Unit 3: Financial Accounting
FI Focuses on:
1.
G/L
2.
Processing of Receivables
3.
Asset Accounting
Major Processes:
A/R O2C Customer
A/P P2P Supplier
Parties and Factors Involved:
4.
Bank
5.
Treasury
6.
FSCM
7.
Asset Management
8.
Bank Ledger supports booking of cash flows
Important Tasks of FI:
9.
Recording of monetary and value flows
10.
Evaluation of inventories
The General Ledger
11.
Contains records of all accounting-relevant business transactions via G/L Accounts in a business
perspective
12.
Is structured according to a Chart of Accounts
1.
13.
Contains Definitions of all G/L accounts
1.
Account #
2.
G/L Account Designation
3.
Categorization of G/L Accounts as I/S or B/S
Often contains ONLY collective postings
1.
Subledgers pass data in compressed form to G/L via Reconciliation Accounts
14.
Managed at CC level
1.
B/S & I/S complied from this
15.
Transactions entered into Subledgers, MM (material stock) and Treasury flow into B/S in real-time
16.
The component Treasury (TR) focuses on functions such as:
17.
1.
Payment means
2.
Treasury Management (financial means, Forex, derivatives, bonds)
3.
Loans
4.
Market Risk Management
One Leading Ledger in each Client for New G/L Accounting
1.
Other ledgers can exist within the G/L
SAP FSCM:
18.
Helps enterprises to optimize their cash flows
19.
Improvements in invoicing, reconciliation, preventing arrear and process related delays in payments
(printing + sending invoices)
20.
Represents a major area of process innovation and improvement in a broad range of industries
Four Key Functionalities:
1.
Evaluate the Customer (SAP Credit Management)
2.
Helping to contact customers
3.
Dispute management
4.
Collections
Process Steps in FSCM:
1.
Check credit worthiness
2.
Issue Invoice
3.
Forecast Cash
4.
Finance Working Capital
5.
Resolve Disputes
6.
Collect Cash
7.
Settle and Pay
8.
Reconcile
FSCM Components:
1.
2.
3.
SAP Biller Direct (Electronic Bill Presentment and Payment)
1.
Send and receive invoices electronically
2.
Customers access info via internet
3.
Reduces media fragmentation, allows vendors to interact w/ customers
SAP Dispute Management
1.
System support for processing payment deductions
2.
Cross-departmental resolution of dispute cases
3.
Collaboration w/ customers supported by correspondence with them via internet (using SAP
Biller Direct)
4.
Improves receivables management and speeds up invoice settlement
SAP Collections Management
1.
4.
5.
6.
7.
Structure, classify, minimize receivables owed
SAP Credit Management
1.
Provides companies w/ large customer base the opportunity to monitor total liabilities of
customers, using appropriate credit lines
2.
Advantage of centralized and company-wide management of credit lines
3.
Eliminates risk of customer exceeding credit limit
4.
Different Distribution Channels use same data to check credit worthiness
SAP Cash and Liquidity Management
1.
Effectively manage liquidity and currency risk
2.
Redundant data entry eliminated
3.
All corporate sectors operate on unique and consistent database
SAP In-House Cash
1.
Allows diversified companies to optimize intra-group payment transactions by opening an inhouse bank
2.
In-house cash center is a virtual bank within the corporate group
3.
Saves on costs of external netting services + gives flexibility when processing payment netting
transactions
SAP Treasury and Risk Management
1.
Set of functions for managing financial transactions and risk
FI vs. CO
FI
CO
Audience
External
Internal
Objective
Legal Reporting
Internal Management of Costs and
Revenues
Requirements
Determined by Law
Up to company
Level
Defined by Law
Costs and Revenues at a higher level
than FI
*costs and revenues from FI used in CO
FI Organizational Levels
Company Code
8.
Should create based on tax law, commercial law, other FI criteria
9.
Usually created based on geographic considerations
10.
CC key is a 4 digit alphanumeric code
Segment
11.
Available as of SAP ERP 2004 (ECC 5.0)
12.
In New G/L, can be used as a dimension for reporting purposes
13.
Aim is to provide insight into different business activities of a diversified company and info about the
general environment
14.
Purpose is to provide a better overview of the companys economic performance, improve forecasting
and better anticipate risks and opportunities
15.
IAS Definition
16.
1.
Business Segment is a sub-activity of a company, involving manufacture of product or provision
of service, with risks and revenue that differ from other segments
2.
Geographical Segment risks and revenues that differ from other geographic segments in terms
of economic or political factors
US GAAP part of a company that incurs costs, generates revenue, has own financial data w/ regard to
profit + resource consumption
Controlling Area
17.
Self-contained Organizational Structure for which costs and revenues can be managed and allocated
18.
Represents a separate unit of cost accounting
19.
Assign multiple CCs to carry out Cross-CC cost accounting
1.
Same operating COA and fiscal year required
General Ledger Accounting
20.
Represents a companys set of books
Chart of Accounts
21.
each G/L set up according to a COA
22.
contains definitions of all G/L accounts in an ordered form
23.
consists of
24.
1.
Account #
2.
Account Name
3.
Type of G/L Account (B/S or I/S)
Can specify an unlimited # of COAs
GL Account Master Record
Comprised of:
25.
26.
Chart of Accounts Segment
1.
Description of account
2.
Type: B/S I/S
3.
Account Group (controls CC segment fields)
4.
Consolidation Account #
Company Code Segment
1.
Details how specific CC will manage account
1.
Account control
2.
Account management
3.
Bank/financial details
4.
Joint ventures
5.
Interest calculation
6.
Document control
Account Groups
27.
Classify G/L accounts into user defined segments (cash/asset/material/PL/liabilities,etc)
28.
Determine # range of accounts that will fall into those segments
29.
Field status (Supress/Required/Display/Optional)
Reconciliation Accounts and Subledgers
30.
Ensures real-time integration of subledger accounts with G/L
Financial Statement versions
31.
Helps to meet various reporting requirements
32.
Define exactly which accounts appear in which line items of the financial statements
Profit Centers (previously CO only, a profit area of responsibility]
33.
Like CCs, function as a dimension for reporting
1.
34.
Financial statements can be created for PCs
Can represent:
1.
An organizational unit (plant)
2.
A line of business
3.
A geographical location
35.
Since SAP ERP 2004 (ECC 5.0), are now an integral part of G/L
36.
Still considered master data
G/L Account Posting page 68
Posting Key
37.
Used for internal control
38.
Account type/Debit or Credit/Field Status
Accounts Payable (P2P)
PO GR IV Payment
Vendor Master Record
39.
Contains data that controls how transaction data is posted and processed
40.
Includes all info about a vendor needed to do business w/ them
41.
Client Level
1.
Vendor specific info
2.
Name, address, etc
3.
any CC will have access to Vendor General Info
42.
Company Code
43.
Purchasing Organization
1.
Data specific to purchasing in VMR must be entered before suppliers master record can be used
Document Splitting
44.
Used because corporate groups are required to create a B/S at segment level
Vendor Payment
1.
Select Payment Method and Bank
2.
Select items for payment
3.
Calculate payment amount, take account of cash discount periods
4.
Post payment document
5.
Print payment medium
If Automatic
1.
Post payment document
2.
Clear open items
3.
Prepare data for printing
Purchase to Pay Process (Accounting View)
4.
Purchasing organization MUST create purchase specific data in VMR before that can use Supplier Master
record
PO
5.
No accounting documents generated
GR
6.
System checks quantity of goods received vs. Order quantity
7.
Material document created to update stock
8.
At the same time, FI Document created (Debit Materials, Credit GR/IR)
IV
9.
Invoice received in Logistics invoice verification
10.
Vendor invoice checked for correctness
11.
Vendor invoice posted (PO history updated)
12.
At the same time, FI document generated (Debit GR/IR, Credit A/P)
Payment
13.
Debit A/P, Credit Bank Reconciliation when payment made
14.
Once payment verified, Debit Bank Reconciliation, Credit Bank Account
Accounts Receivable (O2C)
SO Delivery Billing Payment
Customer Master Data
15.
Client
16.
CC
17.
Sales Area (Sales Org + Distribution Channel + Division)
1.
Sales area-specific settings
2.
Must be defined before it can do business
Credit Management (SAP Credit Management)
18.
Accounts are processed on the basis of Credit Segment in the CMR
1.
Credit segment data contains all data required for checking credit when sales order is accepted
and for resulting order-related credit decisions
2.
Data updated from Sales and FI
1.
SD Sales Order outbound delivery (ECC 6.0) Billing Document
2.
FI Transferred in report UKM_TRANSFER_ITEMS
19.
Maintained in a separate data basis in SAP Credit Management
20.
Includes all information about business partner required for monitoring credit risk
21.
Credit Profile
1.
Contains data related to scoring, limit calculations [Role UKM00 (Credit Mgt Bus Post) used to
maintain data]
SO
22.
Sales Order Created (No FI document)
Delivery
23.
Outbound delivery document created (SD)
24.
Goods delivered posted as Goods Issue (MM)
25.
At the same time, FI Goods Issue (COGS Debit/Inventory Credit)
Billing
26.
SD Billing document created, invoice sent to customer
27.
At the same time, FI Invoice (A/R Customer Debit/Revenue Credit) *Revenue Recognized
Payment
28.
FI (Credit A/R customer/Debit Bank)
Service O2C
29.
Expenses incurred when services procured outside company and provided internally
30.
External services posted without, internal services posted with an account assignment to Cost Center
performing activity (personnel expenses)
Customer Payments
31.
Maximum amount that constitutes a minor payment difference is defined in tolerance group settings
32.
Any larger deal with manually
1.
Partial payment item doesnt clear
2.
Residual Item open invoice cleared
3.
New open item (Residual Item) in amount of payment difference is created
Fixed Asset Accounting
Allows organizations to:
33.
Manage asset info
34.
Post transactions during life of an asset
35.
Calculate asset depletion
Asset Master Record
36.
Each asset belongs to a Company Code and Business Area (postings made for asset change both)
37.
Can also assign assets to CO Objects (Cost Center/Internal Order/Activity Type/Logistics Org. Units)
38.
Assets Business Area = 1 1 // Business Area Assets = 1 many
Asset Class
39.
Each asset MUST be assigned to one
40.
Costs that dont appear on same line item of B/S have to be assigned to different ones
41.
At least 1 special asset class for assets under construction and low value assets (4000, 5000)
42.
Can also create for intangible and leased assets
43.
Application Component PM (Plant Maintenance) used for technical management of assets
44.
Application Component TR (Treasury) used for managing Financial Assets
10
Asset Transactions (acquisitions, retirements)
45.
Can be posted in various ways:
1.
w/o a vendor or PO offsetting entry made to a G/L clearing account
2.
to a vendor, w/o reference to a PO
3.
Via MM using MM functions (PO, GR, Invoice Receipt)
Transaction Type
46.
An addition to Posting Keys 70(debit) and 75(credit)
47.
Must be included when posting to an asset
account
48.
Necessary, because it specifies exactly
where the asset posting is listed in the asset
history sheet
49.
Details the distinguishing characteristics of
various asset postings which include:
1.
Buying and Selling
2.
Credit Memos
3.
Acquisition from Internal
Production
4.
Adjustment Postings
5.
Retirement w/o Revenue
6.
Depreciation and Appreciation
Asset Explorer
50.
Offers overview of activity for an asset
51.
Can drill down details to FI transactions
11
52.
Possible to branch master data, cost
objects, perform simulations
Depreciation Areas
53.
Often asset balances need to be
valuated differently for various
purposes
54.
To keep more than one valuation basis, depreciation areas are kept in SAP
55.
Data stored in Asset Master Record
Depreciation Run
56.
Depreciation only posted into asset accounting and G/L after depreciation run
57.
Posted to corresponding depreciation accounts in G/L and to assigned CO Cost object assigned to Asset
Master
58.
Can be run in direct or batch mode
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