1. Business Process Re-Engineering Finance Transformation “SAP 101”
Fundamentals of finance system structure and master data

2. OBJECTIVE AND AGENDA Objective for the session
Establish a baseline understanding of core components of the SAP Finance system
This baseline will be the foundation for future trainings and exercises
Agenda
SAP ledgers
Main master data elements
Other critical data elements and fields

3. “SAP 101”
SAP Ledgers

4. FOUR LEDGERS Purdue’s SAP implementation uses four ledgers
Financial Accounting (FI)
Funds Management (FM)
Controlling (CO)
Grants Management (GM)
It’s important to understand the use for all ledgers in financial management
Each is intended to answer different questions

5. FOUR LEDGERS Financial Accounting (FI) Reporting based on GAAP
Provides Balance Sheets and Income Statements
Funds Management (FM)
Reporting based on budgetary management
Calculates available balance
Provides Income Statements
Controlling (CO)
Designed to assist with planning on individual accounts
In S/4, CO ledger table has been merged with the FI ledger table
Grants Management (GM)
Facilitates both budgetary management and financial accounting by grant

6. Chart of Accounts Balance Sheet Accounts Income Statement AccountsFI FM CO
General Ledger Acct
Commitment Item
Cost Element
Balance Sheet Accounts
1xxxxx – Assets
2xxxxx – Liabilities
3xxxxx – Fund Balance
Income Statement Accounts
4xxxxx – Revenue
5xxxxx – Expense
How transactions post to these objects can vary between modules

7. Master Data – Main Elements
“SAP 101”
Master Data – Main Elements

8. Organization Fund Cost Object “ACCOUNTS” Company Code Business Area
“Accounts” are comprised of three main components
Company Code and Business Area are derived today
In the future state, Fund and Cost Center will also be derived
Organization
Company Code
Business Area
Fund
Cost Object
Cost Center
Internal Order

9. FundS Represent a particular funding source and restriction
Subdivide balance sheet reporting
Can split all balance sheet G/L’s by fund
Today, some funds are shared (“central revenue”) while others are owned by specific units
In the future structure, all funds will be shared
And only 61 funds will be used
Most departments will use ~6 funds

10. FundS Three general funds Most units will only use 21010000
and will remain available for areas required to divide their general fund by function
Other unrestricted funds consolidated into general fund
Residuals (conference, grant, royalty, etc.)
Study Abroad
Digital Education & Conferences
Income Producing - Other

11. FundS One Services fund One Gift fund, one Scholarship fund
Recharges, general service centers, and “ancillary” income producing options will share one fund
One Gift fund, one Scholarship fund
All gift and scholarship accounting will be consolidated to one fund for each type
Tracking of individual gifts & scholarships will shift from funds to internal orders
One Grant fund
Grant type will differentiate sponsor types

12. FundS Other restricted funds Agency (1) Auxiliary (1) Debt (23)
Endowment (2)
Federal Appropriations (8)
Plant (1)
Restricted – Other (1)
State Line Items (3)
Student Aid (3)
Student Loans (6)
Work Study (4)

13. ORG STRUCTURE

14. Company Codes Separates Distinct Legal Entities
Current State: One company code (PUR) Future State: Multiple company does
PUR
PII
NewU
PUR: Purdue University
PII: Purdue International
PICO: Purdue Colombia
PIAF: Purdue Afghanistan
TBD: NewU
PICO
PIAF
7/1/2018: PII, PICO and PIAF will be implemented
“NewU” implementation TBD

15. Business Area
Within company codes, Business Areas divide the organization
Today, Business Area represents campus
West Lafayette, Fort Wayne, Northwest
Future State, represents
Organizations led by direct reports to the President, Provost, Treasurer, or EVPRP
And equivalent positions at PNW / PFW
And organizations which require a separate GAAP financial statement
E.g. WBAA, North Central Nursing Clinic

16. Business Area Business Areas will be grouped into segments
Two levels of segments will be used
First grouping: based on executive reporting
Segments for Provost, CFO, EVPRP and President
Second grouping: based on campus
Segments for West Lafayette, Fort Wayne, Northwest
May want to mention that this allows full financial reporting at the campus level. This is a hot topic at the Fort Wayne campus especially.

17. Business Area Future State Example Campus ExecutiveSegment

18. ORG STRUCTURE

19. Cost Center Future State Represents unitsFI FM CO
Cost Center
Fund Center
Future State
Represents units
To which multiple positions are assigned
1:1 with future state HR Departments (i.e. “org units”)
That are accountable for their annual revenue and expenditures
That can allocate revenues or make independent decisions about use for specific purposes and programs
Will not be used for tracking programs, projects, etc. that don’t function as organizational units

20. Cost Center Structure Three Level Hierarchy
Emphasize that level 3 and level 4 are going to exist as organizational units
Cost centers will be used forever
Relations with other cost objects

21. Cost Center Future StateFI FM CO
Cost Center
Fund Center
Future State
Cost Centers can be reassigned to different departments and business areas without changing numbers
Addresses many problems caused by reorgs
Will not maintain “smart-numbering” after implementation
No longer will be able to tell campus and major unit/college from looking at the cost center

22. “ACCOUNTS” Future State
All accounts will have a unique Internal Order (IO) or WBS Element (WBSE)
Fund and organizational elements will be derived from the IO or WBSE
No longer will be able to tell campus and major unit/college from looking at the cost center

23. Internal Orders Used for detailed tracking within Cost CentersFI FM CO
Internal Order
Funded Program
Used for detailed tracking within Cost Centers
Individual programs
E.g. Study Abroad, Digital Education programs
Individual gift/scholarship accounts
Can be assigned to any level of Cost Center
Transactions not associated with faculty or construction accounts will post to internal orders in the future state

24. Internal Orders Internal Order TypesFI FM CO
Internal Order
Funded Program
Internal Order Types
Enables standard groupings for more better reporting
Categorizes accounts by detailed restrictions/ designations
Undergrad Scholarships, Graduate Scholarships, etc.
Will determine IO numbering

25. WBS Element (WBSE) Similar to an Internal OrderFI FM CO
WBS Element
Funded Program
Similar to an Internal Order
Allows for linkages to “projects”
Construction projects (C.X )
Faculty* members (F.XXXXXXXX.XX.XXX)
Each faculty member will have a project
Will be categorized by Project Type
Also categorized by “node”
*Staff who receive allocations for their personal research/instruction/ engagement activities may also have projects

26. WBS Element (WBSE) Faculty can see all accounts in one place
Allows departments to identify and segregate resources allocated to faculty for their individual activities

27. ORG STRUCTURE

28. Master Data – Other Elements & Fields
“SAP 101”
Master Data – Other Elements & Fields

29. Grant & Sponsored ProgramFI FM CO GM
WBS Element
Funded Program
Sponsored Program
Future State
Grant number field extended to 8 digits
Grant types expanded to replace sponsor divisions previously identified by unique fund numbers (e.g. NSF, NIH, Industrial)
Internal Orders replaced with WBS Elements
Formatted as F.xxxxxxxx.02.xxx
The “.02.” identifies sponsored accounts
The same WBSE number will be used in the Sponsored Program field

30. Functional Area Defined by NACUBO codes
Categorizes expenditures by function
Instruction, research, student support, etc.
Used for financial statement and IPEDS reporting
Will be assigned to individual IO’s/WBSE’s in future state
Currently assigned based on fund and funds center combination

31. Functional Area Instruction & Departmental Research (1000 – 1100)
Organized Research (1200 – 1400)
Extension & Public Service (1500)
Academic Support (1600)
Student Services (1700)
General Administration & Inst. Support (2000 – 3000)
Scholarships & Fellowships (4xxx)
Auxiliaries (5xxx)
Plant (1800)

32. PUBLIC / AVAILABLE
Flags that track whether an account contains “public” funding or funding unavailable for debt payments
Legislation limits what the university can do with funds from certain sources
Will be tracked on individual IO’s/WBSE’s in the future state
Currently tracked on individual funds