Sap Fico BBP As Is To Be Details

1 Financial
Accounting
As Is Business Process and Business Requirement

from BIOPAC
PROJECT EXCELL
To Be Business Process for BIOPAC
Sign-off on Business Blue Print
3. Financial Accounting
Implementation of mySAP ERP by SEAL InfoTech (P) Ltd. for Biopac India Corporation Limited
Mr. Harish Doshi

Steering Committee
Member, Biopac
Mr. Pankaj Doshi

Steering Committee
Member, Biopac
Mr. AMIT GUPTA

Project Manager & FI
consultant
SEAL Infotech (Pvt) Ltd.
Mr. Senthil Kumar

Steering Committee
Member, SEAL Infotech
(Pvt) Ltd.
Mr. Rajiv Parekh

Project Manager,
Biopac
Mr. Rajesh Punjani

Key User, Biopac
Business Blue Print Financial Accounting Mr. Rajesh Punjani, BIOPAC, Mr Amit Gupta SEAL
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Introduction
This Business Blue Print Document describes the following:
Enterprise Structure of BIOPAC
Business requirements as given by the BIOPAC Key Users
Suggestions by SEAL INFOTECH (P) LTD. consultants wherever mySAP ERP 2005 are found to be useful to BIOPAC s business functionality
To-Be Process on mySAP ERP 2005 system suggested by SEAL INFOTECH (P) LTD. Consultants
Comments whether the requirement can be realized on the mySAP ERP 2005 system or not.
Gaps which are at different stages of exploration
The following codes are given to each module that is within the scope of the agreement:
Module
ID
Module
Financial Accounting
Controlling
Sales & Distribution
Materials Management
Production & Planning
Plant Maintenance
Quality Management
Payroll
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Further processes, sub-process and activities in each module are denoted by, say. 1.1, 1.1.1, 1.2.1 etc.
A Business Blueprint document is prepared for each module and reference shall be made wherever required to other modules, whenever there is an
overlap of business processes across modules or a business process requires to be completed in more than one module. The reference to the business
process shall be made using the process numbers as described above;
For e.g.:
As per the above notation, all processes in Sales and Distribution start with 3.* So if a reference has to be made to process in Accounts Receivable of
Financial Accounting, then the reference is made using the notation say, 1.2.* where 1 refers to Financial Accounting and 1.2 refers to Accounts
Receivable and then further numbers denote the sub-processes and activities in the module.
Step 1:
The Module Owner shall identify various existing business processes at a broad level and make a list of them as described under section 1 of this
document
Step 2:
Depending upon the various business processes thus identified in Step 1, various business scenario are described in the following way:
As Is Business Processes: The current way of executing the business process shall be explained in detail with data/information flow along with the IT
systems / Manual Systems being used in the whole cycle.
Business Requirement: Under this head, the module owner shall describe the requirements of the company vis--vis this business scenario, if necessary
with examples. Following situations can arise:
(a) The current provisions in the system are sufficient enough and additional configuration efforts are not required.
(b) The current provisions are not sufficient and satisfactory and additional features need to be incorporated in the system
(c) There is no current provision to handle this transaction at all.
The module owner shall identify each business scenario with the above classification.
Step 3:
Based on the Business Requirement, Seal consultant shall do a detailed Requirement Analysis and based on the analysis shall propose the best-fit
business process on the mySAP ERP 2005.
It may not be possible to decide the realization possibility of all Business requirements on the mySAP ERP 2005 immediately and hence the following
legend is being followed for describing the statuses:
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Status of To-Be Business

Process
Status Description
A-Possible
Can be implemented on mySAP ERP
B-Possible with workaround
Can be implemented on mySAP ERP through indirect means
C-Possible with ABAP
Can be implemented on mySAP ERP through ABAP/4 development
D-Possible with ABAP (But

performance issue)
Can be implemented on mySAP ERP through ABAP/4 development but system performance may be effected
E-Not possible with out

Major Modification
Cannot be implemented on mySAP ERP without major system modification
F-Open for exploration
Possibility of implementation will be explored in the development environment. Cannot be confirmed at this
stage
G-Not possible
Cannot be implemented on mySAP ERP
H-Not in Scope
Cannot be implemented because it is not part of the scope defined in the Software Services Agreement
between Seal Infotech and BIOPAC
The To-Be business process realization is dependent on the following aspects:
Scope of services described in the Software Services Agreement signed by BIOPAC and Seal Infotech
Scope of functionality described in the Software Services Agreement mentioned above.
Capabilities and Limitations of mySAP ERP
As-Is Business Knowledge Transfer from BIOPAC Project Team members
Business Requirements defined by the BIOPAC Project Team members
BIOPAC accepts that the decision to accept the To-Be Business Processes is completely its own and not influenced by Seal Infotech. Seal Infotech shall
not be responsible for the business consequences on BIOPAC after the realization and usage of the processes being suggested here.
BIOPAC shall indemnify Seal Infotech from all responsibilities for any other business consequences during the framing of the To-Be Business processes,
or at any time during or after the realization / implementation of these processes on mySAP ERP system or while using the system.
Methodology to be adopted for preparing Business Blue Print:
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Contents
Topic
Page Numbers
Start
End
Process Scope List of Business Processes
06
07
Definitions
08
14
Enterprise Structure on mySAP System
15
16
Master Data
17
32
To-Be Business Processes
33
69
Integration Points
70
73
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Process Scope List of Business Processes

Process
ID
Process Description
1.1 Account Receivable Transactions
1.1.1.
Booking of Local Sales Entry
1.1.2
Setting off Excise Duty Liability with the duty collection account and PLA Account
1.1.3
Paying off the credit balance in PLA account (month end)
1.1.4
1.1.5
Receipt payment from the customer
1.1.6
Correspondence (Credit Not, Debit Note, Receipts)
1.1.7
One Time Customer
1.2.1
Purchase Related Activities
1.2.2
Import Purchase of Raw Material
1.2.3
1.2.4
Local Purchase of RM
Local Purchase of PM
1.2.5
Local Purchase of Consumables
1.2.6
Local Purchase of Trading Goods
1.2.7
Local Purchase of Labour Charges, Service Charges
1.2.8
Cash Purchase
1.2.9
Purchase Return
1.2.10
Transport Payment
1.2.11
Down Payment to Vendors
1.2.12
Transport Liability
1.2.13
Posting Vendor Invoice
1.2.14
Display a Document
1.2.15
Reversing a document
1.2.16
Outgoing Payment
1.2.17
Outgoing payment using payment program
1.2.18
Displaying a vendor account Balance
1.2.19
Display and change line item
Displaying Balance in Customer Account.
1.2 Accounts Payable Transactions
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1.2.20
Period end activities
1.2.21
Advance given to employees and received from them
1.2.22
Service Tax
1.3 Asset related Transactions

1.3.1
Acquisitions
1.3.2
Retirement of asset
1.3.3
Depreciation on Fixed Assets
1.3.4
Depreciation Posting Run
1.3.5
Fiscal Year Change
1.3.6
Year-end Closing
1.4 Cash Journal
1.4.1
Cash Management
1.4.2
Manual Bank Statement
1.4.3
Bank Reconciliation Process
1.4.4
Letter of Credit Management
1.4.5
Loan Disbursement
1.4.6
Bank Margin Against LC: -
1.4.7
Fixed Deposit with Banks

1.5 General Ledger
1.5.1
General Posting
1.6 TDS
1.7 Period End Activities (Pre Balance Sheet Activities)
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1. Definitions
Client
A commercially, organizationally, and technically self-contained unit within an SAP System. Clients have their own master records and set of
tables.
The client is the highest level in the SAP System hierarchy. Specifications that you make, or data that you enter at this level are valid for all
company codes and for all other organizational structures. You therefore only need to make these specifications, or enter this data once. This
ensures that the data is consistent.
Company
The smallest organizational unit for which individual financial statements are created according to the relevant legal requirements. A company can
include one or more company codes.
All of the company codes within a company must use the same chart of accounts and fiscal year. However, each company code can have a
different local currency. If the fiscal year is different for different co. code then different fiscal year variant will be used and consolidation of
accounts will not be possible. Consolidation of Accounts will be done manually outside the system. However, all the relevant data for consolidation
will be available in the system.
Company Code
Smallest organizational unit of external accounting for which a complete, self-contained set of accounts can be created. This includes the entry of
all transactions that must be posted and the creation of all items for legal individual financial statements, such as the balance sheet and the profit
and loss statement.
The company code is the central organizational unit of external accounting within the SAP System. You must define at least one company code
before implementing the Financial Accounting component. The business transactions relevant for Financial Accounting are entered, saved, and
evaluated at company code level.
A single company code will be created for Biopac.
Business Area
Organizational unit of external accounting that corresponds to a specific business segment or area of responsibility in a company. Movements in
value entered in Financial Accounting are assigned to business areas. Financial statements can be created for business areas for internal purposes.
Business areas are used in external segment reporting (over and above company codes), based on the significant areas of operation of a company
(for example, product lines, branches).
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If you have defined business areas, the transaction figures for the G/L accounts are managed separately for internal evaluation purposes. You can
therefore create internal financial statements for business areas.
To post items in a business area, enter the business area when you enter the business transaction. However, the business area can also be derived
from other account assignments, such as the cost center.
Business Area will not be defined for Biopac.
Document
The result of a posting in Financial Accounting. There are two types of documents: Original documents and processing documents.
Examples of original documents:
Receipts
Invoices
Checks
Bank statements
The accounting document represents the original document in the system. The other processing documents can be used to simplify document
entry. The document remains as a connecting unit in the system until it is archived. Documents are the link between the business transaction and
the posting in accounting. You can only check whether postings are correct in the compact journal and general ledger by means of documents.
Every posting must therefore have a document.
A document consists of a document header and at least two line items.
Suggested Business Process:
Standard SAP methodology is suggested.
Document Type: A key that is used to classify accounting documents and distinguish between business transactions to be posted. The document type is entered in
the document header and applies to the whole document. Document types are defined at client level.
The document type has the following functions:
Differentiating between business transactions. The document type tells you instantly what sort of business transaction is in question. This
is useful, for example, when displaying line items for an account.
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Controlling the posting to account types (vendor, customer, or G/L accounts). The document type determines which account types that
particular document can be posted to.
Assigning document numbers. A number range is assigned to every document type. The numbers for the documents you create are taken
from this number range. The original documents from one number range should be stored together. In this way, the document type
controls document storage.
Document types reflect the different business transactions in your organization. Since the document type can be displayed for every line item,
you can immediately find out the type of business transaction in both document display and line item display. You can also use the document
type for evaluation purposes.
To differentiate between business transactions using the document type, you specify for each document type, what type of account that
document can be posted to. Document type AB allows you to post to all accounts. All other document types limit the types of accounts you can
post to. Document type DA, for example, only allows you to post to customer and G/L accounts. The document types delivered with the
system have already been limited to specific types of accounts.
You can define a special authorization for every document type. To do this, you need to determine what document types in which form
employees are allowed to process.
Authorizations are checked for the following activities:
Posting documents
Document display and line item display
Changing documents
Programs that evaluate documents.
The system does not check the authorization for document types that are not assigned an authorization group.
For each document type, you can specify whether users are required to enter a reference number or the document header text.
The suggested Document types that can be used by Biopac are as below: Type
AA
AB
AF
BP
BR
Description
Asset posting
Clearing document
Depre. Postings
Bank Payments
Bank Receipts
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CP
CR
DA
DC
DI
DL
DX
JV
KA
KC
KI
KX
MD
MU
OP
PR
RE
RV
SA
SU
TD
VL
WA
WE
WI
WL
ZP
ZR
Cash Payment
Cash Receipt
Customer document
Customer credit note
Customer invoice-FI
Customer LC
Customer Noted Items
Journal Voucher
Vendor document
Vendor credit note
Vendor invoice-FI
Vendor Noted Items
CENVAT Postings
CENVAT Utilization
Data transfer
Price change
Invoice doc. frm MM
Sales Billing doc.
G/L account document
Prd Order Settlement
TDS Doc. for Cln Pmt
Vendor LC
Goods issue (IO,PO,CC
Goods receipt(PO,PdO
Inventory document
Goods issue/Sales Or
BRS Payment clearing
BRS Receipt Clearing
Document Number Assignment

In the SAP System, every document is assigned a number that identifies it uniquely within a fiscal year and company code.
There are two types of number assignment:
External (by the user)
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The accounting clerk enters the number of the original document during document entry, or the number is transferred automatically from a
pre-invoicing system. A prerequisite is that the document numbers are unique. The system checks whether the number entered already exists
and prevents users from assigning the same number twice. Numbers assigned to documents that have been archived however, can be reused.
Internal (by the system)

The system automatically assigns a sequential number. The accounting clerk transfers this SAP document number to the printed original
document and then files it using this number. This method is used if the original documents do not have a unique document number. This is
the case, for example, with vendor invoices.
You use a number range to define how the document number is assigned. Each document type has a specific number range from which the
document number is selected.
Internal number assignments would be assigned to all document types.
Biopac management will decide Numbers.
Posting Keys
Two-character numerical key that controls the entry of line items. The posting key determines:
Account type
Debit/credit posting
Layout of entry screens
When you enter a posting, enter a posting key for each item. This key determines how the item is posted. Posting keys are defined at client level
and therefore apply to all company codes. The posting key determines:
The data you can enter in the line item
How data you post is processed
How the system updates the data you enter
Posting keys are differentiated by customer, vendor and G/L accounts. Apart from the General Ledger Accounting (FI-GL) and Accounts Receivable
and Payable (FI-AR/AP) components, there are also posting keys for asset and material accounts.
Posting keys in the standard system: -
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Posting Key
Description
40
G/L account debit posting
50
G/L account credit posting
Suggested Business Process

Standard posting keys will be used
Chart of Accounts
This is a list of all G/L accounts used by one or several company codes. For each G/L account, the chart of accounts contains the account number,
account name, and the information that controls how an account functions and how a G/L account is created in a company code.
A chart of accounts would be assigned to each company code. This chart of accounts is the operating chart of accounts and is used for the daily
postings in this company code. The operating chart of accounts is shared by Financial Accounting as well as Controlling. The accounts in a chart of
accounts can be both expense or revenue accounts in Financial Accounting and cost or revenue elements in cost/revenue accounting.
Single Chart of account will be created for Biopac.
Logical coding for Chart of Accounts to be worked on by Biopac Key Users.
G/L Accounts
Each account used for posting is defined in the general ledger and contains information that reflects or describes its function. This information is
stored in the master record of an account. It controls how business transactions are entered and posted to the account as well as how posting data
is processed. G/L account master data is divided into two areas:
Chart of accounts area:
This area contains information that applies to the complete master record (G/L account number, account name, P&L account, or balance sheet
account). In addition, you use it to store data that controls the creation of a master record in the company code (account group and screen
layout).
Company code-specific area:
This area contains data that controls the entry of business transactions for the related account and account management in the respective
company code (currency; open item management).
Chart of Depreciation
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Charts of depreciation are used in order to manage various legal requirements for the depreciation and valuation of assets. These charts of
depreciation are usually country-specific and are defined independently of the other organizational units. A chart of depreciation, for example, can
be used for all the company codes in a given country.
Single Chart of Depreciation will be used for Biopac.
Open and Close Posting periods
You define posting periods in your fiscal year variants. You can open and close these posting periods for posting. As many periods as you require
can be open for posting simultaneously.
Usually, only the current posting period is open for posting, all other posting periods are closed. At the end of this posting period, the period is
closed, and the next posting period is opened.
Posting Period Variants:
You can specify which company codes are open for posting in a posting period variant. Posting period variants are cross-company code and you
have to assign them to your company codes. The posting periods are then opened and closed simultaneously for all company codes via the posting
period variants.
Account Type:
You can differentiate the opening and closing of posting periods by account type. This means that for a specific posting period, postings can be
permitted to customer accounts, but not to vendor accounts.
Account Interval:
You can differentiate the opening and closing of posting periods by account intervals. This means that you only open a posting period for posting to
a specific account.
Account intervals always apply to G/L accounts. If you want to open sub-ledger accounts, you have to enter the corresponding reconciliation
account and the account type.
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2. Enterprise structure on my SAP R/3 System

Company
To Be Created
Code
Justification / Purpose of the Organizational Unit
Description
Biopac India Corp Ltd.
Biopac is a single entity.

Company Code
To Be Created
Code
1000
Description
Biopac India Corp Ltd.
Legal Entity
Business Area
To Be Created
Code
Description
Business area functionality would not be used.

Chart of Accounts
To Be Created
Code
BCIL
Description
Biopac Chart of Accounts
A New Chart of Accounts 9000 would be created and all company codes
would be using this chart of account.
Operating Concern
To Be Created
Code
BIOC
Description
Biopac Operating Concern

A New Operating Concern would be created for Profitability Analysis
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3. Master Data
3.1 Customer Master Data
As Is Business Process
Customer master already exists in Legacy system. However, it does not

store much information. Important information like customer name,
address, sales tax registration number, ECC number etc can be
maintained in the current system.
The Accounts Receivable application component records and

manages accounting data of all customers. It is also an integral part of
sales management.
The current system does not support customer account groups and
customer account codes.
Business Requirements
Three account groups will be created in the system, namely:
1.
Export customers
2.
Domestic customers
3.
One time customers
All postings in Accounts Receivable are also recorded directly in the

General Ledger. Different G/L accounts are updated depending on the
transaction involved (for example, receivables, down payments, and
bills of exchange). The system contains a range of tools that you can
use to monitor open items, such as account analyses, due date lists,
and a flexible dunning program.
Both the accounting (FI-AR) and the sales (SD) departments of your
organization use customer master records. By storing customer master
data centrally, you enable it to be accessed throughout your
organization, and avoid the need to enter the same information twice.
You can also avoid inconsistencies in master data by maintaining it
centrally. If the address of one of your customers changes, for
example, you only have to enter this change once, and your
accounting and sales departments will always have up-to-date
information.
A customer is represented in the SAP System by means of a master
record. All the data relating sales shall be captured in SD Module.
The master record contains data that controls how business
transactions are recorded and processed by the system. It also
includes all the information about a customer that you need to be able
to conduct business with him or her.
Master records are divided into the following areas so that each
company code and each sales organization can store its own
information for doing business with customers:
1.
General data
This is a data that applies to every sales organization in your
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company. The general area includes, for example, the customer's

name, address, language, and telephone data.
2.
Company code data

This is a data that is specific to an individual company code.
Company code data includes, for example, the reconciliation
account number, terms of payment, and dunning procedure.
3.
Sales area data

This is a data relevant to the sales organizations and distribution
channels of your company. Data that is stored in this area
includes, for example, data on order processing, shipping, and
billing.
Account Group:
You must assign each account to an account group. The account group
ensures that only the relevant screens and fields are displayed and
ready for input for each of the customers different partner functions.
For example, the address, communication, and bank data fields are
omitted for the account group for one-time accounts.
The account group controls:
The type of number assignment used for the account number
A number interval from which the account number is chosen.

The system uses the account number to identify the customer.
Which fields are displayed when you enter or change customer

master data and whether or not an entry must be made in
these fields (field status)
Whether the account is a one-time account
Numbering Master Records:

Each master record has a unique number. You need this number to call
up the master record or to post to the customer account.
The account group determines the type of number assignment used
and the valid number range for a customer master record.
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The customer master record number is assigned either internally or

externally. Internal numbers are assigned by the system, whereas you
enter external numbers yourself when creating the customer master
record. External numbers can be alphanumeric.
The system ensures that
With internal assignment,
the interval. With external
entering the same number
the numbers assigned are always unique.

the system selects the next number from
assignment, the system prevents you from
twice.
A customer account has the same account number in all company

codes.
Reconciliation Accounts:
You must specify a reconciliation account in the master record so that
all postings made to a subsidiary ledger are also posted to the general
ledger.
When you post items to a subsidiary ledger, the SAP system
automatically posts the same data to the general ledger at the same
time. Each subsidiary ledger has one or more reconciliation accounts in
the general ledger. These reconciliation accounts ensure that the
balance of G/L accounts is always zero. This means that you can draw
up financial statements at any time without having to transfer totals
from the sub-ledgers to the general ledger.
The Important fields in general data are Name, Address, Country,
region etc.
Fields provided by SAP for the customer master will be filled up.
GAP:
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3.2 Vendor Master

As-Is Business Process:
Vendor master exists in the legacy system. However very less

information is stored in the master data. Important information like
The Accounts Payable application component records and manages

accounting data for all vendors. It is also an integral part of the
purchasing system: Deliveries and invoices are managed according to
vendors. The system automatically triggers postings in response to the
operative transactions.
customer name, address, sales tax registration number, ECC number etc
can be maintained in the current system.
There is no concept of vendor account group or vendor account code in
the current system. The different vendors are identified based on their
names.
PAN number should be mandatory for the vendors on which TDS is
applicable.
Postings made in Accounts Payable are simultaneously recorded in the

General Ledger where different G/L accounts are updated based on the
transaction involved (payables and down payments, for example). The
system contains due date forecasts and other standard reports that
you can use to help you monitor open items.
Account Group:
1.
Vendor R/M
2.
Vendor Packing Material
You must assign each account to an account group. The account group
ensures that only the relevant screens and fields are displayed and
ready for input for each of the vendors different functions. For
example, the address, communication, and bank data fields are
omitted for the account group for one-time accounts.
3.
Vendor Freight
The account group controls:
4.
Vendor Expenses
The following account groups will be defined for vendors:
PAN number shall be mandatory for the account groups of Freight &
Expenses.
The type of number assignment used for the account number
A number interval from which the account number is chosen.

The system uses the account number to identify the vendor.
Which fields are displayed when you enter or change vendor

master data and whether or not an entry must be made in
these fields (field status)
Whether the account is a one-time account
Numbering Master Records:

Each master record has a unique number. You need this number to call
up the master record or to post to the vendor account.
The account group determines the type of number assignment used
and the valid number range for a vendor master record.
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The vendor master record number is assigned either internally or

externally. Internal numbers are assigned by the system, whereas you
enter external numbers yourself when creating the vendor master
record. External numbers can be alphanumeric.
The system ensures that
With internal assignment,
the interval. With external
entering the same number
the numbers assigned are always unique.

the system selects the next number from
assignment, the system prevents you from
twice.
A vendor account has the same account number in all company codes.
Reconciliation Accounts:
You must specify a reconciliation account in the master record so that
all postings made to a subsidiary ledger are also posted to the general
ledger.
When you post items to a subsidiary ledger, the SAP system
automatically posts the same data to the general ledger at the same
time. Each subsidiary ledger has one or more reconciliation accounts in
the general ledger. These reconciliation accounts ensure that the
balance of G/L accounts is always zero. This means that you can draw
up financial statements at any time without having to transfer totals
from the sub-ledgers to the general ledger.
Fields provided by SAP for the vendor master will be filled up.
PAN Number:
A separate account group will be created for the vendors on which TDS
is applicable. PAN number will be mandatory for all the vendors in
created in this account group.
GAP: A
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3.3 G/ L Master
AS Is Business Process
G/L master in the legacy system consists of account name and grouping.
There is no concept of G/L account codes in the legacy system.
G/L account master records contain the data that is always needed by
the general ledger to determine the account's function. The G/L
account master records control the posting of accounting transactions
to G/L accounts and the processing of the posting data.
Sub ledger entry is mandatory for certain type of ledger accounts

maintained in the master.
Before you can make postings to a G/L account, you have to create a
master record in the system for the account.
G/L account groups to be decided by the Biopac key user. The codes will
be in 8 digit.
G/L account master records are divided into two areas so that
company codes with the same chart of accounts can use the same G/L
accounts.
Chart of accounts area

The chart of accounts area contains the data that is valid for all
company codes, such as the account number.
Company code specific area

The company code specific area contains data that may vary
from one company code to another, such as the currency in
which the account may be posted.
The following objects play a central role in the creation and

management of master records:
Chart of Accounts List
Chart of accounts
Account group
The account group is a summary of characteristics that control the

creation of master records. You can use it to determine which fields
must or can be filled when creating the master record. In addition, it
can be used to predefine a number interval, from which the numbers
for the master records should be chosen. Accounts that require the
same master record fields and use the same number interval are
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created with the same account group.

The G/L account master record in the company code contains
company code-specific information, which controls the entry of data to
this account and the management of the account.
The account group determines:
The number interval from which the account number is

selected when a G/L account is created.
The screen layout for creating G/L accounts in the company

code-specific area.
When you define an account group, you also determine the number
interval in which the accounts of this group must lie. When creating a
G/L account, the system checks whether the number you entered lies
in the predefined number interval.
For each account group, a screen layout is determined, that is, it is
determined which fields are relevant for this group of G/L accounts.
You can assign the following field statuses to the fields of a field group.
Field status
Description
Required
entry
This field requires an entry when creating a

G/L account
Optional
entry
You may make an entry in this field when

creating a G/L account
Display
The field is displayed, but you cannot make

an entry in it.
You should not use this status, since the
fields should be available for entry when
creating a G/L account.
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Suppressed
The field is not displayed, that is, you do not

see the field when creating a G/L account.
Field Status Group

You have to define field status outside of the master record. Mark the
field status you need for each field or field group under a field status
group. Then assign the field status group to individual G/L accounts in
the G/L account master records.
Field status groups are independent of company code, attaching
instead to the field status variant. A separate variant exists in each
company code for field status groups in the standard system. The
name of the variant is identical to the company code. Each company
code is assigned to the variant with the same name.
Account Currency:
When creating a G/L account, you must define the currency in which
the account is to be kept.
This defines the following:
The currency used for postings made to this account
The currency in which transaction figures are updated and the

account balance is displayed
You specify the account currency in the company code area of the G/L
account master data. This allows you to keep the G/L account in the
local currency of each company code.
Enter the local currency of your company code.
The system automatically uses the local currency that you

defined when creating the company code as the default value.
This allows posting to the G/L account in any currency. When

you make a posting in a foreign currency, the amount is
translated into the local currency. The transaction figures are
kept as follows:
o
In the local currency, that is, the total of all the
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amounts posted in the local currency

o
In the individual currencies, that is, the total of all the

amounts posted in various currencies.
Balances in Local Currency:

When creating a G/L account in a company code, you can decide
whether the transaction figures should only be kept in the local
currency for this account.
You have to set this indicator for clearing accounts you use to clear
line items in various currencies with one local currency amount and
without posting any exchange rate differences that may occur.
Do not set this indicator for A/P A/R reconciliation accounts.
You have to set the indicator for the following accounts:
o
Cash discount clearing accounts
Clearing accounts for goods receipt / invoice receipt
The indicator is usually set for the following balance sheet accounts:
o
Accounts without open item management in which no foreign

currencies are managed
Reconciliation Account for Account Type:

You use this field to indicate G/L accounts as being reconciliation
accounts. For each subledger account, you must keep at least one
reconciliation account in the general ledger. When you post to an
account in the subledger, the system automatically posts to the
corresponding reconciliation account.
Using the reconciliation account procedure, it is possible to create a
balance sheet and a profit and loss statement at any time, since the
amounts posted to subledger accounts are also posted automatically in
the general ledger.
You define reconciliation accounts by specifying in the G/L account
master record the account type (such as fixed assets, vendor or
customer) for which the account is to be used. In this way, the account
can only be assigned to accounts in the corresponding subledger. You
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set the assignment of the subledger account to a reconciliation account

in the master record of the subledger account. You cannot post to
reconciliation accounts manually.
Open Item Management:
If you set the "Open item management" indicator in the master record
for an account, the line items in this account is marked as open or
cleared.
The balance of an account with open item management is equal to the
balance of the open items. General ledger accounts are kept with open
item management if you need to check whether there is an offsetting
posting for a given business transaction.
Line Item Display:
If you set the "Line item display" indicator in the master record for an
account, all line items that have been posted to this account are
displayed if they have not been archived.
You use line item display to display the document line items from the
account. For line item display, the system lists all the line items for an
account.
Field Status Group:
You use this field to define which fields are displayed when you post
accounting transactions to a G/L account. A field may have one of the
following statuses:
o
Hidden (suppressed)
Entry required (required field)
Ready for input (optional field)
Automatic Postings:
When posting documents, the system automatically adds line items to
manually entered items as needed. For example, the tax amount, the
cash discount amount, and profits or losses from foreign currency
translations (exchange rate differences) can all be calculated and
posted automatically by the system. You can decide that accounts to
which these automatic postings are made can only be posted to
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automatically. This will prevent any manual postings to such an

account. A definition like this would be useful for tax accounts, if, for
example, you had no subsequent tax debit to post.
Apart from the aforementioned, further aspects that can be defined for
G/L accounts are as follows:
Tax Category:
In tax accounts, you can specify the type of tax on sales/purchases
(input or output tax) that can be posted to the account.
In rare cases, it is useful to assign a certain tax code to an
account. You enter the tax code in the master record in this case.
Only this tax code can be used when posting to this account. If a
G/L account is not tax relevant, you may make no specification in
this field.
Posting without Tax Allowed:
If you select this indicator, no tax code needs to be entered when
posting to this account. If a tax code is entered, it is checked according
to the tax category for this account.
You use this indicator if taxable and non-taxable postings are to be
entered to an account at the same time. In such a case, you normally
set up your own tax code to allow for non-taxable transactions.
However, this is not possible - for example - for tax entry with
jurisdiction code, since no jurisdiction code can be specified for
customers abroad. You would then allow postings without tax codes
for the corresponding expense or revenue accounts.
This indicator is not needed for invoice verification postings, since the
account assignments are generally derived from the purchase order.
The indicator is therefore not checked by the system for these
postings.
GAP: A
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3.4 Asset Master

As Is Business Process:
Asset Master is currently not maintained in the legacy system. Sub

ledger accounts are created for various assets in the system.
The Asset Accounting (FI-AA) component is used for managing and

supervising fixed assets with the SAP R/3 System. In SAP R/3 Financial
Accounting, it serves as a subsidiary ledger to the FI General Ledger,
providing detailed information on transactions involving fixed assets.
Business Requirements:
None
As a result of the integration in the R/3 System, Asset Accounting (FIAA) transfers data directly to and from other R/3 components. For
example, it is possible to post from the Materials Management (MM)
component directly to FI-AA. When an asset is purchased or produced
in-house, you can directly post the invoice receipt or goods receipt, or
the withdrawal from the warehouse, to assets in the Asset Accounting
component. At the same time, you can pass on depreciation and
interest directly to the Financial Accounting (FI) and Controlling (CO)
components.
The FI-AA component uses the various SAP organizational units. An
asset is clearly assigned to these organizational units at any given
point in time.
Charts of depreciation are used in order to manage various legal
requirements for the depreciation and valuation of assets. These charts
of depreciation are usually country-specific and are defined
independently of the other organizational units.
Further, the following are defined for the purpose:
Depreciation Areas:
An area showing the valuation of a fixed asset for a particular purpose
(for example, for individual financial statements, balance sheets for tax
purposes, or management accounting values).
Book Depreciation
Depreciation as per I.T Act
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Asset Class:
The asset class is the most important criteria for structuring fixed
assets from an accounting point of view. Every asset has to be
assigned to exactly one asset class. The asset class is used to assign
the assets (and their business transactions) to the correct general
ledger accounts. Several asset classes can use the same account
assignment. You can see that it is possible to make finer distinctions at
the level of the asset class than at the level of the general ledger
accounts.
Account Determination:
An automatic function that determines the accounts for posting
amounts is Financial Accounting.
Chart of Accounts
In the General Ledger, you can define different charts of accounts.
Each company code is assigned to exactly one chart of accounts. The
chart of accounts is used for the account assignments within Asset
Accounting.
The account assignment is controlled by means of the asset class in
Asset Accounting. You have to specify an account determination in
each asset class. In this account determination, you specify the G/L
accounts in which automatic posting takes place for different
transactions.
Company Code
Asset Accounting uses the same company codes as the General Ledger.
However, you need to define these company codes further with the
specifications needed for Asset Accounting. An FI company code is not
usable in Asset Accounting until it has been defined in this way. In
order to make a company code usable in Asset Accounting, you have
to assign a chart of depreciation to the company code.
You have to enter a company code when you create an asset. This
ensures that each asset is always uniquely assigned to a company
code.
You create asset reports per company code. For reports for a group
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concern, it is also possible to run reports on all or several company

codes.
Business Area
The business area is another organizational criterion for General
Ledger Accounting, in addition to the company code.
If you specify in Customizing for the General Ledger that business area
balance sheets should be created for a company code, the system
requires that assets be assigned to a business area during master
record maintenance. The business area can also be adopted
automatically from the cost center that you entered. As long as a fixed
asset is assigned to a business area, the system makes account
assignment of all postings to this asset to this business area, including
depreciation and gain or loss postings on asset retirement.
If you want to assign a fixed asset, which has already been posted, to
another business area, you have to transfer the fixed asset to a new
asset master record. The posting becomes effective at the same time
in the General Ledger. If you do not create business area balance
sheets, you can change the business area in the time-dependent
assignments in the asset master record.
Plant
Generally, the plant is a plant location or branch. The plant has no
asset accounting relevance, but it can be used as a sort and selection
criterion for reports. You can assign a fixed asset to one plant for a set
time in its asset master record. By changing the asset master record,
you can change the assignment to a different plant.
Location
The location is handled the same as the plant. In addition to a plant,
you can make a time-dependent assignment of the asset to a location.
Address
In the Customizing definition of the location, you can also specify an
address. Using this method, you can indirectly assign an address to an
asset. The comprehensive address data consists mainly of
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Street address
PO box
Information for communication (such as telephone number)
Since the address is linked to the location, all assets with the same
location must have the same address.
The meanings of the plant and location organizational units are
primarily specified in the SAP R/3 logistics components.
For internal accounting, you generally need to assign asset costs to
cost centers. Therefore, you can assign each asset in Asset Accounting
to exactly one cost center. You make this assignment in the asset
master record.
Fields Provided as per Standard SAP to be filled
Depreciation Areas would be used for the purpose.
The depreciation areas that would be defined for Biopac would be as
below:
Book Depreciation
Depreciation as per I.T Act
GAP: A
3.5 House Bank
House Banks are not maintained in the current system. Only G/L
accounts are opened for various bank accounts.
In the R/3 System, bank master data is stored centrally in the bank
directory. In addition to defining bank master data, you also define
your own bank details (house banks).
The bank directory contains the bank master data.
Bank Details:
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To be able to run the payment program, the system requires details on

your own bank, and these details must be entered in the customer and
vendor master records. In the company code-specific data of a vendor
master record, you could for example enter the house bank from which
payment is to be made to this vendor. If you do not enter a bank in the
master record, you must specify the rules by which the payment
program determines the bank. The data that you enter is the same in
both cases - an ID code for your bank.
You define your bank details per company code by entering a code for
each bank. You can enter a five figure alphanumeric key as a bank ID.
Each bank ID is unique within a company code. For each bank, enter
the bank country, and either the bank number or an appropriate
country-specific key. The system uses this information to identify the
correct bank master data. When you define details for the payment
program (this necessitates entering the bank master data for your
bank details) you need enter only the bank ID.
Defining bank accounts

In addition to the bank details, you must also define the bank accounts
that you have at your bank. You define these under an account ID
which is unique per company code and house bank.
This account ID can incorporate attributes of the bank account, and
you are advised to choose an ID that reveals as much information
about the account as possible. You will use this ID to be able to refer
to your bank account both when entering specifications for the
payment program, and in G/L account master records.
The account data you enter comprises the account number at your
bank, the currency in which the account is managed, and any
additional country-specific data. To assist, the system displays bank
master data on the entry screen.
G/L accounts for your bank accounts

For each of your bank accounts, you must define a G/L account in the
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system.
In the G/L account master record, enter a currency key (this must
correspond to the currency in which the bank account is managed). If,
for example, you manage a foreign exchange account in USD at your
bank, you must enter the currency key for this currency in the G/L
account master record.
GAP: A
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4. To-Be Business Processes

1.1 Accounts Receivable Transaction
The sales are generally made against the advance payments received
from the customers. The Sales takes place through 6 C&F agents also
spread across the country. Generally sales are made to :
The FI module is integrated with the SD module by defining the

account determinations in the SAP system. Sales activities leading to
financial implications automatically update the respective Customer &
G/L accounts.
Distributors spread across the country.
Direct customers
Sales through C&F agents.
The financial accounting entries that get generated for various salesrelated transactions would be mentioned while discussing the
respective scenario.
In case of sales through C&F agents, the material is sent to the agent
through the stock transfer note and invoicing is done at the time of final
sale from the C&F agent. Sales tax is applicable on such sales.
Business Requirement:
The basic sales flow in SAP is as below:

1. Inquiry from customer
2. Quotation provided to customer
3. Preparation of Sales Order on placement of purchase order by
customer
4. Delivery of goods & PGI
5. Billing
6. Excise Invoice
GAP: A
1.1.1 Booking of Sale Entry
Types of Sales:
o

On delivery of Goods, the following entry gets generated.
Domestic Sales
Cost of Goods Sold a/c..Dr. xxx
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Export Sales
Trading Sales
To Inventory (Finished Goods) a/c
Sales Account defined for the respective kind of sales are: -
On updating the Excise records (excise invoice), the following entry is

generated:
Excise Duty Paid a/cDr. xxx
Sales Domestic
To Excise Duty Payable a/c
Sales Export.
Currently, these accounts are linked to the product code, hence the
bifurcation between domestic and export is not proper.
Booking of Sales entry is done manually. Sales invoice is being created
manually in excel.
Dr.
To Sales a/c
Customer a/cDr. xxx

To Sales a/c
To CST/ VAT Payable a/c
xxx
.Cr
xxx
To CST/VAT (%) Payable a/cCr
xxx
To Excise Duty Liability a/cCr
xxx
To E. CessCr
xxx
xxx
On doing the Billing (commercial invoice), the following accounting

entry gets generated.
The Accounting Entry for Manufacturing Goods: Customer a/c.
xxx
xxx
xxx
To Excise Duty Recovered a/c
xxx
To E. Cess a/c
xxx
Accounting Entry for Sale of Traded goods:

Customer a/c..Dr. xxx
To Sales a/c
xxx
The accounting entry for Sale of Trading Goods
To CST/ VAT Payable a/c
Customer a/c Dr. xxx
To Excise Duty Recovered a/c
xxx
To E. Cess a/c
xxx
To Sales a/c .....Cr xxx
xxx
To CST/VAT (%) Payable a/c.Cr xxx

To Excise Duty Liability a/c ...Cr xxx
To E. Cess
a/c.Cr xxx
C&F Sales:
In case the goods are transferred to the 6 C&F agents, a stock transfer
note is generated and excise is paid on the goods. The following financial
entry is generated in the books:
Excise % and sales tax % will be defined in SD module under pricing

conditions which will be picked up by the system.
C&F sales will happen through SAP. When the material is being
transferred to C&F agent, the Stock Transfer invoice will be generated
and excise entry will be passed in FI. The stock available at C&F agent
can be monitored in SAP. The sale will be booked once Invoice will be
generated by the C&F agent.
Excise Duty Paid on C&F sales Acc .Dr XXX

Excise Duty on purchase acc ..Cr XXX
GAP A
When the sales is made by the C&F agent, the following entry is
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generated:
Customer Account .Dr XXX
Sales Account Cr XXX
VAT payable Account ..Cr XXX
1.1.2 Setting off Excise Duty/Education Cess Liability with the duty collection account and PLA Account
All excise related entries are passed in the system manually. Excise
records for the statutory purpose in the prescribed format are
maintained manually.
Every month end, on utilization of the existing credit, the following

entry gets generated (the automatic account assignments are active)
For taking credit for Raw Material, Packing material, Capital goods
different statutory books are maintained manually. For Capital goods a
different registered is maintained as per statutory requirement
After month-end, duty payable is calculated as per excise records and
payment is made to PLA account. If Credit is available nothing is paid
and balance credit is carried forward to next month.
Currently, a single monthly entry is being generated for stock transfer to
C&F agents in Financial books.
Excise Duty Payable a/c..Dr. xxx

Education Cess Payable a/cDr. xxx
To CENVAT (RG23A) a/c
To PLA a/c
xxx
xxx
Whenever there is an excise transaction in any module, system

automatically updates the excise register and report will be available.
GAP: A
1.1.3 Paying off the credit balance in PLA account (month end)
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The PLA balance at the month-end is paid-off through Bank as follows: -
The PLA balance at the month-end is paid-off through Bank as follows: -
PLA a/c
Dr. xxx
To Bank a/c
PLA a/c Dr. xxx
Cr. xxx
To Bank a/c
xxx
GAP: A
Same to be followed
1.1.4 Receipt payment from the customer

As-Is Business Process:
Mostly the payments are received in advance. In case of credit sales,

credit appraisal is done manually by the marketing and the accounts
department. This is finally approved by the MD before any credit sales
are made. The company has a collection account and all the customers
deposit the cheques in this account for the payments.
Incoming payments are recorded in SAP system by using the respective

Transaction for posting incoming payment.
The company has both domestic and export sales. The sales are also
made against Letter of Credit.
When L/C is received from the customer, no accounting entry is created
in the system.
The receipts from Customers are handled through Finance Accounting

(Accounts Receivable).
The respective document type for receipt from customers is to be used.
Bank a/c..Dr. xxx
To Customer a/c
xxx
Customer account is credited only at the time of receipt of payment in

the bank.
The amount is cleared against the respective receivable from the

Customer.
Tracking of L/C is done manually outside the system.
In case of advance received from the customer, the entry will be passed
using a special G/L indicator and Advances from Customers account will
be updated. After the invoice has been raised, the entry will be cleared
with the advance amount.
Business requirement:
Details of sales made through L/C should be available from the system.
In case of export sales, the average foreign exchange rates will be

maintained in the system. Any fluctuation in the exchange rate will
automatically be adjusted in the Foreign exchange fluctuation account.
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Sales against L/C:

When a sale is made against L/C an additional entry will have to be
passed in the system using special G/L indicator. Once the payment is
received this entry will be cleared.
Tracking of L/C will be available after the entry has been passed using
special G/L indicator. The tracking of L/C will be limited to the L/Cs
against which the sales have been made and payment is yet to be
received by the bank.
GAP: A
1.1.5 Displaying Balance in Customer Account
Customer Balance Display is available from the system with the detail of
line items.
Standard SAP functionality allows viewing of balance in customers

account at any given point of time. The balance can be further drilled
down to see the line items constituting the same.
Details of customer statement of accounts should be available in the
system.
GAP: A
1.1.6 Correspondence (Credit Not, Debit Note, Receipts)

Debit note, Credit notes are maintained in the system. The sales team
directly handles all the correspondence with the customers.
All evaluations and reports you send to your business partners by mail
are considered correspondence.
Correspondence for customers only includes:
o
Payment notices
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Statements of bill of exchange charges
Internal evaluations are account lists, balance lists, open item lists, and
sorted lists of open items. These are created in the SAP Financial
Accounting application component where they remain.
Dunning
Sometimes the business partners may fall behind on payments. A
payment reminder or a dunning notice can be send to remind them of
their outstanding debts.
The SAP System allows to dun business partners automatically. The
system duns the open items from business partner accounts in which the
overdue items create a debit balance. The dunning program selects the
overdue open items, determines the dunning level of the account in
question, and creates a dunning notice. It then saves the dunning data
determined for the items and accounts affected.
Dunning Procedures would be defined containing the various levels of
reminders. Every customer would be assigned a dunning procedure so as
to enable automatic creation of correspondence for overdue items from
the customer.
The dunning run is done periodically for achieving the same
GAP: A
1.1.7 One Time Customer
In the current system there is no concept of one time customer. However

company do have customers which are just one time buyers.
One time customers can be created in SAP. This functionality is used in

case of saes to customers for which the company does not want to
maintain complete master record.
GAP: A
One time customer should be created in the system.

1.2 Accounts Payable Transaction
1.2.1 Purchase related Activities
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No vendor account groups exist in the current system. All the vendor
balances are updated in a single general ledger account. Advances are
given to employees as well as to outside vendors, Credit facility from
vendors is availed, payment is mostly made through LC and Cheque.
Vendors are issued Debit/Credit Note after MRN, cash discount is also
availed from Vendors, purchase history of Vendors for analyse is not
available in the current system.
In the SAP system, the material related activities are handled through
Material Management Module.
The Purchases at Biopac are primarily classified into:
Purchase of Raw Material
Purchase of Consumables
Purchase of Fixed assets (Capital Goods)
Purchase of Packing Material
Purchase of Engineering Material
All the above purchases are booked through a purchase invoice). Some
of the Fixed Assets are purchased directly from FI, e.g., Computers, Air
Conditioned etc.
On receiving a vendor invoice by the Accounts Dept., along with a copy
of PO & GRN, the entry is made in the books for booking the invoice.
The Financial Accounting module is integrated with the MM module and

the account determinations are defined to enable automatic postings in
Financial Accounting for transactions in MM having a financial
implication.
The brief overview of the transactions that happen in MM module are:
1. Requisition
2. Purchase Order
3. Goods Receipt / Invoice Receipt (GR/IR)
4. Invoice Verification (done by Accounting Department)
Accounting entries get generated at the time of GR/IR, and invoice
verification.
At the time of GR/IR, the following entry gets generated.
Inventory a/c...Dr. xxx
To GR/IR a/c..xxx
After doing the Goods receipt, the Excise records are updated in case of
purchase of raw material and packing material on which excise duty has
been paid and is claimable as CENVAT credit.
The entry that gets generated at this level is as follows:
CENVAT a/c ..Dr. xxx
To CENVAT Clearing a/c.xxx
On doing the Invoice verification, the following entry gets generated and
the liability is booked.
GR/IR a/c..Dr. xxx
CENVAT Clearing a/c
Dr xxx
To Vendor a/cxxx
After completing part 2 excise entry only invoice verification has to be
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performed else the excise duty amount would be loaded onto inventory
or to price differences a/c.
At the time of invoice verification if there were differences between GR
value and IR and if stock is not available the difference amount would go
to price differences A/c.
GAP: A
1.2.2 Import Purchase Raw Materials

Process: -
The account determinations would decide the corresponding G/L

accounts to be updated for individual transactions carried out in the MM
module.
1- Purchase Order is placed with the suppliers

2- Supplier sends Proforma Invoice
3- Based on Proforma Invoice LC is Open
4- Supplier sends materials
5- Material is received at plant
In case of Import purchases, the process remains the same but for the
additional charges that are included in the cost of inventory.
The same is processed in MM module. The following accounting entry
gets generated on receipt of goods.
Inventory a/c..Dr. xxx
To GR/IR a/c..xxx
To Freight Clearing..xxx
To Customs Clearing...xxx
At the time GRN bill of entry is also captured.
Cenvat receivable a/c .
DR (For PM & Store Spares 100%,

Capital item 50%, Balance 50%
will go to Cenvat Receivable Deferral A/c)

To CVD clearing a/c
Cr
To E Cess Clearing a/c..Cr.

On doing the Invoice Verification, the following entry gets generated.
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GR/IR Clearing a/cDr. xxx

Freight Clearing a/c.Dr. xxx
Customs Clearing a/c..Dr. xxx
CVD Clearing a/c..Dr. xxx
E Cess Clearing a/c.Dr. xxx
To Vendor a/cxxx
Foreign Exchange Fluctuation
At the time of Goods Receipt, the exchange rate for imported material
shall be picked from the exchange rate tables. Inventory account will be
debited with the value based on this exchange rate.
At the time of payment, the difference between the liability against the
vendor and the actual amount paid, valued at the exchange rate at the
time of payment shall be posted to Foreign currency Gain or Loss A/C as
the case may be.
GAP
1.2.3 Local Purchase-Raw Material

The following materials are procured locally:
The account determinations would decide the corresponding G/L accounts

to be updated for individual transactions carried out in the MM module.
1.
Raw Material
2.
Packing Material
3.
Consumables Items
At the time of Goods Receipt the following entry gets generated
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4.
Engineering Materials
5.
Capital goods
notional figures).
(when freight is borne by the company)
Process: -
Inventory (Raw-material) a/c.Dr xxx
1. PO is raised.
To GR/IR Clearing a/c.xxx
2. GRN is done based on PO
To Freight Clearing a/c...xxx
3. Quality Check is done
On updating the excise records, the following entry is generated.
4. The GRN is sent to the excise department for recording.
CENVAT (RG23A) a/..Dr. xxx
5. The GRN is then sent to the accounts department for booking

accounting entry.

To E Cess Clearing a/c.xxx
A lot of time is lost between the actual goods receipt and the updation
of stocks in Finance. Entries happen at three stages:
1. GRN preparation by stores
CENVAT Clearing a/cDr. xxx

GR/IR Clearing a/c....Dr. xxx
Freight Clearing a/cDr. xxx
2. Updation of excise records based on GRN
E Cess Clearing a/cDr. xxx
3. Creating accounting entry.
To Vendor a/c .xxx
The stocks should be available in the stock ledger on real time basis
and the financial books should be updated simultaneously.
To Vendor a/c (Freight). xxx
GAP: A
1.2.4. Local Purchase Packing Material

Same procedure as Local Purchase RM

The treatment for purchase of Packing material is similar to the ones

stated above. The respective Inventory account gets updated.
Same to be followed
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Standard SAP process of procurement as mentioned in the MM document

would be followed.
GAP: A
1.2.5. Local Purchase - Consumables

Same procedure as Local Purchase RM

The purchase of consumable stores if done through MM, would lead to
similar entries as discussed above.
Same to be followed

would be followed.
GAP: A
1.2.6. Local Purchase-Trading Goods

It is not being done currently but would be done in future


would be followed.
The procurement should be controlled through SAP.
In case of traded goods, the entries would be as below:

On receipt of the goods,
Inventory (Traded) a/c..Dr. xxx
To GR/IR Clearing a/c.xxx
On doing the Invoice Verification, the following entry is generated.
GR/IR Clearing a/cDr. xxx
To Vendor a/c..xxx
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GAP: -
1.2.7 Local Purchase of Labour Charges, Service Charges

Other than materials, various kinds of services are also procured.
Purchase orders are raised for these services. The process is similar to
the procurement of material. No entry is made for the receipt of
services and the invoice is directly booked in the system.

The purchase of Services is also processed by MM module.
A minute change in the process would be that the process begins with
creation of a P.O for Services. A Service Entry Sheet is passed for the
services utilised for a particular period by the concerned department.
Service entry sheet is nothing but the confirmation of services rendered by
the vendor, this will be initially entered by the concerned department
based on services received.
A) The following FI entry will flow in the books on posting of service entry
sheet by the concerned department.
Expense GL A/c . Dr
To GR/IR clearing account (Interim liability A/c) Cr
The Vendor invoice for the above services will be posted by finance
department directly or parked by the concerned department & the
finance department will post the same. On posting of the same the
following entry will be posted.
GR/IR clearing account (Interim liability A/c)
Dr
Service tax A/c
Dr
To Service Vendor A/c .... Cr

To O/L TDS Payable A/c... Cr
To E- cess payable account ..Cr
To Surcharge A/c ..Cr
B) The Following entries are required to be passed in case of bills are
passed in Finance/Accounts department.
At the time of booking of Expenses.
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Expense GL A/c Dr
Service tax a/c
Dr
To Service Vendor A/c . Cr

To O/L TDS Payable A/c ..Cr
To E- cess payable account ..Cr
For services where service entry sheet is not required to be prepared
entries would be done in FI department through MIRO with reference to
Purchase order.
On doing the Invoice Receipt, the following entry gets generated.
Expenses a/cDr. xxx
To Vendor a/cxxx
Gaps: A
1.2.8 Cash Purchases
In case of urgent requirement, the employee does cash purchase of

some inventory item.
Cash Purchases are usually done for low value items and most of them are
non-stock items (the vice-versa may not be completely true)
Cash Purchases are done for the material required on an urgent basis of
some inventory items.
For these type of purchases, purchase orders are not created and direct FI
invoice is booked in the system.
Same to be followed
Gaps: A
1.2.9 Purchase Returns
At BIOPAC, some incoming materials that are found defective
or rejected during the inspection, the materials are sent back to
vendor.

If the goods are returned to the vendor, then the accounting entry
created for purchase of the material gets reversed to the extent of
material returned.
Gaps: A
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1.2.10
Transport Payment
The payment made to transporters for the materials purchased is
taken to the cost of inventory. The invoice for transportation is
received separately from the transporters.

At the time GRN posting:
Inventory a/c
Dr
Business requirement
GRIR a/c
Their should be a tracking of the transporters cost with respect to the

purchase order.
GRIR Freight a/c
Cr
Cr
At the time of Invoice booking:

GRIR Freight a/c
Dr
Vendor (Freight) a/c
Cr
The tracking of transporters invoice value with respect to the purchase

order can be maintained if the transportation cost is mentioned in the
purchase order.
GAP A
1.2.11 Down Payment to Vendor

Down payments are given only in certain cases to vendors, which are
subsequently deducted against the bills of the vendors.
Down payment requests and down payments are special general ledger
transactions. These transactions are not posted to the G/L account defined
in the customer master record but to an alternative G/L account.
P. O. states whether the down payment has to be made or not.

TDS wherever applicable would be deducted on down payments and
cleared off manually while entering the invoices in the system.
Following Accounting entry is passed
Special G/L transactions are special transactions in accounts receivable and

accounts payable that are displayed separately in the general ledger and
the subledger. This is achieved by posting to alternative reconciliation
accounts, instead of posting to the reconciliation accounts for receivables
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Vendor A/c .....Dr

To TDS A/c.....Cr.
To E Cess A/c.Cr.
To Bank A/c ...Cr.
Business Requirement;
and payables.
These special procedures are displayed separately from other receivables
and payables on the balance sheet either for legal reasons, such as with
down payments, or for control reasons, such as with guarantees received.
A separate special G/L account is created for each special G/L transaction.
As a result, it is possible to display each transaction in the balance sheet
without having to carry out any transfer postings and to receive an
overview via the account limited to this procedure only.
Special G/L transactions are special transactions in accounts receivable and

accounts payable that are displayed separately in the general ledger and
the subledger. This is achieved by posting to alternative reconciliation
accounts, instead of posting to the reconciliation accounts for receivables
and payables.
Process Flow:
Down payment request
Down payment
Invoice
Down payment clearing
Payment and clearing
Unlike partial payments, down payments are reported separately in the

balance sheet.
The accounting entries to be passed for recording such transactions is as
follows:
For recording the entry for Down-payment:
A special G/L indicator is chosen for recording the down-payment
transaction.
Vendor a/c (Special G/L Ind. On)Dr. xxx
To Bank a/c..xxx
On receipt of invoice from the vendor and on booking of the expense, the
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down-payment is cleared off against the payment to the vendor. The open
items chosen for processing would include the Special g/l transactions
regarding that particular vendor to whom the down payment has been
made.
GAP A
1.2.12 Transport Liability

Transportation is paid on the goods dispatched to the customers and

C&F agents. The bills are received from the transporters and the
booking of invoice takes place based on that.
The transporters invoice will be booked just like an invoice for any other
vendor.
GAP:
None
1.2.13 Posting Vendor Invoice
Vendor Invoice booking is done by Accounts department for payments

made.
For all other expenses not automatically posted (where there is no

automatic posting arising out of integration),the expenses are to be
booked by posting an Invoice in Accounting.
The flow of transactions for booking such expenses is as below:
Business Requirement
1.
Invoice
2.
Outgoing payment
3.
Cheque Printing (in case of payment through Bank)
Expenses are recorded directly in Financial accounting by posting an

invoice.
The entry for expenses is booked accordingly by choosing the respective
G/L account for expense and the respective Vendor for liability.
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The debit/credit functions are identified by the posting key that has been
used.
The entry for expense would be as below,
Expense a/cDr. xxxx
To Vendor a/cxxx
Gaps: A
1.2.14 Display a Document

In Legacy this facility is available.

Every document generated in the system is assigned a unique number for
as per the number assignments. The documents can be viewed using the
document number or can be searched for by using various selection
criterions.
This facility should be available in the system.
SAP Standard methodology is suggested.

Gaps: A
1.2.15
Reversing a Document
This facility is available in legacy system.
Standard SAP functionality allows reversal of documents. The documents

may be reversed and the reason codes for reversal may be mentioned for
the same. A reversal document number is generated for the reversal.
This facility should be available in the system.
Reversal of a document is categorised into two:

1.
Reversal of clearing document.
2.
Reversal of other documents.
In case of reversal of clearing documents, the cleared items have to be

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reset. Then the document can be reversed.

SAP Standard methodology is suggested.
Gaps: A
1.2.16
Outgoing Payment
Vendor payment is through Bank only
Cheques are prepared at HO only.
Payments are made as per the amount availability.
Outgoing payments are made to vendors using the document type defined
for payments. In case of any down payments made to the vendor, the
same is adjusted at the time of booking Outgoing payment by choosing the
special g/l open items for that particular vendor and clearing the same.
Cheque and LC Payment method is used.
Outgoing Payment
Using this activity, Vendor Open item will be cleared by making the
outgoing payment.
Printing of cheques along with advices from SAP.
Based on the document type you selected, system will assign the
Document number. The default document type BP/CP generates the above
document number.
The payment to vendors is done using the transaction code for outgoing
payment by choosing the open items against the vendor. The accounting
entry that gets generated is as below:
Vendor a/c..Dr. xxx
To Cash a/c or Bank a/cxxx
Different cheque lot numbers shall be maintained for different types of
payments and for HO & Factory.
Gaps: A
The printing of
developments.
1.2.17
cheques
and
advice
will
be
Outgoing Payment Using Payment Program

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No such facility is available in the legacy system.
The payment program will be configured for Banks (will be decided by

Biopac). Use of Payment program helps generating multiple payments to
vendors. Also the payments can be made only on or after the due date.
The payment program automatically picks up all the invoices for vendors
which have become due for payment. The selection can be controlled
through parameters available in the program. Once the payments have
been selected, the program creates the payment entries, clears the invoice
documents and prints the check, all at one go.
None
Gaps: A
1.2.18
Displaying a Vendor Account Balance
In Legacy this facility is available.
Standard SAP functionality allows viewing of balances in Vendor accounts

at any given point of time. The balances are updated in real-time for any
transactions that happen in the system affecting that particular account.
Further drill down can be done to view the line items constituting the given
balances.
This facility should be available.

Gaps: A
1.2.19
Displaying and changing a line item
Changes in the document can be made even after they have been
posted.
Standard SAP functionality allows drill down of line items and changing
certain fields in individual line items.
Though not all fields are modifiable (for control issues),
Fields such as reference, text, etc are free for modification.

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Gaps: A
1.2.20
Period End activities
While making provision following entry is passed manually
Month-end activities comprises the activities as below:
Expenses AccountDr.
To Provision for Expenses Account..Cr.
This is reversed at the time of bill booking
Provision for Expenses Account.Dr.
To Expense Account.Cr.
Period should be closed on a monthly basis. No backdated entries
should be allowed.
Open and Close Posting Periods
Year-end Activities:
Foreign Currency Valuation - All open items in foreign currency are
valuated as part of the foreign currency valuation:
The individual open items of an account in foreign currency form the basis
of the valuation, that is, every open item of an account in foreign currency
is valuated individually. The total difference from all the open items in an
account is posted to a financial statement adjustment account. The
account therefore retains its original balance. The exchange rate profit or
loss from the valuation is posted to a separate expense or revenue account
for exchange rate differences as an offsetting posting.
Carrying Forward Balances:
This process involves carrying forward account balances into the new fiscal
year. The balance to be carried forward is shown in the account balance
display. When you carry forward the balances for G/L accounts at the end
of a fiscal year, the system automatically adjusts the balances when you
post values to the previous year. The system uses an indicator to
determine whether the balances have been carried forward. Once this has
been done, the balance is automatically carried forward whenever a
posting is made, even when a posting is made to the previous year. It is
therefore not necessary to execute the balance carry forward again.
The balances on the balance sheet accounts are simply carried forward
into the new fiscal year.
Profit and loss accounts are carried forward to retained earnings accounts.
The balances of the profit and loss accounts are set to 0.
The accounting entry that gets generated on revaluing, is as below:
Exchange Rate Difference a/cDr. xxxx
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To Financial Statement Adjustment a/cxxxx

OR
Financial Statement Adjustment a/cDr xxxx
To Exchange Rate Difference a/c..xxx
The accounting entry that gets generated on revaluing, is as below:
Exchange gain/ loss a/cDr. xxxx
To Debtors/Creditors
xxxx
OR
Debtors/Creditors Dr xxxx
To Exchange gain/ loss a/c..xxxx
Provision to be made for the expenses:
Respective Expense Account Dr.
To Outstanding Payables Account - Cr.
Provision for expenses will have to be done manually.
Business area Adj:
This process ensures the zero balance per business area necessary for
creating business area balance sheets.
It consists of the following steps:
When posting a document, the system analyzes it to determine

whether a balance sheet readjustment is necessary. If a
readjustment is required, the system marks the document for
readjustment.
Readjustments are calculated for the marked documents and

stored in special tables.
The calculated readjustments are read and then distributed and

posted in total to the appropriate accounts.
Example:
Expense a/c
Dr
(Business Area 1000)
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Bank a/c
Cr (Business Area 2000)
Business area adj. Entry passed by system:

Business area adjustment a/c
(2000)
Business Area Adjustment a/c
Dr
1000)
Cr
SAP Methodology Suggested

Gaps: A
1.2.21
Advance given to employees and received from them

Advance given to employee has to be treated as a special G/L and it will be
cleared off upon receipt of the expenses statement. If any Balance has to
be collected from the employee, it will be done through a receipt voucher.
SAP standard to be followed.
None
Gaps: A
1.2.22 Service Tax
Service Tax is paid on the services availed by the company. The

service tax paid to transporters is expensed out and is not available for
setoff. The service tax paid on other services is adjusted against the
excise duty liability.
Service tax setoff can be done in the system. For service tax paid to
transporters, a separate G/L account will be created and the amount will
not be available for setoff from the system.
The system should allow the service tax to be adjusted against the
excise duty liability.
Gaps: A
Development of report for actual invoices paid during the month to
calculate the service available for adjustment will be considered at the time
of study of reports.
1.3 Asset Related Transaction

As Is Business Process
The procurement of assets takes place from H.O. The standard
procurement process is followed. Fixed Assets register is maintained
outside legacy system.

The Asset Accounting (FI-AA) component is used for managing and
supervising fixed assets with the SAP R/3 System. In SAP R/3 Financial
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None
Accounting, it serves as a subsidiary ledger to the FI General Ledger,

providing detailed information on transactions involving fixed assets.
As a result of the integration in the R/3 System, Asset Accounting (FI-AA)
transfers data directly to and from other R/3 components. For example, it
is possible to post from the Materials Management (MM) component
directly to FI-AA. When an asset is purchased or produced in-house, you
can directly post the invoice receipt or goods receipt, or the withdrawal
from the warehouse, to assets in the Asset Accounting component. At the
same time, you can pass on depreciation and interest directly to the
Financial Accounting (FI) and Controlling (CO) components.
The FI-AA component uses the various SAP organizational units. An asset
is clearly assigned to these organizational units at any given point in time.
Charts of depreciation are used in order to manage various legal
requirements for the depreciation and valuation of assets. These charts of
depreciation are usually country-specific and are defined independently of
the other organizational units.
Chart of Accounts
In the General Ledger, you can define different charts of accounts. Each
company code is assigned to exactly one chart of accounts. The chart of
accounts is used for the account assignments within Asset Accounting.
The account assignment is controlled by means of the asset class in Asset
Accounting. You have to specify an account determination in each asset
class. In this account determination, you specify the G/L accounts in which
automatic posting takes place for different transactions.
Company Code
Asset Accounting uses the same company codes as the General Ledger.
However, you need to define these company codes further with the
specifications needed for Asset Accounting. An FI company code is not
usable in Asset Accounting until it has been defined in this way. In order to
make a company code usable in Asset Accounting, you have to assign a
chart of depreciation to the company code.
You have to enter a company code when you create an asset. This ensures
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that each asset is always uniquely assigned to a company code.

You create asset reports per company code. For reports for a group
concern, it is also possible to run reports on all or several company codes.
Business Area
The business area is another organizational criterion for General Ledger
Accounting, in addition to the company code.
If you specify in Customizing for the General Ledger that business area
balance sheets should be created for a company code, the system requires
that assets be assigned to a business area during master record
maintenance. The business area can also be adopted automatically from
the cost center that you entered. As long as a fixed asset is assigned to a
business area, the system makes account assignment of all postings to
this asset to this business area, including depreciation and gain or loss
postings on asset retirement.
If you want to assign a fixed asset, which has already been posted, to
another business area, you have to transfer the fixed asset to a new asset
master record. The posting becomes effective at the same time in the
General Ledger. If you do not create business area balance sheets, you can
change the business area in the time-dependent assignments in the asset
master record.
Plant
Generally, the plant is a plant location or branch. The plant has no asset
accounting relevance, but it can be used as a sort and selection criterion
for reports. You can assign a fixed asset to one plant for a set time in its
asset master record. By changing the asset master record, you can change
the assignment to a different plant.
Location
The location is handled the same as the plant. In addition to a plant, you
can make a time-dependent assignment of the asset to a location.
Address
In the Customizing definition of the location, you can also specify an
address. Using this method, you can indirectly assign an address to an
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asset. The comprehensive address data consists mainly of
Street address
PO box
Information for communication (such as telephone number)
Since the address is linked to the location, all assets with the same
location must have the same address.
The meanings of the plant and location organizational units are primarily
specified in the SAP R/3 logistics components.
For internal accounting, you generally need to assign asset costs to cost
centers. Therefore, you can assign each asset in Asset Accounting to
exactly one cost center. You make this assignment in the asset master
record.
Gaps: A
1.3.1 Asset Acquisition

For the purchase of fixed assets, the following entry is passed in the
system: Asset a/c.Dr. xxx

Asset Accounting of SAP shall support the following acquisition
business processes of Biopac:
a.
Direct Capitalization
RG23 50% .Dr. xxx
i.
External Asset Acquisition
RG 23 C 50%.Dr. xxx
ii.
Acquisition through Purchasing (i.e. through the

purchase cycle PO, Goods Receipt, Invoice
Verification)
iii.
Acquisition from internal activity (capitalization of

goods or activities that are partly or completely
created within the company)
To Vendor a/c..Cr. xxx

For the purchase of assets, the process is same as other purchases.
b.
Assets under Construction (CWIP)

All the above transactions shall be made possible business area wise location wise.
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Asset masters are defined for the asset to be purchased selecting the
relevant asset class and the company code in which the asset is being
acquired.
The purchase of asset is made against the respective asset .
The entry that gets generated on processing this transaction is as follows:
Asset a/cDr. xxx
To Vendor a/c.xxx
The asset value dates are mentioned at the time of purchase. The asset
value dates determine the date from which the depreciation would be
calculated.
Purchase of Capital Goods on which Excise Duty is payable and
where CENVAT credit is claimable
The same is processed through MM module.
An account assigned P.O is created and the reference of the Asset master
is mentioned in the P.O.
On receipt of the asset, the following entry gets generated on Goods
Receipt.
Asset a/cDr. xxx
To GR/IR.xxx
The above transaction is recorded net of the Excise Duty amount.
On preparing the excise invoice, the following entry is generated.
CENVAT a/c(RG23C)..Dr. xxx
CENVAT on Hold a/c (50%)..Dr. xxx
To E.Cess Clearing a/c ...xxx
CENVAT Clearing a/cDr. xxx
GR/IR a/c....Dr. xxx
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E Cess Clearing a/cDr. xxx

To Vendor a/c .xxx
Only 50% of the Excise Duty amount is transferred to the CENVAT a/c in
the current year.
The balance is transferred to the CENVAT a/c in the subsequent year.
On doing the same, the following entry gets generated:
CENVAT a/c (RG23C).Dr xxx
To CENVAT on Hold a/c 50%xxx
Gaps: A
1.3.2 Retirement of Assets

All the entries are passed manually in the system, since the asset
master is not maintained in legacy system.
Transactions related to sale of asset are processed in Asset Accounting

module. The retirement of asset with revenue can be done by choosing the
respective asset that is to be retired (either partially or wholly). In case of
partial retirement, the same may be in terms of value or quantity or
relative percentage to the actual asset.
None
The calculations for the profit/loss on sale are calculated internally and the
updation of the respective G/L accounts happen automatically on posting
the document.
The entries that get generated are as below: (with notional figures)
Customer a/c...Dr.
Clearing A/C..Dr.
Accumulated Depreciation..Dr.
Loss on Sale of Fixed Asset...Dr.
To Clearing a/c.Cr.
To Asset G/L accountCr.
Gaps: A
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1.3.3 Depreciation on Fixed Assets

Depreciation is being calculated outside the Legacy System.
Depreciation rates can be configured with the help of calculation keys and
we can maintain different depreciation areas for assets.
A journal entry is being passed for booking Depreciation Expense.
Gaps: A
None
1.3.4 Depreciation Posting Run

No such posting run is available in legacy system. Posting is done

manually.
Depreciation, in SAP environment is calculated periodically by running a

Depreciation Run. By doing this, the system calculates the depreciation for
the total assets and creates a session for processing.
None
The session so created is processed to post the depreciation to the

respective G/L accounts. The depreciation is posted to the respective cost
centres mentioned in the individual asset masters. In the absence of the
same, the cost centres can be input at the time of passing the entries.
The entries that get generated are as below:
Depreciation a/c Dr. xxx
To Accumulated Depreciation a/c..xxx
GAP: A
1.3.5 Fiscal Year Change

Fiscal Year is maintained from April to March.
From the point of view of the system, a fiscal year change is the opening of
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a new fiscal year for a company code. At the fiscal year change, the asset
values from the previous fiscal year are carried forward cumulatively into
the new fiscal year. Once the fiscal year change takes place, you can post
to assets using value dates in the new fiscal year. At the same time, you
can continue to post in the previous fiscal year.
None
The fiscal year change can only be carried out (even in test mode) for the
new fiscal year. The earliest that you can carry out a fiscal year change is
in the last month of the old fiscal year. You can choose any point in the new
fiscal year for carrying out the fiscal year change. Before you can change
to fiscal year YYYY, you must have already closed fiscal year YYYY - 2 . You
can have a maximum of two fiscal years open for posting at one time.
No business transactions can be posted in a new fiscal year before the
fiscal year change. You can continue to post in the old fiscal year, even
after the fiscal year change. The system automatically corrects any values
that are affected by postings in the past.
Gaps: A
1.3.6 Year-end Closing

Fiscal year closes in March but actual closing takes roughly two
months.
Before you can close a fiscal year in Financial Accounting from a

bookkeeping perspective, you have to carry out preparatory measures in
Asset Accounting.
None
You use the year-end closing program to close the fiscal year for one or
more company codes from an accounting perspective. Once the fiscal year
is closed, you can no longer post or change values within Asset Accounting
(for example, by recalculating depreciation). The fiscal year that is closed
is always the year following the last closed fiscal year. You cannot close the
current fiscal year.
Gaps: A
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1.4 Cash Journal

1.4.1 Cash Management
Cheques are printed from the system and cheque register is

maintained in the legacy system.
Cheques will be printed from SAP based on the automatic payment

program.
Cheque register is also automatically updated in the system.
Cash transactions happen at H.O & plant.
Cash journal will be configured for entering the cash transactions.
Gaps: A
1.4.2 Manual bank Statement

Bank Statement is received from the banks monthly.
With this function, you can manually enter bank account statements you
receive.
User enters following for each bank
Company code
House bank
Account id
Statement number
Opening and closing balance as per bank statement.

The system checks as per the bank statement number the opening balance
of the current statement and the closing balance as per the previous
statement.
The bank statement is then uploaded in R/3 system using a floppy or it is
entered in the system using Manual Bank Statement option. A Transaction
type needs to be entered for each entry in the Bank statement.
Accounting rules are defined for each transaction type and posting rule for
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posting accounting entries as per bank statement.

Gaps: A
1.4.3 Bank Reconciliation Process

Bank Reconciliation is done manually.
The Bank reconciliation process starts at the time of saving and posting the
Bank statement input.
Bank Main account balance is the actual balance as per the bank statement
whereas the Bank sub accounts denote the reconciliation items. These sub
accounts show those entries, which are not cleared in the bank statement.
The Bank reconciliation process starts at the time of saving and posting the
Bank statement input.
Bank Main account balance is the actual balance as per the bank statement
whereas the Bank sub accounts denote the reconciliation items. These sub
accounts show those entries, which are not cleared in the bank statement.
The following scenarios explain the reconciliation process:
Accounting entry after checks received have been cleared in the Bank
statement
Main Bank account
Bank sub account
Dr.
.Cr.
Accounting entry after checks have been presented in the Bank

Bank sub account
Dr.
Main Bank account
Cr.
Gaps: A
1.5 General Ledger & 1.5.1 Posting

At present there is one company Biopac with offices at Factory and HO.
One chart of accounts is maintained and one balance sheet is maintained
The books of accounts for HO & Factory will be maintained online. They
will be segregated based on business area. Transactions taking place in
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but two different sets of Trial Balance are prepared for HO & Factory.
During the day the transactions are being entered at plant & HO
separately. Everyday in the morning, data synchronisation takes place to
merge the data of Plant & HO.
Fiscal Year starts from April and all posting periods are open during the
year.
Different document types are maintained for different transactions,
different document number ranges are maintained for different document
types,
The system allows documents to be changed even after posting has
taken place.
Present system supports reversal Postings,
HO & Factory will be updated in the books of Biopac simultaneously.

Different document types with different number ranges will be
maintained for different types of transactions. HO & Factory will have
similar document type and number range.
Certain fields can be changed in SAP after the document has been
posted. It is not possible to change the fields like G/L account, after the
document has been posted.
Reversal of entries can be done in SAP with reference to the original
document.
TDS is automatically calculated by the system if proper masters are
maintained in the system.
The document entry will be controlled through authorisations.
System does not calculate tax automatically for different statutory

requirements. TDS is also calculated manually.
No authorization levels for passing Entries,
Financial Statement is prepared manually.
Automatic number assignment is there in existing system.
Document Types are same for Factory and HO, but document number
ranges are different for Factory & HO,
Two different GL account will be maintained to capture exchange rate

fluctuation for Sales & Purchases separately.
Document Numbers are assigned externally by the users.

List of all the transactions posted during a day for all the modules are
available in the system.
There will be sufficient space for writing texts in the text field.
Multiple Cost Centre Expense booking will be available in the system.
Gaps:
1.6 TDS
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TDS processing is done manually.
After submitting the payment challan in bank along with the cheque,
payment details are entered in the system for updating records.
The TDS Certificates are printed manually on yearly basis for individual
parties.
Also, a list of TDS deductions by Customers from whom TDS certificates
are to be collected is prepared manually and requests sent to the
respective customer. No record is kept in the system for the TDS
certificates, which have to be recovered from the customers.
TDS deductions for down payments made to vendor are not automatic
from the system. Manual entry is passed in the system and during
invoice booking it is cleared manually.
Only one cheque is issued to the Income Tax Authority monthly on or
before every 7th of next month.
On using the standard functionality of SAP and on deducting the TDS at

the time of booking of expenses, at the end of a period, the TDS can be
processed to know the overall liability or the liability for a particular class
of assesses or for the statutory provisions under which the TDS has been
done.
The same is then set off against the bank account from which the
payment is to be made.
The accounting entry that gets generated is as follows:
TDS Liability a/c..Dr. xxx
To Bank a/c.xxx
On depositing the amount with the bank through a Challan, the details of
deposit with the Bank are input into the system to give the details of the
payments.
Form 16 A is prepared manually in the prescribed format.
Certificates to be issued to the various persons, from whose payment the

TDS has been deducted, can be generated from the system.
TDS is deducted for the following types of payments
The certificates can be reprinted or cancelled.
Payments to Vendors for services 194 C
Payment to Vendors for Rents or lease premises.
TDS returns for the year can be generated from the system at the end of
each quarter.
Payment to Vendors who provide professional and technical

services 194J
Payment of interest on security deposits, Interest on Short-term

deposits, Int. on FD holders etc.
Payment to Employees on account of Salary. 192
Payment on account of Commission 194 H
Payment to contractors and Advertisement. Two separate GL

but coming on one head
In Accounts Payable, the vendor is the person subject to tax, and the
company code is obligated to deduct withholding tax and pay this over to
the tax authorities on the vendors behalf. In Accounts Receivable, the
company code itself is subject to tax, and the customers that do
business with this company code deduct withholding tax and pay this
over to the tax authorities on the company codes behalf. In both cases,
the business partner of the person/entity subject to tax deducts the tax
and pays it over to the tax authorities.
Withholding tax is calculated and posted to the appropriate withholding
tax accounts at different stages, depending on the legal requirements in
each country. As a rule, withholding tax is posted at the same time that
the payment is posted, in other words the outgoing payment (Accounts
Payable) or incoming payment (Accounts Receivable), is reduced by the
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withholding tax amount.

The key concept in extended withholding tax is the distinction between
withholding tax type and withholding tax code. While withholding tax
types represent basic calculation rules, specific features of these rules in particular the percentage rate - are represented by the withholding
tax code. You can define any number of withholding tax codes for a given
withholding tax type.
If a particular transaction requires more than one kind of withholding
tax, this is covered in the SAP System by defining more than one
withholding tax type. When entering a line item, you can enter
withholding tax data for each of these withholding tax types.
The withholding tax types and codes that would be defined for Biopac
are as below:
TDS Challan:
Standard SAP functionality provides a report to gather information
relating to the withholding tax transactions that you have carried out.
You can also use it for carrying out pending transactions like challan
updates, bank challan updates, and certificate printing. You can display
the individual documents (invoices, down payments, challan clearing
documents) pertaining to withholding tax transactions. You can run this
report at any stage in the withholding tax cycle in order to obtain the
necessary information.
In the Challan Update Status report, you can create a remittance challan
for various documents When you create a remittance challan, the system
identifies which withholding tax items need to be remitted. The system
generates separate remittance challans for each tax office (business
place) and each section of the Income Tax Act (official withholding tax
key) and numbers each one accordingly.
TDS certificates:
Standard SAP functionality allows printing withholding tax certificates.
This program allows to process documents for one withholding tax
section at a time. The program also allows printing the certificates,
numbered consecutively.
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It even allows display of list of all the certificates printed, grouped by

certificate, challan, and business place
Gaps: A
The changes required in the layout of standard certificate will be
considered in ABAP developments.
1.7 Period End Activities (Pre Balance Sheet Activities)
All period end activities are carried out manually.
Standard SAP Methodology suggested

Gaps: A
5. Integration Entries
MM
At The time of Goods Receipt into restricted
Inventory RM A/c Dr
As the material reaches the gate the documents should
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Stock
be sent to the commercial dept. This is required to

confirm whether the 57 A/G declarations for the material
has been filed with the excise dept. After this
confirmation the documents are sent to raw materials
stores and the material is taken in.
To GR/IR Account Cr
To Freight Clearing A/c Cr
The GRN is prepared by the stores dept. In the R/3

system the Goods Receipt is posted to Blocked Stock
through movement type 103.
After the inspection the Goods Receipt is posted to
Unrestricted Stock by the materials dept. The posting
generated at this stage is Shown here:
Vendor Excise
applicable)
invoice
Verification
(if
MODVAT RG23A BED A/C
Dr
MODVAT RG23A AED A/C

Dr
To MODVAT Clearing A/c ..Cr.
The vendors excise invoice has to be entered by giving

the reference of the Goods Receipt .The details
pertaining to the item description, quantity, excise duty,
etc can be verified and suitable changes made as per the
vendor invoice received. This saved invoice displays the
actual excise paid by the supplier.
The vendor invoice is verified by the Commercial dept.
and changes if any can be made. For this it should be
made mandatory that the copies of the PO, GRN and
vendors excise invoice are sent to the Commercial Dept.
The verified excise invoice can be POSTED by the user in
the Commercial Dept. The relevant authorisations can be
provided.
At the time of invoice Verification by the

accounts department.
GR/IR A/C
Dr
MODVAT Clearing A/C
Dr
To Vendor
A/c
.Cr.
The Materials dept. can follow the standard invoice

verification procedure with the calculate tax indicator set
as ON. This entered invoice can be PARKED by the user
in this dept.
Copies of all the relevant documents i.e. PO, GRN,
Invoice, test reports, etc are sent to the Accounts Dept.
Here the invoice can be checked for various details
again. In case of no discrepancies the PARKED invoice
can be POSTED by the user in Accounts Dept. The
relevant authorisations can be provided
Goods Rejected and returned to the Vendor
GR/IR A/c
Dr.
Here goods would be returned to the vendor before the
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(before Invoice Verification)
To Inventory -Raw Material .. Cr.
Goods Rejected and returned to the Vendor

(After Invoice Verification)
Vendor A/c
Invoice
Verification
for
freight
submitted by the freight vendor.
Freight Clearing A/c
Bills
Scrapping of material
goods are taken to unrestricted stock
Dr.
To Raw Material Purchase A/c . Cr.
Dr.
Here goods would be returned to the vendor after the

goods are taken to unrestricted stock
Freight clearing account would be Credited at the time of

goods receipt with the amount of provisional freight
calculated based on the purchase order conditions, in
this step the freight clearing account would be debited
and the liability would be transferred to the vendor
To Freight Vendor Account Cr.
Scrap Loss A/c Dr.

To Inventory -Raw Material ..Cr
Consumption of Material against Production

order.
Raw Material Consumed A/c..

To
Raw
Material
Component .Cr
Dr.
Brought
out
PP
1. Issue of Material from One WIP Account
to Another WIP Account
Inventory change Semi Finished Goods A/c..

Dr.
To Inventory WIP A/c Cr
2. Booking of production of finished goods
Finished Goods A/c Dr.

To Inventory Change FGCr.
SD
Post Goods Issue
Goods In Transit A/C .Dr

To Finished goods inventory A/C Cr
After the creation of the delivery, Goods Issue from the

Finished Goods Inventory is posted. This is done when
the finished goods are ready for dispatch from the
factory. After the goods issue the stock value will be
reflected in the Goods In Transit stock account. This
status is maintained till the receivable can be created on
the customer. Hence the accounting entry posted is as
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follows:
Billing Document Creation
Customer A/C Dr
The exchange rate at which FBP is created is updated in

the system. Based on this and giving the reference to
the delivery document the final billing document or the
commercial invoice is created. While the document is
posted in the foreign currency the display in the local
currency are available.
To Export Sales A/C.. Cr
Goods In transit Account Clearing
Cost Of Goods Sold A/C.
Dr
To Goods In Transit A/C . Cr
Sales Return
At this stage the Goods In transit can be cleared. This

can be done through the posting with clearing function.
The line items to be cleared can be chosen from the
display available. The transaction can be posted by the
user in the accounts dept.
Sales returned A/CDr

To Cost of goods sold .Cr
Free Samples PGI
Cost Of Goods Sold A/C .Dr

To Finished goods inventory A/C ..Cr
Free Samples Billing Document
Cost Of Goods Sold A/C ..Dr

To Finished goods inventory A/C..Cr
Scrap Sales
Customer A/C
Dr
To Scrap Sales A/C ..Cr
After the creation of the delivery, Goods Issue from the

Finished Goods Inventory is posted. This is done when
the finished goods are ready for dispatch from the
factory
Giving the reference to the delivery document the final
billing document or the commercial invoice is created.
Scrap sale order can be created in the system and
against the delivery made in the order the billing
document with reference to the delivery can be passed.
Payroll
Salary Account integration
Basic
Dr
To PF
Cr
The salary is processed in HRMS system. After the salary

process, the salary payable to be updated to SAP-FI.
There will be a payable voucher generated for the
Employee vendor group. The following entries will be
generated in the payable voucher.
HRA
.... Dr
To PT
Cr
Vendor Group to be created according to the Employee
All Other Allowances.. Dr
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To Loan Deduction
(EMI)
To Interest Received
Cr
Group. The GL account to be assigned for vendor group.
Cr
To ESIC
Cr
To Sundry Creditor GPR

Salary)
For Example : Sundry Creditor GPR employees

Cr
(Net
Sundry Creditor PPR employees
The following entries are made from SAP-FI

module while doing the payment against the
salary.
Sundry Credit GPR
To Bank/ Cash
.. Dr
Cr
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Sap Fico BBP As Is To Be Details

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1 Financial

As Is Business Process and Business Requirement

To Be Business Process for BIOPAC

Sign-off on Business Blue Print

Mr. Harish Doshi

Mr. Pankaj Doshi

Mr. AMIT GUPTA

Mr. Senthil Kumar

Mr. Rajiv Parekh

Mr. Rajesh Punjani

As Is Business Process and Business Requirement

To Be Business Process for BIOPAC

Enterprise Structure of BIOPAC

Business requirements as given by the BIOPAC Key Users

Gaps which are at different stages of exploration

Sales & Distribution

Production & Planning

As Is Business Process and Business Requirement

To Be Business Process for BIOPAC

As Is Business Process and Business Requirement

Status of To-Be Business

To Be Business Process for BIOPAC

Can be implemented on mySAP ERP

B-Possible with workaround

Can be implemented on mySAP ERP through indirect means

C-Possible with ABAP

Can be implemented on mySAP ERP through ABAP/4 development

D-Possible with ABAP (But

E-Not possible with out

Cannot be implemented on mySAP ERP without major system modification

F-Open for exploration

Cannot be implemented on mySAP ERP

The To-Be business process realization is dependent on the following aspects:

Scope of functionality described in the Software Services Agreement mentioned above.

Capabilities and Limitations of mySAP ERP

As-Is Business Knowledge Transfer from BIOPAC Project Team members

Business Requirements defined by the BIOPAC Project Team members

Methodology to be adopted for preparing Business Blue Print:

As Is Business Process and Business Requirement

To Be Business Process for BIOPAC

Process Scope List of Business Processes

Enterprise Structure on mySAP System

To-Be Business Processes

As Is Business Process and Business Requirement

To Be Business Process for BIOPAC

Process Scope List of Business Processes

Booking of Local Sales Entry

Paying off the credit balance in PLA account (month end)

Receipt payment from the customer

Correspondence (Credit Not, Debit Note, Receipts)

One Time Customer

Purchase Related Activities

Import Purchase of Raw Material

Local Purchase of Consumables

Local Purchase of Trading Goods

Local Purchase of Labour Charges, Service Charges

Down Payment to Vendors

Posting Vendor Invoice

Outgoing payment using payment program

Displaying a vendor account Balance

Display and change line item

Displaying Balance in Customer Account.

1.2 Accounts Payable Transactions