Financial Reports

EGN 5622 Enterprise Systems Integration

Spring, 2013
Financial Reports

Concepts & Theories

Financial Reports
Financial Reporting in Enterprise Systems (ES)
can be classified as either internal reporting, or
statutory (external) reporting.
Modern management goals aim at real-time
decision making, supported by the increased use
of online reporting, interactive analysis, and
intuitive reporting.
While companies are required to deploy ES to
handle basic business transactions, they also
need to efficiently retrieve transactional data in
real-time of a specific information structure
around cross-functional business processes.

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 Financial Reports
Reporting
Internal Types External
Reporting Reporting

ES
Database

Real time database, External Interfaces,

ready to supply with
ready to download
Integrated Information
across business reports in formats
processes
ES
Reporting
Features

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Financial Reports (- continued)
Internal Reporting:
Provides reports that meet a
wide range of internal
informaton needs and enable
managerial decision-making.
Examples: inventory stock
overview and plant
maintenance reports
Integrated Information:
Supplies real-time information
that is fully integrated across
cross-functional business
processes and uses the same
underlying data.
External Reporting
Provides reports to meet
regulatory and external
reporting requirements.
Examples: balance sheet,
income statement
External Interface:
Enables download of report
lists to several file formats
including spreadsheet
applications such as Microsoft
Excel. Supports other external
interfaces including
e-mail, Internet, PDAs, and
print devices
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 Target Audience
Internal External
Executives Legal Authorities
Senior Management Banks
Account managers Auditors
Administration Staff Shareholders
Employees Insurance
Taxing Authorities
Media
Financial Analysts

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The Rushmore Group, LLC 2008. All
January 2008 rights reserved. 6
Financial Reports (- continued)
Guidelinesfor efficient and cost-effective
reporting processes

Ensure optimal decision making through the

improved use of information

Reduce data complexity and promote handoffs

through smooth data flow

Concentrate on data analysis instead of

scanning printed reports

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Financial Reports (- continued)
Reporting is a tool:
through which internal and external stakeholders
can understand the organizations financial
performance as a result of the business decisions
made by management in the period defined

Two categories of financial accounting

reports:
displaying account information, and
generating financial statement.

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Financial Reports (- continued)

Accounting Information
Account information can be obtained at three
levels according to the Introduction to Financial
Accounting:

balance display,
line item list, and
original FI document.

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Financial Statements
The goal of financial accounting is to report data
in order to meet legal and regulatory
requirements.

The reporting takes the form of financial

statements including
Balance sheet
Income statement (profit and loss), and
Cash Flows statement

The specific accounts that need to be included in

these statements are determined by the external
requirements.

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Financial Statement
Financial statements can be generated for
different organizational levels including one or
more company codes and business areas.

Financial statements are created from financial

statement versions.
A financial statement version is a hierarchical grouping of
general ledger accounts that must be included in the
financial statement.
Several financial statement versions can be defined, and
each is defined to meet different reporting requirements.

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Financial Statement
The balance sheet summarizes
Assets,
Liabilities, and
Owners equity of a business at a point in time.

The income statement summarizes

revenues
expenses of a firm over a particular period of
time
incomes before and after tax

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Financial Statement
A conceptual framework for financial analysis
provides the analyst with an interlocking means
for structuring the analysis.

In the analysis of external financing for example, one is

concerned with firms needs for funds, its financial
condition/performance, and its business risk.

Upon analysis of these factors, senior managers are able

to determine the firms financial needs and to negotiate
with outside suppliers of capital.

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Financial Statements
Balance sheet accounts include assets,
liabilities, and equity.

Assets = Liability + Equities

Profit and loss accounts include revenue

and expenses within a given period of time
(e.g., monthly, quarterly, or yearly)

Cash Flows (Statement)

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Balance Sheet Assets
Assets are things of value that a company
owns or controls that accountants have
agreed to measure in monetary terms.
Examples of these accounts include:
Current assets:
Cash
Accounts receivables
Inventory
Prepaid expense
Fixed assets
Land
Building
Equipment 15
Balance Sheet Liabilities
Liabilities are things that a company owes
or must provide services in order to settle
that accountants have agreed to measure
in monetary terms.
Examples of these accounts include:
Accounts payable
Notes payable
Bonds payable
Unearned revenue

SAP AG - University Alliances and

The Rushmore Group, LLC 2008. All
January 2008 rights reserved. 16
Balance Sheet Equity
Equity is simply the mathematical
difference between assets and liabilities.

It includes the monetary amounts

collected with respect to
all preferred and common stock transactions,
the aggregate net income reported since
organization of the company, and
a reduction for dividends that have been paid
to stockholders.

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Balance Sheet Sample

Assets Liabilities
Cash 1,000 Accounts Payable 2,250
Accounts Receivable 3,000 Taxes Payable 250
Equipment 500 Total Liabilities 2,500
Total Assets 4,500
Equity
Common Stock 1,750
Retained Earnings 250
Total Equity 2,000

Total Liabilities
and Equity 4,500

2007 by SAP AG. All rights

reserved. SAP University Alliance.
January 2007 (v1.0) The Rushmore Group, LLC 18
Balance Sheet

SAP AG - University Alliances and

The Rushmore Group, LLC 2008. All
January 2008 rights reserved. 19
Income Statement
Presentation of an organizations Revenues,
Expenses, and Income for a given period of
time (e.g., monthly, quarterly, or yearly)
Revenues, in a simple sense, are inflows of cash
as a result of selling activities or the disposal of
company assets
Expenses, in a simple sense, are outflows of cash
or the creation of liabilities to support company
operations
Net Income before TAX= RevenueExpenses
Net Income after TAX= Revenue-Expenses -Tax

2007 by SAP AG. All rights

reserved. SAP University Alliance.
January 2007 (v1.0) The Rushmore Group, LLC 20
Income Statement Revenues

The monetary amounts collected from

customers in settlement for goods
purchased from our company or services
rendered by our firm to them during the
current fiscal year.

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The Rushmore Group, LLC 2008. All
January 2008 rights reserved. 21
Income Statement Expenses
The monetary amounts paid to vendors in
settlement for goods purchased by
company or services rendered to our firm
by other companies during the current
fiscal year.
Cost of Goods Sold (COGS)
Payroll
Utilities
Taxes
Interest

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The Rushmore Group, LLC 2008. All
January 2008 rights reserved. 22
Income Statement - Sample

Revenue
Sales 11,000
Deductions -750
Total Revenue 10,250

Operating Expenses
Cost of Goods Sold 4,500
Operating Expenses 3,750
Total Expenses 8,250

Net Income Before Taxes 2,000

Taxes -750
Net Income 1,250

2007 by SAP AG. All rights

reserved. SAP University Alliance.
January 2007 (v1.0) The Rushmore Group, LLC 23
Income Statement

SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights
January 2008 reserved. 24
Statement of Cash Flows
Considers the associated
changes, both inflows
and outflows, that
have occurred in cash
arguably the most
important of all assets
over a given period of
time (e.g., monthly,
quarterly, or annually)

2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore
January 2007 (v1.0) Group, LLC 25
 Financial Ratios
Financial ratios are the tools used to analyze financial condition and
performance. Financial ratios can be divided into five basic types:
Liquidity,
leverage (debt),
coverage,
activity, and
profitability.
No one ratio is itself sufficient for realistic assessment of the financial
condition and performance of a firm. With a group of ratio, reasonable
judgments can be made.

Comparing one company with similar companies and industry standards

over time is crucial. Such a comparison uncovers leading clues in
evaluating changes and trends in the firms financial condition and
profitability. This comparison may be historical, but it may also include an
analysis of the future based on projected financial statements.
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Financial Ratios

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Financial Ratios

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Financial Ratios

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Financial Ratios

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Financial Ratios

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Financial Reports

SAP Implementation
 SAP Module View
Financial
Sales &
Accounting
Distribution
Materials Controlling
Mgmt.

R/3
Production Fixed Assets
Planning Mgmt.

Human
Integrated Solution
Project
Resources Client / Server System
Quality Open Systems
Maintenance Workflow
Plant Industry
Management Solutions
SAP Reports Tools
SAP Standard Reports (in focus)
SAP Report Painter Report
SAP Query
ABAP Report
Data Warehouse (to introduce)

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SAP Standard Reports
SAP has thousands of reports available to use.

Each report can be customized by the user to

meet different report requirements, by setting
different report selection criteria.

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SAP Report Painter Report
Used to deliver many tabular style management
reports to produce various financial statements.

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SAP Query
Used to run queries on SAP tables to return data.

Before engaging in SAP Query, the user should

look at the available standard reports in SAP;
those reports that are based on the same tables
should be able to return the same type of data
the user is looking for.

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ABAP Report
ABAP/4 (Advanced Business Application
Programming) is used to code SAP software and
can also be used to customize reports.

The downside of ABAP may not be automatically

compatible with upgraded versions.

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SAP Data Warehouse
SAP Netweaver Business Intelligence (BI/BW) is
SAPs own data warehousing tool

One benefit of using a data warehouse is that it

reduces the load on SAP ECC (ERP Central
Components) system.

The downside is that the data warehouse solution

will be only updated overnight, then the data to
be used may not be updated to the moment.

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SAP Standard Reports
Three basic steps to running a standard
report:
1. Access the report (find the SAP
command transaction (T) code)
2. Enter selection criteria
3. Execute the report

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SAP Standard Reports
Accounts Payable Reports
Accounts Receivable Reports
Asset Accounting Reports
General Ledger Reports
Cost Centers:
Actual/Plan/Variance Report
Profitability Analysis:
Plan/Actual Comparison Report
Balance Sheet
Profit and Loss Statements

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Accounts Payable Reports
It revolves around the reporting of
invoices due for payment.

The information is important from a cash

flow point of view, as each vendor invoice
contains payment terms that determine
when the invoice is due for payment.
Vendor line item report shows all the vendor
items.

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Useful Reports in AP Area

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Vendor Document Display

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Accounts Receivable Reports
It revolves around the reporting of unpaid
(customer) items. This is more of an internal
requirement than an external requirement. The
information is important from a cash flow point of
view.
Customer line item report shows all the
customers items.
Customer balance statistics report monitors
customers payments, especially pass-due
items.

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Accounts Receivable Reports

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Customer (Receivable) Balance Display

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Customer Line Item Display

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Customer Document Display

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Asset Accounting Reports
Asset Explorer is the primary tool used
to run asset accounting reports.

It provides analysis for a particular asset.

In addition, users can use its Asset History

Sheet, which is very detailed asset register.

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Asset Accounting Reports

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General Ledger Reports
The most important reports of general
ledger are:
balance sheet
income statement, and
cash flow.

They can be generated monthly, quarterly

and annually

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General Ledger Reports

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Cost Centers: Actual/Plan/Variance
Report (internal report)

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Profitability Analysis: Plan/Actual
Comparison Report (internal report)

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Profitability Analysis: Plan/Actual
Comparison Report (in detail)

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Balance Sheet

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Balance Sheet (Assets)

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Balance Sheet (Liabilities & Equity)

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Income Statements

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Exercises: (Due date 2/25/2013)
FI 4A: Post Transfer of funds to Bank Account
MM6: Create a new vendor
MM7: Create material master for trading goods
MM8: Display Stock/Requirements list
MM9: Create a purchase requisition
MM10: Display stock/requirements list
MM11: Create request for quotation for your requisition
MM12: Maintain quotation from vendors
MM13: Evaluation quotations on price
MM14: Rejecting quotations
MM15: Create a purchase order referencing an RFQ
MM16: Create a goods receipt for the purchase order
MM17: Verify the purchase receipt of goods
MM18: Create an invoice receipt from vendor
MM19: Display purchase order history
Exercises:
MM20: Create a goods receipt for purchase order
MM21: Create an invoice receipt from vendor
MM22: Post payment to vendor
MM23: Display vendor line items
MM24: Display and review general ledger account balances and
individual line items
FI 17: Run balance sheet/profit and loss statements
FI 18: Assign General Ledger Accounts to Financial Statement
Version
FI 19: Run Balance Sheet / Profit and Loss Statements