UNIT5 : SAP R/3 Accounting: Financial and Management
Accounting
Lesson : Accounting Foundation
SAP R/3 Accounting System
The
accounting system with its various sub-units is a credit part of SAP solution.
The integration of the various aspects of accounting with each other and with
logistics and human resources applications becomes a management tool for all
company departments.
Beside providing accounting
data, the accounting system must concentrate primarily on processing
operational data for strategic company decisions. Documentation and
administration functions are generally performed automatically and in the
background.
For
international companies, SAP R/3 offers flexible software that can be used in
different countries. The system meets the needs of the major industrial nations
of the world with its multilingual approach, flexible currenc handling, and
country-specific functions for taxes, reporting, and payment transaction. SAP
R/3 provides all the necessary functions for developing a uniform accounting
system that can be consolidated across international borders.
Financial Accounting (FI) includes:
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G/L Accounting
·
Accounts Payable and Accounts Receivable
·
Asset Accounting
·
Corporate Finance Management (Planning,
analysis, decision support, financial transaction, payment, and risk
capabilities in various group enviorment)
·
Treasury Management (cash, stocks, bonds, and
derivatives) Enterprise Controlling Includes EIS (Executive Information
System), Profit Center Accounting, Legal Consolidation, Planning
·
EIS (Executive Information System)
·
Profit Center Acccounting
·
Legal consolidation
·
planning
·
Profitability Analysis
·
Product Cost Planning
·
Cost Objects Controlling
Overhead Cost Controlling includes:
·
Cost cnters
·
Internal orders
·
Activity-Based Costing
Allows company-wide planning of capital
investment programs and control of individual capital investment measures.
Allows efficient planning, cost-sensitive
control, and target oriented implementation of project with comprehensive
integration with controlling and Logistic.
These components provide
the basis for performing operational transaction and meet the requirements of
decision-based reporting for each application area.ORGANITATIONAL ELEMENTS
An effective accounting system includes more than ledgers, accounts, and documents. Organizational structure is also essential component. Structure established the parameters for corporate, tax, and management requirements.
Assingning all relevant business transactions to these organizational units by using axplicit or implicit account assignment updates the ledgers. The SAP R/3 FI-SL system also conveys actual values for the integrated controling objects contained in SAP R/3’s controling (CO) application.
The depiction of current corporate structure and future strategies has a bearing on how you use the organizational terms in SAP’s accounting system:
Ø
Corporate group
Ø
Company
Ø
Company code
Ø
Business area
Ø
Functional area
Ø
Profit center
Company :
This represent a legally autonomous
entity, composed of one or more company codes
Company Code:
This represent the tax law
(national) view the company. Fiscal calendar, local currency, and
tax reporting requirements
determine the design complete and reconciled tracking system.
Business Area:
This helps depict internal structures for external
segment reporting
Functional Area:
This area displays the profit and
loss statement according to cost-of-sales accounting.
Profit Center (Management
Accounting):
This controlling term is used to
depict internal areas of responsibility. The objectof company’s operating.
Consequently, areas of responsibility are more detailed than can be captured by
just using the business areas.
Chart of Account:
The F1 components offers a flexible
method for setting up a general ledger to meet various goals concering legal
eiisues, value flow, and classification of posting. The chart of
accounts is a classification system defined by accounting to record values or
value flows.
The chart of accounts can be represented in the
SAP system as one of three function:
As an operational chart of accounts:The operational chart of accounts contains the accounts currently used in day-to-day transactions with the system. It allows uniform, company-wide classification of business transactions.
As a local chart of accounts:
The local chart of accounts contains the accounts that are necessary to fuulfill legal requirements. The posting can be represented based on country-spesific, predefined classification criteria.
As a group charts of accounts:
The group chart of accounts contains all accounts that apply throughout the corporate group. The posting data can be processed or represented based on the requirements of external group accounting.
Daily document postings are posted from the operational chart of accounts using account numbers. Alternately, you can also perform evaluatiions for a specific country.
Costumer Master-Accounts Receivable
A customers master record contains all the information that a company needs for its business relations with a customer.
Three-part structure of master records makes it possible to flexibly depict the various organizational structures of an operation
1. General Data
2. Data for Company Codes
3. Data for Sales
Vendor Master-Accounts Payable
When postings are made, this number is incorporated into the document and its available for consolidation purposes:
General data
Includes address and
telecommunications data, general vendor information as well as bank details.
Company code data
Includes company-specific policies
concerning payment transactions, dunning procedures, and correspondeence
information.
Purchasing organization data
Includes inquiry, order, and
invoice verivication information.
Increasing automation makes planning and monitoring of fixed assets for external and internal accounting purposes ever more important.
Asset classes support the structuring and classification of fixed assets. Central default values, such as classification criteria, depreciations keys and useful life, data on the valuation of the net assets, insurance-related data, and much more are dtored with the assets class
Account Balances
There account balance offers an overview of transaction figures for each period by debits and credits. Possible differentiating criteria include account number, company code, fiscal year, business area, and currency.
Lesson: Financial Accounting
General Ledger
General Ledger posting may be the result of :
>
Operational transaction : if the SAP Materials
Management (MM) system is active and integrated
>
Posting transaction : in subsidiary ledgers
(asset acquisition in fixed assets) if the SAP Asset Accounting (FI-AA) system
is active and integrated.
>
Transaction originally assigned to the ledger,
if the General Legder (FI-GL) system is active.
At the same time, interrelationship with
Controlling and its components can be taken inti account. The extent and type
of the integrated system used determine how entris, account assignments and
updates are processed for business transaction.Subsidiary ledgers are completely and comperhensive integrated with G/L accounting on the following levels :
> Maste Data
>
Transaction Data
>
Reporting
Intergration of master data comprises the shared
chart of accounys and all acount assigment elements of the subsidiary ledgers
including cost accounting. This integration is also teh crusial advantage of
complete data integration at individual transaction level.
The FI Accounts Receivable compnent is responsible for monitoring and controlling customers accounts with in SAP R/3’s Finacial Accounting component. Accounts analyses, alarm reports, due date lists and a flexible dunning system all make it easier to keep track of open times.
Accounts Payable
SAP R/3’s FI Accounts Payable component manages accounting data for all vendors. Payment are made so that maximum advanatage is taken of available discount, using either standard written forms or electronic means. The system supports all international methods of payment. Balance aidit trails, accounts balances and journals document transaction in Account payable.
Travel Management and Expense Reimbursement
SAP R/3 Travel Management gives you a flexible, high-performance tool wih you can:
o
Plan trips
o
Book Travels services
o
Approve trips via SAP Business Workflow
o
Record trip data
o
Detemine and valuate reimbursement amounts
according to statutory and enterprise-specific provisions
o
Account for travel expneses according to
specified statuory provision
Payments of expenses can be accomplished via Finalcial Accounting, Payroll Accounting, or data medium exchange (DME) with credit instituions. SAP R/3 Travels Managment the triggres teh transfer of trvel expenses accounting result.
Lesson: Management Accounting
FI and CO : Standards Versus Flexbility
The mySAP Financials applicatons compnets Conroling (CO) contains all accounting functions necessary for effective conrolling. If an organizations divides accounting into enternal and external viewpoints, CO represent the internal accounting perspective because it provides information for managers –those who are inside an organization and are charged with controlling its operations. CO includes cot and revenue accounting.
Components of Management Accounting
The mySAP Financials key functional area : Management Accounting is comprised of application components in the Controlling (CO) and Enterprise Controlling (EC) areas. This involves recording oth the cumsumption of productio factors of production factors ang the services provied by an organization.
The components of CO and CE include the following key capabilities: key controlling capabilities:
*
Cost center accounting
*
Internal orders
*
Activity-based costing
*
Product cost controling
*
Profitability analysis
Key Enterprise Controling Capabilities:
*
Profit center accounting
*
consolidation
Master Data
The Controlling Area forms a framework within which CO processes cot and revenus elements transactions an all CO documents. The assigment of multiple company codes to a controlling area can be uesed to support centralized cost accounting for an entire organization.
Cost and revenue element accounting records and groups the cost incurred during a particular settlement.
Overhead Cost Controlling
Overhead in planning, monitoring, control and coordination in such areas as research and development, procurement, work scheduling and maintenace is gaining more impotance. The mySAP Financials Overhead Cost Controlling (CO-OM) component helps you plan, allocated, control, and monitor overheadin your organization. You can assign overhead to tehe cost centers where it accurred or to the activities that generated the overhead.
Cost Center Accounting
The cost center accounting determines where cost appear in the organization. You thereby assign cost to their organizational subareas.
Internal Order
Internal order are categorized as eitheir:
*
standard orders used only for monitoring objects
in cost accounting
*
productive orders that are value-added, that is,
orders that can be capitalized. These orders can be used to assist in
decision-making, such as when you need to decide between in-house production
and external procurement.
Is a relatively new cost accounting method used by some companies to monitor cost by business process rather than cost centers. The goal of ABC is to determine the cost of performing a business process. This process cost can then be analyzed at the product or customer level by determining how much of the process was used or consumen by an ABC cost object, such as a product.
Product Cost Controling
Is part of my SAP Financial’s Controling application componentand is a tool for managing cost related to the manufacturing process and the rendering of services. Product cost controling uses information form the overhead cost controling components to calculate such cost as labor, machine, or factory overhed, and provides information to profitability analysis so that tool can calculate contribution margins.
Profitability Management
mySAP Financials provides you with two tools for
evaluating profitability in such a decentralized environment:
Profitability
Analysis (CO-PA)
Provides you with an external view of your
profitability. Profitability analysis allows you to monitor and analyze the
contribution of your market segments and units, structured according to
products, customers, orders, and summarizations of these and other user-defined
characteristics.
Profit
Center Accounting (EC-PCA)
Provides you with an internal view of your
profitability. EC-PCA makes it possible to evaluate the operating profit of
different areas or units within your enterprise.
Posting in Controlling
This CO document with its own unique number contains
the following details:
·
controlling object posted to
·
the cost element used
·
the amount
·
the date
Integration
All important transactions in the controling
application appear in separate controlling documents (or CO documents). In the
integrated SAP R/3 sustem, ou can transfer data to cost center accounting from
the following application components:
·
financial
accounting (FI)
·
Asset
accounting (FI-AA)
·
Materials
Management (MM)
·
Material
Consumption
·
Production
planning (PP)
·
Personnel
administration and payroll (PA)
Sales and distribution (SD) is a primary source of
revenue postings to CO/EC via billing documents. As SD sales order can also be
used in conjunction with a make-to-order production scenario in CO to track
both cost and revenues, and to evaluate the profitability of fulfilling the
order.
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