You are on page 1of 28


About SAP
Systems-Applications-Products in data
ERP package designed to integrate all areas
of a business.
Provides end to end solutions for:
*Human resource
Business processes executed on one SAP
system can be shared with everyone.
SAP Functional Modules
FICO- Finance & Controlling
PP- Production Planning
MM- Material Management
SD- Sales and Distribution
HR- Human Resource
PLM- Product Life Cycle Management
WM- Warehouse Management
CRM- Customer Relationship Management
SRM- Supplier Relationship Management
Stores the financial transactions data.
SAP FI collects, records and processes financial
transactions or information on real time basis.
Provides necessary inputs for statutory/external
Financial transactions are recorded in the P & L
a/c and B/S .
Sub-components of this module is aligned with
the B/S and Income statement.
Sub-Components of FI
General Ledger An account used to store balance sheet
(GL) and income statement transactions.

Accounts Anything which needs to be paid to a

Payable (AP) party.

Accounts Anything which needs to be received

Receivable (AR) from a party.

Asset Specifically for the Fixed Assets.

Accounting (AA)
Banking Ledger
Anything which relates to bank.
Supports the process of:
*Decision making for internal reporting
1. Cost controlling
2. Increasing the profitability
Sub-Components of CO
Master & Transaction Data
Master Data:
Common data that is stored and used across
IT systems. For example:
Apple:- Address, Contact, Payment Terms,
Bank Data.
Transaction Data:
Uses the master data in its transactions. For
Purchasing an I phone from Apple.
Making a bill payment to Apple.
Organizational units
Highest level in SAP system hierarchy.
Independent unit containing master
Data that is required for all organizational
units is entered at the client level.
Client key is required to log on to the
Company Code (CC)
Legal accounting entity.
A company with independent accounts within
a corporate group.
Identified by a 4 character code in SAP with:
Used for external purposes.
Business Area
Separate area of operation within an
Can be used across company codes.
Create their own set of financial
statements for internal purposes.
True or false?
You can assign a business area to a
company code directly.
Answer: False
Assigned at Client level. It makes possible to
evaluate transaction figures for each
business area beyond the boundaries of the
company code too.
While defining a Company Code..

4 digit alphanumeric CC Key

Company name
Address COA

Global Parameters
Fiscal Year
Account type
A: Asset account type
D: Customer account.
K: Vendor account.
M: Material account.
S: General Ledger.
CO: Controlling
Chart of Accounts (COA)
List of general ledger accounts used by
one or several company codes.
Defined at Client level.
For every G/L account, the COA contains:
*Account Number
*Account Name
*Information about how an a/c functions
When working on multiple CC, same COA
can be used for all CCs.
Types of COA
Operating COA Contains list of G/L
accounts that are used for posting during
daily activities.
Group COA Contains list of G/L accounts
that are used by the entire corporate group.
Country specific COA Contains list of G/L
accounts that are needed to meet the
countrys legal requirements.
It is a 3 step process used to assign
particular properties to one or more objects.
*Define Variant.
*Determine the values for the variant.
*Assign the variant to the objects.
Maintaining the properties which are
common among several objects.
Example:- Fiscal Year Variant, Posting
Period Variant
Fiscal Year
To assign business transactions to different
periods, fiscal year with posting periods have
to be defined.
The companys fiscal year is their calendar
year for financial reporting.
Example: *Australia- (Jul-June)
*USA- (Jan-Dec)
*Germany- (Oct-Sept)
Fiscal year as a variant can be defined and
assigned to company codes.
There are:
*12 posting periods (months)
*4 special periods
1 special period is defined for each quarter
for adjustment postings.
Maximum 16 periods can be defined in SAP.
The system derives the posting period from
the posting date.
Fiscal Year

Year Independent Year Dependent (Specific)

Posting period dates are

Standard Calendar Year
different (e.g. Jan 29

Non-Calendar Year
Shortened Fiscal Year
For what purposes are year-specific fiscal
year variants usually used?
The year-specific fiscal year variants are used:
If the start and end date of the posting periods
differ from year to year
If one fiscal year has fewer posting periods
than the others (shortened fiscal year)
A company has to use different currencies
while dealing with different customers and
Currency keys are used to define currencies in
Exchange rate types:
Historical rate 1 EUR= 1.30 USD Fixed
Bank Buying rate 1 EUR= 1.10 USD
Bank Selling rate 1 EUR= 1.20 USD
Average rate 1 EUR= 1.15 USD
Tools to maintain the currency conversions

1. Base Currency:
The currency which a company code uses. It is
assigned to an exchange rate type.

Example: Base currency is set as USD. Then you

update the exchange rate for USD to AUD as 1.30.
Similarly from USD to CAD as 1.29. System will
automatically calculate AUD to CAD and vice-versa.
2. Inversion:
Inversion is the process of calculating the
opposite rate from a defined exchange rate.
*Direct Quote: No. of units of foreign
currency required to buy one unit of home
Ex.-: 1 INR = 1/67 INR= 0.014 USD
*Indirect Quote: No. of units of home
currency required to buy one unit of foreign
Ex.-: 1 USD= 67 INR
3. Exchange rate spread:
A spread can be assigned and the system will
calculate the buying/selling rate from the base
rate and spread amount.