1. Introduction to SAP R/3

2. Introduction
SAP – Systems, Applications and Products in Data Processing
Standard Package
Satisfies general business processes
Can be configured in multiple areas and adapted to the specific needs of a company
Market leader in the development of standard applications

3. SAP R/3’s Integrated Modules

4. SAP R/3’s Integrated Modules
All business areas access the same database
Eliminates redundant data and communications lags
Sales & Distribution (SD)
Records sales orders and scheduled deliveries.
Customer Info, pricing, delivery details, billing etc
Materials Management (MM)
Manages the acquisition of raw materials from suppliers (Purchasing)
Handling of Raw Materials Inventory
Production Planning (PP)
Maintains production information
Quality Management (QM)
Helps plan and record quality-control activities, such as product inspections and material certifications
Plant Maintenance (PM)
Allows for planning for preventative maintenance of plant machinery and managing maintenance resources to minimize equipment downtime

5. SAP R/3’s Integrated Modules
Human Resources (HR)
Facilitates employee recruiting, hiring, and training.
Includes payroll and benefits
Financial Accounting (FI)
Records transactions in the general ledger accounts.
Generates financial statements for external reporting purposes
Controlling (CO)
Used for internal management purposes.
Manufacturing costs are assigned to products and to cost centres
Facilitates cost analysis
Asset Management (AM)
Management of fixed-asset purchases (Plant & Machinery) and related depreciation
Project System (PS)
Planning and control over new R&D, construction and marketing projects.
Allows for costs to be collected against a project
Frequently used to manage the implementation of the SAP R/3 system
Workflow (WF)
Automation of activities in R/3
Performs task-flow analysis and prompts employees (via ) if action is required
Industry solutions (IS)
Contains R/3 configuration settings that SAP has found appropriate for particular industries.

6. Unique Features of SAP R/3
Original system targeted very large companies
Acquiring an R/3 system is very expensive
Modular design is based on business processes
Design incorporates “Best Practices”

7. ERP Basics
Organization levels and master data provide the framework that supports the business transactions.
Reporting allows you to view master data, as well as the output of business transactions.
Important to understand the fundamental concepts or organizational levels, master data, transaction data and reporting.

8. Organizational Levels

9. Organizational Levels

10. Organizational Levels
Company’s structure is mapped to SAP applications using organizational Units
Used to represent the enterprise structure in terms of legal and/or business-related purposes.
Client > Highest-level unit of all organizational elements and represents the enterprise group
Company Code is a unit included in the balance sheet of a legally-independent enterprise and is the central organizational element of Financial Accounting
Sales Organization is the central organizational element in the context of Sales and Distribution. Division is used to represent product line
Plant is the central organizational unit in the context of Production Planning. A plant can manufacture products, distribute products or provide a service
Storage Location within a plant is used in the context of Inventory Management

11. Organizational Levels Sales Areas

12. Organizational Levels Plants

13. Purchasing Organizations

14. Master Data

15. Master Data Master Data:
Data which is used long-term in the SAP System for several business processes. Eg. Customers, materials, and vendors
Contains key information that defines the business relationship between a company and its customer
Used to support execution of key business processes such as customer requests, deliveries, invoices and payments

16. Transactions

17. Transactions
Applications programs which execute business processes in the SAP systems such as creating a customer order, posting an incoming payment, or approving a leave request
Document: A data record that is generated when a transaction is carried out
Document generated by transaction contains all relevant pre-defined information from the master data and organizational elements

18. Purchasing
From a logistical point of view, requirements planning is carried out first of all. To do this, the
responsible department can register a materials requirement manually to Purchasing using an order
requirement. It is possible to have the order requirement automatically created by the system.
PURCHASE ORDER HANDLING: The system provides you with entry tools when creating ORDERS. The
required entry data such as supplier, material, plant and other data relevant to the organization of
purchasing must be provided.
When goods are received, the system checks, among other things, the quantity of goods received
against the order quantity. A material document is created in MM to update the inventory. At the
same time, a document is created in FI with which the evaluated goods are posted to the material
stock account or the consumption account (debit) and to a goods receipt / invoice receipt account
(credit).
After the invoice has been received in the ,Invoice Verification, the Vendor Invoice is checked as
to the correctness of computation and content. All of these purchasing processes are settled in
Logistics. The vendor invoice is posted in MM and, at the same time, a document is created in FI
with which the invoice amount is posted to the goods receipt / invoice receipt account (debit) and the
vendor account (credit). The goods receipt / invoice receipt account is used to make sure that a
goods receipt is executed for every invoice and vice versa.
The Payment Processing usually takes place in Financial Accounting. It is here that decisions are
made about the payment process, such as, for example, the payment methods and the bank
settlement

19. Process Overview
From a logistical point of view, requirements planning is carried out first of all. To do this, the responsible department can register a materials requirement manually to Purchasing using an order requirement. It is possible to have the order requirement automatically created by the system.
PURCHASE ORDER HANDLING: The system provides you with entry tools when creating ORDERS. The required entry data such as supplier, material, plant and other data relevant to the organization of purchasing must be provided.
When goods are received, the system checks, among other things, the quantity of goods received against the order quantity. A material document is created in MM to update the inventory. At the same time, a document is created in FI with which the evaluated goods are posted to the material stock account or the consumption account (debit) and to a goods receipt / invoice receipt account (credit).

20. Process Overview
After the invoice has been received in the ,Invoice Verification, the Vendor Invoice is checked as to the correctness of computation and content. All of these purchasing processes are settled in Logistics. The vendor invoice is posted in MM and, at the same time, a document is created in FI with which the invoice amount is posted to the goods receipt / invoice receipt account (debit) and the vendor account (credit).
The goods receipt / invoice receipt account is used to make sure that a goods receipt is executed for every invoice and vice versa.
The Payment Processing usually takes place in Financial Accounting. It is here that decisions are made about the payment process, such as, for example, the payment methods and the bank settlement

21. Sales Order Process
The sales order is the basis of the sales process. Many different scenarios can be settled via the sales
order in SD. Two scenarios which are typical for Accounting are introduced here as an example: The
anonymous Sale of Products ex Stock and the made to order production using generation of a service as an example.
Product sale ex stock: In this process, a sales order is created for material which is kept in inventory.
Costs and revenues are derived automatically from the material production costs or from the SD
sales prices. An outbound delivery document is created. The delivery cannot be billed until the
goods have been removed from the stock and posted as goods issue. You can create a Transport Order that generates a transfer order. The required goods are removed from the stock and prepared
for delivery. The goods to be delivered are posted as Goods Issue. In MM, a goods issue document
and an accounting document in FI are created. The last step in the sales and distribution process is
Billing. An invoice document is created in SD and a printed invoice is sent to the customer. Billing
is also the point when revenues are transferred to Controlling. When Paymenthas been made by the
customer, you receive your money and post the receipt of payment in FI.
Producing a service represents, in contrast to ex stock sales, a direct Service Generation Process
that can also be displayed via a sales order item. The sales order item is a cost bearer. This means
that the costs, and also the revenues, can be posted individually and directly on the SD item. The
steps incoming orders, billing, payment are nearly all identical to the steps in sales ex stock.
However, in this services example, transport and delivery do not apply. The cost bearer sales order
item can be posted for all transactions of the Service Generation directly. When the service is
completed, you can pass on the costs and revenues to the profitability analysis (CO-PA) via the
Order Settlement.

22. Sales Order Process
The sales order is the basis of the sales process. Many different scenarios can be settled via the sales order in SD
Sale of products ex stock
Service order
Sales order is created for material in inventory (MM)
Costs and revenues are derived automatically from the material production costs or from the SD sales prices. (CO)
Outbound delivery document is created
Delivery cannot be billed until the goods have been removed from the stock and posted as goods issue
Last step is billing where an invoice document is created in SD
Customer Payment is posted in FI

23. Sales Order Process
Producing a service represents, in contrast to ex stock sales, a direct Service Generation Process that can also be displayed via a sales order item
The sales order item is a cost bearer
This means that the costs, and also the revenues, can be posted individually and directly on the SD item
Incoming orders, billing, payment are nearly all identical to the steps in sales ex stock.
Transport and delivery do not apply
When the service is completed, you can pass on the costs and revenues to the profitability analysis (CO-PA) via the Order Settlement