Knowledge Sharing on Brazil Localization Requirements

Knowledge Sharing Workshop
<Topic>
August, 2005
Introduction
Procwork
Introducing PW team
PP Consultant : Leonardo Abreu MM Purchasing Consultant : Marcelo Stieger & Rafael Costa IM/WM Consultant : Reanato Penna FI / CO Consultant : Alexandre Matoso SD Consultant : Marcelo Stieger & Marcell Mascarenhas PM : Marcelo Stieger
Output & Deliverables

Understanding
Impacts of Brazil local legal requirements on Global Solution
Brazil
Consultant Risk
Complexity and effort to meet the Brazilian local legal requirements
PW
Localization Principles
Where do all these requirements come from?
Culture of bureaucracy
reality since very early in Brazils history continued regardless of many attempts to modernize
Long period of high inflation

during the last decade required complex calculation rules
High historic level of tax evasion

creation a very complex set of rules and regulations
Legal and Tax Requirements for Brazil

What are their impacts on a SAP R/3 implementation ?
.. Mainly the requirements are concentrated on tax calculation and reporting, new document flow (nota fiscal) and specific accounting rules (p.e., product costing) .. There are specific SAP hierarchy elements and some additional customizing required for Brazil in a R/3 implementation
Brazil Localization
Benchmark data based on Procwork Roll Out Experiences
Based on several SAP R/3 roll out projects in Brazil, Procwork have learned the following * :
Over 300 process variants can be impacted by localization requirements Average level of adherence of international templates (developed without Brazilian requirements) for implementation in Brazil SAP Module Adherence* SD 40% MM 50% CO 60% FI 60% PP 90% Average 60% Some processes not fully supported by standard SAP R/3
- Foreign trade document flow & documentation - Tax reports for different regions and/or for specific requirements of the business - some aspects of Payroll, External Warehouse, Bank EDI, etc ...
* impact varies significantly considering client specific business requirements, therefore, data should be used as a benchmark reference only
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Hierarchy
Hierarchy - Branch
The Filial (branch)
tax reporting Nota Fiscal reporting
Company
Filial
Plant
Plant
Legally represents each physical address of the company in which there will take place any tax related operations Important data is maintained at this level
Storage Location
Nota Fiscal and Legal books are issued at this level
Hierarchy Company Code
JABIL Circuit Brasil

Company Code
Banch 1
Branch 2
Branches
Jabil Circuit could be structured as only one Company Code. Reports could be taken at Company Code level, for Legal and Business requirements.
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Brazilian Localization
Nota Fiscal Most important fiscal/tax document for
Invoicing Accounting Goods movement
Contains taxes and business requirements Pre-printed form Sequenced numbers by physical site (branch) Audited by local Fiscal Authorities Source of key integration data
Accounting information Tax information
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Nota Fiscal Nota Fiscal Types
Nota Fiscal Fatura (invoice) Nota Fiscal Complementar (complement) Nota Fiscal de Correo (correction) Nota Fiscal de Devoluo (returns) Nota Fiscal de Transferncia (transfers) Nota Fiscal de Simples Remessa (issue goods without billing) Nota Fiscal de Entrada (incoming - e.g. Importation) Nota Fiscal de Conhecimento de Transporte (freights) Nota Fiscal de Energia Eltrica (energy) Nota Fiscal de Telefonia (telecomunications)
SAP Configuration
Nota fiscal has internal and external number ranges Depends on Sales document type Depends on Movement type
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Taxes There are many taxes in Brazil
Main ones affecting almost all goods movements:

ICMS - Material Circulation tax IPI - Manufacturing tax PIS - Social Integration COFINS - Contribution for social funds ISS - Services tax IRRF - Withholding tax INSS - Withholding tax social purpose
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Taxes IPI is a federal tax and depends on:
Control code (in Brazil is used as NCM code) Material exception
ICMS is a state tax and depends on:

Goods movement State from (plant) / State to (ship-to) for outgoing State from (vendor) / State to (plant) for incoming Material exception
PIS and COFINS:

Could be customized using sales organization and country
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Taxes IRRF is a tax related to natural person (IRPF) and legal entities (IRPJ) and depends on:
Vendor for incoming
INSS is a tax related to natural person and depends on:

Vendor for incoming
ISS is a city tax and depends on:

Material number for outgoing Vendor for incoming
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Tax Reports Tax related transactions should be stored in Fiscal Books (livros fiscais) There are rules on how to register them Requirements for printing and archiving are needed Different sorts of industry (or even company) operations require reports adaptation
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Product Costing Real Cost Method is mandatory Requires a significant amount of configuration and testing (Material Ledger) SAP have developed specific programs to be executed every time a period is closed Localization Brazil now is part of SAP standard.
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Master Data
Master Data Records Material

NCM Code Brazilian naming of goods CFOP Category the type of operation Material Destination Resale, Consumption & Asset Material Origin
Domestic Imported
Produced in-house or not Taxes Classification

ICMS / IPI ISS
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Material Master Screen
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Material Master Screen
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Master Data Records Vendor

Natural person or Legal entity indicator Legal Information
CNPJ number (identification for legal entity) or CPF number (identification for natural person) Natural person (must be set when CPF number is informed) Inscrio Estadual (regional tax code state inscription) Inscrio Municipal (city tax code municipal inscription) Domiclio Fiscal (jurisdiction code, ex. SP So Paulo
Situao Tributria IPI and ICMS Withholding category indicator

indicates that a tax will be withheld for payment. ex. IRRF Income tax held at the origin
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Vendor Master Screen
CNPJ CPF Insc.Estadual Insc.Municipal
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Master Data Records - Customer

Natural person or Legal entity indicator Legal Information
CNPJ number (identification for legal entity) or CPF number (identification for natural person) Inscrio Estadual (regional tax code state inscription) Inscrio Municipal (city tax code municipal inscription) Domiclio Fiscal (jurisdiction code, ex. SP So Paulo
Text code
texts are printed in the Nota Fiscal
Tax Classification
0 : Not Taxable 1: Taxable 2: Zona Franca
CFOP Category
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Customer Master Screen
CNPJ
Insc.Estadual
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Nota Fiscal - Sales
Nota Fiscal Number Operation Description CFOP Code Inscrio Estadual CNPJ Outgoing or Incoming Nota Fiscal ICMS item rates
Observations
Tax related part of the Nota Fiscal

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Nota Fiscal - Symbolic Return
Nota Fiscal Number Operation Description CFOP Code Inscrio Estadual CNPJ Outgoing or Incoming Nota Fiscal ICMS and IPI item rates and IPI amounts
NCM Code
Observation and Special Rule description
Tax related part of the Nota Fiscal ICMS and IPI Texts and observations
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Bolt-ons
Indicative Map of Interfaces (Bolt-ons)

Payroll Banks DWWD
(EDI)
WinChem
SAP R/3
Global Marketing
Export Web Shopping Legal Books Import

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Bolt-ons
Legal Books Export/ Import
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Bolt-ons
Legal Books Objectives :
1. Generate the Legal Books according to the Federal, State and City laws 2. Calculate the amounts to be paid, issue the legal documents (gias) and generate electronic files, when applied
Notes :
SAP provides some of the Legal Books based on So Paulo state only It is necessary to issue the other books / same books for other states Most clients decide to use specialized bolt-on systems to support these legal requirements Even with these bolt-on systems its absolutely necessary to do all the configurations in the SAP side Bolt-ons just get the information from SAP and put it into the specific lay-outs, according to the legislation
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Bolt-ons
Legal Books Effort :
Dependant on the fiscal requirements of the company Should start at the Realization phase
Resources :
Business input tax resources Designers tax resources Specialists bolt-on specialists
Options :
Mastersaf Aspen-Sati Syncro ...
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Bolt-ons
Export Objectives :
1. 2. 3. 4. 5. 6. 7. Export Data Bases Control Export Orders and Shipments Processes Follow-Up Issue Documents Export Exchange Control Issue Reports Generate daily and monthly accounting postings
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Bolt-ons
Import Objectives :
1. Import documentation from the Import Order to the issue of the Receipt Fiscal Invoice 2. Import Data Bases 3. Issue Documents 4. Follow-up reports 5. Import exchange control 6. Generate daily and monthly accounting postings
Note :
The physical receipt, as well as the fiscal and accounting receipt are not included in the scope but may be executed in SAP
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Bolt-ons
Export / Import Effort :
High Should start at the Realization phase
Resources :
Business input import/export resources Designers import/export resources Specialists bolt-on specialists
Options :
Bergen Aspen CE (Procwork) Bysoft Average ...
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The Scenarios & Presentation Approach
Customer to Cash Scenarios

For discussion SD:
Standard Sales Export Orders 3rd Party Sales Consignment Samples and Free of Charge (FOC) Customer Returns with customer Nota Fiscal Customer Returns with Companys own Nota Fiscal Correction of prices or quantity
Other Local Legal Scenarios
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Purchase to Pay Scenarios

For discussion in MM :
Standard Purchasing Stock Transfers Import Subcontracting Consignment Vendor Returns
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Finance Integration Scenarios

For discussion in FI / CO :
Product Costing Legal Books & Files
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Finance Specific Scenarios

For discussion FI :
Accounts Payable and Payments Accounts Receivable Collections Legal Books and Files Preparation
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Presentation Approach
A Generic Business Process Model
Define & Maintain Data
Forecast
Order Handling
Planning
Purchasing
Inventory
Production
Shipping & Logistics
Invoice & Payment
Claims & Feedback
Inquiry & Quotation
Execute Work
Finance
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Agenda <Scenario>
Overview Description of Scenario Overview Business Process Flow Main Localization Requirements Solutions SAP configuration Special Development Bolt Ons Manual workaround Summary Reminder of Key Points
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<Scenario Description>
Define & Maintain Data Forecast Order Handling Planning Purchasing Inventory Production Shipping & Logistics Invoice & Payment Claims & Feedback
Inquiry & Quotation
Execute Work
Scenario : <Scenario Name> This scenario describes
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<Overview Business Process Flow>

Customer
Request for quotation Quotation Approved, Purchase Order Receives Goods & documents Nota Fiscal for Domestic Sales
Local Legalisation Impact Description of Impact etc.
Plan Shipments & Book Transport Confirm qty Sales order
Loa d Tru ck Create/ Confirm Transfer Order
Print Shipping Doc.
Quotation (optional)
Create Sales order ref. quot.
To Production & Purchasing
Transfer Goods from production to Warehouse
Create Delivery
Post Goods Issue
Create Billing Doc. Bolt-on
Posting G/L
Account Receivable
Fiscal Books
Suppliers
Confirm Purchase order
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<The Scenario Solution>

The Solution
What is the solution?
SAP configuration special development bolt-on manual workaround Is it a mixture of these?
What does the solution do?
Implementation
How COMPLEX is this to do? How much EFFORT is required, type of resources, duration, etc.
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Brazilian Localization Review

48

Main ones affecting almost all goods movements are:

ICMS - Material Circulation tax IPI - Manufacturing tax ISS - Services tax PIS - Social Integration COFINS - Contribution for social funds IRRF - Withholding tax INSS - Withholding tax social purpose
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Master Data Records

Material
NCM Code Brazilian naming of goods CFOP Category the type of operation Material Destination Resale, Consumption & Asset Material Origin (domestic / imported) Produced in-house or not Taxes Classification (ICMS, IPI/ISS)
Vendor
Legal Information (tax code i.e. CNPJ) Situao Tributria IPI and ICMS Withholding category indicator
Customer
Legal Information (tax code ie. CNPJ, Insc.Estadual) Text code (texts are printed in the Nota Fiscal) Tax Classification (Taxable, Zona Franca) CFOP Category
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For discussion now:
Standard Sales Export Orders 3rd Party Sales Consignment Samples and Free of Charge Customer Returns with customer Nota Fiscal Customer Returns with Companys own Nota Fiscal Correction of prices or quantity
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Agenda Standard Sales

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Standard Sales
Inquiry & Quotation
Execute Work
Scenario : Standard Sales This scenario describes the main flow of activities to be performed in Brazil from the creation of a sales quotation (optional) and convert it to a sales order until the delivery the goods to the customer, the billing and the Sales Nota Fiscal generation.
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Standard Sales
Customer
Request for quotation Quotation Approved, Purchase Order
Customer Region (state) Tax Code for Brazil Pricing Procedure for BR Domestic Sales Taxes calculation (ICMS, IPI, PIS,COFINS) Fiscal Texts for ICMS & IPI
Plan Shipmen ts & Book Transpor t Create Delivery Print Shipping Doc. Receives Goods & documents
Nota Fiscal for Domestic Sales
Create Sales order ref. quot. (ORB)
Confirm qty Sales order
Post Goods Issue
Create Billing Doc. (F2B)
Generate Nota Fiscal (N1) Bolt-on
Pricing Procedure for BR Domestic Sales Taxes calculation (ICMS, IPI, PIS,COFINS) Suppliers
Confirm Purchase order Posting G/L
Posting G/L
Account Receivable
Fiscal Books
Account Keys for BR Dom. Sales Fiscal Texts for ICMS & IPI
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Standard Sales
The Solution
SAP configuration
Configuration specific for Brazil; New Sales order type and item category; New Billing document; New Incompletion proc.for Brazilian mandatory fields; New Pricing procedure and Account keys assigned to the new condition types; Legal Text for ICMS and IPI; SAP Script development for Nota Fiscal
MASTERSAF, Aspen-Sati, SYNCRO [Fiscal Books]
Special development
Bolt-on
Implementation
A standard sales order process is not difficult to be implemented. There are some points of attention to consider: Standard pricing procedure for Brazil must be adjusted; Complex SAP Script development for NF; All business variants relevant to Brazilian operations must be tested; Knowledge of the BBRAUN fiscal area to handle correctly the Brazilian requirements in SAP
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Pricing Procedure
* Sales Pricing Procedure for Brazil (Std.: RVXBRA)
Initial Price (PR00) -/+ Discount/Surcharge * (without taxes) ______________________________ + Price with ICMS (ICMI) -/+ Discount/Surcharge * (including taxes) ______________________________ Tax Base + IPI + ICMS + ISS _ _ Final Sales Price (NF) _______________________________ Base of PIS/COFINS PIS (statistic) COFINS (statistic)
*Optional conditions for pricing -Automatic condition calculated by a formula - IPI calculation: NCM code / material -ICMS Region-from/ Region-to -ISS Tax for services
- PIS and COFINS calculation: Condition records
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Agenda Export Orders

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Export Orders
Inquiry & Quotation
Execute Work
Scenario : Export Orders This scenario describes the main flow of activities to be performed in Brazil from the creation of a export quotation (optional) and convert it to a sales order until the export documentation preparation, the delivery to the external agent, the billing and the Export Nota Fiscal generation.
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Export Orders
Customer
Request for quotation Quotation Approved, Purchase Order
Customer Country Tax Code for Brazil (I0,C0) Pricing Procedure for BR Export Sales NO Taxes calculation Fiscal Texts for ICMS & IPI Shipme
nts & Book Transpo rt Plan
Receives Goods & documents
Create Packing List
Create Commercial Invoice
Create Sales order ref. quot.
Create Delivery
Post Goods Issue Bolt-on Posting G/L
Create Billing Doc.
Generate Nota Fiscal Bolt-on Bolt-on Fiscal Books
Bolt-on
Posting G/L
Account Receivable
Agent
Request for export docum. Confirm Purchase order
Pricing Procedure for BR Export Sales NO Taxes

Confirm calculation export Doc. Nota Fiscal / Invoice for Export
Account Keys for BR Export Fiscal Texts for ICMS & IPI
Add Export Doc. Deliver to customer
Suppliers
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Export Orders
The Solution
SAP configuration
Specifics for Brazil; Sales order type, item category and billing document; New incompletion proc.for Brazilian mandatory fields; New Pricing procedure specific for BR Export and Account keys assigned to new condition types; Legal Text for Export; SAP Script development for Nota Fiscal Bergen, Aspen CE [Export and documentation Control]; MASTERSAF, Aspen-Sati, SYNCRO [Legal Books] Extra export documentation, communication with SISCOMEX
Special development

Bolt-on
Manual workaround
Implementation
Its a complex solution because requires or a large manual documentation for export process or an new integration with the bolt-on system to solve this. Besides, new SD documents, pricing procedure and accounting assignment must be created.
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Agenda 3rd Party Sales

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3rd Party Sales

Inquiry & Quotation
Execute Work
Scenario : 3rd. Party Sales This scenario describes the main flow of activities to be performed in Brazil when for the same customer, you have a payer different from ship-to address. Locally this process is called Venda por conta e ordem. In this case, to support the Brazilian legal requirements, SAP system must provide 2 different types of Notas Fiscais. The first one must to be issued to the payer (just to bill the customer) and another one must to be issued and sent to the ship-to address (just to follow the goods to the customer plant).
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3rd Party Sales

Customer (payer)
Request for quotation Quotation Approved, New Sales order type (1) Purchase Order
Use Customer-Payer (address)
Pricing Procedure for BR 3 rd. Party Sales Taxes calculation (ICMS, IPI, PIS,COFINS) Account Keys for BR 3rd. Party Fiscal Texts for ICMS & IPI and Loa Plan d manual fiscal text Shipments
Nota Fiscal W/ ref.to Payer (send by mail)
Pricing Procedure for BR 3 rd. Party Sales Taxes calculation (ICMS, IPI, PIS,COFINS) New Sales order type (2) Fiscal Texts for ICMS & IPI Use Customer-Send to (address) Pricing Procedure for BR 3 rd. Party Sales
Tru & Book ck No Accountings Transport
Create Nota Fiscal (N1)
Create To Sales order Taxes calculation (ICMS, IPI, Quotation Production & PIS,COFINS) ref. quot. Purchasing (RCS)
Manual texts for NF (if necessary) Reference w/Confirm the first NF Goods issued Delivery
(1) Transfer Order Issue Create Create/ Post
Create Billing Doc. (F2B) Bolt-on
Fiscal Texts for ICMS & IPI Payer
Step 1
Reference: Billing doc. Step 1 Confirm Purchase order Create Sales order ref. Bill.doc. (RCM) Ship-to Create Billing Doc. (FST) Create Nota Fiscal (N1) Bolt-on
Posting G/L
Account Receivable
Fiscal Books
Step 2
Suppliers Customer (send-to)
Ref. First NF
Nota Fiscal W/ ref. Send-to
Receives Goods & documents

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3rd Party Sales

The Solution
SAP configuration
Specifics for Brazil; Sales order type, item category and billing document (one for each step of the process); New incompletion proc.for Brazilian mandatory fields; New Pricing procedure specific for BR 3rd.party and Account keys assigned to new condition types; Legal Text for ICMS and IPI;
SAP Script development for Nota Fiscal MASTERSAF, Aspen-Sati, SYNCRO [Fiscal Books]
Special development

Bolt-on
Implementation
This scenario has a medium effort to be implemented. There are some points of attention to consider:
Distinct configurations to support the first and second Nota Fiscal, its take more time to prototype and test; The scripts are important to drive the user in order to choose the correct documents in the right sequence; Knowledge of the BBRAUN fiscal area
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Agenda Consignment Sales

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Consignment Sales
Inquiry & Quotation
Execute Work
Scenario : Consignment Sales This scenario describes the main flow of activities to be performed in Brazil when you need to send products in consignment to the customer without bill him, but to support the Brazilian legal requirements, you need to send a Nota Fiscal to follow goods. When customer consumes your products, you have to invoice him, sending another Nota Fiscal. In the first Nota Fiscal, we have to bring the taxes but we will not charge the customer, and then in the second Nota Fiscal, it will have the same taxes
67
Consignment Sales
Customer (payer)
Customer request Customer Use Customer Region informs consumed Pricing Procedure for BR quantity
New Sales order type (KBB)

Receives Accountings only for ICMS with ref. goods Step 1 No account receivable Nota Fiscal Nota Fiscal just to follow goods
Step
Account receivable and IPI Taxes calculation (ICMS statistic, IPI, PIS,COFINS) Taxes calculation (ICMS statistic, IPI, PIS,COFINS) Fiscal Texts for ICMS & IPI 1: Fill-up Fiscal Texts for ICMS & IPI
Create Sales order ref. Bill.doc. (KEB)
Plan Taxes calculation (ICMS, IPI Shipme Taxes calculation (ICMS, IPI statistic) nts & statistic) Book Fiscal texts for ICMS, IPI New Sales order type (KEB) Fiscal Texts for ICMS &Transpo IPI rt Use Customer Region Confirm To Transfer Goods Post Pricing procedure for BR Create Create qty Pricing Procedure for BR& Production fromConsignment production Delivery Goods Sales order Issue Sales order Purchasing Consignment Issue to Warehouse (LFB) Issue (KBB) Consign. Special Stock
Consignment Fill-up
Create Billing Doc. (FCR) Posting G/L
Generate Nota Fiscal Bolt-on Fiscal Books
Create Symbolic Delivery
Post Goods Issue from consig. stock
Create Billing Doc. (FC)
Create Nota Fiscal Bolt-on
Step 2: Issue
Posting G/L
Posting G/L
Account Receivable
Fiscal Books
Suppliers
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Consignment Sales
Customer (payer)
Customer request Return customer Nota Fiscal & goods Receives goods Plan Shipme nts & Specific Sales Order type (KAB) and Book item category Transpo for Brazil rt Use same Pricing Procedure for BR Confirm Create Post Consignment Fill-up qty Delivery Goods Sales order (LFB) NF number Issue (Legal Inform Customer Nota Fiscal just to follow goods
Create Sales order (KBB)
Create Generate Billing Nota Its not necessary Doc. Fiscal to issue another NF (FCR) (N1)
Books) w/o reference in SAP
Step 1: Fill-up
Consign. to a Usually created with reference Special billing Stock
to receive goods. Bolt-on The customer NF Posting Fiscal will G/L support the Books process
Create Sales order ref. Bill.doc. (KAB) Register customer Nota Fiscal ref: bill.doc. Confirm Purchase order
Create Delivery (LRB)
Post Goods Receipt from consig. stock
Create Billing Doc. (REB+N4) Bolt-on
Step 3: Pick-up
Specific Register Reason (REB)
Billing document Consign.

Special Stock
Posting G/L
Fiscal Books
Use same Pricing Procedure for BR Consignment Fill-up
Suppliers
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Consignment Sales
The Solution
SAP configuration
Specifics for Brazil; Sales order type, item category and billing document (one for each step of the process); New incompletion proc.for Brazilian mandatory fields; New Pricing procedure specific for BR 3rd.party and Account keys assigned to new condition types; Legal Text for ICMS and IPI;
SAP Script development for Nota Fiscal MASTERSAF, ASPEN-SATI , SYNCRO [Fiscal Books]
Special development

Bolt-on
Implementation
This scenario has a medium effort to be implemented. There are some points of attention to consider:
Distinct configurations to support the first and second Nota Fiscal, its take more time to prototype and test; The scripts are important to drive the user in order to choose the correct documents in the right sequence; Knowledge of the Jabil fiscal area
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Agenda Samples and FOC

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Samples and Free of Charge

Inquiry & Quotation
Execute Work
Scenario : Samples and Free of Charge This scenario describes the main flow of activities to be performed in Brazil to send some samples or free of charge products to a customer. Every product must be followed by a Nota Fiscal, even if it is free of charge. Samples with less than 5 kg are tax exempt, otherwise they will have ICMS and/or IPI. In cases we have taxes, we need to account them and register in Legal Books.
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Customer
Request for Samples
Customer Region (state) Tax Code for Brazil Pricing Procedure for BR Samples Taxes calculation (ICMS, IPI) Fiscal Texts for ICMS, IPI
Plan Shipme nts & Book Transpo rt Confirm qty Sales order Create Delivery Post Goods Issue Create Billing Doc. (ZXX)
Nota Fiscal for Samples
Create Sample Order (ZXX)
Generate Nota Fiscal Bolt-on
Tax Code for Brazil Pricing Procedure for BR Samples Suppliers

Posting G/L
Posting G/L
Fiscal Books
Taxes calculation (ICMS, IPI) Fiscal Texts for ICMS, IPI
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The Solution
SAP configuration
Configuration specific for Brazil; New Sales order type and item category; New Billing document; New Incompletion proc.for Brazilian mandatory fields; New Pricing procedure and Account keys assigned to the new condition types; Legal Text for ICMS and IPI; Billing has to account the ICMS and IPI, but not account receivable. SAP Script development for Nota Fiscal
MASTERSAF, ASPEN-SATI , SYNCRO [Fiscal Books]
Special development
Bolt-on
Implementation
A sample or free of charge process is not difficult to be implemented. There are some points of attention to consider: Standard pricing procedure for Brazil must be adjusted; Complex SAP Script development for NF; All business variants relevant to Brazilian operations must be tested; Knowledge of the BBRAUN fiscal area to handle correctly the Brazilian requirements in SAP
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Agenda Customer Returns

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Customer Returns
Inquiry & Quotation
Execute Work
Scenario : Customer Returns This scenario describes the main flow of activities to be performed in Brazil when a customer returns the goods for commercial or quality reasons. The difference in Brazil exists only because of the Nota Fiscal that will be used during the process. There are two different process: one with own Nota fiscal that Jabil has to create another incoming nota fiscal and the other with Customers nota fiscal where Jabil has only to inform in incoming Legal Book.
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Customer Returns Companys own NF

Reject goods before receiving Return BBRAUN Nota Fiscal & goods
Customer
Specific Sales Order type (ROB) and item category for Brazil Use same Pricing Procedure for BR Standard Sales Inform Jabil NF number (Legal Receive Books) the goods Usually created with reference to to stock a billing
to return Analyse the goods and release or Reject
Create specific Sales Order (ROB) Register Jabil Nota Fiscal ref: bill.doc.
Confirm Qty Order
Post Goods Receipt
Create Billing Doc. (REB) Account Payable (Credit)
Generate Incoming Nota Fiscal (N5) Bolt-on
Register Reason
Posting G/L
Posting G/L
Fiscal Books
Specific Billing document (REB) Suppliers Use same Pricing Procedure for BR Standard Sales
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Customer Returns Customer NF

Customer
Reject goods before receiving Return customer Nota Fiscal & goods
Specific Sales Order type (REB) and item category for Brazil Use same Pricing Procedure for BR Standard Sales Inform Customer NF number (Legal Books) w/o reference in SAP Receive Usually created with billing
the goods reference to a to return to stock Analyse the goods and release or Reject
Create specific Sales Order (REB) Register customer Nota Fiscal ref: bill.doc.
Confirm Qty Order
Post Goods Receipt
Create Billing Doc. (REB + N4) Account Payable (Credit)
Its not necessary to issue another NF to receive goods. The customer NF will support the process.
Bolt-on Register Reason Posting G/L Posting G/L
Specific Billing document (REB) Suppliers Use same Pricing Procedure for BR Standard Sales
Fiscal Books
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Customer Returns
The Solution
SAP configuration
Configuration specific for Brazil; New Sales order type and item category (consider 2 scenarios); Billing document; New incompletion proc.for Brazilian mandatory fields; Automatic Legal Text for ICMS and IPI and manual texts (if necessary) SAP Script development for incoming Nota Fiscal (Scenario: Returns w/ BBRAUN NF) MASTERSAF, Aspen-Sati, SYNCRO [Fiscal Books]
Special development Bolt-on
Implementation
The returns from the customers process isnt difficult to be implemented. There are some points of attention to consider:
Two different scenarios for Brazil, using specific documents types, will demand a effort of configuration and testing The scripts are important to drive the user in which documents must be used Knowledge of the Jabil fiscal area to understand and fill correctly all the Brazilian legal fields in SAP and how the process must be handle in SAP
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Agenda Correction of price or qty

80
Correction of price or quantity

Inquiry & Quotation
Execute Work
Scenario : Correction of price or quantity This scenario describes the main flow of activities to be performed in Brazil when Jabil makes a mistake related to the price or quantity and the customer or the own firm recognize issue and decide to correct the amounts. For Brazil, the SAP needs to provide a Nota Fiscal (Complement NF) to match the legal requirements.
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Customer
Notifiy NF Error: Qty NF < real price/qty
Specific Sales Order type (DRB) Complement and item category for Brazil Specific Billing type (L2B) Nota for Brazil Fiscal Manual condition type to inform de difference of price Manual condition type to inform de difference of price Inform BBRAUN NF number (Legal Books) Inform BBRAUN NF number (Legal Books) Usually created with reference to a billing
Create Billing Doc. (L2B) Inform the Difference (PR00 or Qty) Generate Complement Nota Fiscal (N2) Bolt-on
Create Debit Request Sales Order (DRB)
Inform Original NF Ref.:bill.doc.
Inform order reason
Account Receivable (Debit/ Credit)
Posting G/L
Fiscal Books
Suppliers
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The Solution
SAP configuration
Configuration specific for Brazil; New Sales order type and item category; New Billing document; New incompletion proc.for Brazilian mandatory fields; Automatic Legal Text for ICMS and IPI
Special development
SAP Script development for Nota Fiscal
Bolt-on
MASTERSAF, ASPEN-SATI, SYNCRO [Fiscal Books]
Implementation
This scenario requires a low effort be implemented. There are some points of attention to consider:
Besides the low complexity, this scenario is very important to the day by day for all the companies in Brazil.
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Customer to Cash
Services; Industrialization; Resales; Sales for consumption; Zona Franca (Resales and Industrialization; Scrapping; Fixed Assets; Credit Memos;
84

For discussion now:
86
Agenda - Standard Purchasing

87
Standard Purchasing
Inquiry & Quotation
Execute Work
Scenario : Standard Purchasing This scenario describes the main flow of activities to be performed in Brazil from the creation of a purchase requisition for an item and its release procedure until payment of the item when it is received.
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Standard Purchasing
Customers
- At
Nota Fiscal Receiving Invoice Verification, inform Nota Fiscal Number, Issuing date, receiving date, total amount, Nota Fiscal Type
- At Goods Receipt, inform Nota Fiscal Number, Issuing date, receiving date
Posting G/L
Posting G/L
Accounts Payable
Fiscal Books
Outline Agreement
Purchase requisition
Request for quotation
Evaluate quotations
Release purchase requisition
Purchase order
Enter order Confirm.
Follow-up on delivery
Goods receipt
Invoice verification Bolt-On
Pricing Schema Tax code
Pricing Schema
Suppliers
Quotation
Tax code - Nota Fiscal Type - Additional data: Material - Additional data: Material - Tax code Usage, Material Origin, Usage, Material Origin, Create Confirm Deliver Nota Material Category, Material Category, NCM code - PO Number Sales NCM code
Order order material
Fiscal
89
Standard Purchasing
The Solution
SAP Configuration Pricing Schema with Brazilian taxes (ICMS, IPI); Tax code configuration. Special Development SAPscript for Purchase Order Printing. Bolt-Ons MASTERSAF, ASPEN_SATI, SYNCRO.
Implementation
A standard purchasing order process configuration isnt difficult to be implemented. The complexity will be the fiscal variants to be tested and configured. There are 3 points of attention to consider: pricing schema configuration; SAP Script development; basic fiscal knowledge of the buyer to understand which tax code should be used.
90
Pricing Procedure
Example of basic Pricing Procedure for Brazil: ZRM0000
Price with ICMS IPI + (((Gross Price (Preo Bruto) Consumption ICMS) Industrialization ICMS) IPI) + Net Price (Preo Lquido) IPI ICMS
- Automatic IPI calculation: Standard; By NCM Code; Exception by material. - Automatic ICMS calculation: Standard; By State; Exception by material.
IVA CODE
91
Agenda - Stock Transfer

92
Stock Transfer
Inquiry & Quotation
Execute Work
Scenario : Stock Transfer This scenario describes the main flow of activities to be performed in Brazil while transferring a material from one plant to another.
93
Stock Transfer - Unplanned

Customers
Posting G/L Fiscal Books
-
Nota Fiscal Issuing Generate Nota Fiscal to support material transfer from one plant to the other (outgoing Nota Fiscal) using a special movement type
-
Cotia
Goods Issue of Material/ Transfer Nota Fiscal Bolt-On
Fiscal Texts for ICMS and IPI
Nota Fiscal Receiving Receive Nota Fiscal from the other (incoming Nota Fiscal) using a special movement type
-
Pirapozinho
Goods Receipt of Material/ Transfer Nota Fiscal Bolt-On
Supplier
Posting G/L
Fiscal Books
94
Stock Transfer - Planned

Customers
-
PO Type UB Item Category U Pricing Schema Tax code

Goods Receipt of Material/ Transfer Nota Fiscal Bolt-On Fiscal Books
Cotia
Create Transfer Purchase Order
data: Material Usage, Material Origin, Material Category, NCM code Nota Fiscal Receiving Receive Nota Fiscal from the other (incoming Nota Fiscal) using a special movement type
-
- Additional
Pirapozinho
Analyse pending deliveries
Nota Fiscal Issuing Generate Nota Fiscal to support material transfer from one plant to the other (outgoing Nota Fiscal) using a special movement type
-
Goods Issue of Material/ Transfer Nota Fiscal Bolt-On
Supplier
Posting G/L
Fiscal Books
95
Stock Transfer
The Solution
SAP Configuration
Nota Fiscal Association to special movement types; Associate Issuing Plant as a customer; Create Receiving Plant as a vendor; Tax Code configuration.
Special Development
Adjustments to SAPscript for Outgoing Nota Fiscal form (Nota Fiscal de Transferncia).
Bolt-Ons
MASTERSAF, ASPEN_SATI, SYNCRO.
Implementation
The process has an standard operation in SAP. The complexity will be the planning and control of the transfers between plants. In case of using business areas some complex ABAP programs should be developed to support the transfers.
96
Agenda - Import
97
Import
Inquiry & Quotation
Execute Work
Scenario : Import This scenario describes the main flow of activities to be performed in Brazil from the creation of a purchase requisition for an item and its release procedure until payment of the item when it is received for a material bought out of the country. It also shows the integration points of SAP to bolt-on systems that control the imports.
98
Import
Customers
Nota Fiscal Writer Receiving
Posting
-
Custom Expenses Invoice Verification

Accounts Posting G/L
The Nota Fiscal issued by G/L the agent to support Payable material transfer from the harbor to the plant Outline should be received manually at the Nota Fiscal Agreement Writer Transaction
Release purchase requisition Create Downpayment Bolt-On
-
The Custom Expenses declared by the agent to nationalize the imported materials are received with a Nota Fiscal Accounts Posting Fiscal transaction as in the Invoice Verification Payable G/L cost receipt Books a planned (if the cost was planned in the pricing schema in the purchase order) Exchange
rate variation
Fiscal Books
Purchase Order Purchase requisition
Enter order Confirm. Bolt-On
Invoice verification Bolt-On Nota Fiscal Writer Receipt Custom Expenses Invoice verification Bolt-On
Bolt-On
Nota Fiscal type Company Code
Goods receipt
Bolt-On
Foreign Suppliers- Branch
Schema - Pricing Nota Fiscal Type Receive Create Confirm Deliver code Down- Invoice Sales - Vendor number - Tax Tax code order Material payment Order data: Material - Material information (Quantity, Unit price, CFOP, - Additional PO Number
Agent
ICMS Tax Usage, Material Origin, Situation, IPI Tax Situation, Material Usage, Material Origin, - Planned costs Material Category, NCM code Material Category, NCM code)
Receive Material Deliver Material Nota Fiscal
Nota Fiscal Custom Expenses
99
Import
The Solution
SAP Configuration
Pricing Schema with import pricing (Import Tax, freights, ).
Special Development
SAPscript for Purchase Order Printing; SAPscript for Incoming Nota Fiscal form (Nota Fiscal de Entrada).
Bolt-Ons
Bergen, SIGA-EIC (Easy Management) [Import Control]; MASTERSAF, ASPEN_SATI, SYNCRO [Fiscal Books].
Manual Workaround
Nota Fiscal Writer to receive the materials in stock; Distribution of custom expenses.
Implementation
Its a complex solution because requires the configuration of an import pricing schema, manual Nota Fiscal Writer for the goods receipt and the integration with the bolt-on system.
100
Agenda - Subcontracting
101
Subcontracting
Inquiry & Quotation
Execute Work
Scenario : Subcontract This scenario describes the main flow of activities to be performed in Brazil from the creation of a purchase requisition for an item and its release procedure until payment of the item when it is received for a material that was processed outside the plant using components sent by the plant. In this process, the company sends components to the vendor which processes it and send back to the company the processed material.
102
At goods receipt the components used in the ubcontracting process are consumed to produce the material that was subcontracted
A specific Nota Fiscal is required to support this operation and can be sent by the vendor in 2
-
Subcontracting
Nota Fiscal Receiving
- At Invoice Verification, inform Nota Fiscal Number, Issuing Posting Accounts date, receiving date, total G/L Payable amount, Nota Fiscal Type and Posting system Fiscalwill include the line items for Books the symbolic return of the G/L components used by the vendor
Issuing of Components Customers separated from the Nota Fiscal to bill the (Remessa para service (special transaction to receive it) Beneficiamento)
- AtFiscal goodsto issue the components used in together with the Nota bill the the subcontracting service (received at invoice verification) process are sent to vendor
Fiscal Books
Outline Agreement
Posting G/L
Fiscal Books
Evaluate quotations
Purchase order
Goods Issue of Components
Goods receipt
Invoice verification
Suppliers
Quotation
Bolt-On Type - Pricing Schema - Fiscal Texts for ICMS and IPI - Tax code - Nota Fiscal Type - Tax code - Amount of each component - Additional data: Material - Tax code being sent to subcontracting - Additional data: Material Usage, Material Origin, Create Nota Fiscal Usage, Material Origin, Confirm Deliver Nota Material Category, NCM code - PO Number Sales to receive - PO Number order material Fiscal Material Category, NCM code Order Components
- Special Movement - Pricing Schema
Bolt-On
Bolt-On
103
Subcontracting
The Solution
SAP Configuration
Pricing Schema with Brazilian taxes (ICMS, IPI); Special Nota Fiscal type to support Subcontracting Nota Fiscal; Special movement type to support Subcontracting components issue and Subcontracting components return (symbolic); Nota Fiscal Association to Movement types for Subcontracting; Account association to subcontracting movements. SAPscript for Purchase Order Printing; Adjustments to SAPscript for Outgoing Nota Fiscal form (Remessa para Beneficiamento). MASTERSAF, Aspen-Sati, SYNCRO. Price of each component to be sent to subcontracting should be informed manually.
Special Development

Bolt-Ons

Manual Workaround
Implementation
The complexity of this solution is high due to:

control the components sent to subcontracting and do the manual movements to adjust stock in case of material loss; look for the price of each component to be sent to subcontracting and calculate the amount of the material to be sent to inform in the goods issue transaction to generate the Nota Fiscal; match the values of the components sent to subcontracting in the Symbolic Nota Fiscal of Return of the Components used in the subcontracting; process definition difference between subcontracting (components <> processed material) and industrialization (components = processed material).
104
Agenda - Consignment
105
Consignment
Inquiry & Quotation
Execute Work
Scenario : Consignment This scenario describes the main flow of activities to be performed in Brazil from the creation of a purchase requisition for an item and its release procedure until payment of the item when it is received for a material that was received in the plant used a consignment process. In this process, the material is sent by the vendor without payment and at a certain period (for example, the end of the month) it is verified the usage of this material and the vendor invoices the company the quantity used. Replenishments of this stock are performed during the month to avoid lack of material in stock.
106
Consignment
Customers
- At Invoice Verification, inform Nota Fiscal Number, Issuing - At goods receipt the materials in date, receiving date, total consignment are received in SAP in a amount, Nota Fiscal Type and special stock (or accounting control) and a Posting Fiscalto the Nota Fiscal the reference Nota Fiscal of Remessa em Consignao G/L Books received in consignment is generated in SAP (that has all the information of the Nota Fiscal sent by the vendor)
Goods Receiving of Materials in Consignment (Remessa em Consignao)
Nota Fiscal Receiving Posting Accounts

G/L Payable
Fiscal Books
Outline Agreement
Posting G/L
Fiscal Books
Evaluate quotations
Purchase order
Goods receipt
Follow-up on next deliveries
Invoice verification
Goods receipt
Suppliers
Quotation
Bolt-On - Pricing Schema - Pricing Schema - Special Movement Type - Tax code - Tax code - Fiscal Texts for ICMS and IPI - Nota Fiscal Type - Additional data: Material - Additional data: Material - Tax Code - Tax code Usage, Material Origin, Usage, Material Origin, Create Deliver Material Category, NCM Material code Category, NCM code Confirm - PO Number - PO Number Sales Material/ order Order Nota Fiscal
Bolt-On
Bolt-On
Nota Fiscal
Deliver Material (replenishment)
107
Consignment
The Solution
SAP Configuration
Pricing Schema with Brazilian taxes (ICMS, IPI); Special Nota Fiscal type to support Consignment Nota Fiscal; Special movement type to support Consignment receipt; Nota Fiscal Association to Movement type for Consignment receipt; Account association to consignment movement; Special Tax Code configuration for Consignment process. SAPscript for Purchase Order Printing. MASTERSAF, ASPEN_SATI , SYNCRO. Use of SAP standard reports to gather information about consignment stock in hand, materials received in consignment and usage of materials.
Special Development
Bolt-Ons Manual Workaround
Implementation
The process has an standard operation in SAP. The complexity will be the control of stock in consignment because its required to use some SAP standard reports to control these stocks.
108
Agenda - Vendor Returns

109
Vendor Returns
Inquiry & Quotation
Execute Work
Scenario : Vendor Returns This scenario describes the main flow of activities to be performed in Brazil when a material received is rejected by any reason and it is necessary to return the goods to the vendor.
110
Vendor Returns
Customers
-
Return to Vendor Nota Fiscal Create a Credit Memo to the vendor informing Purchase Order Number, total amount being returned, materials being returned, amounts per material being returned, Nota Fiscal Type, Fiscal Texts for ICMS and IPI
Posting G/L
Reverse Accounts Payable
Fiscal Books
Posting G/L
Reject Material
Return Nota Fiscal (Credit Memo)
Goods issue of returned materials
Reopens Purchase Order balance
Bolt-On
Suppliers
Nota Fiscal receipt Receive Returned material
111
Vendor Returns
The Solution
SAP Configuration Pricing Schema with Brazilian taxes (ICMS, IPI); Special Nota Fiscal type to support Return to Vendor Nota Fiscal; Special movement type to support Return to Vendor issue. Special Development Adjustments to SAPscript for Outgoing Nota Fiscal form (Vendor Return). Bolt-Ons MASTERSAF, ASPEN-SATI , SYNCRO.
Implementation
The process has an standard operation in SAP.
112
Purchase to Pay
Utilities Nota Fiscal (Energy, Phone, Water); Future Delivery on purchasing; Third-Party; Complementar Nota Fiscal; Free of Charge (Donations, Samples); Return of Repairs; Test; Returnable Packaging; Freights; Inventory Write-offs; Purchase of Services.
113
Reminder of Key Points - Logistics

MASTER DATA:
Material, vendors and customer master data should have the localized fields filled correctly in order to allow localization operation and minimize the fiscal problems;
CONFIGURATIONS:
Different pricing schemas for several scenarios in Sales and Purchasing (complex configurations); New SD documents should be created using specific doc. types for Brazil; Different Nota Fiscal types to support business processes; New movement types to support business processes; Different tax codes should be created to support business process; Upload or input exceptions related to taxes calculation (ICMS and IPI rates - exception by material, ICMS and IPI Fiscal Texts, withholding taxes - IRRF, INSS, ISS); Extra configuration required in case of using bolt-on systems.
DEVELOPMENTS:
SAP Script development for the main documents in Logistics (purchase order, sales order and picking list); SAP Script development for the Nota Fiscal and high effort to test all the business variants and validate the Nota Fiscal printing (Outgoing and Incoming); Extra ABAP developments in case of using interfaces of SAP to other systems.
114
Reminder of Key Points - Logistics

TESTING:
High effort to map and consider all business and fiscal variants that must be used during the test of the scenarios. The validation process should involve the key-users and also the Fiscal Area.
FISCAL KNOWLEDGE:
BBRAUN Fiscal Area participation during the project is essential in order to transfer their fiscal knowledge, provide information during configuration, validate the tests and learn how to handle the SAP system; Basic fiscal knowledge of the buyers and the sales team to understand all Brazilian legal fields and their correct application in SAP documents affected by localization (sales orders, purchase orders, goods movements, Nota Fiscal).
115

116

Main ones affecting almost all goods movements are:

ICMS - Material Circulation tax IPI - Manufacturing tax ISS - Services tax PIS - Social Integration COFINS - Contribution for social funds IRRF - Withholding tax INSS - Withholding tax social purpose
117
Material
NCM Code Brazilian naming of goods CFOP Category the type of operation Material Destination Resale, Consumption & Asset Material Origin (domestic / imported) Produced in-house or not Taxes Classification (ICMS, IPI/ISS)
Vendor
Legal Information (tax code i.e. CNPJ) Situao Tributria IPI and ICMS Withholding category indicator
Customer
Legal Information (tax code ie. CNPJ, Insc.Estadual) Text code (texts are printed in the Nota Fiscal) Tax Classification (Taxable, Zona Franca) CFOP Category
118

For discussion now:
Standard Sales Export Orders 3rd Party Sales Consignment Samples and Free of Charge Customer Returns with customer Nota Fiscal Customer Returns with BBRAUN Nota Fiscal Correction of prices or quantity
119

For discussion now:
120
Finance Integration Scenarios
Agenda - Product Costing

122
Scenario: Product Costing

Accounts Payables Closure Accounts Receivables Closure Inventory Adjustments Product Costing General Ledger Closure Fiscal Books Closure Reporting
Actual Cost Method is mandatory in Brazil for legal requirements. It requires specific configurations and a significant amount of testing. SAP developed specific programs that have to be executed at every period end. The solution was part of Localization Brazil but now, it is part of SAP standard through the Material Ledger tool. An additional feature is the inventory control in 3 currencies
123
Description of Scenario Std Cost
Customer
Production Order
Finished Product Cost Center Expenses

AMBEV CBB Entidade Legal rea de Negcio rea de Negcio ITB Filial/Planta ITB
Production Order
Semi-finished Product
Filial/Planta Paulnea
Spending Variance (c.c. balance)
Production Order
Planned Rates (std costing structure)
Price Variance Raw Material

124
Description of Scenario Std Cost
Customer
Production Order
Finished Product Cost Center Expenses

Production Order
Production Order
P&L Price Variance Raw Material

125
Description of Scenario Actual Cost
Cost Center Expenses

Customer
Production Order
Finished Product
Production Order
Production Order

126

Customer
Production Order
Finished Product
Production Order
Production Order

127

Customer
Production Order
Finished Product
Production Order
WIP Inventory
Production Order
Planned Rates (std costing structure) Price Variance Raw Material

128
Customer
Production Order
(COGS)
Finished Product
Expenses
Production Order
Semi-finished Product Planned Rates
Production Order
CC. Balance

129
Product Costing
All goods movements within a period are valuated preliminarily at the standard price. At the same time, all price and exchange rate differences for the material are collected in the material ledger. At the period end, the periodic unit price (actual price) is calculated based on each materials actual costs. The periodic unit price is used to revaluate the inventory at period close. Actual costing determines the portion of the variance debited at the nexthighest level using material consumption. With the actual BOM, variances can be rolled up over multiple production levels to the finished product and COGS (if sold). The revaluation is automatic reversed in next period and it is input back as "price difference". It will only definitely revaluate the inventory after the next standard cost calculation, which will probably take a good portion of the price variance.
130
Product Costing
The Solution
Material Ledger activation Actual Costing functionality activation SAP Configuration Automatic Postings Movement Type Classification Special Correction Note Application Variance Adjustments Development for WIP inventory Abap Reporting (optional)
Implementation
Some difficulty to understand the concept ; High effort (resources and time) ;
131
Detail analisys
Ensure correct costing in materials movement Period End Closing
132
Price Control
Standard
Raw Material Package Semi-Finished Product Finished Product
All material movements are valuated at standard price and at period end, they are revaluated at moving average price.
Moving Average
All the remaining materials consumed at cost center level, not in production orders.
The moving average price is calculated at the moment of the entrance (Logistics Invoice Verification ). The consunption is valuated by the moving average price at the moment of each consumption.
133
Example
Date: 01/05 Date: 02/05 Date: 03/05 Date: 04/05
Logistics Invoice Verification of Soya oil: Quant. = 1.000 Kg Amount = R$ 1.000
Soya oil consumption in Production of I / Mono-di: 900 KG
Complementary cost (ex. Freight) Of soya oil: Quant. = 0 Kg Amount = R$ 5.000
Soya oil consumption in Production of Mono-di: 100 KG
Inventory Movement of Soya Oil Soya oil Init Bal.: 0 Entrance: 1.000 Kg End Bal: 1.000 Kg Soya oil Init Bal: 1.000 Kg Sales: 900 Kg End Bal: 100 Kg Soya oil Init Bal: 100 Kg End Bal: 100 Kg Soya oil Init Bal: 100 Kg Sales: 100 Kg End Bal: 0 Kg
134
Example
I / Mono-di
Glicerine
Unit Price R$ 1,00
Soya oil
Soya oil Value: R$ 900,00 Quantity: 900 Kg
135
Example
Mono-di
Glicerine
Unit Price R$ 51,00
Soya oil
Soya oil Value: R$ 5.100,00 Quantity: 100 Kg
136
Transfer between plants

SAP R/3
Transfer at standard price (during month)
Plant A
Plant B
137
Transfer between plants

SAP R/3
Transfer at standard price (during month)
Plant A
Plant B
Material ledger price variance update (period end)
138
Example of purchase with PRD
139
Example of goods issue to a process order
140
Month End Closing Steps

The shaded steps refers to financial postings .
Actual Activity Split
Calculate Actual Activity Prices
Revaluation Process Order
Calculate STD WIP amount Material Selection Single Level Costing
Calculate Variances
Order Settlement Single Level Costing Multi Level Costing
Material Sequence Multi Level Costing
Adjust Actual WIP (GAP)
Post Periodic Unit Price (inventory reval)
COGS Revaluation
141

The shaded steps refers to financial postings .
Calculate Variances
Order Settlement Single Level Costing Post Periodic Unit Price Multi Level Costing and calculate plus post Actual WIP Inventory and COGS Revaluation
Solution available in November 2002
142
Calculate Variances
COGS Revaluation
143
KSS2 Actual Activity Split

The cost center XXX produces 2 activities (labour and machine). The building renting actual expense is posted to the cost center and then split accross the activies labor and machine.
144
Calculate Variances
COGS Revaluation
145
KSII Actual Price Calculation

Actual activity rate = Actual expense posted against the activity Actual activity utilization
146
Calculate Variances
COGS Revaluation
147
Cost center cost report - before P.O revaluation
Utilization and Spending variance
148
Calculate Variances
COGS Revaluation
149
Cost center cost report - after P.O revaluation
No more utilization and Spending variance
150
Calculate Variances
COGS Revaluation
151
CKM3 Before Order Settlement
Material: AM0657050AG
152
Calculate Variances
COGS Revaluation
153
CO88 Order Settlement
154
CKM3 After order settlement
The variance is posted as a price difference in the ML. This means it will be posted back to inventory when running the actual price revaluation
155
CKMLCP Cockpit Actual Costing
156
Calculate Variances
COGS Revaluation
157
CKMLCP Selection of materials
158
Calculate Variances
COGS Revaluation
159
CKMLCP Determine sequence
160
Calculate Variances
COGS Revaluation
161
CKMLCP Single-level price determination
162
Calculate Variances
COGS Revaluation
163
CKMLCP Multi-level price determination
164
CKMLCP - Check all calculations (single and multi-level)
165
CKM3 after multi-level price determination

The finished products receive the price difference from the lower levels according to the proportionality of the lower level consumption
Double Click
166
Double Click
167
640,000 X 0.028 = 0.18 100,017,373

168
Reminder of Key Points
Logistics Invoice Verification required Impacts every logistic scenario Price Control issues
Raw material price control : Moving Average or Standard
WIP Inventory variance allocation when MTO
169
Financial Accounting Scenarios
Finance Specific Scenarios

For discussion now:
Accounts Payable and Payments Accounts Receivable Collections Legal Books and Files Preparation
171
Agenda Acc.Payable and Payments

172
Vendor Master Records

Vendor Master Records:
Vendor Master maintenance follows standard procedures. However, for Brazil, you must maintain the following fields: Partner bank type in order to enter the vendors bank into the open item. Bank address When paying in general individually, use the indicator individual payment. For vendor that send boletos, the maintenance of payment terms with payment block.
173
Boleto Forms
174
Bank Transfer
Bank Transfer:
The following Brazilian-specific print program must be entered in the country dependent customizing of all payment methods that are used to create bank transfers. As part of localization, payment methods U and N are already customizing this way: RFFOBR_U This program prints a payment list (Bordero) or a DME (Data Medium exchange/Arquivo Remessa) file containing all payment information. The following Brazilian-specific payment transfer must be customized per company code.
J_1B_BORDERO: Payment list J_1B_DME: accompanying sheet
175
Bank File Formats

Bank File Formats:
Brazilian localization supports the following bank file formats for DME: SISPAG Ita PFEB Bradesco FEBRABAN/CNAB
176
Bank File Formats

Payment Forms
The Brazilian localization supports all Brazilian-specific payment forms summarized in the table below.
For each of the both payment forms 02 and 10, a respective payment method has to be defined country dependent as a copy of the released payment method U (bank transfer) with a corresponding entry (02 or 10, respectively) in the field key in code line.
For payments without boleto, that is, for payment forms 01, 02, 03 and 10, any entry in the field Key in code line overwrites the automatic selection. However, if the field barcode number is entered into the open item, the resulting Payment form is 30 or 31 pending on the above conditions and the field key in code line is of no relevance. House bank and partner bank are identified by the first three digits of the entered barcode number.
177
SPB - Brazilian Payment System

SPB
The law that controls the new Brazilian Payment System is Law 10.214, March 27th of 2001. Payment systems is a set of rules, procedures, instruments and operating systems integrated used to transfer funds from payer to receiver. The objective is to reduce the credit risk and liquidity. The payment system will make transfers and payments between economic agencies safer and efficient, with benefits that will be reflected in the companies and people and in the perception outside of Brazil decreasing the risk for Brazil. Nowadays customers transfer their resources using checks or DOCs. By this way, the money is just available after the traditional clearing that lasts at least one day. Starting on April, 22nd of 2002, the new Brazilian Payment System allows the customers to transfer the money, in the same day, for payments and other purposes in a safer way and it will not take so long as the tradition clearing system.
178

TED
The new SPB offers a new transfer option from one bank to the other named as Transferncia Eletrnica Disponvel TED. Through TED the amount will be credited in the bank account and it will be available as soon as the bank receives the transfer message. Transfer options: STR huge amount interbanks Clearing / Payments big / medium amount via electronic payments Compe checks, DOCs below R$5.000,00 in retail
179

Definitions :
STR Sistema de Transferncia de Reservas The Transfer of Funds System manages the funds transfer between financial institutions (STR) in real time, managed by the Central Bank of Brazil. The system will check the bank fund account balance and rejects the debits greater than the bank account balance. The customer can transfer funds from his own bank account to other bank using STR. COMPE - Compensao de cheques e outros Papis This system is responsible for check clearing and other papers, it is managed by Banco do Brasil. The objective is to remove from Compe the critical payments or high value payments, as well as other payments that can be done by STR. CIP Cmara Interbancria de Pagamentos The payment clearing is managed by the Banks for values higher than R$5.000,00 and the liquidation is done in the end of the day. The objective of Clearing House is to liquidate payments in a faster way, secure and cheaper than traditional liquidation system.
180
Accounts Payable and Payments

Inquiry & Quotation
Execute Work
Finance
Scenario : Accounts Payable and Payments This scenario describes the activities flow regarding documents registering in Accounts Payable through the utilization of bar code reader device and also payments execution with files generation and exchange with banks.
181

Customer
Purchase/ Goods Mov.Op.
document posting without typing payment confirmation of payments

-Automatic
-Automatic
Pass boleto onto bar code reader
Register Payable in SAP
Carry out payment routine
Generate file to banks w/ posting
Integrate confirmation file
Bank / Interchange
-Automatic
file generation
Payments
Generate payment confirmation file
Supplier
Generate boleto
182

-Acquire
appropriate bar code device and extensive testing
Customer
-Configuration
bank has its own file layout (Ita, Bradesco and Interchange) and extensive testing involving banks folks and testing environment
-Configuration
-Each
Purchase/ Goods Mov. Op.
Pass boleto onto bar code reader
Register Payable in SAP
Carry out payment routine
Generate file to banks w/ posting
-Development
is required
Integrate confirmation file
Bank / Interchange
-Each
bank has its own file layout and extensive testing involving banks folks at its system environment for testing is needed is required
Payments
Generate payment confirmation file
-Configuration
Supplier
Generate boleto
-Development
183
Accounts Payable and Payment

The Solution:
SAP configuration at payment program transactions Special ABAP development regarding files generation to be exchanged with bank
The objective of this solution is address automatic payment through bank exchange files
C The complexity of this solution addresses:
extensive configuration required by payment program extensive testing with each one of the banks involved. contact banks folks to ask them to create system testing environment to start testing files exchange ASAP
184

Bar code reader device utilization Complex payment program configuration ABAP development is needed in order to generate files Extensive testing with banks involved since the beginning of the project. High level of interaction with banks is needed Electronic/Manual Extracts
185
Agenda Acc. Receivable Collections

Overview Description of Scenario Overview Business Process Flow Main Localistion Requirements Solutions SAP configuration Special Development Bolt Ons Manual workaround Summary Reminder of Key Points
186
Accounts Receivable Collections

Duplicata:
An essential element of accounts receivable in Brazil is the concept of duplicata. For each debit liability the vendor collects the expected money with the active help of its house banks. For this purpose, information on the liability must be passed to the respective bank. This information is called duplicata. The localization Brazil supports the automatic generation and processing of duplicatas in local currency. The duplicata information is based on the related open items and is extended through additional information such as the instruction key. The information returned by the bank can be electronically processed (Arquivo retorno).
187

Customer Master Data:
Customer master maintenance follows standard procedures. However, for Brazil, you must maintain the following fields: Interest calculation indicator This indicator is used to charge interest payment for overdue items. Individual payment This must be entered because a duplicata is created for each open item.
188

Bill of Exchange Payment Request:
Duplicata creation is represented by a standard R/3 payment method, namely the creation of a bill of exchange payment request. As for any other R/3 payment method, specifications have to be customized country and company code dependent. When running the payment program for the duplicata creation, one bill of exchange payment request is created for each open item. This BOE is only a statistical document in the context of the Brazilian localization. It has two main function: It labels the related item as being processed, meaning it indicates that the duplicata has been created. Thus, no second duplicata is created for this specific item when running the payment program again. It carries the information on the selected bank.
189

Print Programs and Forms for Payment Transfer Media
The following Brazilian-specific print program must be entered in the country dependent customizing of all payment methods that are used to create duplicatas. As part of localization, payment methods A is already customizing this way: RFFOBR_A This program prints a duplicata list or a DME (Data Medium exchange/Arquivo Remessa) file containing all duplicata information. The following Brazilian-specific payment transfer media must be customized per company code. J_1B_DUPLICATA: Duplicata list
190

Data Medium Exchange (Arquivo Remessa)
Bank File Format Cobrana Ita Cobrana Bradesco Febraban/Cnab
Instruction Code
The instruction code specifies further processing of the duplicata. Basic instruction codes are part of the localization Brazil. However, if required, additional instruction codes may be added though customizing. Instruction Code 1 = Codigo de ocorrencia Instruction Code 2/3 = Instrues de cobrana The instruction code can be entered into each individual item, when creating a duplicata the entered instruction code is transported into the duplicata. If there is no instruction code entry in the open item, instruction code defaults (e.g. REMESSA) are set either through the customer master or the respective house bank.
191

SAP Query
A report on issued duplicatas in the form of a SAP Query is part of the localization for Brazil. This specific SAP Query is called DU. It is linked to the functional area / SAPQUERY/J1B1 and the user group /SAPQUERY/XX. This report covers the legal requirements for the Registro de Duplicatas a receber such as reporting due date, duplicata issue date, gross amount, customer name/street and amount. The list is sorted by due date. You can select via customer, company code, due date, issue date and document number.
192

Inquiry & Quotation
Execute Work
Finance
Scenario : Accounts Receivable Collections This scenario describes the activities flow regarding the execution of accounts receivable collections with files generation and exchange with banks (Ita and Bradesco) and Interchange.
193

Customer
Sales Operations Receive boleto Proceed boleto payment
-Automatic
payment confirmation and posting in accounting
Register Receivables in SAP
Carry out collection routine
Print boleto
Generate file to banks w/o posting
Integrate collections file w/ payment postings
Bank / Interchange
-Automatic
file
Collections
generation
Generate collections file w/ clients payments
Collections Updated
Supplier
194

-
Customer
Sapscript development form

Sales Operations
Receive boleto
Proceed boleto payment
Register Receivables in SAP
Carry out collection routine
Print boleto
Generate file to banks w/o posting
Integrate collections file w/ payment postings
bank has its own file layout Bank / Interchange and extensive testing involving banks folks at its system environment for testing is needed
-Development -Configuration
-Each
Collections
Generate collections file w/ clients payments

-Each
Collections Updated
is required
Supplier
bank has its own file layout Configuration and extensive testing involving banks folks and testing environment is required
-Development
195
Account Receivable - Specific Scenarios

Bank issues the BOLETO
Accounts posting Accounts Receivable
Bordero
Payment program Nota Fiscal
Duplicatas file
Customer
Boleto
Bank
196

Company issues the BOLETO
Accounts posting Accounts Receivable
Bordero
Payment program Nota Fiscal
Duplicatas file
Boleto
Customer
Bank
197

Return file
Import R/3 (Treasury) Bank Return file
Automatic posting
Posting error log
198

The Solution:
SAP configuration at payment program transactions for collections (as the same as payments) Special ABAP development regarding files generation that will exchanged with bank and boleto form
The objective of this solution is address automatic collection through bank exchange files
The complexity of this solution addresses basically to:

extensive configuration required by payment program extensive testing with each one of the banks involved. Its important to contact banks folks since the beginning of the project in order to ask them to create system testing environment to start testing files exchange ASAP
199

Complex payment program configuration for collections ABAP development is needed in order to generate files and boleto form Extensive testing with banks folks involved since the beginning of the project. High level of interaction with banks is needed Electronic/Manual Extracts
200
Agenda Legal Books and Files Prep

Overview Description of Scenario Overview Business Process Flow Main Localistion Requirements Solutions SAP configuration Special Development Bolt Ons Manual workaround Summary Reminder of Key Points
201
Legal Books and Files Preparation

Inquiry & Quotation
Execute Work
Finance
Scenario : Legal Books and Files Preparation This scenario describes the activities necessaries to address Brazilian Legal and Tax requirements through legal books and files preparation. Its important to mention that most of sales, purchases and goods movement have tax impact in the books and files and based on these data repositories, taxes are calculated to be paid. There are three taxes levels: country, state and city levels.
202

Customer
Receive and book Nota Fiscal
-
Configuration of all fiscal variations
Extensive testing of all fiscal variations of sales and purchases operations

Register Nota Fiscal at tax tables within SAP Generate Legal Books Bolt-on Generate Legal Files Calculate tax to be paid Prepare Guias de Recolhim. Accounts Payable Accounting books and reports
Sales Operations
Send Nota Fiscal
Purchase / Goods Mov. Operations
Bolt-on implementation in parallel with SAP

-
Authorities
development of Interface between SAP and Bolt-on (e.g. Mastersaf, Syncro, Aspen-Sati)
Send Nota Fiscal
- ABAP
Send files as required
Display books as required
Manual workaround for Fiscal and Accounting issues not treated even by Bolt-on
-
Supplier
files and Books generation through Bolt-on
-Legal
203

The Solution:
Tax configuration with high level of complexity: IPI
for purchases operations IPI is calculated based on:
NCM code identified at material master Tax code defined at purchase order Its booked in accounting and Legal Books at invoice verification posting Tax calculated only at manufactured goods Tax accounts by plant NCM code identified at material master Tax code defined at sales order Its booked in accounting and Legal Books at billing document posting Necessity of releasing billing documents which accounting documents werent booked Tax calculated only at manufactured goods Tax accounts by plant
for sales operations IPI is calculated based on:
ICMS
for purchases ICMS is calculated based on:
Jurisdiction Code defined at vendor master data (to define rate) Jurisdiction Code define at plant address data (to define rate) Tax code defined at purchase order Its booked in accounting and Legal Books at invoice verification posting Tax calculated based on goods movement and services (e.g. freight) Tax accounts by plant
204

The Solution:
for sales ICMS is calculated based on:
Jurisdiction Code defined at customer master data (to define rate) Jurisdiction Code define at plant address data (to define rate) tax code defined at purchase order Its booked in accounting and Legal Books at billing document posting Necessity of releasing billing documents which accounting documents werent booked Tax calculated based on goods movement and services (e.g. freight)
Tax accounts by plant

Withholding Tax (IRRF and ISS on services purchases) WT field in Vendor Master identify if WT should be calculated or not WT can be booked in two different moments: during invoice verification / FI invoice posting or Invoice payment / Down Payment Services are classified by fiscal codes (e.g. code 1708, 3205). Standard Sap report by code is developed to reach this necessity. ISS for services sales ISS is calculated based on: ISS tax code defined at sales order Its booked in accounting and Legal Books at billing document posting Necessity of releasing billing documents which accounting documents werent booked
205

The Solution:
Third-party software bolt-on for legal books below: Mod-1 Registro de Entradas (List of incoming documents) Mod-2 Registro de Sadas (List of outgoing documents) Mod-3 Controle de produo (Overview of production and inventory) Mod-7 Registro de Inventrio (Physical of inventory overview) Mod-8 Registro de Apurao do IPI (Directory for calculating IPI tax) Mod-9 Registro de Apurao do ICMS (Directory for calculating ICMS tax) Listagem Operaes Interestaduais (List of interestate goods movements) Livro Dirio (with historical description) Livro Razo (with historical description) Razo Auxiliar de Fornecedores (Statement for Vendor accounts) Razo Auxiliar de Clientes (Statement for Customers accounts) Registro de Duplicatas a Receber (List of open items to receive) GIA Guia de Informao e Apurao (Tax payment form)
206

The Solution:
Third-party software bolt-on for legal files below: Arquivo Magntico Convnio ICMS no. 57/95 (file as per law ICMS) DIRF IN 86 (Master data, documents files and tables) Manual workaround LALUR (Taxable Income Control Register) DOAR (Source and Funds) Mutaes do Patrimonio Liquido (Equity Moviment) Lucros ou Prejuzos Acumulados (Retained Earnings Demonstration) PIS (Employees Profit Participation Program) and COFINS (Tax for Social Security Financing) calculation IR (Income Tax): Provision, normal calculation, and calculation with indirect benefits
207

The Solution:
Assets Its important to mention that assets control in Brazil is treated through SAP standard functionality however there is an specific topic called CIAP. It addresses to the ICMS recovering of assets purchased for utilization at productive process. It has legal requirements represented by specific legal book and rules for its calculation. The main activities necessaries to implement CIAP control are: extensive configuration ABAP development for reports patches aplication into system environment
208
The complexity of this solution addresses basically to:

extensive configuration and testing of all legal requirements and fiscal variants at SAP definition of procedures for legal issues treatment after SAP implementation Definition of procedures about how to handle manual workarounds Develop ABAP program for interface between SAP and Legal Books bolt-on Patches application for CIAP control for assets besides configuration and ABAP development
209

Legal Books bolt-on implementation doesnt avoid extensive configuration and testing at SAP, because SAP is bolt-on information source Extensive configuration and testing of all legal variants in SAP Bolt-on implementation in parallel with SAP and ABAP development to integrate both SAP and bolt-on Necessity to define procedures to handle manual workarounds for cases not treated by SAP or bolt-on Patches application for CIAP
210
Questions
211

Knowledge Sharing on Brazil Localization Requirements

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Output & Deliverables

Where do all these requirements come from?

Long period of high inflation

High historic level of tax evasion

Legal and Tax Requirements for Brazil

Nota Fiscal and Legal books are issued at this level

Hierarchy Company Code

JABIL Circuit Brasil

Main ones affecting almost all goods movements:

ICMS is a state tax and depends on:

PIS and COFINS:

INSS is a tax related to natural person and depends on:

ISS is a city tax and depends on:

Master Data Records Material

Produced in-house or not Taxes Classification

Material Master Screen

Material Master Screen

Master Data Records Vendor

Situao Tributria IPI and ICMS Withholding category indicator

Vendor Master Screen

CNPJ CPF Insc.Estadual Insc.Municipal

Master Data Records - Customer

Customer Master Screen

Nota Fiscal - Sales

Tax related part of the Nota Fiscal

Nota Fiscal - Symbolic Return

Observation and Special Rule description

Indicative Map of Interfaces (Bolt-ons)

Export Web Shopping Legal Books Import

The Scenarios & Presentation Approach

Customer to Cash Scenarios

Other Local Legal Scenarios

Purchase to Pay Scenarios

Other Local Legal Scenarios

Finance Integration Scenarios

Finance Specific Scenarios

Other Local Legal Scenarios

A Generic Business Process Model

Define & Maintain Data

Shipping & Logistics

Invoice & Payment

Claims & Feedback

Inquiry & Quotation

Inquiry & Quotation

Scenario : <Scenario Name> This scenario describes

<Overview Business Process Flow>

Local Legalisation Impact Description of Impact etc.

Plan Shipments & Book Transport Confirm qty Sales order

Loa d Tru ck Create/ Confirm Transfer Order

Print Shipping Doc.

Create Sales order ref. quot.

To Production & Purchasing

Transfer Goods from production to Warehouse

Post Goods Issue

Create Billing Doc. Bolt-on

Confirm Purchase order

<The Scenario Solution>

What does the solution do?

Brazilian Localization Review

Brazilian Localization Review

Main ones affecting almost all goods movements are: