SAP FINANCIALS INTEGRATION

SAP FI ECC6.0 INTEGRATION WITH OTHER MODULES

Prepared By:

Ms.Pramila Nagaraj
First Class MBA Finance Graduate (2009-10)
Global Academy of Technology, Bangalore (VTU- Belgaum)
Trained up in SAP FICO @ SAPTAC Bangalore (FRESHER)

2010-2012 ALL RIGHTS RESERVED

SAP FI Integration with Other Modules

Overview
Financial activities from other SAP modules are integrated with FI

Overview Business Process

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SAP FI Integration with Material Management (MM)

Procure to Pay

Purchasing Master Data

Vendor Master

Material Master

Procure to Pay Purchase Order

Procure to Pay Goods Movement

Account Assignment

Automatic account determination for goods movement (goods receipt, goods issue,
transfer)

Procure to Pay Invoice Verification

Automatic account determination for invoice verification

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Purchasing Data Vendor Master

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Purchasing Data Material Master

Pricing control of material: Standard price or Moving Average Price

Valuation Class: determine G/L accounts which needs to be updated for goods movement

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Purchase Order Account Assignment

Determine purchase order specification

For example, what the purchase order is raised for, e.g., asset, non-stock, services

Only for non-material purchase orders

Nature of the account assignment (cost object), e.g., cost centre, sales order, project

Indicates which account is used at goods receipt and invoicing

Purchase Order Account Assignment (cont.)

Determine purchase order specification

FI posting will be created automatically based on the account assignment and

account determination (for material purchase)

Example:

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Account Assignment = Blank (Material)

Goods Receipt
Dr. Material
Cr. GR/IR
Account Assignment = A (asset)
Goods Receipt
Dr. Asset
Cr. GR/IR
Account Assignment: Example

Enter Account assignment Cat here

List of Account Category

Goods Movement Account Determination (1 of 3)

Determine purchase order specification

For example, what the purchase order is raised for, such as asset, non-stock,
services

Only for non-material purchase orders

Nature of the account assignment, for example, cost center, sales order, project

2010-2012 ALL RIGHTS RESERVED

Indicates which account is used at goods receipt and invoicing

Goods Movement Account Determination (2 of 3)

Determine purchase order specification (cont.)

FI posting will be created automatically based on the account assignment and

account determination (for material purchase)

Example:

Account Assignment = Blank (Material)

Goods Receipt
Dr. Material
Cr. GR/IR
Account Assignment = A (asset)
Goods Receipt
Dr. Asset
Cr. GR/IR
Goods Movement Account Determination (3 of 3)

Roadmap to Automatic Posting

Valuation Class is maintained in Material Master Accounting View

For example, Material 100-401 with Valuation class 7900

Account determination has been configured for movement type and valuation
class

For example, Movement Type 101 (goods receipt) for valuation class 7900
is debited to stock account 304000

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Account Determination Example

Account Determination Configuration

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Invoice Verification

When a vendor invoice is entered through MM invoice verification, automatic posting is

generated to FI

If the Purchase Order is set with goods receipt, invoice verification is a 3-way matching (e.g.,
quantity from the goods receipt and price/invoice amount from the PO)

Transaction code MIRO

Purchase Order from FI Invoice

Purchase Orders can be drilled into from FI invoice and vice versa

Transaction code FB03

Enter the FI document number

Go to Environment and select Original Document

Click on Purchase Order number to display the PO

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FI Invoice from Purchase Order

Transaction code ME23N

Go to PO History

Click on the Invoice Receipt material document

Click on FI documents button

Double click on the FI doc number to display the accounting journal

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FI Invoice from Purchase Order (cont.)

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SAP FI Integration with SD

Sales Master Data Customer Master

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Customer Credit Management

Credit limit is assigned per customer

We can determine when the checking is done: order, delivery, goods issued, etc.

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Sales Order Credit Check Example

System checks customer outstanding balance against the credit limit allowed before a
sales order can be saved

Sales Order Revenue Account Determination (1 of 3)

Condition Type determines items included in the Sales Order, for example, material price,
tax, discount, etc.

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Sales Order Revenue Account Determination (2 of 3)

Account key is assigned to condition type

Sales Order Revenue Account Determination (3 of 3)

Account key and other parameters determine GL accounts for automatic posting during A/R
invoicing

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Condition type

Sales Org Account key

Profit Center Assignment in Material Master

Default profit centre is maintained in Material Master

This profit centre will be taken to Sales Order and then to A/R invoice generated from the
Sales Order

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Billing/Invoicing (1 of 3)

When a billing document is created, the system automatically creates all relevant
accounting documents

Billing/Invoicing (2 of 3)

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Billing/Invoicing (3 of 3)

Display Billing document from FI Invoice:

Transaction code FB03

Enter the FI document number

Go to Environment and select Original Document

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SAP FI Integration with Controlling

Controlling (CO) and Financial Accounting (FI) are independent components in the SAP
system but the data flow between the two components takes place on a regular basis

All data relevant to cost flows automatically to CO from FI

The system assigns the costs and revenues to different CO account assignment objects like:

Cost centres

Business processes

Projects or orders

All relevant accounts in FI are managed in CO as cost elements or revenue elements, which
enables one to compare and reconcile values from CO and FI

Transaction Type: Purchase

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Transaction Type: Settlement

Transaction Type: Allocation

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Accounting Documents

Accounting documents consist of FI document, Special Ledger document, Profit Centre

document, Profitability Analysis document, and CO document

Display Billing document from FI invoice:

Transaction code FB03

Enter the FI document number

Go to Environment and select Accounting Documents

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List of Accounting docs:

FI document

Profit centre document

Special Ledger document

CO document

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SAP Purchase to Pay Flow- SAP MM

SAP MM (Materials Management)

1. SAP MM (Materials Management) is a module of the SAP Enterprise Resource Planning
(ERP) package that is used for Procurement Handling and Inventory Management.
2. The module has two important master data material and vendor.
3. Broadly, the various levels that can be defined for a SAP MM implementation are: Client,
Company Code, Plant, Storage Location and Purchase Organization.
4. This is the largest and most complex in all of SAP modules. It can be divided into five major
components. There are: materials management, plant maintenance, quality management,
production planning and control, and a project management system. Each is divided into
number of subcomponents.
5. SAP Materials management covers all tasks within the supply chain, including
consumption-based planning, planning, vendor evaluation and invoice verification.
6. It also includes inventory and warehouse management to manage stock until usage
dictates the cycle should begin again. Electronic Kanban/Just-in-Time delivery is
supported.
7. Material Management covers the functionality required to purchase goods and services,
manage inventory, and inspect incoming materials.
8. The Purchasing function includes creation of requisitions, requisition approval, purchase
order generation, and receipt of goods and services.
9. Inventory Management includes issuing and transferring inventory, inventory restocking,
and the inventory count and adjustment processes.
The basic of the purchase to pay flow is explained below.
1. Determination of Requirements
In this step, there is a requirement of material or service, which must be procured externally, from
the user. The requirement must be recorded as Purchase Requisition (PR) document in SAP MM.
Purchase Requisition (PR) is an internal purchasing document in SAP ERP that is used to give
notification to responsible department about the requirement of material/service and to keep
track of such requirement.
2. Determination of the Source of supply
After the PR has been created in the previous step, the responsible department must process it.
The buyer of the procurement department must determine the possible sources of supply of the
material/service specified in the PR.
3. Vendor Selection
If in the previous step, there are some outline agreements or info record documents that can be
used as references to create a PO, the buyer can select or choose which vendor that will be
appointed to provide the material/service at this time.

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4. PO Processing
In the previous step, the buyer has selected the vendor which will provide the material/service
needed in PR. In this step, the buyer creates a Purchase Order (PO) based on the PR and the
reference document (that can be an outline agreement, an info record, or a quotation).
5. PO Monitoring
After the PO has been sent to the vendor, the buyer has the responsibility to monitor whether the
vendor delivers the material/service at the right time on the right place.
6. Goods Receipt
When the vendor delivers the material or perform the service, the responsible person of the
company must perform the goods receipt (GR) or service acceptance (SA) transaction. The GR/SA
will update the PO history.
7. Invoice Verification
After the vendor delivered the material/service, it will send the invoice to the person responsible
in the company. Invoice is a formal document issued by a vendor to the company to request the
payment for the material or service that the vendor has already provide to the company according
to the terms of payment agreed in the PO.
8. Payment Processing
After the Invoice Receipt (IR) transaction has been posted, the vendors account payable will
increase and the company must process the payment to that vendor as stated in the terms of
payment of the PO. The payment transaction will be performed in FI module. After the payment
has been posted, the vendors account payable will be debited and the cash or bank account will
be credited.
SAP MM stands for Materials Management and this is part of SAP Logistics includes:
1.
2.
3.
4.
5.
6.
7.

Requisitions
Purchase orders
Goods receipts
Accounts payable
Inventory management
BOMs
Master raw materials, finished goods etc

Some of the Main SAP MM Transactions are:

1.
2.
3.
4.

ME51N Create Requisition

ME21N Create Purchase Order
MIGO Goods receipt a PO
MIRO Create Invoice

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One of the main areas covered by MM module is Purchasing/Procurement. The purchasing process
is initially started when there is a requirement of material/service from a user. If the
material/service cannot be obtained from companys internal resource, the responsible person of
that company must find the vendor/supplier which can provide it on the required date. The
purchasing process is ended when the payment processing to the vendor that supply the
material/service has been done.
SAP Order to Cash Flow- SAP SD

SAP SD is simply Sales and Distribution

1. Its all about selling goods & distributing them to relevant parties and gets the payments
for relevant parties.
2. Helps to optimize all the tasks and activities carried out in sales, delivery and billing.
3. Key elements are: pre-sales support, inquiry processing, quotation processing, sales order
processing, and delivery processing, billing and sales information system.
4. SAP SD application components fulfills many of the international requirements that
supports the sales and distribution activities with functions such as pricing and conditions,
customer order processing, delivery monitoring, billing, credit and risk management.
5. The SAP sales and distribution is part of the logistics module that support your customers,
starting from quotations, sales order and all the way towards billing the customer.
6. It is tightly integrated with the MM and PP functional modules. It allows companies to
input their customer sales price, check for open orders and forecast etc.
The most important basic functional features in the SD module are:
1.
2.
3.
4.
5.
6.

Pricing
Availability Check
Credit Management
Material Determination
Output Determination
Text Processing

SAP SD stands for Sales and Distribution and this is the module which is used to manage customerfocused activities, from selling to delivery, including 1.
2.
3.
4.
5.
6.

RFQ
Sales orders
Pricing
Picking (and other warehouse processes)
Packing
Shipping

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Some of the main SAP SD transactions are:

1.
2.
3.
4.
5.
6.

VA01 Create Customer Order

VL01N Create a Delivery
VA03 Display a Order
VL02N Change Customer Delivery (F20 is to post a good issue)
VA05 List Orders
VF01 Create a Invoice

The Order to Cash flow roughly follows the following sequence 1.

2.
3.
4.

5.
6.
7.
8.
9.

A customer orders some items from your company by creating a sales order
Your company decides to deliver the items ordered by the customer.
This is recorded by creating a outbound delivery document
Once the items are available for sending to the customer, you post goods issue which
reduces your inventory and puts the delivery in transit. This will create a material
document.
You will post goods but the material document created will be stored in tables.
You will then create shipment document to actually ship the items.
You finally create a sales billing document.
This will have a corresponding accounting document created that will be in different
tables.
When customer pays to your invoice, it will directly hit your AR account in FI.

2010-2012 ALL RIGHTS RESERVED