Sap Fico BBP Sample Up To Date PDF

Business Blueprint
Submitted
To
X GROUP
By
KPIT CUMMINS INFOSYSTEMS
Financial Accounting
December, 2013
Version 0.0
DOCUMENT RELEASE NOTICE
Customer: X CompanyGroup
Project : XXXXX
Document details:
Document details:
TheseName Versionaccess
are confidential documents. Unauthorized No. or copying is prohibited.
Description
Financial Accounting 1.0 This document outlines the
Financialaccountingbusiness
processes of X COMPANY and how
these will be implemented in SAP.
Revision Action taken Preceding New Revision

Number (add/del/chg) Page No. Page No. Description
0.0 Initial draft
1.0 Final draft
2.0 Final Document
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.
Related Documents/ References

Documents referred to prepare Financial Accounting Business Blueprint Document are as follows:
Sl. No. Title Version Author

Sign Off
Role Name Signature Date

Functional Mr.
Consultant GajananMankeshwa
rkar
Project Manager- Mr.Ravichandra
KPIT Cummins
Infosystems Ltd.
Business Process Mr. Jayaprakash
Owner
Project Manager- X Mr. Padma Kumar
Company Group
ORGANIZATION OF THIS DOCUMENT
The FinancialsBlueprint consists of 10 chapters in the order as mentioned below:
1. Organization Structure: That describes the organization structure to be configured in SAP.
2. Master Data: It describes the master data in Financials. It includes creation and maintenance of master record.
3. GL Accounting: This process describes various GL Accounting tasks done by accounting department.
4. Accounts Payable Accounting: This part described various activities, business transactions in connection with customer
postings
5. Accounts Receivable Accounting: This part described various activities, business transactions in connection with
customer postings.
6. Assetaccounting: This section talks about asset life cycle management per legal entity. It describes the accounting
treatment for acquisition of assets, capitalization, depreciation and sale of assets is detail.
7. Cash and bank accounting: Cash and Bank Accounting details describe procedures across all locations to manage Cash
and Bank transactions
8. Profit center accounting: This section describes the processes of profit center accounting. The profit center accounting
helps an enterprise to analyze the profitability or draw financial statement based on the internal area of responsibility.
9. Process mapping: This section summarizes the AS IS business process and corresponding TO BE business processes.
10. Reports: This section covers the reporting requirements. It includes how all reporting requirements would be fulfilled
with the TO BE process.
Table of Contents
ACRONYMS ........................................................................................................................................................... 9
GENERAL EXPLANATION ........................................................................................................... 10
1. SAP ORGANIZATION STRUCTURE WITH REFERENCE TO FI MODULE ................................. 11
1.1. COMPANY ...................................................................................................................... 11
1.2. COMPANY CODE ............................................................................................................. 11
1.3. CHART OF ACCOUNTS ..................................................................................................... 13
1.4. CREDIT CONTROL AREA ................................................................................................... 13
1.5. SEGMENTS ...................................................................................................................... 14
1.6. PROFIT CENTERS ............................................................................................................. 14
1.7. FINANCIAL ACCOUNTING GLOBAL SETTINGS: .................................................................. 15
2. MASTER DATA FOR FI ...................................................................................................... 19
2.1. GENERAL LEDGER ............................................................................................................ 19
2.2. ASSET ............................................................................................................................. 23
2.3. BANK MASTER ................................................................................................................ 25
2.4. MATERIAL MASTER ......................................................................................................... 26
2.5. VENDOR MASTER ............................................................................................................ 27
2.6. CUSTOMER MASTER ....................................................................................................... 29
3. BUSINESS PROCESSES- GL ACCOUNTING .......................................................................... 33
3.1. GENERAL EXPLANATION – (AS IS): ................................................................................... 33
3.2. SOLUTION IN SAP –( TO BE): ............................................................................................ 34
3.3. CHANGES TO EXISTING ORGANIZATION PROCESS ............................................................ 43
3.4. SPECIAL ORGANISATION CONSIDERATIONS: .................................................................... 43
3.5. GAP ANALYSIS: ............................................................................................................... 43
3.6. INTEGRATION CONSIDERATIONS ..................................................................................... 43
4. ACCOUNTS PAYABLE ....................................................................................................... 45
4.1. GENERAL EXPLANATIONS (AS-IS) ..................................................................................... 45
4.2. SOLUTION IN SAP – (TO BE): ............................................................................................ 46
4.3. CHANGES TO EXISTING ORGANIZATION PROCESS: ........................................................... 60
4.5. GAP ANALYSIS: ............................................................................................................... 60
4.6. INTEGRATION CONSIDERATION: ..................................................................................... 60
5. BUSINESS PROCESSES - ACCOUNTS RECEIVABLES ............................................................ 61
5.1. GENERAL EXPLANATIONS (AS IS): .................................................................................... 61
5.5. GAP ANALYSIS: ............................................................................................................... 73
6. ASSET ACCOUNTING ....................................................................................................... 75
6.1. GENERAL EXPLANATIONS (AS-IS) ..................................................................................... 75
6.2. FUNCTIONS AND EVENTS (TO BE): ................................................................................... 75
6.5. GAP ANALYSIS: ............................................................................................................... 84
7. CASH AND BANK ACCOUNTING ....................................................................................... 85
7.1. GENERAL EXPLANATIONS- (AS IS): ................................................................................... 85
7.2. SOLUTION IN SAP ............................................................................................................ 85
7.5. GAP ANALYSIS: ............................................................................................................... 87
8. PROFIT CENTER ACCOUNTING ......................................................................................... 88
8.1. GENERAL EXPLANATIONS- (AS IS): ................................................................................... 88
8.5. GAP ANALYSIS: ............................................................................................................... 89
9. PROCESS MAPPING ......................................................................................................... 90
10. REPORTS ......................................................................................................................... 96
ACRONYMS
Code Description
X COMPANY X CompanyGroup
MM Material Management
QM Quality Management
PP Production Planning
PM Plant maintenance
VM Vendor master
PO Purchase Order
PR Purchase Requisition
SD Sales and Distribution
LE Logistics Execution
MM Material Master
HR Human Resource
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.
1. SAP ORGANIZATION STRUCTURE WITH REFERENCE TO FI MODULE
1.1. COMPANY
1.1.1. Definition
A company is an organizational unit in Accounting which represents a business organization according to the
requirements of commercial law in a particular country.
In the SAP system, consolidation functions in financial accounting are based on companies. A company can comprise
one or more company codes.
1.1.2. Application
 If an organization uses several clients, the companies which only appear as group-internal business partners, and are
not operational in each system, must be maintained in each client. This is a precondition for the account assignment
of a group-internal trading partner.
 Companies must be cataloged in a list of company IDs which is consistent across the group. The parent company
usually provides this list of company IDs.
 It is also acceptable to designate legally dependent branches 'companies' and join them together as a legal unit by
consolidation.
 In case of X Company group, the consolidation is required for all 9 legal entities. And this is required only at group
level. Therefore 1 company would be set up in the system.
1.1.3. Naming Convention
1.2. COMPANY CODE

1.2.1. Definition
The company code is an organizational unit used in accounting. It is used to structure the business organization from a
financial accounting perspective.
A company Code represents an independent accounting unit, for example, a Company within a Corporate Group
(Client).
COMPANY DESCRIPTION
1000 X Company Group
1.2.2. 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.
Sr. No. Company Code Description

1 1000 X Company Paints
Corporation Ltd.
2 1100 X Company Financial
services
3 1200 Sphinax Organic &
research P. Ltd.
4 1300 Sphinax Info Systems
5 1400 TechServices
6 1500 X Company Auto
Solutions
7 1600 Sheenworld Services
LLP
1.3. CHART OF ACCOUNTS
1.3.1. Definition
This is the classification scheme consisting of a group of general ledger (G/L) accounts.
A chart of accounts provides a framework for the recording of values to ensure an orderly rendering of accounting
data. The G/L accounts it contains are used by one or more company codes.
1.3.2. 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
1.4. CREDIT CONTROL AREA

1.1.1. 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.
Chart of Accounts Description
YAIN X Company Chart of
Sr. No. Credit Control Area Description

1.5. SEGMENTS
1 1000 X Company Paints Credit
1.1.2. Definition
Control area
2 1500 X Company Auto Credit
Profitability Segment corresponds to market segment. The market segments can be defined as products, product groups,
Control
customers, customer groups, geographic areas. For example, a company may wisharea
to analyze profitability for a particular
3
geographical area. 1600 Sheenworld Services
1.5.1. Application Credit Control area
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.
Sheenlac Segments.xlsx
1.6. PROFIT CENTERS
1.6.1. 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.
 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. Application
 X COMPANY will have profit centre accounting taking into consideration of location wise trial balance
requirement
Sheenlac Profit Centers.xlsx

1.7. FINANCIAL ACCOUNTING GLOBAL SETTINGS:
Posting of Transactions in SAP requires the following settings:
 Currency Settings
 Fiscal year and Fiscal year variant
 Posting period variant
 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 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 2011-March 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 Description

1 1000 X Company Paints
Posting period variant
2 1100 X Company Financial
3 1200 Sphinax Organic Posting
period variant
4 1300 Sphinax Info Posting
period variant
5 1400 TechServices Posting
period variant
6 1500 X Company Auto Posting
period variant
7 1600 Sheenworld Services
8 1700 Sphinax Chemicals
Posting Periods:
 One posting period should generally be kept open for the current month
 At the month end next posting period should be opened
 The previous month should be closed after the month end closing procedures are carried out
 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.
 A document is uniquely identified by the combination of fiscal year, company code and document number
 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.
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 Descriptio No. Range From To Number External Reverse

n Number Doc. Type
AA Asset 01 100000000 199999999 AA
posting
AB Accounting 01 100000000 199999999 AB
document
AF Dep. 03 300000000 399999999 AF
Postings
DG Customer 16 160000000 169999999 DA
credit 0 9
memo
DR Customer 18 180000000 189999999 DR
invoice 0 9
DZ Customer 14 140000000 149999999 DA
Account type: payment 0 9
KG Vendor 17 170000000 179999999 KA
credit 0 9
memo
KR Vendor 19 190000000 199999999 KA
invoice 0 9
KZ Vendor 15 150000000 159999999 KA
payment 0 9
PR Price 48 480000000 489999999 PR
change 0 9
RE Invoice – 51 510000000 519999999 RE
gross 0 9
WA Goods 49 490000000 499999999 WA
issue 0 9
WE Goods 50 500000000 599999999 WE
receipt 0 9
ZP Payment 20 200000000 299999999 ZP
posting 0 9
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
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.
2. MASTER DATA FOR FI
2.1. GENERAL LEDGER
2.1.1. Definition
General Ledger Accounting allows you to perform parallel accounting by managing several parallel ledgers. It is just
the extend version of classic general ledger. Also Segment wise reports are also possible.
Following are the features of New GL
 Real time integration between FI and CO
 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
In X Company Group, new GL will be used to support the internal management reporting and to have financial
statements for segments and profit centers.
In New General Ledger Accounting, you can perform internal management reporting in parallel with legal reporting.
For this purpose, the Segment and Profit Center Accounting functions are integrated with General Ledger Accounting.
Furthermore, you can generate financial statements for any dimension (such as profit center).
New GL helps in giving cost centre at each line item while posting transaction. Also it helps in Document Splitting i.e.
splitting one Balance sheet item in two cost centre
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:
 Automatic and simultaneous posting of all sub ledger items in the appropriate general ledger accounts
(reconciliation accounts)
 Simultaneous updating of the parallel general ledgers and of the cost accounting areas
 Real-time evaluation of and reporting on current posting data, in the form of account displays, financial statements
with different balance sheet versions, and additional analyses.
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.
 Company code specific area
The company code specific area contains data that may vary from one company code to another, such as the currency
in which the account may be posted.
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. In order to organize and manage a large number of G/L Accounts better, they are arranged
in account group. So when creating a G/L account, you must specify an account group.
The accounts of an account group normally have similar business functions. You could, for example have an account
group for cash accounts, one for Expenses accounts, one for revenue accounts, and one for other balance sheet
accounts etc.
 The account group determines:
ü The interval in which the account number must be
ü Which fields are required and optional entries when creating and changing master records
ü Which fields are suppressed when creating and

changing master data?
ü It enables you to control the layout of screens.
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.
 Chart of accounts area
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.
 Specifies whether the account is a balance sheet account or an income statement account. At the start of a new
fiscal year, the balance of a balance sheet account is carried forward to the same account. With income statement
accounts, you must specify the account to which the profit or loss is carried forward at fiscal year change.
 Controls how a master record is created or changed. In particular it specifies which fields must or can be filled or
suppressed when creating or changing a master record. You use the account group to do this.
 Can group G/L account master records in the chart of accounts when you specify number intervals. You enter the
number of the master record in the company code in the chart of accounts and use the account group to control and
check the number assignment. To do this, you define corresponding number intervals using the account group.
CREATION OF GL ACCOUNT MASTER RECORD

Account Exists inChart of Accounts?NoYesNoSTOPAccount required inCompany CodeYesAccount Exists inCompany Code?
YesSTOPStartGeneral LedgerMaster does not existSEndYesCheck the Chart ofAccountsSCreate at Chart ofAccounts
LevelSCreate at CompanyCode LevelS
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:
2.2. ASSET
2.2.1. Definition
COA A/C Group Description From To
The "master data
YAINmaintenance"LIAB component is used for recording10000000
Balance the master data15999999
of organization fixed assets on an
individual asset basis. A fixed asset is defined asSheet
an individual
A/C - economic good that it is recognized in the balance sheet
at the time of closing, and is in the long-term service of the enterprise.
Liabilities
2.2.2. Application
YAIN PABL Reconciliatio 16000000 16999999
ns Account -
Traditional asset accounting encompasses the entire
Vendorlifetime of the asset from purchase order or the initial acquisition
(possibly managed
YAIN as an asset DEPN
under construction) through its retirement.
Accumulated 20100000 20999999
The system calculates, to a large extent automatically, the values for depreciation, interest, insurance and other
Depreciation
purposes between these two points in time, and places this information at your disposal in varied forms using the
YAIN FXAS Fixed Assets 21000000 21999999
Information System. There is a report for depreciation forecasting and simulation of the development of asset values.
YAIN MATL Material 22000000 22999999
Management
- Inventories
YAIN RCBL Reconciliatio 23000000 23999999
ns Account -
Customer
Time-independent management of organizational units If you set this indicator, the system manages the
organizational unit and ‘cost center’ (and thereby ‘profit center’) as not time dependent in the asset master records in
this company code.
2.2.4. General Master Data
This part of the master record contains concrete information about the fixed asset. The following field groups exist:
 General information (description, quantity, etc.)
 Account assignment
 Posting information (for example, capitalization date)
 Time-dependent assignments (for example, cost center)
 User fields/evaluation groups etc.
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. Data for Calculating Asset Values
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 & Account Determination
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 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:
2.3. BANK MASTER

2.3.1. Definition
Bank is used to handleDetails

accounting transactions that
Assetprocess
Classwith bankers.
Bank accounting includes the management
Land and buildings of bank
1000master data; cash balance management (check), and the creation
and processing of incoming and outgoing
Plant and Machinerypayments.
2000
Bank Master Data is required for bank transaction
Fixtures and fittings like Bank Reconciliation and payments; this master record is also
3000
known as you’re House Bank.Equipments
Office 4000
2.3.2. Application Vehicles 5000
Computer equipments 6000
A house bank refers toLow-value
the bank aassets
company uses for
7000 receivables and/or payments. It is any bank with which your
company code does business. Each house bank contains a company’s bank accounts. It also contains a bank key that
Assets under 9000
defines address and control data for the bank. The house bank establishes a link with G/L accounts.
construction
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.
Sphinax Chemicals Pvt. Ltd.
2.4. MATERIAL MASTER

2.4.1. Definition Bank name Account No. A/C Type
The material master

Thecontains information on
South Indian all the materials that aCash
0138083000001620 company
Creditprocures orproduces, stores, and sells. It
is the company's central
bank source for retrieving material-specificdata. This information is stored in individual material
master records.
A material masterHDFC
has many
Bankviews
Ltd to be maintained , these dependCurrent
00040330012166 upon the material type which we choose , some
A/c
important views are Basic Data1 , Basic Data 2 , Sales org 1 , Sales Org 2, Sales Org general / Plant, Purchasing, MRP1,
MRP2, MRP3, MRP4, Plant storage, accounting1, accounting2, costing1, costing2, etc.
For Finance, accounting views are important as they decide the link of material and accounts it will trigger.
2.4.2. Application
Bank name Account No A/c Type
HDFC Bank 00040330002962 Current A/c
The South Indian 0138073000001792 Current A/c

Bank

Bank

Bank
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.
BDC/LSMW will be created to upload material master.

File format will be provided to upload material master using BDC/LSMW.
Fields to be maintained for Valuation class, Price control
2.5. VENDOR MASTER
The vendor master record will have three data segments:
 General data segment: Information such as name, address, post box, communication details of vendors will be
maintained. In addition to this, if the vendor is also a customer, the customer number will be entered.
 Company code data segment: Information such as reconciliation account, sort key, terms of payment, bank
particulars and other correspondence details will be maintained.
 Purchasing area data segment: Information such as vendor group, shipping details, billing details will be maintained.
Certain vendors for example auditors, insurance Companies, Banks etc can be created only in financial accounting, i.e
vendor will be have General data segment & Company code segment only. Restricted user will be given the right to
create such vendors. Materials management personnel will create the purchasing view of the vendor and financial
accounting personnel will create the accounting views for the same. The accounting view consists of reconciliation
account, method of payment, tolerance groups etc.
It is necessary that the reconciliation account for the vendor is correctly identified and defined in the master data.
Vendor master consists of three views:
General view
This is data that applies to every company code and every purchasing organization in your company. The general area
includes, for example, the vendor’s name, address, language, and telephone number.
Company code view:
This is data that is specific to an individual company code. Company code data includes, for example, the
reconciliation account number, payment method and payment terms.
Purchasing view:
This is data relevant to the purchasing organization of your company. For example, requests for quotations, purchase
orders, and invoice verifications are stored in this section.
Data in vendor master records controls how transaction data is posted and processed for a vendor. The vendor master
record also contains all the data you require to do business with your vendors.
Each master record has a unique number. You need this number to display or change the master record and to post to
the vendor account.
Vendors are generally classified as:
General vendor:
General vendor means a regular supplier who will be rendering either goods or service from within the country or
outside country. Since he is very frequent vendor with whom company is willing to have long time relationship, in SAP
R/3, all the master information such as name, address, bank details, payment terms etc. should be made available at
the time of vendor master creation.
One time vendor:
One time vendor means a vendor who does adhoc services to the company and will not hold long term relationship.
Since he is not a frequent vendor, in SAP R/3, it will not expect vendor master details at the time of master creation. It
will only expect the name, address and bank details at the time of payment transaction.
Account Groups:
The account group is a classifying feature within vendor master records. It determines the following
 Which screens and fields are necessary for entering master data
 Fields can be defined as optional or mandatory at creation of master data
 How master record numbers are assigned (externally by you or internally by the system) and the number range from
which they are assigned
 Which partner functions are valid
 Whether the business partner is a one-time vendor
The following vendor account group will be maintained.
2.6. CUSTOMER MASTER

Customer Master
The customer master record contains all the data required to do business with the customer. Data in customer master
records controlsSr.how
No. transaction data
Vendor Accountand From
is posted To
processed for a customer. Individual fields within the customer
Group
master record are also used:
X COMPANY has1identified the following
Vendors 10000000
specific requirements: 19999999
Domestic
 Input master data in central location to be RM
accessed via all other modules
2 Vendors 20000000 29999999
Domestic PM
 The ability to assign and report on customers by various categories and/or classifications
3 Vendors 30000000 39999999
Accounts Receivable Master DataImports RM Functions
Maintenance
4 Vendors 40000000 49999999
Imports PM
5 Vendors 50000000 59999999
Service
6 Vendors 60000000 69999999
Logistics
7 One Time 70000000 74999999
SAP provides the following transactions for maintaining Accounts Receivable master records:
 Create a new account
 Create a new account with template
 Change an account
 Display an account
 Block/unblock an account
 Set the deletion indicator
The above operations may be undertaken at the general/company code level, the sales area level, or centrally against
both levels.
It is anticipated that the X COMPANY accounts receivable account maintenance will be centralized, and the creation of
any new accounts will go through an approval process.
Account Groups. The account group is a classifying feature within customer master records. It determines the
following:
 Which screens and fields are necessary for entering master data
 Fields can be defined as optional or mandatory at creation of master data
 How master record numbers are assigned (externally by you or internally by the system) and the number range from
which they are assigned
 Which partner functions are valid
 Whether the business partner is a one-time customer

Account Groups:
Data in the customer master is stored in 3 views:

Sr. No.
General Data: Data that Customercodes and
applies to all company From
sales areas (e.g.Tocustomer’s name, addresses, language and
Account Group
telephone data).
1 Customer 10000000 19999999
Company Code/Accounting Data: Data that is specific to a company code (e.g. the reconciliation account number,
payment terms and dunning area). domestic
Sales Area Data: Data2specific to the sales
Customer 20000000
area of the company (e.g. sales29999999
office, sales district, pricing information, as
export
well as information relating to shipping and billing).
Customer Reconciliation Account
Customer Reconciliation account is the G/L account for a group of customers in FI-AR module. The number of
Customer Reconciliation accounts will depend on the grouping of the customers in FI.
The following reconciliation accounts are to be used by X COMPANY.
Payment Terms:
Payment terms enable the system to determine the required terms of payment automatically. The specified terms of
payment are assigned using a key. This key can be:
Stored in the master record of the customer/vendor account (in the purchasing or sales view and in the accounting
view)
Entered when the FI document is created (or changed)
GL Account Description
23000000 Accounts receivable-Domestic
customers
23100000 Accounts receivable-Export
Customer
23200000 Accounts receivable-One time
Entered when the logistics documents (in the purchase order / sales order and incoming invoice or in the order and
the outgoing invoice, for example) are created (or changed)
Terms of payment include settings for the payment terms, the day limit, the baseline date for payment, and
installment payments. Baseline date determines the date from which payment terms will be calculated. The final
deadline for payments can be summarized in a formula:
Payment Deadline = Baseline Date + Payment Terms
Payment terms will be defined in system and will maintain in Customer master. Standard SAP payment terms are: -
Customer Credit Master

Customer Credit processing includes risk and credit exposure management. It provides levels and mechanisms to
handle credit limits. Credit Management enables to minimize the credit risk by specifying a specific credit limit for
customers.
Using Credit Management module credit limit can be granted to customers by setting up Credit Master Data. The
system controls transactions of each customer’s on basis of this master data.
The Credit Management function provides the following functions:
 Create/Edit/Display Credit Master Data (Risk Category, Total Credit Limit, Review period etc)
Key Description
0001 Payable Immediate
 Overview of Credit Limit usage
NT07 Payable in 7 days
NT15
 Sales and Delivery documents blocked due toPayable in 15 days
Credit Management
NT45
 Releasing Process of Blocked documents Payable in 45 days
3. BUSINESS PROCESSES- GL ACCOUNTING
3.1. GENERAL EXPLANATION–(AS IS):
X Company accounting team performs following activities under GL Accounting
a. Posting Journal Entries: As a part of day to day accounting activities and month/ year end closing journal entries are
posted by the accounting department.The entries are reviewed by the supervisor periodically and necessary corrections are
made if required. Printout for the journal entry vouchers are taken and are files time to time. Some entries of recurring
nature are posted during monthly closing. Salary posting is also done by passing a journal entry. Also journal entries are
passed to adjust the CENVAT credits.
b. GL accounting further functions: To meet business requirements X Company team does foreign currency valuation or
interest calculations manually. Also as a part of process the GR/IR accounts and other provision accounts are cleared
periodically.
c. GL reporting: The accounting team uses GL A/c balance, item wise reports for internal analysis.
d. Financial statements:
 The accounting team draws financial statements at legal entity level. Depending upon the legal statuses of the legal
entities, the financial statement reporting format is changed. The Limited and Private limited companies use new schedule
VI format for statutory reporting. And other proprietary and partnership firms use different formats.
 Also some reports are generated to analyse the profitability per location/division.
 As on date the consolidated financial statements are prepared for X Company group manually using excel.
Summarized expectations from the new system:

 Ability to manually process Journal entries
 System to facilitate the parking of transaction and to be posted on specific approvals
 Integration to other modules with real time
 Financial statements as and when required
 Consolidation at group level
 Processing of foreign currency transactions
 Foreign exchange transaction with gain loss information is required
 On-line data entry validation and correction facility
 System to facilitate the posting and reversal of provisional entries by the system
 System to facilitate the automatic posting of recurring entries
 To facilitate the month closing activities
 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
3.2. SOLUTION IN SAP –(TO BE):

Overview: General ledger is a comprehensive financial management solution that dramatically enhances financials controls,
data collection, information access and financial reporting through the organization. General ledger is the central repository
of all the accounting information of the organization. Most of the transactions will be handled in respective sub-ledgers and
subsequently consolidated and posted to General Ledger. However the module shall provide specific functions of passing
journal entries (Manual, Provisional, Recurring and Reversal Journals) and posting them, which will be purely rectification
and provisional in nature.
The objective is to maintain accurate and complete books of accounts in compliance with the provisions of Indian GAAP as
Leading Ledger and IFRS as non Leading Ledger .Also ensuring compliance with statutory guidelines with the provisions of
the Companies Act, 1956.
The General Ledger is integrated with all other modules in SAP and thus serves as a complete record of all business
transactions. This means that all postings that originate in other sub-modules of SAP will be automatically transferred to GL
during day-to-day processing, thus considerably reducing the amount of manual journals. For example, when a purchasing
officer records a receipt of goods that was purchased in the Purchasing module, the inventory value is updated in the GL
immediately. Each transaction updates the GL at the individual transaction level and summary level by account, debit or
credit total and period total. All these items can be displayed on-line.
The SAP ECC 6.0 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. The following are
the common documents that will be used within the General Ledger posting area:
 Adjustment entries
 Banking and Cash Transactions
 Provision Postings
Other G/L Transactions:

 Information, which applies to the entire document, such as the document date and number, will be specified in the
document header. It also contains controlling information such as the document type. The document number will be
assigned internally which will be specific for document type of X COMPANY.
 The line item only contains information, which will be specific to that line item. It always has an amount and one account
number. It may also contain other specifications, such as the terms of payment, a cost center or an explanatory text,
depending on the transaction being posted.
3.2.1. DOCUMENT
A document consists of a document header and line items.

Document header is the part of a document that contains information valid for the whole document, for example,
document date and number. It also contains controlling information such as the document type, user.
Line items are the part of a document that contains information about an item. This includes an amount, an account
number, the credit or debit assignment, and additional details specific to the transaction being posted. For example you can
enter terms of payment, a cost centre, or an explanatory text in a line item.
You can display the line items for one or more accounts.
Line items are document items that were posted to a specific account. In contrast to a document item, a line item only
contains the information from the document that is relevant from the account view.
You can display the following line items in GL account balances:
 Open items
 Cleared items
 Noted items
 Parked items
 Items with special G/L transactions (in Accounts Receivable &Accounts Payable)
 Items with customer / vendor items(in Accounts Receivable &Accounts Payable)
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. PARK AND POST GENERAL LEDGER DOCUMENT
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.
3.2.3. POST/DISPLAY/CHANGE GENERAL LEDGER DOCUMENT
Document Posting
 Header information like company code, posting date, document date currency is entered.
 Items details like general ledger account, amount, tax code, cost assignment will also be entered for each line item.
 New line items can be added.
 A line item before posting may be deleted if required.
 An automatic internal number will be created for each document posted in the system.
 Document display in accounting document will allow viewing all the header and line item details.
 Document change of the accounting document will allow changes to the Header text, reference, and line item next and
assignment field.
Post general ledger documents
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.
Flow diagram:Document parking and posting
Authorized topost?Accept?YesNoAuthorized toPost?YesNoEndGL documententeredSStartPost thedocumentSPark the
documentSYesAuthorized personaccesses theparked documentSAuthorized personaccesses theparked documentSPost
thedocumentSCorrect thedocumentSPost the documentSNo
3.2.4. 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.
 When reversing a document, a reversal reason code must be entered to explain the reversal. The reason code also
controls if the reversal date is allowed to be different from the original posting date.
 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 ITEM CLEARING
 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 item management would be set for the following GL accounts:

o Check clearing accounts (bank clearing accounts).
o Goods receipt/invoice receipt.
o Other General Ledger Balance Sheet Account
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.
 The clearing program is used to automatically clear open items based on predefined criteria. Manual clearing of open
items is therefore not usually necessary.
 Automatic clearing (i.e. clearing based on SAP-defined fields such as assignment, amount, ref. field).
 Manual clearing (i.e. matching of amount performed by users).
 Within the general ledger module, account clearing shall be performed using the following functions:
o Account clearing (ad hoc).
o Automatic clearing (part of closing activities).
o Post with clearing (during the course of posting a document).
3.2.6. POST RECURRING DOCUMENT
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.
When the session is processed, an FI document that corresponds to the original document is posted, and the date of the
next posting is changed accordingly in the recurring entry original document.
3.2.7. SAMPLE DOCUMENTS
Sample documents will be used as reference documents entered specifically for a purpose. Sample documents will have a
separate number range. When such documents are entered and posted as a sample document, the system stores the
document, but does not update any transaction figures.
During document entry, data could be from another document defaulted. The items from this reference document will be:
 Transferred without changes
 Used for reverse postings
 Changed
In contrast to an accounting document, sample documents do not update transaction figures. They serve merely as data
sources for an accounting document. Their advantage will be that change or enhancements are possible. Therefore a
sample document will be used rather than an accounting document when a reference document has to be defined.
Sample documents will be used as a reference document when allocation to more than one cost center is defined. If
allocation is to be made to other cost centers, the values in the sample document need to be changed.
Sample documents will be entered with a special function to ensure that these documents cannot be accidentally posted as
accounting documents.
3.2.8. FIXED DEPOSITS WITH BANKS
Making/Breaking/Maturity of Fixed Deposits/Investments

The company operates fixed deposits of various values with several banks. Though the deposits made for a fixed period
with a defined maturity date these will be broken based on the business needs.
As on the date of maturity, a manual entry will be posted for recording the interest due on the deposit.
3.2.9. JOURNAL VOUCHER
Here all adjustment entries related to vendors or customers is to be passed through FI (JV). It covers following:
1. Vendor/ customer reconciliation entry.
2. GL rectification JV.
3. Accrual JV’s
3.2.10.No.
PERIODIC PROCESSING Area Description Business Process
Description
Closing Procedures:
Apart from
9 the normal day-to-dayFI transaction processing thatCustomer
is undertaken within SAP, there
& vendor Theseare many processes that
transactions
require completion on a periodic basis. These include the regrouping of customer
Balance Carry credits and vendor debits,
carry forwards the and
unmatched invoice receipts and material receipts, revaluing offorward.
foreign currency items, and
Vendor & Customer and
month-end accruals
deferrals.
balances to next fiscal
List of period close operations in SAP:
year. For carry
forwards of Balances
the selection of data
will be Company Code
3.3. CHANGES TO EXISTING ORGANIZATION PROCESS & Year. Before running
N.A.
the carry forward it
3.4. SPECIAL
No. ORGANISATION
Area CONSIDERATIONS:
Description can be runProcess
Business in Test
N.A. mode.
Description
3.5. GAP ANALYSIS:
N.A. 10
1 FI GL Balance
Book Carry
all provisions These transactions
Enter Accrual /
forward carry forwards
Deferral Document the for
3.6. INTEGRATION CONSIDERATIONS GeneralLedger
the period
SAP financial accounting module has a close integration with other modules in SAP. Allbalances to next
the postings fiscal modules
in other
having3financial impact would beFIdirectly posted to Financial accounting GL
Depreciation Run A/c in year.
real For
time. Incarry
case of
This process involvesX Company the
integration would be primarily as follows: forwards
executionofofBalances
monthly
 FI-CO Integration(Company code, GL accounts) the selection run
depreciation of data
and
will be Company
centrally Code
&Year.
executed Before
in X running
COMPANY on a pre-
defined date. It has to
be ensured that
before execution of
this process, all asset
capitalization entries
must be completed.
4 FI Bank Reconciliation This process is for

running automatic
bank Reconciliation
for X COMPANY
5 FI Clearing of The program (T-code –

GL/Customer/Vendor F.13)when executed at
accounts the required
periodicity will clear
all the matching open
items in the GR/IR
account so as to retain
items which will be
the open Goods
Receipt Credits for
which the Invoice
Verification has not
 FI-SD Integration (General data, Company code, Distribution Chain)
 FI-MM Integration (General data, Company code, Purchase area) and FI-AA
 FI-HR Integration (Company code)

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
PO based Bills processing (Revenue & Service):
X Company purchases the raw materials, fixed assets, production consumables, services etc. by placing a purchase order to
the vendor. The centralized purchase department caters to the need of all 9 legal entities. As per the process, the ordered
goods are delivered to the plant-store or desired place. The stores person books the goods receipt. Usually the invoice is
accompanied with the goods delivery. In case the invoice document arrived at plant, the stores people send the invoice
copies to Purchase department in head office. The purchase department verifies the invoice and passes it on to accounts
department for further processing.The accounting department posts the vendor liability and processes for payment.
Sometimes, if the expenses incurred at individual branch, the invoice is forwarded to purchase department in head office.
The purchase department verifies the invoice and passes it on to accounts department for payment. X Company also
imports some materials. In these cases the invoices are booked in INR.
If in case any discrepancy seen between delivered quantity and invoice quantity above tolerance limit, subsequent debit
note is issued to the vendor. The vendor is paid only for quantity actually received + allowable tolerance quantity.
Unplanned delivery cost if any is identified as separate expenses.
Accounting for Purchase - Other Than PO
 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 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.
Communications with vendors:X Company sends payment advices to the vendors along with the check. This contains the
information about the invoices paid. As on date the other formal correspondence with vendors is not followed particularly.
However, as and when required requests for balance confirmations are sent to vendors.
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.
4.2. SOLUTION IN SAP–(TOBE):
Overview: The Accounts Payable application component records and administers accounting data for all vendors. It is also
an integral part of the purchasing system. Deliveries and invoices are managed according to vendors. The system
automatically makes postings in response to the operative transactions.
Payables are paid with the payment program. The payment program supports all standard payment methods.
Postings made in Accounts Payable are simultaneously recorded in the General Ledger where different GL accounts are
updated based on the transaction involved (payables and down payments, for example). The system contains due date
forecasts and other standard reports that you can use to help you monitor open items.
You can design balance confirmations, account statements, and other forms of reports to suit your requirements in
business correspondence with vendors. There are balance lists, journals, balance audit trails and other internal evaluations
available for documenting transactions in Accounts Payable.
4.2.1. PO BASED BILLS PROCESSING (REVENUE & SERVICE)
In this process Purchase Order is raised with reference to Purchase Requisition where accounting has no impact, it’s 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.
Material document will be for accounting stock into stores and FI entry will
Inventory / Stock A/c Dr.
GR/IR Clearing A/c Cr.
Here GR / IR clearing account is a clearing account and gets knocked off at the time posting the invoice (MIRO execution).
All the Incoming Invoices are verified in terms of their content, prices and arithmetic and the invoice is posted, the data is
saved in the system. The system updates the data saved in the invoice documents in Materials Management and Financial
Accounting.
After the invoice has been posted, the document appears as an open item in the vendor account. (Payment proposal list).
Accounting Entries when invoice is posted will be:
GR/IR A/c Dr.
CENVAT Clearing A/c Dr (if applicable)
VAT Clearing A/c Dr (if applicable)
Vendor Account Cr.
In case of Service PO following entry will be triggered:-

Goods Receipt:
Expense a/c Dr.
Service GR / IR A/c CR
Invoice Posting:
Service GR/IR A/c Dr.
Vendor Account Cr.
Delivery costs can be divided into:
 Planned delivery costs
 Unplanned delivery costs
Planned Delivery Cost:
Planned delivery costs are entered at item level in the purchase order.
Planned delivery costs can be divided into:
 Freight costs
 Customs relevant
 Insurance
Planned delivery costs can be invoiced in the following ways:

 Fixed amount, independent of scope of supply
 Quantity-dependent amount
 Percentage of value of goods to be delivered
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
Freight Vendor A/c Cr
In case of planned delivery cost for Customs duty (Bill of Entry items),
Customs clearing A/c Dr
Customs Officer’s A/c Cr (Govt. Vendor)
Unplanned Delivery Cost:
Enter the unplanned delivery costs on the Extras tab page. The System distributes unplanned delivery costs among the
items; it treats them in the sameway as price differences. However, it does not check the price after distributing the
delivery costs. It does not list them separately in the purchase order history. They are only included in the invoiced value.
Then accounting entries will be,
Vendor A/c Cr
Stock A/c (or) Price Difference Dr
Domestic Purchases (material) -- which includes fright,VAT
During GR:
Material Stock Dr
GR/IR Clearing A/c Cr
Freight Clearing A/c Cr
During Invoice Verification:

GR/IR Clearing A/c Dr
Freight Clearing A/c Dr
VAT A/c Dr
Vendor A/c Cr
Freight Vendor A/c Cr
For Domestic Procurements of Capital Goods:

During GR:
Material (Asset) A/c Dr
GR/IR Clearing A/c Cr

GR/IR A/c Dr
Vendor Payable A/c Cr
Import Purchases (material) -- which includes fright, Duty

During Customs Duty Clearing Invoice:
Custom Clearing A/c Dr
Custom Officer A/c Cr
Here Custom Officer is created as a vendor.
During GR:
Material Stock Dr
GR/IR A/C Cr
Custom Clearing A/c Cr
(The custom duty portion of value is loaded to the inventory and the Customs clearing a/c will get nullified)
GR/IR A/c Dr
Vendor A/c Cr
4.2.2. DIRECT BILLS PROCESSING (NON PO BASED)
Accounting Document is generated manually by debiting the expense and crediting the vendor. WHT is also deducted at this
stage which will be called up automatically.
 Vendor invoices without MM purchase order would be booked through FI vendor invoice and has no impact on the stock.
 In the FI vendor invoice, GL account is to be entered for the debit posting. Due date, payment terms is to be mentioned in
the invoice.
4.2.3. VENDOR DOWN PAYMENT & CLEARING
Payment / Receipt process (Advance & Regular):

 Advance Payment: Once the APR (Advance Payment Request) received from Purchase / Intending department, AP user
will cross check the request with PO for compliance.
 For all the purchase based advances, PO numbers will be referred/attached to prepayment voucher. So system will allow
to pay the advance always less than or equal to the advance amount mentioned in the PO. More than one PO can be
referred for a single pre payment against each vendor.
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:
 Down Payment request, a notational item recorded against the vendor,
 Make payment against the payment request,
 Post the invoice which required the down payment,
 Clear the down payment against the invoice, and
 Make final vendor payment, the balance of the invoice.
The accounting entry for making the down payment will be:
Vendor account (Spl. G/L: Down Payment) Dr
Bank A/c Cr
4.2.4. INVOICE BOOKING & SETTLEMENT OF ADVANCE
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
Vendor A/c (Spl. G/L: Down Payment) 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. CREDIT PERIOD FOR VENDOR PAYMENTS:
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
4.2.6. VENDOR NORMAL PAYMENT
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
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
 Vendors to be paid (and customers for refunds)
 Posting and document date for open transaction items that must be included in the proposal list
 Defining the bank from which the payments will be made
 Payment methods that are permitted (e.g. Check, EFT)
 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.
 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. VENDOR FOREIGN PAYMENT
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 company’s 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. DEBIT NOTE & CREDIT NOTE
All the support/relevant documents will be submitted by purchase to generate the debit/Credit note on the identified
process like discounts on the qtypurchase.
Cross Functional with MM:
Credit Memo:
A credit memo can be entered with reference to a purchase order or a goods receipt. Purchase Dept/AccountsDept enter a
credit memo for a purchase order item when the goods are returned to the vendor. First MIGO is to be posted for the
return quantity and then credit memo to be posted in MIRO for the return PO.
Accounting Entries will be for Credit Memo (returned goods)
Goods Receipt - MIGO
GR/IR A/c Dr
Inventory A/c Cr
Posted for the returned quantity, stock value & quantity is reduced.
Invoice Posting – MIRO

Vendor A/c Dr
GR / IR A/c Cr
VAT Receivable A/c Cr
4.2.11. ADJUSTMENT / CLEARING PROCESS
 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.
 The clearing program is used to automatically clear open items based on predefined criteria. Manual clearing of open
items is therefore not usually necessary.
 Automatic clearing (i.e. clearing based on SAP-defined fields such as assignment, amount, ref. field).
 Manual clearing (i.e. matching of amount performed by users).

4.2.12. CORRESPONDENCE
All evaluations and reports sent to business partners are considered as correspondence. Correspondence for both
customers and vendors includes:
 Account statements and open items lists in letter form
 Individual letters and standard letters
 Balance confirmations
 Document extracts
Since standard reporting format of above correspondence does not meet X COMPANY requirement, need to be developed
Vendor master creation
YesYesNoCreate Vendor Centrally ?Purchasing view created?Vendor is createdNoStartDecide the account groupMCreate
vendor in that account groupSCreate accounting viewsSStopMaterials management processSCreate Accounting ViewYesNo
Park and post vendor invoice:
X COMPANY requires day to day accounting of the transactions that take place in the organization. This application
component is required for entering vendor invoices that arise in the accounts payable module of financial accounting.
In case, where materials management is involved, the entering of the invoice is done in the logistics invoice verification of
the materials management.
Authorized topost?YesEndVendor invoiceenteredSStartPost theinvoiceSYesNoPark the invoiceSAuthorized personaccesses
theparked invoiceSAccept?YesAuthorized topost?NoCorrect the invoiceSPost theinvoiceSNoAuthorizedpersonaccessesthe
invoiceS
Vendor down Payment
X COMPANY has to pay, during their course of transactions, advance payments to the vendors. Advance payments are
known as down payments in SAP. Down payment request can be created by the materials management department and
the same can be viewed by the accounts payable person. After checking the purchase order terms, the down payment is
made by the accounts payable person.
The system posts the down payment transaction as a special general ledger transaction in the vendor account. Hence, it will
not appear in the regular balance but only in special general ledger balance. Once, the down payment is cleared against an
invoice, the balance is shifted from the special general ledger balance to the regular vendor account balance.
At the time of document entry, the appropriate special general ledger indicator needs to be chosen.
Flow diagram for vendor down payment
Down payment to be made?YesNoStopVendor Account updatedDown payment request from Purchase Department
SStartRead the purchase orderMEndMake down payment through check/transferS
Flow diagram Vendor Payment Process
Payment due?Funds exist?YesYesNoStopDown paymentexists?YesNoNoFull Payment?Vendor
PaidDocumentgeneratedYesNoCheck the vendordue listSStartWait forfundsMClear thedownpaymentSEndPartpaymentS
4.3. CHANGES TO EXISTING ORGANIZATION PROCESS:
N.A.
4.4. SPECIAL ORGANISATION CONSIDERATIONS:
N.A.
4.5. GAP ANALYSIS:
N.A.
4.6. INTEGRATION CONSIDERATION:
FI-MM Integration
5. BUSINESS PROCESSES - ACCOUNTS RECEIVABLES branches.
5.1. GENERAL
5 EXPLANATIONS (ASIS):
TechServices ‘Tech Services’ are
The following table summarizes the sales business lines of the individual legal manufacturers
entities. As a business
of some practice usually the
sales invoice is created by the sales team. Based on that the accounting team post the accounting
material. They haveentry periodically.
a contract
executed with ‘X Company
Paints’, under which they sale
the material to ‘X Company
Among the entities listed above, almost all the entities post their invoices through Sales and Distribution module. Only in
Paints Corporation Ltd’. Tech
case of X Company Financial services it is proposed to book the invoices directly through Financial Accounting.
Services
AR Credit/debitnotes:In case of ‘Sphinax Chemicals Pvt. Ltd.’, the material is sold raises invoices
the distributor for sale is
and primary
considered at this point. Depending upon the market situation the distributor themaysale
sale of
thematerial
X Company andproducts
earns at a
Sr. No. Name of the company Existing
their Line
revenue. ofAsbusiness
on date
discounted price. Or distributor may sale the X Company products at a premium price. In this situation to adjust the
1 X Company Paints ‘X Company Paints
customer (distributor) account balance, Sphinax chemicals issues a credit notethey the sales
or a debit noteistomade only ‘X As on date
the distributor.
Corporation Ltd.
a distributor sales report is pulled from another system and based on the report Corporation
Company
credit orPaintsLtd’. is the
Corporation
debit note entries are posted into
the accounting system. manufacturer
Ltd.’ and sellers of
6 Sphinax Info Systems paints,
‘Sphinaxthinners, wood is an IT
Info Systems’
finishes, putties
services company.They and other
render
materials.
IT services As to on
otherdate ‘X
sister
CompanyPaint
concern companies salesin their
the X
products through
Company Group. IT services Sphinax
Chemicals.X
fees are charged CompanyPaints
to each
earn the primary
sister based on the revenue
number of
through this sale.
users. It is likely possible that
However,soon
Sphinax would Xsale Company
some is
going
computerto sale their products
peripherals to the
directly into the market.
sister concerns companies as
2 Sphinax Chemicals Pvt. Ltd. As on date
a part Sphinax
of service Chemicals
contract.
7 Sphinax Organic & research P. Pvt. Ltd. actsas
‘Sphinax Organic marketing
and research
Ltd. Company for X Company
P. Ltd.’is into agriculture
Paints. TheThey
activities. actshave
as carrying
procured
and
some farming land andfor
forwarding agent X
they
Company Paints Ltd.Sphinax
cultivate crops there. The
Chemicals
food grainssales thusthefarmedfinished
are
products ofX Company
sold into local market. Paints
in the market.Sphinax
Revenue is earnedthrough raises
invoice
crop sale.on X Company
8 X Company Financial services Paintsfor commission.
‘Sheelac Financial A
Services’
monthly invoice is
are into business of lendingraised by
the
fundsfinance
to other department.
sister concern
3 Sheenworld Services LLP Sheenworld team
companies in the group. promotes They
the sales for Sheenworld
division of X Company Paints
Ltd. Based on the sales
revenue recognized for the
division for a particular period
(for a month); an invoice is
raised on X Company Paints
Corporation Ltd. This invoice
is currently raised by the
Finance team. However,
management is of the view
the Sheenworld services
would have their own branch
offices (same as Sphinax
Chemicals Pvt. Ltd.) at
different locations. And
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
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.
5.2. SOLUTION IN SAP – (TOBE):
Overview: The Accounts Receivable module records and administers accounting data of all customers, and is also an
integral part of sales management.
All postings in Accounts Receivable are also updated in the General Ledger. Different G/L accounts are updated depending
on the transaction involved (for example regular invoice posting, advance payments). The system contains a range of tools
that can use to monitor open items, customer account balance analysis, ageing analysis. The correspondence linked to
these tools can be individually formulated to suit the requirements. This caters to the requirement of sending payment
notices, balance confirmations, account statements, and interest calculations.
Accounts receivable also provides the data required for effective credit management, (as a result of its close integration
with the Sales and Distribution component).
Accounts receivable sub module of financial accounting also enables to post customer invoices directly through financial
accounting.
This also caters to the requirement of dealing with outgoing taxes on customer invoices.
 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 COMPANY’s requirements. This is also the
case for payment notices, balance confirmations, account statements, and interest calculations.
 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. CUSTOMER MASTER DATA

The Accounts Receivable application component records and manages accounting data of all customers. All postings in
Accounts Receivable are also recorded parallel in the General Ledger. Different G/L accounts are updated depending on the
transaction involved (for example, receivables, down payments,). The system contains a range of tools that can be used to
monitor open items, such as account balances, reports, and due date lists.
In X Company Customer will be created through Sales and Distribution Module & FI Module jointly.Customer Master is
created centrally in sales and distribution and financial accounting with their respective views
Flow diagram for customer master
YesYesNoCreate customer centrally?Sales Organization views Created?Customer is createdNoStartDecide the account

groupMCreate customer in that account groupSStopSales and distribution processSCreate accounting viewsSCreate
Accounting view?YesNo
5.2.2. INVOICE POSTING
X Company requires recording of customer invoice transactions. This application component is required for entering
customer invoices that arise in the accounts receivable module of financial accounting. Generally, the customer invoice is
raised in sales and distribution module and is released to accounting.
However, in some circumstances, the invoice is raised in accounts receivable module itself. Accounting executive enters the
invoice and parks the invoice. The parked invoice is checked by Accountant/accounting manager and if he is authorized, he
will complete the document and posts it. In case, he is not authorized, then he will complete the document and his superior
will post the document.
Park and Post Customer Invoice

Authorized to post?YEndCustomer invoice enteredSStartPost the invoiceSYesNoPark the invoiceSAuthorized person
accesses the parked invoiceSAccept?YesAuthorized to post?NoCorrect the invoiceSPost the invoiceSNoAuthorized
person access the invoiceS
LOCAL SALES PROCESS
1. Release Billing Document to Accounting (VF01/VF02): - If there is a Posting Block activated to the Document Type then it
will not get released to Accounts automatically. In that case, an authorized person will go to change Billing Document and
release it to Accounting. As a result of which Customer Account will get debited and Revenue Accounts will get credited in
the system.
(The above process is same for Raw Material / Scrap Sales Process)
Customer A/c Dr
5.2.3. DEBIT MEMO & CREDIT MEMO
Sales A/c Cr
 Price difference can be addressed directly in SD byCr
VAT Payable creating Debit Memo request/Debit memo by refereeing sales
order/invoice Other taxes Cr
payable
 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. DOWN PAYMENT RECEIVED AND CLEARING
Down Payment is a function that uses Special GL indicators. Special GL Transactions allow the user to post the document to
an alternative GL account instead of “normal” customer’s reconciliation account. They are defined in Customizing for
Customers reconciliation accounts. This Process involves receipt of Advances from customers against orders. The
functionality can be triggered either by recording a down payment request, or by actually receiving a down payment. The
sales order reference no. is to be mentioned here.
The event will always make the system prompt that Down payments from customers exist whenever invoices are raised.
The Down payment Clearing Functionality will be used to clear existing Down payments.
Advances are received from the customer:
Bank Account Dr
Advanced Payments CustomerCr.
These advances are later adjusted against the final invoice raised on the parties and advance can be adjusted against more
than one invoice at the time of clearing of the invoices against advances.
Adjustment of advances is done as follows:
Advanced Payments Customer Dr.
Customer Account Cr.
5.2.5. COLLECTION PROCESS (POST INCOMING PAYMENT)
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.
 Incoming payment can be cleared partially or residually depending on the situation.
 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.
Customer Incoming Payment Process (Regular/Advance/Adhoc)
Down Paymentexists?PaymentDocument PostedFull Payment?YesYesNoNoPart Payment?YNoPaymentreceived
fromcustomerMStartClear the downpaymentSEnter paymentSEnter paymentSEnter residualpaymentSEnd
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)
Down Payment exists?Payment Document PostedFull Payment?YesYesNoNoPart Payment?YNoPayment received by
bankMStartClear the down paymentSEnter paymentSEnter paymentSEnter residual paymentSEndCMS from BankMYes
5.2.7. CUSTOMER ACCOUNT CLEARING
a) Manual Incoming Payment Processing

This process allows selecting an invoice or a group of invoices, further an invoice may be paid in full or partially. In case, the
invoice is paid partially, the item is held in the customer account as an open item. This transaction will be used in X
COMPANY, in cases where incoming payments are received for a customer or a few customers.
b) Automatic Incoming Payment Processing
Automatic incoming payment processing facility can be used to process incoming payments. Standard incoming payment
methods such as Check Deposits, Bank transfers shall be available. The incoming payment however needs to match the
invoice for a clearance to be effected by the posting rule for such clearances. In the event of an exact match not being
available, an on account posting can take place through a separate statement & posting rule for such on account payments.
5.2.8. CREDIT CONTROL PROCESS
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 customer’s 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. RESTATEMENT OF FOREX RECEIVABLES
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. RECONCILIATION & MIS
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
SAP system would enable X Company to generate customer correspondences like document extract, balance confirmation
etc.

N.A.
N.A.
5.5. GAP ANALYSIS:
N.A.
FI-SD Integration
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 company’s act and income tax act only. They requirement
is post depreciation as per company act into GL A/c.
6.2. FUNCTIONS AND EVENTS (TOBE):

OVERVIEW: The Fixed Asset module is an integrated asset management solution for additions, updating, tracking,
depreciation and purposes. Assets are depreciated periodically to arrive at their current net value. Once an asset is
capitalized, it can be transferred between locations, cost centers. Assets can be removed from the Assets Ledger by
disposing/scraping them.
The Asset Accounting module provides most of the processes required for the management of fixed assets. The module is
integrated with all other modules and data for all asset-related transactions is updated into GL online. Accounting for assets
is 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
For purchasing new Assets, PO is raised in following ways –

a) Account Assigned – If PO is Account Assigned, then on the preparation of GRN the Asset is directly capitalized.
b) No Account Assignment – If PO is not Account Assigned then on the preparation of GRN Inventory Asset A/c is debited.
Once the Asset is ready to use the Inventory Asset A/c is transferred to the Asset A/c.
For the assets, which are not yet installed, an asset master is created as Capital work in Progress. As and when the asset is
installed, the balances under WIP asset will be transferred to the final asset, for which an asset master record will be
prepared under an appropriate asset class.
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.
6.2.3. 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 depreciation-posting run is started, one has
to enter the period for which one wants it to be carried out.
6.2.4. ASSET TRANSFER
Asset transfer within a company code is made mainly for 2 reasons

a) Wrong Asset Class: In case, the asset was created under a wrong asset class then a new asset has to be created in a New
Asset Class and an “Intra Company Transfer” will to be executed. During the Asset transfer, SAP transfers Acquisition Value,
Accumulated Depreciation as of the day of the Transfer from the Old Asset to the New Asset. Depreciation will be
prospectively calculated with the new rate.
However we can use the transaction for ‘unplanned depreciation’ to make an unplanned posting of previous depreciation.
b) Change in Location (profit centre): In case of a change in location (profit centre) of the asset, the master record is to be
changed.
6.2.5. ASSET SCRAPPING / RETIREMENT
Management approval is necessary for retirement of assets. Retirement can be through a customer, either with revenue or
without revenue. It may be for net book value as well. The customer may / may not exist in the accounts receivable module.
In case of retirement with revenue, the profit or loss on sale of assets is recorded automatically by the system, even if it is
partial or full retirement is made. In case of retirement with net book value, no profit or loss sale of asset is triggered.
Asset retirement can be done in many ways and if the asset is retired with revenue and with customer, then a customer
liability is created while retiring the asset and the 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:
 Sale of asset with customer: - An asset is sold, resulting in revenue being earned. The sale is posted with a customer
 Without customer: - An asset is sold, resulting in revenue being earned. The sale is posted against a clearing account (no
customer record needs to be maintained)
 Scrapping of an asset: - An asset has to be scrapped, with no revenue being earned
 Inter-unit transfer from one Profit Center to another Profit Center or from one location to other location
 Posting revenue / loss on asset sale or scrapping of asset
 Profit or loss on disposal will be automatically calculated and posted to the relevant general ledger accounts.
 Retirement may involve a single, multiple or partial asset(s).
 For partial retirement of an asset, the value, quantity or percentage of an asset can be entered when posting the
retirement.
 The profit or loss from retirement will be assigned to separate general ledger accounts.
Create Asset Master:
Asset MasterExist?NoYesStopStartCheck the AssetMaster ListSDecide Asset ClassMCreate Asset Masterin Asset ClassSEnd
Settlement of Assets under Construction
Relevant Assets created?Distribution rules defined?NoNoYesAssets SettledCreate AssetsSStartDefine distribution
rulesSExecute SettlementSEndYesYes Form C2 to be approvedMNoEnd
Retirement of Assets
Retirement with customer?Customer exist?YNoYesRetirement with revenue?YesYesProfit/Loss PostedNoNoAsset

RetiredPartial Retirement?YesYesNoAsset is to be retiredSStartCreate customer in ARSPost book valueSPost partial
entriesSPost full entriesSEndForm C2 to be approved M YesNoEndPartial Retirement?No
Depreciation posting process
6.2.6. DESCRIPTION OF IMPROVEMENTS
1. Manage the history of Assets from their origin to their disposal/scrapping

2. Proper capitalization of all the incidental expenses till the time of capitalization.
3. Cost centre wise Assets detail will be available
4. Capitalization of asset can be done through AUC (Asset under construction) wherever relevant.
5. From AUC part capitalization is possible with the balance written off as expense in a cost centre.
6.2.7. SYSTEM CONFIGURATION CONSIDERATIONS

 Creation of Asset Classes
 Account Determinations
 Screen Layouts & Rules
 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:
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.
N.A.
Dep. Area Description

01 Book Depreciation.
15 Depreciation per Income
Tax act
N.A.
6.5. GAP ANALYSIS:
N.A.
FI-MM Integration
7. CASH AND BANK ACCOUNTING
7.1. GENERAL EXPLANATIONS- (AS IS):
Bank accounting:Each legal entity holds own set of bank accounts. They do the banking transactions independently.
X Company as a part of bank transactions includes depositions, check/DD payments, outward remittances, interbank
transfers, overdraft facilities etc. All the bank accounts in India are maintained in INR currency. Only the bank account for Sri
Lankan entity is maintained in LKR.
Sphinax Chemicals and X Company Paints Lt. also enjoy check printing facility from one of its banking partner HDFC. HDFC
Bank issues check numbers to X Company which are updated into payment voucher at the time of payment.
Sphinax also uses Central Cash Management facility from HDFC bank. Under this facility a main bank A/c is held in the name
of HO. And a CMS code is given to each individual branch. The checks deposited by the individual branch into the CMS code
A/c. The checks are cleared locally and credit is passed to HO main bank A/c immediately (next day). Currently the bank
reconciliation is done manually for the CMS code A/c as well as for the main bank A/c.
Cash accounting: Each legal entity and each individual branch has its own petty cash book. Each individual legal entity does
the physical cash balance count every day. In case of individual branches, the physical cash count is taken per week. And the
same is reported to HO accounting team. The individual branch raises a request to the HO in case of cash requirement.
Usually sundry expenses on ad hoc basis are made from the potty cash. All the cash payments are approved by the
appropriate authority.
7.2. SOLUTION IN SAP – (TO BE):
The objective is to ensure compliance and standardization of procedures across all locations so as to effectively manage
Cash and Bank transactions and to build robust controls and cover risk exposure associated with cash and bank transactions
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.
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
§ Choose from business transactions list available for processing.
§ 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.
§ Cash receipts and cash withdrawals can be processed
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. CHECK PRINTING
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. CHECK CANCELLATION PROCEDURE
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
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.

N.A.
N.A.
7.5. GAP ANALYSIS:
N.A.
FI-MM Integration
FI-SD Integration
8. PROFIT CENTER ACCOUNTING
8.1. GENERAL EXPLANATIONS- (AS IS):
Currently X Company has exclusive set of GL Accounts per location / branch. The expenses pertaining to the specific
location / branch are posted to the GL Account specifically maintained for that location/branch. Also sales entries are
passed by selecting the location/branch. Based on this an income/expense statement is derived in the system. Also as and
when required a trial balance report is extracted by the system at the location level.
8.2. SOLUTION IN SAP – (TO BE):
Profit center accounting will be used for specific reporting purposes. As Profit Center Accounting will be actively used in X
COMPANY, some key aspects of this functionality will be discussed in detail.
Profit center is a management oriented organizational unit in SAP used for internal controlling purpose. Enterprise will be
divided into profit center units. It enables you to analyze the profitability of the Responsibility areas and to delegate
Responsibility to such units.
Profit center will be of Products (products or product lines), Geographical areas (regions, sites, offices) or functional areas
(production, sales)
Profit Center Accounting (EC-PCA) helps to analyze the operating results of the internal organizational units. Profit center
reporting is used to control the results of the individual areas of Responsibility (profit centers) within the organization.
Broad objectives of the profit center accounting are to get Profit and loss account and balance sheet for the each profit
center wise.
 Revenue & sales deductions postings will be made using profit center.
 Each cost center will be mapped to a 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.
It is necessary to assign SD sales orders to profit centers in order to reflect sales revenues and sales deductions. The profit
assignment is passed on from the sales order -> delivery note -> goods issue -> billing document. By default it takes the
profit center from the material master.
Therefore the dominant link in the SAP system that will be used by X COMPANY is the one between material and profit
center. Through this assignment, the majority of the PCA postings will occur. With a single assignment on the material
master record, for each material / plant combination, you will have identified for SAP the default profit center for all sales
orders, process orders, goods movements, material transfers and physical inventory adjustments.
When creating a process order for finished goods, material costs will be posted to the process order and at the same time
to the Profit Center of the material confirmation of activities will credit a manufacturing cost center and debit the process
order and the Profit center of the material. Goods receipt of this finished product into warehouse will credit the process
order and the Profit center of the material. If a balance exists on the process order due to more than budgeted usage of raw
materials for example, then this balance will also be visible on the profit center of the material.
REPORTING REQUIREMENTS
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.
N.A.
N.A.
8.5. GAP ANALYSIS:
N.A.
N.A.
1.4
3.2 Taxes and
Customer N.A. SAP
9.5.2PROCESS MAPPING
duties
credit
Bank limits

 Passing
Credit limit JV 
 Excise
Credit
Bank
JV
master N.A. SAP
for
basedCENVAT
on the  Journal
management
accounting  Individual record  Vendor
output taxes
opento
credit
security set off voucher
 entry
Processing
bank a/c for House banks item clearing
current
deposit
each legal block
Check lot liabilities
2.4 Communicatio entity  Automatic
management N.A. SAP
 Withholding
2 Accounts  credit checks
ns with  CMS
Vendor A/c for  Account
Check register taxes credit
Sr. payable
Process Name  As-IS Process To-Be Process WA/GAP System
vendors balance
Sphinax statements
Check
2.1
3.3 Vendor
customer invoice N.A.
N.A. SAP
SAP
confirmation
Chemicals  Balance
cancellation
document
credit period 
 Vendor
7 daystransfer
and 
 Vendor
Payment
4 Asset letters
 Fund confirmations
1 postings
GL - invoice

30days credit master
terms record
Accounting  Payment
Balance  Payment
Accounting verification
period  PO based
4.1 Asset Master advices for all
tracking advices
Asset class N.A. SAP
1.1 GL – reference to invoice N.A. SAP
record  Assets
CMS branches
are Asset Master
3.4 Accounting:Do
Customer PO
 As a part of verification
 GL A/c N.A. SAP
2.5 Accounts managed in record N.A. SAP
cument
payment  Vendor
day
 to  Vendor
master data
5.3 payable  Regular
excel.
X Company
Asset 
 Incoming
Manual
Vendorbank N.A. SAP
processing
receipts invoice
accounting
payments and invoice
 GL parking
payments
reports team
with
 Manual
individual
usesbank Account
reconciliation
verification
monthly
 Partial  Vendor
Accounting
 Partial report
vendor
tags
reconciliation balance
non-reference
closing
payments X invoice
 Document
incoming posting
balances,  Vendor
to PO
Company
 Advance  Handling
parking
payments
4.1 Asset vendor open Account line
Asset N.A. SAP
 Vendor
Accounting
payments delivery

 Document
Advance costs
6 acquisition
Profit Center and 
invoices
Procurementand item
acquisition
report
invoice
team posts posting  Vendor
posting
incoming
retirement
Accounting vendor ageing
through PO  Vendor
Asset under
 Vendor
some journal credit/debit
 Document
payment
6.1 Cost allocation  analysis Account
constructions
Profit center N.A. SAP
Debit/credit
voucher notes
editing
 Customer
per unit of reports.
Capitalization
 Posting master
Asset
assignment data
note
entries, makes 
A/cDocument
clearing
responsibility from the put
expenses per to report
retirement
 Vendor
monthly reversal
use
location- Asset scrap
credit
provisionsperiod  Sample
2.6 Input branch N.A. SAP
3.5 Customer entries etc. Document N.A. SAP
4.2 Taxes/duties
Asset  Input taxes:  Tax codes for
Planned N.A. SAP
2.2 Vendor
interest  Not followed 
 Voucher
Customer N.A. SAP
6.2 depreciation
Profitability Excise,
 Manual VAT, : Input
depreciation
Profitability
taxes: N.A. SAP
payment credit
calculations  Depending
currently  Payment
printing
balance
analysis for CST,
depreciation
 Income
service Excise, VAT,
Scheduled
analysis report
period upon terms
Interest
branch tax, customsat
calculation
expenses CST, service
depreciation
1.2 GL - understanding calculations N.A. SAP
locations duty,year
the
analysisGTAforend tax, customs
run
Accounting : with business
 To meet 
 Period
Customer end
 Input
and
various
posting
tax duty,
Depreciation
GTA
Further partner,
businessthe closing
item
credit
into
locations/bran
system perInterest
 Automatic
as
functions credit limit is X
requirements  Recurring
calculations
 No inputs
ches posting of act
company’s
utilized
Company forteam document
credit input taxes to
Depreciation
3.6 releasing
does
Communicatio  Withholdingperiod the  Foreign N.A. SAP
current
as per Income
assets
ns with payments.
end
 closing,
Balance currency
 Dunning
taxes  Automatic
Tax act
customer foreign
confirmation valuations
 Balance
loading of
2.3 Outgoing currency
 Payment  Interest
confirmation N.A. SAP
4.3 Asset report input taxes
Asset explorer
to N.A. SAP
payments  Manual
valuations,
reminders  Manual
calculations
 Account
 Asset expenses
Asset balances
check
interest payment payment
 Open item
statements entry
balances  Withholding
Depreciation
entry
calculations  Regular
clearing
 Payment
 Depreciation taxes
scheduleat invoice
 Check lotAlso
manually. payment
advices
balance posting or
tracking
as a part of  Payments in
payment
3.7 Accounts  Generation
process the foreign N.A. SAP
posting
receivable of ‘.csv’ file
account currency
5 Cash and bank  Customer  Customer
reports  Check
balances
balances  Advance
Account
accounting
printing
clearing
 Customer facility
done payment
balance report
3
5.1 Accounts
Petty cash Cash Journal N.A. SAP
from bank
regularly.
open invoices 
 Advance
Customer
receivable
book  Petty cash Cash receipts
 Outward
 Customer payment
Account line
3.1 Customer book for each Cash payments N.A. SAP
1.3 GL Accounting remittances
aging report settlement
item report N.A. SAP
document  Manual
branch  Customer
reports  The 
 Automatic
GL Account
Customer
posting periodic
 Cash master record
accounting payments
balance
Account report
accounting of :
payments  Real time
team uses GL  Payment
GL Account
master data
 Cash closing
block
report
 Generation
10. REPORTS date open at key date
S_ALR_87012287 Debit & Credit Notes Debit & Credit Notes SAP Standard
Register – Monthly Register – Monthly
S_ALR_87012186 Customer wise Sales Customer wise Sales SAP Standard
S_ALR_87012169 Transaction Figures Transaction Figures SAP Standard
Account Balance Account Balance
Transaction Code of
S_ALR_87012197 Name of the Reports
List Of Customer Line Items Details of the Report
List Of Customer Line Items SAP Standard
SAP Standard
Report /Customized
Accounts payable
GL Accounting
S_ALR_87012086 Vendor List Vendor List SAP Standard
S_ALR_87012087
S_ALR_87012326 Vendor
Chart ofaddress
Accounts List Vendor List accounts in
List of Ledger SAP Standard
S_ALR_87012077 Vendor Information System Vendor
Chart ofInformation
accounts System SAP Standard
S_ALR_87012082
S_ALR_87012328 Vendor Balances
GL Account List Vendor Balances
Details of Ledger accounts SAP Standard
S_ALR_87012078
S_ALR_87012308 Due Date
Display Analysistofor
Changes GLOpen Due Date
Display Analysistofor
Changes GLOpen SAP Standard
Items
Accounts Items
Accounts
S_ALR_87012103
S_ALR_87012279 List of Vendor
Structured Line Items
Account List of Vendor
Structured Line Items
Account SAP Standard
S_ALR_87012287 Vendor
BalancesDebit/Credit Memo
(Balance Sheet & Vendor
BalancesDebit/Credit
(Balance SheetMemo& SAP Standard
Register
P&L Account in FS Version Register
P&L Account in FS Version
S_ALR_87012089 Display
Format)Changes to Display
Format)Changes to SAP Standard
S_ALR_87012301 Vendors
GL Account Balances Vendors
GL Account Balances SAP Standard
S_ALR_87012309 Print
(TotalsCashbook
& Balances ) Print
(TotalsCashbook
& Balances )- Trial SAP Standard
S_P99_41000101 Check Register Check
balanceRegister SAP Standard
S_P99_41000102
S_ALR_87012282 Check
GL LineNumber
Items Ranges Check
GL LineNumber
Items Ranges SAP Standard
S_ALR_87012332 Statements for GL Statements for GL SAP Standard
Asset accounting Accounts, Customers & Accounts, Customers &
AW01N Vendors
Asset Explorer Vendors
Asset Explorer SAP Standard
S_ALR_87012287
AR02 Document
Asset HistoryJournal
Sheet Document
Asset HistoryJournal
Sheet SAP
SAP Standard
Standard
S_ALR_87012289
S_ALR_87011963 Compact Document
Asset Balance by Asset Compact Document
Asset Balance by Asset SAP
SAP Standard
Standard
Journal
Number Journal
Number
S_ALR_87012291
S_ALR_87011964 Line
AssetItem Journal
Balance by Asset Periodic list of by
Asset Balance Journal
Asset SAP
SAP Standard
Standard
Class posting
Class
S_ALR_87012293
S_ALR_87011965 Display of Changed
Asset Balance by Business Display of Changed
Asset Balance by Business SAP
SAP Standard
Standard
Documents
Area Documents
Area
S_ALR_87012341
S_ALR_87011966 Invoice Numbers
Asset Balance assigned
by Cost Invoice Numbers
Asset Balance assigned
by Cost SAP
SAP Standard
Standard
Twice
Center Twice
Center
S_ALR_87012344
S_ALR_87011967 Posting Totals Document
Asset Balance by Plant Posting Totals Document
Asset Balance by Plant SAP
SAP Standard
Standard
S_ALR_87011968 Type wise
Asset Balance by Cost Type wise
Asset Balance by Cost SAP Standard
S_ALR_87012346 Recurring
Location Entry Documents Recurring
Location Entry Documents SAP Standard
S_PL0_86000030 G/L Account Balances G/L Account Balances SAP Standard
Accounts receivables
S_ALR_87012172 Customer Balances in Local Customer Balances in Local SAP Standard
Currency Currency
S_ALR_87012197 Customer Line Items Customer Line Items SAP Standard
S_ALR_87012168 Due Dates Analysis for Due Dates Analysis for SAP Standard
Open Items Open Items
S_ALR_87012173 List of Customer Open List of Customer Open SAP Standard
Items Items
S_ALR_87012176 Customer Evaluation with Customer Evaluation with SAP Standard
Open Item Sorted List Open Item Sorted List
S_ALR_87012177 Customer Payment History Customer Payment History SAP Standard
S_ALR_87012178 Customer Open Item Customer Open Item SAP Standard
Analysis (Overdue Items Analysis (Overdue Items
Balance) Balance)
S_ALR_87012198 List of Customer Cleared List of Customer Cleared SAP Standard
Line Items Line Items
S_ALR_87012199 List of Down Payments List of Down Payments SAP Standard
open at key

Sap Fico BBP Sample Up To Date PDF

Hochgeladen von

Dokumentinformationen

Originaltitel

Copyright

Verfügbare Formate

Dieses Dokument teilen

Dokument teilen oder einbetten

Freigabeoptionen

Stufen Sie dieses Dokument als nützlich ein?

Sind diese Inhalte unangemessen?

Copyright:

Verfügbare Formate

Sap Fico BBP Sample Up To Date PDF

Hochgeladen von

Copyright:

Verfügbare Formate

Business Blueprint

Revision Action taken Preceding New Revision

Related Documents/ References

Sl. No. Title Version Author

Role Name Signature Date

The FinancialsBlueprint consists of 10 chapters in the order as mentioned below:

1. Organization Structure: That describes the organization structure to be configured in SAP.

1.2. COMPANY CODE

Sr. No. Company Code Description

1.4. CREDIT CONTROL AREA

Sr. No. Credit Control Area Description

Sheenlac Profit Centers.xlsx

 Fiscal year and Fiscal year variant

 Posting period variant

Sr. No. Posting period variant Description

 At the month end next posting period should be opened

Docu. Type Descriptio No. Range From To Number External Reverse

ü The interval in which the account number must be

ü Which fields are suppressed when creating and

ü It enables you to control the layout of screens.

CREATION OF GL ACCOUNT MASTER RECORD

2.2.4. General Master Data

 Posting information (for example, capitalization date)

 Time-dependent assignments (for example, cost center)

 User fields/evaluation groups etc.

2.3. BANK MASTER

Bank is used to handleDetails

Sphinax Chemicals Pvt. Ltd.

2.4. MATERIAL MASTER

The material master

HDFC Bank 00040330002962 Current A/c

The South Indian 0138073000001792 Current A/c

The South Indian 0138073000001793 Current A/c

The South Indian 0127073000001413 Current A/c

BDC/LSMW will be created to upload material master.

 Fields can be defined as optional or mandatory at creation of master data

 Which partner functions are valid

 Whether the business partner is a one-time vendor

The following vendor account group will be maintained.

2.6. CUSTOMER MASTER

 Create a new account with template

 Set the deletion indicator

 Fields can be defined as optional or mandatory at creation of master data

 Which partner functions are valid

 Whether the business partner is a one-time customer

Data in the customer master is stored in 3 views:

Customer Credit Master

Summarized expectations from the new system:

 System to facilitate the parking of transaction and to be posted on specific approvals

 Integration to other modules with real time

 Financial statements as and when required

 Consolidation at group level

 Processing of foreign currency transactions

 Foreign exchange transaction with gain loss information is required

 On-line data entry validation and correction facility

 To facilitate the month closing activities

3.2. SOLUTION IN SAP –(TO BE):

 Banking and Cash Transactions

Other G/L Transactions:

A document consists of a document header and line items.

 Items with customer / vendor items(in Accounts Receivable &Accounts Payable)

 New line items can be added.

 A line item before posting may be deleted if required.