Professional Documents
Culture Documents
FI
In R/3 the logistical value flows are automatically transformed to money flows in financial accounting and controlling.
Business Process
Procurement Production
Material Management
Sales
MM
PP
MM
SD
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R/3 modules
COCOOM COCOPC Overhead Cost Controlling (cost center accounting, cost element accounting) Product Costing
MM
Material Management
PP
Production
COCOPA
Profitability Analysis
SD
FI
Financial Accounting
R/3
ABAP/4 3.x -> 4.x
HR IS
A M P C
P M
W F
Non-SAP Systems
execute
Over the years SAP had grown to an ERP market leader and has developed new functionalities. The original SAP diamond has become the core on which these new satellite modules build.
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Production
Sales
SAP R/3 changes the world. Every store worker becomes a bookkeeper producing accounting postings. A horror scenario for accounting department, if the SAP use is not disciplined.
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SAP has solved the discipline issue with automatic account determination. Behind all logistical transactions are lots of parameters and configuration settings that steer the process.
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Total: 3200
Accounting
FI
P&L
PCA
Balance sheet Capital
CO
Costs
Postings in accounting
The accounting documents are generated mostly outside accounting module as by-products of postings in logistics.
SAP R/3 is a document based system. Everything you do creates a document in the system.
The relations between the documents can bee seen with Document Relationship Browser (transaction ALO1). From the document list you can drill down to the documents.
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Automatic postings
Sales invoices from SD MM invoices Material movements 725.380 35.424 2.775.875
Via interfaces
Wages, salaries Here is an example of a company' document statistics in one year. As you s can see here the store workers produce the most of the accounting documents.
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EC/CO-modul
Material management Purchase Requisition Purchase order Goods Receipt Invoice verifiction
MM-modul
Financial accounting
FI-modul
Accounting
Payments
Reporting
The purchase process starts with a Purchase requisition. At this state a commitment item for the money to be spend is created in CO. The integration point to FI is at goods receipt. Then a posting to GR/IR-account is made. When the invoice is posted the second posting to GR/IR account takes place. From here the accounting department and accounts payables takes over.
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In this case the purchase is made to a cost center. The creator indicates this by putting a K in the assignment field. When the goods arrive, this will create a consumption posting. The price is defaulted from info record.
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Cost center is the only field to be filled. All the other fields - the account, business area, controlling area, company code - get values automatically on the basis of their assignments. The plant defines the company, cost center defines profit center. The account is derived from MM Account determination parameters.
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The recipient must only give the purchase order number and accept the quantity.
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The goods receipt is posted to a cost account and a GR/IR account, which the system finds from the MM account determination parameters based on material and MM transactions type.
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The invoice posting balances the GR/IR-account. The vendor postings generates to postings, one on vendor account in accounts payable and one on the reconciliation account in general ledger.
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Vendor payment
The accounting department continues from here. Goods receipt is posted and invoice verified. An open item in accounts payables waits for clearing. The accounts payable clerk runs the payments daily.
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MMMM-processes
4) master data (materials, vendors, cost centers, etc) The automatic postings rely on correct system settings. The most important settings the skeleton of R/3 - are the assignments between organizational structures. It is also important, that the user knows how what to do, and picks the right transaction. The quality of master data is crucial to the posting quality.
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Purch Org
Vendor
Plant
Company
Ch. acct
Account
Material
CoArea
Cost Element
The purchase organization determines the company in whose accounting the posting is made. The plant defines the company, to whom the material belongs. The accounts payable account is in the vendor master data.
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Postings in controlling
The goods receipt posting seems to be on the cafeteria cost center.
This example created a posting in CO, because the purchase was made to a cost center. Then the account must also be a cost element. The CO-postings can best be studied in the CO-reports.
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1000 IDES AG
CO Europe
Plants
IDES UK
2000
Here is an example of the assignments of organizational structures in SAP IDES. Company codes are the accounting units and can have several plants. All european companies are assigned to same controlling area. Controlling area is the management accounting unit. This means, that common management reports are obtained for all European companies.
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Transaction type
If I buy, I choose Purchasing. If I make a receipt, I go to Inventory management.
MM
All MM inventory postings use a transaction type, which steers the processing in the system. The transaction type is also very important in account determination.
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The account is determined based on Plant (valuation are), materials valuation class, movement type and MM transaction type.
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The account for consumption postings can be tracked from IMG. The account modification code for Account assignment category is VBR. In transaction GBB Offsetting entry for inventory posting account 410000 is defined. The valuation class is in material master. At first sight this might seem difficult, but this is not rocket science and worth studying.
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Implementing R/3 usually means that an army of SAP consultants occupy your company. Hopefully they do a knowledge transfer of the configurations before they leave. You should be the one, who understands the system settings and knows the processes.
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An integrated system demands more knowledge and understanding the process, because also the errors are very integrated.
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FI
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What are the main causes of the integration problems? Configuration errors: wrong assignments missing account determinations Master data errors: wrong or missing master data Human factors: misunderstandings lack of knowledge ignorance
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Problems, pitfalls
MM:
Balances master data moving average prices transfer prices
SD:
period accounting rebates
Intercompany transactions
Interfaces
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Errors are usually found: 1. Accounting finds something unusual like posting to a wrong accounts or unusual amounts. The drill down reveals wrong transaction type, wrong order type etc. The logistics users cannot get the posting through. They get an error message needs cost accounting assignment, error in account determination etc. 99% of cases these messages do not come from FICO parameters but erroneous procedures in logistics or missing master data.
2.
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Not working!
LOG
FICO
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But only if you understand its principles and agree to work according to them.
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ERP Pros
The transparency of processes is increased (good drill down functions) Same figures everywhere in the organization (right or wrong) Corrections are no longer made in accounting but at source Common master data Real-time information
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ERP - cons
The errors are also very integrated. Especially the bad quality of master data creates problems. Demands more from users, can even disturb the business, particularly at the early stages of the implementation. The concepts can be strange and do not correspond those used in the organization. The translation to national languages is often clumsy and erroneous.
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Is it worth it?
If you survive, yes. Its a giant leap to an other level as IT user.
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