http://academic.uofs.edu/faculty/gramborw/sap/sapguide.

htm

Traditional Model

The traditional model used to manage a business is based on the

paradigm of the General Ledger and the calculation of Net
Earnings for the stockholder. All decision making is based on the
predicted effect the outcomes will have on earnings and the
attendant stock price. This model has several serious
shortcomings:

• Ignores crucial non-monetary factors such as quality and

customer satisfaction. Transactions and data only enter the
system when monetary values can be assigned.
• Serious Lags exists making the paradigm better at autopsies
than dynamic management.
• Values are subject to arbitrary allocations related to
reporting requirements.
• System depends on values based on currencies valued in the
past.

EMT Model

• This model seeks to maximize customer perception of

value added through the use of best business practices and
real time control.
• Managers provide creativity and direction.
• This is generally equivalent to increasing customer demand
inelasticity and simultaneously minimizing costs.
Main Components

• Customer Relations
o Sales Support
o Delivery
o Billing
o Credit
• Logistics
o Procurement
o Production
o Materials Mgt.
• Human Resources
o Payroll
o Organization
o Hiring
• Treasury
o Commitments
o Investments

o Currencies
What is SAP?

SAP is the leading Enterprise Information and Management

Package worldwide. Use of this package makes it possible to track
and manage, in real-time, sales, production, finance accounting and
human resources in an enterprise.

What is the connection between the Kania School of

Management and SAP America?

SAP America and the Kania School of Management have entered

an educational alliance in which SAP provides the software and
training for faculty, the Kania School provides the computer
hardware and network assets. The end result of the the alliance is
the integration of the use of the SAP system into business courses
so that students can develop an awareness of the Enterprise
Management Systems.

What Makes SAP different?

Traditional computer information systems used by many businesses

today have been developed to accomplish some specific tasks and
provide reports and analysis of events that have already taken
place. Examples are accounting general ledger systems.
Occasionally, some systems operate in a "real-time" mode that is,
have up to date information in them and can be used to actually
control events. A typical company has many separate systems to
manage different processes like production, sales and accounting.
Each of these systems has its own databases and seldom passes
information to other systems in a timely manner.

SAP takes a different approach. There is only one information

system in an enterprise, SAP. All applications access common data.
Real events in the business initiate transactions. Accounting is done
automatically by events in sales and production. Sales can see when
products can be delivered. Production schedules are driven by
sales. The whole system is designed to be real-time and not
historical.

SAP structure embodies what are considered the "best business

practices". A company implementing SAP adapts it operations to it
to achieve its efficiencies and power.

The process of adapting procedures to the SAP model involves

"Business Process Re-engineering" which is a logical analysis of
the events and relationships that exist in an enterprise's operations.

SAP Application Modules

SAP has several layers. The Basis System is the heart of the data
operations and should be not evident to higher level or managerial
users. Other customizing and implementation tools exist also. The
heart of the system from a manager's viewpoint are the application
modules. These modules may not all be implemented in a typical
company but they are all related and are listed below:

• FI Financial Accounting--designed for automated

management and external reporting of general ledger,
accounts receivable, accounts payable and other sub-ledger
accounts with a user defined chart of accounts. As entries are
 made relating to sales production and payments journal
entries are automatically posted. This connection means that
the "books" are designed to reflect the real situation.
• CO Controlling--represents the company's flow of cost and
revenue. It is a management instrument for organizational
decisions. It too is automatically updated as events occur.
• AM Asset Management--designed to manage and supervise
individual aspects of fixed assets including purchase and sale
of assets, depreciation and investment management.
• PS Project System--is designed to support the planning,
control and monitoring of long-term, highly complex projects
with defined goals.
• WF Workflow--links the integrated SAP application modules
with cross-application technologies, tools and services
• IS Industry Solutions--combine the SAP application modules
and additional industry-specific functionality. Special
techniques have been developed for industries such as
banking, oil and gas, pharmaceuticals, etc.
• HR Human Resources--is a complete integrated system for
supporting the planning and control of personnel activities.
• PM Plant Maintenance--In a complex manufacturing process
maintenance means more than sweeping the floors.
Equipment must be services and rebuilt. These tasks affect the
production plans.
• MM Materials Management--supports the procurement and
inventory functions occurring in day-to-day business
operations such as purchasing, inventory management,
reorder point processing, etc.
• QM Quality Management--is a quality control and
information system supporting quality planning, inspection,
and control for manufacturing and procurement.
• PP Production Planning--is used to plan and control the
manufacturing activities of a company. This module includes;
bills of material, routings, work centers, sales and operations
 planning, master production scheduling, material
requirements planning, shop floor control, production orders,
product costing, etc.
• SD Sales and Distribution--helps to optimize all the tasks and
activities carried out in sales, delivery and billing. Key
elements are; pre-sales support, inquiry processing, quotation
processing, sales order processing, delivery processing,
billing and sales information system.

Each of
these Modules may have sub-modules designed for specific tasks as
detailed below.

System-Wide Features

SAP uses certain system wide features that should be understood at

the outset. These are used to logically, safely and flexibly organize
the data in a business enterprise.

• Customizing-- is the configuring of the system to represent

your organization's legal structure, reporting requirements and
business processes. Internal reporting is a managerial tool in
the daily operations. External reporting is required by
governmental units controlling the legal structure of the
corporation, such as, the IRS state taxing authorities, SEC etc.
• Organizational Elements
o Financial--
 client is a legal and organizationally independent
unit at the highest level in SAP
 company is an independent legal entity within a
client
 business areas are used to produce profit and loss
statements and balanced sheets across marketing
lines
o Materials Management
 Purchasing units
 Plants
o Sales and Distribution
 Sales Organization
 Distribution channel
 Division
• Master Data is records that remain in the database over an
extended period of time. Examples:
o Customer Master
o Vendor Master
o Material master
o Account Master

This structure eliminates redundant data and is shared by all

SAP Modules. It is a critical aspect of the robustness of the
system.
 • Employee Self Service--your employees have access to the
own HR records over the Internet.
• Classification is the assignment of objects to a class. Each
class has standard characteristics.
• Matchcodes are query tools used to find specific information
using search methods.
• Security is administered for objects, profiles and
authorizations. Users are only authorized to see or change the
parts of the system required by their job responsibilities.

Business Processes and SAP Functionality

In order to understand a system like SAP a thorough understanding

of the events and relationships that take place in a business is
required. It is not enough to just realize the Sales, Production,
Finance and Accounting have jobs to do in a business. The exact
details of each action, the timing of that action and its
interrelationships with every other process must be understood. In
many large operations there may be no person that has a complete
grasp of the situation. Before an operation can be automated or
computerized a thorough study of the business must be undertaken.
This task is called Business Process Engineering.
Sequential Walk Through

• Sales
o Pre-sales activity--planning and availability support for
the sales personnel
o Sales Order--The actual entry of the sales order into the
system done by the salesperson at the point of sales
perhaps using a PC and Internet connections.
o Determining where the most efficient source of the
ordered product is in inventory and shipping it.
o Delivery
o Customer Billing
o Customer Payment
• Production
o Sales and Operations Planning SOP where the sales
forecasts are used in a production planning model to
check feasibility.
 o Master Production Scheduling MPS--The actual plan for
the whole production process
o Material Requirements Planning MRP--Where the
production plan is actually converted into raw materials
input requirements.
o Planned Order--When materials are available and
capacity exists this plan is created and then converted
into a
o Production Order.
o Shop Floor Control where the actual production takes
place and is registered into the system as finished goods.
• Purchasing
o Requisition--Once the Production manager plans to
manufacture something a requisition for the raw
materials required but not on hand must be prepared.
o Vendor Selection--made by the purchasing department
o Purchase order sent
o goods receipt increasing inventory
o Invoice verification as it is received from vendor
o Payment to vendor.
• Finance and Accounting
o Sales events must be captured at the proper time into the
ledger system
o Inventory must be adjusted to match goods shipped
o Inventory must be adjusted to match raw materials
received
o Inventory must be adjusted to move value from raw
materials to work in process
o Inventory must be adjusted to increase finished goods
when they are produced
o Accounts Payable must be set up for purchases
o Accounts Receivable must reflect goods billed but not
yet paid for

Business Process Engineering must not only identify all these steps
but must also find the most efficient way to minimize redundant
actions. For example, when sales are made, inventory and
manufacturing plans should be automatically updated. When
manufacturing plans are updated raw materials should be
automatically ordered from vendors. When finished goods are
shipped customers should be automatically billed at the same
instant. Real situations are far more complex than the simple
explanation above.

Quick Tour of the SAP User Interface

The SAP R/3 system presents a Windows interface with several of
the familiar Windows functions for screen manipulation. The
apparent simplicity of the interface hides the power of the menus
residing within the menubar at the top of the screen. The initial
screen shows a menubar with the following selections. The first
level sub menus are listed below to give you an idea of where to
start:

• Office
o Workplace
o Telephone Integration
o Appointment Calendar
o Room Reservations
o Start Workflow
o Business Documents
• Logistics
o Materials Management
o Sales/distribution
o Logistics Execution
o Production
o Production-process
o Plant Maintenance
o Customer Service
o Quality Management
o Logis. controlling
o Project Management
o Environment Health & Safety
o Central Functions
• Accounting
o Financial Accounting
o Treasury
o Controlling
o Enterprise Control
o Investmt Mgt.
 o Project management
o Real Estate
• Human Resources
o Managers Desktop
o Personnel admin.
o Time management
o Payroll
o Training and Event Management
o Organizational Management
o Travel
o Information system
• Information Systems
o Executive Information Systems
o Logistics
o Accounting
o Human Resources
o Project System
o Ad Hoc Reports
o General Report System
• Tools
o ABAP/4 Workbench
o Accelerated SAP
o Administration
o ALE
o Business Communication
o Business Documents
o Business Framework
o Business Workflow
o CCMS
o Web Development
o SAPScript
o Hypertext

o Find
FI-CO OVERVIEW

SAP R/3 Organizational elements for Financials

Reporting and Analysis

OBJECTIVES

• Define the SAP R/3 organizational elements for Financial

reporting and control
• Identify financial integration points with the logistics chain
• Execute financial and management reports in the SAP R/3
system
Financial Accounting is broken down into the following
submodules:

• General Ledger accounting

• Accounts Receivable
• Accounts Payable
• Legal Consolidations
• Special Purpose ledger
• Asset Accounting

Controlling is broken down into the following submodules:

• Overhead Cost Controlling

• Product Cost Controlling
• Sales and Profitability Analysis
• Activity Based Costing
Views of the the company's financial situation and performance
Enterprise
an enterprise-wide view of financial reporting
controlling (EC)
control of cash, banking, securities, and funds
Treasury (TR)
management
Financial core financial accounting integrated with
Accounting (FI) subledgers
management accounting for tracking overhead
Controlling (CO) and profitability as well as production process
control
Investment capital investment management such as
Management (IM) construction projects or capitalization of assets
Summary of Organizational Units in SAP
Financial Accounting
Chart of accounts Contains all account numbers
Group Company Consolidation of company codes
Independent balancing unit used for legal
Company Code
reporting
Business Area Used to create internal balance sheets
Controlling
Controlling area Organizational unit for cost accounting
Cost center Organizational unit for cost control
Profit center Organizational unit for internal profit analysis
SAP R/3 Organizational elements for Financials
Reporting and Analysis
• External accounting is directed "outwards" and is regulated
strictly by tradition and law to ensure comparability.
o Principles of double entry bookkeeping
o Profit and loss system
o Period based accounting
• Internal accounting is purely for internal use and serves to
control and manage the organization. It is constructed along
the lines set by management and must be flexible.
The Audit Trail

• Every transaction in the system is represented by a document

• A document records a business transaction
• Documents are accessible in real time and are stored centrally
• Data resulting from transactions posted to the system can be
viewed at every level of detail from the original document to
the final report.
• The system provides an audit trail of the reporting
information through the drill down capabilities.

General Ledger and its Subledgers

• Transactions that affect financials update the General Ledger

via subledgers that are directly integrated.
• Subledgers reduce the number of General Ledger accounts
shown on the Financial Statement.
 • The balances of subledger accounts are automatically
updated in the General Ledger through a Reconciliation
Account.

Accounts Receivable Process

 The Accounts Receivable process starts with
the shipment of the goods to the customer.
When this occurs, the shipping department
automatically causes SAP to send a bill to
the customer by integrating customer master
data with the shipment data. This transaction
also posts to the Accounts Receivable
subsidiary ledger and also to the
reconciliation account. The billing to the
customer may be on paper or by EDI.

This entry into the accounts receivable

system sets up the account for the terms of
sale and also starts the clock running for the
dunning procedure.

When the customer pays the bill, which may

be by check or to a lockbox or by electronic transfer and EDI, the remittance advice
applies the cash paid to the open items on the account.

Accounts Receivable Management with SAP

Accounting Organizational Structure

Some important concepts:

• Client--A self contained unit for technical purposes. Usually refers to the overall
enterprise managed with SAP
• Chart of Accounts--The list of accounts that are posted to everyday.
• Legal Entity--A unit with external reporting requirements, usually a corporation.
• Business Area--A subdivision of a Company Code along the lines of the business,
or a division. Used for internal reporting and profitability analysis
Sales Areas: A sales area is a combination of sales organization, distribution channel and
division.
The Reconciliation Account and Subledgers:

• The General Ledger records all G/L accounts. The Chart of Accounts is used to
organize these accounts. The Income Statement and Balance Sheet are created
from the General Ledger
• Individual G/L reconciliation accounts are recorded in detail in the Subsidiary
Ledgers and summarized in the General Ledger. Important subledgers are
maintained for:
o Accounts Recievable--Customer Accounts
o Accounts Payable--Vendor Accounts
o Asset Accounting--Asset Accounts
• The balance of the G/L accounts is automatically updated when postings are made
to a subledger.
The Purpose and Operation of the Reconciliation Account

• The Reconciliation Account is managed as an ordinary account in the G/L

component.
• As in all G/L accounts there are two areas which contain master data:
o A chart of accounts area
o A company code specific area
• The chart of accounts area consists of specifications that are necessary for
functions across company codes. The company code-specific area contains data
that may be defined differently in each company.
• In all reconciliation account master records, line item display is deactiviated and a
special entry is made to indicate that the G/L account is a reconciliation account
• The required reconciliation account is entered in the master record of the
customer account.

Master Data

The concept of master data is an important one in data management. Although it may
seem complex at first glance it is the best method to eliminate duplication of data and to
ensure compatibility of data among transactions. Every customer has master data
associated with it. It is defined only once and in only one location, although there is a
hierarchy of where that data is stored.
 • The customer master record is made up of three main areas that contain the
following information:
o General Data including the customer's bank details [at the client level]
o accounting data [at the company code level]
o sales data [at the company code level
• Data that exists at the client level is available to all company codes. Since
numbers are assigned to accounts at this level, a customer receives the same
account number in all company codes.
• Individual company codes store their own information on customers at the
company code level.
• Before you create a new customer master record, you should check whether the
customer already exists in the system.

Details on Master Records

Account Groups:

• The Account group controls the numbering and screen layout of master records
• You can define several account groups for one account type (D,K,S)
• You must assign an account group to every master record.
Address and Communications:

On the first screen of the customer master record basic data on the customer is listed.
This includes addresses and important numbers for communication. This data is entered
at the client level. Additional information can also be entered at the company code level.
To prevent a customer from being created twice in your system, you need to determine
who in your organization is responsible for creating new customers. Initial contact with a
new customer will probably be made by the Sales Organization and the master record
will need to be completed by the accounting and finance functions.
Bank master data includes the following items to facilitate payments to or from the
customer by check or EDI.

Account Management and Reconciliation Account

On the next screen of the master record you store the information that is relevant to
accounting at the company code level. This is a critical link between the sales data and
the general ledger systems.
Payment Transaction Data:

The following screen sets the parameters for the accounts receivable administration of the
customer. Payment term groups are defined in the IMG and are assigned to this account.
Likewise, tolerance limits for over and under payments of items are defined in the IMG
and assigned to the account. The days specified for check cashing time are inmportant for
the treasury and cash management modules. There are also fields for payment methods
and lockbox codes which have been defined in the IMG and assigned to this account.
Dunning Data:

The next screen shows the entries for setting up dunning for the account.
Summary: Creating and maintaining customer master records are of critical importance in
SAP. New customer masters can be created by using a reference from another account
and simply changing the relevant data. Much of the data can be automatically filled in by
a pattern created by a Group key which can be selected at the beginning of the generation
process.

Navigation Guide
Accounts Receivable Structure and Master Data
Information about Posting
Retrieving Account Data
SD and Financial Accounting Integration
Lockbox Processing
Manual Postings
Dunning
Reporting and Information Systems
Return to SAP Flows Overview
Credit Management
CRM01

· Open order value

The open order value is the value of all order items which have not yet been delivered.

The open order value is based on confirmed quantifies (Confirmed quantities x Credit
price = Open order value of an order). An order which has been blocked due to a credit
check does not contain confirmed quantities. The open order value does not increase as
long as the block remains in place.

· Open delivery value

The open delivery value is the value of all delivery items which have not yet been billed.
· Open billing value

The open billing value is the value of all billing items which have not yet been transferred
to Accounting.

· Receivables from sales are included in total commitments as long as they have not been
indicated as disputed items. For more information, see the chapter on processing
incoming payments and commitments.

· Receivables from special G/L transactions are transferred from special commitments to
total commitments if they are relevant to credit limit, for example payments. For more
information, see the chapter on processing incoming payments and commitments.

The system updates values based on the payer.

CRM02

CRM03
CRM04
CRM05

• Use the system settings to specify when you would like to carry out a credit
control check. You could require that checks be carried out only during sales
order processing.
• Subsequent function in Sales and Shipping cannot be carried out as long as the
relevant document is blocked by a credit check.
• A check carried out at goods issue can no longer block the transaction as goods
issue is the final function in Shipping. If a credit check is carried during goods
issue and the transaction exceeds the credit limit, it is not posted for delivery. The
system issues an error message.

CRM06
The credit control area, the risk category of the customer and the business transaction all
influence the type and scope of automatic credit checking.

Credit groups combine different business processes that are to be treated in the same way
with regards to the credit check. These credit groups are assigned to the sales document
types and the delivery document types for which a credit limit check is to be carried out.

You determine for each item category, whether an item of that item category is included
in the credit functions. The credit management field must be activated for item categories
that are to be taken into account during the credit check.

CRM07
 • The customer credit exposure can be divided into a static part (open items, open
billing values and delivery values) and a dynamic part (open order value).
o The open order value comprises all partially delivered or undelivered
orders. It is accumulated for the material availability date within an
information structure in freely definable units of time or periods, ( day,
week, month).
o When defining the credit check, you specify a certain number of the
corresponding periods from which the date will be determined in the
future.
o This makes sure that sales orders planned in the future are not taken into
account when determining credit exposure.

• The 'actual date' in this example is the initial date for determining the open order
value on the credit horizon. The 'actual date' is the current date for each check. In
an order, it is the date that the order is created or changed. In a delivery, it is the
date that the delivery is created or changed.

CRM08
 • The sales order or delivery value may not exceed the specific value defined in the
credit check. This value is stored in the currency of the credit control area. It is
particularly applicable if a credit limit has not yet been defined for a new
customer. You can initiate this check using a risk category defined for a new
customer.

CRM09
 • When carrying out a check of this type, a credit check is triggered by changes
made in the document to values of any of the credit-sensitive fields. These fields
are proposed from the customer master record, and include, for example, terms of
payment and fixed value dates.

CRM10
 • Here you must specify a number of days. Without these 'buffer days' the system
will carry out the check as soon as it recognizes that the next check date has been
reached.

CRM11
 • The relationship between open items which are more than a certain number of
days overdue and the customer balance may not exceed a certain percentage.

CRM12
 • By specifying the number of days, you can determine the days that oldest open
items may be in arrears.

CRM13
 • Store the current dunning level in the customer master record with the company
code-specific data. If a customer reaches the dunning level, then the order is
blocked.

Finance Tables

AGKO Cleared Accounts

ANAR Asset Types

ANAT Asset type text

ANEK Document Header Asset Posting

ANEP Asset Line Items

ANEV Asset downpymt settlement

ANKT Asset classes- Description

ANLA Asset Master Record Segment

ANLB Depreciation terms

ANLC Asset Value Fields

ANLH Main asset number

AT02T Transaction Activity Category- Description

AT02A Transaction Code for Menu TIMN

AT10 Transaction type

AT10T Name of Transaction Type

BKDF Document Header Supplement for Recurring Entry

BKORM Accounting Correspondence Requests

BKPF Accounting Document Header

BLPK Document log header

BLPP Document log item

BLPR Document Log Index and Planned Order (Backflush)

BNKA Bank master record

BP000 Business Partner Master (General Data)

BPBK Doc.Header Controlling Obj.

BPEG Line Item Total Values Controlling Obj.

BPEJ Line Item Annual Values Controlling Obj.

BPEP Line Item Period Values Controlling Obj.

BPGE Totals Record for Total Value Controlling obj.

BPJA Totals Record for Annual Total Controlling Obj.

BSAD Accounting- Secondary Index for Customers (Cleared Items)

BSAK Accounting- Secondary Index for Vendors (Cleared Items)

BSAS Accounting- Secondary Index for G/L Accounts (Cleared Items)

BSEC One-Time Account Data Document Segment

BSEG Accounting Document Segment

BSID Accounting- Secondary Index for Customers

BSIK Accounting- Secondary Index for Vendors

BSIM Secondary Index, Documents for Material

BSIS Accounting- Secondary Index for G/L Accounts

CEPC Profit Center Master Data Table

CEPCT Texts for Profit Center Master Data

COBRA Settlement Rule for Order Settlement

COBRB Distribution Rules Settlement Rule Order Settlement

COKA CO Object- Control Data for Cost Elements

COSP CO Object- Cost Totals for External Postings

COSS CO Object- Cost Totals for Internal Postings

CRCO Assignment of Work Center to Cost Center

CSKA Cost Elements (Data Dependent on Chart of Accounts)

CSKB Cost Elements (Data Dependent on Controlling Area)

CSLA Activity master

FEBEP Electronic Bank Statement Line Items

FPLA Billing Plan

FPLT Billing Plan- Dates

GLPCT EC-PCA- Totals Table

KNA1 General Data in Customer Master

KOMK Pricing Communication Header

MAHNV Management Records for the Dunning Program

REGUT TemSe - Administration Data

SKA1 G/L Account Master (Chart of Accounts)

SKAT G/L Account Master Record (Chart of Accounts- Description)

SKB1 G/L account master (company code)

T003T Document Type Texts

T007S Tax Code Names

T087J Text

TAPRFT Text tab. for investment profile

TKA01 Controlling Areas

TKA09 Basic Settings for Versions

TKVS CO Versions

TZB0T Flow types text table

TZPAT Financial Assets Management product type texts

VBSEGS Document Segment for G/L Accounts Document Parking

VTBFHA Transaction

VTBFHAPO Transaction Flow

VTBFHAZU Transaction Activity

VTBFINKO Transaction Condition

VTIDERI Master Data Listed Options and Futures

VTIFHA Underlying transaction

VTIFHAPO Underlying transaction flows

VTIFHAZU Underlying transaction status table

VTIOF Options Additional Data

VWPANLA Asset master for securities