SAP-TO BE Process

New Allenberrry Works

FICO NAW
Finance and Controlling

Version 1.0
25.09.2006

STATEMENT OF CONFIDENTIALITY / DISCLAIMER

This document is the property of Caritor, Inc. No part of this
document shall be reproduced, stored in a retrieval system,
or transmitted by any means, electronic, mechanical,
photocopying, recording, or otherwise without prior written
permission from Caritor, Inc.

Table of Contents

Table of Contents
Vendor Master.......................................................................................................................................3
1. AS IS Process.............................................................................................................................................4
2. Core to Be Process.....................................................................................................................................5
Changes to Existing Organization.........................................................................................................................11
Description of Improvements and Key Metrics.....................................................................................................11
Notes on Further Improvements...........................................................................................................................11
Functional Deficit and Method to Remove That....................................................................................................11
Interface Requirement..........................................................................................................................................11
System Configuration Considerations...................................................................................................................11
File Conversion Considerations............................................................................................................................11
Any reports required related to current business process....................................................................................11
Any document/output would be printed for this business process........................................................................12
Authorization Considerations................................................................................................................................12
End User Training Requirements..........................................................................................................................12

A. SAP Standard Reports.............................................................................................................................13

B. Custom Developments............................................................................................................................14

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Vendor Master
TO-BE Document
For SAP R/3 Implementation at New Allenberry Works
Date: 25.09 2006
Sr. No of TO BE document

Ref. Sr. No. Of AS-IS document

Name of Business Process:

Vendor Master

Module: Finance

Sub module: Accounts Payable

Version no of document:

Date: 25.09.2006

Version Management This Document is subject to change control. Every change of the document has to Undergo change
control procedure and has to be registered in the following table
Version

Caritor

Change

Prepared By

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Date

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1. AS IS Process
Vendor master is created by accounts department and fills name, address, PAN
number. Vendor code in legacy will be alpha numeric. Vendors are categorized into
various vendor groups like raw material vendors, job work vendors etc and the number
is assigned externally based on the type of vendor group. Currently vendor master dont
capture contact details, payment terms, bank details, TDS section, purchase group etc.

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2. Core to Be Process
An individual vendor master record is created for every vendor (apart from one-time
vendors).
Data in vendor master records controls how the transaction data is processed and
posted for a vendor.
In SAP the vendor master database contains information about the vendors that supply
an enterprise. It consists of a large number of individual vendor master records. Since,
in Accounting, the vendor represents an account payable, and the vendor master record
also contains accounting information, such as the relevant control account
(reconciliation account) in the general bookkeeping system. Therefore, both Accounting
and purchasing departments maintain the vendor master record.
Creation of Vendor Master
Vendor master creation will be centralized. The purchase department creating purchase
order will create vendor master under appropriate vendor account group. Purchase
department creating vendor master will fill the general data/the purchase organisation
data and the accounts department will create the Company code data.
In SAP- MM vendors are those, which are related to material purchases, postings to
which will be made by the MM module of SAP. FI vendors are those which are unrelated
to material purchases generated in MM, (e.g. vendors for rent, electricity and employee
travel & expense vendors), in other words, they represent purchases that do not require
a purchase order. The accounts department will create FI vendor master with General
data and Company code data and there is no need of filling purchasing organisation
data
Data Areas in Vendor Master
A vendor master record is subdivided into three different data areas:

General Data Contains the relevant vendor's name and address as well as data
such as Language, Region, Names of important contact persons (sales staff) of
supplier etc General data is valid at client level i.e. data is accessed by all the
company codes.

Company code Data

A large amount of accounting information is stored at company code level. The
financial data for the vendor master contains:

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The payment methods,

House Bank details,
Reconciliation Accounts,
Payment Terms etc
Sort Key

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Purchase organization Data
Contains purchase organisation specific data like the currency used for ordering from
the vendor, purchase group, purchase organisation, whether the GR based invoice
verification, etc.
Vendor Account Group/Numbering
Every Vendor master will be created under one Vendor account group. Vendor
Account group determines the number range, type of number assignment
(externally or internally), and whether a vendor is one time vendor or not, Which
fields are ready for input or must be filled when creating and changing master
records (field status).
For NAW Fbd every vendor master record is assigned a unique number by the system
based on the selected vendor account group.
The following account groups will be defined in the system and the number ranges are
as follows.

PURCHASE
Raw material-Automobile
Raw material-Industrial
Heat Treatement
Maintenance
Cutting Tools
Packing
Stores & Spares
Capital Goods
Electrical
Machinery Spares
Others
One time

Number Range
10000-11999
12000-13999
14000-15999
16000-17999
18000-19999
20000-21999
22000-23999
24000-25999
26000-27999
28000-29999
30000-32999
3300-35999

JOB WORK
Rough Turning
Heat Treatment
Maintenance
CNC Turning
Broaching
Transporter
Annual Maintenance
Legal & Professional
Coating
Others
One Time

Number Range
40000-41999
42000-42999
43000-44999
45000-46999
47000-48999
49000-50999
51000-52999
53000-54999
55000-56999
57000-58999
59000-60999

Employees

70000-74999

NAW Fbd doesnt want to have a separate account group or separate reconciliation GL
account for SSI but nevertheless business wants to identify amount due to SSI. If the
business also wants to identify a vendor whether he is a SSI or not with out separate

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account group or reconciliation then the business can fill the industry field in vendor
master as SSI and this field can be used in any report to identify SSI vendors.
Reconciliation Ledger
The reconciliation account ensures the integration of a sub ledger account into the
general ledger. The G/L account itself is not designed for direct posting. In this way,
reconciliation between sub ledger and general ledger is always guaranteed.
The following reconciliation GLs will be created in the system
Creditors-Domestic
Creditor-Import
Creditors -Job work
Employee Dues
Creditors-Inter co

Employee as Vendors
Employee expenses can be booked through employee vendor code. Advances to
employees can be tracked through the special GL indicators.
Special GL Indicators
The following special GL indicators will be created in system:
Advance for Capital Goods-Domestic
Advance for Capital Goods-Import
Advance for Others -Domestic
Advance for Others -Import
Bills of Exchange/Hundi
Terms of Payment
The Payment terms will be specified in the vendor master. The payment terms key and
the terms determined with it are proposed when entering a document to the vendor
account. The proposed payment terms in a document can be overwritten at the time of
data entry.
The following payment terms will be created in the system (List can be modified during
the progress of the project)
Due Immediate
30 Days Credit
60 Days Credit
120 Days Credit
50% Immediate and 50% - 30
Days
15 Days Credit
45 Days Credit
90 Days Credit
180 Days Credit
360 Days credit
540 Days Credit
100% Advance
Against Cash Discount 4%

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Against Cash Discount 4.5%
Against Cash Discount 6%
After Successful Trial

Payment Method
The Payment method will be specified in the vendor master. The following payment
methods will be created in system:
Cheque/Demand draft
Fund Transfer
Cash Payment
LC/Hundi through bank

House Bank
The house bank will be specified in the vendor master.
The following house banks will be created in system:
UCO Bank-Faridabad
UCO Bank-Delhi
HDFC Bank
ICICI Bank
Check Double Invoice
Check double invoice can be ticked in vendor master and system checks for the
incoming invoices and credit memos for double/duplicate entries at the time of entry.
The system checks based on the data filled in document date, reference field, company
code and currency
Tolerance Group-Payment
A tolerance group can be specified in vendor master. These tolerances are used for
dealing with differences in payment and residual items, which can occur during payment
settlement. Specify the tolerances under one or more tolerance groups. Allocate a
tolerance group to each vendor via the master record. Only one tolerance group can be
assigned to a vendor in the one company code.
Tolerance group- Invoice Verification
Only one tolerance group can be assigned to a vendor in the one company code.
For each tolerance group you can define:
by how much the actual value of an invoice can differ from the expected value and still
be accepted by the system;
These settings are valid in Logistics Invoice Verification.
Withholding Tax (TDS)
As per income tax act, for all the sections like 194C (contractors), 194J
(Professional services) and 194I (Rent) tax codes will be created in the system.
Tax codes will be created separately for invoice deduction and advance payment
deduction. The withholding tax code and type will be specified in vendor master. At
the time of data entry the user Tax codes will be attached to vendor master. A
vendor master can have multiple tax codes based on the sections applicable for

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that vendor. Tax deductions will be captured at the time of capturing the vendor
invoices into the system.

Sort Key
The system uses a standard sort sequence for displaying line items. Among other
things, it sorts the items according to the content of the Allocation field. This field can be
filled either manually or automatically (by the system) when a document line item is
entered.
For this purpose, the system requires rules that determine which information is to be
taken from the document header or from the document line item and placed in the field.
The rules can be stored in the master record of an account, which enables you to
determine the standard sort sequence on an account-specific basis.
The broader activities in relation to vendor masters that take place in SAP, are:

Creation of Vendor Groups as per requirement.

Assignment of number ranges to Vendor Groups created.
Creation of Vendor Master records.
Creation of Vendor Reconciliation Account

Process flow chart

Create Vendor Groups

Create Number Ranges

Attach Number ranges

to Vendor Groups

Create Reconciliation
Accounts in GL Master

Create the Vendor

Master, here number
gets generated internally

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Vendor Master Data

A/cGroups

Vendor Number
internally assigned

Master Record
Content

General Data

General Details
of Vendor
available for
entire client

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Co Code Data

Details required and

usedfor Business
Transactions at
Com pany Code Level

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Purchasing
Organization Data

Details required and

used for Business
Transactions During
purchase transactions
via MM module.

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Further Notes

Changes to Existing Organization

The master data for different view being entered/updated by different persons,
principle of multiple controls is maintained. Codification of vendors will be unique,
Concept of vendor account group and reconciliation account. Vendors will be
maintained as sub ledgers and not as separate GL accounts for each vendor.

Description of Improvements and Key Metrics

Vendor accounts group helps for the easy account determination. The vendor master
captures all important details like contact details, payment method, payment terms,
bank details etc. The reconciliation account ensures the online matching of sub ledger
with the reconciliation ledger. Through special GL indicators all advances can be
tracked vendor wise. Vendor Account Group Can be used in all vendor reports for
specific analysis on any particular vendor account group. Single master record will be
maintained across FI and MM. This reduces data redundancy and repetition of work.
Moreover, the data pertaining to the Purchasing view and Finance view are
entered/updated by different persons, so this maintains what is known as 4 Eye
principle or multiple layers of control over sensitive data. Checking double invoice
option helps in reminding finance whether duplicate invoice is being made inadvertently.
Withholding tax information can be captured in master.

Notes on Further Improvements

NA

Functional Deficit and Method to Remove That

NA

Interface Requirement
NA

System Configuration Considerations

NA

File Conversion Considerations

NA

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Any reports required related to current business process
Vendor Master Search: -- Available

Any document/output would be printed for this business process

NA

Authorization Considerations
Detailed Authorization matrix will be defined for all users in the common file for all
modules.
The high level Authorization requirements are as below.
Business Roles

Number of Users

Business Manager
Operations Manager
Transaction Owners

End User Training Requirements

<E.g.:
Business User Segments

Number of Users

Type of Transaction

Business Manager

Display, Reports

Operations Manager

Change, Display, Reports

Transaction Owners

Create, Display, Reports

Geographical Location

Sign-off (Approval) for this document:

Name of Team members:

Organization / Bus. Unit

FI/CO Consultant-Vinod Atmakuri

Caritor Inc

Business Process Owners-C.M Duggar

New Allenberry Works

Key User-Balbir Khanna

New Allenberry Works

Key User-Vishal Sharma

New Allenberry Works

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Signature

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A. SAP Standard Reports

<E.g.:
SAP Standard Reports
Sl No:
01

Report Description
Vendor Master List

Selection Criteria
S_ALR_87012086

Output
Print Screen/output

02
03
04
05
06
07
08
09
10
11

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B. Custom Developments
<E.g.:
Print Requirements
Sl No:

Report Description

Selection Criteria

Output

1.0
2.0

Development Requirements
Sl No:

Report Description

Selection Criteria

Output

1.0

Report Requirements
Sl No:

Report Description

Selection Criteria

Output

1.
2.
3.

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