CMA Srushti Ashok Bedekar ( ACMA and SAP Certified Application Associate – Management Accounting)

(System Applications Products) What is SAP? (System Applications Products) SAP stands for Systems, Applications and Products in data processing. SAP is the fourth largest software company in the world. The SAP R/3 system is a business software package designed to integrate all areas of a business. It provides end to end solutions for financials, manufacturing, logistics, distribution etc. All business processes are executed in one SAP system and sharing common information with everyone. SAP is an Enterprise Resource Planning (ERP) system by SAP AG, company based out of Walldorf in Germany. AG is derived from the German word AKtiengesellschaft. According to German Language SAP Stands for Systeme, Anwendungen und Produkte in Der Datenverarbeitung. SAP software suite that is being implemented as part of re-engineering and Provides end to end solutions for financial, logistics, distribution, inventories. Present scenario large number of companies are using sap software for their day to day business activities. After the hugely successful R/3, SAP created more and more niche software like Customer Relationship Management (CRM), SRM, XI (now called Process Integration or PI) and once again living up to the standards of SAP by maintaining tight integration with their core ECC software. The newest version of the suite is SAP ECC 6.0.

Advantages of SAP :- SAP software manages these business management tasks in modules that all work together in one system by sharing information. Promoting consistent practice across an entire division No duplicate data Automate Project Monitoring and Multi dimensional and flexible reporting Standardization of business processes Make Planning, Scheduling, Tracking and Management easier leaving more time for you to perform value-added work Ability to provide clear cut job roles with authorizations Enabling integration with e-commerce Cost Savings on overheads such as Stationery, File Storage, etc Why – SAP R/3 software has been successful Multi-Lingual Secure Information

SAP R/1 :– The first version of SAP software was launched in and around 1972 known as the “R/1 system. R” stands for real-time data processing. it is one tier architecture in which three layers Presentation, Application and Database are installed in one system/server (one – Presentation + Application + Database) SAP R/2 :– In 1979 second version of SAP R/2 was released. with IBM’s database and a dialogue-oriented business application. SAP R/2 to handle different languages and currencies. R/2 is 2 tier architecture in which three layers Presentation, Application and Database are installed in two separate server. (Server one – Presentation, Server two – Application + Database SAP R/3 :– SAP upgraded R/2 to R/3. SAP R/3 is the client/server version of the software and it is 3 tier architecture in which three layers Presentation, Application and data base are installed in three server/system.

Why – SAP R/3 software has been successful Multi-Lingual Secure Information Multi-Currency Best business Practice Enterprise-Wide Real time processing with an integrated suite of client/server applications SAP R/3 Architecture SAP Systems contains three layers such as Presentation Layer, Application Layer and Database Layer. Presentation: – It is a layer where the user work with SAP GUI. It interacts with database layer via Application layer. 2. Application: – It interacts between presentation and database layer 3. Database: – It is a central database that stores all the data of ERP SAP Systems.

SAP R/3 Modules and Integration

Phases of Implementation Project

Phase 1 Project Preparation - The primary focus of Phase 1 is getting the project started, identifying team members and developing a high-level plan. Phase 2 Business Blueprint - The primary focus of Phase 2 is to understand the business goals of the company and to determine the business requirements needed to support those goals. Phase 3 Realization - The purpose of this phase is to implement all the business and process requirements based on the Business Blueprint. You customize the system step by step in two work packages, Baseline and Final configuration. Phase 4 Final Preparation - The purpose of this phase is to complete testing, end-user training, system management and cut over activities. Critical open issues are resolved. Upon the successful completion of this phase, you will be ready to run your business in your productive R/3 system. Phase 5 Go Live and Support - Transition from a project oriented, pre-productive environment to a successful and live productive operation. PDCA

Organizational Elements:- Company Code Business Area Chart of Account Functional Area Company Code in SAP is the smallest organizational unit of Financial Accounting for which you draw individual financial statements like Balance Sheet and Profit & Loss Account for purpose of external reporting. Business Area :- Business area is a separate area of operations or responsibilities of organizational units with in a company code and used for internal and external reporting . Different divisions of each business with in a legal entity are created as Business areas for reporting of each operational areas.

Chart of Accounts :- The chart of accounts ( COA ) is a list of GL accounts master record that are used by the organisation. A chart of accounts must be assigned to each company code Types of Chart of Accounts :- Operating chart of Accounts Country Specific chart of Accounts Group Chart of Accounts Operating chart of Accounts :- The operating chart of accounts contains the G/L accounts that uses for posting in company code for daily activities and used in both financial accounting and cost accounting Country Specific chart of Accounts The country-specific chart of accounts contains the G/L accounts needed to meet the country’s legal requirements Group Chart of Accounts :- The Group chart of accounts contains the G/L accounts that are used by the entire corporate group and this COA is used to consolidate the reports for the entire corporate group

Functional Area Functional Area is a organisational unit in accounting that classifies the expenses of an organisation by functions. The functional area is use to create P&L A/C in Financial Accounting using cost of sales accounting. e.g of functional area are Administration Sales and distribution Manufacture Production Research and development

Financial Accounting

Contents Organizational Units in FI Integration With Materials Management Integration With Sales and Distribution Asset Accounting Bank Accounting With- holding Taxes Closing Processes

Organization Structure Define Company Define Company Code Create new companies by copying existing company code Assign Company Code to Company Define Business Area Define Functional Area Define Credit Control Assign Company Code to Credit Control Financial Accounting Global Settings Maintain Fiscal Year Variant Assign Company Code to Fiscal Year Variant Define variants for Open Posting Periods Open and Close Posting Periods Assign Posting Period Variant to Company Code Define Field Status Variants Assign Company Code to Field Status Variants 8. Define Posting Keys 9. Define Document Types 10. Define Document Number Ranges 11. Define Tolerance Group for Employees

General Ledger 12. Define Tolerance Group for G/L Accounts 13. Assign Users to Tolerance Group 14. Global Parameters for Company Code 15. Define Additional Local Currencies for Company code General Ledger 1. Define Chart of Accounts 2. Assign Company Code to Chart of Accounts 3. Define Account Groups 4. Define Retained Earnings Account 5. Define sample account rule types 6. Define data transfer rules 7. Assign company code to rule type 8. Create Sample Account 9. Create General Ledger Account Tax Configuration 1. Tax calculation procedure 2. Tax condition types 3. Assign country to calculation procedure 4. Jurisdiction code structure 5. Maintain Tax Accounts

Accounts Receivable :- Accounts Payable :- Create Vendor Account Groups 2. Create Number Ranges for Vendor Accounts 3. Assign the number ranges to Vendor account groups 4. Create Sundry Creditors Account 5. Define Tolerances Group for Vendors 6. Vendor Payment Terms 7. Create Vendor Master Data 8. Automatic Payment Program Accounts Receivable :- 9. Create Customer Account Groups 10. Create Number Ranges for Customer Accounts 11. Assign Number Ranges to Customer Account groups 12. Define Tolerances Group for Customer 13. Customer Payment Terms 14. Create Customer Master Record 15. Dunning procedure configuration

Asset Accounting Bank Accounting 16. Chart of Depreciation 17. Assign Chart of Depreciation to Company Code 18. Specify Account Determination 19. Create Screen Layout Rules 20. Maintain asset number ranges 21. Define Asset Classes 22. Determine Depreciation area in the Asset Class 23. Assignment of General Ledger Accounts 24. Define Screen Layout for Asset master data 25. Define Screen Layout for Asset Depreciation Areas 26. Maintain Depreciation key Bank Accounting 1. Create bank key 2. Define House bank 3. Global Settings for Electronic Bank Statement

Investment Management Treasure Management Define Lockboxes 2. Define lockbox posting data Define source symbols Investment Management 1. Define investment program types 2. Assign program types to operative objects 3. Define Investment Profiles 4. Define Investment Plan Profiles 5. Define budget profile 6. Define Budget Categories

SAP FI – Organization Structure 1. Define Company- OX15 SPRO –> Implementation Guide –> Enterprise Structure –> Definition –> Financial Accounting –> Define Company 2. Define Company Code- OX02 SPRO –> Enterprise Structure –> Definition –> Financial Accounting – > Edit, Copy, Delete Company Code 3. Create new companies by copying existing company code- EC01 SPRO –> IMG (F5) –> Definition –> Financial Accounting – > Edit, Copy, Delete Company Code 4. Assign Company Code to Company- OX16 SPRO –> Img –> Enterprise Structure –> Assignment –> Financial Accounting –>Assign Company Code to Company 5. Define Business Area- OX03 SPRO –> Implementation Guide –> Enterprise Structure –> Definition –> Financial Accounting –> Define Business Area 6. Define Functional Area- OKBD SPRO –> Implementation Guide –> Enterprise Structure –> Definition –> Financial Accounting –>Global setting –> Company Code –>Cost of sale –> Activate Cost of Sale 8. Assign Company Code to Credit Control Define Credit Control Area for Customer in SAP The credit control area is an organizational unit that specifies and checks a credit limit for customers. Credit control area can includes one or more company codes. Transaction Code to Define Credit Control Area – OB45 IMG Menu Path :- SPRO –> Implementation Guide –> Enterprise Structure –> Definition –> Financial Accounting –> Define Credit Control Area

Credit Control Area The credit control area is an organizational unit that specifies and checks a credit limit for customers. Credit control area can includes one or more company codes. 7. Define Credit Control Area – OB45 SPRO –> Img –> Enterprise Structure –> Definition –> Financial Accounting –>Define Credit Control Area 8. Assign Company Code to Credit Control SPRO –> Img –> Enterprise Structure –> Assignment –> Financial Accounting –> Assign Company Code to Credit Control

Financial Accounting Global Settings Definition Fiscal year :- A fiscal year is divided in to number of posting periods and each posting period in a accounting period is defined by a start date and end date Fiscal year in SAP can be defined as year dependent or Year Independent Year independent – Same number and dates for the periods every year Year dependent – Periods can be different from year to year Fiscal year variant is used to define the fiscal year. A Fiscal year variant contains the 12 normal posting periods and 4 special periods. We can define maximum 16 posting periods for each year. Special periods are used for Year end activities 1. Maintain Fiscal Year Variant- SPRO > (IMG) –> Finance Accounting –> Global Settings-> Fiscal Year-> Maintain Fiscal Year Variant 2. Assign Company Code to Fiscal Year Variant- OB37 SPRO > (IMG) –> Finance Accounting –> Global Settings-> Fiscal Year-> Assign Company Code Fiscal Year Variant

3. Define variants for Open Posting Periods The Posting Period Variants ( PPV ) in SAP is used to control which accounting period is open for postings and ensuring that closed period remain balanced and reconciled. we can assign posting period variants to one or more company codes. Posting Periods are opened and closed for all company codes in SAP by the PPV. SPRO > (IMG) –> Finance Accounting –> Finance Accounting Global Settings –> Documents –> Posting Periods –> Define variants for open posting periods 4. Open and Close Posting Periods- OB52 SPRO > (IMG) –> Finance Accounting –> Finance Accounting Global Settings –> Documents –> Posting Periods –>Open and Close Posting Periods 5. Assign Posting Period Variant to Company Code- OBBP SPRO > (IMG) –> Finance Accounting –> Finance Accounting Global Settings –> Documents –> Posting Periods –>Assign Posting Period Variant to Company Code 6. Define Field Status Variants- SPRO > (IMG) –> Finance Accounting –> Finance Accounting Global Settings –> Documents –>Line Item –>Control- Define Field status

7. Assign Company Code to Field Status Variants – OBC5 SPRO > (IMG) –> Finance Accounting –> Finance Accounting Global Settings –> Documents –>Line Item –>Control- Assign company to Field status 8. Define Posting Keys- Posting key in SAP is a two digits numerical key that determines the type of transaction entered in a line item Posting Keys Determines :- Account Types ( A, D, K, M, S ) Type of postings i.e Debit or Credit Account Types in SAP :- 1. Assets 2. General Ledger 3. Customer 4. Vendor 5. Material Account SPRO > Implementation Guide –> Finance Accounting –> Finance Accounting Global Settings –> Documents –> Line Item –> Controls –> Define Posting Keys 9. Define Document Types – SPRO > Implementation Guide –> Finance Accounting –> Finance Accounting Global Settings –> Documents –> Header –> Define Document Types

10. Define Document Number Ranges – FBN1 SPRO > Img –> Finance Accounting –> Finance Accounting Global Settings –> Documents –>Document No range–> Define Document No range 11. Define Tolerance Group for Employees – OBA4 SPRO > Img –> Finance Accounting –> G/L Accounting –> Buisness transaction –>Open Item clearing–> Clearing Differences-> Tolerance Group for employess 12 Define Tolerance Group for G/L – OBA0 SPRO > Img –> Finance Accounting –> G/L Accounting –> Buisness transaction –>Open Item clearing–> Clearing Differences-> Tolerance Group for G/L 13. Assign Users to Tolerance Group- OB57 SPRO > Img –> Finance Accounting –> G/L Accounting –> Buisness transaction –>Open Item clearing–> Clearing Differences->Assign Users to Tolerance Group 14. Global Parameters for Company Code – OBY6 SPRO > Img –> Finance Accounting –> Finance Accounting Global Settings –> Company code –>Global parameter Define additional local currencies for company code- OB22 SPRO > Img –> Finance Accounting –> Finance Accounting Global Settings –> Company code –>Parallel currency- Define additional local currencies

General Ledger Define Chart of Accounts- OB13 SPRO > Img –> Finance Accounting –> G/L Accounting –> G/L Accounts –> Master data–>Preparation->edit Chart of Accounts 2. Assign Company Code to Chart of Accounts –OB62 SPRO > Img –> Finance Accounting –> G/L Accounting –> G/L Accounts –> Master data–>Preparation->Assign Chart of Accounts 3. Define Account Groups- OBD4 SPRO > Img –> Finance Accounting –> G/L Accounting –> G/L Accounts –> Master data–>Preparation->Define Account Groups 4. Define Retained Earnings Account – OB53 SPRO > Img –> Finance Accounting –> G/L Accounting –> G/L Accounts –> Master data–>Preparation->Define Retain earning a/c 5. Define sample account rule types- OB15 SPRO > Img –> Finance Accounting –> G/L Accounting –> G/L Accounts –> Master data–>Preparation->Additional activity-> Sample account-> Define sample account rule types

6. Define data transfer rules – FSK2 SPRO > Img –> Finance Accounting –> G/L Accounting –> G/L Accounts –> Master data–>Preparation->Additional activity-> Sample account-> Define data transfer rules 7. Assign company code to rule type – OB67 SPRO > Img –> Finance Accounting –> G/L Accounting –> G/L Accounts –> Master data–>Preparation->Additional activity-> Sample account-> Assign company code to rule type 8. Create Sample Account –FSM1 SPRO > Img –> Finance Accounting –> G/L Accounting –> G/L Accounts –> Master data–>Preparation->Additional activity-> Sample account->Create 9. Create General Ledger Account- FS00 Centrally, FSP0 at chart of account level, FSS0 at Company code level Accounting > Financial Accounting >General Ledger > Master records > G/L Accounts > Individual Processing > Centrally

Tax Configuration Tax calculation procedure SPRO > IMG > Financial Accounting > Financial Accounting Global Settings > Tax on Sales/Purchases > Basic Settings > Check Calculation Procedure The standard system comes with two tax calculation procedures. TAXINN – Condition Based TAXINJ – Formula Based TAXINN :- TAXINN supports only condition based excise determination TAXINJ support the condition based and as well as formula based excise determination entries Select “Define procedure” 2. Tax condition types- OBYZ SPRO > IMG > Financial Accounting > Financial Accounting Global Settings > Tax on Sales/Purchases > Basic Settings > Check Calculation Procedure > Define condition type 3. Assign country to calculation procedure- OBBG SPRO > IMG > Financial Accounting > Financial Accounting Global Settings > Tax on Sales/Purchases > Basic Settings > Assign country to calculation procedure 4. Jurisdiction code structure- OBCO Specify for Tax Jurisdiction

Accounts Payable :- 5. Maintain Tax Accounts- FTXP SPRO > IMG > Financial Accounting > Financial Accounting Global Settings > Tax on Sales/Purchases > Basic Settings > Specify for Tax Jurisdiction Accounts Payable :- Create Vendor Account Groups :- OBD3 SPRO>IMG > Financial accounting –> Accounts Receivable and Accounts Payable –> Vendor Accounts –>Master data –> preparation for creating vendor master data –> Define Account Groups with Screen Layout (Vendors) 2. Create Number Ranges for Vendor Accounts –XKN1 SPRO>IMG > Financial accounting –> Accounts Receivable and Accounts Payable –> Vendor Accounts –>Master data –>Preparation for create vendor data 3. Assign the number ranges to Vendor account groups SPRO>IMG > Financial accounting –> Accounts Receivable and Accounts Payable –> Vendor Accounts –>Master data –> Assign the number ranges to Vendor account groups 4. Create Sundry Creditors Account SPRO>IMG > Financial accounting –> Accounts Receivable and Accounts Payable –> Vendor Accounts –>Master data –> Preparation> G/L a/c> Edit

5. Define Tolerances Group for Vendors- OBA3 SPRO> IMG > Financial accounting > Accounts receivable and accounts payable > Business transactions > Outgoing payments > Manual outgoing payments > Define Tolerances (Vendors) SPRO>IMG > Financial accounting > Accounts receivable and accounts payable > Business transactions > incoming payments > Manual incoming payments > Define Tolerances (Customer) 6. Vendor Payment Terms – OBB8 SPRO>IMG > Financial accounting > Accounts receivable and accounts payable > Business transactions > incoming payments >Incoming invoices> Maintain payment 7. Create Vendor Master Data - XK01 – Create XK02 – Change XK03 Accounting > Financial Accounting > Accounts Payable >Master records > Maintain centrally > XK01 – Create 8. Automatic Payment Program - FBZP SPRO> IMG > Financial accounting > Accounts receivable and accounts payable > Business transactions > Outgoing Payment> Payment program

Accounts Receivable :- 9. Create Customer Account Groups – OBD2 SPRO>IMG > Financial accounting –> Accounts Receivable and Accounts Payable –> Customer Accounts –>Master data –> preparation for creating Customer master data –> Define Account Groups with Screen Layout (Customer) 10. Create Number Ranges for Customer Accounts- XDN1 SPRO>IMG > Financial accounting –> Accounts Receivable and Accounts Payable –> Customer Accounts –>Master data –>Preparation for create customer data>Create Number Ranges for Customer Accounts 11. Assign Number Ranges to Customer Account groups SPRO>IMG > Financial accounting –> Accounts Receivable and Accounts Payable –> Customer Accounts –>Master data –> Assign the number ranges to Customer account groups 12. Define Tolerances Group for Customer –OBA3 SPRO>IMG > Financial accounting > Accounts receivable and accounts payable > Business transactions > incoming payments > Manual incoming payments > Define Tolerances (Customer) 13. Customer Payment Terms –OBB8 SPRO>IMG > Financial accounting > Accounts receivable and accounts payable > Business transactions > incoming payments >Incoming invoices> Maintain payment

Asset Accounting 14. Create Customer Master Record –XD01 SAP> Logistics>Sales and Distribution> Master Data> Business Partner> Customer> Complete 15. Dunning procedure configuration- FBMP SPRO>IMG > Financial accounting > Accounts receivable and accounts payable > Business transactions >Dunning> Dunning Procedure > Define Asset Accounting 16. Chart of Depreciation –EC08 SPRO>IMG > Financial accounting >Asset accounting>Organizational structure> Copy reference chart of depericiation/ depereciation area 17. Assign Chart of Depreciation to Company Code – OAOB SPRO>IMG > Financial accounting >Asset accounting>Organizational structure> Assign chart of depericiation Note- Before Assign Chart of Depreciation to Company Code – OAOB, assign input tax indicator for non taxable transaction. - OBCL 18. Specify Account Determination SPRO>IMG > Financial accounting >Asset accounting>Organizational structure> Asset class> Specify account determination

19. Create Screen Layout Rules SPRO>IMG > Financial accounting >Asset accounting>Organizational structure> Asset class> Create Screen Layout Rules 20. Maintain asset number ranges- AS08 SPRO>IMG > Financial accounting >Asset accounting>Organizational structure> Asset class> Define Number range interval 21. Define Asset Classes- OAOA SPRO>IMG > Financial accounting >Asset accounting>Organizational structure> Asset class> Define Asset Classes 22. Determine Depreciation area in the Asset Class –OAYZ SPRO>IMG > Financial accounting >Asset accounting> Valuation > Determine Depreciation area in the Asset Class 23. Assignment of General Ledger Accounts SPRO>IMG > Financial accounting >Asset accounting> Integration with G/L accounting > Define how Dep area post to G/L 24. Define Screen Layout for Asset master data SPRO>IMG > Financial accounting >Asset accounting> Master Data > Screen layout > Define Screen Layout for Asset master data 25. Define Screen Layout for Asset Depreciation Areas- AO21 SPRO>IMG > Financial accounting >Asset accounting> Master Data > Screen layout > Define Screen Layout for Asset dep area

Bank Accounting Treasure Management 26. Maintain Depreciation key SPRO>IMG > Financial accounting >Asset accounting> Dep> Valuation method> Dep key> Maintain Depreciation key Bank Accounting Create bank key SPRO>IMG > Financial accounting –> Accounts Receivable and Accounts Payable –> Master Record –> Create Bank 2. Define House bank – FI12 SPRO>IMG > Financial accounting –> Bank accounting-> Bank accounts -> Define House bank 3. Global Settings for Electronic Bank Statement SPRO –> IMG –> Financial Accounting –> Bank Accounting –> Business Transactions –> Payment Transactions –> Electronic Bank Statement –> Make Global Settings for Electronic Bank Statement Treasure Management Define Lockboxes- OB10 SPRO>IMG > Financial accounting –> Bank accounting-> Bank accounts -> Define Lockboxes Define lockbox posting data –OBAX SPRO –> IMG –> Financial Accounting –> Bank Accounting –> Business Transactions –> Payment Transactions –> Lockbox-> Define posting data

Investment Management Define source symbols – OT05 Investment Management Define investment program types –OIT3 SPRO > IMG > Investment Management > Investment programs > Master data > Define program type Assign program types to operative objects – OIT3 Define Investment Profiles –OITA SPRO > IMG > Investment Management > Investment programs > Master data > Define Investment profile Define Investment Plan Profiles –OIP1 SPRO > IMG > Investment Management > Investment programs > Planning in Program > Define Plan profile Define budget profile- OIB1 SPRO > IMG > Investment Management > Investment programs > Bugdeting in Program > Define Budget profile Define Budget Categories- IM01 SPRO > IMG > Investment Management > Investment programs > Program >Master data> Investment program definition> Create.

Prepared By CMA Srushti Ashok Bedekar ( ACMA and SAP Certified Application Associate – Management Accounting)