Beruflich Dokumente
Kultur Dokumente
Submitted
To
X GROUP
By
KPIT CUMMINS INFOSYSTEMS
Financial Accounting
December, 2013
Version 0.0
Project xxxxxx
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X CompanyGroup
Project
XXXXX
Document details:
Name
Financial Accounting
Version No.
1.0
Description
This
document
outlines
the
Financialaccountingbusiness processes of X COMPANY
and how these will be implemented in SAP.
Document details:
Revision
Number
Action taken
(add/del/chg)
0.0
Initial draft
1.0
Final draft
2.0
Final Document
Preceding New
Revision
Page No. Page No. Description
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PREFACE
Purpose of this Document
The purpose of this document is to record the business process requirements of X
CompanyGroupand outline the requirement mapping in SAP.
Intended Audience
The intended audience for the Financials Blueprint is the employees of X
CompanyGroup and other persons authorized by X Company who are in any way
related to Business Processes involving Financial Accounting.
Title
Confidential
Versio
n
Author
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Sign Of
Role
Name
Functional Consultant
Mr.
GajananMankeshwark
ar
Mr.Ravichandra
Business Process
Owner
Mr. Jayaprakash
Project Manager- X
Company Group
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Signature
Date
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1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
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describes
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GL
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Table of Contents
ACRONYMS....................................................................................................................... 9
GENERAL EXPLANATION.................................................................10
1.
1.1. COMPANY...............................................................................11
1.2. COMPANY CODE......................................................................11
1.3. CHART OF ACCOUNTS..............................................................13
1.4. CREDIT CONTROL AREA............................................................14
1.5. SEGMENTS.............................................................................. 15
1.6. PROFIT CENTERS.....................................................................17
1.7. FINANCIAL ACCOUNTING GLOBAL SETTINGS:.............................18
2.
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ACCOUNTS PAYABLE................................................................59
ASSET ACCOUNTING................................................................89
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PROCESS MAPPING................................................................107
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ACRONYMS
Code
Description
X
COMPA
NY
X CompanyGroup
MM
Material Management
QM
Quality Management
PP
Production Planning
PM
Plant maintenance
VM
Vendor master
PO
Purchase Order
PR
Purchase Requisition
SD
LE
Logistics Execution
MM
Material Master
HR
Human Resource
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GENERAL EXPLANATION
Company Profile -X Company Group is one of the leading paint manufacturers in
India based at Chennai, Tamil Nadu. This 350cr organization is in the industry for more
than 5 decades. The product range includes paints for Architecture, Automotives and
wood finishes. The brand X Company is quite famous in India. The organization split
into multiple legal entities which manufactures and markets Paints/wood finishes
across India. This organization has around 450 employees in its group. They have
operations in Sri Lanka also.
Business Blue Print - This is the document where we define the business processes
and operating procedures for your company to support the corporate growth initiatives
and also to adapt to the new SAP system that will be implemented.
SAP Blueprint is the architectural foundation for the success of our project. This is
where we define your business requirements, set expectations from the new system
and gain alignment of the key business stakeholders with the capabilities and
expected output from the new SAP system.
In a Business Blueprint, we create a project structure in which relevant business
scenarios, business processes and process steps are organized in a hierarchical &
tabular structure to specify how your business processes should run in your SAP
systems.
The project documentation and the project structure that you create during the
Business Blueprint will be integral part in the configuration and test organization
phases.
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1. SAP
ORGANIZATION
REFERENCE TO FI MODULE
STRUCTURE
WITH
1.1. COMPANY
1.1.1.
Definition
Application
1.1.3.
Naming Convention
COMPANY
DESCRIPTION
1000
X Company Group
Definition
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Application
The Company Code is the smallest Organizational unit for which a complete
self-contained set of accounts can be drawn up for purposes of external
reporting.
Balance sheets and Profit and Loss statements, required by law, are created
at company code level.
We can set up several company codes in one client in order to manage
various separate legal entities simultaneously, each with their own balanced
set of financial books.
Different Currency requirement will need additional company code.
In case of X Company group, it consists of 9 legal entities. It individual entity
prepares and files the financial statements and income tax returns.
Therefore 9 company codes would be set up in the system.
1.2.3.
Naming Convention
Sr. No.
Company
Code
Description
1000
1100
1200
1300
1400
TechServices
1500
7
8
1600
1700
5000
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Definition
Application
For each G/L account, the chart of accounts contains the account number,
account name, and the information that controls how an account functions
and how a G/L account is created in a company code.
We have to assign a chart of accounts to each company code. This chart of
accounts is the operating chart of accounts and is used for the daily
postings in this company code.
In case of X Company group, all the 9 legal entities use same chart of
accounts for day to day operation. Therefore 1 chart of accounts would be
would be set up and assigned to all 9 legal entities. The same chart of
accounts would be used for the purpose of consolidation at the company
level.
Naming Convention
Chart of Accounts
YAIN
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Description
X Company Chart of
Accounts
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Definition
The credit control area is an organizational unit that specifies and checks a credit limit
for customers. A credit limit is set per business partner record. Within a credit control
area, the credit limits must be specified in the same currency
1.4.1.
Application
This organizational unit is either a single company code or, if credit control is
performed across several company codes.
As required in X Company the credit monitoring should be done per separate legal
entity. Therefore separate credit control area would be set up per legal entity. It would
be done only for the below mentioned company codes since the credit checks are not
required for the remaining company codes.
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Naming Convention
Sr. No.
Credit Control
Area
1000
1500
1600
1700
5000
Description
X Company Paints Credit Control
area
X Company Auto Credit Control
area
Sheenworld Services Credit
Control area
Sphinax Chemicals Credit Control
area
X Company Lanka Credit Control
area
1.5. SEGMENTS
1.1.2.
Definition
1.5.1.
Application
This organization unit would be set up based on the geographical bifurcation present
in X Company. The X Company group has East, West, South and North regions and
distribution chains. Based on that,Segments would be set up as East, West, South
and North regions. Among all the legal entities, only X Company Paints Corporation
Ltd., Sphinax Chemicals Pvt. Ltd., Sheenworld Services LLP,X Company Auto Solutions
has the regional segments.
1.5.2.
Naming Convention
Sheenlac
Segments.xlsx
Definition
Profit centre represents a part of firm as independently operating enterprise within the
company.
Profit centres collect revenues and also collect costs via cost centres.
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A profit centre is a management oriented organizational unit used for internal controlling
purposes.
Dividing your company into profit centres allows you to analyze areas of responsibility and
to delegateresponsibility to decentralized units, thus treating them as companies within the
company.
Profit centres are statistical objects.
1.6.2.
Blue
Application
X COMPANY will have profit centre accounting taking into consideration of location wise
trial balance requirement
1.6.3.
Naming Convention
Sheenlac Profit
Centers.xlsx
Currency Settings
Document Types
Document Numbering
Posting Keys
Currency:
X Company group will use Indian Rupees (INR) as the local and base currency. The
local and base currency for all Indian Legal Entities would be Indian Rupees (INR). In
case of legal entity in Sri Lanka the base currency would be Sri Lankan Rupees (LKR).
Other currencies would be defined in relation to INR. The factors for currency
translations will be based on the direct quotation method that is i.e. 1: n, where one
unit of foreign currency will be equal to n units of INR.
Fiscal year and fiscal year variant:
A Fiscal year variant is defined in the SAP system to identify financial transactions
related to a particular financial year. X Company will define 1000 as the fiscal year
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variant. Since all the legal entities are using the same financial year (April to March),
the same fiscal year variant would be used for all legal entities. The fiscal year will be
defined as the last accounting year; for example, if the financial year is April 2011March 2012, then the fiscal year will be 2012. A fiscal year will consist of twelve
normal posting periods and four special posting periods.
Fiscal Year Variant V3 will be used
Sixteen periods will be defined in the system. The first period will be April and the
twelfth period will be March. The four extra periods will be used for posting year-end
/closing adjustment entries. Special restrictions will be made on the accounts that can
be posted to in the 4 special periods.
A Posting Period Variant is defined & assigned to one or more company codes. This
variant controls opening and closing of one or more posting periods in Financial
Accounting.
It is further desired by X Company, that the controlling the posting period should be
possible at the individual location level. I.e. a posting period can be opened only for
Hyderabad branch. To cater this need, authorization groups would be created per
various locations. Users from the locations would be assigned to the respective
authorization group.
Sr. No.
Posting period
variant
1000
1100
3
4
5
1200
1300
1400
1500
1600
1700
9
Posting Periods:
5000
Description
X Company Paints Posting period
variant
X Company Financial Posting period
variant
Sphinax Organic Posting period
variant
Sphinax Info Posting period variant
TechServices Posting period variant
X Company Auto Posting period
variant
Sheenworld Services Posting period
variant
Sphinax Chemicals Posting period
variant
X Company Lanka Posting period
variant
One posting period should generally be kept open for the current month
The previous month should be closed after the month end closing procedures
are carried out
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One or more posting periods may be kept open for certain accounts on selective
basis, if required. However the authorization for this will be maintained at a very
high level.
Old Posting Periods have to be closed after carry forwarding all ledger balances
to next year and New posting periods will be opened for new year
It will be possible to post to the current and the previous fiscal years until the
previous fiscal year is not closed
All document numbers will be reset to the minimum number of the range for the
new fiscal year
Document Principle:
SAP uses the document principle as its reference for entering and posting business
transactions. Each business transaction is stored as a document form and remains a
complete unit within the system till it is archived. In SAP, a document consists of a
document header and a line item, both of which are controlled by document types and
posting keys.
Document types:
Document types are required in the SAP system to create and post financial
documents, such as (e.g. Bank Payment Voucher, Bank Receipt Voucher and, Journal
Etc.) Document types are also used to distinguish between the various FI documents.
In addition, Document types also controls, Document Numbering (external or internal),
Account Types (Debtors, Materials, Assets, G/L accounts and Creditors) that can be
entered in the document.
Apart from the key controls mentioned above, few other definitions are made at the
Document type level for the purpose of processing transactions, which are driven by
the business process needs.
X Companywould use the standard SAP document types for the various types of
transactions across all legal entities.
Document numbering:
Each of the document types defined will have an identification number. The SAP
system uses predefined number ranges for this purpose. The number ranges are
assigned to the document types. The number ranges may be defined as internal, that
is i.e. automatically generated by the system in chronological order or as external, i.e.
that is enterable at the time of the transaction.
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X Company has decided to have internal numbering for all the documents. The
number range would be year dependent.The following Document Types are identified
for use from SAP Standard.
Docu.
Type
AA
AB
AF
Description
Asset posting
Accounting
document
No.
Ran
ge
01
01
DG
Dep. Postings
03
Customer
credit
memo
16
DR
Customer invoice
18
DZ
Customer payment
14
KG
17
KR
Vendor invoice
19
KZ
Vendor payment
15
PR
Price change
48
RE
Invoice gross
51
WA
Goods issue
49
WE
Goods receipt
50
ZP
Payment posting
20
From
Number
1000000
00
1000000
00
3000000
00
1600000
000
1800000
000
1400000
000
1700000
000
1900000
000
1500000
000
4800000
000
5100000
000
4900000
000
5000000
000
2000000
000
To
Number
1999999
99
1999999
99
3999999
99
1699999
999
1899999
999
1499999
999
1799999
999
1999999
999
1599999
999
4899999
999
5199999
999
4999999
999
5999999
999
2999999
999
Exter
nal
Reverse
Doc.
Type
AA
AB
AF
DA
DR
DA
KA
KA
KA
PR
RE
WA
WE
ZP
Account type:
Account type is a key that specifies the accounting area to which an account
belongs.Examples of account types are:
Asset accounts - A
Customer accounts - D
Vendor accounts - K
G/L accounts - S
Materials accounts - M
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Posting Key:
The posting key is a two digit numeric key that controls the entry of document
line items. It specifies whether the line item is a debit or a credit entry, the
account type that can be posted (Vendors, Customers, and General Ledger etc.)
and the screen layout.
For posting special G/L transactions special posting keys, are used which are
supplemented by a special G/L indicator. The system uses the specifications
(posting key and special G/L indicator) to determine the alternative reconciliation
account.
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Definition
Integrated PCA
Document Splitting
G/L account master records contain the data that is always needed by the
general ledger to determine the account's function. The G/L account master
records control the posting of accounting transactions to G/L accounts and
the processing of the posting data.
Business transactions are posted to accounts and managed by GL accounts.
You must create a master record for each account that you need. This
contains information that controls the entry of business transactions in an
account and the processing of data.
2.1.2.
Application
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Example:
Repairs A/c... Dr (Cost Centre 100001) - Rs.2000
Repairs A/c... Dr (Cost Centre 200001) - Rs 1000
To Bank A/c (Cost Centre 100001) - Rs.2000
To Bank A/c (Cost Centre 100001) - Rs.1000
New General Ledger Accounting comprises the following functions for
entering and evaluating posting data:
Closing:
The new general ledger has significantly simplified and accelerated period-end
closings. For document splitting, the data in the new GL already meets the
reporting requirements from the time of posting. You can make a zero balance
setting for the corresponding characteristics (segment, profit center, and
customer fields) in each document. In this manner, you can create a
(nonconsolidated) balance sheet at the level of these characteristics at any
time. You no longer need additional program runs to split the characteristics.
Reconciliation between controlling functions and the new general ledger also
do not require additional program runs. In the case of cross-entity controlling
postings (such as transfer postings for costs from one cost center or profit
center to another, either manually or with allocations), the values are updated
to the general ledger in real time. In this manner, the controlling area and
general ledger are synchronized for the transactions. You no longer need
additional reconciliation activities or use of the reconciliation ledger. The
system provides data on the origin of such documents. If you have to
distribute values for specific general-ledger characteristics (such as a
customer field) using a specific scheme, you can perform allocations in the
general ledger.
2.1.3.
Data Maintenance
G/L account master records are divided into two areas so that company
codes with the same chart of accounts can use the same G/L accounts.
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You use account groups to combine accounts according to the above criteria
(for example, a P&L account group, asset account group and material
account group).
Account groups for G/L accounts are based on the chart of accounts.
The chart of accounts area contains the data that is valid for all company
codes, such as the account number. The following is the data in Chart of
account
Specifies the account number and account name (short and long
text) for each G/L account master record.
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You must define your account groups outside of the chart of accounts.
First specify the key under which you have stored these definitions in the
chart of accounts. Then create a G/L account master record: specify the
account number of the sample account in the required master record in
the chart of accounts.
Following account groups would be created for X Company:
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COA
A/C
Group
YAIN
LIAB
YAIN
PABL
YAIN
DEPN
YAIN
FXAS
YAIN
MATL
YAIN
RCBL
YAIN
CASH
YAIN
ASET
YAIN
REVN
YAIN
CONS
YAIN
EXPN
Description
Blue
From
100000
Balance Sheet A/C - Liabilities
00
Reconciliations
Account
- 160000
Vendor
00
201000
Accumulated Depreciation
00
210000
Fixed Assets
00
Material
Management
- 220000
Inventories
00
Reconciliations
Account
- 230000
Customer
00
240000
Cash and bank Accounts
00
Balance sheet Accounts - 250000
Assets
00
310000
P&L A/Cs - Revenues
00
Material
Management
- 401000
Consumption
00
400000
P&L A/Cs - Expenses
00
To
159999
99
169999
99
209999
99
219999
99
229999
99
239999
99
249999
99
259999
99
399999
99
401999
99
499999
99
2.2. ASSET
2.2.1.
Definition
Application
Data Maintenance
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2.2.4.
This part of the master record contains concrete information about the
fixed asset. The following field groups exist:
Account assignment
In addition, you can create long texts for the individual field groups
belonging to the general data part of the asset master record. You can
simplify the creation of long texts by using freely-definable long text
templates.
2.2.5.
You can specify depreciation terms in the asset master record for each
depreciation area in the chart of depreciation. In order for you to make
these specifications, the master record contains an overview of the
depreciation areas. In addition, there is a detailed display available for
each depreciation area. Group asset will be created to group the asset as
per IT act. But depreciation value for IT department will be calculated out
of system.
Internal Number Range will be used for the Asset Class.
2.2.6.
Asset Classes are used to classify the Assets under various heads for
Legal and reporting purposes. Asset Classes facilitate creation of
individual Asset Masters with certain default values and characteristics
that may, if required, be changed at individual asset master level.
Account Determination forms the link between Asset Classes in Asset
Accounting Module and FI module for integration with GL. Various GL
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Accounts for APC, Depreciation, and Asset Disposal etc. are assigned in
various depreciation areas through account determination.
Each asset class is maintained with different depreciation areas as
required by X COMPANY. Once the asset classes are defined different
asset master records will be created under the asset classes. Each class
will be assigned a different number range to give different numbers to
assets.
Following asset classes would be set up in the system:
Details
Land and buildings
Plant and Machinery
Fixtures and fittings
Office Equipments
Vehicles
Computer equipments
Low-value assets
Assets under construction
Asset
Class
1000
2000
3000
4000
5000
6000
7000
9000
Definition
Application
A house bank refers to the bank a company uses for receivables and/or
payments. It is any bank with which your company code does business.
Each house bank contains a companys bank accounts. It also contains a
bank key that defines address and control data for the bank. The house
bank establishes a link with G/L accounts.
2.3.3.
Data Maintenance
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The bank key contains the addresses and valid control data of all banks
used in the SAP System. The bank key has to be created in the system, if
a bank is set up in the bank key, this information could then, for example,
be accessed when entering the bank information in a customer or vendor
master record. You would only need to enter the country of the bank and
the country key; the system would determine the name and address in
the background.
A G/L account master record must be created for each bank account.
The house bank and account ID must be entered in the GL account
master record to ensure the accounting transactions involving the bank
account will be reflected in the general ledger.
The following bank accounts would be set up in the system per legal
entity:
X Company Paints Pvt. Ltd.
Bank name
The South Indian bank
HDFC Bank Ltd
Axis bank Ltd
Axis bank Ltd
ICICI bank Ltd
Account No.
01380830000016
20
00040330012166
90903003321056
3
91102005601252
8
000905019304
A/C Type
Cash Credit
Current A/c
Cash Credit
Current A/c
Current A/c
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Account No
0004033000296
2
0138073000001
792
0138073000001
793
0127073000001
413
0138073000001
791
0111073000003
324
0374073000000
278
0414073000000
117
000905024635
9110200559576
57
A/c Type
Current A/c
Current A/c
Current A/c
Current A/c
Current A/c
Current A/c
Current A/c
Current A/c
Current A/c
Current A/c
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30861566143
Current A/c
Definition
Application
Accounting1
This view of material has details regarding how the material is
accounted. i.e. unit of measure, currency etc. Below are important fields
Valuation class: Determines the G/L account that is updated if there is
impact on accounting.
Price control: Determines whether material is valuated on standard price
basis or moving average price basis.
Prices: displays the price of material
Accounting2
This view is only to display different prices like tax prices etc. if
maintained.
2.4.3.
Data Maintenance
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Which screens and fields are necessary for entering master data
Vendors Domestic RM
Vendors Domestic PM
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Vendors Imports RM
Vendors Imports PM
Vendors Service
Vendors Logistics
Vendors Employee
Vendors Others
Blue
00
300000
00
400000
00
500000
00
600000
00
700000
00
750000
00
800000
00
9
3999999
9
4999999
9
5999999
9
6999999
9
7499999
9
7999999
9
8999999
9
Input master data in central location to be accessed via all other modules
Change an account
Display an account
Block/unblock an account
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Which screens and fields are necessary for entering master data
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Account Groups:
Sr.
No.
1
Customer domestic
2
Customer export
3
One time customer
4
Project customers
From
To
1000000
0
2000000
0
3000000
0
4000000
0
1999999
9
2999999
9
3999999
9
4999999
9
23000000
23100000
23200000
23300000
Description
Accounts
customers
Accounts
Customer
Accounts
customers
Accounts
customers
receivable-Domestic
receivable-Export
receivable-One
time
receivable-Project
Payment Terms:
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Description
Payable Immediate
NT07
Payable in 7 days
NT15
Payable in 15 days
NT30
Payable in 30 days
NT45
Payable in 45 days
NT60
Payable in 60 days
Management
function
provides
the
following
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are
generated
to analyse
the
profitability per
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To facilitate the smooth and proper closure of books at the end of the
accounting year and carry forward of balances to new accounting year
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Adjustment entries
Provision Postings
Blue
3.2.1.
DOCUMENT
Open items
Cleared items
Noted items
Parked items
Items with special G/L transactions (in Accounts Receivable &Accounts Payable)
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The SAP system adheres to the document principle. This means that each posting is
always stored in the form of a document; each document has a document type, which
is generally used to identify the source and nature of the transaction (e.g. AP Invoice,
AR Debit Memo etc.), and a unique document number. Each document remains in the
system until it is archived.
Only complete documents can be posted in the SAP system. "Complete" means that
the balance from the debit and credit items is zero. Further conditions for posting a
document are that you must enter the basic document data, such as document date,
posting date, document type, posting key, account number and amount. You must
make entries in all the required fields (these are defined as "required" during system
configuration of Field Status Groups).
When you enter documents, the system checks whether these conditions have all
been met. It also checks/validates the entries themselves. For example, if you have
entered a key that is not defined in the system, the system issues an error message to
this effect. If this is the case, you can only continue processing after you have
corrected the error. These system checks & validates that all the required data is
entered into the system in complete and in error-free form.
If you are interrupted on entering a document and want to save the information you
have already entered, you can do so by using the Hold function. On the other hand,
you cannot post the document as account assignments are missing, or something is
unclear, you can use the preliminary posting function to park the document until you
are ready to complete it.
3.2.2.
An incomplete document may be parked and then posted at a later date; this may be
done by the same or a different user.
Generally the documents are parked when the user is waiting for an approval from the
superior. Subsequently the user can book the same as a G/L document.
One advantage of parking is that you can evaluate the data in documents online for
reporting purposes from the moment they are parked, rather than having to wait until
they have been completed and posted.
A list of parked documents can be generated in the SAP for the benefit of the
supervisor/manager. The document can then be checked and corrected by the user.
This document can then be posted in the General ledger. Parked documents can be
modified or deleted before posting.
The documents are entered in to the system and depending on the authorizations;
the documents are parked and posted later.
The user will park all the documents in R/3. Then the designated approver will view
the list of all the parked documents and post the parked documents before the end
of the day.
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Items details like general ledger account, amount, tax code, cost
assignment will also be entered for each line item.
To make general ledger business transaction available, you must post them to
the general ledger account. The system creates the document and makes the
data available in accounts.
When you carry out the postings to G/L accounts, you enter the document header
data and line items data. Upon simulation of the document, the system carries
out the consistency checks before posting the data. If the error exists, the data
will not be posted and proposes error information. Once the data is error free,
then the system updates the document file and G/L accounts amount may be
posted.
The expense GL account is made mandatory to input a cost centre.
Journal creation will be mainly used for adjustments of incorrect postings, ad-hoc
entries, or period-end adjustments. All GL transactions from other modules will
be generated automatically with their own document types and number ranges.
In addition, the standard journal creation program provides for the creation of an
Account Assignment Template. At any time during the creation of a document,
the user may save the document as a template for future use. The template may
contain any number of individual line items (up to the SAP maximum of 999), and
any combination of GL account assignments and individual line item values.
The values posted to the G/L accounts appear in the Trial Balance which will
provide financial statements like Balance Sheet, Profit and Loss Statement.
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DOCUMENT REVERSAL
It is possible for a user to make an input error. As a result, the created will
contain incorrect information. In order to provide an audit of the correction, the
user must first reverse the document in error, and then capture the document
correctly.
The system provides a function to reverse G/L, A/R and A/P documents both
individually or in mass.
Documents with cleared items cannot be reversed. The document must first be
reset.
However, it needs to be noted that reversal of any document will affect the allocation
cycles in case if these processes are completed. It will be required to re-run all these
cycles once again after reversing the document.
3.2.5.
Open items reflect unfinished transactions. For example, a Liability that has not
been settled remains in the Liability account as an open item until it is settled.
The open items of an account can only be cleared once you post an identical
offsetting amount to the account. In other words, the balance of the items
assigned to each other must equal zero.
During clearing, the system enters a clearing document number and the
clearing date in these items.
Open items can only be cleared if they are posted to accounts that are
managed on an open item basis. Open item management is automatically set
for customer and vendor accounts. For GL accounts, however, you have to set
the open item management option in the master record.
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Open items of an account can be cleared manually using the Account Clearing
function, or they can be cleared automatically by the system. Automatic clearing is
especially useful for clearing accounts in the GL account area.
Users will clear open items from GL accounts by running the clearing program.
This program uses predefined criteria to group together open items per
account. If the balance of the group of open items equals zero in local or foreign
currency, the items are marked as cleared.
Within the general ledger module, account clearing shall be performed using
the following functions:
3.2.6.
on
SAP-defined
fields such
as
For postings that recur on a regular basis, such as payments for rent or interest,
legal fees, and property taxes, the recurring entry program can be used to have
the necessary documents generated automatically.
The recurring business transactions must be stored in the system as recurring
entry original documents.
Each recurring entry original document contains the date of the first and last
posting, the frequency at which posting should be made, and the date of the
next planned posting.
The recurring entry program must be started at regular intervals within a
specified period. The program selects all recurring entry original documents in
which the date of the next posting falls within the specified period, and then
generates a batch input session.
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SAMPLE DOCUMENTS
Changed
3.2.8.
3.2.9.
JOURNAL VOUCHER
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PERIODIC PROCESSING
Closing Procedures:
Apart from the normal day-to-day transaction processing that is undertaken within
SAP, there are many processes that require completion on a periodic basis. These
include the regrouping of customer credits and vendor debits, and unmatched invoice
receipts and material receipts, revaluing of foreign currency items, and month-end
accruals and deferrals.
List of period close operations in SAP:
N
o.
Are
a
Description
FI
FI
Depreciation Run
FI
Bank Reconciliation
FI
Clearing of
GL/Customer/Vendor
accounts
FI
Withholding Tax
Provision
FI
FI
Financial Statement
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N
o.
Are
a
Description
FI
FI
GL Balance Carry
forward
11
FI
12
FI
Foreign Currency
Revaluation
10
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FI-MM Integration (General data, Company code, Purchase area) and FI-AA
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4. ACCOUNTS PAYABLE
4.1. GENERAL EXPLANATIONS (AS-IS)
Currently X Company accounting team along with the purchasing team performs
following activities under Accounts payable Accounting
In case of Vendor invoices without Purchase Order / Service Order / Contract would
be booked by the Finance vendor invoice. And link with the relevant department at
the time of transaction.
In the FI vendor invoice, GL account is to be entered for the debit posting. Due
date, payment terms is picked up from the vendor master but this can be modified
if required at the transaction level.
Payment to vendors: the vendors are usually paid through checks. Some times
RTGS or DD are used for payments. This file is then shared with bank for check
printing.
Vendors are usually paid through checks. The payment request is raised by respective
branch (if procurement does not happen from HO) along with invoice. In case of check
payments, manual payment entry is posted into the system which owns a check
number. X Company has got check numbers received from the bank. At a particular
time interval, a file (.csv format) is generated which includes the information
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pertaining to the check payments. This file contains the information about the vendor,
invoice details, amount paid and checks number. This file is then shared to bank for
check printing. Then check printing takes place at bank end. The printed checks are
collected by X Company person. The checks are then couriered to respective vendors.
All the legal entities pays to respective vendors form their own bank accounts.
Salary payments:As on date the net salaries for all the legal entities are paid from
Sphinax Chemicals bank account. A consolidated file is uploaded to bank portal. A this
point other legal entities are considered as receivables in the Sphinax chemicals books
of accounts. Later on each legal entity reimburses the amount to Sphinax Chemicals
Pvt. Ltd.
Payment in cash:Some minor expenses are paid in cash.
Accounts payable reports:X Company team uses reports like vendor open
invoices, due date analysis, vendor balances etc. for analysis purpose.
Taxes and duties:X Company deals with excise, VAT/ CST, service tax, customs
duty, GTA as input taxes. The input taxes, where ever applicable, for eligible expenses
are booked as current asset to avail the CENVAT credit. And the expenses which are
not eligible for credit, the taxes are loaded to the expenses account. Also if applicable
the withholding tax is deducted at the time of invoice posting or payment whichever is
earlier.
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In this process Purchase Order is raised with reference to Purchase Requisition where
accounting has no impact, its only a commitment item. When the goods are received
from the vendor based on the PO, we execute MIGO where goods receipt is posted and
both Material document and FI document is generated.
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Material document will be for accounting stock into stores and FI entry will
Inventory / Stock A/c
Dr.
Dr.
Dr
(if applicable)
Dr
(if applicable)
Vendor Account
Cr.
Dr.
Service GR / IR A/c CR
Invoice Posting:
Service GR/IR A/c
Dr.
Vendor Account
Cr.
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Freight costs
Customs relevant
Insurance
For planned delivery costs, the System makes postings to a clearing account at goods
receipt.
If the delivery costs in the invoice differ from the planned delivery costs, the System
posts the differences in the same way as it posts normal price and quantity variances.
In case of planned delivery cost such as Freight:
Freight clearing A/c
Dr
Dr
Cr (Govt. Vendor)
Cr
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Dr
Cr
Cr
Dr
Dr
Vendor A/c
Cr
Dr
Cr
Dr
Cr
Dr
Cr
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GR/IR A/C
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Cr
Cr
(The custom duty portion of value is loaded to the inventory and the Customs clearing
a/c will get nullified)
During Invoice Verification:
GR/IR
A/c
Dr
Vendor A/c
Cr
4.2.2.
4.2.3.
Advance Payment: Once the APR (Advance Payment Request) received from
Purchase / Intending department, AP user will cross check the request with PO
for compliance.
Advance Payment:
A Down Payment request is raised by the authorized person requesting for payment.
Based on the request, a down payment may be released to the particular vendor and
request item is cleared. Down payment request is a noted Item special General Ledger
account which will not be displayed in the Balance Sheet. In SAP, processing of a down
payment involves a number of steps:
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The accounting entry for making the down payment will be:
Vendor account (Spl. G/L: Down Payment)
Bank A/c
4.2.4.
Dr
Cr
The concept of authorizing the document entry can be achieved by the standard SAP
functionality creating and authorizing the payment request. Payment request will be
created by one person and authorized by another person to keep the control.
It is also possible to post invoices from FI without the necessity of purchase order. That
can be used to fulfill the requirement of postings like miscellaneous payments,
employee related payments, travel agent payments, hotel bills and consultancy
payments.
Settlement of down payments to the vendor account and clearing of Invoice
against,Down Payment
Vendor A/c
Dr
Cr
Wherever, WHT is applicable, the WHT will be deducted at the time of down-payment
to the vendor and will be adjusted at the time of settlement of advances.
4.2.5.
Terms of Payment will be defined by the Company, which will be updated in the Vendor
Master for each vendor and will be defaulted in the PO and Invoice level. Where the
payment terms have been changed in the invoice level, the due dates will over-ride
the original due date (calculated based on Purchase Order). Terms of payment will
define the credit period, due date and cash discount, if applicable. The due date will
be calculated from a baseline date as per the payment terms, which will be either of
the following dates:
Document Date
Posting Date
No Default
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By using the SAP standard functionality all the check payments can be managed. The
typical procedure under SAP with respect to check will be:
a) Defining the check lots for house bank of X COMPANY
b) Entering the vendor invoice
c) Entering the vendor payment by clearing the open item created by invoice
d) Attach check to the payment document number generated in step (C)
e) Check the check register to see the check updated/3
Vendor Payments can be manual or automatic. The general aspects related to vendor
payment are Terms of Payment, Method / Media of Payment, manual payment &
Automatic Payment
X COMPANY has to make payments to vendors during their course of transactions,
vendors invoice due date is checked and if it is due, then the payment process begins.
Prior to making any payment down payments if any are to be checked and cleared
against the invoices. Only then Payment process can be carried out.
The payment can be full payment or part payment or residual payment. In case of full
payment, the system clears the open item. In case of part payment, the open item is
not cleared and has to be cleared manually subsequently, when the entire amount is
paid. In case of residual payment, the original invoice is cleared and the balance
amount is created as fresh open item.
Availability of the funds is checked before making the payment. In case funds are not
available, after making the funds available, the payment has to be carried out.
Payments can be made through automatic payment program or through manual
payment.
Check payment can be made through automatic payment program or through post
plus print option transaction. In case of automatic payment program, the parameters
have to be entered and the system prints the checks for all the vendors who are due
as per specified parameters. In both cases, the check is printed.
In case of post plus print option, the individual vendor has to be selected and
payments are to be made by selecting the required open items and with that
reference of payment document check can be printed.
4.2.7.
AUTOMATIC PAYMENTS:
The payment program is designed so that you can pool and process outgoing
payments. The payment program processes domestic and foreign payments for
vendors and customers. It creates payment documents and supplies data to the
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payment medium programs. These payment medium programs print either a payment
list, payment forms (for example, checks).
The payment program processes the open line items in three steps:
It determines the open items to be paid according to the parameters entered and
creates a proposal list. You then have the ability to edit the proposed payments
before the transactions are posted. Any items that you do not want to pay can be
blocked for payment, however, if you need additional items to be included in the
proposal list, the previous proposal must be deleted, the parameters changed to
pick up the additional transactions and the payment program rerun.
The payment program makes the payments based on the edited proposal list. Only
the open items contained in the proposal list are taken into consideration. The
payment program posts documents, sets up data for the form printout (check), the
remittance advice, and the payment summary as required.
Payment program will automatically update the check register (if used) and the
relevant general ledger accounts and also clear the vendor invoice for which
payment run is executed.
Considering the need of paying multiple vendors at a time and generating .csv file,
automatic payment program would be used for X Company.
The payment parameters that need to be specified include:
Company Code
Posting and document date for open transaction items that must be included in
the proposal list
Currency
During the payment run accounting document is generated clearing the vendor open
item.
4.2.8.
MANUAL PAYMENT
With manual payments you can print checks without running automatic payment
program. There are two ways of doing this:
You can print a check for a payment already posted. This may be necessary if a
check is damaged during printing.
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Check is prepared manually i.e outside the SAP system and then check details are
updated to the payment document which updates the check register.
4.2.9.
In case of Import materials, Purchase orders will be processed and sent to the selected
vendor with all terms and conditions. Upon the receipt of the goods in the customs
area, they would be released after the payment of duty. In SAP the customs authority
would be considered as vendor and a liability towards customer duty would be
recognized in the system. This would be called as customs invoice verification. Then
after payment of subsequent duties, goods would be released from the customs area.
Goods receipt would be booked once the goods are received in companys storage
location. Then import vendors commercial invoice would be booked in the system.
If goods received are as per the PO order quantity, Goods receipt will be posted with
reference to purchase order when material is physically received. Invoice verification
will be processed with reference to goods receipt and vendor invoice receipt as per the
payment terms stated in purchase order. Vendor payment will be processed with
reference invoice verification posted in Materials Management by Financial
Accounting. For such an IR, the exchange rate is picked up from the PO in which we
have defined a fixed exchange rate.
All import purchase orders are to be raised in foreign currency but the transactions are
to be recorded in INR. The import vendor invoice would be booked in the system in
foreign currency. System would pick up the exchange rates maintained in the system
for the currency pair for e.g. USD to INR. The exchange rate can be changed in the
document, if required. At the time of payment, the system would automatically
calculate the exchange gain/loss and book it to relevant GL A/c.
4.2.10.
Dr
Inventory A/c
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Posted for the returned quantity, stock value & quantity is reduced.
Dr
Cr
4.2.11.
Open items reflect unfinished transactions. For example, a Liability that has not
been settled remains in the Liability account as an open item until it is settled.
The open items of an account can only be cleared once you post an identical
offsetting amount to the account. In other words, the balance of the items
assigned to each other must equal zero.
During clearing, the system enters a clearing document number and the clearing
date in these items.
Open items can only be cleared if they are posted to accounts that are managed
on an open item basis. Open item management is automatically set for customer
and vendor accounts. For GL accounts, however, you have to set the open item
management option in the master record.
Open items of an account can be cleared manually using the Account Clearing
function, or they can be cleared automatically by the system. Automatic clearing is
especially useful for clearing accounts in the GL account area.
Users will clear open items from GL accounts by running the clearing program.
This program uses predefined criteria to group together open items per account.
If the balance of the group of open items equals zero in local or foreign currency,
the items are marked as cleared.
4.2.12.
CORRESPONDENCE
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Balance confirmations
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Since standard reporting format of above correspondence does not meet X COMPANY
requirement, need to be developed
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4.3. CHANGES
TO
EXISTING
ORGANIZATION
PROCESS:
N.A.
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X
Company
Corporation Ltd.
X
Company
Solutions
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TechServices
Sphinax
Organic
research P. Ltd.
X
Company
services
Among the entities listed above, almost all the entities post their invoices through
Sales and Distribution module. Only in case of X Company Financial services it is
proposed to book the invoices directly through Financial Accounting.
AR Credit/debitnotes:In case of Sphinax Chemicals Pvt. Ltd., the material is sold
the distributor and primary sale is considered at this point. Depending upon the
market situation the distributor may sale the X Company products at a discounted
price. Or distributor may sale the X Company products at a premium price. In this
situation to adjust the customer (distributor) account balance, Sphinax chemicals
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issues a credit note or a debit note to the distributor. As on date a distributor sales
report is pulled from another system and based on the report credit or debit note
entries are posted into the accounting system.
In case of other legal entities depending upon business requirement the credit notes
are issued to the end customers. The sales team posts the credit notes into the
system. Usually at the month end the accounting team posts the accounting entry
for the same.
AR Sundry Invoices:Other direct sales invoices other sundry Invoiceslike sale of an
asset and scrap, miscellaneous receipts etc.would be posted directly through
financial Accounting. In case of scrap sales, TCS is not collected.
Incoming payment receipts: In case of Sphinax chemicals Pvt. Ltd.the customer
payments are usually collected through check. Sometimes other medium like DD,
RTGS or very rarely cash are accepted. The customer payment is collected by the
local branch team and deposited into Sphinax chemicals Pvt. Ltd. CMS (Cash
Management System) HDFC bank A/c. Each branch has a CMS bank A/c code. The
branch also informs the accounting team in the head office about the details of
payments received. The credits for the payments deposited by the branches are
reflected into HO HDFC Bank A/c. Based on the credits in the bank A/c and the
information received from the branches the accounting department posts the
payment receipt to the customer account.
In case of other legal entities in the group the customer payments are usually
collected through checks. Sometimes other medium like DD, RTGS or very rarely
cash are accepted. Based on the payment receipts, the accounting team posts the
customer payment receipt in the system.
It is also practiced that customer payments are received in advances. And
sometimes in partial amounts.
X Company also holds some security deposits for the distributors. This deposit is not
adjusted against the invoice outstanding.
Correspondence with the customer:X Company accounting team sends
reminders to the customer informing the outstanding invoices. Besides this as a part
of year end closing, balance confirmation requests are also sent to customers.
Interest calculations: Currently the X Company accounting team does not follow
the practice to calculate interest on customer outstanding.
Credit limit:X Company customers enjoy some credit as business partners. The
credit limit may differ from customer to customer. For dealers the credit limit starts
from Rs.50K and goes in multiple of Rs.50K. In case of SKU, X Company holds a
deposit for a particular amount. Credit limit is offered to the extent of 4 times of the
deposit amount. The credit limit is legal entity specific. The customer outstanding for
the purpose of calculating the credit is not cumulative across the across company
codes
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Credit period:X Company uses credit period of 7 days or 30 days. After that the
invoice is considered as overdue.
Reports: for the purpose of AR analysis the accounting team makes use of customer
balance, customer line item reports. The customer ageing report is also used for
analysis purpose.
Taxes and duties: All the legal entities have individual tax/duties registration
depending upon the line of business. All the taxes compliances are followed
meticulously by the legal entities. The tax/duty liabilities are recognized in the
accounting entries posted by the accounting department.
Accounts Receivable is not merely one of the branches of accounting that forms
the basis of adequate and orderly accounting. It also provides the data required
for effective credit management, (as a result of its close integration with the
Sales and Distribution component)
All postings in Accounts Receivable are also recorded directly in the General
Ledger. Different G/L accounts are updated depending on the transaction
involved (for example, receivables, down payments, and bills of exchange). The
system contains a range of tools that you can use to monitor open items, such
as account analyses, alarm reports, due date lists. The correspondence linked to
these tools can be individually formulated to suit X COMPANYs requirements.
This is also the case for payment notices, balance confirmations, account
statements, and interest calculations.
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There are ranges of tools available for documenting the transactions that occur
in Accounts Receivable, including balance lists, journals, balance audit trails,
and other standard reports. When drawing up financial statements, the items in
foreign currency are re-valued; customers who are also vendors are listed.
5.2.1.
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INVOICE POSTING
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Customer A/c
Dr
Sales A/c
Cr
VAT Payable
Cr
Cr
(The above process is same for Raw Material / Scrap Sales Process)
5.2.3.
X Company team desires to have a tool to post the debit or credit notes to the
distributor A/c. A flat file would be imported into SAP system which would
automatically post the debit or credit notes into respective customer A/c. This
activity is usually done at the month end. A customized tool would be given for
this process.
Besides the tool option is always available to the finance department to pass
manually entry for the traction.
5.2.4.
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Dr
5.2.5.
Dr.
Cr.
This function allows user to record receipts from customers in the system and adjust
them against invoices and debit memos.
In the case of receipts received against invoices, the user can enter the invoices
to be adjusted.
Else, he can record the receipt as an On Account receipt, and link to one or
more invoices later. But this will lead to manual clearing.
Invoices, advances and debit memos can be settled to the extent of the
outstanding amount.
In case the receipt currency is not the local currency, the same is converted into
local currency for accounting purposes. The exchange rates maintained as on
the value date will be used for conversion. However, the receipt details are
stored in the entered currency but can be view in local and foreign currency as
and when required.
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5.2.6.
CUSTOMER INCOMING PAYMENT PROCESS (DIRECT DEPOSIT
INTO BANK)
Collections received from customers in two ways. The first one is check or draft
directly received from customer and deposit into Bank. Second one is Customer
directly deposit into our specified bank account. Further entries are to be updated
based on the Bank statement and the RTGS / E-net receipts.
Customer incoming payment process (Direct deposit into bank)
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5.2.8.
Credit control area is an organizational unit that represents the area where customer
credit is awarded and monitored.Credit control area will be defined at company code
level and would be updated in customers master record.
Credit limits can normally be specified in the individual customer master records at
sales organization level. The credit limits at the control area level are checked during
sales order processing.
Simple Credit check is established during sales order by maintaining Credit master
Data will be captured in SD. The customer can be blocked for the billing by using
delivery/billing block field in sales order.
It is also desired by the X Company team to have customer processing block based on
the days of overdue invoices.
5.2.9.
This process performs the revaluation of all foreign currency open items, primarily in
customer and vendor accounts, using the month end exchange rate maintained.
This process carries out foreign currency valuation for accounts managed on an open
item basis. Valuation takes place according to the single valuation principle. This
means that individual open item on the key date only are taken into consideration for
the valuation.
SAP selects open items for customers, vendors, and G/L accounts posted in foreign
currencies. Based on the exchange rate on the key date, exchange rate difference is
calculated automatically and valuation document is posted.
The balance of the foreign currency balance sheet accounts, i.e., the balance of the
G/L account managed in a foreign currency forms the basis of the valuation. The
exchange rate profit or loss from the valuation is posted to a separate expense or
revenue account for exchange rate differences.
5.2.10.
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Due to tight integration with Sales & Distribution module all entries will be posted
through sub modules Accounts Receivable to FI. Hence Reconciliation processes which
are following in Legacy will be eliminated in SAP.
5.2.11.
DUNNING
SAP enables sending the reminder letters to the customer based for outstanding
invoices. The system would be configured as per the X Company team requirement for
sending the reminder letters.
5.2.12.
CORRESPONDENCE
5.3. CHANGES
TO
EXISTING
ORGANIZATION
PROCESS:
N.A.
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6. ASSET ACCOUNTING
6.1. GENERAL EXPLANATIONS (AS-IS)
Asset acquisitions/capitalization:All legal entities of X Company groups hold
fixed assets and are managed per legal entity.
The asset procurement process starts with requisition. The requisitions are
approved by concern authority. Based on the requirement, the quotations are
called. After finalizing the best quotation, a purchase order is released. All the
assets are procured through purchase order only.
If the new fixed asset needs installation, erection etc to put to use,the asset is
considered as under construction. The asset would be capitalized once it is put to
use.
An individual asset tag is allotted per asset and is tracked accordingly. Based on
the location of the fixed asset it is identified as office equipment or plant and
machinery. E.g. Air conditioner fitted on the shop floor is identified as plant and
machinery. And an air conditioner fitted in the production office on the shop floor is
identified as office equipment.
Depreciation:The fixed asset register is maintained in Excel and the
Depreciation is calculated in excel. Usually the depreciation calculation and posting
takes place at financial year end closing activity.
Asset scrap:The scenario of asset scrapping of write off is not yet taken place.
Assets are owned and managed per legal entity. There is no cross company or
sharing ownership in the assets.
Assets of one legal entity may be used by other legal entity for which rent or
required charges are paid to the owing company code.
X Company would like to have depreciation calculations as per companys act
and income tax act only. They requirement is post depreciation as per company
act into GL A/c.
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done on the concept of sub ledger - all postings made to any asset are updated in the
GL account and there is never any difference between the values as shown by the
asset reports and the GL balances.
The depreciation calculation process is also automatic, and depreciation is posted to
the books of accounts at pre defined periodical intervals (generally monthly).
Depreciation can be calculated according to different principles for the same asset,
based on business requirements. For example, the depreciation rates for accounting
purposes and for tax purposes can be different.
The asset master contains all the important information required, and the depreciation
calculation, postings to cost centers etc. depends upon the assignments made in the
master data.
6.2.1.
ASSET ACQUISITION
6.2.2.
ASSET CAPITALISATION
All Asset purchases would be routed through Materials Management in the form of a
Purchase order. The Accounts section will create the Asset Master record before
Purchase Order is raised through MM Module. All Asset purchases in X COMPANY in the
nature of Office Equipment, Computer Equipment, Furniture and Fixtures and Vehicles
will be routed through Capital Work in Progress (CWIP) to make it capitalized.
During the construction phase, all the assets are initially booked to the assets under
construction account (capital works in progress Account).After the completion of the
construction and when the assets are put to use the assets under construction need
to be transferred to the assets account. This transfer of assets from assets under
construction to the assets is known as settlement in SAP. Before making the
settlement, it is to be clearly known, as to in which proportion the line items under
assets under construction are to be settled to the assets. Basing on this, the
distribution rules are defined and then assets can be settled.
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PERIODIC PROCESSING
Depreciation Run:
SAP gives a functionality of Depreciation Forecast Report wherein one can analyze the
Depreciation of the existing Asset over a period of years.
The planned depreciation is posted to the general ledger at the time of the monthly
depreciation posting run. This posting run uses a batch input session to post the
planned depreciation for each posting level for each individual asset.
The depreciation posting cycle is determined by entering the length of time (in posting
periods) between two depreciation-posting runs. This means that a setting of 1
indicates monthly posting, 3 means quarterly posting, 6 means semi-annual, and 12
means annual (for a fiscal year version with 12 posting periods). When a depreciationposting run is started, one has to enter the period for which one wants it to be carried
out.
6.2.4.
ASSET TRANSFER
6.2.5.
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system will take care of all the background processing like calculating the net book
value, loss/gain on sale of asset etc.,
Asset retirement can happen by way of sale of an asset to a customer, sale without
customer, debiting customer account for loss of asset and also by way of scrapping. In
case of scrapping, the asset scrap will be without customer and this can also be with
and without revenue.
The asset retirement consists of any of the following:
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Retirement of Assets
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Start
Review
Planned
Depreciation
Perform Batch
Recalculation?
Yes
Run Batch
Recalculatio
n Program
No
Perform
Depreciation
Run in Test
Mode
Review
Results and
Error Log
Amend
Items?
No
Run
Depreciation
in Actual
Mode
Yes
Correct/Amen
d Entries
Review and
Release
Batch, Postprocess
Errors
Run Reports
and Review
Postings
End
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DESCRIPTION OF IMPROVEMENTS
6.2.7.
Account Determinations
Asset Depreciation
Depreciation Keys
Different depreciation rates are configured using different depreciation keys and they
will be attached with the asset masters at the time of creating an asset master.
In X COMPANY, two depreciation areas will be created as follows:
Dep.
Area
Description
01
Book Depreciation.
15
For X COMPANY there would be monthly posting for Book Depreciation. A batch input
session will be run called depreciation run for posting of planned depreciation using
periodic execution functionality. The unplanned depreciation will be calculated
manually and posted through System. The required posting documents are created
once this is executed, this will be execute as a background job every period end to
post the depreciation postings to the generalledger.
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6.3. CHANGES
Blue
TO
EXISTING
ORGANIZATION
PROCESS:
N.A.
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7.2.1.
CASH ACCOUNTING:
7.2.1.1.
CASH JOURNAL
All the cash transactions will be handled through cash journal. Cash Account will
not be available for direct posting through FI-GL or through any other module.
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All cash disbursing locations will need to be defined as Cash Journal number in SAP.
7.2.1.2.
CASH WITHDRAWAL
The amount and time of cash withdrawal is fixed based on the cash balance in hand
and average requirement for each week. The cash withdrawal statement is prepared
by the Cashier specifying the amount of cash to be withdrawn and dually approved by
the Finance Manager. On receipt of the approval the check for cash withdrawal is
processed.
7.2.1.3.
CASH PAYMENTS:
Cash imprest accounts will be created for each location. Cash reimbursement will be
as per their imprest limit. All other expenses like centralized or local purchases will be
routed through purchase accounting procedure. There will be a field to capture
Employee personnel number for all employee related claims, payments and advances.
Cash transactions in SAP would include sundry expenses like Medical bills, Travel
Advance bills, and Imprest A/C reimbursement.
Accounting treatment will be:
Debit Expense A/C
Credit Cash A/c
7.2.1.4.
CASH RECEIPTS
Cash receipts for scrap sale, return back imprest from employees
Cash journal entries locally in the cash journal. The system also calculates the
balances. The cash journal entries saved is then posted to the general ledger.
7.2.2.
BANK ACCOUNTING:
7.2.2.1.
CHECK REGISTER
A Check Register will be maintained in the SAP system, which will show status of
issued check, cancelled check and unused check.
7.2.2.2.
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A .csv file would be generated using automatic payment program. The same then
would be sent to bank for check printing.
OR
Multiple check lot will be maintained in the system. For check printing in the system,
the payment document number, check lot number, check date, and check number will
be entered.
Along with the Bank provided check-printing stationery the check payment advice will
be printed (format provided by client).
7.2.2.3.
X Company will cancel the check physically and will mention check cancellation reason
in the system. The cancelled check will be filed separately for future reference.
The reference of cancelled check will be mentioned in the narration of the reversal
entry. Fresh check will be issued in the same manner as applicable for other payments.
7.2.2.4.
Bank charges and interest accrued will be on account of DD charges, transfer charges,
LC opening charges, Bank Guarantee charges and interest on working capital, etc.
7.3. CHANGES
TO
EXISTING
ORGANIZATION
PROCESS:
N.A.
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Revenue & sales deductions postings will be made using profit center.
P&L and Balance sheet will be generated at the profit center level.
Revenue related AOP data will need to be migrated to profit center structure.
Using the module Profit Center Accounting in addition to the other modules in
controlling involves little additional workload on business users. Once set up correctly
we can benefit from reporting in Profit center wise almost automatically.
Main reason is that Profit Center Accounting generates very few transactional postings
itself, relying instead on the data being generated by other sources, such as goods
movements through production and receiving and billing documents through sales.
These external transactions update PCA through object assignments. The profit
centers are central objects reflecting all costs and revenues from all cost objects in the
SAP system.
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Reports predefined by SAP are available for Profit Center Accounting. The predefined
reports are arranged in a Standard report tree. The reports enable you to evaluate the
posted data according to various criteria.
The report shows enable to draw Profit loss account, balance sheet; GL account
balances per profit centers.
8.3. CHANGES
TO
EXISTING
ORGANIZATION
PROCESS:
N.A.
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9. PROCESS MAPPING
Sr.
Process
Name
GL
Accounting
1.
1
GL
As a part of day
Accounting:Do
to accounting
cument
and monthly
processing
closing X
Company
Accounting
team posts
some journal
voucher
entries, makes
monthly
provisions
entries etc.
1.
2
GL Accounting :
Further
functions
As-IS Process
To-Be Process
WA/GAP
System
N.A.
SAP
N.A.
SAP
To meet
business
requirements X
Company team
does period end
closing, foreign
currency
valuations,
interest
calculations
manually. Also
as a part of
process the
account
balances
clearing done
regularly.
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1.3
GL Accounting
reports
1.
4
Taxes and
duties
Accounts
payable
2.
1
Vendor
invoice
document
postings
Blue
The accounting
team uses GL
A/c balance,
item wise
reports for
internal
analysis.
GL Account balance
report
Passing JV for
CENVAT credit
set off
Excise JV
Vendor invoice
verification
reference to PO
Vendor invoice
verification
non-reference
to PO
Vendor invoice
posting
Vendor
Debit/credit
note
N.A.
SAP
N.A.
SAP
N.A.
SAP
PO based invoice
verification
Vendor invoice
parking
Vendor invoice
posting
Handling delivery
costs
Vendor credit/debit
notes
Vendor credit
period
2.
2
Vendor
payment
credit period
Depending
upon
understanding
with business
partner, the
credit limit is
utilized for
releasing the
payments.
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2.
3
Outgoing
payments
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Manual check
payment entry
Manual payment
entry
Check lot
tracking
Regular payment
Generation of
.csv file
Check printing
facility from
bank
Outward
remittances
N.A.
SAP
N.A.
SAP
N.A.
SAP
N.A.
SAP
Payments in foreign
currency
Advance payment
Advance payment
settlement
Automatic payments
Payment block
Generation of .csv
file
Vendor open item
clearing
2.
4
Communicatio
ns with
vendors
Vendor balance
confirmation
letters
Payment
advices
2.
5
2.
6
Accounts
payable
reports
Input
Taxes/duties
Account statements
Balance
confirmations
Payment advices
X Company
team uses
vendor
balances,
vendor open
invoices and
vendor ageing
analysis
reports.
Vendor Account
balance report
Input taxes:
Excise, VAT,
CST, service
tax, customs
duty, GTA
Automatic posting of
input taxes to current
assets
Automatic loading of
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Withholding
taxes
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input taxes to
expenses
Withholding taxes at
invoice posting or
payment posting
Accounts
receivable
3.
1
Customer
document
posting
Manual periodic
accounting of :
Sales invoices,
Credit notes,
Debit notes
Customer master
record
Customer
credit limits
Credit limit
based on the
security deposit
Credit management
3.
2
N.A.
SAP
N.A.
SAP
Processing block
Automatic credit
checks
3.
3
customer
credit period
7 days and
30days credit
period
Payment terms
N.A.
SAP
3.
4
Customer
payment
receipts
Regular
payments
Incoming payments
N.A.
SAP
N.A.
SAP
Partial
payments
Advance
payments
3.
5
Customer
interest
calculations
Not followed
currently
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Advance incoming
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Customer A/c
clearing
Customer balance
Interest calculations
Customer item
Interest calculations
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3.
6
Communicatio
ns with
customer
Balance
confirmation
Payment
reminders
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Dunning
N.A.
SAP
N.A.
SAP
N.A.
SAP
N.A.
SAP
N.A.
SAP
Balance confirmation
Account statements
Payment advices
3.
7
3.
8
Accounts
receivable
reports
Output
Taxes/duties
Customer
balances
Customer Account
balance report
Customer open
invoices
Customer Account
line item report
Customer aging
report
Customer Account
master data report
Input taxes:
Excise, VAT,
CST, service tax
Withholding
taxes
Automatic posting of
output taxes to
current liabilities
Withholding taxes
credit
Asset
Accounting
4.
1
Asset Master
record
Assets are
managed in
excel. Asset
with individual
tags
Asset class
4.
1
Asset
acquisition
and
retirement
Procurement
through PO
Asset acquisition
Capitalization
from the put to
use
Asset under
constructions
Asset retirement
Asset scrap
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4.
2
Asset
depreciation
Manual
depreciation
calculation at
the year end
and posting
into system
Blue
Planned depreciation
N.A.
SAP
N.A.
SAP
N.A.
SAP
N.A.
SAP
N.A.
SAP
Scheduled
depreciation run
Depreciation as per
companys act
Depreciation as per
Income Tax act
4.
3
Asset report
Cash and
bank
accounting
5.
1
Petty cash
book
Asset balances
Asset explorer
Depreciation
balance
Asset balances
Cash Journal
Cash payments
Depreciation schedule
Cash receipts
Cash payments
Cash closing
5.
2
Bank
accounting
Individual bank
a/c for each
legal entity
CMS A/c for
Sphinax
Chemicals
Fund transfer
Balance
tracking for all
CMS branches
Manual bank
reconciliation
5.
3
Manual bank
reconciliation
Profit Center
Accounting
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6.
1
Cost
allocation per
unit of
responsibility
Posting
expenses per
location-branch
Profit center
assignment
N.A.
SAP
6.
2
Profitability
analysis for
branch
locations
Income
expenses
analysis for
various
locations/branc
hes
Profitability analysis
report
N.A.
SAP
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10. REPORTS
Transaction
Code of Report
Details
Report
of
SAP
the Standard
/Customize
d
GL Accounting
S_ALR_87012326
Chart of Accounts
S_ALR_87012328
GL Account List
S_ALR_87012308
Display Changes to GL
Accounts
S_ALR_87012279
S_ALR_87012301
S_ALR_87012282
GL Line Items
S_ALR_87012332
S_ALR_87012287
Document Journal
S_ALR_87012289
S_ALR_87012291
S_ALR_87012293
S_ALR_87012341
S_ALR_87012344
Display of Changed
Documents
Invoice Numbers assigned
Twice
Posting Totals Document Type
wise
S_ALR_87012346
S_PL0_86000030
List of Ledger
accounts in Chart of
accounts
Details of Ledger
accounts
Display Changes to GL
Accounts
Structured Account
Balances (Balance
Sheet & P&L Account
in FS Version Format)
GL Account Balances
(Totals & Balances )Trial balance
GL Line Items
Statements for GL
Accounts, Customers
& Vendors
Document Journal
Compact Document
Journal
Periodic list of Journal
posting
Display of Changed
Documents
Invoice Numbers
assigned Twice
Posting Totals
Document Type wise
Recurring Entry
Documents
G/L Account Balances
SAP Standard
SAP Standard
SAP Standard
SAP Standard
SAP Standard
SAP Standard
SAP Standard
SAP Standard
SAP Standard
SAP Standard
SAP Standard
SAP Standard
SAP Standard
SAP Standard
SAP Standard
Accounts
receivables
S_ALR_87012172
S_ALR_87012197
S_ALR_87012168
S_ALR_87012173
S_ALR_87012176
S_ALR_87012177
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Customer Balances in
Local Currency
Customer Line Items
Due Dates Analysis for
Open Items
List of Customer Open
Items
Customer Evaluation
with Open Item Sorted
List
Customer Payment
History
SAP Standard
SAP Standard
SAP Standard
SAP Standard
SAP Standard
SAP Standard
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S_ALR_87012178
S_ALR_87012198
S_ALR_87012199
S_ALR_87012287
S_ALR_87012186
S_ALR_87012169
S_ALR_87012197
Blue
SAP Standard
SAP Standard
SAP Standard
SAP Standard
SAP Standard
SAP Standard
SAP Standard
Accounts
payable
S_ALR_87012086
S_ALR_87012087
Vendor List
Vendor address List
S_ALR_87012103
S_ALR_87012287
S_ALR_87012089
S_ALR_87012309
S_P99_41000101
Print Cashbook
Check Register
Vendor List
Vendor List
Vendor Information
System
Vendor Balances
Due Date Analysis for
Open Items
List of Vendor Line
Items
Vendor Debit/Credit
Memo Register
Display Changes to
Vendors
Print Cashbook
Check Register
S_ALR_87012077
S_ALR_87012082
Vendor Balances
Due Date Analysis for Open
Items
S_P99_41000102
SAP Standard
Asset Explorer
Asset History Sheet
Asset Balance by Asset
Number
Asset Explorer
Asset History Sheet
Asset Balance by
Asset Number
Asset Balance by
Asset Class
Asset Balance by
Business Area
Asset Balance by Cost
Center
Asset Balance by Plant
Asset Balance by Cost
Location
SAP Standard
SAP Standard
S_ALR_87012078
SAP Standard
SAP Standard
SAP Standard
SAP Standard
SAP Standard
SAP Standard
SAP Standard
SAP Standard
SAP Standard
SAP Standard
Asset
accounting
AW01N
AR02
S_ALR_87011963
S_ALR_87011964
S_ALR_87011965
S_ALR_87011966
S_ALR_87011967
S_ALR_87011968
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SAP Standard
SAP Standard
SAP Standard
SAP Standard
SAP Standard
SAP Standard
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