the system.

2.1.1.5 Inventory Accounting Supports the valuation and reporting of inventory according to different regulations. Carries inventory values in two additional currencies/valuations via the Ledger component. Performs all goods movements in the Material Ledger in up to three currencies or valuations. Translates currency amounts into foreign currencies at historical exchange rates at the time of posting. Supports the determination of actual costs (compared to standard costs) for externally procured materials and materials produced in-house via Actual Costing. Valuates material inventories, such as raw materials as well as semifinished and finished products, accordingly.

2.1.1.6 Tax Accounting Supports the calculation and reporting of taxes on sales and purchases and withholding tax.

2.1.1.7 Financial StatementsAs part of the period or year-end closing, individual companies create financial statements according to country-specific regulations.

2.1.2 Management AccountingThe Management accounting component provides valuation and recording of financial data as the basis for all cost- and revenue-related reporting.

The following business goals and objectives can be achieved through the implementation of these processes:

An increase in revenue

o Maximization of profitability by customer

A reduction in operating costs and an increase in efficiency

o A reduction in the cost-of-goods-sold (COGS)

o An improvement in inventory visibility

2.1.2.1 Cost Center and Internal Order AccountingRecords costs incurred during the company operations by assigning them to cost centers (assigned to managers or organizational units). Plans, records, and then analyzes costs against the plan. Uses internal orders to plan, collect, and settle the costs of internal jobs and tasks. Monitors internal orders throughout their entire lifecycle using the SAP system, from initial creation, through the planning and posting of all the actual costs, to the final settlement and archiving.



2.1.2.2 Project AccountingMonitors precise planning of the detailed activities involved in both large scale projects, such as building a factory, and small scale projects, such as organizing a trade fair. Helps the project manager ensure that the project is executed efficiently, on time, and within budget - which he or she achieves by ensuring that the required resources and funds are available as and when needed.

2.1.2.3 Product Cost Accounting Helps a company know the costs incurred by its products to successfully manage the product portfolio. Calculates cost of goods manufactured (COGM) or cost of goods sold (COGS) broken down by each step of the production process. Uses cost information gathered about the product automatically in other SAP applications.

2.1.2.4 Profitability Accounting Records costs and revenues by market segment to calculate the contribution margin for each market segment. Market segments can be products and product groups, customers and customer groups, orders, or any combination of these or strategic business units, such as sales organizations or business areas.

2.1.2.5 Transfer PricingManages transfer prices, which support organizations that divide tasks among different organizational units by valuating the goods and services exchanged between these units. Aids particularly large corporations that are divided into a number of independently operating divisions or companies that exchange large quantities of goods and services with one another. Lets transfer prices be used for controlling corporate units as the division of labor between internationally operating units increases, value-added chains become more complex and responsibilities become more decentralized. Valuates the exchange of goods and services using transfer prices, to significantly influence the actual success of corporate divisions or profit centers. Helps today's accounting systems provide decision support that represents operational results from different points of views and using different currencies.

2.2 AnalyticsSAP™ ERP is a complete, integrated solution for analytics and business intelligence, including strategic enterprise management and financial, operational, and workforce analytics. It enables companies to clearly understand profit drivers of their business, tightly link strategic plans to operational performance, and support a single analytical platform for their enterprise.

Key functions include the following:

Financial analytics enable you to define financial targets, develop a realistic business plan, and monitor costs and revenue during execution.

Operational analytics enable you to compile detailed operations reports and support informed operational decision making.

Workforce analytics support human capital management policy development and decision making.



2.2.1 Operations AnalyticsSAP ERP provides operational analytics that facilitate the compilation of detailed operations reports and support informed operational decision making - giving management and employees the information they need to increase insight into business processes. In addition sales planning can allow organizations to generate a complete picture of the entire supply chain, including the impact of sales on operations.

2.2.1.1 Sales Planning Sales Planning is a planning application for translating company targets into concrete, concerted marketing, sales, and service strategies. This application is based on a reconciled top-down and bottom-up sales planning process helping to increase visibility resulting in improved decision-making and profitability.

2.2.1.2 Procurement Analytics This function

Monitors purchasing operations (for example, how many goods have been received for purchase orders for the last month) using various standard analyses and reports.

Facilitates the detailed analysis of the purchasing activities and procurement processes taking place within your enterprise (for example, ranking your suppliers according to purchasing values).

2.2.1.3 Inventory and Warehouse Management Analytics Inventory controlling provides different standard analyses and reports display actual stock situation according to quantity-based and value-based criteria. Other reports are available for monitoring characteristics on a periodic basis.

2.2.1.4 Manufacturing Analytics Provides various standard analyses and reports to visualize production-related information.

2.2.1.5 Sales Analytics Enables salespeople to quickly and easily understand the actual status and overall effectiveness of the sales organization. Helps obtain the data necessary to proactively address trends and measure success and revenue shortfalls.

2.2.1.6 Customer Service Analytics Provides organizations with a comprehensive view of key figures of all service-related scenarios.

2.2.2 End-User Service Delivery: SAP RolesSAP ERP End-User Service Delivery enables the delivery of ERP services together with business content to the entire organization and beyond at low costs. It gives the users multiple options to



access ERP services depending on their situation, their preferences, and the business context. By standardizing and automating business processes, companies can implement efficient shared service strategies, establish service excellence and foster innovation and growth.

SAP Best Practices provides several predefined roles to be used in the SAP NetWeaver Business Client (NMBC) to ensure an efficient system access for users. These can be used out of the box or otherwise be easily adapted to company-specific needs.

2.3 Human Capital ManagementTo meet the demands of today's knowledge-based economy, companies must maximize the potential and productivity of their employees. Maximizing the investment in the organization’s human capital is crucial to business success. SAP Best Practices delivers preconfiguration for selected areas of the workforce process management: Employee Administration and Time & Attendance Management.

2.3.1 Employee Administration SAP offers advanced features for Employee Administration, such as Maintenance or Employee Status Change.

2.3.2 Time and Attendance SAP optimizes processes for planning, managing, and evaluating the working times and activities of internal employees via the Time Management capabilities.

2.4 Procurement and Logistics ExecutionWith SAP ERP Operations, you can manage end-to-end logistics for complete business cycles. The solution enables a wide range of activities, from self-service requisitioning to flexible payment processing, including management of material flows.

2.4.1 Procurement Procurement – SAP ERP supports not only traditional processes such as requisitioning, purchase order management, and invoice verification, but also catalog-based self-service requisitioning for MRO material and services. Catalog integration has been expanded to maintenance operations and project management.

2.4.1.1 Requisitioning A purchase request is a request or instruction to purchasing to procure a certain quantity of a material or a service so that it is available at a certain point in time.

Manual creation of Shopping Carts

Empowers employees to create and manage their own requisitions for products or services. It relieves your purchasing department of this administrative burden while making the procurement process both faster and more responsive. Providing catalogs of the most frequently ordered materials ensures that employees can easily manage their own purchase orders in accordance with your organization's rules.

When employees have filled their shopping cart, they can either place an order straight away or hold it for subsequent completion. Users can check the status of their shopping at any time in a graphical view.



Approval

When a shopping cart is released for ordering, the system checks whether approval is necessary. If one or more managers need to approve the shopping cart for example, because it exceeds a certain value the system automatically submits it to the respective inbox(es).

2.4.1.2 Purchase Request Processing The purchasing department works with the purchasing request, decides on whether the requirement of products can be covered from stock or needs to be procured externally considering optimization issues.

Source of Supply Assignment

Conversion of Demands to Purchase Orders

The requirements that have been created and released for procurement (for example, demands for spare parts coming from plant maintenance, demands for raw materials determined in a planning run, or requests for office supplies entered by an employee) are transferred to purchasing as purchase requisitions. They are presented to the buyer in worklists that support him or her in converting the requisitions into purchase orders. Release procedures are available to control critical procurement processes.

2.4.1.3 Purchase Order Processing When a purchase order has been created a number of checks and validations make sure that the right contract, discount, price, and so on, is referenced correctly. Purchase Order Processing also deals with the communication of the purchase order to the supplier.

When a purchase order has been created a number of checks and validations make sure that the right contract, discount, price, and so on, is referenced correctly.

2.4.1.4 Receiving Receiving deals with the actual shipping of goods or performing of services by a supplier, the recording of the goods receipt or service entry in the system and with the follow-on activities that correspond to these, such as returns handling.

Goods Receipt

The confirmation of the quantity received is created centrally and forms the basis of the information flow to the planning and purchasing departments. These departments can consider the new stock or requirement situation and see the receipt in the order history. If the receipt is relevant for warehouse management, the receipt confirmation is linked to physical inbound processing. The receipt confirmation automatically triggers the material valuation and creation of documents for accounting. Documents for controlling are also created if necessary.

Returns handling

Should the delivered goods turn out to be faulty or damaged, you can return either the entire or partial quantity to the supplier. In the case of an existing confirmation, you can return either parts of single items or all items to the vendor.



2.4.2 Inventory and Warehouse Management Processes in the area of Inventory Management address the recording and tracking of materials on a quantity and value basis. This includes planning, entry, and documentation of stock movements such as goods receipts, goods issues, physical stock transfers, and transfer postings as well as the performance of physical inventory (stocktaking). Warehouse Management Processes cover warehouse-internal movements and storage of materials.

2.4.2.1 Warehousing and Storage Processes warehouse-internal movements and storage of materials.

Inventory Management

Manages the stocks of a company in quantities and values. It is integrated with supply chain accounting and is responsible for:

Goods receipts and goods issues

Managing different stock categories (available, blocked stock, in quality assurance, and so on)

Special stocks (including consignment stock, project stock, and so on).

Enables a summarized visibility of stocks in the supply chain.

Production Supply

The material supply of storage bins in production can be handled with SAP Warehouse Management. Picking for work orders is supported by advanced strategies and combined with handling unit management. It is possible to pack for a specific work order.

Storage and Stock Management

Serial Numbers

Batch Management: This includes the handling of batches and batch determination for delivery picking, for production supply, or in internal warehouse processes.

2.4.2.2 Physical InventoryManages physical inventory for your organization's own stocks or for special stocks in your warehouse.

Planning Phase of Physical Inventory

The physical inventory process can plan which material has to be counted at which storage location on which date. Stocks can be blocked for goods movements before the beginning of counting, measuring, and weighing.

Counting Phase of Physical Inventory



After the counting results have been entered, you can monitor the differences and trigger a recount if necessary. If you post quantity differences for your locations, an update of the material valuation and financial accounting is triggered automatically.

Monitoring of the Physical Inventory Activities

Detailed functions for monitoring the completeness of the physical inventory, the status of open and completed physical inventory activities, and the results of historical physical inventory activities are available. You can monitor the activities on material or location level.

2.4.3 Inbound and Outbound LogisticsThe Inbound process comprises all the steps of an external procurement process that occur when the goods are received; the outbound part covers the necessary activities for preparation and shipping of goods to their destination.

2.4.3.1 Inbound Processing Goods Receipt

Is a follow-on activity to a purchase order. It forms the basis for updating the financials and inventory records and can trigger warehouse management and quality management processes.

With the warehouse management system, you can control the goods receipt and goods issue processes at a physical level. Goods receipts are possible from purchase order, inbound deliveries (advanced shipping notice), stock transport orders, or from production orders. Goods receipt begins the putaway process, which is supported by different advanced strategies.

Determination of External Demands

Determines the data describing a demand for a material that is procured externally. This data includes the quantity that is required, the release-to-supplier date of the demand, the goods receipt date for the delivery, and the location to which the material has to be shipped.

Shipping Notification

Comes from the vendor and contains the exact materials, quantities, and the delivery date with reference to a purchase order. This document becomes the Inbound Delivery in the receipt process.

2.4.3.2 Outbound Processing Goods Issue

The outbound delivery forms the basis for goods issue posting. The data required for goods issue posting is copied from the outbound delivery into the goods issue document. When you post goods issue for an outbound delivery, the following functions are carried out on the basis of the goods issue document:

Warehouse stock is reduced by the delivery quantity.

Value changes are posted to the balance sheet account in inventory accounting.

Requirements are reduced by the delivery quantity.



The serial number status is updated.

The goods issue posting is automatically recorded in the document flow.

Stock determination is executed for the vendor's consignment stock.

A worklist for the proof of delivery is generated.

After goods issue is posted for an outbound delivery, the scope for changing the delivery document becomes very limited. This prevents discrepancies between the goods issue document and the outbound delivery.

Delivery Processing & Distribution

Controls the actual fulfillment of sales orders and purchase orders as well as stock transport orders. The execution of logistics tasks is handled here. With delivery processing, the goods are shipped and relevant documents are printed out. The sales requirements can be distributed to alternative locations. The delivery might be shipped to the customer directly from the fulfilling locations (more than one delivery), or consolidation may occur at one location before one complete shipment is transported to the end customer.

2.5 Product ManufacturingWith SAP ERP Operations, you can manage engineering and design, create relevant product data, and plan and execute your manufacturing operations. The solution enables connectivity to shop-floor systems, adherence to quality requirements, and compliance with relevant regulations and standards.

2.5.1 Production Planning SAP ERP uses MRP techniques to create un-constraint production plans in form of production orders or planned orders.

2.5.2 Manufacturing Execution Supports the process of capturing actual production information from the shop floor to support production control and costing processes.

Make-to-Order

Supports customer-order-specific planning and production and is industry-specific. Supports assembly processes for (non-) configurable products in a repetitive manufacturing environment or the production of (non-) configured products with production orders. For both processes, the visibility of the customer order is key. This is achieved by using dynamic alerts and order pegging structures during planning and execution.

Repetitive Manufacturing

Is a rate-based, lean production control system. Based on production and assembly lines, the takt times are used for scheduling. An optimizer and heuristics are available for model mix planning and line balancing. Continuous input and output are considered during scheduling. The production runs



without any orders for run schedule quantities and production versions. Backflush of labor and material at reporting points support the lean execution process.

Process Manufacturing

Supports the plant as a multiprocess facility. Resource and recipe management forms the basis for planning and sequencing batches or production lots. The solver schedules the process order sequence to avoid costs such as cleanout or changeover. This can be achieved with production campaigns, block planning, or detailed scheduling with a focus on critical resources. Process orders are used for scheduling, execution, and costing. Process management coordinates the data exchange between the SAP execution system and connected process control systems. These processes can be documented and evaluated. The seamless integration with quality management ensures process control and stability.

Batch Management

Batch management fulfills the requirements for managing and tracking batches or production lots across the whole production process. In various industry sectors, particularly the process industry, you have to work with homogeneous partial quantities of a material or product throughout the entire quantity and value chain. In the SAP system, a batch is the quantity or partial quantity of a particular material or product that is manufactured according to the same recipe. There are various reasons for this:

Legal requirements, for example, guidelines on good manufacturing practice (GMP), or regulations on hazardous materials.

Defect tracing, recall activities, and recourse requirement.

The requirement for differentiated quantity-based and value-based inventory management, for example, through heterogeneous yield/result quantities or unequal constituents in production.

Usability differences and the monitoring thereof in materials planning, sales and distribution, and production.

Production or technical requirements, for example, material quantity calculations on the basis of different batch specifications.

2.5.2.1 Document Management

SAP Easy Document Management

Enables you to use document management as a virtual drive in the Microsoft® Explorer (for example, using drag & drop to check documents in and out). You can also check documents in and out directly from all office applications, search for documents and add them to a worklist, maintain classification data, and create objects links.



2.6 Sales and ServiceThe Sales & Service area addresses the customer focusing processes like selling products and services and providing aftermarket services. It enables sales organizations to manage the sales cycle, sales, and service orders and the subsequent activities.

2.6.1 Sales Order ManagementProvides capabilities that companies can use to create inquiries and quotations, acquire and enter orders, configure products, determine pricing, check product availability, track and manage, and bill orders.

2.6.1.1 Account Processing Enables companies to provide a detailed view on customers and prospects. Captures, monitors, and tracks information such as master data, and an overview of critical relationships.

2.6.1.2 Quotation ProcessingAllows you to create and process orders, including pricing and scheduling order for fulfillment. SAP ERP supports many process variants, for example:

Ship-to-order

Make-to-order

Returnables (pallets)

Batch processing

Serial number processing

Third-party delivery processing

Complaint handling

Returns

2.6.1.3 Sales Order Processing The order management capabilities allow sales reps to easily configure, price, and create sales orders for customers. In addition, order management provides the ability to perform product determination and substitution, explode structured products in a business transaction to carry out pricing, availability checks, transferring those requirements to production or purchasing for either the header product or for the components of the product, and to perform incompleteness checks.

2.6.1.4 Contract Processing Quantity Contracts

Monitors agreements that a customer will order a specific quantity of releasable products during a specified period. The following functions are covered:



Creating a basic agreement (quantity contract)

Creating a purchase requisition

Assigning requisition and creating purchase order

Approval of purchase orders

Contract monitoring

Goods receipt

Invoice receipt by line item

Outgoing payment

2.6.1.5 Billing Is the final processing stage of a business transaction in sales and distribution. Information on billing is available at each stage of order processing and delivery processing.

Billing documents such as invoices, credit, or debit memos, can be created based on order information only or based on order and delivery information, where, for example, the quantity to be invoiced is derived from the delivery note.

During billing processing, you create, change, and delete billing documents such as invoices, credit memos, and debit memos. Flexible calculation of rebates is integrated.

Integration with financial accounting consists of forwarding billing data in invoices, credit, and debit memos to financial accounting. The system posts offsetting entries to the appropriate accounts (with the help of account assignment) and makes sure that FI can recognize all billing documents belonging to one business transaction (for example, a credit memo to an invoice). Integration with controlling consists of assigning costs and revenues to the appropriate subledgers.

2.6.1.6 Returnable Packaging Management Returnable packaging consists of materials that are stored at the customer location but which remain the property of the seller. The customer is only required to pay for the returnable packaging if it is not returned by a specified time.

2.6.1.7 ConsignmentConsignment goods are goods that are stored at the customer location but which are owned by your company. Customers store the consignment goods at their own warehouses. The customer is not obliged to pay for these goods until they remove them from consignment stock. Otherwise, the customer can usually return consignment goods that are not required.

2.6.1.8 Service Contract Management Create and manage service contracts with related billing plans, price agreements and conditions. Service contracts can be referenced in subsequent service processes. Service plans enable contractual preventive maintenance strategies based on time and/or performance.



2.6.1.9 Customer Service and Support Manage incoming service and support requests and identify customers with their respective installed base. Based on this information relevant warranties and service contracts are identified. Tasks to resolve the service issues can be planned with the necessary labor and service parts resources.

Returns Processing determines, tracks, and credits returns of products within a service, including the features warranty check, return reason recognitions, and quantity checks.

Billing documents such as invoices, credit, or debit memos, can be created based on services rendered and/or resources consumed.

2.6.1.10 Warranty & Claims Management Warranty Claim Processing fulfils the needs both of manufacturers, importers or vendors of complex products and their suppliers. Warranty Claim Processing offers a solution that can deal with a large number of warranty claims and, as far as possible, automatically. Only those claims that produce negative results in the automatic checks are included in manual processing.

Product and Warranty Registration: You can create warranties and assign technical objects to those warranties.

2.6.2 Professional-Service DeliveryProvides a comprehensive set of capabilities designed for selling, planning, delivering, and billing project-based services. Projects have to be created, structured, and staffed with the appropriate resources, complex services are delivered and the associated projects have to be executed within a given timeframe, with a satisfying quality and according to contractual agreements. Changes in project timelines, scope, and staffing have to be handled. An integrated project controlling is the bracket for many other scenarios. Engagement Management processes accompany service delivery: contracts have to be set up according to customer agreements, times and expenses are recorded and are priced and billed to the customer in various ways.

2.6.2.1 Quotation Processing With this business process, you can assure your business partners that you will deliver a certain product configuration and quantity of products at a specific time and price. During sales order processing, the sales employee can make use of a variety of sales functions and special quotation functions.

2.6.2.2 Sales Order Processing This business process makes it possible for you to deliver a specific product configuration and quantity, or to provide a service at a specific time. During sales order processing, a sales organization accepts the sales order and is responsible for fulfilling the sales order

2.6.2.3 Project Execution Executing a project based on the project plan including creation of documents, simulation of alternative project structures and analytics.



2.6.2.4 Time and Attendance Optimizes processes for planning, managing, and evaluating the working times and activities of internal and external employees via the Time Management capabilities of SAP ERP HCM. Provides intuitive, user-oriented interfaces that support centralized or decentralized time management.

2.6.2.5 Managing Employee Time and Attendance Optimizes processes for planning, managing, and evaluating the working times and activities of internal and external employees via Time Management in SAP ERP.

2.6.2.6 Project Accounting Monitors precise planning of the detailed activities involved in both large scale projects, such as building a factory, and small scale projects, such as organizing a trade fair. Helps the project manager ensure that the project is executed efficiently, on time, and within budget - which he or she achieves by ensuring that the required resources and funds are available as and when needed.

2.6.2.7 Resource-Related Billing Times and all kind of expenses (for example, travel expenses, 3rd party expenses) can be billed to a customer using several rules. It is possible to filter times and expenses and/or to reject or postpone billing items.

2.6.2.8 BillingIs the final processing stage of a business transaction in sales and distribution. Information on billing is available at each stage of order processing and delivery processing.

Billing documents such as invoices, credit, or debit memos, can be created based on order information only or based on order and delivery information, where, for example, the quantity to be invoiced is derived from the delivery note.

During billing processing, you create, change, and delete billing documents such as invoices, credit memos, and debit memos.

Integration with financial accounting consists of forwarding billing data in invoices, credit, and debit memos to financial accounting. The system posts offsetting entries to the appropriate accounts (with the help of account assignment) and makes sure that FI can recognize all billing documents belonging to one business transaction (for example, a credit memo to an invoice). Integration with controlling consists of assigning costs and revenues to the appropriate subledgers.

2.7 Corporate ServicesSAP ERP Corporate Services supports and streamlines the administrative processes that are standard to most businesses -- those business-critical support processes that you must execute with maximum efficiency and control.

You can tailor SAP ERP Corporate Services to meet your requirements for transparency and control, as well as reduced financial and environmental risk, in the following areas:



Travel management -- SAP ERP Corporate Services helps you reduce costs, streamline travel administration processes, monitor compliance with travel policies, and manage changes in compensation and pricing models from suppliers, global distribution systems, and travel agencies.

Quality management -- SAP ERP Corporate Services enables a unified approach to total quality management, delivering efficiencies that result from fewer product returns, and improved asset utilization.

2.7.1 Project Accounting Monitors precise planning of the detailed activities involved in projects. Helps the project manager ensure that the project is executed efficiently, on time, and within budget.

Integrated Planning and Tracking

Detailed integration brings SAP ERP Financials capabilities to the project world, including budgeting, cost planning and actual costs confirmations and commitments from various sources.

Settle Financial Data

Transfers costs and revenues to ERP Financial Accounting (FI) , Asset Accounting (AA), Profitability and Sales Analysis (CO-PA), and Controlling (CO)

2.7.2 Travel Management Travel management provides fully integrated management of all incurred travel expenses – from the planning/approval stage right through to the point at which the travel expenses are posted to Financial Accounting and allocated on a cause basis in Cost Accounting.

2.7.3 Quality Management Quality management is the comprehensive solution that supports the company throughout the product lifecycle and along the supply chain. It offers a wide range of functions and collaborative services, which are fully integrated into SAP ERP, for assuring and managing the quality of products. It also focuses on prevention and continuous process improvement through collaboration and sustained quality control.

2.7.3.1 Quality Engineering Inspection Planning

Identifies the inspection characteristics (tests) and inspection methods (procedures) and assigns it to various inspection operations of an inspections plan or material specification. SAP ERP offers advanced tools for inspection planning and the management of standard operation procedures. This includes the planning of multiple specifications for one inspection characteristic dependent on defined criteria, such as country, customer, or legal tolerances.

Supplier Management



Ensures that the products of the supplier will be fit for use with minimal corrective action and inspection. SAP ERP supports:

Definition of requirements for product and program quality

Evaluation, selection, certification, and rating of suppliers

Joint quality planning

Communication with supplier during contract execution

Proof of conformance to requirements

Quality improvement program

2.7.3.2 Quality Assurance / Control Quality Inspection

Measures, examines, tests, and gages one or more characteristics of a product or service and compares the results with specified requirements to determine whether conformity is achieved for each characteristic. Includes inspection lots of various origins. Provides results recording and defects recording (also Web-enabled). Includes usage decision and release of the stock from being in quality inspection. Follow-up actions include batch classification and quality scoring.

Batch Management and Traceability

Required if products may vary in quality or if they originate from different production runs. SAP ERP can provide identification, classification, and inventory management for different batches of a material. Bottom-up as well as top-down analyses are offered to show into which final products a batch of raw material has flown or which batches of raw materials have flown into a final product. It might even be necessary to show the lifecycle of individual items. In this case, traceability is achieved via serial numbers. Moreover, process data can be stored in an order record and in an optical archive (electronic batch record).
