E-MSG

MSTER EN SOFTWARE DE GESTIN DE EMPRESA SAP R/3

2003-2004 Certificacin FIN (7011) Albert Cau T-FIN10-1 parte (6 a 8)

Financial Applications

EC

Enterprise Controlling
TR
Cash management and forecast Treasury Management Cash Management

FI

CO
Overhead cost accounting Product cost accounting Profitability analysis

General Ledger Accounting Subsidiary ledgers

IM

Investment Management

PS

Project System

RE

Real Estate

SAP AG 1999

Various financial applications offer different views of the financial position and performance of a company and allow various control levels. FI Financial Accounting CO TR EC RE Controlling (Managerial accounting) Treasury Enterprise Controlling Real Estate

IMInvestment Management

PS Project System In this course, you learn primarily about the application component FI.

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Accounting Target Groups

Journalists Media

Tax authorities

Shareholders

Banks

Legal authorities

Insurance Auditors Administrative staff Executive officers Financial analysts Senior management

Accountants

Employees

SAP AG 1999

There are two target groups that use accounting information: External users: These users usually require information that conforms with legal requirements. This data is managed in the application component FI (Financial Accounting). Internal users: These users come from all levels within the company. The need information for the internal operations of the company. This information is contained in the application component CO (Controlling).

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Overview Diagram

CO

FIBL

FITV

FIAA

MM

FIAP

FIGL

General ledger

FIAR

SD

Balance sheet ... P&L ... ...

SAP AG 1999

The general ledger contains a record of all relevant accounting transactions from a business point of view in the G/L accounts. In order to retain a clear overview, the general ledger often contains collective postings. In such cases, the information posted is displayed in more detail in the subsidiary ledgers, which provide their information to the general ledger in summarized form: Accounts Payable records all accounting transactions for dealings with suppliers. Much of its data is obtained from procurement (Materials Management). Accounts Receivable records all accounting transactions for dealings with customers. Much of its data is obtained from Sales and Distribution. Asset Accounting records all accounting transactions relating to the management of assets. Travel Management manages and calculates travel costs and supports travel planning and travel expenses Bank ledger supports the posting of cash flows. All G/L account postings that post to business expense accounts automatically send the expenses as costs to Controlling. The balances of G/L accounts are used to calculate financial statements.

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Company Code

Independent accounting entity

Company code

SAP AG 1999

A company code is an independent accounting entity (the smallest organizational element for which a complete self-contained set of accounts can be drawn up). An example is a company within a corporate group. It has a unique, four character key. The general ledger is kept at the company code level and is used to create the legally required balance sheets and profit and loss statements. A company code designation is required for every financially based transaction entered into R/3. This is done either manually or automatically by deriving the company code from other data elements.

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Business Area

Business Segments

Business areas

Machinery

1000

Machinery

Plant construction

2000

Plant construction

Automotive

3000

Automotive

SAP AG 1999

The business segments or branches in which a group operates can be set up in the R/3 System as business areas. They provide an additional evaluation level for the purpose of segment reporting, for example.

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FI and CO: Standard versus Flexibility

ECPCA

CO

Controlling

Internal accounting Cost accounting Various valuations Flexibility

Profit Center Accounting

FI

Financial Accounting

IA GA S GO A B P

Tax audit

Ext. accounting Financial statements Legal requirements Standards

SAP AG 2001

The R/3 application component Controlling (CO) contains all the functions necessary for effective cost and revenue controlling. CO covers all aspects of management Controlling.. It offers a broad spectrum of tools which can be used to compile information for the company management which greatly exceeds that required by law. Financial reports used for external reporting purposes (such as balance sheets and profit and loss calculations) are created in FI. These external reporting requirements are, like the varying legal requirements set by the relevant financial authorities, usually prescribed through general accounting standards such as GAAP or IAS.

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Reporting Requirements

External reporting
Balance Sheet Cash flow statement Profit & loss (P&L) Retained earnings

External Accounting

Internal reporting Internal Accounting

Product cost reports

Cost center reports Profit Center reports

Contribution margins

SAP AG 2001

While there are often different accounting information requirements for internal and external users, much of the underlying data may be relevant for both purposes. But that same data can be presented in very different ways to satisfy the differing requirements. Standardized accounting intended for external users is sometimes termed "financial accounting". The term "managerial accounting" generally refers to the non-standardized accounting approach that supports the management decision-making process. Financial accounting reports typically required include the income statement (or profit & loss statement), and balance sheet. Managerial accounting reports can be structured individually, a common example being the plan/actual cost comparison for the current period directed to the department.

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Controlling Architecture
COPA

Profitability Analysis Overhead Cost Controlling Process

Profitability segment

ECPCA

CO OM

CO-PC

Overhead Cost Controlling Material Valuation

Profit Center Accounting

Cost Center

Internal Order

Production MaterialLabor OH Process Order

Cost Element Accounting

FI

Financial Accounting

Asset

WIP

Stock

Revenue

HR Human Resources
SAP AG 2001

Procure

Product

Warehouse

Sales

This graphic illustrates the essential features of the CO architecture. The black arrows between the different CO components display the typical cost and activity quantity flows (such as working hours) which occur between these components. The arrow between CO-OM and CO-PC shows, for example, that costs can flow from overhead controlling to product cost controlling. Later on in the course it will be shown that these costs can be transferred to a production order in the form of an overhead allocation. Likewise they can be charged as overhead to the same production order as working hours, meaning the labor costs could be calculated by multiplying the number of hours with a standard hourly rate Similarly, costs from Overhead Controlling (OM) and Product Cost Controlling (PC) can flow into Profitability Analysis, where together with revenue data they can be used to calculate operating results making it possible to establish how profitable the various area are. You will also later see that other R/3 applications can post costs or revenues to CO. The arrows between FI and CO illustrate the relationship between Financial Accounting (FI) and CO. Hence, for example, postings to expense account in FI can cause cost postings in the OM component in CO. In the same way FI can post revenues directly in component PA. Cost flows also occur between FI and the component PC, which is where raw material costs incurred in the production process are entered In addition, there is a flow back into FI if production costs have been activated as an end product or WIP (work in process). Other R/3 components such as Human Resources (HR), and Logistics (materials management, sales and production planning) are integrated with CO, as can be seen in the logistics process flow (procurement, production, warehouse and sales) in the above graphic.

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Cost and Revenue Element Accounting

Overhead Cost Controlling Profit Center Invoice

FI

AA

Cost and Revenue Element Accounting

Answers the question:

Cost Center Process

Internal Orders

MM

Product cost Controlling

Cost object

SD What costs have been incurred? Profitability Analysis

Profit Center

HR

Profitability segment
SAP AG 2001

Cost and Revenue Element Accounting (CO-OM-CEL) is part of Overhead Cost Controlling. It provides a structure for the assignment of CO data by the classification of transaction items. These items are posted to a corresponding controlling object (e.g. a cost center or an internal order) depending on their cost or revenue element. The cost flow in CO can mean the need for reconciliation between internal and external accounting. Cost and Revenue Element Accounting is the CO component that supports this reconciliation requirement. The reconciliation ledger provides reporting functions for the identification of cost differences between FI and CO. If required, it can be used for reconciliation postings to Financial Accounting (FI).

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Cost Center Accounting

H1
H2000 H2000 UK IDES Europe H2100 H2100 Portugal H2300 H2300 Spain

H1000 H1000
H1010 Group

Germany

H1110
The Management 1110 The Management

H1120
Corporate services 1000 Corporate services 1200 Cafeteria 1210 Telephone 1220 Motor Pool 1230

H1200 Finance & Administration H1210 H1220 H1230 Purchasing

2300 Purchasing

H1400 Technical services

Administration Human Resources

2100 Finance & Administration 2200 Human Resources

H1300 Sales & Marketing

SAP AG 2001 Energy

Cost Center Accounting (CO-CCA) is for finding out where costs are incurred in your organization. When costs are incurred, you assign them to the corresponding cost center or you post them to this cost center. These costs can include personnel costs, rental costs, or any other costs that can be assigned to an existing cost center. You assign each cost center to a cost center type (for example, administration cost centers or production cost centers). In the master record for each cost center, there is a field for the name of the cost center manager. The posting and assignment of costs on or to cost centers enables internal accounting, but more importantly, is also a significant requirement for using the other CO components. The following are typical approaches that can be used for defining cost centers: functional requirements, allocation criteria, activity provided, geographical location and or the area of responsibility. The selected approach should, however, be used consistently throughout the entire enterprise. Cost centers can be grouped together to provide summary cost information. A basic requirement for setting up Cost Center Accounting is thus the creation of a standard hierarchy for a controlling area. This reflects the whole structure of all cost centers in the controlling area, and provides cost totals at each node of the structure. This will be described in greater detail in the next unit. The HAC040 node is used throughout this course. It is under the hierarchy path H1 -> H9500 -> HAC040.

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Internal Orders

FI

MM

CO

Internal Orders
Overhead Cost Orders Investment Orders Accrual Orders
revenues

Orders with Revenues

Costs

Order Proftblty seg. Cost Center project

G/L Account Cost Center Assets project

Proftblty segment

G/L Account Proftblty segment Sales order Billing element Orders with Revenues For any receiver

Cost Accounting Functions

SAP AG 2001

An internal order is an extremely flexible CO tool that can be used for a wide variety of purposes to document costs and, in some cases revenues within a controlling area. You use internal orders for planning, monitoring and allocating costs. You can use internal orders for different purposes. They can be split into four categories: Overhead cost orders: monitoring overhead costs that are incurred for certain purpose, such as holding a trade fair, or for the documentation of costs, such as for maintenance and repair tasks. Investment orders: monitoring costs that are incurred for an asset under construction, for example, a building or a warehouse. Accrual order: offsetting entry of accrual costs (calculated costs in CO) to cost centers. Orders with revenues: can be used as cost objects so that costs and revenues can be tracked.

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Product Cost Controlling (CO-PC)

Product Cost Controlling

Product Cost Planning Cost Object Controlling Actual Costing/Material Ledger

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Product Cost Controlling is concerned with all aspects of planning the cost of producing products or services, as well as tracking and analyzing the actual costs. Product Cost Controlling consists of the following components: Product Cost Planning is used for preliminary costing purposes and can answer the following questions: What will the production of a certain product or service cost? Is external procurement less expensive than on site production? Cost Object Controlling focuses on simultaneous costing and the period end closing. Actual production costs are cumulated alongside raw material consumption when completing the work. This means that the information provided allows you to compare planned and actual costs for any phase of the production process. Period end closing calculates the value of goods still in the production process (work in process) and the variances between the cost estimate and the actual costs, and settles them to other modules like CO-PA, EC-PCA and FI. Actual Costing / Material Ledger is used to provide actual costs for each material at the end of the period. Materials and their movements are valued with a standard price during the period. Any variances with respect to this standard are collected in the material ledger when invoices are received or orders settled. During period closing these variances are used to calculate an actual price for the material in the closed period.

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Profitability Analysis per Market Segment

Region Area Sales Quantity Sales revenue Customer discount Sales commission Direct sales costs Net revenue Direct material costs Variable production costs Contribution margin I Material overhead costs Fixed production costs Contribution margin II Variances Contribution margin III Overhead costs SAP AG 2001 Operative profit

Customer Product Sales Office

Reporting Dimensions Answers Profit analyses Revenue Market segments

fit Pro

Cost

Lo

ss

The market segments are defined by characteristics such as products, product groups, customers, customer groups or geographical areas. You can, for example, analyze the profitability of a particular product group that you are selling to a certain customer (or a certain customer group). If you set up CO-PA in your enterprise, you make yourself very flexible when you select the characteristics that are relevant for the definition of the market segments of your enterprise. Each unique combination of characteristic values (for example, sale of product A to customer Y) defines a profitability segment. You also need to specify which of the values that affect profitability are to be analyzed for this object. These values are key figures. You can, for example, define which revenue types and expense/cost categories are to be used for determining a value for the trade margin according to the requirements of your enterprise. CO-PA also provides you the option of choosing relevant values for the different users of your enterprise. If different types of user define the trade margin differently (for example, profitability and sales accounting vs. product management) you can determine different key figures for each trade margin according to each specific requirement. CO-PA provides you with a multidimensional reporting tool. This tool can be used for creating reports that analyze data for any market segment and any profitability measure.

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Profit Center Accounting

Accounts Revenues Deductions Administration overhead Operating profit Payables Accounts receivable Fixed asset capital Asset balance Capital costs Return on Investment (ROI)

Reporting Dimensions

Answers Analyses of profit, balances and financial key figures by profit center
Profit
ROI Capital sales Sales revenue

Capital investment

SAP AG 2001

Profit Center Accounting (PCA) enables you to draw conclusions on the internal aspects of profitability. This internal view of profitability is used for measuring the success of a particular profit center in meeting the profitability goals of a given area of responsibility. The Information System provides a tool for evaluating plan and actual data. Numerous standard reports are provided, and you can create your own custom reports as well. Reports can be executed for profit centers or profit center groups. Profit Center Accounting can report on selected balance sheet items, such as assets, AR/AP, material inventory, and work in process. This permits the calculation of certain financial key ratios such as ROI (Return on Investment). Other reporting functions include detailed the provision of information on the source objects (e.g. cost centers, internal orders) that contributed costs posted to profit centers.

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Integration With Other Modules (1)

Overhead Cost Controlling
Cost center Process

Depreciation

and Accounting Cost and Revenue Element Accounting

FI

AA

Profit Center Acc.

Internal Orders

Vendor Analysis

Product cost Controlling

Cost object Profit Centers

Profitability Analysis
Profitability segment

SAP AG 2001

Data created in other R/3 modules can have a direct influence on CO, If, for example a non-stock item is purchased, this results in an expense being posted to the general ledger. At the same time, this expense is posted, in the form of costs, to a cost center or other CO Object for which the item was purchased. That cost center's costs may later be passed on as overhead to a production cost center, or elsewhere in CO. The Financial Accounting application area of R/3 is a primary source of data for Controlling. Most expense postings in the general ledger result in a cost posting in CO. These expense posting in the general ledger can be journal postings, vendor invoices, or depreciation postings from Asset Management (FI-AA) or other R/3 Modules. Revenue postings also result in postings to CO, CO-PA and Profit Center Accounting. Both expense and revenue postings from FI must specify one (or more) object in CO that will receive the cost or revenue data. There are also several situations that will cause CO to create postings in FI. These would include reconciliation postings initiated by the reconciliation ledger in CO, inventory postings caused by the delivery of finished goods from production, and settlement of capital costs from the creation of fixed assets.

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Integration With Other Modules (2)

Overhead Cost Controlling
Cost center Process

Personnel Costs

and Accounting Cost and Revenue Element Accounting

HR

Profit Center Acc.

Internal Orders

Product cost Controlling

Cost object Profit Centers

Profitability Analysis
Profitability segment

SAP AG 2001

The Human Resource component (HR) can generate different types of cost postings in Controlling. The HR System offers you the opportunity to allocate labor costs to various controlling objects. In addition to this, planned personnel costs can be transferred and be used for CO planning.

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Integration With Other Modules (3)

Overhead Cost Controlling
Cost center Process

Purchase order

and Accounting Cost and Revenue Element Accounting

MM

Profit Center Acc.

Internal Orders

Goods receipts/ Goods Issue

Product cost Controlling

Cost object Profit Centers

Profitability Analysis
Profitability segment

SAP AG 2001

The Logistics area of R/3 also has numerous integration points with Controlling. In the inventory area of Materials Management, a goods issue transaction can create a cost posting in CO to whichever object is specified (e.g. cost center, production order, internal order). Looking from the other direction, CO can cause a posting to inventory (in MM) resulting from the delivery of finished goods from production. In addition, product cost estimates created in CO can update price fields in material master records. Finally, the creation of purchase orders in MM can generate commitment postings within CO.

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Integration With Other Modules (4)

Overhead Cost Controlling
Cost center Process

Production orders

and Accounting Cost and Revenue Element Accounting

SD

PP

Profit Center Acc.

Internal Orders

Customer orders

Product cost Controlling

Cost object Profit Centers

Profitability Analysis
Profitability segment

SAP AG 2001

The Production Planning (PP) area of Logistics also works very closely with Controlling. Bills of Materials and routings, which are created in PP, can be utilized in Product Cost Accounting in CO. In addition, PP production orders are one form of cost object utilized to track and control production costs in Cost Object Controlling. Sales and Distribution (SD) is a primary source for revenue postings from billing documents to CO. A SD sales order can also be used in conjunction with the make-to-order production scenario in CO, in order to track costs and revenues and evaluate the profitability of the arrangement.

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Course: Business Partner Accounting

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R/3 System 4.6C Release 4.6C November 2000 Material number: 5004 2206

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Course Goals

This course will enable you to:

carry out the core configuration of R/3s financial accounting module perform core business processes

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Course Objectives

At the conclusion of this course, you will be able to: create financial accounting organizational units maintain financial accounting master data influence creation and display of financial transactions generate automatic financial data transactions perform financial data analysis

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Business Partner Accounting: Course Content

Unit 1 Unit 2 Unit 3 Unit 4 Unit 5 Unit 6 Unit 7

Basic Settings Master Data Document Control Posting Control List Viewer and Table Control Clearing Cash Journal Appendix

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Main Business Scenario

Your company GR## is bidding for a consulting contract. In order to do this, your company has to prepare a prototype to present to the prospective clients steering committee. The client will award the contract to a consulting company based upon the quality of this presentation. You are a part of the team which is responsible for configuring the core FI component.

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Symbols Used in this Course (1)

Document
Line items

Client or Client level Company code or company code segment

D Acct 1 C Acct 2

Document

Document header

Business area Document line item

Dec. Nov. Oct. 11 10 09 Jan. Feb. 02 12 01

Mar. 03 04 Sept. Apr. 08 05 Aug. May Fiscal year or 07 06 July June

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Tax ID
A0 V0 0O 0I 0I

fiscal year variant

Tax ID

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Symbols Used in this Course (2)

House bank Currencies Partner bank

Chart of accounts, account, or chart of account segment

DT

Document type

PK
Account groups Posting key
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Basic Settings

Organizational Units
Company Codes Business Areas

The Variant Principle The Fiscal Year Currencies

Currency Codes Exchange Rate Types Maintaining Exchange Rates

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Basic Settings: Objectives

At the conclusion of this unit, you will be able to: map the accounting structure of your company to an R/3-FI-Structure by using R/3-organizational units define a R/3-fiscal year maintain exchange rates using different tools

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Basic Settings: Business Scenario

Your prospective client wants to ensure that its organizational structure can be replicated in the R/3-system and asks you to verify this for the financial accounting application. The head accountant wishes to know how posting periods are defined in R/3 and how postings are assigned to them. The enterprise has a number of foreign customers and vendors and therefore postings in different currencies must be possible. You must verify that R/3 can handle foreign currency postings.
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Organizational Units: Objectives

At the conclusion of this topic, you will be able to: describe the meaning of organizational units company code and business area and determine their differences create a company code using the copy company code functionality

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Organizational Units in R/3 FI

Client 000 Client 001 Client 400 ...

Company Code 1000

Company Code 2000

Company Code 3000

Company Code 4000

Business area 1000 Business area 2000

SAP AG 1999

The client is the highest level in the R/3 system hierarchy. Specifications or data which shall be valid for all organizational units in all R/3 applications are entered at the client level, eliminating the need to enter this information more than once (e.g. exchange rates). Each client is a self-contained unit which has separate master records and a complete set of tables and data. Users must enter a client key and have a user master record in the client in order to log on to the system. Main FI organizational units: Company code (external purposes) A Company Code represents an independent balancing/legal accounting entity. An example would be a company within a corporate group. Balance sheets and profit/loss statements required by law, can be created at the company code level. Therefore, a company code is the minimum structure necessary in R/3 FI. In an international business, operations are often scattered across numerous countries. Since most government and tax authorities require the registration of a legal entity for every company, a separate company code is usually established per country. Business area (internal purposes) Business areas represent separate areas of operation within an organization and can be used across company codes. They are balancing entities which are able to create their own set of financial statements for internal purposes. The use of business areas is optional.

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Creating a Company Code

To create a company code copy an existing company code using the organization copy function, which copies:
the definition global parameters customizing tables (approx. 315 tables) general ledger accounts (if desired) account determination After using this function, only the desired changes between the original and the new company code have to be maintained.

SAP AG 1999

Note : The IMG suggests the order Copy, delete, check company code Edit company code data Copy the company code from an existing company code. This has the advantage that you also copy the existing company code-specific parameters. After copying, you can edit data in your new company code. You have to select a four-character alpha-numeric key as the company code key. This key identifies the company code and must be entered later when posting business transactions or creating company code-specific data. Note : The use of the organization copy function is not required. It is also possible to define the company code and fill the customizing tables from scratch.

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Company Code Components

Definition of a company code
4 character company code key Company name City Country Currency Language Address

Global Parameters
Chart of accounts Fiscal year Company code defaults

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The editing of the company code data includes: The address data is required for correspondence and is recorded on evaluation reports. For each company code a currency must be specified. Accounts are managed in the company code currency. All other currencies are indicated as foreign. The system converts the amounts posted in a foreign currency into this currency. The currency defined in the company code is known as the local currency within R/3. The country key specifies which country is to be regarded as the home country. The system interprets all other countries as foreign. This is important with business or payment transactions, since different forms are needed for foreign payment transactions, and the system supports different formats for addresses for foreign correspondence. A language key must be entered so that the system can create texts automatically in the correct language; for example, when issuing checks. When defining a business area, only a 4 digit alpha-numeric key and a short description are needed.

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Country Templates

US01

DE01 (chart GKR) CC 0001

FR01

DE02 (chart IKR)

GB01 etc. CC 1000

JP01 etc.

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In the R/3-standard system company code 0001 is a template for a general company code with chart of accounts INT and no special country-specifications. If you need a company code in a country for which a country template exists, you can use the country version program which copies the country-specific customizing tables from the specific country template into company code 0001. Upon completion, company code 0001 will be customized for the selected country. You should then copy this company code into your new desired company code. You may then start the country version program again to create a template for another country and so on. Note: The country version program not only creates a country-specific company code template but also a country-specific template for controlling areas, plants, purchasing organizations, sales organizations, credit control areas, financial management areas,etc. Attention: Do not forget to copy the template before you proceed further. Do not use company code 0001 as your productive company code because the country version program always uses this company code as the target company code. Furthermore, you should run the country version program only in a new installation of R/3 and not in an upgrade installation because the structure of the country-specific customizing may have changed from one R/3 release to another.

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The Variant Principle: Objectives

At the conclusion of this topic, you will be able to: explain the use and advantages of the variant principle

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The Variant Principle

The variant principle is a three step method used in R/3 to assign special properties to one or more R/3 objects. The three steps are:

1. Define the variant, 2. Populate the variant with values, 3. Assign the variant to R/3-objects. This principle is used for
field status posting periods fiscal years
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....

The variant principle is a widely used method in R/3 to assign special properties to one or more R/3-objects. For example using creating a company code as an example; Define the variant: K4 is our fiscal year variant Populate the variant with values: we define the properties of K4 to be calendar year Assign the variant to R/3 objects: we assign K4 to multiple company codes that use that calendar The main advantage for using variants is that it is easier to maintain properties which are common among several business objects. Note: On this slide the variant principle is discussed in general so that you will recognize it in other areas of the course.

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The Fiscal Year: Objectives

At the conclusion of this topic, you will be able to: explain the necessity and use of a fiscal year variant and the different types of posting periods define a fiscal year variant which matches your requirements assign the fiscal year variant to a company code

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The Fiscal Year

13

14

15

16

The fiscal year can be defined as...

12 11 10 09 08 07 06 05 01 02 03 04

Year-independent
==> the same number and dates for the periods every year

Year-dependent
==> periods can vary from year to year

SAP AG 1999

To separate business transactions into different periods, a fiscal year with posting periods has to be defined. The fiscal year is defined as a variant which is assigned to the company code. The fiscal year variant contains the definition of posting periods and special periods. Special periods are used for postings which are not assigned to time periods, but to the process of year-end closing. In total,16 periods can be used. The system derives the posting period from the posting date. When the posting date falls within the last normal posting period, the transaction may be posted into one of the special periods. Example: Above you see a fiscal year with 12 posting periods and 4 special periods. If the posting date falls in the 12th period, the transaction can instead be posted in one of the four special periods. Standard fiscal year variants are already defined in the system and can be used as templates. Note: The fiscal year variant does not include the information as to whether a period is open or closed; this is maintained in another table. The fiscal year variant only defines the amount of periods and their start and finish dates.

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The Year - Independent Fiscal Year Variant

Calendar year = Fiscal year Calendar year different than fiscal year
-1 Dez. Nov. Oct. 11 10 Jan. Feb. 02 03 Mar -1 Mar Feb. 06 -1 Jan. Dec. 05 04 Oct. 03 Sept. 02 01 June July Apr. May

12 01

04 Apr. Sept. 09 08 05 Aug. May 07 06 July June

Nov.

Aug.

Begin: April/1/2000 End: March/31/2001 The posting periods correspond to the months in the year
SAP AG 1999

Which fiscal year and posting period was used on Jan.15, 2000 for postings? These postings were completed in posting period 5 of the previous fiscal year

If each fiscal year of a fiscal year variant uses the same number of periods, and the posting periods always start and end at the same day of the year, the variant is called year-independent. A yearindependent fiscal year variant can be defined as the calendar year a non-calendar year If the fiscal year is defined as the calendar year, the posting periods are equal to the months of the year. Therefore a calendar year variant must have 12 posting periods. If the fiscal year is defined as a non-calendar year, the posting periods need to be defined by assigning ending dates to each period. A non-calendar year can have between 1 and 16 posting periods. If the non-calendar year does not start at January 1st the periods of the year which belong to the former or the coming fiscal year must get an annual displacement indicator (-1, +1). The example above on the right shows a non-calendar year with 6 posting periods which goes from April to March. The months January to March therefore still belong to the old fiscal year and need to have the annual displacement indicator -1. If the fiscal year differs from the calendar year, but the posting periods correspond to calendar months, the day limit for February should be 29 to be prepared for leap years. Fiscal years are normally year-independent.

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The Year - Dependent Fiscal Year Variant

Full years with different period dates 199a

04 03 01 02

Shortened fiscal year 199e

01 02 03

199b
04 03 02 01

199c
04 03 01 02 03

199d
04 01 02

04 08 07 06 05

SAP AG 1999

A fiscal year variant has to be defined as year-dependent if the start and the end date of the posting periods of some fiscal years will be different from the dates of other fiscal years, and/or if some fiscal years shall use a different number of posting periods. If all of the years of a year-dependent fiscal year variant have the same number of periods, only the different period dates for the different years have to be defined (see example to the left). If one year of a fiscal year variant has less posting periods than the others, it is called a shortened fiscal year (see example on the right). This could be required if closing has to be made before the end of the normal fiscal year; (e. g. if the beginning of the fiscal year should be changed or if the company was sold). The shortened fiscal year and its number of posting periods has to be specified before definition of the period dates. For this year only a lesser number of posting periods can be assigned.

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Currencies: Objectives

At the conclusion of this topic, you will be able to: define currencies in the R/3-system explain the meaning of different exchange rate types maintain exchange rates use the different tools which help in exchange rate maintenance define direct or indirect quotation as the standard quotation for the exchange rate

SAP AG 1999

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Currency and Exchange Rate Types

Currency Codes, e.g.

USD Exchange rate types: historical rate bank selling rate bank buying rate average rate the rate on certain key dates ...

GBP

JPY

rate
1 0,5 0

time

SAP AG 1999

Every currency which will be used has to be identified by a currency code. Most of the world's currencies are already defined in the SAP R/3-System. Each currency code can have a validity date. For every combination of two currencies, different exchange rates can be maintained which are distinguished by an exchange rate type. These different exchange rates can be used for various purposes such as: valuation, translation, conversion, planning, etc.

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Translation factors

1 1 1 100
SAP AG 1999

The relation between currencies have to be maintained per exchange rate type and currency pair in the translation factors. This usually has to be performed only once. Because inflation can dramatically change the relationship between currencies, translation factors can be maintained on a time-dependent basis (since 4.0A).

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Maintaining Exchange Rates

Exchange rate type Every used exchange rate type !

From

To

Valid from

Exchange rates

Every day ?

A lot of daily work! ==> tools offer help

Every currency combination !

SAP AG 1999

Maintaining exchange rates is an on-going task. To reduce maintenance, R/3 offers several tools. For each exchange rate type one of the following tools can be used: Inversion (of the tools available, inversion is the oldest and is seldom used today) Base Currency Exchange Rate Spreads Note: Just one of these three tools can be used per exchange rate; however, for different exchange rate types different tools can be used. Furthermore: the program RFTBFF00 maintains the exchange rate table automatically by uploading an input file in multicash-format. Another option for transferring exchange rates is offered by the program RFTBDF07, which uses a data-feed interface to transfer data in real-time, if the external data-feed supports real-time exchange rate supply. With Remote Function Call (RFC), a direct connect is set up directly between an external system and a SAP System. You can find information on the file format, data suppliers, file structures and so on in the documentation for this program.

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Exchange Rate Spreads

Selling rate B + spread Average rate M - spread Buying rate G Exchange rate spread Exchange rate spread

SAP AG 1999

Exchange rate spreads between the bank buying/selling rate and average rate usually remains constant. If the exchange rate spread of an exchange rate type is entered into the system, only the average rate has to be maintained since the buying and the selling rate can be derived by adding/subtracting the exchange rate spread to/from the average rate. Combination of base currency and exchange rate spreads: A very efficient combination of the exchange rate tools is Using a base currency for the average rate (M) Using the exchange rate spreads to calculate the buying and selling rates (B and G)

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Base Currency

Average rate To maintain:

Average rate Calculated:

SAP AG 1999

A base currency can be assigned to an exchange rate type. It is then only necessary to maintain exchange rates for all other currencies into this base currency. An exchange rate between two foreign currencies is calculated by combining the two rates between each currency and the base currency. Note: A base currency can only be used for an average rate (e.g. M), not for a selling or buying rate. Until 4.0A it was only possible to use one base currency per exchange rate type. Legal requirements may make it necessary to use different base currencies for the exchange rates with different currencies. Example: The base currency of the group is USD. One company code of the group lies in Mexico. In Mexico it is a legal requirement that all company codes have to use the local currency MXN as the base currency. Solution: To all currency pairs with MXN of the normal exchange rate type a derived exchange rate type gets assigned which has the base currency MXN. Normally the base currency USD is used; however, for all exchange rates with the currency MXN, the base currency MXN is used.

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EURO

Base currency switches to EURO

derived exchange rate types are used in translation

Special translation regulations

no inversion calculations no cross rates six significant figures

Fixed exchange rates between participating currencies

SAP AG 1999

At the beginning of the currency union, the base currency has to be switched to EURO. This can be done by defining a new exchange rate type with the base currency EURO valid from the day of the beginning of the European Monetary Union (EMU). This new exchange rate type then has to be entered as the derived exchange rate type of the former exchange rate type. Special translation regulations for the EMU have to be followed, e.g. rounding rules. For each exchange rate type you can choose whether these regulations should be followed or not. The exchange rates of an exchange rate type can be fixed, i.e. the system checks whether the manually entered exchange rate varies from the fixed exchange rate.

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Triangulation as of January 1, 1999

German DEM

Euro EUR

French FRF

SAP AG 1999

Since January 1, 1999 in EU countries, officially you may only calculate rates via the EURO. There are no longer any direct exchange rate relations between the participating countries. Please see Note No. 91481 and 99271. EURO Conversion with the SAP System is set up, is covered in the course CA990.

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Direct/Indirect quotation of exchange rates

Direct Quotation 1

0,92000

Indirect Quotation

1 1,08696
Base Currency = Euro

SAP AG 1999

All R/3 applications and functions process exchange rates using the direct quotation as well as the indirect quotation. Whether the exchange rate is defined or communicated using the direct or indirect method of quotation depends on the market standard or the individual business transaction. The use of indirect quotation is neither application nor country-specific - it affects all the components in which exchange rates are used. The direct quotation is also known as the price notation: The currency value is expressed in the local currency per unit of foreign currency. The indirect quotation is also known as the volume notation: The currency value is expressed in units of the foreign currency per unit of the local currency. Example: local currency: EUR, foreign currency: USD - direct quotation: 1 USD = 0.92000EUR One unit of foreign currency USD costs the displayed number of units of local currency - indirect quotation: 1 EUR = 1.08696 USD For one unit of the local currency EUR you will receive the displayed number of units of the foreign currency. For each currency pair you can define either the direct quotation or the indirect quotation as the standard notation for the exchange rate. If the exchange rate you enter does not have the same quotation as the standard quotation set up here, the exchange rate is highlighted to show this.

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Design of exchange rate in different quotations

Transaction with exchange rate in Direct Quotation (local currency EUR): 1 USD = 0,92000 EUR

Curr/ExchRate

USD

0,92000

Transaction with exchange rate in Indirect Quotation (local currency EUR): 1 EUR = 1,08696 USD

Curr/ExchRate

USD

/1,08696

SAP AG 1999

Exchange rates can be entered as a direct or indirect quotation. You can maintain two prefixes that can be used to differentiate between direct and indirect quotations exchange rates during input and display. If you dont set up a prefix, the standard setting is valid: (blank, without a prefix) for direct quotation exchange rates / for indirect quotation exchange rates Scenario 1: If you use mainly direct quotation exchange rates and indirect quotation occurs seldom, use the default configuration. In this way you can enter direct quotation exchange rates without a prefix. Scenario 2: If, in addition to direct quotation exchange rates, the handling of indirect quotation is required, you should define a prefix that is not blank for both quotation types, e.g.: * for direct quotation exchange rates, / for indirect quotation exchange rates If you follow this suggestion, the configuration does not allow exchange rates to be entered without a prefix, an error message occurs. Thus users are forced to consider which the correct quotation is and enter the rate with a valid prefix. Scenario 3: If indirect quotation is the major notation at your company, you can configure the settings this way: * for direct quotation exchange rates, (blank) for indirect quotation exchange rates This configuration allows indirect quotation exchange rates to be entered without a prefix whereas the less used direct quotation exchange rates have to be entered with a prefix.

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Basic Settings: Summary

The main organizational units in R/3-financial accounting are the company code and business area. Posting periods and special periods are defined in a fiscal year variant. For conversion of currencies exchange rates have to be maintained in the system. R/3 offers several tools to facilitate maintenance.

SAP AG 1999

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Exercises
Unit: Basic Settings Topic: Organizational Units
At the conclusion of this exercise, you will be able to: Create a company code

The company of your client is a medium sized enterprise based in the course country. The enterprise is a single legal entity.

1-1

Create a company code GR## that reflects the enterprise of your client. In the rest of this course, you will be working within this company code. 1-1-1 The company code 0001 already contains the country specifics for your country. Copy company code 0001 into your new company code GR##. Dont copy the general ledger accounts at this point! We will do this at a later stage. 1-1-2 Change the definitions of your company code GR##: Company name: Group ## Country: Currency: Language: Course country Local currency Local language

You are free to complete the other fields. 1-1-3 Review the global parameters for your company code that were copied when you created your company code.

1-2

Find all of the organizational elements that a company code can be assigned to using the IMG.

Use the Binoculars Icon,

, to search for assign company code.

1-3
SAP AG

T/F: You can assign a company code to a business area. __________________

TFIN10 8-27

Basic Settings Exercises

Unit: Basic Settings Topic: The Fiscal Year
At the conclusion of this exercise, you will be able to: Create a calendar year based fiscal year variant and to assign it to your company code Create a quarter based fiscal year variant The enterprise operates in a fiscal year that corresponds to the calendar year. The head accountant wants four special periods for postings concerning year-end closing.

2-1

Which of the predefined fiscal year variants are - calendar-year? ________________________ - year-dependent? _______________________

2-2

For what purposes are year-dependent fiscal year variants usually used? ________________________________________________________________ ________________________________________________________________ ________________________________________________________________

2-3

Create a calendar year variant ## for your company with 12 posting periods and four special periods Add 30 to your group number since some of the existing data begins with 01, 02, etc. For example, if your group number is 02, you would add 02 + 30 and enter 32 for your fiscal year variant.

2-4 2-5

Assign the fiscal year variant that you created to your company code GR##. Create a fiscal year variant ## + 40 for a fiscal year with just four posting periods and one special period. The length of one posting period is three months. The fiscal year runs from April to March

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Basic Settings Exercises

Unit: Basic Settings Topic: Currencies
At the conclusion of this exercise, you will be able to: Check your knowledge about the possibility of maintaining exchange rates in R/3 The enterprise has customers and vendors in several foreign countries. The head accountant is worried that it will be a substantial amount of daily work to keep the exchange rates up-to-date within the system. You need to convince him that it is much less work than expected if the tools R/3 offers are used. 3-1 Name the tools for maintaining the exchange rates: ________________________________________________________________ ________________________________________________________________ 3-2 3-3 In R/3, currencies are defined by _________________. Name three commonly used exchange rate types and what they are used for: ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ 3-4 List the IMG path where base currency is defined? ________________________________________________________________ 3-5 What is the difference between a participating and non-participating currency? ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________

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Solutions
Unit: Basic Settings Topic: Organizational Units

1-1

Create a company code GR## that reflects the enterprise of your client. In the rest of this course you will be working within this company code. 1-1-1 IMG Menu Path Options:

IMG Menu Path: Tools AcceleratedSAP Customizing Edit Project SAP Reference IMG Pushbutton IMG Transaction Code: SPRO Copy company code: IMG: Enterprise Structure Definition Financial Accounting Define, copy, delete, check company code Copy, delete, check company code Organizational object Copy org.object
Field Name or Data Type From Company code To Company code Values 0001 GR##

Select Enter.
Field Name or Data Type G/L accounts in company codes Change local currency Values No No !!!

Reply to the information message, Certain data was not copied dialog window by selecting Enter. Confirm any information messages by selecting Enter and continue copying. Confirm the Enter intervals without overlap dialog box by selecting the red X.

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1-1-2 Select the green arrow to return to the dialog box and select Edit company code data or follow the next menu path.

Change definition of company code: IMG: Enterprise Structure Definition Financial Accounting Define, copy, delete, check company code Edit company code data Select GR##.
Field Name or Data Type Company name City Country Currency Language Values Group ## any city Your country Local currency Local language

Select Save.
1-1-3 Review the global company code parameters.

IMG: Financial Accounting Financial Accounting Global Settings Company Code Enter Global Parameters Drill down on your company code to review the global parameters.

Checklist

Congratulations! You have just created your own company code!

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1-2

Search for elements that are assigned to a company code.

Use the Binoculars Icon,

, to search for assign company code!

Assign Company Code Assign Company Code Workflow Variant for Release for Payment Assign Company Code for EDI Incoming Invoice Assign Company Code for EDI Payment Advice Notes Assign Company Code to Chart of Accounts Assign Company Code to Document Date for Tax Determination Assign Company Code to Field Status Variants Assign Company Code to Plant Assign Company Code to Rule Type Assign Company Code to a Fiscal Year Variant Assign Company Codes to Correspondence Company Codes Assign Company Codes to Tax on Sales/Purchases Group Assign company code to company Assign company code to controlling area Assign company code to credit control area Assign company code to financial management area
1-3

False. Business areas are not assigned to company codes. They can report across company codes.

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Basic Settings Solutions

Unit: Basic Settings Topic: The Fiscal Year

2-1

Verify properties of fiscal year variants.

IMG: Financial Accounting Financial Accounting Global Settings Fiscal Year Maintain Fiscal Year Variant (Maintain Shortened Fisc. Year) Calendar year: 01, K1, K2, K3, K4 Year-dependent: AA, AM, R1, UL, WK
2-2 Purposes of the year-dependent fiscal year variants.

The year-dependent fiscal year variants are used: - if start and end date of the posting periods differ from year to year - if one fiscal year has fewer posting periods than the others (shortened fiscal year)
2-3 Create calendar year variant.

IMG: Financial Accounting Financial Accounting Global Settings Fiscal Year Maintain Fiscal Year Variant (Maintain Shortened Fisc. Year) Edit New entries
Field Name or Data Type FV Values ## + 30

Add 30 to your group number since some of the existing data begins with 01, 02, etc. For example, if your group number is 02, you would add 02 + 30 and enter 32 for your fiscal year variant.

Field Name or Data Type Description Calendar-yr Number of posting periods No.of special periods

Values Calendar year variant ## X 12 4

Select Save.
SAP AG TFIN10 8-34

2-4

Assign fiscal year variant to company code.

IMG: Financial Accounting Financial Accounting Global Settings Fiscal Year Assign Company Code to a Fiscal Year Variant
Field Name or Data Type Fiscal year variant Values ##

Select Save.
2-5 Define a fiscal year variant with 4 posting periods and one special period.

IMG: Financial Accounting Financial Accounting Global Settings Fiscal Year Maintain Fiscal Year Variant (Maintain Shortened Fisc. Year) Edit New entries
Field Name or Data Type FV Description No. posting periods No. special periods Values ## + 60 4 periods Group ## 4 1

Select Save. Select the green arrow to return to the Overview screen Define period dates: Highlight Fiscal year variant ## + 60. Under the Dialog Structure, drill down on Periods. Edit New Entries
Month 03 06 09 12 Day 31 30 30 31 Period 4 1 2 3 Year shift -1 0 0 0

Select Save.
Checklist

You just created a calendar-year fiscal year variant, assigned it to your company code. You also created a non-calendar fiscal year variant.

SAP AG

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Basic Settings Solutions

Unit: Basic Settings Topic: Currencies

3-1

Inversion Base Currency Exchange Rate Spreads

3-2 3-3

Currency Code M: Average rate for posting and clearing B: bank buying rate S: bank selling rate Euro: fixed exchange rate type for countries in the EMU

3-4 3-5

General Settings Currencies Check exchange rate types A participating currency is the currency of the country participating in the European Monetary Union. As of January 2000, those countries include: Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Portugal and Spain. A non-participating currency is the currency of a country not participating in the EMU.

SAP AG

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