TERP21 SAP ERP: Introduction into Processes in Financial Accounting

About This Module This module aims to provide an understanding of how SAP ERP supports an organizations Financial Accounting processes and integration of processes related to Material Management, Production, Sales and istri!ution, Management Accounting etc" with Financial Accounting" The course will also introduce the participant to e#ternal reporting through Financial Accounting" Module Objectives Appreciate how SAP ERP supports an organizations Financial Accounting processes and integration of processes related to Material Management, Production, Sales and istri!ution, Management Accounting etc" with Financial Accounting" The participant would !e a!le to identif$ various organization units and master data which support Financial Accounting" The participant will also !e introduced to transactions in Accounts Pa$a!le, Accounts Receiva!le, Asset Accounts, %eneral &edger etc" The course also aims to introduce the participant to the 'ew %eneral &edger functionalit$ and e#ternal reporting through Financial Accounting" E#plain the tas(s in Financial Accounting" E#plain the functionalit$ of the main structures used in Financial Accounting" escri!e displa$ of the )hart of Accounts" *t also e#plains how to create the %& accounts, and e#ecute %& postings" *n addition, it also descri!es the special role of Reconciliation Accounts and the functions of the 'ew %eneral &edger" E#plain +endor Master Record and Post +endor *nvoices" Along with this, it also descri!es ,asic Purchasing Process and *ntegration of MM with Financial Accounting and the automatic pa$ment program" escri!e the customer master record and its three components, the process of maintenance of )redit Management ata, the processes of posting a )ustomer *nvoice, ,asic Sales Process in Sales -rder Management and its integration with the Financial Accounting" escri!e Asset Master Record, the role of an Asset )lass, Asset postings, and the role of depreciation areas in Asset Accounting" E#plains the process of Preparing Financial Statements" Module ontent Tas(s in Financial Accounting -rganizational &evels %eneral &edger Accounting Account Pa$a!le Account Receiva!le Fi#ed Asset Accounting Prepare Financial Statements Solution architect, pro.ect managers, team mem!ers, and solution consultants who want to gain a !road fundamental understanding of the core processes, !usiness interrelations, and integration of the individual !usiness applications within the SAP ERP solution"

Target Audience

Tas!s in Financial Accounting

About This To"ic escri!es the important tas(s in Financial Accounting"/hat0s in it for me1 escri!e the tas(s in Financial Accounting

Tas!s in Financial Accounting

Audio Transcript &et us understand the tas(s in Financial Accounting" The %eneral &edger is a critical part of Financial Accounting" *t is in this %eneral &edger where all the !usiness transactions are recorded and e#ternal accounting is prepared here" Ma.or postings such as Account Receiva!les from the S course and Accounts Pa$a!les from the MM module ma$ ta(e place in the su!2ledgers" These su!2 ledgers are connected to the %eneral &edger with an assignment called the Reconciliation account in the %eneral &edger" These reconciliation accounts are !alance sheet accounts that represent 3Receiva!les4 and 3Pa$a!les4 in the ,alance Sheet" Since the s$stem updates these accounts online and in real time, the %eneral &edger is alwa$s up to date and !alanced" 5ou will have all the details of individual posting for customers and vendors in the su!2ledgers and onl$ the total de!its and credits, which are collective postings, are posted in the %eneral &edger" Similarl$, $ou can see here that Asset Accounting and the ,an( &edger are connected to the %eneral &edger" As SAP ERP has an integrated framewor(, $ou will find that all e#pense postings flow automaticall$ to )ontrolling 6)-7"

Integration o# the $%& in Financial Accounting:

Audio Transcript *n SAP ERP, the integration to the %8& is real time" &et us understand this in detail here" *f $ou ma(e postings in F*2AA such as ac9uisition, retirement and so on for the assets, the same will !e updated in the asset reconciliation account" The material purchase entr$ through a purchase order or goods receipt which was made in Materials Management will !e automaticall$ posted to the material account in Financial Accounting" /ith respect to the customer su!2ledger, if there is an$ increase or decrease in the customer !alance such as sales or incoming pa$ments, it is updated in real time to the 3Receiva!les Reconciliation account"4 Sometimes entries in this su!2ledger happen through S li(e sales made to customers" Similarl$, in the case of !an( accounts, the entries with respect to a !an( account, for e#ample, incoming or outgoing pa$ments will !e automaticall$ posted to the !an(s %& account" This is what happens in the case of loans which are made from the 3Treasur$4 /ith respect to a vendor su!2ledger, if there is an$ increase or decrease in the vendor !alance li(e purchase or outgoing pa$ments, it is updated in real time to the 3Pa$a!les Reconciliation account3 under lia!ilities" Sometimes entries in this su!2ledger happen from MM li(e purchase made from vendors"

Financial Accounting versus Manage'ent Accounting:

Audio Transcript Financial Accounting deals with pu!lishing information on the financial position and performance of an entit$ through financial statements" The financial information is mainl$ used !$ persons who are outsiders to the organization such as Shareholders, Auditors, and so on" &evel: Financial accounting is defined !$ the law to ensure that the pu!lished information conforms to the legal re9uirements" Financial Accounting includes Accounts Receiva!le Accounts Pa$a!le Asset Accounting ,an( Accounting" Management Accounting refers to )ontrolling in the SAP s$stem and contains all the functions necessar$ for effective cost and revenue control" *n Management Accounting, the financial data can !e allocated across several entities li(e compan$ codes" Management Accounting includes ;" )ost )enter Accounting <" Product )osting =" >o! )osting

?" Profita!ilit$ Accounting" @sers of Management Accounting are called as internal users" *n SAP ERP unli(e RA=, automatic reconciliation happens !etween F* and )-"

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/e now come to the end of this topic on the tas(s in Financial Accounting"

Organi)ational &evels
About This To"ic This topic descri!es the various -rganization @nits which support the Financial Accounting Processes and Transactions" /hat0s in it for me1 E#plain the functionalit$ of main structure used in Financial Accounting

o'"an( ode:

Audio Transcript &et us now understand the organizational unit2)ompan$ )ode" The compan$ code is an independent !alancing or legal accounting entit$" *t is the minimum structure necessar$ in RA= Financial Accounting" Since most government and ta# authorities re9uire the registration of a legal entit$ for ever$ compan$, a separate )ompan$ )ode is usuall$ created per countr$" There must !e at least one )ompan$ )ode in the production environment for a !usiness to !e live" The )ompan$ )ode is identified !$ a ?2digit alphanumeric (e$"

*usiness Areas:

Audio Transcript The ,usiness Area is one significant -rganizational @nit in F*, although the use of a ,usiness Area is optional in enterprise reporting" &et us now understand what is a ,usiness Area" To illustrate, assume that $our )ompan$ )ode has < areas of operations, Machine )onstruction and Plant )onstruction" 5ou now want to see the results of each area of operation separatel$, in addition to the overall results of the compan$ code" 5ou can set up < !usiness areasBfor each area of activit$ and create financial statements for each" Please note that the ,usiness areas are not attached to )ompan$ )odes" This leads us to the 9uestion: wh$ cannot we attach a !usiness area to a )ompan$ )ode1 Ta(e for e#ample, $our corporate group has < compan$ codes and !oth have two areas of operations, Machine )onstruction and Plant )onstruction" *t would not !e logical to restrict an$ of these two areas to an$ particular )ompan$ )ode" ,oth )ompan$ )odes should !e permitted to operate in an$ area of operation" This is the reason is wh$ there are no attachments or 3assignments4 of !usiness areas to )ompan$ )odesBthe$ are free2flowing units that are freel$ defina!le" Remem!er B the use of the -rganizational @nit 3,usiness area4 is '-T mandator$C

ontrolling Area:

Audio Transcript )ontrolling Areas are the -rganizational @nits within a compan$ where )ost Accounting is performed" 5ou cannot allocate costs outside )ontrolling Areas" A )ontrolling Area ma$ contain more than one )ompan$ )ode and these )ompan$ )odes can include more than one currenc$" Dowever, the )ompan$ )odes assigned to a )ontrolling Area must all use the same operational chart of accounts and the same fiscal calendar $ear" Dere $ou can see )ompan$ )odes A, ,, and ) using the same chart of accounts and finall$ !eing assigned to a )ontrolling Area"

Organi)ational &evels:

Audio Transcript A ,usiness Area is an -rganizational @nit in e#ternal accounting, which corresponds to a separate operational or responsi!ilit$ area in the organization and value flows recorded in Financial Accounting can !e assigned to it" ,usiness Areas are generall$ compan$ code2independent, which facilitates the introduction of postings from an$ )ompan$ )ode into these ,usiness Areas"

Su''ar(
/e now come to the end of this topic on -rganizational @nits in Financial Accounting"

$eneral &edger Accounting

About This To"ic This topic descri!es how to displa$ the )hart of Accounts, create %A& accounts, descri!e the role of Reconciliation Accounts, descri!e the !enefits of the 'ew %eneral &edger functionalit$ and perform %A& postings" /hat0s in it for me1 ispla$ the )hart of Accounts )reate %A& accounts escri!e the special Role of Reconciliation Accounts escri!e the functions of the 'ew %eneral &edger Perform %A& postings

harts o# Accounts:

Audio Transcript The )hart of Accounts contains the definitions of all %A& accounts in an ordered form" *n other words, the )hart of Accounts is a variant that contains the structure and !asic information a!out general ledger accounts" *n the slide here $ou can see that the charts of accounts *'T, )A@S, and *ER contain %& accounts ;FFF, <FFF, and so on" This means that all the %& accounts which are supposed to !e used in a compan$ code must find a place in the )hart of Accounts" *n the SAP E)) s$stem, $ou can maintain )hart of Accounts such as: ;" -perational )hart of Accounts,

<" %roup )hart of Accounts, and =" )ountr$ )hart of Accounts" 5ou can define unlimited num!er of )harts of Accounts in the SAP E)) S$stem" The standard s$stem consists of man$ countr$2specific charts of accounts"

harts o# Accounts Assign'ent:

Audio Transcript The )ompan$ code in order to use financial accounting in the SAP E)) s$stem must have a )hart of Accounts for the general ledger" The )hart of Accounts is assigned to the )ompan$ )ode" *n other words, ever$ )ompan$ )ode must have a )hart of Accounts assigned to it" -ne )hart of Accounts can !e assigned to several )ompan$ )odes" *n this slide, $ou see that a single )hart of Accounts has !een assigned to two )ompan$ )odes ,PF; and ,PFG" This assignment ena!les cross )ompan$ )ode controlling"

$& Account Master +ata:

Audio Transcript The %& Account master data has two segmentsB)hart of Accounts segment and compan$ code segment" The )hart of Accounts segment contains information that applies to all )ompan$ codes" *nformation a!out an account is summarized in the )hart of Accounts segment in the form of: Account num!er 6ma#imum ;F digit, numeric, alphanumeric7 'ame of the account 6as short as long te#t7 )ontrol fields, for e#ample: account group )onsolidation fields, for e#ample, a uni9ue compan$ * in a group" )ompan$ code segment: To !e a!le to use one of the accounts from the assigned )hart of Accounts in $our compan$ code, $ou must create a compan$ code segment for the account" This compan$ code segment is added to the )hart of Accounts segment and together the$ form the account" *n this slide, $ou can see that the %& account G has !een defined at the )hart of Accounts segment and at compan$ code segments )) ,PF; and )) ,PFG which facilitates a complete %& account for the respective compan$ codes"

Account $rou"s #or $,& Accounts:

Audio Transcript ,efore $ou start creating accounts in the )hart of Accounts, $ou must have account groups" Account groups: are group accounts of the same t$pe" control the num!er ranges" control the field status of the compan$ code segment" To e#plain further, ;" An account group groups accounts with the same tas(s within the general ledger such as cash accounts, material accounts, asset accounts, profit and loss statement accounts, and so on" <" ,$ assigning a num!er range to an account group, $ou can ensure that accounts of the same t$pe are within the same num!er range" =" Account groups control the appearance of the compan$ code segment of a %A& account"

Reconciliation Accounts and Sub-&edgers:

Audio Transcript Reconciliation Accounts are %eneral &edger Accounts assigned to the !usiness partner Master ata to record all the transactions in the su!2ledger" The Reconciliation Account connects a su!2ledger to the %eneral &edger real time" All postings to the su!2ledger accounts are automaticall$ posted to the assigned reconciliation accounts !ecause amounts cannot !e directl$ posted to reconciliation accounts The su! ledgers which are connected to the general ledger via reconciliation accounts include: Accounts Receiva!le Accounts Pa$a!le Assets )ontract Accounts Receiva!le and Pa$a!le"

*ene#its o# the .e/ $eneral &edger-Overvie/:

Audio Transcript *n SAP ERP, the 'ew %eneral &edger has advantages such as: The 'ew %eneral &edger has an e#tended data structure !$ default, due to which customer fields can !e added to the general ledger" The document split ma(es !alance sheet possi!le for entities such as segments, which will !e dealt in detail later" Real time integration !etween F* and )-, which ena!les reconciliation !etween Financial Accounting and )ontrolling real time" The new %& ma(es it possi!le to maintain multiple !oo(s"

Advantages in +etail-E0tended +ata Structure:

Audio Transcript The new totals ta!le contains additional standard fields for storing totals" /ith the standard ta!le, $ou can easil$ activate support for man$ scenarios !$ customizing the software" The ta!le thus supports activities such as: Segment Reporting Profit2)enter updating )ost2of2Sales Accounting )ost2)enter updating Preparation for consolidation ,usiness2Area updating 5ou can add other fields that are supported in the standard software, such as 3plant4 from the SAP Materials Management software" 5ou can include these fields in the totals ta!le with minimum effort" 5ou can also define $our own fields"

Advantages in +etail-+ocu'ent S"litting 1Online S"lit I2:

Audio Transcript ocument Splitting is an appropriate tool for determining missing account assignments according to the cause in common accounting processes in SAP software 6*nvoices, Pa$ments, or )learing7" For each financial2account document, document splitting applies account2assignment information to non2assigned accounts according to the assignment rules set in the customizing area" The following !usiness transaction demonstrates the advantages: There is a vendor invoice for Euro ;;HFF" E#penses needed to !e assigned to two segments" 5ou can see that the document can !e posted to segmentsI this was not possi!le in the earlier prevalent classic general ledger" )urrentl$, SAP supports the derivation of segments from profit centers" Profit centers can in turn !e derived from a cost center, a )-2internal order or a pro.ect, for e#ample"

Advantages in +etail-+ocu'ent S"litting 1Online S"lit II2:

Audio Transcript 5ou can assign profit centers to e#pense accounts manuall$, derive the assignment automaticall$ or ma(e the assignment using a su!stitute cost center" ocument splitting places these profit centers in the pa$a!les accounts of the invoice document" This function can help $ou create !alance sheets for entities that e#tend !e$ond the scope of the compan$ code" T$pical e#amples include !alance sheets at the segment or profit center level or !alance sheets !ased on compan$2specific or industr$2specific entities" *n addition to the split, the displa$ shows the inheritance of the segment to the vendor and ta# lines of the document"

Advantages in +etail-Real Ti'e Integration o# O-FI:

Audio Transcript *ntegration with SAP controlling software ena!les the transfer of cross2entit$ controlling postings to the new general ledger in real time" Such transfers allow continuous reconciliation of cost elements and e#pense accounts and remove the need for su!se9uent reconciliation runs B which considera!l$ accelerates period2end closings" The faster closings are particularl$ evident in profit2center accounting: cross2cost2center controlling transactions that involve different profit centers" The net result is a high level of transparenc$ and 9ualit$ for $our data at all" &et us understand this in greater detail through an e#ample: Dere, $ou can that see a posting has !een made in F* for wages and salaries %l account ?<FFFF, an assignment is also made to the cost center ;FFF and functional area F?FF is derived" The entr$ in functional area F?FF will !e de!ited to the %& account ?<FFF and credit pa$a!les with Amount JFF" *n )- the cost center ;FFF will !e de!ited with amount JFF" The cost element will !e the same" *f in )-, the cost center ;FFF is reposted to cost center ?;?F, the functional area F;FF will !e derived" -nce reposting is done, the following effect will happen in real time" *n case of )-, the cost center ;FFF will !e credited and cost center ?;?F will !e de!ited, carr$ing the same cost element" *n case of F*, the %& account ?<FFFF of the functional area F?FF will !e credited and %& ?<FFFF of functional area F;FF will !e de!ited"

Advantages in +etail-Parallel Accounting:

Audio Transcri"t For listed companies which are in the European @nion, new financial reporting regulations such as the *nternational Financial Reporting Standards or *FRS will appl$ to all consolidated financial statements filed as of <FFJ" *n addition, local re9uirements will remain in force" Parallel reporting is critical to $our compan$s a!ilit$ to meet these new standards" ,ut until now, it has !een rather difficult to gather, store, and report the valuation !ases re9uired to settle the various accounts, ma(ing parallel reporting a challenge" /ith the new general ledger capa!ilities of SAP ERP, parallel financial reporting can !e represented in several ledgers" These ledgers are provided with contents through a unified posting transaction" -r, the$ ma$ !e anal$zed through a unified reporting tool for purposes such as the !alance sheet or profit2and2loss statements" &et us understand the advantages in relation to parallel accounting: *n each client, there is onl$ one leading ledger" The leading ledger is !ased on the same accounting principle as that of the consolidated financial statements" For e#ample, *AS" Dowever, $ou can also maintain non2leading ledger alongside the leading ledger" The non2 leading ledgers are parallel ledgers to the leading ledger" The$ can !e !ased on a local accounting principle, for e#ample, D%,, @S %AAP"

$,& Account Posting:

Audio Transcript The postings in the general ledger are single screen transactions" 5ou can enter documents with a minimal num!er of entries on one screen" /or( templates here $ou can select screen variants, account assignment templates, or held documents as references" -n the top part of the screen, $ou enter the general data for the document that $ou want to enter or process further, together with the data for the customer or vendor item" *mportant fields are on the initial ta! page, less fre9uentl$ used fields and detailed information are on the su!se9uent ta! pages" -n the lower part of the screen $ou enter the invoice or line items in a ta!le" -nce $ou have made $our entries, $ou can chec(, hold or post the document" *nformation area 2 here the de!it and credit totals of the document are displa$ed"

Posting 3e(:

Audio Transcript The posting (e$ is a two digit numeric (e$ which is significant in controlling the entr$ of the document" This two2digit numeric (e$ defines Postings to Account t$pe 6S, , E, A, M7 e!it or )redit Posting &a$out of the entr$ screens 6field status7" For e#ample, posting (e$ ?F would mean it is hitting a %A& account posting and that it is for e!it, while posting (e$ JF would mean it is hitting a %A& account posting and that it is for )redit" *t also determines, the field status of line item entr$, whether certain fields of the line items are 3Re9uired4, 3-ptional4 or 3 Suppressed4 The posting (e$ also specifies: /hether the line item is connected to a pa$ment transaction or not" /hether the posting is sales2relevant and the sales figure of the account is to !e updated !$ the transaction, for e#ample, !$ the posting of a customer invoice" *n the standard transactions, posting (e$s are la!eled 3de!it4 and 3credit4"

Account In#or'ation:

Audio Transcript The !alance displa$ and line item displa$ are provided to displa$ the account data" The line item displa$ is onl$ possi!le for %A& accounts for which the Function 3&ine item displa$4 has !een activated in the %eneral ledger master record" The !alance displa$ is the sum of the de!it and credit !alances of the account" 5ou can displa$ the line items of an account directl$ from the !alance displa$" *n order to go to the line item displa$, the line item displa$ setting has to !e set for the %A& account" 5ou ma(e this setting in the %A& account master record" &ine items are document items that were posted to a specific account" *n contrast to a document item, a line item onl$ contains the information from the document that is relevant from the account view" 5ou can displa$ the following line items: -pen items )leared items 'oted items Par(ed items *tems with special %A& transactions 6in Accounts Receiva!le and Accounts Pa$a!le7

 *tems with customer or vendor items 6in Accounts Receiva!le and Accounts Pa$a!le7 5ou can drilldown from the line item to the document containing this line item" From there $ou can see the complete transaction !$ selecting ocument -verview"

Su''ar(
/e now come to the end of this topic on %eneral &edger Accounting"

Account Pa(able
About This To"ic This topic descri!es the +endor Master Record and its three components, the processes of posting a +endor *nvoice, the !asic purchasing process in Material Management and its integration with the Financial Accounting" The topic also descri!es the process of running the automatic pa$ment program" /hat0s in it for me1 escri!e the vendor master record Post +endor *nvoices escri!e the ,asic Purchasing Process in Material Management and integration with the Financial Accounting Run the Automatic Program

4endor Master Record:

Audio Transcript +endor master records contain data that controls how transaction data is posted and processed" This includes all the information a!out a vendor that is needed to !e a!le to conduct !usiness with them >ust li(e general ledger accounts, vendor accounts also have two segments: -ne segment at client level that contains general data" This data can !e accessed throughout the whole organization" A segment with compan$ code specific data at compan$ code level" An$ compan$ code that wishes to do !usiness with a specific vendor has to create a compan$ code segment for this vendor" This also creates a vendor account" Dere $ou can see Master data +endor G created for compan$ codes ,PF; and ,PFG includes !oth general data and compan$ code data"

Procure'ent Process Fro' The Accounting 4ie/:

Audio Transcript

&et us now loo( at the inventor$ procurement process from accounting point of view" There might !e instances where %oods are received first and invoice is received later" Accounting in these cases has to !e madeI therefore for a %RA*R account, a clearing account is opened" -nce the goods are received, a goods receipt entr$ is passed in materials management" ue to the integration of various courses in the SAP E)) s$stem, an accounting entr$ is passed in Financial accounting !$ de!iting the Material account and crediting the %RA*R account" /hen !ills are su!mitted !$ vendors, an invoice entr$ is made in F*2AP !$ de!iting the %RA*R account and crediting the vendor account" 'e#t, a pa$ment has to !e made to vendors after ta(ing into consideration the due date, cash discount and so on" *n the SAP E)) s$stem the pa$ment is usuall$ made !$ a running an automatic pa$ment program2Transaction code2 F;;F !$ creating an entr$2de!it vendor and a credit !an( su! account" Finall$, the entries in the !an( su! account will have to !e transferred to the 3Main ,an( Account4 !$ de!iting the !an( su! account and crediting the Main ,an( Account"

Integration o# Materials Manage'ent:

Audio Transcript The Purchase -rder is created in MM containing details li(e Material, +endor, Kuantit$, Amount, and so on" The Purchase -rder does not create an$ F* document" Through Purchase -rder $ou can create two entries in MM: ;" %oods Receipt for Purchase -rder <" *nvoice Receipt %oods Receipt entr$ create two documents one material document for goods received and another in Financial Accounting !$ de!iting 3Material stoc( or consumption Account4 and crediting %RA*R account, sometimes it even creates a controlling document if controlling module is used" &i(e %oods Receipt, *nvoice Receipt entr$ also creates two documents one in Materials Management as invoice verification and another in Financial accounting" The entr$ in Financial Accounting will !e 3 e!it %RA*R account4 and 3)redit +endor Account4" The %RA*R account as e#plained in the earlier slide is a clearing account which chec(s whether goods were received for each invoice or invoice were received for the goods received"

AP Invoice, redit Me'o Entr(:

Audio Transcript The postings in the vendor area are single screen transactions" 5ou can enter documents with a minimal num!er of entries on one screen" /or( templates 2 here, $ou can select screen variants, account assignment templates, or help documents as references" -n the top part of the screen, $ou enter the general data for the document which needs to !e entered or processed further, together with the data for the customer or vendor item" The important fields are on the initial ta! page and the less fre9uentl$ used fields and detailed information are on the su!se9uent ta! pages" -n the lower part of the screen $ou enter the invoice or line items in a ta!le" -nce $ou have made $our entries, $ou can chec(, hold, or post the document" The s$stem uses the chec(, proposal, and posting logic of the e#isting entr$ transactions such as the invoiceAcredit memo fast entr$ or the standard document entr$" The En.o$ transactions are offered parallel to the standard transactions" *nformation area 2 The document !alance and information a!out the vendor are displa$ed here"

Ele'ents o# the Pa('ent Process:

Audio Transcript &et us understand the pa$ment process" Select pa$ment method and !an(: 5ou need to select the pa$ment method li(e chec(, !an( transfer and so on" *n the SAP E)) s$stem standard pa$ment methods have !een delivered for e#ample: 2 )2 *nternational chec( and T2 ,an( transfer" Select items for pa$ment: 2 5ou have to select the items in order to ma(e pa$ments, for e#ample, selecting line items in a vendor account or customer account" )alculate the pa$ment amount, ta(ing account of cash discount periods:2 The pa$ment amount has to !e paid after deducting an$ cash discount" The cash discount will !e entered in the vendor master record or at the time of document entr$" Post the pa$ment document: 2 once steps ;, < and = are performed $ou need to post the document called a pa$ment document" The entr$ in Financial accounting after posting a pa$ment document will !e e!it B +endor Account and )redit2)ash account" Finall$ $ou need to print the pa$ment medium li(e pa$ment advice notes, chec(s !ills of e#change" Pa$ment medium can !e printed manuall$ and automatic" For e#ample, in case of printing chec(s for vendor, $ou can print it using the transaction code2f2J= 6Manual7 or F;;F 6Automatic7"

Overvie/ o# the Auto'atic Pa('ent Progra':

Audio Transcript 'ow let us understand in the graphic the Pa$ment Process steps" The process contains ? steps ;" Parameters: *n this step, the following 9uestions are as(ed and answered: /hat is to !e paid1 /hat pa$ment methods will !e used1 /hen will the pa$ment !e made1 /hich compan$ codes will !e considered1 Dow are the$ going to !e paid1 <" Start proposal run: pa$ment proposal is created !$ the s$stem after the parameters are entered" *t generates a list of !usiness partners and open invoices that are due for pa$ment" =" Edit Proposal: 5ou can edit the proposal generated !$ the s$stem" *nvoices can !e !loc(ed or un!loc(ed for pa$ment" -nce edited, $ou can confirm the proposal" ?" Program2 Start Pa$ment Run: -nce the pa$ment list has !een verified and confirmed, the s$stem triggers the Run" A pa$ment document is created and the general ledger and su!2 ledger accounts are updated" J" Print: The accounting functions are completed and a separate print program is started to generate the pa$ment media 6for e#ample, E *, ME or )he9ue printing7" /hile understanding the pa$ment process, $ou also need to (now where the settings for the pa$ment program are defined" These are defined in three places:

;" *n the master record for the !usiness partner, for e#ample, !an( details and pa$ment method <" *n the items" For e#ample, pa$ment methods in the document, terms of pa$ment and so on" =" *n )ustomizing for the pa$ment program 'ow what happens if the data in the master data and document is different: The data in the document ta(es precedence over the data in the master record 6the s$stem assumes that the user has changed the standard data on purpose7"

Su''ar(
/e now come to the end of this topic on Accounts Pa$a!le"

Account Receivable
About This To"ic This topic descri!es the )ustomer Master Record and its three components, the process of maintenance of )redit Management ata, the processes of posting a )ustomer *nvoice, ,asic Sales Process in Sales -rder Management and its integration with the Financial Accounting" /hat0s in it for me1 escri!e the customer master record Maintain credit management data Post a customer invoice escri!e the !asic sales process in Sales -rder Management and the integration with the Financial Accounting

The usto'er Master Record:

Audio Transcript )ustomer Master Records contain data that controls how transaction data is posted and processed" This includes all the information a!out a customer that is needed to !e a!le to conduct !usiness with them >ust li(e general ledger accounts, )ustomer accounts also have two segments: -ne segment at client level that contains general data" This data can !e accessed throughout the whole organization" A segment with compan$ code specific data at compan$ code level" An$ compan$ code that wishes to do !usiness with a specific customer has to create a compan$ code segment for this vendor" This also creates a customer account" Dere $ou can see Master ata customer G created for compan$ codes ,PF; and ,PFG includes !oth general data and compan$ code data"

I+ES redit ontrol Area:

Audio Transcript A )redit )ontrol Area is an -rganizational @nit for specif$ing and controlling customer credit limits" This organizational unit can either !e a single or several compan$ codes, if credit control is performed across several compan$ codes" -ne credit control area contains credit control information for each customer" According to $our corporate re9uirements, $ou can implement credit management that is centralized, decentralized, or somewhere in !etween" For e#ample, if $our credit management is centralized, $ou can define one credit control area for all $our compan$ codes li(e compan$ codes @SA, )anada, and Europe" *f, on the other hand, $our credit polic$ re9uires decentralized credit management, $ou can define credit control areas for each compan$ code or each group of compan$ codes" For e#ample, compan$ codes Me#ico and >apan"

redit Manage'ent Master Record:

Audio Transcript The )redit Management master record is an e#tension of the customer master record which is set up !$ the credit department" The data relevant to credit management is maintained and monitored in this master record" The credit management master record consists of the following sections: %eneral data: The data which is same for all credit control areas" *t is even relevant for credit control areas, such as customers address and communication data, the ma#imum total limit that can !e permitted for the sum of all granted credit limits, individual limit or currenc$" )redit control area data: The data mentioned in this segment is onl$ relevant for specific credit control area" For e#ample, credit limit at the credit control area level, Ris( categor$, credit representative group, and so on" -verview: The credit overview shows certain additional data including dunning data, open items, and te#ts on the customer"

Sales Process And Integration:

Audio Transcript A sales order is an electronic document that records $our customers re9uest for goods or services" At the time of sales order creation no financial document is created" uring shipping an out!ound deliver$ document is created" 'e#t transfer order is created in order to pic( the goods" The goods to !e delivered are posted as goods issue in MM at the same time a Financial accounting document is created with an entr$ e!it cost of goods sold account and credit *nventor$ account" The last stage in the sales process is 3,illing4" A !illing document is created in S and in real time an F* document is created with an entr$ e!it customer account and credit revenueAsales account"

Sales Order Process Fro' Accounting 4ie/:

Audio Transcript At the time of deliver$, the 3Stoc( change F%4 will !e de!ited and the material account will !e credited" ,illing creates revenue from the respective customer" The in2entr$ in F*2%& will !e to the e!it )ustomerAreceiva!les account and credit salesArevenue account" The pa$ment from the customer will settle the !alance in the F*2%& with an entr$ to the e!it !an( account and credit customerAreceiva!les"

redit ontrol Process:

Audio Transcript 5ou enter a sales order" A chec( is run to see whether the customers credit limit would !e e#ceeded" *f it does not e#ceed, the sales process can !e carried out in the usual wa$" Assuming that this sales order leads to the credit limit !eing e#ceeded for this customer, the s$stem now responds" *t !loc(s the order" *n the second case, the procedure continues as follows: *f the order is !loc(ed, the credit representative processes the !loc(ed order either from a list of !loc(ed sales and distri!ution documents, or from hisAher Mail!o#" The credit representative now decides how to proceed with this order" -nce the credit representative releases the order, a deliver$ can !e created and a !illing document generated" -nce $ou have saved this document, the s$stem automaticall$ creates a financial accounting document" *f the credit representative decides not to release the order, the order is re.ected"

Inco'ing Pa('ents in Accounts Receivable:

Audio Transcript &et us understand the incoming pa$ment process in accounts receiva!le" +o/n "a('ent: Sometimes there might !e a situation where in a customer might ma(e a down pa$ment in those cases the down pa$ment is created for the concerned customer" o'"lete "a('ent: -nce full pa$ment is received from the customer, the down pa$ment is cleared off" Minor "a('ent di##erences: At the time of clearing of the invoice, if there is a minor pa$ment

difference, then it will !e charged off automaticall$ since it is with in tolerances" $reater "a('ent di##erences: *f the pa$ment differences is outside the tolerances that is there is greater pa$ment difference then it has to !e ta(en care of either !$ Post partial pa$ment or %enerate residual item" Partial "a('ent: For a partial pa$ment the invoice and the partial pa$ment are managed as open items and !oth have the same assignment" ou!le2clic(ing on the partial pa$ment shows that it is a pa$ment for the invoice" The invoice and the partial pa$ment are not cleared until the pa$ment is cleared" Residual "a('ent: /hen $ou create a residual item the pa$ment difference is posted as residual item and remains in the accountI the original document and the pa$ment are cleared" The s$stem creates a new document num!er with reference to the original document"

Su''ar(
/e now come to the end of this topic on Accounts Receiva!le"

Fi0ed Assets Accounting

About This To"ic This topic descri!es the process of marinating an asset master record, descri!e the role of an asset class, e#plain Asset Postings and descri!e the role of depreciation areas in Asset Accounting Management /hat0s in it for me1 Maintain an asset master record escri!e the role of an asset class E#plain asset postings escri!e the role of depreciation areas in asset accounting

Assets in FI Organi)ational 5nits:

Audio Transcript *n -rder to view a segment report of assets, each asset should !elong to a compan$ code and cost center" All postings made for the asset li(e ac9uisitions, retirements, depreciation, and so on are captured in the compan$ code" The segments as e#plained in earlier slides are derived from the profit center which in turn is derived from the cost center"

Asset lass:

Audio Transcript Asset )lasses are the most important means of structuring fi#ed assets according to the re9uirements of $our enterprise" The Asset )lass definitions appl$ to all compan$ codes in a client" The asset class is the main criteria for defining the asset" Each asset is assigned to onl$ one asset class" 5ou can specif$ certain control parameters and default values for depreciation calculation and other master data in each asset class" Each asset has to !e assigned to an asset class for e#ample various machineries can !e assigned to one asset class called machiner$" Real Assets2Machiner$2Fi#tures and Fittings are standard assets" 5ou can maintain one special asset class for Assets under construction and one for low2value assets" An asset class consists of two main sections: A Master ata section with control data and default values for the administrative data in the asset master record A valuation section with control parameters and default values for valuation and depreciation terms" "

Asset Transactions:

Audio Transcript The ac9uisition posting can !e created in the department that is primaril$ responsi!le for this !usiness transaction" Ac9uisition of an asset from a !usiness partner 22 e#ternal ac9uisition: *n Asset Accounting 6F*2AA7 integrated with Accounts Pa$a!le 6incoming invoice7, !ut without reference to a purchase order" *n FI-AA /ith auto'atic o##setting entr(6 but /ithout a lin! to a "urchase order and /ithout integration /ith Accounts Pa(ableI this posting is normall$ used when the invoice has not $et !een received, or when the invoice was posted !$ the Accounts Pa$a!le department !eforehand in a separate step" The offsetting account also has to !e cleared" *n FI-AA /ith auto'atic clearing o# the o##setting entr(: The first posting usuall$ is made in F*2 AP" The clearing account is cleared at the same time as the asset posting is made" *t is also possi!le, however, for !oth departments to ma(e postings in the opposite se9uence: An asset is entered with automatic offsetting entr$, and the clearing account is cleared with the credit posting of the incoming invoice" *n Materials Management or MM: The asset is posted in MM

Transaction T("e:

Audio Transcript The transaction t$pe is an addition to the asset posting (e$s LF 6de!it7 and LJ 6credit7" Transaction t$pes are used with ever$ posting" The$ identif$ ac9uisitions, retirements and transfers" The asset histor$ sheet reports and other F*2AA reports use the transaction t$pe to identif$ the different (inds of transactions and displa$ them separatel$, for e#ample, the transaction t$pe specifies where the value change is shown in the asset histor$ sheet: as a retirement of a prior2$ear ac9uisition, or of a current2$ear ac9uisition" The transaction t$pe specifies which of the following are updated: Asset ,alance sheet accounts epreciation Areas +alue Fields 5ou can also defined $our own transaction t$pes" The$ can !e used to seprate variouse t$pes of accounting or !usiness transactions in Reports"

Asset E0"lorer:

Audio Transcript From SAP RA= ?"H), the Asset E#plorer contains all the main functions from the old asset value displa$ transaction" The main differences are: a !etter overview than(s to the use of an overview tree and ta! pagesI a more transparent displa$ of the s$stems calculation of depreciationI and new functions for printing and e#porting values"

*n the Asset E#plorer, depreciation areas are displa$ed in an overview tree, from which the$ can !e selected" Two different s$m!ols ena!le $ou to immediatel$ distinguish !etween real depreciation areas and derived depreciation areas" The field a!ove the tree structure provides information on the selected asset, including its compan$ code, asset main num!er, and su! num!er" 5ou can .ump from this field to the asset master data" 5ou can displa$ planned values, !oo( values, and transactions directl$ in the Asset E#plorer in a print preview format, and $ou can print and e#port this information" -n the planned values ta! page, $ou can call the functions for displa$ing the depreciation calculation and for recalculating depreciation" A useful feature in asset e#plorer is the overview tree, which lists o!.ects such as cost center, %A& account, vendor, emplo$ee, purchase order or e9uipment related to the asset, and which also ena!les $ou to go to the master data o!.ect" Another feature in the asset e#plorer is the comparisons ta! page" This allows $ou to displa$ the changes in value of an asset over several $ears and, at the same time, in several depreciation areas"

+e"reciation Areas:

Audio Transcript Asset portfolios and transactions are often valued differentl$ for different purposes, for e#ample, different valuation approaches ma$ !e used for: Financial Statements according to local re9uirements ,alance Sheets for ta# purposes 6insofar as another valuation is permitted7 *nternal Accounting 6)ost Accounting7 Parallel Financial Reporting, for e#ample, for creating a consolidated !alance sheet 6according to *AS, @S %AAP, and so on7 epreciation areas are created to manage these different valuation approaches" There are separate transaction figures for: Each Asset and epreciation Area *ndividual +alue )omponents, such as Asset +alues, epreciation, and net !oo( values epreciation Areas are identified in the s$stem !$ a two2character numeric (e$" The numeric (e$s represent depreciation terms that $ou can enter in the asset master record or in the asset classes" +alues and depreciation are posted to the general ledger" epreciation area F;2 !oo( depreciation in SAP E)) s$stem is the ma.or depreciation area" +alues and depreciation are posted to the general ledger"

+e"reciation Run:

Audio Transcript *n the !oo( epreciation Area, the s$stem calculates !oo( depreciation without special depreciation according to the commercial law"

Su''ar(
/e now come to the end of this topic of Fi#ed Asset Accounting"

Pre"are Financial State'ents

About This To"ic This topic descri!es the process of Preparing Financial Statements" Estimated time to complete this topic: =F minutes

/hat0s in it for me1 escri!e the process of preparing financial statements

Pre"aring Financial State'ents:

Audio Transcript Financial Statement versions are created in order to prepare the reports according to various criteria" 5ou can create as man$ financial statement versions as $ou need" For e#ample, $ou can create financial statements as compan$ code financial statements, segment financial statements, financial statements for operating chart of accounts or countr$ chart of accounts, and so on" Financial statement versions are also used in the structured !alance list, drilldown reporting, planning, and transferring data to consolidation" The financial statement version ena!les $ou to configure the report format" 5ou define the following: /hich items are to !e included and the se9uence and hierarch$ of these items The te#t descri!ing the items The )harts of Accounts and the individual accounts relevant to the report The totals to !e displa$ed"

*alance Sheet and Pro#it 7 &oss State'ent:

Audio Transcript Financial Statements are created in order to provide monetar$ information for review of the reporting compan$s financial performance and position, and ena!le the readers of the financial statements to assess the management and ma(e decisions" Financial statements are created using the general ledger of a compan$ code" The following financial statements can !e created in SAP E)) s$stem: ;" ,alance sheet <" *ncome statement The A,APA? program RF,*&AFF calculates the !alance sheet profitAloss from the assets and lia!ilities totals and enters the result in the 3!alance sheet results profitAloss4 item" The profit and loss statement results are determined from all accounts not assigned to either assets or lia!ilities, and are entered in the proper item"

Financial State'ents-An Alternative:

Audio Transcript Tool for evaluating the data of an application according to its characteristics and (e$ figures" rilldown reporting allows $ou to generate simple data2driven lists 6ad2hoc reports7 as well as comple# formatted reports 6using forms7" @sing hierarchies, varia!les, formulae, cells and (e$ figures, $ou can generate reports that satisf$ all user re9uests" A new F* drilldown report is availa!le as an alternative to the conventional statements" &et us see the advantages of drilldown reporting compared to RF,*&AFF" A drilldown report is more 3Fle#i!le4 than the older A,AP program Selecting the report !$ standard characteristics such as profit centres, functional area, !usiness area, compan$ code and so on"

Su''ar(
/e now come to the end of this topic on Preparing Financial Statements"

Module Su''ar(
The participant should now !e a!le to appreciate how SAP ERP supports an organizations Financial Accounting processes and integration of processes related to Material Management, Production, Sales and istri!ution, Management Accounting etc" with Financial Accounting" The participant would !e a!le to identif$ various organization units and master data which support Financial Accounting" The participant will also have an understanding of transactions in Accounts Pa$a!le, Accounts Receiva!le, Asset Accounting, %eneral &edger Accounting etc" and descri!e the 'ew %eneral &edger functionalit$ and e#ternal reporting through Financial Accounting"