Phase I: Financial Accounting SAP University Alliances Version 2.2 Authors Simha Magal Stefan Weidner Tom Wilder Phase I: Financial Accounting Product SAP ERP 6.0 EhP4 Global Bike Inc. Level Beginner Focus Configuration: Financial Accounting

Agenda Enterprise Structure Business rules and parameters Master data Process execution (testing) Exercises

Enterprise structure elements Client Financial accounting Company code Business area Management accounting Operating concern Controlling area Fulfillment Credit control area Define / Maintain Including some parameters Assign

CO-PA CO-PCA, CO-OM, CO-PC FI SD, MM, PP, etc. Enterprise Structure Operating Concern Controlling Area Company Code S-Org P-Org Plant, etc.

Used to represent a legal entity Company Code Used to represent a legal entity Key organizational level for financial accounting Books are maintained at the company code level Financial statements are generated for company codes

Company Code One for each legal entity One for each country Buick Cadillac Chevrolet GMC Shanghai GM GBI USA GBI Germany GBI Australia

Internal divisions of the enterprise Business Area Internal divisions of the enterprise Define areas of responsibility Financial statements are generated for business areas

Operating Concern & Controlling Area Company Code Controlling Area Operating Concern GL00 NA00 US00 NA## US## Operating Concern: Relevant to profitability analysis Represents external market segments Several controlling areas can be assigned to operating concerns Controlling Area Organizational level in controlling Costs are allocated within a controlling area Several company codes can be assigned to a controlling area

Responsible for customer credit Centralized Credit Control Area Responsible for customer credit Centralized Once CCA for the enterprise Decentralized Multiple CCA for the enterprise Example: North America, Europe, Asia Company Code Credit Control Area Enterprise GBI GL00 US00 DE00 GL## US## DE##

Agenda  Enterprise Structure Business rules and parameters Master data Process execution (testing) Exercises

Business Rules and Parameters Global parameters (for CC) Account groups Field status variants Posting periods Number ranges Tolerance groups

Business Rules and Parameters Global parameters (for CC) Chart of accounts Credit control area Fiscal year variant Define accounting fiscal year Create normal posting periods Create special periods for adjustments Account Groups Groups accounts with similar characteristics Define field status Field status variants ZEXP: Expense accounts ZGBS: General Balance Sheet Accounts ZMMA: Material Management GR/IR Accounts ZRAA: Reconciliation Accounts ZREV: Revenue Accounts Demo Note: FI global settings->Ledgers->Fields

Business Rules and Parameters Posting Periods Define periods Assign periods to CC Close past periods Document number ranges For various documents Tolerance groups for employees Posting limits

Agenda  Enterprise Structure  Business rules and parameters Master data Process execution (testing) Exercises

Master Data Chart of accounts General ledger accounts Subsidiary (sub)ledgers Cost elements Cost centers Statistical key figures

An orderly definition of accounts in the general ledger Chart of Accounts An orderly definition of accounts in the general ledger Three types of chart of accounts: Operative COA Country-specific COA Group COA Multiple charts of accounts exist US (CAUS) , Germany (GKR), Canada (CANA) Country specific to meet reporting requirements International Chart (INT) IFRS

One COA can be used by multiple company codes Chart of Accounts One COA can be used by multiple company codes Different GM companies (Buick, Cadillac, GMC) can use the same (US) chart of accounts Shanghai GM will use the Chinese chart of accounts A company must use at least one chart of account Can use more than one chart of account to create alternate ledgers

General Ledger Accounts Used to record all accounting impact of business transactions Groups Retained earnings account Balance sheet accounts Income statement accounts Reconciliation accounts Data in the general ledger accounts are segmented by organizational level Chart of account segment Company code segment General ledger = COA data + Company code data

Master Data: General Ledger Accounts Demo Show available chart of accounts Show examples of GL accounts Show segments of data

Master Data: Sub-ledger and Reconciliation Accounts Subsidiary Ledgers Are not part of the general ledger. Used to separate accounting for customers, vendors, and assets Reconciliation Accounts Are general ledger accounts Cannot be posted to directly Maintain the sum of the postings in sub-ledgers Are specified in the definition of the sub-ledger Sub ledger account Reconciliation account Customer Accounts Receivable Vendor Accounts Payable Asset (specific) Assets Demo Show sub ledger accounts Show connection between sub ledger and GL (Customer <--> AR) Show non-reconciliation AR and AP accounts

Master Data: Sub-ledger and Reconciliation Accounts

Master Data: Cost Center Location where costs are incurred Department, individuals, special projects Examples Copy center Security department IT Help desk Cost bucket used to accumulate costs Typically Overhead costs Payroll Rent utilities Responsible for cost containment Accumulated costs are then “charged” to other cost centers Many processes have “orders” Purchase orders, Production orders, Sales orders Expenses can be charged to these orders Collectively objects that can absorb costs are called controlling objects

Master Data: Cost Center Hierarchy Demo Cost center hierarchy

Associated with expense accounts in G/L Cost Elements Primary Cost Element Associated with expense accounts in G/L All postings in the G/L expense account are also (automatically) posted in the corresponding cost element Payroll, rent, utilities, etc Typically uses the same number as G/L account Secondary Cost Element Secondary cost elements are defined only within CO and do not have a corresponding G/L account Used for internal cost allocation among cost centers Example: Primary: Electricity, Gas, Water Secondary: Utilities

500 500 500 Posting in FI and CO FI CO Supplies Expense Bank Account Debit Credit Debit Credit PCE 500 500 500 NAAD1000: Administrative Costs

Master Data: Statistical Key Figures An allocation base for cost allocation between cost centers Measurable quantity Number of employees Square feet Miles driven Minutes of time (phone call) Used in periodic allocations and distributions (CO processes)

Agenda  Enterprise Structure  Business rules and parameters  Master data Process execution (testing) Exercises

Process execution (Testing) Recording of value flows ($$) as a result of other processes and transactions General Ledger Accounting G/L postings for rent, utilities, wages, etc. Accounts Payable Accounting Part of the procurement process Accounts Receivable Accounting Part of the fulfillment process Asset Accounting Acquisition, depreciation, retirement Processes are executed to test the configuration General Ledger Accounting in this Phase Other testing will occur in later phases

Agenda  Enterprise Structure  Business rules and parameters  Master data  Process execution (testing) Exercises

1.1 - Enterprise Structure 1.2 - Business Rules and Parameters Exercises 1.1 - Enterprise Structure Configure the enterprise structure 1.2 - Business Rules and Parameters Define Business Rules and Parameters 1.3 - Master Data Create needed master data (copy from 00 where possible) 1.4 – Process Execution (Testing) Post several G/L transactions Appendices Exercises provide detailed instructions for one or few objects (e.g., once cost center, once vendor, etc.) Appendices provide data from additional objects (cost centers, etc.) Don’t forget them!!!!

Exercises I.1.1: Define Company Code 3 I.1.2: Define Business Area 5 Enterprise Structure Rules and Parameters Master Data Process Execution I.1.1: Define Company Code 3 I.1.2: Define Business Area 5 I.1.3: Define Empty Chart of Accounts 6 I.1.4: Maintain Controlling Area 7 I.1.5: Define Credit Control Area 8 I.1.6: Define Variants for Open Posting Period 9 I.1.7: Define Field Status Variants 10 I.1.8: Enter Global Parameters 11 I.1.9: Assign Company Code to Controlling Area 12 I.1.10: Assign Controlling Area to Operating Concern 13 I.1.11: Define Standard Hierarchy 14 I.1.12: Assign Permitted Credit Control Areas 15 I.1.13: Maintain Company Code for Materials 16

Exercises Configuration Step Explanation Navigation Description: In this task, you define your own company code in the United States. The company code is the organizational unit that allows you to structure your enterprise from a financial accounting perspective. A company code possesses information that is important for financial accounting purposes. For example, each company code is assigned to exactly one country. Warning: See “General Notes and Cautions” about table locks. Navigation

Exercises Tasks and Data Entry Enter value as specified (except for ##) e.g.: US05, Dallas Find and enter appropriate Code/Value e.g.: US, USD, EN Tasks and Data Entry

Exercises A note about ## vs. ### Examples User IDs have three digits at the end: GBI-### Configuration can only have 99 users : 01, 02…..99 Exercises reference ##. Substitute the last two digits from their UserID User GBI-034 will use 34 Examples Controlling area (North America: NA## -> NA34) Company code (US company: US## -> US34) Business area (Bicycles: BI## -> BI34) Credit control area (Global: GL## -> GL34) Exception: Operating concern (GL00 for everyone) Technical reason for not using GL## Operating concern is a cross client change

Exercises Two versions Student version Instructor version Includes screenshots Notes (need to add more; you can help!) Cautions and warnings (need to add more; you can help!) Don’t give these to students

Agenda  Enterprise Structure  Business rules and parameters  Master data  Process execution (testing)  Exercises