Sap Overview - Imp - BD

SAP - OVERVIEW
Tapas Bhattacharya-FCMA,CISA (USA) & SAP Cert.

Consultant
TOPICS (DAY 1)
Cert.Consultant
Tapas Bhattacharya-FCMA, CISA(USA) & SAP
What is ERP
Why ERP- An Example of Non ERP Scenario
Introduction of SAP
Navigation to SAP
Components in SAP
Modules
Financial Process
Procurement Process
Sales Order Management
2
WHAT IS ERP?
Cert.Consultant
An Enterprise Resource Planning system is a
packaged business software system that allows
a company to:
Automate and integrate the majority of
its business processes
Share common data and practices across
the entire enterprise
Produce and access information in a real-
time environment
3
BUSINESS WITHOUT ERP
PP contacts
Customers Purchasing for
raw material
4
Purchasing
Customer
Calls to
1 place order
for a Car Sales
office/Inventory
contacts PP Production
Planning
3
3
Sales office
contacts
Inventory
Sales Inventory 4
Tapas Bhattacharya-FCMA, CISA(USA) & SAP Cert.Consultant

BUSINESS WITHOUT ERP (CONTD..)
Lets add some more Business Processes

(CONTD..)
Where is my
What is this
car
Customers confusion
What to
manufact
ure??
Whom to Production
contact for Planning
status?
What is
Cost
Sales and Shop floor
profit
Finance
Purchasing
Vendors
Inventory6

LETS DELIVER THE END PRODUCT TO
CCUSTOMER..
I did not
order for a
TRUCK!!!!
Dear Sir,
Your
Order
Sales
7

BUSINESS WITHOUT ERP (CONTD..)
I AM NOT TAKING
DELIVERY AND WILL
NEVER DEAL WITH YOU!
We are
SORRY Sir
Sales
8

OVERALL PICTURE
Vendors
Sales Purchasing
General
Ledger A/P
Customers A/R
Production
Planning
Inventory Shop Floor

Execution
9

Tapas Bhattacharya-FCMA,
CISA(USA) & SAP Cert.Consultant
ERP CHARACTERISTICS
Real Time
Integrated System
Customizing
Best Practice
(Configuration)
Process Oriented
10
SOLUTION - AN INTEGRATED SYSTEM DESIGN
Budgetary
Control Maintenance
Finance
Management
& SAP Cert.Consultant

Tapas Bhattacharya-FCMA, CISA(USA)
Enterprise
Human Management Project
Resources Management
Management
Asset Material Information
Management Management System
11
INTEGRATION CONCEPT
Integration
Integration of
of previously
previously off-line
off-line functions
functions into
into the
the operational
operational flow
flow is
is a
a
key
key enabler
enabler for
for competitive
competitive advantage
advantage
Cert.Consultant
Inventory Vendor
Purchase Costing Accounting Treasury
Management Management
Stock Indent
Available Budget Currency
Check Risk
Vendor Tender and
Master Evaluation Forex
Matching
Purchase
Order Cash
Management
Stock Goods Material

Update Receipt Valuation
Invoicing Cost Account Cash

& Payment Control Updation Outflow
12
... Cross Country ... Cross Department ... Cross Organization

What is S A P
SAP
Stands for
Systems Applications and
Products
14
Introduction
SAP AS AN ORGANIZATION
Cert.Consultant
Started in 1972 by 5 IBM ex employees
Till 2004 SAP has more than 24,000
customers across 120 Countries
84,000 installations by 2004
Head quarters at Walldorf, Germany
9 subsidiaries Tokyo, Shanghai, Bangalore,

Tel Aviv, Budapest, Sofia, Sophia antipolis,
Palo Alto & Philadelphia.
15
Cert.Consultant
16
WHY SAP IS UNIQUE
Highly integrated
Comprehensive functionality
Complex data structures
Availability of data
Single point of entry
On-line data capture and real-time update
Requires strong application knowledge
Causes personnel and organizational
structure changes
Causes business process changes
17

SAP - THE PRODUCT
Original product was SAP R/2 on the
mainframe introduced in 1972
SAP R/3 introduced for smaller platforms
in 1992
Developed using a fourth generation
proprietary language developed by SAP
called ABAP/4
Major SAP versions:
2.2h
3.0d, 3.0e, 3.0f , 3.1g, 3.1h, 3,1i
4.0b, 4.5b, 4.6b, 4.6c, 4.7 18
5.0, 6.0
Cert.Consultant
19
NETWEAVER..
SAP's application and
integration platform is the
technical foundation for mySAP
Business Suite, SAP Industry
Packages, and SAP xApps. It
delivers a complete, open, and
flexible infrastructure that
allows you to easily integrate
SAP and non-SAP components. 20
SAP Co-Existence with other
applications
Cert.Consultant
Other
Mobile Business
Databas Technolo Business Applications
Application Server e gy Intelligen
ce
XI
Netweaver Common
Platform for ERP
21
PCs, Laptops, Browser Client
etc.
Cert.Consultant
Network
Web Server
Internet
Presentatio Transaction
n Server
Applicatio Application
n Servers
Database
22
Database
MYSAP ERP
Cert.Consultant
mySAP ERP is designed in such a way
that companies can implement only the
business functions they need when they
need them, thus simplifying upgrades and
reducing total cost of ownership.
With mySAP ERP, SAP has set a new standard
for ERP systems.
This application incorporates the mySAP
ERP Financials, mySAP ERP Human
Capital Management, mySAP ERP
Operations and the mySAP ERP
Corporate Services solutions. 23
SAP NAVIGATION
Before you log on for the first time, your system

administrator will give you an initial password. During
the process of logging on, you should enter a new
password, one that you alone will know. After that, use
24
your own password whenever you log on.
Cert.Consultant
25
Password
User
ID
LOGIN AREA
26
NAVIGATION
27
NAVIGATION ....
28
NAVIGATION....
29
NAVIGATION...
30
TIT BITS
Cert.Consultant
Entry - Result
/n - Cancels the current transaction
/nXXXX -Initiates the specified transaction directly
from another transaction
/o - Displays an overview of sessions
/oXXXX - Initiates the specified transaction in a new
session
/nend - Ends the logon session with a confirmation
pop-up window
/nex - Ends the logon session without a confirmation
pop-up window
/i - Deletes your current session
F1 Help 31
F4 Entry options support
COMPONENTS IN SAP
Cert.Consultant
Organizational
Elements
Master Data
Transactions
32
SAP ENTERPRISE STRUCTURE
Cert.Consultant
Fiscal
Credit Control Client Year
Area
Chart of
Variant
Compan
y
Controlli
Account
ng Area
s Code
Purchasi
ng
Organiza Plan
t Sales

tion
Purchasi Organization
ng SL10
SL20
Group
Shipp Distribution Divisi
ing Channel on
Point 33
Sales Area
ORGANIZATIONAL ELEMENTS .1
Cert.Consultant
Client: The client is the highest-level element of all
organizational elements; it represents the
enterprise/headquarters group.
Company Code: The company code is a legal
independent accounting unit representing the central
organizational element of financial accounting. The
company code also represents the tax law (national) view
of the company, the fiscal calendar, the local currency,
and the tax reporting requirements.
Plant: A plant can manufacture product, distribute
product, or provide a service; it is the central
organizational unit of production.
Storage Location: Material stocks in Inventory
Management can be differentiated within one plant 34
according to storage location.
ORGANIZATIONAL ELEMENTS .2
Purchase Organisation : This org. Unit is responsible for
Procurement of Materials. It can be at Client level
(centralised system)or at Company Code/ Plant

Level(Decentralised system).
Purchasing Group : This is below Purchase Org. is nothing
but a buyer and responsible for certain type of Purchase.
Sales Organization: The sales organization is the
central organizational element in sales order
management that controls the terms of sale to the
customer.
Distribution Channel: Distribution channels can be
used to define how different products reach consumers,
for example, wholesale, Retail etc.
Divisions : it is nothing but grouping of Products / 35
services.
ORGANIZATIONAL ELEMENTS3
Organizational Units:
Jobs: Jobs serve as descriptions, or templates, that
apply to several positions with similar

requirements, tasks, or other characteristics.
Positions: Positions are the individual employee
assignments in the enterprise. Persons occupy
positions. A position inherits a jobs characteristics,
but you can also define additional characteristics
specific to that position.
Persons: Persons hold positions within the
organizational structure. Persons represent
employees in your company.
36
MASTERS CONCEPT
Customer master
A customer master contains key information that defines the
business relationship between a company and its customer.

Company code data controls the posting procedure and
subsequent processing, such as payments and dunning.
Sales organization data provides information on customers
for support execution of such business processes as entering
sales orders, shipping, billing, and processing payment. The
customer master's .three-part structure. is represented by:
General Data: This data is equally relevant to every
company code and every sales organization within a

Client .
Data for Company Codes: This data reflects company-
specific agreements with the customer.

Data for Sales: This data has different characteristics for a
companys sales organizations and channels. 37
ORGANIZATIONAL STRUCTURE IN SAP
Production Planning Financial Accounting
Company
Plant
Code

Controlling Human Resources
Client
Controlling Personnel
Area Area
Sales and Distribution Materials Management
Sales Purchasing
38
Area Organization
MATERIALS MANAGEMENT
(MM)
CHAPTER OVERVIEW
Organization Structure
Master Data

Procurement Process
Procure-to-Pay Process
40
ORGANIZATIONAL STRUCTURE FOR
PROCUREMENT
Client
An independent environment in the system
Company Code

Smallest org unit for which you can maintain a legal set of
books
Plant
Operating area or branch within a company
i.e. manufacturing facility or distribution facility
Purchasing Organization
The buying activity for a plant takes place at the purchasing
organization
Purchasing Group
Key that represents the buyer or group of buyers
41
PURCHASING SPECIFIC STRUCTURE
Purchasing Organization
Organization unit responsible for procuring services and
materials
Negotiates conditions of the purchase with the vendors

Purchasing Group
Buyer or group of buyers who are responsible for certain
purchasing activities
Channel of communication for vendors
42
PURCHASING ORGANIZATION /
GROUP
Company Code
Plant 100 Purchasing Org
100
100

Purchasing Org
Plant 100 Plant 101
100
Centralized vs. Purchasing Org

100
Decentralized
Purchasing
Company Code Company Code
100 101
43
VENDOR MASTER VIEWS
Client Level
Address
Vendor Number
General Data
Preferred Communication

Company Code Data
Reconciliation Account
Terms of Payment
Company Code Data
Bank Account Financial Accounting (FI)
Purchase Org Data
Purchasing Currency
Salesmans Name
Purchasing Data
Vendor Partners Materials Mgmt (MM)
44
VENDOR MASTER DATA
Vendor Master
Contains all the necessary
information needed to
business with an external
supplier
Used and maintained
primarily by the Purchasing
and Accounting Departments
Every vendor MUST have a
master record
45

VENDOR MASTER
General Information relevant for the entire organization:
Name
Address
Communication

Client 410
Company Code specific information: Purchasing Org. specific information:

Acc. Mgmt Incoterms
Payment Currency
Bank
Company Code 102 Purchasing Org. 101
Company Code 101 Purchasing Org. 100
Company Code 100
46
VENDOR ACCOUNTS
Accounts Payable Sub-Module
Information with respect to Vendors from whom the enterprise
purchases goods and services such as purchases and payments made
Substantive and important integration between Materials Management
(MM) and FI
Purchase and goods receipt activities in MM generate FI journal entries
Vendor Vendor
100234 100435 Accounts Payable
20 25 (General Ledger)
0 0
850
Vendor Vendor
100621
10 100846
30
0 0
47

MASTERS CONCEPT
Material Master:
The material master contains all of the key information a
company needs to manage a material within its organization.

The material master defines, among other things, how a product
is sold, manufactured, purchased, inventoried, accounted, and
cost runned. The information in the material master is grouped
into views that are organized by business function.
Note: The majority of the views in a material master are at
plant level.
Material Type : Every material having some characteristics/
type e.g. FG, raw mat, semi finished goods, packing mat
etc. OMS2
When you create a master record of material you need to
mention Mat. Type. It controls
Movement Type ..for every material type there s a
48
movement type in the SAP system
49
MATERIAL MASTER DATA
Material Master
Contains all the information a
company needs to manage
about a material

It is used by most components
within the SAP system
Sales and Distribution
Materials Management
Production
Plant Maintenance
Accounting/Controlling
Quality Management
Material master data is stored
in functional segments called
Views
50
MATERIAL MASTER VIEWS
Sales Data

Basic Data Purchasing Data
Mat. Plan. Data
Material Master Forecasting

Data
Storage Data
Controlling Data Quality Data
Accounting
Data
51
MATERIAL MASTER
General Information relevant for the entire organization:
Name
Weight
U/M

Client 410
Plant specific information: Purchasing Data Storage Location specific information:

Work Sch. Stock Qty
MRP Picking
Plant 102 Storage Location 20

Plant 101 Storage Location 10
Plant 100
52
PURCHASING INFORMATION RECORD
Framework for
Purchase Order
Contains the relationship
between a vendor and a

material
Purchasing
Can be created: Information Record
Manually
Automatically Quotations
Automatically Pur Orders
Reporting
Vendor Evaluation
Material Master Vendor Master
53
PURCHASING INFORMATION RECORD
Allows buyers to quickly
determine:
Which vendors have offered or
supplied specific materials

Info Records contain:
Data on pricing and conditions
Last purchase order
Tolerance limits for deliveries
Specific lead times
Availability periods
Vendor Evaluation data
Serves as default information
for Purchase Orders
54
MASTER DATA IN USE
Purchase
Order

45......01
Material Master Vendor Master
Purchasing
Information Record
55
PROCUREMENT PROCESS
Purchase Vendor
Requisition Selection
Purchas

e
Order
Notify
Payment Vendor
to Vendor
Invoice Vendor
Receipt Shipment
Goods
Receipt
56
57
PURCHASE REQUISITION
Internal Document instructing the purchasing
department to request a specific good or service
for a specified time

Requisitions can be created two ways:
Directly - Manually
person creating determines: what, how much, and when
Indirectly - Automatically
MRP, Production Orders, Maintenance Orders, Sales Orders
58
INTERNAL SOURCING
The requisition for materials could be satisfied by
sources within our company.
It is possible that a plant within your firm could represent a
potential source of supply for the material needed (centralized

warehouse)
If an internal source is identified the requirement is covered by
an internal procurement transaction (stock transport order)
59
PROCUREMENT/ PURCHASE .1
Source Determination helps you identify potential
sources of supply based on past orders and existing longer-term
purchase agreements. This speeds the process of creating

requests for quotation (RFQs)Long term agreements etc.
Vendor Selection and Comparison of Quotations
- The system is capable of simulating pricing scenarios, allowing
you to compare a number of different quotations. Rejection
letters can be sent automatically.
Purchase order Creation - The purchase order adopts
information from the requisition and the quotation to help you
create a purchase order.
Purchase Order Follow-Up - The system checks the
reminder periods you have specified and, if necessary,
automatically prints reminders or expediters at the predefined
intervals. The system also provides you with an up-to-date status 60
of all purchase requisitions, quotations, and purchase orders.
Goods Receiving and Inventory
Management

Goods receiving personnel can confirm the receipt of goods
simply by entering the purchase order number. By specifying
permissible tolerances, buyers can limit over- and under-
deliveries of ordered goods.
Document: Material Document

Stock\ inventory A/c Dr. 100
VAT\TAX A/c Dr 004
GR\IR (Material) A/c Cr 94
GR\IR Freight clearing A/c Cr 05
61
GR\IR Other Expenses Payable A/c Cr 05
Invoice Verification - The system supports the
checking and matching of invoices. The accounts payable
clerk is notified of quantity and price variances because the

system has access to purchase order and goods receipt
data. This speeds the process of auditing and clearing
invoices for payment.
Document - Accounting Document

GR/IR (Material) A/c Dr 94
GR\IR Freight clearing A/c Dr 05
GR\IR Other Expenses Payable A/c Dr 05
Vendor A/c Cr 94
Freight clearing A/c Cr 05
62
Other Expenses Payable A/c Cr 05
PURCHASE ORDER
A purchase order is a formal request to a vendor
for a specific material or service under the stated
conditions
Purchase Orders can be created manually
Reference a Purchase Order
Reference a Purchase Requisition
Reference a RFQ/Quotation
Without Reference
Purchase Orders can be create automatically
63
PURCHASE ORDER
A purchase order can be used
for a variety of purposes, the
item category (procurement
type) defined in the PO will
dictate the use of the order
and the process that the order
will follow:
Standard
Stock or Consumption
Services
Subcontracting
Third-Party
Consignment
64
PURCHASE ORDER STRUCTURE
Header
Vendor Date
Doc. Number Currency
Terms of Payment PO Price
Item Overview
Purchase Materials Price/UofM

Order Quantities
Delivery Date
45......01
Line Item
PO History Tolerances
Line Price
Delivery Schedule
65
PURCHASE ORDER OUTPUT
Once a Purchase Order has been created the
vendor needs to be notified
Printed
E-mail
EDI
Fax
XML
There are a variety of forms that aid in the
purchasing process and are generated from the
Purchase Order
Purchase Order Output
Order Acknowledgement Forms
Reminders
Schedule Agreements
66
GOODS RECEIPT Notify
Vendor
Purchase
Order
45......01
Vendor
Goods
Receipt Shipment
67
GOODS RECEIPT
Goods movement in which we accept goods into
our system
If materials are delivered against a Purchase
Order we will reference that Order
Determine if we got what we ordered
System can purpose data for us from the PO
Material, quantity
Purchase Order History is update with the receipt

Updates Physical Inventory
Updates Inventory G/L Account
68
MATERIAL MOVEMENTS
When a goods movement takes place it is represented
by a Movement Type
Movement types are three-digit keys used to represent a movement of
goods
101 goods receipt into warehouse
103 goods receipt into GR blocked stock
122 return delivery to vendor
231 consumption for a sales order
561 initial entry of stock
Some a/c is debited & some a/c is credited based on Material

movements.
Movement type controls such a/c posting.
Destinations for Receipt of Goods
Warehouse Unrestricted, Quality, Blocked
Quality
Goods Receipt Blocked Stock
69
EFFECTS OF A GOODS RECEIPT
When a Goods Movement for the receipt of goods
takes place a series of events occur
Material Document is Created
Accounting Document is Created
Stock Quantities are Updated
Stock Values are Updated
Purchase Order is Updated
Output can be generated (GR slip / pallet label)
70
MATERIAL VALUATION
In procurement process while creating purchase orders

material price is a mandatory field and it is automatically
determined. This happens because material valuation is
maintained in SAP system in material master. Material
valuation represents integration between MM & FI

(Financial Accounting) modules since it updates the
general ledger accounts in financial accounting. The key
points about material valuation are as follows.
Material valuation helps to determine the price of
material and for which general ledger account it needs
to be posted in financial accounting.
Material valuation can happen at company code level or
plant level.
Material can be valuated based on different types of
procurement and this is known as split valuation.

Normally split valuation is used to valuate material in
71
same valuation area (company or plant) differently.
MATERAIAL VALUATION
Split Valuation
Split valuation enables you to valuate stocks
of a material in the same valuation area
(company or plant) differently. Some of the

examples where split valuation is required
are as follows.
Stock that is procured externally from vendor
has a different valuation price than the stock
of in-house production.
Stock obtained from one vendor is valuated
at a different price than stock obtained from
another vendor
OMWO 72
MATERIAL VALUATION
Some important terms under split valuation are as follows.
Valuation Area:Material may be valuated at plant level

or at company code level. The level at which materials are

valuated is known as valuation area.
Valuation Class : Grouping of different materials having

similar properties .
Valuation Category:Valuation category is the criteria on

which material is split valuated.(for eg procurement, origin
, status like used, new etc)
Valuation Type:Valuation type specifies the features of a
valuation category. Such as external or internal
procurement 73
omsk
INVOICE PROCESSING
Incoming Invoices are reference against a
Purchase Order to verify their content, prices, and
arithmetic.
If discrepancies arise between the purchase order
or goods receipt and the invoice the system with
generate a warning or an error
Depending on system configuration the difference
Purchase order could cause
the system to Block the Invoice - Target quantity -
- Target price -
Invoice receipt Goods receipt

- Actual price - - Actual quantity -
74
INVOICE PROCESSING
When an invoice is saved it applies the liability
from the Goods Receipt of our Purchase Order to
a Vendor
Upon verification the:

Purchase Order is updated
Material Master is Updated (MAP)
Accounting Document is created
Once the Invoice has been posted the verification

process is completed and the payment process is
initiated within Financial Accounting
75
PAYMENT TO VENDOR
Can be done automatically or manually
Post Outgoing Payment vs. Payment Program
Elements of the Payment Transaction:

Payment Method
Bank from which they get paid
Items to be Paid
Calculate Payment Amount
Print Payment Medium
Process will create a financial accounting

document to record the transaction
76
GOODS RECEIPT / INVOICE RECEIPT
RECONCILIATION ACCOUNT
Purchase requisition No impact on

Financial Accounting (FI)
Purchase order
Materials Management
(MM) and Financial
Goods receipt Accounting (FI)
via automatic account
assignment
Inventory GR / IR
Dr Cr Dr Cr
$100 $100
77
GOODS RECEIPT / INVOICE RECEIPT
RECONCILIATION ACCOUNT
Amount owed is
Invoice receipt assigned and transferred
to
vendor account payable
GR / IR Vendor A/P
Dr Cr Dr Cr
$100 $100
78
VENDOR PAYMENT
Amount owed is paid to

Bank vendor and account
payable is reduced
Bank Vendor A/P
Dr Cr Dr Cr
$100 $100
79
FI MM INTEGRATION POINT
Goods Invoice Payment

Receipt Receipt Program
AP
Inventory GR / IR (Vendor) Bank
Dr Cr Dr Cr Dr Cr Dr Cr
$100 $100 $100 $100 $100 $100
80
81
Distribution
Sales &
Cert.Consultant
82
83
General Data
84
General Data
85
General
Data
86
Company
Code
Company Code

87
Company Code

88
Company Code

89
90
Sales Area
Segment
Sales Area Segment

91
Sales Area Segment

92
Sales Area Segment

93
CUSTOMER ACCOUNTS
Accounts Receivable Sub-Module

Information with respect to Customers who purchase the enterprises
goods and services such as sales and payments made
Substantive and important integration between Sales and Distribution
(SD) and FI
Billings in SD generate FI journal entries for sales activity
Customer Customer
Accounts Receivable
0 0
950
Customer Customer
40135 15123
0 0
94

SALES ORGANIZATION STRUCTURE
Sales Organization: A sales organization is the top most entity in
SD. It could be defined based on geography or some other sales
conditions to observe sales statistic. All sales document are created

for a sales organization only. This can be assigned to several
Company codes.
Distribution Channel: Distribution channel is mainly defined to
take care of different types of sales in a sales organization. You can
define a distribution channel for direct sales, internet sales, sales
through dealers etc.
Division: Division is defined mainly based on the bases of products.
For exampleyou canhave one division for twowheelers and one for
four wheelers.
Sales Group: Sales group is also an optional element of SD org
structure. It's mainly used to manage work force, you can assign
employees to a sales group.
Sales Office: Sales office definition is an optional activity, you can run
SD transaction without a sales office. It's used to manage the sales in a 95
particular region based mainly a geographical area.
SALES. 1
The Sales Order Processing (or order to cash)
scenario describes the complete process, starting
with pre-sales activities, moving to the creation of

the sales order, continuing with the sales order
fulfilment, and ending with the invoicing of the
sales order and the parallel process of the
creation of the posting in financial accounting.
96
TRANSACTIONS..
Transactions
Transactions are application programs that execute business
processes in the SAP system

Whenever possible, master data is copied during transaction
processing, thus avoiding re-entry of data. For example, when
executing the transaction Create Sales Order, the user must
enter the customer master number; this copy is in all of the
relevant customer information.
Likewise, once the material master numbers are entered for
the items being ordered, the relevant material data will be
copied into the sales order.
Whenever a transaction is executed in the system, a
document is created.
That document, a data record of the transaction, contains all
of the relevant predefined information from the master data97
and organizational elements.
98
SALES ..2
The basic sales order processing cycle for a service or material
consists of the following phases:
Pre-Sales Activities: Pre-sales activities can be inquiries or quotations
entered in the system. These can then be used as reference during the

creation of a sales order.
Sales Order Creation and Availability Check: The sales order can
adopt information from the pre-sales documents (a quotation or an
inquiry). Sales scheduling agreements or sales contracts (long-term sales
agreements) can also be created with reference to a sales order and are
supported by the sales process steps. During the creation of the sales
order, the availability of the material can be checked to confirm the
customer's requested delivery date. Payment terms will be picked up as
per the customer master by default or it can be substituted by payment
term manually entered.
Sales District, Sales officer, Sales Group, Customer Group, Delivery
options like Delivery priority, Shipping condition & Delivery plant or
Delivery point, Billing Options frequency of billing, payment terms etc.
Price list and Conditions drive the material price and discounts to the
Sales order. 99
Items
100

Line
Header
SALES ORDER SCREENS 1
DELIVERY.1
Delivery: Shipping is an important part of the
logistics chain.
Shipping Functions


The shipping module supports the following functions, which
include but are not limited to:
Deadline monitoring for reference documents due for
shipment (sales orders and purchase orders, for instance)
Creating and processing outbound deliveries
Packing deliveries
Information support for transportation planning
Supporting foreign trade requirements
Printing and transmitting shipping documents
Processing goods issue
Deliveries currently in process
Activities that are still to be carried out 101
Identifying possible bottlenecks
DELIVERY.2
An outbound delivery can be created as
follows:

. With reference to a sales order
. With reference to a stock transport order
. With reference to a subcontract order
. With reference to a project
. Without any reference
102
DELIVERY..3
Goods Issue Posting Functions
Warehouse stock of the material is reduced by
the delivery quantity

Value changes are posted to the balance sheet
account in inventory accounting
Requirements are reduced by the delivery
quantity
The serial number status is updated
Goods issue posting is automatically recorded in
the document flow
103
DELIVERY (DOCUMENTS)..4
Material Documents
Goods are dispatched:
Cost of Goods Sold (COGS) A/c Dr

Inventory (Finished Goods) A/c Cr
When goods are issued to Cost Center or Charged off against
expenses:
Repairs & Maintenance A/c Dr
Inventory A/cCr
When goods are issued for Stock Transfer:
Inventory/ Stock A/c Dr (Receiving Location)
Inventory/ Stock A/c Cr (Sending Location)
Price Difference A/c Dr/Cr
(Due to any differences between the standard Costs between the two
locations) 104
BILLING 1
Billing functions include:
Creation of invoices based on deliveries or
services

Issue of credit and debit memos and pro forma
invoices
Cancelling billing transactions
Comprehensive pricing functions
Issue rebates
Transfer billing data to financial accounting
105
BILLING .2
Billing and Financial Accounting
The system automatically posts the amounts to
the appropriate accounts by means of account

determination.
Costs and revenue can be posted to the following
accounts:
Customer accounts receivable
General ledger (for example, a cash clearing account)
Revenue
Sales deductions
Accruals (for rebate agreements)
Accrual account
Accrual clearing account

106
BILLING (DOCUMENTS) 3
Accounting Entries (Domestic Sales)
Customer Account Dr
Reconciliation A/c Cr

Reconciliation A/c Dr
Revenue (Domestic) A/cCr
Excise Duty A/c Cr
Sales Tax Payable A/c Cr
OR
Customer A/c Dr
Revenue (Domestic) A/cCr
Excise duty Billed Cr
Sales Tax Payable Cr
Excise Duty Paid A/c Dr 107

Excise Duty payable Cr
BILLING (DOCUMENTS) 4
Accounting Entries (Export Sales)
* Invoice/Bill:
Customer A/c Dr

Revenue (Exports) Cr
* Realization:
Bank A/c Dr
Customer A/c Cr
Exchange Fluctuation A/c Cr
* Rebate/Discount:
Rebates/Discount A/c Dr
Reconciliation A/c Dr 108
Customer A/c Cr
CROSS-FUNCTIONAL INTEGRATION
Source Unknown
10
9
PROCESS INTEGRATION Purchase
Requisition
Purchase
Order
Run MRP
Goods
Sales Order Procurement
Check Receipt
Entry Process
Availability
Invoice
Pick Receipt
Materials
Receipt of Payment
Payment to Vendor
Post Goods
Invoice Issue
Customer
11
0
Requisition
Purchase
Order
Run MRP
Goods
Sales Order Procurement
Check Receipt
Entry Process
Availability
Invoice
Receipt
Pick
Receipt of Materials Payment
Payment to Vendor
Post Goods
Invoice Issue
Customer
11
1
Order
Purchase
Requisition Goods
Convert Production
Proposal Schedule Procurement Receip
and Release t
Process
Run MPS Goods
w/MRP Issue Invoice
Production Receipt
Check Process
Availability
Sales Order Completion Payment
Entry Quality Confirmation to Vendor
Pick Inspection Goods
Materials Receipt
Receipt of Order
Payment Settlemen
t
Invoice Post Goods
Customer Issue
11
2
Order
Purchase
Requisition Goods
Convert Production
Proposal Schedule Procurement Receipt
and Release Process
Run MPS Goods
w/MRP Issue Invoice
Production Receipt
Check Process
Availability
Sales Order Completion Payment
Entry Quality Confirmation to Vendor
Pick Inspection Goods
Materials Receipt
Receipt of Order
Payment Settlemen
t
Invoice Post Goods
Customer Issue
11
3
114

Day 2
SAP University Alliances
Version 1. 0
FINANCIAL
Authors Stephen Tracy
Bret Wagner
ACCOUNTING (FI)
Stefan Weidner
Product
SAP ERP 6.0
Global Bike Inc.
Level
Beginner
Focus
Cross-functional integration
Financial Accounting
DAY 2 TOPICS
Finance Module Organization Structure
Chart of Accounts

Fiscal Year Variant
GL Definition
Tolerance Group
Document Structure
Posting Controls
Clearing
116
ORGANIZATION STRUCTURE
Company
Company Code

Chart of Accounts
Business Areas
117
CHART OF ACCOUNTS
Operational Chart of Accounts
Country Chart of Accounts

Group Chart of Accounts
** Ob13, ob62
118
FISCAL YEAR VARIANT
Calendar Year
Short End Fiscal year

Company preferred Fiscal Year
Posting Periods
119
GOAL OF FI
Financial accounting is designed to collect
the transactional data that provides a
foundation for preparing the standard
portfolio of reports
In general, these reports are primarily, but
not exclusively, directed at external parties
Standard reports include:
Balance Sheet
Income Statement
Statement of Cash Flows
12
0
ORGANIZATIONAL OBJECTS
These represent the legal and/or organizational
views of an enterprise
They form a framework that supports the activities
of a business in the manner desired by

management
Permit the accurate and organized collection of
business information
Support the development and presentation of
relevant information in order to enable and support

business decisions
Organizational Objects:
Company Code
Chart of Accounts
12
1
COMPANY CODE
Represents an independent legal accounting
unit
Balanced set of books, as required by law,
are prepared at this level
A client may have more than one company
code
United States
United Kingdom
Liabilities &
South America Assets
Owners Equity
Canada
Germany
12
2
CHART OF ACCOUNTS
A classification scheme consisting of a group
of general ledger (G/L) accounts.
A chart of accounts provides a framework for
the recording of values to ensure an orderly
rendering of accounting data.
The G/L accounts it contains are used by one
or more company codes.
12
3
GENERAL LEDGER (G/L) ACCOUNTS
The unique combination of Company Code
and Chart of Account creates a data storage
area called a General Ledger
The General Ledger contains a listing of the
transactions effecting each account in the
Chart of Accounts and the respective account
balance
It is utilized in the preparation of financial
accounting statements
12
4
POSTING A G/L ENTRY
12
5
G/L ACCOUNT SUMMARY
Account number 100100 Bank Account

Company code 00A1
Period Debit Credit DC bal. Balance

C/f bal. 750,000.00
Period 1 5,250.00 3,540.00 1,710.00 751,710.00
Period 2 25,000.00 15,000.00 10,000.00 761,710.00
12
6
BALANCE SHEET
Presentation of an organizations Assets,
Liabilities, and Equity at a point in time
Assets: What the company owns
Liabilities: What the company owes
Equity: The difference between Assets and

Liabilities
Assets = Liabilities + Equity
12
7
BALANCE SHEET SAMPLE
Assets Liabilities
Cash 1,000 Accounts Payable 750
Accounts Receivable 3,000 Taxes Payable 250
Equipment 500 Total Liabilities 1,250
Total Assets 4,500
Equity
Common Stock 2,000
Retained Earnings 250
Total Equity 2,250
Total Liabilities
and Equity 4,500
12
8
INCOME STATEMENT
Presentation of an organizations Revenues
and Expenses 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
Revenues - Expenses = Net Income
12
9
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
13
0
CUSTOMER AND VENDOR ACCOUNTS
Customer and Vendor account balances are maintained in FI
through fully integrated accounts receivable and accounts payable
sub-modules
Financial postings for Customers and Vendors are made directly to
their respective individual accounts and accompanied by a
concurrent automatic posting to the General Ledger
13
1
CUSTOMER ACCOUNTS
Accounts Receivable Sub-Module
Information with respect to Customers who purchase the enterprises
goods and services such as sales and payments made
Substantive and important integration between Sales and Distribution
(SD) and FI
Billings in SD generate FI journal entries for sales activity
Customer Customer
189 142 Accounts Receivable
0 0
950
Customer Customer
135 123
40 15
0 0
13
2
VENDOR ACCOUNTS
Accounts Payable Sub-Module
Information with respect to Vendors from whom the enterprise
purchases goods and services such as purchases and payments made
Substantive and important integration between Materials Management
(MM) and FI
Purchase and goods receipt activities in MM generate FI journal entries
Vendor Vendor
100234 100435 Accounts Payable
0 0
850
Vendor Vendor
100621
10 100846
30
0 0
13
3
ACCOUNTANTS AND AUDIT TRAILS
Audit trails allow an auditor to begin with an account balance on a
financial statement and trace through the accounting records to
the transactions that support the account balance
Audit trails enable an auditor to trace individual transactions to
the effected account balance(s) on a financial statement
13
4
SAP DOCUMENT PRINCIPLE
Each business transaction impacting FI writes data to the SAP
database creating a uniquely numbered electronic document
The document number can be used to recall the transaction at a
later date
It contains, for example, such critical and necessary information
as:
Responsible person
Date and time of the transaction
Commercial content
Once written to the SAP database, a financial document (one

impacting the financial position of the company) can not be
deleted from the database
It can be changed to some degree
The SAP document principle provides a solid and important
framework for a strong internal control system a requirement of
law for companies that operate in the United States
13
5
SAP DOCUMENT PRINCIPLE
Period 1
Doc. no. DT Doc.date Currency Amount
1500000013 KZ 01/05/04 USD 1,800.00 -
1500000014 KZ 01/06/04 USD 990.00 -
100000012 SA 01/08/04 USD 750.00 -
1400000342 DZ 01/14/04 USD 5,250.00 -
13
6
137

GENERAL LEDGERS
Company Code Data

General Data
138

139

TOLERANCE
Vendor or Customer Tolerance
User Tolerance

Transaction Tolerance
140
DOCUMENT STRUCTURE .1
Between 2 and 999 document items (information that
applies to the line item) If you post documents via the
Accounting interface (for example, from Sales Order

Management, Purchasing Management, or other
applications), this results in items in the accounting
document that are identical in almost all of the fields.
Every document is uniquely identified by the
following fields:
Document number
Company code
Fiscal year
141
DOCUMENT STRUCTURE .2
Two important control keys:
Document type for the document header

The document type controls the document header and
is used to differentiate the business transactions to be
posted, for example, vendor invoices, customer payments,
and so on. Document types are defined at client level and are
therefore valid for all company codes.
Document types define the following:
Number ranges for document numbers
Account types permitted for postings
Posting key for the line items

Posting Keys Control the line Items
To which type of account the line item can be posted
The item posted to be debit or credit

142
Field status of additional details.
POSTING CONTROLS
Posting date determines the Posting period
Period Opening and closing

Reversal of Postings
Standard Reversal Posting/Normal Reversal
Posting - causes the system to post the incorrect
debit as a credit and the incorrect credit as a debit.
The normal reversal posting therefore causes an
additional increase in the transaction figures.
Negative posting also posts the incorrect debit as
a credit and the incorrect credit as a debit. This time
the posted amount is not added to the transaction
figures, but is subtracted from the transaction figures
of the other side of the account. This sets the
transaction figures back to as they were before the 143
incorrect posting took place.
TERMS OF PAYMENT
The terms of payment defaulted when posting
an invoice depends on where the invoice is
created:

If the invoice is created in Financials, the terms of
payment from the company code segment are defaulted.
If a customer invoice is created in Sales order
Management, the terms of payment from the sales area
segment are defaulted. When you post the Sales order
Management invoice, the terms of payment are copied
to the FI invoice (which is created automatically). VF01
If a vendor invoice is created in Purchasing Management,
terms of payment from the purchasing organization
segment are defaulted. When you post this invoice, the
terms of payment are automatically copied to the
accounting document. 144
CLEARING
Open items are incomplete transactions, such as
invoices that have not been paid. For a transaction to
be considered as completed, it must be cleared. A

transaction is cleared when a clearing posting has
been carried out for an item or group of items, so that
the resulting balance of the items is zero.
Posting with Clearing
Account Clearing
*** Clearing activity always generates a document.
Example: Open Item:
Expenses A/c Dr
To Suppliers A/c Cr
Cleared Item: Posting with Clearing
Supplier A/c Dr
To Bank A/c Cr 145
PAYMENT DIFFERENCES
Employee Tolerance
Upper limit for transactions

Lower limit for transaction
GL Tolerance
Permitted payment Differences
Tolerance for Vendors and Customers
Default values for Clearing transactions
Permitted Payment difference
Residual Items from payment differences
Partial receipt or Payment
146
PRIMARY AND SECONDARY COST
ELEMENTS
Managerial Financial
Accounting Accounting
(CO) (FI)
Aggregate Cost Elements General Ledger Accounts
Income Balance
Statement Sheet
Secondary Cost Primary Cost Expense

Elements Elements Accounts
Revenue
Accounts 147

Cert.Consultant
SAP University Alliances
Version 1.0
Authors Stephen Tracy
CONTROLLING (CO)
Bret Wagner
Stefan Weidner
Product
SAP ERP 6.0
Global Bike Inc.
Level
Beginner
Focus
Cross-functional integration
Controlling
GOAL OF CO
Managerial accounting termed controlling
is designed to collect the transactional data
that provides a foundation for preparing
internal reports that support decision-making
within the enterprise
These reports are exclusively for use within
the enterprise and include:
Cost center performance
Profit center performance
Budgets analyses
14
9
TARGET AUDIENCE
Executives
Senior
Management
Department
Managers
Controllers
Cost Accountants
15
0
ORGANIZATIONAL OBJECTS
These represent the legal and/or organizational
views of an enterprise
They form a framework that supports the
activities of a business in the manner desired by
management
Permit the accurate and organized collection of
business information
Support the development and presentation of
relevant information in order to enable and
support business decisions
Organizational Objects:
Company Code - Cost Center
Chart of Accounts - Internal Order
Controlling Area - Profit Center
15
1
COMPANY CODE
Represents an independent legal accounting
unit
Balanced set of books, as required by law,
are prepared at this level
A client may have more than one company
code
United States
United Kingdom
Liabilities &
South America Assets
Owners Equity
Canada
Germany
15
2
CHART OF ACCOUNTS &
CONTROLLING AREA
Chart of Accounts
A complete listing of the accounts that exist in the
General Ledger for a company
Since a given enterprise (e.g., General Motors) can
consist of several separate legal entities (e.g., Cadillac,
Chevrolet), separate company codes can be created for
each entity while each uses the same chart of accounts
so that consolidated statements can be prepared.
Controlling Area
A self-contained, organizational element for which the
management of revenues and expenses can be
performed
A controlling area may include one or more company
codes; therefore, an enterprise can perform management
accounting analyses and reports across several
15 companies
3 A way to identify and track where revenues and costs are
PROFIT CENTER & COST CENTER
Profit Center
Responsible for revenue generation and cost containment
Evaluated on profit or return on investment
Enterprises are commonly divided into profit centers based on
Region
Function
Product
Cost Center
Responsible for cost containment, not responsible for revenue
generation
One or more value-added activities are performed within
each cost center

Unit that is distinguished, for example, by area of
responsibility, location, or type of activity

Copy center
Security department
Maintenance department
15
4
INTERNAL ORDER
Temporary cost center responsible for cost
containment, not responsible for revenue
generation
It is used to plan, collect, and monitor the
costs associated with a distinct short-term
event, activity, or project
Company picnic
Trade show
Recruiting campaign
15
5
REVENUE ELEMENTS
A one-to-one linkage (mapping) between
General Ledger revenue accounts and CO
revenue elements is established to permit
the transfer of FI revenue information to CO
Posting in FI that impact revenue accounts
lead to an posting in CO to a revenue
element
In other words, revenue account = revenue
element just different words depending on
whether FI object or CO object
15
6
COST ELEMENTS
A one-to-one linkage (mapping) between General Ledger
expense accounts and CO cost elements is established to
permit the transfer of FI expense information to CO
Postings in FI that impact cost accounts lead to an posting in
CO to a cost element
In other words, expense account = cost element just
different words depending on whether FI object or CO object
Primary Cost Element

Originate in the General Ledger within FI and are automatically
transferred to CO when an FI transaction is recorded in the
General Ledger
Secondary Cost Element
Used exclusively in CO for allocations and settlements between
and amongst cost centers
15
7
PRIMARY AND SECONDARY COST
ELEMENTS
Managerial Financial
Accounting Accounting
(CO) (FI)
Aggregate Cost Elements General Ledger Accounts
Income Balance
Statement Sheet
Secondary Cost Primary Cost Expense

Elements Elements Accounts
Revenue
Accounts
15
8
POSTING PRIMARY COST ELEMENT
Supplies Expense Cash

Debit Credit Debit Credit
1,500 1,500
Managerial Accounting (CO)
Cost
Primary Cost
Center
Element
A
15
9
POSTING PRIMARY COST ELEMENT
(FI) Transaction Supplies Expense Cash
Document
Amount 1,500 1,500
G/L Account #
Cost Center
1900012432
(CO) Transaction
Document Cost
Cost Center Center
Cost Element 1,500
20000657
16
0
POSTING SECONDARY COST ELEMENT
Supplies Expense Cash

1,500 1,500
Cost CC 2
Center Secondary Cost
A CC 3 Element
16
1
STATISTICAL KEY FIGURES
Provide the foundation for accurate and
effective cost allocations between cost objects
Utilized to support internal cost allocations
involving allocations, assessments, and
distributions
Examples: number of employees, square
footage, minutes of computer usage
6 Hours Executive Offices
Copy
Center Maintenance
10 Hours
Activity Department
(20 Hours) Information Services
4 Hours
Department
16
2
POSTING SECONDARY COST ELEMENT
Executive
Rent Expense Offices
Debit Credit 1,800
t
1,500 Copy e m
en
El
Prim
a ry C
ost
Center c.
Co
st
Maintenance
Elem Se
e nt Department
Supplies Expense 1,500
Debit Credit 2,500 3,000
t Sec. Cost Element
st Elemen
2,500 Prima
ry C o
2,000
nt Se Information Services
c.
me Co
Ele st
Labor Expense st Ele
Co me
ry nt
Debit Credit Prima 1,200
2,000
16
3
TYPES OF ALLOCATION
Distributions primary cost elements
Assessments combination of primary and/or secondary cost
elements
Distribution
Method for periodically allocating primary cost elements
Primary cost elements maintain their identities in both the sending and
receiving objects
Sender and receiver cost centers are fully documented in a unique
Controlling (CO) document
Assessment
A method of allocating both primary and secondary cost elements
Primary and/or secondary cost elements are grouped together and
transferred to receiver cost centers through use of a secondary cost
element
Sender and receiver cost centers are fully documented in a unique
Controlling (CO) document
16
4
DISTRIBUTIONS
Receiving
cost centers
Sending Primary cost
cost center element
maintains its
identity
A010 Administration
Rent Expense Distribution
$1,500
16
5
ASSESSMENTS
Receiving
cost center
Sending
cost center Primary and
secondary
A020 IT cost
Software Expense elements
$4,200
Assessment
A020 IT
Supplies Expense
$500
16
6
167

END OF DAY 2

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SAP - OVERVIEW

Tapas Bhattacharya-FCMA,CISA (USA) & SAP Cert.

Sales Order Management

Tapas Bhattacharya-FCMA, CISA(USA) & SAP Cert.Consultant

Lets add some more Business Processes

Tapas Bhattacharya-FCMA, CISA(USA) & SAP Cert.Consultant

Tapas Bhattacharya-FCMA, CISA(USA) & SAP Cert.Consultant

Tapas Bhattacharya-FCMA, CISA(USA) & SAP Cert.Consultant

Tapas Bhattacharya-FCMA, CISA(USA) & SAP Cert.Consultant

Inventory Shop Floor

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& SAP Cert.Consultant

Stock Goods Material

Invoicing Cost Account Cash

... Cross Country ... Cross Department ... Cross Organization

Head quarters at Walldorf, Germany

9 subsidiaries Tokyo, Shanghai, Bangalore,

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Before you log on for the first time, your system

& SAP Cert.Consultant

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company code and every sales organization within a

specific agreements with the customer.

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Sales and Distribution Materials Management

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& SAP Cert.Consultant

& SAP Cert.Consultant

Centralized vs. Purchasing Org

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Company Code specific information: Purchasing Org. specific information:

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Mat. Plan. Data

Material Master Forecasting

Controlling Data Quality Data

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Plant specific information: Purchasing Data Storage Location specific information:

Plant 102 Storage Location 20

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Material Master Vendor Master

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Document: Material Document

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Document - Accounting Document

Purchase Orders can be create automatically

Purchase Materials Price/UofM

Purchase Order History is update with the receipt

103 goods receipt into GR blocked stock

122 return delivery to vendor

231 consumption for a sales order