Fico bbp final

FINANCIAL ACCOUNTING
&
CONTROLLING
BUSINESS BLUEPRINT

Submitted to

Druk Green Power Corporation Limited
&
Dagachhu Hydropower Corporation Limited

By

Wipro Ltd.
26/10/2010
Version 01.00

eGreen – FICO Business Blueprint

DOCUMENT APPROVALS

Prepared By

(Mr. Amit Mundada)
Wipro Lead Consultant Dated Signature

Prepared By

(Mr. Shinas Hamza) Dated Signature
Wipro Consultant

Reviewed By

(Mr. T.B. Monger) Core Team Lead Dated Signature

(Ms.Sonam Choeden- CTM) Dated Signature

(Mr. Samgay - CTM) Dated Signature

(Mr. Kunzang Dorji - CTM) Dated Signature

(Mr. Kelzang Thukten - CTM) Dated Signature

Wipro Ltd. Page 2 of 146
© Wipro Limited, 2010, All Rights Reserved.
This document is proprietary to Wipro Infotech, a division of Wipro Limited.
You may not modify, copy, reproduce, republish, upload, post, transmit or distribute any material from this document,
in any form or by any means, nor may you modify or create derivative works based on the text of any file, or any part
thereof for public, private or commercial use, without prior written permission from Wipro Limited.


Reviewed by

(Rajneesh Sharma)
Wipro Project Lead Dated Signature

Reviewed by

(Balaji Srinivasamurthy)
Wipro Project Manager Dated Signature

Reviewed by

(Jambay Tshering)
Project Manager
eGreen Project Dated Signature

Approved by

(Ugyen Namgyal)
Project Director
eGreen Project
& BPO, FICO Dated Signature



DOCUMENT INFORMATION

Project Name Document Name Document Location
eGreen FICO Business Blueprint Document Server

DOCUMENT HISTORY

Version Document Date Authors Reviewed Change
Name By Control
0.1 Business 03.09.2010 Shinas
Blueprint Hamza/ Amit
Mundada

1.00 Business 26.10.2010 Shinas
Blueprint Hamza/ Amit
Mundada



TABLE OF CONTENTS
1 EXECUTIVE SUMMARY ........................................................................................ 9
1.1 Background. .................................................................................................... 9
1.2 Business Blueprint Overview ...................................................................... 10
1.3 Financial Accounting .................................................................................... 12
1.4 Module Integration ........................................................................................ 14
2 ORGANISATION STRUCTURE ........................................................................... 16
2.1 Client .............................................................................................................. 19
2.2 Company........................................................................................................ 19
2.3 Company Code .............................................................................................. 19
2.4 Chart of Accounts (COA) .............................................................................. 20
2.5 Group Chart of Accounts (GCOA) ............................................................... 20
2.6 Chart of Depreciation ................................................................................... 21
2.7 Profit Center ........................................................ Error! Bookmark not defined.
2.8 Controlling Area ............................................................................................ 22
2.9 Cost Centers .................................................................................................. 22
3 MASTER DATA.................................................................................................... 23
3.1 General Ledger Master ................................................................................. 23
3.2 Asset Master .................................................................................................. 26
3.3 Vendor Master ............................................................................................... 27
3.4 Customer Master ........................................................................................... 27
3.5 Bank Master ................................................................................................... 28
3.6 Cost Elements ............................................................................................... 29
4 BUSINESS PROCESSES .................................................................................... 29
4.1 Configuration Settings ................................................................................. 29
4.1.1 Currency ............................................................................... 29
4.1.2 Fiscal Year and Fiscal Year Variant .............................................. 30
4.1.3 Document Type ...................................................................... 31
4.1.4 Posting Key ........................................................................... 33
4.1.5 Extended Withholding Tax .......................................................... 34
4.2 General Ledger Postings.............................................................................. 35
4.2.1 Master Data ........................................................................... 37
4.2.2 Solution in SAP ....................................................................... 40
4.2.3 FSBP Link ............................................................................. 51
4.2.4 Integration Requirement ............................................................ 53
4.2.5 Description of Improvements ....................................................... 54
4.2.6 Process Control ...................................................................... 55
4.2.7 Description of Functional Deficits / Gaps ......................................... 56



4.3 Account Payables ......................................................................................... 56
4.3.1 Master Data ........................................................................... 57
4.3.2 Solution in SAP ....................................................................... 60
4.3.3 FSBP Link ............................................................................. 69
4.3.5 Process Control ...................................................................... 70
4.4 Account Receivables .................................................................................... 71
4.4.1 Master Data. .......................................................................... 72
4.4.2 Solution in SAP ....................................................................... 73
4.4.3 FSBP Link ............................................................................. 79
4.4.5 Process Control ...................................................................... 80
4.5 Asset Accounting ......................................................................................... 81
4.5.1 Master Data ........................................................................... 82
4.5.2 Solution in SAP ....................................................................... 82
4.5.3 FSBP Link ............................................................................. 93
4.6 Bank Accounting .......................................................................................... 94
4.6.1 Master data ........................................................................... 94
4.6.2 Solution in SAP ....................................................................... 95
4.6.3 FSBP Link ............................................................................. 98
4.7 Module Integration (MM-FI) ........................................................................ 100
4.7.1 Material purchase Accounting & SAP .......................................... 100
4.7.2 Inventory Valuation ................................................................ 101
4.7.3 Goods Receipt ...................................................................... 103
4.7.4 Material Retur n to Vendor ........................................................ 103
4.7.5 Vendor Invoice Processing ....................................................... 103
4.7.6 Accounting for Goods Movement ............................................... 103
4.7.7 Stock Transfer Between Plants .................................................. 104
4.7.8 Physical Verification. .............................................................. 105
4.7.9 Transfer of Service ................................................................ 105
4.7.10 Accounting for Consumption of Material ....................................... 105
4.7.11 FSBP Link ........................................................................... 106
4.7.12 Description of Functional Deficits / Gaps ....................................... 106



4.8 Employee Welfare Scheme (EWS) ............................................................. 107
4.8.1 Master Data ......................................................................... 107
4.8.2 Solution in SAP ..................................................................... 110
4.8.3 FSBP Link ........................................................................... 115
4.8.4 Reports ...................................... Error! Bookmark not defined.
4.9 Controlling. .................................................................................................. 115
4.9.1 Module Integration ................................................................. 118
4.9.2 Organizational Structure – Controlling. ......................................... 121
4.9.3 Business Process .................................................................. 127
5 STANDARD INFORMATION SYSTEM .............................................................. 143
6 ANNEXURES ..................................................................................................... 146
6.1 Annexure 1 – Key Data Structure .............................................................. 146
6.2 Annexure 2 – Business Process Master List ............................................ 146
6.3 Annexure 3 – FRICE Objects ..................................................................... 146



Abbreviations and Acronyms.
The following abbreviations and acronyms have been used in this document:
Abbreviation/Acronym Description
DGPC Druk Green Power Corporation Limited
AA Asset Ac counting
AP Accounts Payable
AR Accounts Receivable
AUC Asset under Construction
BBP Business Blueprint Process
CCA Cost Center Accounting
CO Controlling
COA Chart Of Account
CSBP Current State Business Process
CWIP Capital Work In Progress
DMS Document Management System
EWS Employee Welfare Scheme
FI Financial Acc ounting
FRICE Format, Reports, Interface, Configuration & Enhancement
FSBP Future State Business Process
G/L or GL. General Ledger
GR Goods Receipt
IM Investment Management
JEMR Joint Energy Meter Reading
IR Invoice Receipts
JV Journal Voucher
MAP Moving Average Price
MM Material Management
PCA Profit Center Accounting
PM Plant Maintenance
PO Purchase Order
PS Project Sys tem
SAP System, Applications and Products
SD Sales and Distribution
STO Stock Trans fer Order
T-Code Transaction Code
TDS Tax Deducted at Source
WBS Work Breakdown Structure



1 EXECUTIVE SUMMARY
1.1 Background
Druk Green Power Corporation Limited (DGPC) was incorporated under the Companies Act of the
Kingdom of Bhutan on 1st January, 2008 through a merger of the erstwhile Basochhu, Chhukha, and
Kurichhu Hydro Power Corporations. Further, Druk Green took over the Tala Hydropower Plant from
the Tala Hydroelectric Project Authority on 1st April, 2009.

In order to further proliferate its growth, Dagachhu Hydroelectric project, a joint venture was
conceived in the year 2006 and got incorporated in March 2008 under Companies Act of the Kingdom
of Bhutan as Dagachhu Hydropower Corporation Limited.
Today, Druk Green is one of the largest corporate bodies in Bhutan contributing to 20% of the GDP
and 45% of the direct revenues to the Royal Government of Bhutan.

Amongs t its many mandates, the two major missions of Druk Green are “to effectively and efficiently
manage hydropower plants”, which was the traditional role of the ers twhile Hydro Power Corporations,
and now more importantly “to take a lead role in accelerating hydropower development in the
Kingdom by developing new hydropower projects independently, through joint ventures, or through
any other arrangement with domestic and international partners ”. Considering these mandates and
especially with the plans of the Royal Government of Bhutan to develop an additional generation
capacity of 10,000 MW by 2020, Druk Green is set to grow in leaps and bounds within this decade
itself.

Given its present size and the expected huge growth and expansion in the size and scale of its
operations over the next decade, the already diverse and c omplex business processes and
operations will become even more demanding and arduous. Implementation of SAP ERP Solutions
is one of the initiatives that DGPC has taken up to address these and run the power plants more
efficiently. The SAP implementation project has been initiated with effect from 15th May 2010 with the
following vision and mission and objectives.

Vision:

To transform and leverage business processes of Druk Green and Druk Holdings and Investments
through the use of SAP s best practice.

Mission:

To implement SAP ECC 6.0 project in time with minimum customization through co-operation of all;
by giving prominence to larger objectives and to avail benefits of integration and industry best
practice.

Objectives:

The primary objectives of the Project are as follows:

Integrate all business process across the organization, under single SAP platform with
minimum interfaces.

Elimination of duplication of activities across business processes by capturing data at sourc e
point.

Develop central and sec ured MIS for better analysis of operations and decision-making
process.



Improved responsiveness to changing business scenarios.

Develop history of various types of data for statistical analysis and decision-making systems

Enhance efficiency in Finance and Controlling s ystem, based on regularly updated data.

Reduction in inventory carrying cost through better inventory planning and management.

Achieve better Investment management by proper reporting sys tem.

Adopt best business practices, tak ing advantage of SAP best practices.

Common understanding and methodology of work, for majority of the processes, within
various departments, plants, units.

Form basic infrastructure of communication and networking for adoption of advanced
business software - SAP.

Improve on timely availability of MIS/ analytical reports

Remove present need for reconciliations of various databases.

Facilitate in compilation and generation of statutory reports as per requirement.

1.2 Business Blueprint Overview

A Business Blueprint documents the business process requirements of a company. The Business
Blueprint gives a general idea of how business processes could be mapped in one or more SAP
Systems. The Business Blueprint documents in detail the scope of business scenarios, business
processes, process steps, and the requirements of SAP solution implementation.

The purpose of this document is to present a comprehens ive Business Blueprint document for
Financials and Controlling Module. This document also summarizes the findings of the Wipro
consulting team and DGPC team, with respect to SAP processes to be implemented at DGPC. On
completion of the blueprint, the consultants will determine the SAP functionality required to run the
DGPC business. The Blueprint presents a summarized perspective of functional business processes
that will be implemented.

Following activities were carried out during Project Preparation phase of the project;

CSBP-Current State Business Process Mapping

FSBP-Future State Business Process Mapping

GAP Analysis

CSBP & FSBP Workshops

The following activities have been covered in the business blueprint phase:

1. Organization structure finalization. : FSBP process definitions and identification with reference
to CSBP processes (attached is the matrix of CSBP vis-à-vis FSBP Mapping with the final
FSBP Codes and names of business proc esses)



S. No. Attachment Description

1 CSBP-FSBP Link
2_BP_FSBP_F ICO_0.
3.xls

2. FSBP discussion along with changes in existing Organization structure, standard reports
available in SAP.

3. Incorporation of comments from CTMS, BPOs, and DGPC management, wherever justified
and applicable.

4. Depiction of FSBP in the form of Flow Chart.

5. Gap discussion with CTMs and formulation of Gap removal / mitigation plans.

6. FRICE requirements discussion, prioritization and finalization.

7. Discussion of configuration blueprint document in the form of KEY DATA STRUCTURE
attached as Configuration Values in this Busines s Blueprint Document.

The information gathered and documented in the Blueprint are sufficient for the team to go forward
into the Realization phase. However, it is critical that both the Consultants and DGPC team agree on
the scope of the project as presented in this doc ument. Acceptance - by both teams - is required to
move the project into the next phase.

Objective of this document :

1. To identify and document the configuration values applicable FSBP-wise post discussion with
CTMs.
2. Have one comprehensive document with referenc e to capturing of Gaps and FRICE
requirements.
3. Brief about the module s standard functionalities, its integration with other modules, master
data requirements and relevant organization structure.



1.3 Financial Accounting

The Financial Accounting (FI) module component addresses the financial requirements of an
organization. It is used for the purpose of the external reporting as well as internal reporting. External
reporting is for external parties like Government Authorities, Creditors, Banks, and Financial
Institutions etc. Internal reporting is used for the purpose of reporting to the management of the
company. It provides the following features:

Management and representation of all accounting data: All business transactions are

recorded with an unbroken audit trail from the financial statements to the individual

documents.

Open and integrated data flow: Data is available in real time within Financial Accounting.

Postings made in the sub ledgers always generate a corresponding posting in the General

Ledger.

All accounting relevant transactions made in Logistics are posted real-time to Financial

Accounting by means of automatic account determination. This data can also be passed on to

Controlling (CO). This ensures that logistical goods movements (such as goods receipts and

goods issues) are exactly reflected in the value-based updates in accounting.

Audit Trail: Each document created has its details stored in system. This provides the audit

trail.

Decision m aking: The systems give the real time information at all the point of time. This
plays a crucial role in the management reporting & strategic decision making.

Financial Accounting:

The Financial Accounting (FI) application component fulfils all the external reporting requirements that
must be met by the organization whether national or international. The SAP FI application provides
the following features;

General Ledger (FI-GL)

Accounts Payable (FI-AP)

Accounts Receivable (FI-AR)

Bank Accounting (FI-BA)

Asset Accounting (FI-AA)



General Ledger:

The central task of G/L accounting is to provide a comprehensive picture for ex ternal reporting and
accounting. Recording is done for all business transactions (primary postings as well as settlements
from internal accounting) in a software system that is fully integrated with all the other operational
areas of DGPC ensuring that the accounting data is always complete and accurate. Accounts
Payable, Accounts Receivable, Asset etc., will be c ategorized as subsidiary ledgers.

Accounts Payable:

The Accounts Payable application component records and manages accounting data for all vendors.
It is also an integral part of the purchasing system: Deliveries and invoices are managed according to
vendors . The system automatically triggers postings in response to the operative transactions in MM.

Accounts Receivable:

The Accounts Rec eivable applic ation component records and manages accounting data of all
customers with respect to the company. It is also an integral part of sales management. All postings in
Accounts Receivable are also recorded directly in the General Ledger. Different G/L accounts are
updated depending on the transactions involved (For Eg: Receiv ables, Down Payments).



Bank Accounting:

This component is used to handle accounting transactions that the Company processes with its
banks. It includes the management of bank master data, cash balance management (Cheque and
DD), and the creation and processing of incoming and outgoing payments.

Asset Accounting:

The Asset Accounting component is used for managing and supervising fixed assets in the system. In
Financial Accounting, Asset accounting serves as a subsidiary ledger to the FI General Ledger,
providing detailed information on transactions involving fixed assets with respect to the company.

Withholding Tax:

SAP FI uses the standard functions for calculating and collecting withholding taxes. However,
withholding tax come with additional functions for tax remittance, journal vouchers, creating
withholding tax certificates, and preparing returns whic h will be useful to DGPC .

1.4 Module Integration

Integration of Financial Accounting with other Components

Every posting that is made in the sub ledgers generates a corresponding posting to the assigned G/L
accounts. The basic concept of SAP integration is ; document once entered should not be entered
twice anywhere in all the applications. As FI module is the important module and involves monetary
issues whether external or internal, all the documents in other modules pertaining to accounting will
be automatically updated in FI module.

The following are some of the integrations: -

Materials Management (MM):

Material Management is used to manage the inventory related transactions. All accounting-relevant
transactions with respect to the following will be made automatically in FI.

Goods receipt against the purchase order.

Goods issue against production order / process order.

Finished goods receipt.

Valuation of material as and when required

Invoice verification( The MM will park the invoice and Finance will post the invoice)

Sales & Distribution

All the sales bills shall be routed through S&D module to FI module in following sequence.

Sales order

Billing

Incoming payment



Human Capital Management (HCM):

All accounting-relevant transactions with respect to the following will be posted automatically in FI.

Payroll, Allowances, Deductions, Employee contribution to welfare, etc.

Project System

All accounting-relevant transactions with respect to the following will be made aut omatically in FI.

WBS Elements

Cost settlement with respect to Project/WBS Element.

Plant Maintenance
All accounting-relevant transactions with respect to the following will be made automatically in FI.

Maintenance order

Cost settlement with respect to maintenance order (Settlement is being carried out by

Finance).

Integration within Financial Accounting (with respect to FI and CO)

Every posting that is made in the sub ledgers (Accounts Payable, Accounts Receivable & Assets)
generates a corresponding posting to the assigned G/L accounts. This ensures that the sub ledgers
are always reconciled with the general ledger. Controlling (CO) and Financial Accounting (FI) are
independent components in the SAP system. The data flow between the two components tak es place
on a regular basis. Therefore, all the data relevant to costing flows automatically to Controlling from
Financial Accounting.



2 ORGANISATION STRUCTURE

Enterprise Structure for DGPC



Client
(DHI)

Operating
Concern
(OP01)

DGPC Cost Controlling Area Controlling Area
Center Hierarchy (DP01) (DS01)

Chart Of
Chart Of Account Company Code Company Code Chart Of Account
Depreciation
(3000) (DG01) (DSWF) (3001)
(3000)

Purchase Plants Sales Dstr.
Organizations (Profit Centers) Organisation Channel Division Personnel Area

DGPC Domestic
BS01 BS01 Power BS01
2001 Sales

CH01 CH01 Export CH01
COE
Sales

KU01 KU01 KU01
Spot Spot
Sales Sales
TA01 TA01 TA01

Others
DG01 DG01 DG01

Profit Centers

CO (Controlling)

FI (Finance)

MM (Material Management)

SD (Sales & Distribution)

HCM (Human Capital Management)



Enterprise Structure for DHPC

Client
(DHI)

Operating
Concern
(OP01)

DHPC Cost Controlling Area
Center Hierarchy (DP01)

Chart Of
Chart Of Account Company Code
Depreciation
(3000) (DH01)
(3000)

Purchase
Plants Sales Dstr.
Organizations
(Profit Centers) Organisation Channel Division Personnel Area
DH01

DHPC Domestic
DH01 Power DH01
2002 Sales

Export
COE
Storage Sales
Location

Spot Spot
CO (Controlling) Sales Sales

FI (Finance)
Others

MM (Material Management)

SD (Sales & Distribution)

HCM (Human Capital Management)



2.1 Client

Client is the highest level in the SAP hierarchy.

Specifications or data which will be valid for all organizational units in all SAP applications are

entered at the client level, eliminating the need to enter this information more than once (e.g.

exchange rates).

Each client is a self-contained unit which has separate master records and a complete set of

tables and data.

A client key is used automatically in all master records in background, which ensures that

they are stored per client.

Users must enter a client k ey and have a user master record in the client in order to log on to

the system.

The Enterprise Structure in SAP Finance module consists of the following entities under Client:

Company

Company Code

Chart of Accounts

Chart of Depreciation

There will be one Client (DHI1) for DHI and DGPC.

2.2 Company

A Company represents a group of entities (one or more Company codes) in SAP. This entity is used
for consolidation of accounts of multiple entities (Company Codes). All company codes within a
company can use the same operational Chart of Accounts and the same Fiscal Year breakdown.
However, the company code currencies can be different.

2.3 Company Code

A Company Code represents an independent legal accounting entity in SAP. Balance Sheets and
Profit/Loss statements required will be created at the Company Code level. In other words, a
company code is an organizational unit for which a complete self-contained set of accounts can be
drawn up for external reporting purpose. The process of external reporting involves recording all
relevant transactions and generating all supporting documents required for financial statements.



Company Code Company Code Description
DG01 Druk Green Power Corporation Limited ( DGPC)

DH01 Dagachhu Hydropower Corporation Limited (DHPC)

DSWF DGPC Staff Welfare Fund(DSWF)

2.4 Chart of Accounts (COA)

A Chart of Accounts is a classification consisting of a group of General Ledger (G/L) accounts under a
Client.

It provides a framework for the recording of values, in order to ensure an orderly rendering of

accounting data.

The chart of accounts contains the definitions of all G/L accounts in an ordered form.

The definitions consist mainly of the account number, account name, and the type of G/L

account, that is, whether the account is a P&L type account or a BS type ac count.

One or more Chart of Accounts can be created for the same Client

A Chart of Accounts can be used by one or more Company Codes.

The following COA will be maintained at company code level.

Chart of Accounts Company Code Description
3000 DGPC Chart Of Accounts
3000 DHPC Chart Of Accounts

3001 DSWF Chart Of Accounts

2.5 Group Chart of Accounts (GCOA)
The group Chart of Accounts contains the G/L accounts that are used by the entire corporate group.
This allows the company to provide reports for the entire corporate group.
There would be one group COA at DHI (Client Level) and all other COA would be mapped to group
COA for the purpose of consolidation.

One group Chart of Accounts can be assigned to different charts of accounts as shown below:



2.6 Chart of Depreciation

A Chart of Depreciation is a list of depreciation areas like book depreciation as per The Companies
Act of the Kingdom of Bhutan, 2000. Chart of Depreciation is created in order to manage various
statutory requirements for the depreciation and valuation of assets. These Charts of Depreciation are
usually country-spec ific and are defined independently of the other organizational units. A Chart of
Depreciation, for example, can be used for all the company codes in a given country. A single Chart
of Depreciation will be assigned to the company code DG01 and separate for DHI. The 2000 & 3000
Chart of Depreciation will consists of the following depreciation areas:

01- Book Depreciation as per Income Tax Act of the Kingdom of Bhutan, 2001.

10- Depreciation as per Company Policy.

15- Depreciation as per Bhutan Electricity Authority, Tariff Determination Regulation, 2007.

20- Depreciation as per IFRS.

2.7
Profit Centers represent separate areas of operation/locations within an organization and can be used
across company codes.

They are balancing entities which are able to create their own set of financial statements for internal
purposes. Movements in value entered in Financial Accounting are assigned to Profit Centers. This
entity is used for segmental reporting by drawing P&L statement and Balance Sheet for a segment
(typically a line of business or geographical location).



Following are the Profit Centers for DGPC,

Profit Center Description
BS01 Basochhu Hydropower Plant

CH01 Chhukha Hydropower Plant
KU01 Kurichhu Hydropower Plant

TA01 Tala Hydropower Plant

DG01 Corporate Office

2.8 Controlling Area

The controlling area is the business unit where cost accounting is carried out. Controlling Area
delimits the company s managerial accounting operations. Organization structure is replicated in the
controlling system. The company code and cont rolling area uses identical chart of accounts, currency
& business area. Cost centers, internal orders, profit centers are used to classify the controlling area.
All inter organizational allocations refers to objects within the same controlling area.

DGPC will have DP01 as its Controlling Area.
DSWF will have DS01 as its Controlling Area.

2.9 Cost Centers

Cost Center in SAP is an organizational unit within a company that is used to track where costs
occurred within the organization (i.e., as a cost collector).In other words, Cost Centers are
respons ibility areas for costs within the organization. Cost Centers are logical units or functional areas
or locations of a company.

Before cost center is created, a hierarchical s tructure (called Standard Hierarchy) is set up and
assigned to the controlling area. Once created, it cannot be deleted or changed in Controlling Area.

The Cost Center is the lowest node of the hierarchical structure.

A standard hierarchy (DGPC) is to be assigned to the controlling area DP01 and cost centers
are created considering the company’s overall operational structure.



3 MASTER DATA

3.1 General Ledger Master

The General Ledger master data contains data that control General Ledger postings.
General Ledger master contains;

GL Naming Conventions
GL Number Ranges
Types of Accounts
Description and
Control Data

3.1.1 General Ledger Naming Convention
In DGPC, the naming convention of GL Accounts is done in such a way that the user can identify
whether the GL A/c is Asset or Liability or Income etc . as shown below:

1. 1000000000 : Asset
2. 2000000000 : Liabilities
3. 3000000000 : Owners’ Equity
4. 4000000000 : Income
5. 5000000000 : Expenses
6. 6000000000 : Clearing Accounts
7. 9000000000 : Initial Uploads

Transactions will be processed in the FI module using G/L acc ounts grouped under Chart of
Accounts. Groups of accounts are as under;

S. No General Ledger Groups Number Range
1 Assets: From To
Cash 1010110010 1010119999
Bank of Bhutan 1010120010 1010129999

Bhutan National Bank 1010130010 1010139999
Central Bank Of India 1010140010 1010149999
Druk Punjab National Bank 1010150010 1010159999
Tashi Bank 1010160010 1010169999
Short Term Investment 1010210001 1010229999
Inventories 1010300001 1010309999
Sundry Debtors 1010410001 1010429999
Prepaid Expenses, Deposit & Accrued Interest 1010510001 1010549999
Advances 1010610001 1010629999
Long Term Investments 1020110001 1020129999
Equity Investments 1020200001 1020209999
Land 1030100001 1030109999
Civil Structures 1030200001 1030299999



Plant & Machinery 1030310001 1030329999
Tools & Safety Equipment 1030400001 1030499999
Other Assets 1030500001 1030599999
Intangible As sets 1030600001 1030699999
PFD- Civil Structure 1040100001 1040199999
PFD- Plant & Machinery 1040210001 1040229999
PFD- Tools & Safety Equipment 1040300001 1040399999
PFD- Other Assets 1040400001 1040499999
PFA-Intangible Assets 1040500001 1040599999
Capital Work in Progress 1050100001 1050199999
Losses and write off 1060100001 1060199999
2 Liabilities From To
Current Liability 2010100001 2010199999
Employee Related Liabilities 2010200001 2010299999
Provisions 2020110001 2020129999
Domestic Loan 2030100001 2030199999
Foreign Sovereign loan 2030200001 2030299999
Foreign-Commercial 2030300001 2030399999
Foreign-Multilateral 2030400001 2030499999

Interest Accrued But Not Due 2030500001 2030599999
3 Owners Equity From To
Share Capital 3010100001 3010199999
Reserves & Surplus 3010200001 3010299999
4 Income From To
Electricity Revenue 4010100001 4010199999
Income from Short Term Investment 4020110001 4020129999
Income from Long Term Investment 4020210001 4020229999
Other Income 4020300001 4020399999
5 Expenses From To
Purchase of Energy, Wheeling Charges 5010100001 5010199999
Running & Maintenance of Civil Structure 5010210001 5010219999
Running & Maintenance of Plant & Machinery 5010220001 5010229999
Operation & Maintenanc e Expenses 5020110001 5020119999
Depreciation-Civil Structures 5020210001 5020219999
Depreciation-Plant and Machinery 5020220001 5020239999
Depreciation-Tools & Safety Equipment 5030230001 5030239999
Depreciation-Other Assets 5020240001 5020249999
Amortization 5020250001 5020259999
Employee Remuneration & Benefits 5020310001 5020319999
Human Recourses Development Expenses 5020320001 5020329999
Staff Welfare 5020330001 5020339999



General Administrative Expenses 5020410001 5020419999
Int-Domestic loan 5020510001 5020519999
Int-Foreign-Sovereign Loan 5020520001 5020529999
Int-Foreign-Commercial Loan 5020530001 5020539999
Int-Foreign-Multilateral 5020540001 5020549999
Environment & Social Impact Management 5020600001 5020699999
Prior Period Expenses 5030100001 5030199999
6 Clearing Accounts From To
Clearing Accounts 6010100001 6010199999
7 Initial Uploads From To
Initial Accounts 9010100001 9010199999

Points to be considered with respect to G/L accounts are:
Master records for each G/L account will be created and maintained at each company c ode

level.

The master record contains information and controlling parameters which control the entry

and processing of business transactions in that G/L account.

G/L accounts will also be used for pos ting transactions from other modules of SAP.( MM /

HCM/ SD, Etc)

Segments in the General Ledger Master record:
Chart of Accounts Segment

Company Code segment

Chart of Accounts Segment

In this segment, specifications that apply to the entire G/L account master record are captured. These
include:

The G/L account number and G/L account name.

Whether the account is a balance sheet account or an income statement account .

Data that controls the creation of a master record in a company code, such as the account

group.

Company Code Segment

The information, which is specific to a particular company, is maintained in the Company Code
segment of the General Ledger Master record. This data controls how one enters and processes
business transaction data in the appropriate account as well as how the account is managed within a
Company Code.

The following are some of the specifications which will be made for each G/L account:



Currenc y - account currenc y (BTN)

Reconciliation Account for Account Type - to s pecify the control accounts for the sub ledgers .

Open Item Management - will be maintained for an account that requires open item

management. Eg. Bank sub-accounts, GR/IR Clearing account, etc., are maintained in Open

Item Management.

Line Item Display - will be retained for accounts for which line items are to be stored

separately. Eg. Bank main accounts, all expense accounts, all balance sheet accounts,

excepting accounts which are of the nature of reconciliation accounts.

3.2 Asset Master

The Asset Accounting module contains master records that control how bus iness trans actions are
recorded and posted to the account. The Asset master record also contains all the data required to
manage c ompany s Fixed Assets.

Following details are maintained in the Asset Master:

General Master Data

This part of the master record contains concrete information about the fixed asset.

The following field groups exist:

General information (description, quantity, etc.)

Posting information (for example capitalization date etc.)

Time-dependent assignments (for example cost center, custodian, etc)

Information on the origins of the asset

Insurance data

Depreciation areas

Data for Calculating Asset Values

Depreciation terms can be specified in the asset master record for each depreciation area in the Chart
of Depreciation. In order to make these specifications, the master record contains an overview of the
depreciation areas. In addition, there is a detailed display available for each depreciation area. If there
are depreciation areas that are not needed for a specific asset, it is possible to deactivate these
depreciation areas at the asset level.

Fixed assets can be structured or classified in the Asset Accounting component using asset classes.
The items in the balance sheet are generally used to define these asset classes. Asset classes are
defined for all clients and contain key control parameters, such as number assignment, account
determination and screen layout.

Each asset class is maintained with different depreciation areas as required for DGPC. Once the
asset classes are defined, different asset master records will be c reated under the asset classes.
Each c lass will be assigned a different number range to give different numbers to assets. Asset
classes and number ranges are in attached sheet;



A sset Class.xls

3.3 Vendor Master

The AP component contains Vendor master records that control how business transactions are
recorded and posted to the account. Creation and maintenance of Vendor Mas ter for material
suppliers and other type of vendor is documented in MM module. Master data for service vendors will
be created on similar lines. Specifications as made in master records are used:

As default values when the items are posted to account. For example, the terms of payment

as specified in the master record are defaulted for document entry.

For processing business transactions for instance, bank details and the payment methods

(cheque or bank transfer, for example) are required for automatic payments.

For work ing with master records, certain users can be prevented from accessing an account

by setting up authorization groups.

In addition, line item display and open item management are defined automatically for each vendor
account.

In DGPC, it is proposed to create separate Vendor accounts for employees. Separate special GL
indic ators will be created to track EMD, Security Deposit from vendors.

Vendor Reconciliation Account

Vendor Reconciliation account is the G/L account for a group of vendors in FI-AP module. The
number of Vendor Reconciliation accounts will depend on the grouping of the vendor in FI.

When posting items to a subsidiary ledger, the system automatically posts the same data to the
general ledger. These reconciliation accounts ensure that the difference balance of G/L accounts and
subsidiary ledger is always equal. This means that balance sheets can be drawn up at any time
without having to trans fer totals from the sub ledgers to the general ledger. A reconciliation account
should be specified in every vendor master record.

TDS Codes

TDS tax codes will be assigned to the individual vendors, wherever applicable, for processing
invoices/payment and relevant tax deductions. Withholding tax codes will be maintained for different
rates of TDS. Multiple tax details can also be assigned to a Vendor. Relevant tax code will be
selected at the time of posting of the individual line item.

3.4 Customer Master

All business transactions are posted to and managed by means of accounts. Master record is to be
created for required accounts. The master record contains data that controls how business
transactions are entered in the account and how posting data is processed. In the master record, all
the data that is needed for conducting busines s with the customer can be maintained.



Customer master records are used by both the Financial Accounting Department (accounts receivable
processing) and the Sales & Distribution .

Customer Reconciliation Account

Customer Reconciliation account is the G/L account for a group of customers in FI-AR module. The
number of Customer Reconciliation accounts will depend on the grouping of the customers in FI.

Customer Payment Terms

Terms of payment are conditions established between business partners to settle the payment of
invoices. The conditions define the invoice payment due date and the cash discount offered for early
settlement of the invoice. Within SAP, some common payment terms have been predefined; new
payment terms may be created as required. Payment terms enable the system to calculate a cash
discount and invoice due date.

In order to perform this calculation, the system needs the following three data elements i.e., Baseline
date, cash discount period and cash discount percentage rate. When processing a document, the
payment term is entered in order for the system to calculate the required conditions of payment. The
payment term will be defaulted if it has been assigned on the master record, or can be entered or
changed by the user during transaction processing.

Payment terms 0001 (Immediate payment) will be defined in SAP and assigned to individual
customers.

Customer Vendor Cross Clearing Transactions

If a customer who is also a vendor, at the time of processing a clearing transaction, such as an
incoming/outgoing payment or account maintenance, the system also selects the open vendor items
automatically, provided that the vendor number is entered in the customer master record and the
Clearing with Vendor indicator has been set. The same rule applies for a vendor that is also a
customer during a clearing transaction.

3.5 Bank Master

The information about a bank that is required to conduct business transactions is mentioned in Bank
Master. This information is stored centrally in the SAP System.

The house bank and account ID are in attached sheet:

Bank Master.xlsx

For each house bank, several bank accounts can be maintained. The bank accounts will have a G/L
account attached to it and the currency of payment. For each bank , there are three different G/L
accounts;

XXXXXXXX0 – Main A/C
XXXXXXXX1 – Incoming A/C
XXXXXXXX2 – Outgoing A/C



3.6 Cost Elements

A cost element is an item in a chart of accounts, which is used within controlling area to record the
value-assigned consumption of production fac tors.

Cost elements are of two types: The Primary Cost Element and Secondary Cost Element.

Primary Cost or Revenue element must have a corresponding GL account in Financial Accounting.

Business will create the primary cost elements at the time of creating the G/L account with the
appropriate cost element category (i.e Primary Cost (1), Revenue (11), Sales Deduction (12) etc.)

Secondary c ost element exists only in CO and is used to allocate costs within CO. Secondary cost
elements are strictly for internal controlling postings like assessments and settlements.

4 BUSINESS PROCESSES

4.1 Configuration Settings

The purpose of this chapter is to document the global configuration settings in Financial Accounting
for the DGPC business. These settings control the transaction entry and the dependant controls in
SAP across all the modules.

Parameter Settings

Posting of transactions in SAP require the following settings:

Currenc y

Fiscal Year in which the transaction is to be posted

Fiscal year variant for determining the posting periods

Document Types

Document Numbering

Document Pos ting Keys (debit/credit)

Posting Period Variant to determine the open and c lose periods

Tax Deducted at Source (Extended Withholding Tax )

4.1.1 Currency

For each Company Code, a currency must be specified. Accounts are managed in the Company
Code currenc y. All other currencies are indicated as foreign currency. The system converts the
amounts posted in a foreign currency into the Company Code (Local) currency. The currency defined
in the Company Code is k nown as the local currency within SAP.



DGPC will use Bhutan Ngultrum i.e. BTN as Local Currency.
Controlling area currency will be BTN & Group currency will also be BTN.

4.1.2 Fiscal Year and Fiscal Year Variant

To separate business transactions into different periods, a fiscal year with posting periods has to be
defined.

The fiscal year is defined as a variant which is assigned to the Company Code. Standard

fiscal year variants are already defined in the s ystem and can be used as templates. The

fiscal year variant contains the definition of posting periods and special periods.

Special periods are used for postings which are not assigned to time periods, but to the

process of year-end closing.

The fiscal year will cons ist of maximum of 12 posting and 4 special periods.

A fiscal year is defined as fiscal year variant which is then assigned to Company Code. One fiscal
year variant can be used by several Company Codes. The following are the available options for
defining fiscal year variants:

Fiscal year same as calendar year.

Fiscal year differs from calendar year (non-calendar fiscal year). The posting periods can

also be different to the calendar months.

The fiscal year variant that would be used by DGPC will be K4 (Jan to Dec + 4 Special periods).



4.1.3 Document Type

The document type controls the document header and is used to differentiate the business

transactions to be posted, e.g. Customer invoice, Vendor payments, etc.

Document types are required in SAP to create and post financial documents (e.g. Bank

Payment Voucher, Receipt Voucher etc.).

Document types are defined at the client level and are therefore valid for all company codes.

The standard system is delivered with document types which can be used, changed, or

copied.

SAP has the standard Document Types, which will be adopted by DGPC.

The document number range defines the allowable range in which a document number must

be positioned and cannot overlap.

The document number range has to be defined for the year in which it is used.

The system stores the last used document number from the number range in the field “current

number” and takes the subsequent number for the next document

The following document types will be used:

No.
Document Document Range Number Number
Type Description Object Range(From) Range(To)
SA G/L Account Document 1 100000000 199999999
SB G/L Account Posting 2 200000000 299999999



SK Cash Document 3 300000000 399999999
AB Accounting Document 4 400000000 499999999
AA Asset Posting 5 500000000 599999999
AF Depreciation Posting 6 600000000 699999999
AN Net Asset Posting 7 700000000 799999999
CC Cross Company Code 8 800000000 899999999
IU Initial Uploads 9 900000000 999999999
DA Customer Document 10 1000000000 1099999999
DR Customer Invoice 11 1100000000 1199999999
DG Customer Credit Memo 12 1200000000 1299999999
WN Net Goods Receipt 13 1300000000 1399999999
DZ Customer Payment 14 1400000000 1499999999
PR Price Change 15 1500000000 1599999999
RB Reserve for Bad Debt 16 1600000000 1699999999
TR Travel Posting 17 1700000000 1799999999
ZR Bank Reconciliation 18 1800000000 1899999999
WL Goods Issue/Delivery 19 1900000000 1999999999
KA Vendor Document 20 2000000000 2099999999
RE Invoice - Gross 21 2100000000 2199999999
KR Vendor Invoice 22 2200000000 2299999999
KZ Vendor Payment 23 2300000000 2399999999
KG Vendor Credit Memo 24 2400000000 2499999999
WA Goods Issue 25 2500000000 2599999999
WE Goods Receipt 26 2600000000 2699999999
WI Inventory Document 27 2700000000 2799999999
IZ Imprest Advance 28 2800000000 2899999999
KN Net Vendors 29 2900000000 2999999999
EG EMD For Goods 30 3000000000 3099999999
ES EMD For Services 31 3100000000 3199999999
EW EMD For Works 32 3200000000 3299999999
GG Guar Adv Paymt Goods 33 3300000000 3399999999
GS Guar Adv Paymt Servc 34 3400000000 3499999999
GW Guar Adv Paymt Works 35 3500000000 3599999999
PG Per.Guaran for Goods 36 3600000000 3699999999
PS Per.Guar for Service 37 3700000000 3799999999
PW Per.Guaran for Works 38 3800000000 3899999999
PY Payroll Document 40 4000000000 4099999999
CH Contract Settlement 41 4100000000 4199999999
EU Euro Rounding Diff. 42 4200000000 4299999999
EX External Number 43 4300000000 4399999999
KP Account Maintenance 44 4400000000 4499999999



ML ML Settlement 45 4500000000 4599999999
RA Sub.Cred.Memo Stlmt 46 4600000000 4699999999
RN Invoice - Net 47 4700000000 4799999999
UE Data Transfer 48 4800000000 4899999999
ZC Cash Journal 49 4900000000 4999999999
ZH Payment By Cheque 50 5000000000 5099999999
ZP Payment Posting 51 5100000000 5199999999
SU Adjustment Document 52 5200000000 5299999999
ZS Project Settlements 53 5300000000 5399999999

4.1.4 Posting Key

Posting Key controls Debit or Credit account indicator for each line item.

The posting key also describes the type of transaction that is entered in a line item and

allowable account type, which will be entered for the respective line item.

SAP provides certain predefined posting keys. These predefined posting keys will be used

wherever applicable. For every posting key, properties control the entry of the line item.

For each Posting Key, a reversal-posting k ey may be defined. The reversal-posting key is

used to reverse a document posted in Financial Accounting.



Some of the Posting Keys are:

Posting keys Transaction Debit/Credit Account Reversal
Types
01 Invoice Dr D 12
02 Reverse Credit Memo Dr D 11
09 Special G/L Debit Dr D 19
11 Credit Memo Cr D 02
19 Special G/L Credit Cr D 09
21 Credit Memos Dr K 32
29 Special G/L Debit Dr K 39
31 Invoice Cr K 22
32 Reverse Credit Memo Cr K 21
39 Special G/L Credit Cr K 29
40 Debit Entry Dr S 50
50 Credit Entry Cr S 40
70 Assets Debit Dr A 75
75 Assets Credit CR A 70
Standard Account Types in SAP are as follows:

S-General Ledger

A-Assets

K-Vendors

D- Customers

M- Materials

DGPC will use the Standard Posting Keys and the Account Types wherever applicable.

4.1.5 Extended Withholding Tax

As SAP standard system allows defining two different tax types in withholding tax namely invoice
posting and payment posting, the DGPC requirement can be achieved with SAP standard
functionality. The tax collected will be deposited in a separate GL accounts through automatic
assignment, so at the time of pos ting, automatically tax account will be updated. All the withholding
settings can be done by using SAP standard system so that the requisite forms will be automatically
updated and available for printing.

For Company Code DG01, following sections of Income tax Act, 2001 will be covered in Extended
Withholding Tax of SAP:
Section Description
18 TDS deducted on Domestic Contractors/Suppliers
18 TDS deducted on Non Domestic Contractors/Suppliers
12 TDS on employees are bas ed on slabs
12 TDS on House Rent
13 TDS on Div idend

The following diagram explains the flow of TDS (Deduction, Remittance and Certificate Printing)



4.2 General Ledger Postings

The General Ledger forms the back bone of all the financial systems. General ledger is the main
accounting record of a business which uses double-entry bookkeeping. It captures all business
transactions in FI and through integration with other operational areas of the company ensures that
accounting data is always complete and accurate.

General ledger is a comprehensive financial management solution that enhances financials controls,
data collec tion, information access and financial reporting. It is the central repository of all the
accounting information of the organization as on date. Most of the transactions will be handled in
respective sub-ledgers (Accounts Payable, Accounts Receivable, Assets) and subsequently
consolidated and posted to General Ledger. However, the module shall provide specific functions of
passing journal entries (Manual, Provisional, Recurring and Reversal Journals) and posting them,
which will be purely rectification and provisional in nature.

Essentially, the general ledger serves as a complete record of all business transactions of DGPC
business. Actual individual transactions can be check ed at any time in real-time proc essing by
displaying the original documents, line items, and transaction figures at various levels.

Features of GL Accounting

GL Account maintenance

Open item clearing

Foreign currency valuation

Recurring journal entry

Accrual/ reversal posting

Balance Sheet & Profit & Loss statements.



Features of SAP FI New General Ledger :

1. Document Splitting

Each business transaction entered is analyzed during the document splitting procedure. In
this analysis, the system determines for each line item whether it is an item that will remain
unchanged or an item that is to be split. In order that document splitting recognizes how the
indiv idual document items are to be handled, user needs to classify them, by assigning them
to an item category. The item category is determined by the account number.

• Revenue account

• Expense account

• Bank account/cash account

• Balance sheet account

For DGPC, document splitting is based on the Profit Centers.

2. General Ledger Reporting

The SAP GL Account Information System, based on Drilldown Reporting, provides for a
dialog-oriented information system. It allows for the evaluation of the dataset, based on all
characteristics contained in the data description. GL account transaction figures and the
financial statement versions serve as the primary data source for the General Ledger
Information System.

In addition, Financial Statement analysis allows for the comparison of financial statements
from two time periods, and the determination of the differences in the individual financial
statement items. The report is based technically on the financial statement version. Financial
statement analys is can be carried out for the following time periods:

• Year to year comparisons

• Half-year comparisons

• Quarterly comparisons

• Monthly comparisons

In addition to financial statement analysis, a Balance Display report (Trial Balance) is also provided.
This report facilitates the evaluation of transaction figures.

3. Parallel Accounting

In the new General Ledger, one can display the parallel accounting using parallel accounts
(as in R/3) or using parallel ledgers. Parallel accounting allows performing parallel accounting
by managing several parallel ledgers for different accounting requirements. The FI standard
functions and reports are available for all parallel ledgers.

4. Integration of Statutory and Management Reporting

In General Ledger Accounting, it is possible to generate internal management reporting in
parallel with statutory reporting. For this purpose, the Profit Center Accounting functions are



integrated with General Ledger Accounting. Furthermore, financial statements can be
generated for any dimension (such as profit center).

5. Profit Center wise Balance Sheet ( Plant wise)

With the help of using the new 'Document Splitting' function (online split), financial statements
can be created at company code level and profit center / plant level. For each document, the
system then creates a zero balance for the relevant entity. In DGPC, each plant is considered
as a profit center.

To facilitate this, Zero balancing acc ounting should be activated (It is a Clearing A/C).

Features of SAP FI General Ledger:

A number of accounting transactions will be carried out by way of automatic ac count

assignments. For example, inventory account is updated and a provision created in GL at

the time of raising a GR in Materials Management.

Automatic and simultaneous posting of all sub-ledger items in the appropriate general

ledger accounts (reconciliation accounts).

Simultaneous updating of general ledger and cost accounting areas.

Real-time evaluation of and reporting on current acc ounting data, in the form of account

displays, financial statements with different financial statement versions and additional

analyses.

Detailed Profit and Loss/Balance Sheet reporting, allowing for review by profit centre, by

account, by month, to prior year

Cash Journal will be used for posting cash transactions. Cash Journal will be maintained at

locations wise or plant wise.

Postings in previous periods in FI can be done to the extent the posting periods are open.

However, in MM & SD, postings can only be done for maximum two months that are open.

4.2.1 Master Data

GL account master records contain the data that is always needed by the general ledger to
determine the account's function. The G/L account master records control the posting of accounting
transactions to G/L accounts and the processing of the posting data. Prior to postings to a G/L
account, creation of master record in the system for the account is required.

G/L account master records are divided into two areas so that Company Codes with the same chart of
accounts can use the same G/L accounts.

Chart of Accounts Area

The chart of accounts area contains the data that is valid for all Company Codes, such as the
account number.



Company Code Specific Area

The Company Code specific area contains data that may vary from one Company Code to
another, such as the currency in which the account may be posted.

The following objects play a central role in the creation and management of master records:

Chart of accounts

Account group

The account group is a summary of characteristics that control the creation of master records.
These can be used to determine which fields must or can be filled when creating the master record.
In addition, it can be used to predefine a number interval, from which the numbers for the master
records should be chosen. Acc ounts that require the same master record fields and use the same
number interval are created within the same account group.

The G/L account master record in the Company Code contains company code-specific
information which c ontrols the entry of data to this account and the management of the account.
The account group determines :

The number interval from which the account number is selected when a G/L account is

created.

The screen layout for creating G/L accounts in the company code-specific area.

While defining an account group, it is also required to determine the number interval in which the
accounts of this group must lie. When creating a G/L account, the system checks whether the number
entered lies in the predefined number interval.

For each account group, a screen layout is determined, that is, it determines which fields are relevant
for this group of G/L accounts.

Account Currency:

When creating a G/L account, the currency must be defined in which the account is to be maintained.
This defines the following:

The currency used for postings made to this account

The currency in which transaction figures are updated and the account balance is displayed

Specify the account currency in the company code area of the G/L account master data. This allows
keeping the G/L account in the local currency of each company code.

Note: - DGPC will use Bhutan Ngultrum i.e. BTN as Local Currency.

The system automatically uses the local currency that has been defined when creating the company
code as the default value. This allows posting to the G/L account in any currency. When making a
posting in a foreign currency, the amount is translated into the local currency. The transaction figures
are kept as follows:
o In the local currenc y, that is, the total of all the amounts posted in the local currency
o In the individual currencies, that is, the total of all the amounts posted in various
currencies.


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