FICO TO BE Document For Abc Limited

23/08/2018
FICO TO BE document for

ABC LIMITED
1.0
DOCUMENT RECORD LIST
Ver/Rel. Release Mod.By Rev. By Auth By Approved by Remarks

No Date Mod. Dt Rev. Dt. Auth Dt. Appv Dt
1.0 01/089/201 VRK, MRR, MGL, RSG MMN
8 RRK,SSK 05/08/2018 20/08/218
1/08/2018 Mr.XYZ
(FICO)
Table of Contents
ORGANIZATION STRUCTURE...................................................................................................................3
COMPANY CODE...........................................................................................................................................3
BUSINESS AREA............................................................................................................................................3
CHART OF ACCOUNTS...................................................................................................................................3
CONTROLLING AREA.....................................................................................................................................4
OPERATING CONCERN...................................................................................................................................4
MASTER DATA.............................................................................................................................................5
GENERAL LEDGER........................................................................................................................................5
CUSTOMER....................................................................................................................................................5
VENDOR........................................................................................................................................................6
COST CENTRES..............................................................................................................................................7
COST CENTRE STANDARD HIERARCHY........................................................................................................7
COST CENTRE GROUP (ALTERNATE HIERARCHIES).....................................................................................7
PROFIT CENTRES...........................................................................................................................................8
PROFIT CENTRE STANDARD HIERARCHY......................................................................................................8
PROFIT CENTRE GROUPS (ALTERNATE HIERARCHIES).................................................................................9
COST ELEMENTS (PRIMARY AND SECONDARY)............................................................................................9
REVENUE AND COST ELEMENT GROUP........................................................................................................9
ACTIVITY TYPES.........................................................................................................................................11
STATISTICAL KEY FIGURES (SKF).............................................................................................................12
GENERAL LEDGER..................................................................................................................................13
G/L POSTING – STANDARD.........................................................................................................................13
G/L POSTING – OFFSETTING.......................................................................................................................15
G/L PLANNING ( STANDARD )....................................................................................................................17
MANUAL CLEARING (STANDARD)..............................................................................................................19
ACCOUNTS RECEIVABLE......................................................................................................................20
CUSTOMER INVOICES (SD AND SM MODULE RELATED)...........................................................................20
CUSTOMER INVOICES (FI GENERATED)......................................................................................................22
CUSTOMER DOWN PAYMENT (STANDARD)...............................................................................................24
MANUAL ACCOUNT CLEARING (CUSTOMER).............................................................................................26
MANUAL INCOMING PAYMENTS.................................................................................................................28
MANUAL OUTGOING PAYMENTS................................................................................................................30
POSTING OF PARKED DOCUMENTS ( STANDARD ).......................................................................................32
CUSTOMER DOWN PAYMENT CLEARING....................................................................................................34
CUSTOMER CREDIT MEMO (FI GENERATED).............................................................................................36
ACCOUNTS PAYABLE..............................................................................................................................38
VENDOR INVOICES......................................................................................................................................38
VENDOR CREDIT MEMO (INVOICE RELATED)............................................................................................40
VENDOR DOWN PAYMENT (STANDARD)....................................................................................................42
MANUAL CLEARING (VENDOR)..................................................................................................................44
VENDOR INVOICE ( STANDARD ) (DIRECT FI INVOICES)............................................................................46
VENDOR CREDIT MEMO ( STANDARD ) (DIRECT FI RELATED)..................................................................48
MANUAL OUTGOING PAYMENTS................................................................................................................50
POSTING OF PARKED DOCUMENTS ( STANDARD ).......................................................................................52
VENDOR DOWN PAYMENT (CLEARING).....................................................................................................54
XYZ LIMITED 1 of 84
CLOSING OPERATIONS..........................................................................................................................55
FOREIGN CURRENCY VALUATION (BALANCES)...........................................................................................55
FOREIGN CURRENCY VALUATION – OPEN ITEMS........................................................................................57
REGROUPING OF RECEIVABLE AND PAYABLES...........................................................................................59
BUSINESS AREA ADJUSTMENT....................................................................................................................60
CUSTOMER / VENDOR BALANCE INTEREST CALCULATION.........................................................................61
MAINTAIN GR/IR CLEARING ACCOUNT......................................................................................................63
PERIODIC REPORTING.................................................................................................................................65
BALANCE CARRIED FORWARD (FI).............................................................................................................67
MATERIAL DEBIT / CREDIT.........................................................................................................................68
MATERIAL PRICE CHANGE..........................................................................................................................69
WITHHOLDING TAX....................................................................................................................................70
PERIODIC PROCESSING.........................................................................................................................72
DUNNING NOTICE (CUSTOMER)..................................................................................................................72
AUTOMATIC CLEARING...............................................................................................................................74
DUNNING NOTICE (VENDOR)......................................................................................................................75
PROFIT AND COST PLANNING.............................................................................................................76
STATISTICAL KEY FIGURES........................................................................................................................76
COST CENTRES............................................................................................................................................76
ACTIVITY PRICES........................................................................................................................................77
PROFIT CENTRES........................................................................................................................................77
PROFITABILITY SEGMENTS.........................................................................................................................77
ACTUAL POSTING (REGULAR AS WELL AS PERIOD-END).........................................................79
STATISTICAL KEY FIGURES........................................................................................................................79
COST CENTRES............................................................................................................................................79
INTERNAL ORDERS.....................................................................................................................................80
PROFIT CENTRES........................................................................................................................................80
SERVICE ORDERS........................................................................................................................................80
SALES ORDERS WHICH ARE COST OBJECTS (OTHER THAN MAKE TO STOCK)..............................................81
PROFITABILITY SEGMENTS.........................................................................................................................81
MANAGEMENT REPORTING.................................................................................................................83
COST CENTRE ACCOUNTING......................................................................................................................83
INTERNAL ORDERS......................................................................................................................................83
PROFIT CENTRE ACCOUNTING...................................................................................................................83
SALES ORDERS / SERVICE ORDERS............................................................................................................84
PROFITABILITY ANALYSIS..........................................................................................................................84
XYZ LIMITED 2 of 84
Organization Structure
Company Code
Minimum one company code is required in SAP R/3 system. Audited Accounts for ABC will
be required to include the same in the accounts of ABC Brothers Limited (ABC). ABC shall
present its financial statements as per the requirements of Schedule IIII to the Companies
Act, 2013 so that consolidation process with ABC accounts will be smooth.
Code Name
KB10 ABC Bros Ltd.
SEGMENT
As explained by ABC, the company is required to disclose its segments as based on product
groups (8 Segments) and geographic locations i.e. about 30 segments (India and all other
countries). R/3 will provide segmental data based on product groups (defined as business
areas), while geographic location wise information will be available through Profit Center
Accounting. Additional balance sheet related data such as fixed assets, bank balances etc.
need to be compiled by the accounts department.
Code Name
BA01 Hyderabad Segment
BA02 Bangalore Segment
BA03 Mumbai Segment
Chart of Accounts
One company code can use only one Chart of Accounts and hence only one will be defined.
Code Name
KBCA ABC Chart of Accounts
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Controlling Area
At least one controlling area is required to activate the CO Module and one company code
can be assigned to only one controlling area.
Code Name
KB10 ABC Bros Ltd.
Operating Concern
At least one operating concern is required to be defined to activate Profitability Analysis. A

decision in taken by the project management to activate Profitability Analysis module
at a later date. Therefore it will not be activated but the TOBE document contains the
procedure for future. The operating concern when activated will be Costing Based.
Code Name
KB10 ABC Bros Ltd.
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Master Data
General Ledger
The G/L master will be of 6 digits as in the legacy system. It will help in maintaining the user
comfort. These G/L accounts will be logically grouped into account groups within chart of
account (KBCA). The account groups and number ranges for the G/L masters are as follows:
Type of GL Account Group Number Range

Liabilities LIAB 100000 to 199999
Assets ASST 200000 to 299999
Income INCO 300000 to 399999
Expenses EXPS 400000 to 499999
Creation of new G/L account and changes thereto in Chart of Account will be controlled
centrally by Corporate Finance and Accounts Department, Pune. Display authority should be
available to all the users.
The entire general ledger accounts except for control (Reconciliation) accounts will be subject
to line item management. Most of the balance sheet accounts will be subject to open item
management. EEFC accounts are to be maintained in foreign currency.
Customer
Customer master should contain data regarding his complete name, complete postal
address, telephone number, fax number, E-mail address, name of contact person, whether
registered dealer or unregistered, in case of registered dealer his registration numbers under
local sales tax, central sales tax, works contract tax, income tax, excise act, type of customer,
whether he is a vendor also.
Customers should be bifurcated into various types such as: Dealers, Direct Customers,
Industrial Sector, Government / Semi Government Undertakings, Original Equipment
Manufacturers, Turnkey Project Customers, Associate Concerns, Overseas Clients, One
Time (Stray) Customer.
The range of accounts numbers will be of 6 digits which is allocated as under:
Customer Group Customer Group Number Range Reconciliation

Code Name Account
KBEX Exports – ABC 151000 to 170000 240200
KBIN Inland – ABC 100000 to 150000 240100
KBOT One-time cust.- ABC 171000 to 171100 240100
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Whenever new customer master is to be opened the requiring department will forward a
requisition in specific format to concerned department. On the basis of such requisition, new
customer master will be opened. In case of change it will be informed to the concerned
department to effect the changes in master record.
Vendor
Vendor master should contain data regarding his complete name, complete postal address,
telephone number, fax number, E-mail address, name of contact person, registration
numbers under local sales tax, central sales tax, works contract tax, income tax, excise act. It
should also be mentioned whether he is small-scale industrialist, type of vendor, whether he
is a customer also.
Vendors should be bifurcated into various types such as: Employee, Factories and offices of
ABC, Ancillary Units, Small Scale Industries, and Overseas Suppliers, Contractors, Associate
Concerns and others.
The range of accounts numbers will be of 6 digits which is allocated as under:
Factories and offices of ABC 200001 to 200200-KBFA

Ancillary Units 200201 to 210000-KBAU
Small Scale Industries 210001 to 220000-KBSS
Overseas Suppliers 220001 to 225000-KBOS
Contractors 225001 to 230000-KBCT
Associate Concerns 230001 to 231000-KBAC
Others 231101 to 240000-KBOT
Capital Goods 231001 to 231100-KBCG
Employees 000001 to 200000 - KBEM
(Employee’s ticket number will be his account number in AP Ledger)
Following will be the respective Reconciliation Accounts in General Ledger for above range of
accounts:
140300 – Depot Ledger Controlling Account for range of accounts with numbers 200001 to
200200.
140400 – Advance Ledger Controlling Account for range of accounts with numbers 1000 to
200000
140500 – Accounts Payable Controlling Account for all the remaining accounts.
Every vendor will have unique account number for E-MAD operations.
Whenever new vendor is to be opened, the requiring department will forward a requisition in
specific format to concerned department. On the basis of said request, new account will be
opened.
In case of change it will be informed to the concerned department to effect the changes in
master record.
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Cost Centres
Cost centers will be defined to reflect location and product group. The cost center numbers
will be numeric of five digits. The numbering logic will be as follows:
First two numbers Location (e.g. Pune, Mumbai)

Last three numbers Product group (e.g. DB, KPD, and Mini)
For each location, common cost centers will also be created to collect costs, which are not
directly allocable. One additional common cost center will also be created at locations with
service centers for service management.
Combination of product groups will form a product division (e.g. industrial pumps, valves).
Product division will not form part of cost center numbering logic but will be reflected through
sub-groupings (nodes) in cost center standard and alternate hierarchies.
Cost Center Standard Hierarchy
Standard hierarchy will be maintained location wise, product division wise. The node names
will be KBC00 + location code + Product division code. The hierarchy structure will be as
follows:
KBC00
KBC00 + location code
KBC00 + location code + product division code
The cost centers will be attached to the lowest level node.
Cost Center Group (Alternate Hierarchies)
Additional cost center groups will be maintained product division wise, product group wise as
follows:
KBC10
KBC10 + product division code
KBC10 + product division code + product group code
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Profit Centers
Profit centers will be defined to reflect location, product group and SBU. The profit center
numbers will be numeric of seven digits. The numbering logic will be same as that of cost
centers for location and product group:
First two numbers - Location (e.g. Pune, Mumbai)

Next three numbers - Product group (e.g. DB, KPD, Mini)
Last two numbers - SBU
The cost centers will be attached to the respective profit centers.
Combination of product groups will form a product division (e.g. industrial pumps, valves).
Product division will not form part of profit center numbering logic but will be reflected through
sub-groupings (nodes) in profit center standard and alternate hierarchies.
Profit Center Standard Hierarchy
Standard hierarchy will be maintained location wise, product group wise. The node names will
be ABC00 + location code. The hierarchy structure will be as follows:
KBP00
KBP00 + location code
KBP00 + location code + product division code
The profit centers will be attached to the lowest level node.
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Profit Center Groups (Alternate Hierarchies)
Additional profit center group will be maintained as follows:
KBP10
KBP10 + product division code
KBP10 + product division code + product group code
KBP20
KBP20 + SBU
Cost Elements (Primary and Secondary)
The necessary income and expenditure GL accounts will be created as primary cost and
revenue elements. The number range has to be of same as that of GL accounts i.e. 300000
to 499999. The following primary cost element categories will be used:
1 - Primary costs/cost-reducing revenues

4 - Accrual/deferral per debit = actual
11 - Revenues
12 - Sales deduction
22 - External Settlement
The secondary cost elements will be created with a number range of 500000 to 599999. The
following secondary cost element categories will be used within the given number ranges.
Category Number range

21 - Internal settlement 500000 to 519999
31 - Order/project results analysis 520000 to 539999
41 - Overheads 540000 to 559999
42 - Assessment 560000 to 579999
43 - Internal activity allocation 580000 to 599999
The secondary cost elements will be created with an interval of 100. E.g. Cost elements of
category 21 will be 500100, 500200,500300 and so on.
Revenue and Cost Element Group
The following revenue and cost element grouping will be maintained. This will be first
maintained in CCA and then will be copied to PCA.
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ABC000 Revenue and Cost element group
ABC100 Sales
ABC101 Sale of main products

ABC102 Sale of services
ABC103 Sale of spares
ABC200 Other income
ABC201 Income from investments

ABC202 Miscellaneous receipts
ABC203 Income from agriculture
ABC204 Profit on sale of asset
ABC205 Recovery of bad debts
ABC206 Profit on sale of investments
ABC207 Royalty received
ABC300 Material cost
ABC301 Cost of goods sold

ABC302 Stores and spares consumed
ABC303 Processing charges
ABC400 Personnel related expenses
ABC401 Salaries, wages & bonus

ABC402 Payment under VRS
ABC403 Contribution to PF & state insurance
ABC404 Contribution to superannuation fund
ABC405 Workmen & staff welfare expenses
ABC406 Provision for gratuity
ABC500 Brokerage and commission
ABC501 Brokerage
ABC502 Commission
ABC600 General expenses
ABC601 Power & fuel

ABC602 Repairs to buildings
ABC603 Repairs to machinery
ABC604 Rent
ABC605 Rates & taxes
ABC606 Insurance
ABC607 Excise duty paid
ABC608 Traveling & conveyance
ABC609 Advertising & publicity
ABC610 Postage & telephone
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ABC611 Transportation
ABC612 Lease rent
ABC613 General Expenses
ABC614 Donations
ABC615 Directors’ fees
ABC616 Directors’ traveling expenses
ABC617 Directors’ remuneration
ABC618 Managing director’s remuneration
ABC619 Bad debts written off
ABC620 Royalties & fees
ABC621 Agricultural expenses
ABC622 Loss on sale / scrapping of fixed assets
ABC623 Provision for doubtful debts / advances
ABC624 Loss on sale of investments
ABC625 Services Received from Press
ABC626 Services Received from Head Office
ABC627 Excess Provision
ABC700 Depreciation
ABC800 Interest Paid
ABC900 Cash Discount
ABC990 Other secondary costs
ABC991 Internal settlement

ABC992 Order / project result analysis
ABC993 Overheads
ABC994 Assessment
ABC995 Internal activity allocation
The following balance sheet group will be created for reporting of inventory, accounts
receivable and accounts payable in PCA.
ABCBS Balance sheet accounts
ABCBS-INV Inventory
ABCBS-AR Accounts receivable
ABCBS-AP Accounts payable
Activity Types
Activity types will be used for service activity for service management module. The activity
type names will be alphanumeric. Common activity types will be created for all product
divisions. These are as follows:
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Code Name Unit Cost Element
AT01HR Upto & Including Supervisors Hour 580100
AT01DY Upto & Including Supervisors Day 580200
AT02HR Above Supervisors, upto & incl. Hour 580300
Managers
AT02DY Above Supervisors, upto & incl. Day 580400
Managers
AT03HR Above Managers Hour 580500
AT03DY Above Managers Day 580600
Statistical Key Figures (SKF)
SKFs will be created for each location to act as a base for assessment of common cost
center costs. The units of measures to be used are
% - Percentage
EA – Each (number of people, sales value)
M2 - Sq. meter (floor space).
The SKFs name can be of 6 character alphanumeric. It will start with 2 digit location code
used in cost center numbering logic followed by four characters to reflect the purpose of SKF.
The data in SKFs will be reviewed every quarter to incorporate changes, if any. Only actual
SKFs will be maintained for first year and will be extended to plan data subsequently.
Refer Annexure – 1 for flow chart on master data
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General Ledger
TO-BE Document
For SAP R/3 Implementation at ABC Brothers Limited
Date : 23rd Aug 2018
Sr. No of TO BE document FI001
AS-IS Business Process Name: General Ledger
Page no.: 10 to 18
Name of Business Process :
G/L Posting – Standard
Module: FICO Sub-module: GL
Flow Chart of Business Process : Annexure - 2
Detailed description of Business Process:
Requirement:
 Generate accounting documents

 Facility to display and change (limited extent) the accounting document
 Facility to park the document and subsequent posting/cancellation of the parked
document
 Location specific document numbers to be generated internally
 Facility for document entry with reference to predefined entries
 Facility to account multi currency transactions.
 Control facility at the time of data entry such as that particular user should enter only
particular types of voucher
Process:
 Every business transaction (journal vouchers, debit / credit advice, asset accounting,
cash/bank, period end provisions) not generated through any module of SAP will be
accounted on the basis of manually prepared vouchers duly approved, checked by the
appropriated personnel
 Based on such vouchers, accountants will enter the data in the system using direct
posting, account assignment model, fast entry or sample document facility
 The appropriate document type will be used based on location
 While entering he will check whether debit amount is equal to credit amount. In case it
is not equal it will be corrected and will post the document.
 In case user is not having authorization, he will park the document and senior user
having authorization will post / cancel the parked document.
Gaps: Nil
Any reports required related to current business process : Yes

If Yes, whether required format of such report is attached: Yes
 Document Register based on document type, posting date, period etc.
Description of reports to be used i.e. purpose of such report:

This Report is used for the purpose of documentation and for facilitating the audit process
and for the purpose of statutory compliance.
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Any document/output would be printed for this business process: No
If Yes mention name of such document : Not Applicable
If Yes, whether required format of document / output is attached: Not Applicable
Whether data records of current business process would be transferred to system

other than SAP R/3: No
If Yes, Describe in details and attach the format in which data would be stored in the
other system : Not Applicable
Which hierarchy levels would be associated with this business process

( please mention about all scenarios ) :
Company code, Business Area, Cost Center
Inputs/ data received from other function for this process, ( if any ) : No
Output from this business process sent to other functions, ( if any ) : No
Sign-off (Approval) for this document :

Name of Team member Organization/Bus. Unit Signature
M M Naik ABC - ABCvadi
S Shreekrishnan ABC - Dewas
V R Kulkarni ABC - Pune Head Office
M R Rajwade ABC - Pune Projects
R R Kittur ABC - Pune Area Office
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TO-BE Document
Sr. No of TO BE document : FI002
Page no.: 10 to 18
G/L Posting – Offsetting
Flow Chart of Business Process : Nil
Requirement:
 Generate accounting documents and clear the same with reference to open items
 Facility to display and change (limited extent) the accounting document
document
 Facility to account multi currency transactions
 Control facility at the time of data entry such as that particular user should enter only
particular types of voucher
Process:
 Every business transaction not generated through any module of SAP will be accounted
on the basis of manually prepared vouchers duly approved, checked by the appropriate
personnel
 Based on such vouchers, accountants will enter the data in the system using direct
posting, account assignment model, fast entry or sample document facility
 While entering the data, user will offset (clear) the transaction by selecting the open
items
 In case open item and the amount to be cleared is not equal, it can be treated as partial
payment against particular open item or open item will be cleared with the payment
amount and open item for balance amount (residual) will be created
 While entering he will check whether debit amount is equal to credit amount. In case it is
not equal it will be corrected and will post the document
having authorization will post / cancel the parked document
Gaps: Nil
If Yes , whether required format of such report is attached: Yes

This Report is used for the purpose of documentation and for facilitating the audit process
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Company code, Business Area, Cost Center.

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TO-BE Document
Page no.: 10 to 18
G/L Planning ( Standard )
Requirement:
 Budgeted financial data for each Segment / G/L account / on period basis i.e. monthly,
quarterly, yearly.
 Accumulate budget data from CCA module for expense accounts to FI module
Process:
 Get information of plan data from all the concerned departments / cost centers at
Company Code Level, Business Area Level, G/L Account Level and amount
 Information for cost center will be for expense accounts only
 Transfer all the expense after summing up for all the cost centers
 Get information of plan data bifurcated into periods such as monthly / quarterly, etc.
 Compare actual versus plan
Gaps: Nil

 Actual versus plan – financial statements
 Variance and percentage
Description of reports to be used i.e. purpose of such report: This Report is used for
the purpose of decision making and management information.


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Company code, Business Area, G/L account
Inputs/ data received from other function for this process, ( if any ) : Yes. The data is
received from CO-CCA.

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TO-BE Document
Date : 23rd August 2009
Page no.: 10 to 18
Manual Clearing (Standard)
Module: FICO Sub-module : GL
Requirement:
 System should facilitate scrutiny of General Ledger Accounts

 Facility of clearing open items should be available
 In case of part clearing, option of both partial and residual clearing should be available
Process:
 Transaction in General Ledger will be verified with original vouchers and cleared against
respective open line items
Gaps: Nil
Any reports required related to current business process : No

If Yes , whether required format of such report is attached: No
Description of reports to be used i.e. purpose of such report: Not Applicable

Company code, Business Area
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Accounts Receivable
TO-BE Document
Date : 24th August 2009
AS-IS Business Process Name: Accounts Receivable
Page no.: 23 to 89
Customer Invoices (SD and SM Module Related)
Module: FICO Sub-module : AR
Requirement:
 User defined Age wise, payment terms wise, group wise, region wise classification of
invoices/ balances.
 Profit center wise bifurcation of balances appearing to the account of customer
 Due date wise classification of dues from customers (Segment wise)
 Customer account to display the different order wise unadjusted advances and
particulars of pending Sales Tax declarations
 Facility to view the customer balances as a whole together with all the branches
 Customers debit notes if any will come to Accounts Department directly. Accounts Dept.
will exercise control on Customer’s debit notes
 Generate accounting Documents
 Facility to Display and change(Limited extent) the accounting document
 Automatic calculation of overdue interest, liquidated damages and cash discount
 Tracking of forms
 Maintenance of various registers mandatory as per Sales Tax Acts
 Accounting in multiple currencies.
 Report of Running Account (RA) Bills
Process:
 After the billing process done in SD module, accounts department will verify the
accounting documents generated on daily basis
Gaps: Nil

 Statement of account of the customer
 Information to arrive at the amount of sales tax payable
 Report on user defined Age wise, payment terms wise, group wise, region wise
classification of invoices and credit notes on / to customers
 Customer Trial Balance
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 Report of Running Account (RA) Bills
Description of reports to be used i.e. purpose of such report: This Report is

used for the purpose of documentation, management information, for facilitating the
audit process and for the purpose of statutory compliance.



Inputs/ data received from other function for this process, (if any): SD module will
release invoice for accounting after all the processes of inquiry, order, despatch and billing.

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TO-BE Document
Page no.: 23 to 89
Customer Invoices (FI Generated)
Requirement:
 Facility to raise invoice for sale that does not pertain to products and which is not routed
through SD module
invoices and credit notes on / to customers and balances.
 Profit center wise bifurcation of balances appearing to the account of customer
 Due date wise classification of dues from customers
particulars of pending Sales Tax declarations
 Facility to view the customer balances as a whole including special G/L balances
together with all the branches
document
 Automatic calculation of cash discount
Process:
 The requests to raise invoices will come to Accounts Dept. directly from concerned
departments (e.g. sale of miscellaneous items like scrap etc.), complete in all respects.
 Accounts Dept. will raise the invoice and account for
 Accounts Dept. will receive the cheque / cash from the customer against the invoice and
account for the same
having authorization will post / cancel the parked document
Gaps: Nil

 Statement of account of the customer
 Sales Invoice
 Sales Tax register
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classification of invoices and credit notes on / to customers
 Customer Trial balances
Description of reports to be used i.e. purpose of such report: This Report is used for the
purpose of documentation, management information, for facilitating the audit process and
for the purpose of statutory compliance.



Company code, Business Area, Profit Center
Inputs/ data received from other function for this process, (if any): Nil
Output from this business process sent to other functions, ( if any ) : Nil

23 of 84
TO-BE Document
Page no.: 23 to 89
Customer Down Payment (Standard)
Requirement:
 Accounting in multiple currency

 Information regarding down payment received, such as sales order number, reference of
commercial policy, details of earnest money deposit etc.
 Down payments received from customers should be accounted to Special General
Ledger Account
 Provision for calculation and accounting of interest on down payments
 Information regarding bank guarantees given.
Process:
 Down payments will be received from customers in accordance with the terms of sales
order, commercial policy etc.
 This will contain the name of the customer, nature of payment and information of tax
deducted by the customer.
 In case bank guarantees are given to the customer, it will be accounted as statistical
information.
 Based on this information, the down payment received from customer will be entered
into books of accounts, net of TDS. Credit for TDS will be given to the customer only on
receipt of TDS certificate before due date of filing our return
 The system should generate money receipt while accounting such down payments.
 Such vouchers will be entered into the books of accounts through location specific
document type “ Bank / Cash Journal”
Gaps: Nil
If Yes , whether required format of such report is attached: NA
Description of reports to be used i.e. purpose of such report: NA
Any document/output would be printed for this business process: Yes
If Yes mention name of such document: Money Receipt.
If Yes, whether required format of document / output is attached: Yes
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Company code, Business Area, Profit Center.
Inputs/ data received from other function for this process, (if any): Down Payment
Request
Output from this business process sent to other functions, (if any): Yes. Money
receipts will be sent to the customer, pay in slip will be used for bank transactions, advices
for interest will be mailed to customer.

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TO-BE Document
Page no.: 23 to 89
Manual Account Clearing (Customer)
Requirement:
 System should facilitate scrutiny of customer Accounts.

 Facility of clearing open items should be available.
 In case of part clearing, option of both partial and residual clearing should be available.
Process:
 Transaction in customer Ledger and Special General Ledger will be verified with original
vouchers and cleared against respective open line items
 Open items in customer ledger with be verified with each other and cleared against
Gaps: Nil

Description of reports to be used i.e. purpose of such report: N A



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TO-BE Document
Page no.: 23 to 89
Manual Incoming Payments
Requirement:

 Details of payment received, such as invoice number, date, amount, nature of
deductions made and amounts deducted on each count, overdue interest paid etc.
 Information regarding deduction of Income Tax
 Payments received from customers should be accounted to their account in Accounts
Receivable Ledger
 Provision for clearing payments received from customers fully / partially / residually
against open items in customer’s account
 Provision for calculation and accounting of overdue interest and cash discount on down
payments
Process:
 Payments will be received from customers in accordance with the terms of sales order,
commercial policy etc.
 This will contain the name of the customer, details of payment, details of deductions
made and amounts deducted on each count, overdue interest paid, information for
deduction of tax at source etc.
 Based on this information, the payment received from customer will be entered into
system
 The system should generate money receipt while accounting such down payments.
document type “ Bank / Cash Journal “
 Payments received from customers will be cleared against open items in the customer’s
accounts
 Calculation and accounting of cash discount will be made at the time of accounting of
payments received from customers.
Gaps: Nil

 Statement of account of the customer.

 Report on age wise classification of customers, due date-wise analysis of dues from
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customers, Profit center-wise information on dues from customers.
the purpose of documentation, management information, for facilitating the audit
process and for the purpose of statutory compliance.




29 of 84
TO-BE Document
Page no.: 23 to 89
Manual Outgoing Payments
Requirement:

 Information regarding customers to whom payment is to be made
 Payments made to customers should be accounted to their account in Accounts
Receivable Ledger as well as to his account in Special General Ledger
 Provision for clearing manual payments against open items in respective accounts
Process:
 Payments will be made to customers in accordance with instructions received from

appropriate authorities
 This will contain the name of the customer, reason for payment.
 Based on this information, FI should generate Remittance Letter through SAP R/3
system
 Based on this information, cheque will be prepared in the name of the customer and
payment made
document type “ Bank / Cash Journal “
 Payments made to customers will be cleared against open items in his account in
Accounts Receivable Ledger as well as in Special General Ledger, automatically either
in full / part / residual
Gaps: Nil


 Report on Age wise classification of customer, due date-wise analysis of dues from
customers, Profit center-wise information on dues from customers.
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If Yes mention name of such document : Remittance Letter



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TO-BE Document
AS-IS Business Process Name: Not in As-IS
Page no.:
Posting of parked documents ( Standard )
Flow Chart of Business Process : Annexure – 4 & Annexure - 5
Requirement:
 Facility to park the document and subsequent posting/change/display of the parked

document.
 Location specific document numbers to be generated internally.
Process:
having authorization will post / change / cancel the parked document.
Gaps: Nil

 Report on Agewise classification of customers, due date-wise analysis of dues from
customers, cost center-wise information on dues from customers.
purpose of documentation, management information and for facilitating the audit process

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33 of 84
TO-BE Document
Page no.: 23 to 89
Customer Down Payment Clearing
Requirement:
 Facility of clearing open items in customer Account with Special General Ledger
Account
 On clearing of open items in Special General Ledger Account with those in customer
Account, the system should generate accounting entry with location specific document
type.
Process:
 Transaction in customer Ledger and Special General Ledger will be verified with original
vouchers and cleared against respective open line items
 Open items in customer ledger will be verified with each other and cleared against
 Down payments received from customers will be cleared against open items in the
customer’s accounts as well as in accounts in Special General Ledger
Gaps: Nil



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35 of 84
TO-BE Document
Page no.: 23 to 89
Customer Credit Memo (FI Generated)
Requirement:
invoices and credit notes on / to customers and balances.
 Profit center wise bifurcation of balances appearing to the account of customer.
 Due date wise classification of dues from customers.
particulars of pending Sales Tax declarations.
 Facility to view the customer balances as a whole together with all the branches
including special G/L balances.
 Customers debit notes if any will come to Accounts Department directly. Accounts Dept.
will exercise control on Customer’s debit notes.
document.
 Automatic calculation of overdue interest, liquidated damages and cash discount.
Process:
 Accounts Dept. will receive debit note from customer, if any.

 After verification of the debit note, if it is observed that the customer has raised the debit
note for excess amount, Accounts Dept. will raise a debit note on customer. In such
case correct amount will be debited to Income Account, excess amount will be debited
to the customer’s account and total amount of debit note will be credited to the
customer’s account. If he has raised debit note for fewer amounts, the customer’s debit
note will be passed for correct amount using location specific document type.
Gaps: Nil

 Sales Tax register
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classification of invoices and credit notes on / to customers.



Inputs/ data received from other function for this process, (if any): Nil
Output from this business process sent to other functions, ( if any ) : Nil

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Accounts Payable
TO-BE Document
AS-IS Business Process Name: Accounts Payable
Page no.: 91 to 97
Vendor Invoices
Module: FICO Sub-module : AP
Requirement:
 Accounting in multiple currency.

 Invoice from vendor with complete details such as reference of purchase order, date,
description of material, quantity, rate, discount, value, details of duties and taxes, terms
of payment etc.
 Open items in vendor account should appear.
 Line items in vendor account should appear.
 Age-wise classification of dues to vendors.
 Due date-wise classification of dues to vendors.
 Facility for two-way (i.e. without GRN) and three-way invoice verification.
 Facility to Display and change (Limited extent) the accounting document
document.
Process:
 The invoices of vendors will come to accounting clerk and will be posted with reference
to Purchase Order and GRN posted (if any) in MM module.
 Sometimes FI also will receive invoices of vendors directly from them (e.g. supply of
stationery etc. items).
 Invoice verification activity will be done by FI only. Invoice verification will be two-way as
well as three-way. Two-way means invoice verification without GRN. Three way means
invoice verification with GRN. It will be accounted using location specific document
types.
 If on invoice verification it is observed that the vendor has raised the invoice for excess
amount, a debit note will be raised on vendor. In such case correct amount will be
debited to Inventory Account, excess amount will be debited to the vendor’s account and
total invoice amount will be credited to the vendor’s account. If he has raised invoice for
fewer amounts, the vendor’s invoice will be passed for correct amount.
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Gaps: Nil
 Statement of account of the vendor.
 Information to arrive at the amount of Purchase set off available.
 Report on Agewise classification of creditors, due date-wise analysis of dues to vendors,
product group/ location wise payables.
 Vendor Trial Balance.
 Vendor wise purchases.
the purpose of documentation, management information and for facilitating the audit


other system: Not Applicable
Inputs/ data received from other function for this process, ( if any ) : Purchase Order,
GRN.
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TO-BE Document
Page no.: 91 to 97
Vendor Credit Memo (Invoice related)
Requirement:

 FI will exercise control on Vendor credit memo.
 Facility for verification and adjustment against original invoice of the vendor.
Process:
 Vendor Credit Memo with complete details (such as reference of Purchase Order, Date,
Vendor’s Invoice, Description of material, Quantity, Rate, Discount, Reason for credit
memo, details of duties and taxes) will come to Accounts Department, who will verify
based on supporting and other documents available.
 If on verification it is observed that the vendor has issued the credit memo for excess
amount, a credit note will be issued to vendor. In such case total amount of credit
memo will be debited to the vendor account, excess amount will be credited to the
vendor’s account and balance amount will be credited to the respective
Inventory/Expenses account. If he has issued the credit memo for lesser amounts, the
vendor’s credit memo will be passed for correct amount using location specific
document types.
Gaps: Nil

 Report on Age wise classification of creditors, due date wise analysis of dues to
vendors, product-group/ location wise payables.
the purpose of documentation, management information and for facilitating the audit
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other system: Not Applicable

Inputs/ data received from other function for this process, ( if any ) : Purchase Order,
GRN and vendor Credit Memo request from MM.
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TO-BE Document
Page no.: 91 to 97
Vendor Down Payment (Standard)
Requirement:

 Information regarding vendors to whom down payment is to be made.
 Information regarding deduction of Income Tax.
 Advances paid to vendors should be accounted to Special General Ledger Account.
 Balances of vendor accounts in Reconciliation Account as well as Special General
Ledger Account should be shown individually and also in totality.
Process:
 Cashier will receive Payment request containing the name of the vendor, reason for
payment and instructions for deduction of tax at source from Purchasing Department for
Advances in accordance with Purchase order after duly verified by the appropriate
authority.
 Cashier will prepare the cheque and voucher on the basis of Payment Request. It will be
verified and signed by the authorized personnel.
 Accounting document will be posted in SAP R/3 for the Advance payment and FI will
generate Remittance Letter through SAP R/3 system.
document type “ Bank / Cash Journal “.
 In case letter of credit, bank guarantee given, it will be accounted as statistical
information.
Gaps: Nil
Company code, Business Area, Profit Centre
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43 of 84
TO-BE Document
Page no.: 91 to 97
Manual Clearing (Vendor)
Requirement:
 System should facilitate scrutiny of Vendor Accounts.

 Facility for clearing debit items against credit items and vice versa should be available.
 In case of part clearing, option of both partial and residual clearing should be available.
 Facility of clearing open items in Vendor Account with Special General Ledger open
items.
 On clearing of open items in Special General Ledger Account with those in Vendor
Account, the system should generate necessary accounting document using location
specific document type.
 Provision for clearing at the time of entering manual payments against vendor invoices /
credit notes.
Process:
 Transaction in Vendor Ledger and Special General Ledger will be verified with original
vouchers and cleared against respective open line items.
Gaps: Nil

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45 of 84
TO-BE Document
Page no.: 91 to 97
Vendor Invoice ( Standard ) (Direct FI Invoices)
Requirement:

 Provision for two ways (i.e. without GRN) and three ways invoice verification.
Process:
 Purchase orders will be created using MS-word and will not be entered in MM-
purchasing.
 The invoices of vendors will come to accounts department. (e.g. supply of stationery etc.
items) with complete details such as reference of purchase order, date, description of
material, quantity, rate, discount, value, details of duties and taxes, terms of payment
etc.
 Confirmation for receipt of material will also come to accounts department. Document
confirming receipt of material / service with reference to Purchase / Sales Order against
which the material is purchased and serial numbers of the products purchased.
 Invoice and receipt document will be matched.
 Accounts department will do invoice verification activity on the basis of available
supporting documents such as purchase order, material receipt document.
 If on invoice verification, it is observed that the vendor has raised the invoice for excess
amount, a debit note will be raised on vendor. In such case correct amount will be
debited to respective purchase account, excess amount will be debited to the vendor’s
account and total invoice amount will be credited to the vendor’s account. If he has
raised invoice for lesser amounts, the vendor’s invoice will be passed for correct amount
through location specific document types.
Gaps: Nil


 Report on Agewise classification of creditors, due datewise analysis of dues to vendors,
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cost centre wise information on dues to vendors.




47 of 84
TO-BE Document
Page no.: 91 to 97
Vendor Credit Memo ( Standard ) (Direct FI related)
Requirement:

 Document confirming approval to vendor credit memo from authorized officer.
 Provision for verification and adjustment against original invoice of the vendor.
Process:
 The credit memo of vendors with complete details (such as reference of purchase order,
date, vendor invoice, date, description of material, quantity, rate, discount, value, reason
for credit memo, details of duties and taxes, terms of payment etc.) will come to
accounts department duly approved by appropriate authority with required supporting
documents.
 This credit memo will be verified with original invoice of the vendor and supporting as
referred above.
 After verification, the vendor credit memo will be accounted for in the System. If on
verification it is observed that the vendor’s credit memo is for excess amount, a credit
note will be issued to vendor. In such case correct amount will be debited to appropriate
General Ledger Account, excess amount will be credited to the vendor’s account. If he
has raised credit memo for lesser amount, the vendor’s credit memo will be passed for
the amount stated in credit note and the debit note will be raised for the differential
amount through location specific document types.
Gaps: Nil

product group / location wise, segment wise information on dues to vendors.
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49 of 84
TO-BE Document
Page no.: 91 to 97
Manual Outgoing Payments
Requirement:

 Information regarding vendors to whom payment is to be made.
 Information regarding deduction of Income Tax.
 Payments made to vendors should be accounted to their account in Accounts Payable
Ledger.
Process:
 Payments will be made to vendors only on receipt of payment request containing name
of the vendor, reason for payment and instructions for deduction of tax at source from
Purchasing Department.
 The Payments will be made to vendors in accordance with the terms of Payment as
stated in Purchase Order.
 Based on this information, cheque will be prepared in the name of the vendor.
 Accounts Department will enter the above payment in the system specifying against
which invoice (through location specific document type “ Bank / Cash Journal “) and
Remittance Letter will be generated through SAP R/3 system.
Gaps: Nil


profit center-wise information on dues to vendors.

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51 of 84
TO-BE Document
AS-IS Business Process Name: Not in As-Is
Page no.:
Posting of parked documents ( Standard )
Flow Chart of Business Process : Annexure – 6 & Annexure – 7
Requirement:
 Facility to park the document and subsequent posting/change/display of the parked

document as referred in Vendor invoices / credit memo process.
Process:
having authorization will post / change / cancel the parked document.
Gaps: Nil

 Report on Agewise classification of creditors, due datewise analysis of dues to vendors,
cost centrewise information on dues to vendors.
purpose of documentation, management information and for facilitating the audit process

Inputs/ data received from other function for this process, ( if any ) : Vendor invoice,
Purchase Order, GRN and vendor Credit Memo from MM.
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53 of 84
TO-BE Document
Page no.: 91 to 97
Vendor Down Payment (Clearing)
Requirement:
 Provision for clearing down payments against vendor invoices.
Process:
 Down payments made to vendors will be cleared after invoice verification activity.
 Generate accounting documents using location specific document types.
Gaps: Nil



Company code, Business Area, Profit Centre.

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Closing Operations
TO-BE Document
Date : 22rd August 2009
AS-IS Business Process Name: General Ledger – Closing Operations
Page no.: 18
Foreign currency valuation (balances)
Module: FICO Sub-module : GL – Closing
Requirement:
 Valuation of balances in foreign currency (G/L accounts) at the end of each quarter and
creation of required accounting document
Process:
 Foreign currency rates (buying, selling, average) for the purpose of valuation will be
maintained at each quarter
 Valuation of G/L balances and generating accounting document
Dr./Cr. Exchange difference account
Dr./Cr. Respective G/L account
Foreign currency - Nil, Local currency – Difference amount
 In case of debit balances (assets) it will be valued at buying rate and in case of credit
balances (liabilities) it will be valued at selling rate
Gaps: Nil

 Report showing the details of calculation


55 of 84

56 of 84
TO-BE Document
Page no.: 18
Foreign currency valuation – Open items
Requirement:
 Valuation of open items in foreign currency (customer / Vendor) at the end of each
quarter and creation of required accounting document
 Exchange difference should be accounted in respective purchase / sale account
Process:
 Foreign currency rates (buying and selling) for the purpose of valuation will be
maintained at each quarter
 Valuation of open items at quarter end date and generating accounting document
Dr./Cr. Respective Purchase / Sale account
Dr./Cr. Clearing account
This accounting document will be generated with posting date of end of the quarter
The aforesaid accounting document will be reversed on 1st of the next quarter
 In case of debit balances (assets) it will be valued at buying rate and in case of credit
balances (liabilities) it will be valued at selling rate
Gaps: Exchange difference will be accounted to exchange difference account instead of
respective purchase / sale account
 Report showing the details of calculation


Company code, Business Area.
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58 of 84
TO-BE Document
Date : 24 August, 2009
Page no.: 18
Regrouping of Receivable and Payables
Module: FICO Sub-module : AR/AP – Closing
Requirement:
 Regrouping of credit balances of customers and debit balances of vendors for the
purpose of schedule VI reporting requirement
Process:
 At the year-end, accounting document will be generated to regroup the balances of

customer having credit balance and vendors having debit balances
 Proper accounting document will be generated through the system
Gaps: Nil


59 of 84
TO-BE Document
Date : 24 August, 2009
Page no.: 18
Business Area Adjustment
Requirement:
 Business Area wise Financial Statement for Segmental Reporting
Process:
 At the period-end, profit & loss account adjustment posting will be executed in test
mode. After analysis of the result the same will be executed in production run
 At the period-end, balance sheet account adjustment will be executed in test mode first
for calculation and then for posting. After analysis of the result the same will be executed
in production run
Gaps: Nil
Any reports required related to current business process : Adjustment posting

calculations
If Yes , whether required format of such report is attached: No - Standard

Company code, Business Area, Cost Center, Profit Center
60 of 84
TO-BE Document
Page no.: 18
Customer / Vendor balance interest calculation
Requirement:
 To calculate interest on customer and vendor invoices for delay in payment

 To generate accounting document for accounting of interest
 To calculate interest on business deposits and advances received from customers
 To Print Letter for interest (Business Deposit) and TDS deducted thereon.
Process:
 At the month-end, appropriate authority will decide to whom to charge the interest,
based on which customers will be selected
 At the month-end, accounting document will be generated for interest in case of all the
selected customers as stated aforesaid
 Interest on business deposit and advances received from customers will be calculated
on annual basis
 Interest will be calculated for each invoices
 In case of Small-Scale vendors, it will be calculated at the year-end for overdue invoices
 Necessary accounting documents will be generated
Gaps: Nil

Description of reports to be used i.e. purpose of such report: It is required for sending
information to the customer.
If Yes mention name of such document : Credit Note for interest
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62 of 84
TO-BE Document
Page no.: 18
Maintain GR/IR clearing account
Requirement:
 To generate the information of goods received but not invoiced and invoiced but goods
not received.
 To adjust the aforesaid differences if quantity differences are smaller than particular
percentage or purchase order is older than particular time period.
Process:
 At the year-end, accounts department will determine GR’s which are not invoiced based
on aforesaid criteria
 At the year-end, accounts department will determine invoices for which goods are not
received
 After proper authorization the said unadjusted GR/invoices will be adjusted
 Necessary accounting documents will be generated
Gaps: Nil
 Report showing GRs and invoices that are not settled


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64 of 84
TO-BE Document
Page no.: 18
Periodic Reporting
Requirement:
 To generate the Reports at the month/year end
Process:
 At the month end as well as year-end following reports will be generated on paper as
well as in electronic form
Gaps: Nil
1. Balance Sheet and Profit and Loss Account in Schedule VI format on quarterly basis at
Company as well as Segment level.
2. Balance Sheet and Profit and Loss Account in Management Reporting Format on
monthly basis.
3. Balance Sheet and Profit and Loss Account in both the above formats with actual versus
actual of previous year and actualize versus planned on quarterly and monthly basis.
4. Data retention should be for a minimum period of eight years.
5. Daily and monthly cash flow statement actual versus planned and variance.
6. Trial balance for each ledger i.e. General Ledger, Accounts Receivables, Accounts
Payables etc.
7. Statement of account for each accounts with line items showing details of open items
and cleared items.
8. Balance confirmation of customers and Vendor. (separately for special G/L accounts)
9. List of schedules attached to Balance Sheet and Profit and Loss Account.
10. Journal Listing for each document type on monthly basis
11. Facility to print all the documents
12. List of bills of exchange
13. Directory of chart of accounts at Business Area level
14. Directory of chart of accounts at company code level
15. Account assignment manual
16. G L Account List ( Query )
17. Document of duplicate invoice numbers
18. Recurring entry original documents
19. Tax Related Reports
20. FOB Value of Exports of Goods and Services (Product-wise and Country-wise). As per
schedule VI of the Companies Act, and as per Section 80HHC of the Income Tax Act.
21. C. I. F. Value of Imports (Raw Materials and Capital Goods)
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22. Earnings and expenditure in foreign currency.



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TO-BE Document
Page no.: 18
Balance carried forward (FI)
Module: FICO Sub-module : GL - Closing
Flow Chart of Business Process : NIl
Requirement:
 To carry forward the balances of customer, vendor, G/L accounts to the next fiscal year
Process:
 At the year-end after finalization of accounts, i.e. after signing the audit report, the
balances of customer and vendors will be carried forward to next fiscal year
 At the year-end after finalization of accounts, i.e. after signing the audit report, the
balances of G/L accounts will be carried forward to next fiscal year
Gaps: Nil


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TO-BE Document
Page no.:
Material Debit / Credit
Requirement:
 Subsequent accounting of debit / credit to material account
Process:
 On the basis of external document, such as vendor credit note, duly verified and
authorized by appropriate authority necessary document for material debit/ credit will be
entered
 System will generate the necessary accounting document
Gaps: Nil


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TO-BE Document
Page no.:
Material Price Change
Requirement:
 To account for the differences in prices of material for the purpose of valuation
Process:
 It will be carried out at the every quarter end

 Based on the authorization, material price changes will be done
 Necessary accounting document will be generated
Dr ./ Cr. Price Difference account
Dr. / Cr. Inventory account
Gaps: Nil


69 of 84
TO-BE Document
Page no.: 91 to 97
Withholding Tax
Requirement:
 To deduct the TDS at the time of advances and at the time of booking invoices which
ever is earlier
 To print / reprint the TDS certificates and Annual Return
 To print the location wise (not segment wise) serial numbers on TDS certificate and
separate annual return for each location
Process:
 At the time of down payment necessary tax is to be deducted

 At the time of booking invoices tax is to be deducted
 TDS at the time of invoices should be net of the TDS deducted at the time of down
payment
 On due date payment will be made to the account of Government
 Only after making payment to the Government, TDS certificate will be printed
 At the year-end annual return will be filed
Gaps:
To print the location wise (not segment wise) serial numbers on TDS certificate and
separate annual return for each location.
 Annual Return
If Yes mention name of such document :
 TDS Certificate
 Duplicate TDS certificate
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Periodic Processing
TO-BE Document
Page no.:
Dunning Notice (Customer)
Requirement:
 To provide facility for creating and printing dunning notices to customers for transactions
in AR and special general ledger accounts
 The dunning notice will be in three levels
Process:
 Dunning letters will be sent to customers for reminding for overdue invoices and
recovery of debit balances including earnest money deposits.
 Dunning program will be executed on user decided time intervals.
 In case of invoices of dealers overdue for 5 days, dunning letters will be sent. If recovery
is not made and it is overdue for 20 days one more letter will be sent. Another letter will
be sent after 35 days. Afterwards no letters will be sent. Based on the information stored
in master record, personal follow up will be done. Similar rule will be followed for earnest
money deposit.
 Format of dunning notices for various reasons are enclosed.
Gaps: Nil
If Yes mention name of such document : Dunning Notice


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TO-BE Document
Page no.:
Name of Business Process : Periodic Processing
Module: FICO Sub-module: AR/AP
Automatic Clearing
Requirement:
 To provide facility for automatic clearing of open items.
Process:
 Transaction in customer Ledger, vendor ledger and Special General Ledger will be
verified with original vouchers and cleared against respective open line items.
 Open items in customer ledger will be verified and cleared against respective open line
items.
 Open items in vendor ledger will be verified and cleared against respective open line
items.
 Open items in special general ledger account will be verified and cleared against
respective open line items.
Gaps: Nil

If Yes mention name of such document : No
If Yes, whether required format of document / output is attached: No

74 of 84
TO-BE Document
Page no.:
Dunning Notice (Vendor)
Requirement:
 To provide facility for creating and printing dunning notices to vendors for recovery of
debit balances,
 The dunning notice will be in three levels.
Process:
 Dunning letters will be sent to vendors for reminding for payment of debit balances,
deposits and advances.
 Dunning program will be executed on user defined time intervals.
 In case of balances due from vendors, dunning letters will be sent. Maximum 3 letters
will be sent with time interval of 15 days. Afterwards no letters will be sent. Based on the
information stored in master record, personal follow up will be done.
 Format of dunning notices for various reasons are enclosed.
Gaps: Nil
If Yes mention name of such document : Dunning Notice
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Profit and Cost Planning
TO-BE Document
Sr. No of TO BE document : CO001
Page no.:
Profit and Cost Planning
Module: FICO Sub-module : CO
Requirement:
 Budgeted ( planned) data for each cost centre / profit centre and for each revenue / cost
element should be available in the system for comparison with actuals
 Budgeted ( planned) data of Sales qty, Revenues, Cost of Goods Sold, Direct Costs and
Overheads should be available for a combination of customer group and material group
for comparison with actual
 The time spent by service departments should be posted to various service orders and
these should be valuated at a pre-determined price. The prices will differ for each cost
centre for same type of service rendered for each financial year
 The planning data in finance and controlling should be uniform for expense accounts
Process:
Statistical Key Figures
 Planned SKF data will be entered every year

 These will be used as a basis for allocation of common cost centre planned costs to
other cost centres
Cost Centres
 Budgeted data i.e. revenue expenses will be compiled cost centre wise and cost
element wise externally through. the normal annual budgeting process carried out in the
organization
 The annual budgeted figures should be broken up into month-wise figures only in case
the month wise break-up is not equal
 The data will be compiled in MS-Excel. The data will include figures in rupees, its month-
wise distribution and explanation for the expense, if any
 The data will be uploaded to SAP system through a program
 The data will then be copied to FI-GL planning
 Any change in the planned figures will not be given retrospective effect. For this the
planning transactions will be locked after the period ( month) is over
 The common cost centre costs will be allocated (through assessment) to other cost
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centres based on applicable Statistical Key Figures
Activity Prices
 The hourly prices will be determined externally for each activity type / cost centre
combination for each financial year. The prices will be calculated externally will be
uploaded through a program.
Profit Centres
 Expenses planned (budgeted) on Cost Centres will automatically get transferred to

Profit centres attached to the cost centres
 Revenue elements and Balance Sheet accounts ( AR, AP and Inventory) will be planned
externally. The data will be uploaded through a program
Profitability Segments
 Data for Sales Quantities, Revenues, Cost of Goods Sold, Direct costs and overheads
will be calculated externally and will be uploaded into profitability segments (customer
group + material group) through a program
 The planned overheads will not be allocated to a particular product
 This planning process will be done after one year of going live on the basis of actual
data available for the first year
Gaps: Nil

If Yes , whether required format of such report is attached: No as the standard SAP
report is meeting the requirement
Description of reports to be used i.e. purpose of such report : Report to compare

planned Vs. actual data

If Yes, whether required format of document / output is attached:

other than SAP R/3 : No
other system :

Controlling Area , Cost Centre , Profit Centre
Inputs/ data received from other function for this process, ( if any ) : The data is
received from budgeting process in MS-Excel
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Actual Posting (Regular as well as Period-end)
TO-BE Document
AS-IS Business Process Name: Cost Center & Order Accounting
Page no.: 101 to 103
Actual Posting ( Regular as well as Period-end)
Requirement:
 On line real time posting to various controlling objects from all other modules
 Costs/ Revenues should be accurately posted to the cost object where it belongs
 Allocation, distribution of costs
 Corrections to wrongly posted cost objects
Process:
Statistical Key Figures
 Actual SKF data will be entered / revised every quarter

 These will be used as a basis for allocation (assessment) of common cost centre costs
to other cost centres
Cost Centres
 Actual costs will be posted to the cost centres by following sources :

 FI-GL posting
 Goods receipts and invoice verification for revenue purchases
 Goods issue for free delivery / free samples
 Goods issue for scrapping of material and sale of scrap
 Settlement of non-billable service orders. These costs will be analyzed and costs
which are resulted from factory will be transferred to factory cost centres through.
debit advices.
 Settlement of internal orders (if any)
 Reposting of costs from one cost centre to another
 Accrual costs using Target = Actual method
 Cost centre assessment from common cost centres
 The activity allocation from cost centres to service orders will post credit entries for
services rendered by the cost centre under secondary cost elements
 The over/under absorption on cost centres will be assessed to profitability segments i.e.
a combination of customer group and product group
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Internal Orders
 Internal orders will be created to capture specific type of expenses such as trade fair,
sales promotion, tendering etc.
 Actual costs will be posted to the cost centres by following sources :
 FI-GL posting
 Goods receipts and invoice verification for revenue purchases
 Reposting of costs from one cost centre
 The cost booked on internal orders will be settled (transferred) to relevant cost object i.e.
cost centre or sales order
Profit Centres
 Actual data flows in profit centre accounting from all other modules through profit centre
assignments. The following objects of other modules are assigned to profit centres:
 Cost centre : - in basic data
 Internal order :- in basic data
 Material master:- for each plant in either sales general/plant view or costing2
view
 Sales order: - in account assignment of sales order item. This can be entered
manually or through substitution rules at the time of sales order
creation
 Service order:- in additional data, assignments
 Actual Revenues /costs will be posted to all the profit centres by following sources :
 Costs booked on cost centres will automatically get posted to the profit centres
attached to the cost centres
 Sales revenues / deductions and cost of goods sold will be posted through. Sales
Orders / billing documents based on the profit centres assigned to the sales orders.
The sales order assignment to profit centre will be either through substitution rule
or through direct input in the sales order
 Balance sheet items (AR, AP and Inventory) will be posted to Profit Centres on periodic
basis i.e. it will not be online and will be transferred after period end process in FI and
CO
 Accounts receivable will be transferred to the profit centre assigned in the sales order
/ line item
 Accounts payable will be transferred to the profit centre of the material purchased
with reference to plant. The Profit centre is assigned for a material at plant level. In
case of account assigned purchases ( i.e. directly debiting cost centre / internal
order / sales order ) AP will be transferred to the Profit Centre assigned to the cost
object
 Inventory will be transferred to the profit centre assigned to the material in a particular
plant
Service Orders
 Actual costs will be posted to service orders by following sources :

 Goods issue to a service order
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 FI-GL posting with cost assignment of service order
 Activity allocation from cost centres through. service order confirmation
 These orders will be settled to the profitability segment for billable or to cost centre(s)
for non-billable type
Sales orders which are cost objects (other than make to stock)
 Actual revenues / costs will be posted to service orders by following sources :

 Revenues will get posted through billing document
 Cost of goods sold will get posted through a goods issue to sales order / item
 Direct costs will get posted through FI-GL posting with cost assignment of sales
order / item
 The profit / loss of the sales order will be settled to a profitability segment of the sales
order / item
Profitability Segments
 Actual revenues / costs will be automatically transferred to profitability segments as

follows
 In make to stock scenario ( sales order not a cost object), Revenues , sales
deductions and cost of goods sold will be automatically transferred on the basis of
billing document to a profitability segment determined in the sales order
 In make to order scenario ( sales order is a cost object), Revenues , sales
deductions, direct costs and cost of goods sold will be transferred to a profitability
segment determined in the sales order through result analysis and settlement
 Cost centre costs will be transferred to Profitability Analysis for a customer group /
product group combination through cost centre assessment
Gaps: Nil

Description of reports to be used i.e. purpose of such report : Report to compare

planned Vs. actual


other system :
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Inputs/ data received from other function for this process, ( if any ) : The data is
received from budgeting process in MS-Excel

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Management Reporting
TO-BE Document
AS-IS Business Process Name: Information System
Page no.: 105
Management Reporting
Requirement:
 Profitability at following levels:

 Location
 Product group
 Product division
 SBU
 Customer group
 Sales Order
 Expense control up to activity level i.e. Marketing, Warehousing etc.
 Location wise, product group wise bifurcation of vendors (AP)and customer(AR)
balances as well as inventory values
Process:
Cost Centre Accounting
CCA will give information on planned vs. actual comparison of expenses for each cost
centre and cost element. The cost centre and cost elements are grouped as standard and
alternate hierarchies. The complete details will be available through. drill down. This will
facilitate expense control up to activity level.
Internal Orders
Internal orders will give information on cost element wise costs booked on internal orders
along with the settlement cost centre and cost element.
Profit Centre Accounting
PCA will give information on planned vs. actual comparison of revenues as well as costs for
each profit centre and cost element. The profit centres and cost elements are grouped as
per user requirements.
It will also provide information on balance sheet items of AR, AP and Inventory.
This will give net profitability for any combination of location, product group / product division
and SBU. This will also provide necessary information for meeting statutory requirement of
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segmental reporting based on geographical locations.
Sales Orders / Service Orders
Sales orders of make to order scenario / projects and service orders will give profitability for
each sales order / item or service order.
Profitability Analysis
PA will give profitability follows :
 Profitability for any combination of characteristics e.g. Customer group , Product

Group , Industry, Product hierarchy etc at contribution level ( Sales – COGS – Direct
Costs)
 Profitability for any combination of Product Group / Customer group at net profit level
( Sales – COGS – Direct Costs – Overheads )
Gaps: Nil

Description of reports to be used i.e. purpose of such report :

other system :


84 of 84

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At least one operating concern is required to be defined to activate Profitability Analysis. A

Type of GL Account Group Number Range

The range of accounts numbers will be of 6 digits which is allocated as under:

Customer Group Customer Group Number Range Reconciliation

The range of accounts numbers will be of 6 digits which is allocated as under:

Factories and offices of ABC 200001 to 200200-KBFA

First two numbers Location (e.g. Pune, Mumbai)

Cost Center Standard Hierarchy

KBC00 + location code

KBC00 + location code + product division code

The cost centers will be attached to the lowest level node.

Cost Center Group (Alternate Hierarchies)

KBC10 + product division code

KBC10 + product division code + product group code

First two numbers - Location (e.g. Pune, Mumbai)

The cost centers will be attached to the respective profit centers.

Profit Center Standard Hierarchy

KBP00 + location code

KBP00 + location code + product division code

The profit centers will be attached to the lowest level node.

Additional profit center group will be maintained as follows:

KBP10 + product division code

KBP10 + product division code + product group code

Cost Elements (Primary and Secondary)

1 - Primary costs/cost-reducing revenues

Category Number range

Revenue and Cost Element Group

ABC101 Sale of main products

ABC200 Other income

ABC201 Income from investments

ABC300 Material cost

ABC301 Cost of goods sold

ABC400 Personnel related expenses

ABC401 Salaries, wages & bonus

ABC500 Brokerage and commission

ABC600 General expenses

ABC601 Power & fuel

ABC800 Interest Paid

ABC900 Cash Discount

ABC990 Other secondary costs

ABC991 Internal settlement

ABCBS Balance sheet accounts

Refer Annexure – 1 for flow chart on master data

 Generate accounting documents

Any reports required related to current business process : Yes

Description of reports to be used i.e. purpose of such report:

If Yes, whether required format of document / output is attached: Not Applicable

Whether data records of current business process would be transferred to system

Which hierarchy levels would be associated with this business process

Output from this business process sent to other functions, ( if any ) : No

Sign-off (Approval) for this document :

Description of reports to be used i.e. purpose of such report:

Which hierarchy levels would be associated with this business process

Output from this business process sent to other functions, ( if any ) : No

Sign-off (Approval) for this document :

Any reports required related to current business process : Yes

Any document/output would be printed for this business process: No

If Yes, whether required format of document / output is attached: Not Applicable

Whether data records of current business process would be transferred to system