You are on page 1of 64

Finance and Purchasing Overview

Finance & Purchasing Overview

1

COURSE OVERVIEW
Finance Finance & & Purchasing Purchasing Overview Overview
SAP SAP Overview Overview Tarrant Tarrant County County Implementation Implementation Finance Finance & & Controlling Controlling Modules Modules Materials Materials Management Management Module Module Getting Getting Help Help Accessing Accessing Training Training Materials Materials

Finance & Purchasing Overview

2

COURSE OBJECTIVES
The Finance & Purchasing Overview course has two purposes:  Introduce SAP and the finance and purchasing modules  Prepare you for role-specific training courses Objectives of the course:  Review SAP system and integration  Understand Tarrant County implementation  Become familiar with terms  Provide a high level understanding of:
► ► ► ► ► ► ► ► General Ledger Functionality Accounts Receivable Functionality Accounts Payable Functionality Asset Accounting Functionality Controlling Functionality Grants Management Functionality Funds Management Functionality Materials Management Functionality

 

How to get Help How to access training materials

Finance & Purchasing Overview

3

and Products  The SAP system is a fullyintegrated system where activities in one area generate activities in another area  The system provides online.Lesson 1: SAP Overview  SAP stands for Systems. real-time information and one place for input of data 4 Finance & Purchasing Overview . Applications.

Finance & Purchasing Overview 5 .Modules in SAP    SAP is made up of various functional modules Each module covers a different business function Tarrant County is using the following modules: CO FI HR MM GM FM Controlling Financial Accounting Human Resources/Payroll Materials Management Grants Management Funds Management TC is also using ESS (Employee Self Service) for employees to enter time and maintain personal information.

How They Work Together HR/Materials Management Modules PAYROLL FI Module ASSETS ACCOUNT S PAYABLE Other Financial Modules FUNDS MANAGEMENT PURCHASING CONTROLLING INVENTORY MANAGEMENT ACCOUNTS RECEIVABL E GRANTS MANAGEMENT Finance & Purchasing Overview 6 .

standard data definition.Integration in SAP  System Integration ►When a transaction is executed in any module. and a common business language  Simplified business processes enhance productivity to allow focus on value-added activities  Data has to be entered only once and all related information is updated automatically  Integration eliminates need for redundant analysis and reconciliation Finance & Purchasing Overview 7 . SAP automatically updates data in all application modules that are affected ►Benefits of Integration  Enables simplified business processes.

Business Flow Integration

Requisitioner

Procurement Officer

Vendor

$$$$$
Receiver GL Accountant Budget Officer

Asset Manager Accounts Payable Officer Finance & Purchasing Overview 8

Hitting the G/L
Goods Issue MM Direct Posting G/L Customer Payments AR Vendor Payments AP Goods Receipt MM Invoice Verification AP

l a r r e en ge G ed L

Charges MM Charges AP Vendor Invoices AP
9

Depreciation AA

Finance & Purchasing Overview

Data
 SAP contains two types of information
► Master Data
 A collection of information about an object or person  It is referenced whenever that object or person is used in an entry field  This data does not normally change  Examples are address and payment information for a vendor or customer

► Transactional Data
   

Information associated with a specific business activity You enter this information in SAP Changes from day to day Examples are: – Invoices – Purchase requisition
10

Finance & Purchasing Overview

Transactional Data Master Records Records that remain in the system for an extended period of time.Master Data vs. G/L Accounts Customer Master Records Vendor Master Records Grants Master Records Asset Masters Material Master Records Transaction Records Journal Entries Invoices Payment Requisitions Records a specific event Finance & Purchasing Overview 11 .

Examples of Master Data Tarrant County Purchase Order Vendor Master Data To: ABC Company.00 Finance & Purchasing Overview 12 .00 Widgets (material #15005). 2004 Qty $$ 10. Vendor #1001 12345 Any street Any town. USA 54321 P. box of 10 10 bx Material Master Data Total 100.O. # 56789 Date: July 2.

box of 10 10 bx 10. Vendor #1001 12345 Any street Any town.00 100. 2004 Transactional Data Qty $$ Widgets (material #15005).Examples of Transactional Data Tarrant County Purchase Order To: ABC Company. USA 54321 Cost Center 987 P. # 56789 Date: July 2.00 Total Finance & Purchasing Overview 13 .O.

Documents & Document Types  A Document generally consists of a document header and line items.    Date Document type Document number ► Document header – contains data that identifies a document and applies to the entire document. ► Line items – generally include  Amount  Account assignment  Additional details specific to the transaction  Document Types are located on the header portion of every document ► Distinguish between different business transactions ► Control document number assignment ► Help manage accounting documents Finance & Purchasing Overview 14 .

Document Structure Illustration The Accounting Document Document No: SAxxxxxx Date: 05/06/2004 Company Code: TC01 Currency: USD Header Revenue A/C DR CR Bank 10000 Citibank DR Sale 10000 CR Line Items Debits = Credits Finance & Purchasing Overview 15 .

Document Types Illustration A document type is a key that is used to classify accounting documents and distinguish between business transactions to be posted Finance & Purchasing Overview 16 .

Purchasing Document Types Purchase Requisition Approval RFQ Purchase Order Contract Master Data Finance & Purchasing Overview 17 .

Tarrant County Document Types Document Type AA AB DA DG DR DZ KA KG KR KZ SA SB WA WE Description Asset posting Accounting document Customer document Customer credit memo Customer invoice Customer payment Vendor document Vendor credit memo Vendor invoice Vendor payment G/L account document G/L account posting Goods issue Goods receipt 18 Finance & Purchasing Overview .

Everyone has access to the same data.Terms Standard SAP terms:               Application – computer program Client – unit in SAP system where data is input. display. or change data Transaction code – (t-code) unique identifier for each transaction that allows you to get to a transaction without going through the menu User role – assigned to each employee. changed. set of activities used by the employee Variants – a saved set of personal selection criteria which can be used for lists and reports 19 Finance & Purchasing Overview . designed to integrate and run all aspects of an organization Information – data that has been collected Integrated – transactions that are completed in one module or process trigger transactions in other modules Menu Path – sequence of menu selections that should be followed to get to a function or screen Module – portion of SAP system that carries out a specific business function Real-time – describes how data that has been entered into the system is available immediately after the transaction has been saved. and managed Data – pieces of information. numbers or text ERP – Enterprise Resource Planning. allows multi-tasking within system Transaction – screen or series of screens to create. Session – instance of SAP.

and organization data. such as income statement and balance sheet  Controlling (CO)    Represents cost and revenue flows throughout the organization Aids in organizational decision making Supports internal reporting such as cost center reports Finance & Purchasing Overview 20 . Supports the planning and control of personnel activities.  In use since October 2003  Financial Accounting (FI)  Designed for automated management and reporting of  General Ledger (GL)  Accounts Receivable (AR)  Accounts Payable (AP)  Asset Accounting (AA)  External reporting.Lesson 2: Tarrant County Implementation  Tarrant County is implementing the following modules in SAP:  Human Resources (HR)  Takes care of payroll. time recording. applicant administration.

supplements.Tarrant County Implementation  (cont’d) Tarrant County is implementing the following modules in SAP :  Materials Management (MM)  Supports the complete cycle of material flow. from the requisition to purchase to the warehousing and distribution  Grants Management (GM)  Manages the application. training & events. returns. and transfers  Tracks expenses to budget  Tarrant County is also using Employee Self-Service for employee entry and management of time. budget tracking. appraisals. and benefits enrollment. award. Finance & Purchasing Overview 21 . and closing of a grant  Funds Management (FM)  Supports the management of budgets  Budget can be adapted to changes in conditions by entering releases. personal data.

Tarrant County Finance & Purchasing Modules Materials (MM) Financials (FI) Controlling (CO) Funds Management (FM) Grants Management (GM) Management Purchasing General Ledger Inventory Asset Accounting Accounts Payable Accounts Receivable Finance & Purchasing Overview 22 .

TCCS Finance & Purchasing Overview 23 .Organizational Elements  The following organizational elements and codes are used in Tarrant County: ► Company Code – TC01  Organization unit where individual financial statements are created  Self-contained Chart of Accounts  Self-contained organization unit where management of costs and revenues is performed ► Controlling Area – TC01 ► Purchasing Organization – TC01 ► Chart of Accounts – TC01 ► Plants  Organizational unit that procures materials or services  List of all General Ledger (GL) accounts used  Organizational unit for Admin and Stockrooms – Tarrant County Admin (all non-stock purchases) – TC01 – Sheriff (Stockroom) – TC04 – Justice Center (Stockroom) – TCJC – Central Supply (Stockroom) .

AA) process settings • For management reporting module settings • For all Purchasing settings Controlling Area – TC01 CO Purchasing Organization – TC01 MM Company Code – TC01 FI/MM •Basic entity in SAP for a legal entity Plant – TC01 Plant .TCJC MM Plant – TC04 Plant .Tarrant County Organization Structure Chart of Accounts – TC01 FI • For all (AP.TCCS • For all Logistics settings Finance & Purchasing Overview 24 . AR. GL.

County implementation of SAP system     Finance & Purchasing Overview 25 .Tarrant County Implementation Tarrant County terms:   GASB – Governmental Accounting Standards Board Go-Live – date when SAP module is scheduled to run live in production system ► Phase I – 10/01/03 HR/Payroll ► Phase II – 07/06/04 Financial/Purchasing ► Phase III – 04/01/05 Budget Prep Legacy System – existing County system that either interfaces with SAP or provides data for start up of SAP Production System – live SAP system used for normal operations SME – subject matter expert. County employee who has experience or expertise in a specific functional area TITAN – Titan Integrated Task Access Network.

Tarrant County Implementation Why Change??    Systems with duplicate data Have to use different systems to enter and get information Have to wait for processing to get data What Does Business Change Involve?    Changing the way we work Changing our roles Changing the ‘tool’ Finance & Purchasing Overview 26 .

Tarrant County Implementation How Will Change Affect Us?   Major changes such as Tarrant County is implementing will have an initial effect on peoples’ performance Over time. the benefits achieved will far outweigh the initial impacts Productivity Time Initial Change Maximum Benefits Achieved Continuous Improvement 27 Finance & Purchasing Overview .

Lesson 3: Finance & Controlling Modules Finance & Purchasing Overview 28 .

What is FI and CO? Financial Accounting (FI) and Controlling (CO) are independent components in the SAP system. The two components are tightly integrated and the data flow between them takes place on a regular basis. FI General Ledger Accounts Payable Accounts Receivable Asset Accounting Controlling Manages all financial accounts Manages vendor invoices Manages customer billing Manages fixed assets and depreciation Manages responsibility accounting 29 FI FI FI CO Finance & Purchasing Overview .

Reporting Overview EXTERNAL AGENCIES Journalists Media Auditors Tax Authorities Insurers FI Financial Accounting External Financial Analysts External CO Controlling Internal Financial Statements Managerial Reports Internal Tarrant County Management Tarrant County Employees Finance & Purchasing Overview 30 .

asset accounting.Financial Accounting (FI) The FI module is designed for automated management and external reporting of general ledger. and other sub-ledger accounts within the chart of accounts This is the key component structure of financial accounting Master Records General Ledger Accounts Payable Accounts Receivable Fixed Assets Periodic Processing Finance & Purchasing Overview 31 . accounts receivable. accounts payable.

Financials (FI) General Ledger (GL) Financials (FI) General Ledger Asset Accounting   Used Usedfor forexternal external reporting reporting   Document Documententry entry  Contains ► General Ledger Accounts ► Chart of accounts Accounts Payable Accounts Receivable   Account AccountManagement Management l a r r e en ge G ed L Finance & Purchasing Overview 32 .

General Ledger (GL) Roles & Responsibilities Financials (FI) General Ledger Departments  Display general ledger accounts. and line items Asset Accounting Accounts Payable Accounts Receivable Auditor  Maintain G/L accounts  Approve and post documents Finance & Purchasing Overview 33 . documents.

Financials (FI) Accounts Receivable (AR)   Processes Processescash cashreceipt receipt transactions transactionsfor foreither either accounts accountsreceivable receivableor or revenue revenuetransactions transactions   Invoices Invoicesor orbills billscustomer customer for foramount amountdue due  Contains ► Customers ► Billing logic ► Dunning Financials (FI) General Ledger Asset Accounting Accounts Payable Accounts Receivable Finance & Purchasing Overview 34 .

Accounts Receivable (AR) Roles & Responsibilities Departments   Record cash receipts into Cash Journal Enter customer invoices / credit memos to create receivables Financials (FI) General Ledger Asset Accounting Accounts Payable Accounts Receivable Auditor  Check entries and posts cash journals  Perform new customer setup Finance & Purchasing Overview 35 .

Financials (FI) Accounts Payable (AP)   Process Processinvoices invoices   Generate Generatewarrants/checks warrants/checks by bydue duedate dateor ordiscount discount date date   Produce Produce1099 1099Reports Reports  Contains ► Vendors ► Warrants ► Checks Financials (FI) General Ledger Asset Accounting Accounts Payable Accounts Receivable Finance & Purchasing Overview 36 .

may contact the vendor. requisitioner or buyer.  Issues checks for invoices with a free for payment status Finance & Purchasing Overview 37 .Accounts Payable (AP) Roles & Responsibilities Department Financials (FI) General Ledger Asset Accounting Accounts Payable Accounts Receivable  Enter Invoice Documents  Park documents when invoice verification fails Auditor  Maintains Vendor Master  Reviews entered documents (except parked documents) and releases invoices for payment  Reviews parked documents to resolve problems.

Financials (FI) Asset Accounting (AA)   Provides Providesmanagement managementof of capitalized capitalizedor ortracked tracked assets assets   Generates Generatesdepreciation depreciation transactions transactionsfor forthe the general generalledger ledger Financials (FI) General Ledger  Contains Accounting Accounts ► Tag numbers Payable ► Asset Classes Accounts Receivable ► Depreciation profiles ► Capitalized assets ► Tracked assets Asset Finance & Purchasing Overview 38 .

Asset Accounting (AA) Roles & Responsibilities Financials (FI) General Ledger Department Create the asset shell at the requisition stage Auditor Maintain asset master records Issue asset tags for Capital and non-computer low value assets Update the records for additional information such as serial numbers Update Capital Asset record master data Asset Accounting Accounts Payable Accounts Receivable Finance & Purchasing Overview 39 .

A key tasks is the analysis of FI data. Variances can be determined by comparing actual data with plan data. It is also a management instrument for organizational decisions. This is the key component structure of Controlling: Cost Element Accounting Cost Center Accounting Internal Orders Finance & Purchasing Overview 40 .Controlling (CO) The CO module represents the County’s flow of costs and revenue.

Controlling (CO) Controlling (CO)   Used Usedfor formanagerial managerial reporting reportingor oractivity activity reporting reporting   Used Usedto tocollect collectand and allocate allocatecosts costs  Contains ► Cost Centers ► Projects ► Internal Orders Finance & Purchasing Overview 41 .

Controlling (CO) Roles & Responsibilities Department  Display: CO reports Cost center/cost center group data Internal order/internal order group data Budget information for internal orders Controlling (CO) Auditor  Display CO reports  Create. and display: Cost centers/cost center groups Internal orders/internal order groups Internal order budget information Finance & Purchasing Overview 42 . change.

Functional Area Commitment Item Fiscal Year Fiscal Year 43 . Funded Program. GM & FM Integration & Terms FI/CO Grant Fund Cost center. Functional Area Cost Elements & GL Accounts GM Grant Fund Sponsored Program Sponsored Class Budget Validity Period Finance & Purchasing Overview FM Grant Fund Fund Center.FI/CO.

identify. revenues. identify. Plan.and andrequired required information information Grants Management (GM)  Contains: ► Grant lifecycles ► Grant details ► Grant reports Finance & Purchasing Overview 44 . costs. and andrecord recordall allfunding fundingrelated related to toawarded awardedgrants grants   Differentiate Differentiatebetween between eligible eligibleand andineligible ineligiblecosts costs   Bill Billand andrecord recordsponsor sponsor amounts amounts   Record Recordand andreport reportall allrelated related costs.budget.revenues. budget.Grants Management (GM)   Plan. obtain.obtain.

Grants Management (GM) Roles & Responsibilities Department  Display Grants Grant budgets Grant reports Grants Management (GM) County Administrator’s Office  Display Grants Grant budgets Grant reports  Create grants Auditor     All above Maintain grant master data Manage grant cycles Monitor grant postings Finance & Purchasing Overview 45 .

Funds Management (FM) Funds Management (FM)   Maintains Maintains budgetary budgetary control controlfor forall allexpense expense activity activity  Contains ► Funds ► Fund Centers ► Commitment Items $$$$$ Budget Officer Finance & Purchasing Overview 46 .

and entry budget documents Auditor    Create and change funds block Create and change funds reservation Create and change funds commitment Finance & Purchasing Overview 47 .Department Funds Management Roles & Responsibilities Funds Management (FM)  ‘Pre-post’ budget transfers for adjustment within their own level of departmental control  Post transfers within budget control categories of commitment items Budget Office  ‘Pre-post’ budget transfers between departments  Generate report listing pre-posted transfers needing Commissioner’s Court approval  Post transfers after approved by Commissioners Court  Create supplement. return.

Lesson 4: Materials Management Module (MM) Finance & Purchasing Overview 48 .

goods receiving. purchasing. This is the key component structure of Materials Management: Invoice Verification – (Done by AP) Master Records Purchasing Inventory Management Finance & Purchasing Overview 49 . Invoice verification is an MM function but is executed by Accounts Payable.Materials Management (MM) The MM application component supports the procurement and inventory functions occurring in day-to-day business operations such as: materials planning and control. and inventory management.

entry. Finance & Purchasing Overview 50 . ► A plant is an operating unit that makes goods available for distribution. and documentation of all goods movements  Inventory Management is responsible for:  Key Terms ► A purchasing organization is an organizational unit that procures materials or services.Materials Management (MM)  Purchasing is responsible for: ► External procurement of materials and services ► Determination of sources of supply (vendors) ► Monitoring deliveries from vendors ► Management of stocks ► Planning. It negotiates purchasing conditions for plants assigned to it.

Materials Management (MM) Purchasing Integration Materials Management (MM) Financials (FI) Controlling (CO) Funds Management (FM) Grants Grants Management Managemen (GM) (GM) Purchasing General Ledger Inventory Log. Invoice Verification Asset Accounting Accounts Payable Finance & Purchasing Overview 51 .

Materials Management (MM) Integration of Inventory Materials Management (MM) Financials (FI) Controlling (CO) Funds Management (FM) Grants Management (GM) Purchasing General Ledger Inventory Log. Invoice Verification Asset Accounting Accounts Payable Finance & Purchasing Overview 52 .

services.   Supports Supportsrequests requestsfor for quotes quotesfrom fromvendors vendorsfor for goods goods   Processes Processesreceipt receiptof ofgoods goods Materials Management (MM) Purchasing Inventory  Contains ► Requisitions ► RFQ ► Purchase orders ► Vendor Performance ► Contracts ► Vendor Finance & Purchasing Overview 53 .Materials Management (MM) Purchasing   Use Useto toorder orderor orcontract contract for forgoods goodsor orservices.

change. display purchase requisitions Material Service Asset Grant  Create asset shell  Approve purchase requisitions  Post goods receipts  Post service entry sheets  View material mater. display purchase orders and RFQs  Display/report on quotation and purchase order price histories  Maintain bids. and contracts Finance & Purchasing Overview 54 . and service master records Purchasing Inventory Purchasing Department  Display/report on vendor.Departments Materials Management (MM) Purchasing Roles & Responsibilities Materials Management (MM)  Create. Info Records. source lists. vendor master. and service master records  Create. material. outline agreements. change.

Materials Management (MM) Inventory Materials Management (MM)   Use Usefor forsupplies suppliesinventory inventory Purchasing   Supports Supportsstoring storingand andissuing issuing Inventory goods goodsfrom fromwarehouses warehouses  Contains   MRP MRP(materials (materialsrequirement requirement ► Plants planning) planning) ► Delivery Addresses   Physical Physicalinventory inventoryprocessing processing Finance & Purchasing Overview 55 .

purchase orders. service master records.Materials Management (MM) Inventory/Audit Contracts Roles & Responsibilities Departments  Display/report on vendor master records. material master records. purchase orders. material documents. and contracts  Process goods movements Goods receipt Goods issue Reversals  Post service entry sheets Materials Management (MM) Purchasing Inventory Purchasing Department  Display/report on vendor master records. and contracts  Create/change contracts  Create/change purchase orders Finance & Purchasing Overview 56 . service master records. material master records. material documents. RFQs.

material documents. and contracts  Process goods movements Goods receipt Goods issue Reversals  Run various inventory management reports  Perform MRP (materials requirement planning) and post to funds management  Perform/enter physical inventory counts  Create. and display physical inventory documents  Create purchase requisitions for stock replenishment Materials Management (MM) Purchasing Inventory Auditor  Display/report on vendor master records. service master records. purchase orders. material master records. change. service master records. material master records. material documents. purchase orders. and contracts  Create/change contracts  Create/change purchase orders  Process goods movements  Post service entry sheets Finance & Purchasing Overview 57 .Materials Management (MM) Inventory/Audit Contracts Roles & Responsibilities Warehouse Stock Clerks  Display/report on vendor master records.

Finance & Purchasing Overview 58 . 3 Ask your peers or super user for assistance.Lesson 5: Getting Help 1 Review the on-line help in SAP 2 Review your training materials and notes.

if you still have questions or problems or If you have problems at any time with accessing SAP.com After utilizing the various methods of help on the previous page. etc. Contact the Tarrant County IT Help Desk at 817-884-3507 Finance & Purchasing Overview 59 .Tarrant County Help Problems with running tutorials?  Training Mailbox – titansaptraining@tarrantcounty. computer or network problems. printing.

The URL for direct link to the Training Materials website is: http://www.com/titan/lib/titan/training/index.tarrantcounty. just click on the Favorites item in the browser menu and highlight the name for the website. you do not have to be on the Tarrant County network.  To access this site in the future. Finance & Purchasing Overview 60  .asp Set up this website as a favorite in your web browser for quick future access  Enter the URL above in the address field in your browser  When you reach the website. go to Favorites>Add to Favorites in the Browser menu  A pop-up window will be displayed with a default name for the site. You will go directly to the website. Click OK.Lesson 6: Accessing Training Materials   All TITAN training materials for Finance & Purchasing are stored on the Tarrant County website This website is accessed through your Internet Explorer from any computer that has internet access.

Quick Reference Cards.Accessing Training Materials    (cont’d) Review the instruction page to understand how to use the website Click on the Courseware link at the top of the Instruction page A Listing of Courses will be displayed  Click on the Course Title to see a general description of the content of the course or Click on one of the buttons beside the Course Title to go directly to either the Overview. or Tutorials These training materials will be available for your use and reference at any time Finance & Purchasing Overview 61   .

Detailed instructions are provided on the website when you click on the Tutorials button Happy Tutoring!! Finance & Purchasing Overview 62 .Running Tutorials    An additional learning tool is being provided with the Phase II SAP implementation -. or ► As an interactive. hands-on practice session that stops at each step and directs you to make entries in fields or take actions per instructions provided by the wizard and in the bubbles    Tutorials are provided with each course in the Finance and Purchasing training A list of the tutorials is provided at the end of each course. Go to the Training Materials website to access and run these tutorials.Tutorials Tutorials are simulations of the SAP system that take you through a transaction step-by-step in a mock SAP environment These can be viewed in two ways: ► As a movie that takes you through the transaction in a demonstration.

Use the Quick Reference Cards to walk you through the transactions.Training Sandbox  An SAP environment (Training Sandbox) where you can practice your skills in a real instance of SAP will be available after midJune  The sandbox can be accessed through the standard logon process discussed in Lesson 2 of the SAP Basic Navigation course  The only differences are:  Highlight the Training environment on the logon pad  Click logon  Enter 520 in the Client field  Enter the same User Id and Password you are assigned for Production Feel free to practice any of the tasks in the basic navigation course and any of the transactions included in other courses you take. Finance & Purchasing Overview 63 .

 Congratulations!!     COURSE SUMMARY  You have completed the Finance & Purchasing Overview and have reviewed the following topics: SAP system and integration Tarrant County implementation Terminology High level functionality:         General Ledger Accounts Receivable Accounts Payable Asset Accounting Controlling Grants Management Funds Management Materials Management  You are now ready to complete your role-specific training courses Finance & Purchasing Overview  Getting Help  Accessing training materials 64 .