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SAP FICO BBP Sample Document PDF NEW!

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New (up to date) Finance & Controlling Business Blueprint (BBP) Sample document for SAP System Impelementation

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SAP FICO BBP Sample Document PDF NEW!

  1. 1. Business Blueprint Submitted To X GROUP By KPIT CUMMINS INFOSYSTEMS Financial Accounting December, 2013 Version 0.0
  2. 2. Project xxxxxx Blue Print Document – Financial Accounting Confidential 2 of 97 DOCUMENT RELEASE NOTICE Customer: X CompanyGroup Project : XXXXX Document details: Name Version No. Description Financial Accounting 1.0 This document outlines the Financialaccountingbusiness processes of X COMPANY and how these will be implemented in SAP. Document details: Revision Number Action taken (add/del/chg) Preceding Page No. New Page No. Revision Description 0.0 Initial draft 1.0 Final draft 2.0 Final Document These are confidential documents. Unauthorized access or copying is prohibited.
  3. 3. Project xxxxxx Blue Print Document – Financial Accounting Confidential 3 of 97 PREFACE Purpose of this Document The purpose of this document is to record the business process requirements of X CompanyGroupand outline the requirement mapping in SAP. Intended Audience The intended audience for the Financials Blueprint is the employees of X CompanyGroup and other persons authorized by X Company who are in any way related to Business Processes involving Financial Accounting. Related Documents/ References Documents referred to prepare Financial Accounting Business Blueprint Document are as follows: Sl. No. Title Version Author
  4. 4. Project xxxxxx Blue Print Document – Financial Accounting Confidential 4 of 97 Sign Off Role Name Signature Date Functional Consultant Mr. GajananMankeshwarkar Project Manager- KPIT Cummins Infosystems Ltd. Mr.Ravichandra Business Process Owner Mr. Jayaprakash Project Manager- X Company Group Mr. Padma Kumar
  5. 5. Project xxxxxx Blue Print Document – Financial Accounting Confidential 5 of 97 ORGANIZATION OF THIS DOCUMENT The FinancialsBlueprint consists of 10 chapters in the order as mentioned below: 1. Organization Structure: That describes the organization structure to be configured in SAP. 2. Master Data: It describes the master data in Financials. It includes creation and maintenance of master record. 3. GL Accounting: This process describes various GL Accounting tasks done by accounting department. 4. Accounts Payable Accounting: This part described various activities, business transactions in connection with customer postings 5. Accounts Receivable Accounting: This part described various activities, business transactions in connection with customer postings. 6. Assetaccounting: This section talks about asset life cycle management per legal entity. It describes the accounting treatment for acquisition of assets, capitalization, depreciation and sale of assets is detail. 7. Cash and bank accounting: Cash and Bank Accounting details describe procedures across all locations to manage Cash and Bank transactions 8. Profit center accounting: This section describes the processes of profit center accounting. The profit center accounting helps an enterprise to analyze the profitability or draw financial statement based on the internal area of responsibility. 9. Process mapping: This section summarizes the AS IS business process and corresponding TO BE business processes. 10. Reports: This section covers the reporting requirements. It includes how all reporting requirements would be fulfilled with the TO BE process.
  6. 6. Project xxxxxx Blue Print Document – Financial Accounting Confidential 6 of 97 Table of Contents ACRONYMS...........................................................................................................................................................9 GENERAL EXPLANATION...........................................................................................................10 1. SAP ORGANIZATION STRUCTURE WITH REFERENCE TO FI MODULE .................................11 1.1. COMPANY ......................................................................................................................11 1.2. COMPANY CODE.............................................................................................................11 1.3. CHART OF ACCOUNTS .....................................................................................................13 1.4. CREDIT CONTROL AREA...................................................................................................13 1.5. SEGMENTS......................................................................................................................14 1.6. PROFIT CENTERS .............................................................................................................14 1.7. FINANCIAL ACCOUNTING GLOBAL SETTINGS: ..................................................................15 2. MASTER DATA FOR FI......................................................................................................19 2.1. GENERAL LEDGER............................................................................................................19 2.2. ASSET .............................................................................................................................23 2.3. BANK MASTER ................................................................................................................25 2.4. MATERIAL MASTER.........................................................................................................26 2.5. VENDOR MASTER............................................................................................................27 2.6. CUSTOMER MASTER .......................................................................................................29 3. BUSINESS PROCESSES- GL ACCOUNTING..........................................................................33 3.1. GENERAL EXPLANATION – (AS IS):...................................................................................33 3.2. SOLUTION IN SAP –( TO BE):............................................................................................34 3.3. CHANGES TO EXISTING ORGANIZATION PROCESS............................................................43 3.4. SPECIAL ORGANISATION CONSIDERATIONS:....................................................................43
  7. 7. Project xxxxxx Blue Print Document – Financial Accounting Confidential 7 of 97 3.5. GAP ANALYSIS: ...............................................................................................................43 3.6. INTEGRATION CONSIDERATIONS.....................................................................................43 4. ACCOUNTS PAYABLE.......................................................................................................45 4.1. GENERAL EXPLANATIONS (AS-IS).....................................................................................45 4.2. SOLUTION IN SAP – (TO BE):............................................................................................46 4.3. CHANGES TO EXISTING ORGANIZATION PROCESS:...........................................................60 4.4. SPECIAL ORGANISATION CONSIDERATIONS:....................................................................60 4.5. GAP ANALYSIS: ...............................................................................................................60 4.6. INTEGRATION CONSIDERATION: .....................................................................................60 5. BUSINESS PROCESSES - ACCOUNTS RECEIVABLES ............................................................61 5.1. GENERAL EXPLANATIONS (AS IS):....................................................................................61 5.2. SOLUTION IN SAP – (TO BE):............................................................................................64 5.3. CHANGES TO EXISTING ORGANIZATION PROCESS:...........................................................73 5.4. SPECIAL ORGANISATION CONSIDERATIONS:....................................................................73 5.5. GAP ANALYSIS: ...............................................................................................................73 5.6. INTEGRATION CONSIDERATION: .....................................................................................73 6. ASSET ACCOUNTING .......................................................................................................75 6.1. GENERAL EXPLANATIONS (AS-IS).....................................................................................75 6.2. FUNCTIONS AND EVENTS (TO BE):...................................................................................75 6.3. CHANGES TO EXISTING ORGANIZATION PROCESS:...........................................................83 6.4. SPECIAL ORGANISATION CONSIDERATIONS:....................................................................84 6.5. GAP ANALYSIS: ...............................................................................................................84 6.6. INTEGRATION CONSIDERATION: .....................................................................................84 7. CASH AND BANK ACCOUNTING.......................................................................................85
  8. 8. Project xxxxxx Blue Print Document – Financial Accounting Confidential 8 of 97 7.1. GENERAL EXPLANATIONS- (AS IS):...................................................................................85 7.2. SOLUTION IN SAP............................................................................................................85 7.3. CHANGES TO EXISTING ORGANIZATION PROCESS:...........................................................87 7.4. SPECIAL ORGANISATION CONSIDERATIONS:....................................................................87 7.5. GAP ANALYSIS: ...............................................................................................................87 7.6. INTEGRATION CONSIDERATION: .....................................................................................87 8. PROFIT CENTER ACCOUNTING.........................................................................................88 8.1. GENERAL EXPLANATIONS- (AS IS):...................................................................................88 8.2. SOLUTION IN SAP – (TO BE):............................................................................................88 8.3. CHANGES TO EXISTING ORGANIZATION PROCESS:...........................................................89 8.4. SPECIAL ORGANISATION CONSIDERATIONS:....................................................................89 8.5. GAP ANALYSIS: ...............................................................................................................89 8.6. INTEGRATION CONSIDERATION: .....................................................................................89 9. PROCESS MAPPING.........................................................................................................90 10. REPORTS.........................................................................................................................96
  9. 9. Project xxxxxx Blue Print Document – Financial Accounting Confidential 9 of 97 ACRONYMS Code Description X COMPANY X CompanyGroup MM Material Management QM Quality Management PP Production Planning PM Plant maintenance VM Vendor master PO Purchase Order PR Purchase Requisition SD Sales and Distribution LE Logistics Execution MM Material Master HR Human Resource
  10. 10. Project xxxxxx Blue Print Document – Financial Accounting Confidential 10 of 97 GENERAL EXPLANATION Company Profile -X Company Group is one of the leading paint manufacturers in India based at Chennai, Tamil Nadu. This 350cr organization is in the industry for more than 5 decades. The product range includes paints for Architecture, Automotives and wood finishes. The brand “X Company” is quite famous in India. The organization split into multiple legal entities which manufactures and markets Paints/wood finishes across India. This organization has around 450 employees in its group. They have operations in Sri Lanka also. Business Blue Print - This is the document where we define the business processes and operating procedures for your company to support the corporate growth initiatives and also to adapt to the new SAP system that will be implemented. SAP Blueprint is the architectural foundation for the success of our project. This is where we define your business requirements, set expectations from the new system and gain alignment of the key business stakeholders with the capabilities and expected output from the new SAP system. In a Business Blueprint, we create a project structure in which relevant business scenarios, business processes and process steps are organized in a hierarchical & tabular structure to specify how your business processes should run in your SAP systems. The project documentation and the project structure that you create during the Business Blueprint will be integral part in the configuration and test organization phases.
  11. 11. Project xxxxxx Blue Print Document – Financial Accounting Confidential 11 of 97 1. SAP ORGANIZATION STRUCTURE WITH REFERENCE TO FI MODULE 1.1. COMPANY 1.1.1. Definition A company is an organizational unit in Accounting which represents a business organization according to the requirements of commercial law in a particular country. In the SAP system, consolidation functions in financial accounting are based on companies. A company can comprise one or more company codes. 1.1.2. Application  If an organization uses several clients, the companies which only appear as group- internal business partners, and are not operational in each system, must be maintained in each client. This is a precondition for the account assignment of a group-internal trading partner.  Companies must be cataloged in a list of company IDs which is consistent across the group. The parent company usually provides this list of company IDs.  It is also acceptable to designate legally dependent branches 'companies' and join them together as a legal unit by consolidation.  In case of X Company group, the consolidation is required for all 9 legal entities. And this is required only at group level. Therefore 1 company would be set up in the system. 1.1.3. Naming Convention COMPANY DESCRIPTION 1000 X Company Group 1.2. COMPANY CODE 1.2.1. Definition The company code is an organizational unit used in accounting. It is used to structure the business organization from a financial accounting perspective. A company Code represents an independent accounting unit, for example, a Company within a Corporate Group (Client).
  12. 12. Project xxxxxx Blue Print Document – Financial Accounting Confidential 12 of 97 1.2.2. Application The Company Code is the smallest Organizational unit for which a complete self-contained set of accounts can be drawn up for purposes of external reporting. Balance sheets and Profit and Loss statements, required by law, are created at company code level. We can set up several company codes in one client in order to manage various separate legal entities simultaneously, each with their own balanced set of financial books. Different Currency requirement will need additional company code. In case of X Company group, it consists of 9 legal entities. It individual entity prepares and files the financial statements and income tax returns. Therefore 9 company codes would be set up in the system. 1.2.3. Naming Convention Sr. No. Company Code Description 1 1000 X Company Paints Corporation Ltd. 2 1100 X Company Financial services 3 1200 Sphinax Organic & research P. Ltd. 4 1300 Sphinax Info Systems 5 1400 TechServices 6 1500 X Company Auto Solutions 7 1600 Sheenworld Services LLP 8 1700 Sphinax Chemicals Pvt. Ltd. 9 5000 X Company Lanka Paint P. Ltd
  13. 13. Project xxxxxx Blue Print Document – Financial Accounting Confidential 13 of 97 1.3. CHART OF ACCOUNTS 1.3.1. Definition This is the classification scheme consisting of a group of general ledger (G/L) accounts. A chart of accounts provides a framework for the recording of values to ensure an orderly rendering of accounting data. The G/L accounts it contains are used by one or more company codes. 1.3.2. Application For each G/L account, the chart of accounts contains the account number, account name, and the information that controls how an account functions and how a G/L account is created in a company code. We have to assign a chart of accounts to each company code. This chart of accounts is the operating chart of accounts and is used for the daily postings in this company code. In case of X Company group, all the 9 legal entities use same chart of accounts for day to day operation. Therefore 1 chart of accounts would be would be set up and assigned to all 9 legal entities. The same chart of accounts would be used for the purpose of consolidation at the company level. Naming Convention Chart of Accounts Description YAIN X Company Chart of Accounts 1.4. CREDIT CONTROL AREA 1.1.1. Definition The credit control area is an organizational unit that specifies and checks a credit limit for customers. A credit limit is set per business partner record. Within a credit control area, the credit limits must be specified in the same currency 1.4.1. Application This organizational unit is either a single company code or, if credit control is performed across several company codes. As required in X Company the credit monitoring should be done per separate legal entity. Therefore separate credit control area would be set up per legal entity. It would be done only for the below mentioned company codes since the credit checks are not required for the remaining company codes.
  14. 14. Project xxxxxx Blue Print Document – Financial Accounting Confidential 14 of 97 1.4.2. Naming Convention Sr. No. Credit Control Area Description 1 1000 X Company Paints Credit Control area 2 1500 X Company Auto Credit Control area 3 1600 Sheenworld Services Credit Control area 4 1700 Sphinax Chemicals Credit Control area 5 5000 X Company Lanka Credit Control area 1.5. SEGMENTS 1.1.2. Definition Profitability Segment corresponds to market segment. The market segments can be defined as products, product groups, customers, customer groups, geographic areas. For example, a company may wish to analyze profitability for a particular geographical area. 1.5.1. Application This organization unit would be set up based on the geographical bifurcation present in X Company. The X Company group has East, West, South and North regions and distribution chains. Based on that,‘Segments’ would be set up as East, West, South and North regions. Among all the legal entities, only X Company Paints Corporation Ltd., Sphinax Chemicals Pvt. Ltd., Sheenworld Services LLP,X Company Auto Solutions has the regional segments. 1.5.2. Naming Convention Sheenlac Segments.xlsx 1.6. PROFIT CENTERS 1.6.1. Definition  Profit centre represents a part of firm as independently operating enterprise within the company.  Profit centres collect revenues and also collect costs via cost centres.  A profit centre is a management oriented organizational unit used for internal controlling purposes.  Dividing your company into profit centres allows you to analyze areas of responsibility and to delegateresponsibility to decentralized units, thus treating them as “companies within the company”.  Profit centres are statistical objects.
  15. 15. Project xxxxxx Blue Print Document – Financial Accounting Confidential 15 of 97 1.6.2. Application  X COMPANY will have profit centre accounting taking into consideration of location wise trial balance requirement 1.6.3. Naming Convention Sheenlac Profit Centers.xlsx 1.7. FINANCIAL ACCOUNTING GLOBAL SETTINGS: Posting of Transactions in SAP requires the following settings:  Currency Settings  Fiscal year and Fiscal year variant  Posting period variant  Document Types  Document Numbering  Posting Keys Currency: X Company group will use Indian Rupees (INR) as the local and base currency. The local and base currency for all Indian Legal Entities would be Indian Rupees (INR). In case of legal entity in Sri Lanka the base currency would be Sri Lankan Rupees (LKR). Other currencies would be defined in relation to INR. The factors for currency translations will be based on the direct quotation method that is i.e. 1: n, where one unit of foreign currency will be equal to ‘n’ units of INR. Fiscal year and fiscal year variant: A Fiscal year variant is defined in the SAP system to identify financial transactions related to a particular financial year. X Company will define ‘1000’ as the fiscal year variant. Since all the legal entities are using the same financial year (April to March), the same fiscal year variant would be used for all legal entities. The fiscal year will be defined as the last accounting year; for example, if the financial year is April 2011- March 2012, then the fiscal year will be 2012. A fiscal year will consist of twelve normal posting periods and four special posting periods. Fiscal Year Variant V3 will be used
  16. 16. Project xxxxxx Blue Print Document – Financial Accounting Confidential 16 of 97 Sixteen periods will be defined in the system. The first period will be April and the twelfth period will be March. The four extra periods will be used for posting year-end /closing adjustment entries. Special restrictions will be made on the accounts that can be posted to in the 4 special periods. A Posting Period Variant is defined & assigned to one or more company codes. This variant controls opening and closing of one or more posting periods in Financial Accounting. It is further desired by X Company, that the controlling the posting period should be possible at the individual location level. I.e. a posting period can be opened only for Hyderabad branch. To cater this need, authorization groups would be created per various locations. Users from the locations would be assigned to the respective authorization group. Sr. No. Posting period variant Description 1 1000 X Company Paints Posting period variant 2 1100 X Company Financial Posting period variant 3 1200 Sphinax Organic Posting period variant 4 1300 Sphinax Info Posting period variant 5 1400 TechServices Posting period variant 6 1500 X Company Auto Posting period variant 7 1600 Sheenworld Services Posting period variant 8 1700 Sphinax Chemicals Posting period variant 9 5000 X Company Lanka Posting period variant Posting Periods:  One posting period should generally be kept open for the current month  At the month end next posting period should be opened  The previous month should be closed after the month end closing procedures are carried out  One or more posting periods may be kept open for certain accounts on selective basis, if required. However the authorization for this will be maintained at a very high level.  A document is uniquely identified by the combination of fiscal year, company code and document number  Old Posting Periods have to be closed after carry forwarding all ledger balances to next year and New posting periods will be opened for new year  It will be possible to post to the current and the previous fiscal years until the previous fiscal year is not closed  All document numbers will be reset to the minimum number of the range for the new fiscal year Document Principle: SAP uses the document principle as its reference for entering and posting business transactions. Each business transaction is stored as a document form and remains a complete unit within the system till it is
  17. 17. Project xxxxxx Blue Print Document – Financial Accounting Confidential 17 of 97 archived. In SAP, a document consists of a document header and a line item, both of which are controlled by document types and posting keys. Document types: Document types are required in the SAP system to create and post financial documents, such as (e.g. Bank Payment Voucher, Bank Receipt Voucher and, Journal Etc.) Document types are also used to distinguish between the various FI documents. In addition, Document types also controls, Document Numbering (external or internal), Account Types (Debtors, Materials, Assets, G/L accounts and Creditors) that can be entered in the document. Apart from the key controls mentioned above, few other definitions are made at the Document type level for the purpose of processing transactions, which are driven by the business process needs. X Companywould use the standard SAP document types for the various types of transactions across all legal entities. Document numbering: Each of the document types defined will have an identification number. The SAP system uses predefined number ranges for this purpose. The number ranges are assigned to the document types. The number ranges may be defined as internal, that is i.e. automatically generated by the system in chronological order or as external, i.e. that is enterable at the time of the transaction. X Company has decided to have internal numbering for all the documents. The number range would be year dependent.The following Document Types are identified for use from SAP Standard. Docu. Type Description No. Range From Number To Number External Reverse Doc. Type AA Asset posting 01 100000000 199999999 AA AB Accounting document 01 100000000 199999999 AB AF Dep. Postings 03 300000000 399999999 AF DG Customer credit memo 16 1600000000 1699999999 DA DR Customer invoice 18 1800000000 1899999999 DR DZ Customer payment 14 1400000000 1499999999 DA KG Vendor credit memo 17 1700000000 1799999999 KA KR Vendor invoice 19 1900000000 1999999999 KA KZ Vendor payment 15 1500000000 1599999999 KA PR Price change 48 4800000000 4899999999 PR RE Invoice – gross 51 5100000000 5199999999 RE WA Goods issue 49 4900000000 4999999999 WA WE Goods receipt 50 5000000000 5999999999 WE ZP Payment posting 20 2000000000 2999999999 ZP Account type:
  18. 18. Project xxxxxx Blue Print Document – Financial Accounting Confidential 18 of 97 Account type is a key that specifies the accounting area to which an account belongs.Examples of account types are:  Asset accounts - A  Customer accounts - D  Vendor accounts - K  G/L accounts - S  Materials accounts - M Posting Key: The posting key is a two digit numeric key that controls the entry of document line items. It specifies whether the line item is a debit or a credit entry, the account type that can be posted (Vendors, Customers, and General Ledger etc.) and the screen layout. For posting special G/L transactions special posting keys, are used which are supplemented by a special G/L indicator. The system uses the specifications (posting key and special G/L indicator) to determine the alternative reconciliation account.
  19. 19. Project xxxxxx Blue Print Document – Financial Accounting Confidential 19 of 97 2. MASTER DATA FOR FI 2.1. GENERAL LEDGER 2.1.1. Definition General Ledger Accounting allows you to perform parallel accounting by managing several parallel ledgers. It is just the extend version of classic general ledger. Also Segment wise reports are also possible. Following are the features of New GL  Real time integration between FI and CO  Integrated PCA  Document Splitting G/L 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. Business transactions are posted to accounts and managed by GL accounts. You must create a master record for each account that you need. This contains information that controls the entry of business transactions in an account and the processing of data. 2.1.2. Application In X Company Group, new GL will be used to support the internal management reporting and to have financial statements for segments and profit centers. In New General Ledger Accounting, you can perform internal management reporting in parallel with legal reporting. For this purpose, the Segment and Profit Center Accounting functions are integrated with General Ledger Accounting. Furthermore, you can generate financial statements for any dimension (such as profit center). New GL helps in giving cost centre at each line item while posting transaction. Also it helps in Document Splitting i.e. splitting one Balance sheet item in two cost centre
  20. 20. Project xxxxxx Blue Print Document – Financial Accounting Confidential 20 of 97 Example: Repairs A/c... Dr (Cost Centre 100001) - Rs.2000 Repairs A/c... Dr (Cost Centre 200001) - Rs 1000 To Bank A/c (Cost Centre 100001) - Rs.2000 To Bank A/c (Cost Centre 100001) - Rs.1000 New General Ledger Accounting comprises the following functions for entering and evaluating posting data:  Automatic and simultaneous posting of all sub ledger items in the appropriate general ledger accounts (reconciliation accounts)  Simultaneous updating of the parallel general ledgers and of the cost accounting areas  Real-time evaluation of and reporting on current posting data, in the form of account displays, financial statements with different balance sheet versions, and additional analyses. Closing:  The new general ledger has significantly simplified and accelerated period-end closings. For document splitting, the data in the new GL already meets the reporting requirements from the time of posting. You can make a zero balance setting for the corresponding characteristics (segment, profit center, and customer fields) in each document. In this manner, you can create a (nonconsolidated) balance sheet at the level of these characteristics at any time. You no longer need additional program runs to split the characteristics.  Reconciliation between controlling functions and the new general ledger also do not require additional program runs. In the case of cross-entity controlling postings (such as transfer postings for costs from one cost center or profit center to another, either manually or with allocations), the values are updated to the general ledger in real time. In this manner, the controlling area and general ledger are synchronized for the transactions. You no longer need additional reconciliation activities or use of the reconciliation ledger. The system provides data on the origin of such documents. If you have to distribute values for specific general-ledger characteristics (such as a customer field) using a specific scheme, you can perform allocations in the general ledger. 2.1.3. Data Maintenance 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.  Company code specific area
  21. 21. Project xxxxxx Blue Print Document – Financial Accounting Confidential 21 of 97 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. 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. In order to organize and manage a large number of G/L Accounts better, they are arranged in account group. So when creating a G/L account, you must specify an account group. The accounts of an account group normally have similar business functions. You could, for example have an account group for cash accounts, one for Expenses accounts, one for revenue accounts, and one for other balance sheet accounts etc.  The account group determines:  The interval in which the account number must be  Which fields are required and optional entries when creating and changing master records  Which fields are suppressed when creating and changing master data?  It enables you to control the layout of screens. You use account groups to combine accounts according to the above criteria (for example, a P&L account group, asset account group and material account group). Account groups for G/L accounts are based on the chart of 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. The following is the data in Chart of account  Specifies the account number and account name (short and long text) for each G/L account master record.  Specifies whether the account is a balance sheet account or an income statement account. At the start of a new fiscal year, the balance of a balance sheet account is carried forward to the same account. With income statement accounts, you must specify the account to which the profit or loss is carried forward at fiscal year change.  Controls how a master record is created or changed. In particular it specifies which fields must or can be filled or suppressed when creating or changing a master record. You use the account group to do this.
  22. 22. Project xxxxxx Blue Print Document – Financial Accounting Confidential 22 of 97  Can group G/L account master records in the chart of accounts when you specify number intervals. You enter the number of the master record in the company code in the chart of accounts and use the account group to control and check the number assignment. To do this, you define corresponding number intervals using the account group. CREATION OF GL ACCOUNT MASTER RECORD Account Exists in Chart of Accounts? No Yes No STOP Account required in Company Code Yes Account Exists in Company Code? Yes STOP Start General Ledger Master does not exist S End Yes Check the Chart of Accounts S Create at Chart of Accounts Level S Create at Company Code Level S
  23. 23. Project xxxxxx Blue Print Document – Financial Accounting Confidential 23 of 97 You must define your account groups outside of the chart of accounts. First specify the key under which you have stored these definitions in the chart of accounts. Then create a G/L account master record: specify the account number of the sample account in the required master record in the chart of accounts. Following account groups would be created for X Company: COA A/C Group Description From To YAIN LIAB Balance Sheet A/C - Liabilities 10000000 15999999 YAIN PABL Reconciliations Account - Vendor 16000000 16999999 YAIN DEPN Accumulated Depreciation 20100000 20999999 YAIN FXAS Fixed Assets 21000000 21999999 YAIN MATL Material Management - Inventories 22000000 22999999 YAIN RCBL Reconciliations Account - Customer 23000000 23999999 YAIN CASH Cash and bank Accounts 24000000 24999999 YAIN ASET Balance sheet Accounts - Assets 25000000 25999999 YAIN REVN P&L A/Cs - Revenues 31000000 39999999 YAIN CONS Material Management - Consumption 40100000 40199999 YAIN EXPN P&L A/Cs - Expenses 40000000 49999999 2.2. ASSET 2.2.1. Definition The "master data maintenance" component is used for recording the master data of organization fixed assets on an individual asset basis. A fixed asset is defined as an individual economic good that it is recognized in the balance sheet at the time of closing, and is in the long-term service of the enterprise. 2.2.2. Application Traditional asset accounting encompasses the entire lifetime of the asset from purchase order or the initial acquisition (possibly managed as an asset under construction) through its retirement. The system calculates, to a large extent automatically, the values for depreciation, interest, insurance and other purposes between these two points in time, and places this information at your disposal in varied forms using the Information System. There is a report for depreciation forecasting and simulation of the development of asset values. 2.2.3. Data Maintenance
  24. 24. Project xxxxxx Blue Print Document – Financial Accounting Confidential 24 of 97 Time-independent management of organizational units If you set this indicator, the system manages the organizational unit and ‘cost center’ (and thereby ‘profit center’) as not time dependent in the asset master records in this company code. 2.2.4. 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.)  Account assignment  Posting information (for example, capitalization date)  Time-dependent assignments (for example, cost center)  User fields/evaluation groups etc. In addition, you can create long texts for the individual field groups belonging to the general data part of the asset master record. You can simplify the creation of long texts by using freely-definable long text templates. 2.2.5. Data for Calculating Asset Values You can specify depreciation terms in the asset master record for each depreciation area in the chart of depreciation. In order for you 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. Group asset will be created to group the asset as per IT act. But depreciation value for IT department will be calculated out of system. Internal Number Range will be used for the Asset Class. 2.2.6. Asset Classes & Account Determination Asset Classes are used to classify the Assets under various heads for Legal and reporting purposes. Asset Classes facilitate creation of individual Asset Masters with certain default values and characteristics that may, if required, be changed at individual asset master level. Account Determination forms the link between Asset Classes in Asset Accounting Module and FI module for integration with GL. Various GL Accounts for APC, Depreciation, and Asset Disposal etc. are assigned in various depreciation areas through account determination.
  25. 25. Project xxxxxx Blue Print Document – Financial Accounting Confidential 25 of 97 Each asset class is maintained with different depreciation areas as required by X COMPANY. Once the asset classes are defined different asset master records will be created under the asset classes. Each class will be assigned a different number range to give different numbers to assets. Following asset classes would be set up in the system: Details Asset Class Land and buildings 1000 Plant and Machinery 2000 Fixtures and fittings 3000 Office Equipments 4000 Vehicles 5000 Computer equipments 6000 Low-value assets 7000 Assets under construction 9000 2.3. BANK MASTER 2.3.1. Definition Bank is used to handle accounting transactions that process with bankers. Bank accounting includes the management of bank master data; cash balance management (check), and the creation and processing of incoming and outgoing payments. Bank Master Data is required for bank transaction like Bank Reconciliation and payments; this master record is also known as you’re House Bank. 2.3.2. Application A house bank refers to the bank a company uses for receivables and/or payments. It is any bank with which your company code does business. Each house bank contains a company’s bank accounts. It also contains a bank key that defines address and control data for the bank. The house bank establishes a link with G/L accounts. 2.3.3. Data Maintenance The bank key contains the addresses and valid control data of all banks used in the SAP System. The bank key has to be created in the system, if a bank is set up in the bank key, this information could then, for example, be accessed when entering the bank information in a customer or vendor master record. You would only need to enter the country of the bank and the country key; the system would determine the name and address in the background.
  26. 26. Project xxxxxx Blue Print Document – Financial Accounting Confidential 26 of 97 A G/L account master record must be created for each bank account. The house bank and account ID must be entered in the GL account master record to ensure the accounting transactions involving the bank account will be reflected in the general ledger. The following bank accounts would be set up in the system per legal entity: X Company Paints Pvt. Ltd. Bank name Account No. A/C Type The South Indian bank 0138083000001620 Cash Credit HDFC Bank Ltd 00040330012166 Current A/c Axis bank Ltd 909030033210563 Cash Credit Axis bank Ltd 911020056012528 Current A/c ICICI bank Ltd 000905019304 Current A/c Sphinax Chemicals Pvt. Ltd. Bank name Account No A/c Type HDFC Bank 00040330002962 Current A/c The South Indian Bank 0138073000001792 Current A/c The South Indian Bank 0138073000001793 Current A/c The South Indian Bank 0127073000001413 Current A/c The South Indian Bank 0138073000001791 Current A/c The South Indian Bank 0111073000003324 Current A/c The South Indian Bank 0374073000000278 Current A/c The South Indian Bank 0414073000000117 Current A/c ICICI Bank Ltd 000905024635 Current A/c Axis Bank Ltd 911020055957657 Current A/c State bank of India 30861566143 Current A/c 2.4. MATERIAL MASTER 2.4.1. Definition The material master contains information on all the materials that a company procures orproduces, stores, and sells. It is the company's central source for retrieving material- specificdata. This information is stored in individual material master records. A material master has many views to be maintained , these depend upon the material type which we choose , some important views are Basic Data1 , Basic Data 2 , Sales org 1 , Sales Org 2, Sales Org general / Plant, Purchasing, MRP1, MRP2, MRP3, MRP4, Plant storage, accounting1, accounting2, costing1, costing2, etc. For Finance, accounting views are important as they decide the link of material and accounts it will trigger. 2.4.2. Application
  27. 27. Project xxxxxx Blue Print Document – Financial Accounting Confidential 27 of 97 Accounting1 This view of material has details regarding how the material is accounted. i.e. unit of measure, currency etc. Below are important fields Valuation class: Determines the G/L account that is updated if there is impact on accounting. Price control: Determines whether material is valuated on standard price basis or moving average price basis. Prices: displays the price of material Accounting2 This view is only to display different prices like tax prices etc. if maintained. 2.4.3. Data Maintenance BDC/LSMW will be created to upload material master. File format will be provided to upload material master using BDC/LSMW. Fields to be maintained for Valuation class, Price control 2.5. VENDOR MASTER The vendor master record will have three data segments:  General data segment: Information such as name, address, post box, communication details of vendors will be maintained. In addition to this, if the vendor is also a customer, the customer number will be entered.  Company code data segment: Information such as reconciliation account, sort key, terms of payment, bank particulars and other correspondence details will be maintained.  Purchasing area data segment: Information such as vendor group, shipping details, billing details will be maintained. Certain vendors for example auditors, insurance Companies, Banks etc can be created only in financial accounting, i.e vendor will be have General data segment & Company code segment only. Restricted user will be given the right to create such vendors. Materials management personnel will create the purchasing view of the vendor and financial accounting personnel will create the accounting views for the same. The accounting view consists of reconciliation account, method of payment, tolerance groups etc.
  28. 28. Project xxxxxx Blue Print Document – Financial Accounting Confidential 28 of 97 It is necessary that the reconciliation account for the vendor is correctly identified and defined in the master data. Vendor master consists of three views: General view This is data that applies to every company code and every purchasing organization in your company. The general area includes, for example, the vendor’s name, address, language, and telephone number. Company code view: This is data that is specific to an individual company code. Company code data includes, for example, the reconciliation account number, payment method and payment terms. Purchasing view: This is data relevant to the purchasing organization of your company. For example, requests for quotations, purchase orders, and invoice verifications are stored in this section. Data in vendor master records controls how transaction data is posted and processed for a vendor. The vendor master record also contains all the data you require to do business with your vendors. Each master record has a unique number. You need this number to display or change the master record and to post to the vendor account. Vendors are generally classified as: General vendor: General vendor means a regular supplier who will be rendering either goods or service from within the country or outside country. Since he is very frequent vendor with whom company is willing to have long time relationship, in SAP R/3, all the master information such as name, address, bank details, payment terms etc. should be made available at the time of vendor master creation. One time vendor: One time vendor means a vendor who does adhoc services to the company and will not hold long term relationship. Since he is not a frequent vendor, in SAP R/3, it will not expect vendor master details at the time of master creation. It will only expect the name, address and bank details at the time of payment transaction. Account Groups:
  29. 29. Project xxxxxx Blue Print Document – Financial Accounting Confidential 29 of 97 The account group is a classifying feature within vendor master records. It determines the following  Which screens and fields are necessary for entering master data  Fields can be defined as optional or mandatory at creation of master data  How master record numbers are assigned (externally by you or internally by the system) and the number range from which they are assigned  Which partner functions are valid  Whether the business partner is a one-time vendor The following vendor account group will be maintained. Sr. No. Vendor Account Group From To 1 Vendors Domestic RM 10000000 19999999 2 Vendors Domestic PM 20000000 29999999 3 Vendors Imports RM 30000000 39999999 4 Vendors Imports PM 40000000 49999999 5 Vendors Service 50000000 59999999 6 Vendors Logistics 60000000 69999999 7 One Time Vendors 70000000 74999999 8 Vendors Employee 75000000 79999999 9 Vendors Others 80000000 89999999 2.6. CUSTOMER MASTER Customer Master The customer master record contains all the data required to do business with the customer. Data in customer master records controls how transaction data is posted and processed for a customer. Individual fields within the customer master record are also used: X COMPANY has identified the following specific requirements:  Input master data in central location to be accessed via all other modules  The ability to assign and report on customers by various categories and/or classifications Accounts Receivable Master Data Maintenance Functions
  30. 30. Project xxxxxx Blue Print Document – Financial Accounting Confidential 30 of 97 SAP provides the following transactions for maintaining Accounts Receivable master records:  Create a new account  Create a new account with template  Change an account  Display an account  Block/unblock an account  Set the deletion indicator The above operations may be undertaken at the general/company code level, the sales area level, or centrally against both levels. It is anticipated that the X COMPANY accounts receivable account maintenance will be centralized, and the creation of any new accounts will go through an approval process. Account Groups. The account group is a classifying feature within customer master records. It determines the following:  Which screens and fields are necessary for entering master data  Fields can be defined as optional or mandatory at creation of master data  How master record numbers are assigned (externally by you or internally by the system) and the number range from which they are assigned  Which partner functions are valid  Whether the business partner is a one- time customer
  31. 31. Project xxxxxx Blue Print Document – Financial Accounting Confidential 31 of 97 Account Groups: Sr. No. Customer Account Group From To 1 Customer domestic 10000000 19999999 2 Customer export 20000000 29999999 3 One time customer 30000000 39999999 4 Project customers 40000000 49999999 Data in the customer master is stored in 3 views: General Data: Data that applies to all company codes and sales areas (e.g. customer’s name, addresses, language and telephone data). Company Code/Accounting Data: Data that is specific to a company code (e.g. the reconciliation account number, payment terms and dunning area). Sales Area Data: Data specific to the sales area of the company (e.g. sales office, sales district, pricing information, as well as information relating to shipping and billing). 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. The following reconciliation accounts are to be used by X COMPANY. GL Account Description 23000000 Accounts receivable-Domestic customers 23100000 Accounts receivable-Export Customer 23200000 Accounts receivable-One time customers 23300000 Accounts receivable-Project customers Payment Terms: Payment terms enable the system to determine the required terms of payment automatically. The specified terms of payment are assigned using a key. This key can be: Stored in the master record of the customer/vendor account (in the purchasing or sales view and in the accounting view) Entered when the FI document is created (or changed)
  32. 32. Project xxxxxx Blue Print Document – Financial Accounting Confidential 32 of 97 Entered when the logistics documents (in the purchase order / sales order and incoming invoice or in the order and the outgoing invoice, for example) are created (or changed) Terms of payment include settings for the payment terms, the day limit, the baseline date for payment, and installment payments. Baseline date determines the date from which payment terms will be calculated. The final deadline for payments can be summarized in a formula: Payment Deadline = Baseline Date + Payment Terms Payment terms will be defined in system and will maintain in Customer master. Standard SAP payment terms are: - Key Description 0001 Payable Immediate NT07 Payable in 7 days NT15 Payable in 15 days NT30 Payable in 30 days NT45 Payable in 45 days NT60 Payable in 60 days Customer Credit Master Customer Credit processing includes risk and credit exposure management. It provides levels and mechanisms to handle credit limits. Credit Management enables to minimize the credit risk by specifying a specific credit limit for customers. Using Credit Management module credit limit can be granted to customers by setting up Credit Master Data. The system controls transactions of each customer’s on basis of this master data. The Credit Management function provides the following functions:  Create/Edit/Display Credit Master Data (Risk Category, Total Credit Limit, Review period etc)  Overview of Credit Limit usage  Sales and Delivery documents blocked due to Credit Management  Releasing Process of Blocked documents
  33. 33. Project xxxxxx Blue Print Document – Financial Accounting Confidential 33 of 97 3. BUSINESS PROCESSES- GL ACCOUNTING 3.1. GENERAL EXPLANATION–(AS IS): X Company accounting team performs following activities under GL Accounting a. Posting Journal Entries: As a part of day to day accounting activities and month/ year end closing journal entries are posted by the accounting department.The entries are reviewed by the supervisor periodically and necessary corrections are made if required. Printout for the journal entry vouchers are taken and are files time to time. Some entries of recurring nature are posted during monthly closing. Salary posting is also done by passing a journal entry. Also journal entries are passed to adjust the CENVAT credits. b. GL accounting further functions: To meet business requirements X Company team does foreign currency valuation or interest calculations manually. Also as a part of process the GR/IR accounts and other provision accounts are cleared periodically. c. GL reporting: The accounting team uses GL A/c balance, item wise reports for internal analysis. d. Financial statements:  The accounting team draws financial statements at legal entity level. Depending upon the legal statuses of the legal entities, the financial statement reporting format is changed. The Limited and Private limited companies use new schedule VI format for statutory reporting. And other proprietary and partnership firms use different formats.  Also some reports are generated to analyse the profitability per location/division.  As on date the consolidated financial statements are prepared for X Company group manually using excel. Summarized expectations from the new system:  Ability to manually process Journal entries  System to facilitate the parking of transaction and to be posted on specific approvals  Integration to other modules with real time  Financial statements as and when required  Consolidation at group level  Processing of foreign currency transactions  Foreign exchange transaction with gain loss information is required  On-line data entry validation and correction facility  System to facilitate the posting and reversal of provisional entries by the system
  34. 34. Project xxxxxx Blue Print Document – Financial Accounting Confidential 34 of 97  System to facilitate the automatic posting of recurring entries  To facilitate the month closing activities  To facilitate the smooth and proper closure of books at the end of the accounting year and carry forward of balances to new accounting year 3.2. SOLUTION IN SAP –(TO BE): Overview: General ledger is a comprehensive financial management solution that dramatically enhances financials controls, data collection, information access and financial reporting through the organization. General ledger is the central repository of all the accounting information of the organization. Most of the transactions will be handled in respective sub-ledgers 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. The objective is to maintain accurate and complete books of accounts in compliance with the provisions of Indian GAAP as Leading Ledger and IFRS as non Leading Ledger .Also ensuring compliance with statutory guidelines with the provisions of the Companies Act, 1956. The General Ledger is integrated with all other modules in SAP and thus serves as a complete record of all business transactions. This means that all postings that originate in other sub-modules of SAP will be automatically transferred to GL during day-to-day processing, thus considerably reducing the amount of manual journals. For example, when a purchasing officer records a receipt of goods that was purchased in the Purchasing module, the inventory value is updated in the GL immediately. Each transaction updates the GL at the individual transaction level and summary level by account, debit or credit total and period total. All these items can be displayed on-line. The SAP ECC 6.0 uses the document principle as its reference for entering and posting business transactions. Each business transaction is stored as a document form and remains a complete unit within the system till it is archived. The following are the common documents that will be used within the General Ledger posting area:  Adjustment entries  Banking and Cash Transactions  Provision Postings Other G/L Transactions:  Information, which applies to the entire document, such as the document date and number, will be specified in the document header. It also contains controlling information such as the document type. The document number will be assigned internally which will be specific for document type of X COMPANY.
  35. 35. Project xxxxxx Blue Print Document – Financial Accounting Confidential 35 of 97  The line item only contains information, which will be specific to that line item. It always has an amount and one account number. It may also contain other specifications, such as the terms of payment, a cost center or an explanatory text, depending on the transaction being posted. 3.2.1. DOCUMENT A document consists of a document header and line items. Document header is the part of a document that contains information valid for the whole document, for example, document date and number. It also contains controlling information such as the document type, user. Line items are the part of a document that contains information about an item. This includes an amount, an account number, the credit or debit assignment, and additional details specific to the transaction being posted. For example you can enter terms of payment, a cost centre, or an explanatory text in a line item. You can display the line items for one or more accounts. Line items are document items that were posted to a specific account. In contrast to a document item, a line item only contains the information from the document that is relevant from the account view. You can display the following line items in GL account balances:  Open items  Cleared items  Noted items  Parked items  Items with special G/L transactions (in Accounts Receivable &Accounts Payable)  Items with customer / vendor items(in Accounts Receivable &Accounts Payable) The SAP system adheres to the document principle. This means that each posting is always stored in the form of a document; each document has a document type, which is generally used to identify the source and nature of the transaction (e.g. AP Invoice, AR Debit Memo etc.), and a unique document number. Each document remains in the system until it is archived. Only complete documents can be posted in the SAP system. "Complete" means that the balance from the debit and credit items is zero. Further conditions for posting a document are that you must enter the basic document data, such as document date, posting date, document type, posting key, account number and amount. You must make entries in all the required fields (these are defined as "required" during system configuration of Field Status Groups). When you enter documents, the system checks whether these conditions have all been met. It also checks/validates the entries themselves. For example, if you have entered a key that is not defined in the system, the system issues an error message to this effect. If this is the case, you can only continue
  36. 36. Project xxxxxx Blue Print Document – Financial Accounting Confidential 36 of 97 processing after you have corrected the error. These system checks & validates that all the required data is entered into the system in complete and in error-free form. If you are interrupted on entering a document and want to save the information you have already entered, you can do so by using the Hold function. On the other hand, you cannot post the document as account assignments are missing, or something is unclear, you can use the preliminary posting function to park the document until you are ready to complete it. 3.2.2. PARK AND POST GENERAL LEDGER DOCUMENT An incomplete document may be parked and then posted at a later date; this may be done by the same or a different user. Generally the documents are parked when the user is waiting for an approval from the superior. Subsequently the user can book the same as a G/L document. One advantage of parking is that you can evaluate the data in documents online for reporting purposes from the moment they are parked, rather than having to wait until they have been completed and posted. A list of parked documents can be generated in the SAP for the benefit of the supervisor/manager. The document can then be checked and corrected by the user. This document can then be posted in the General ledger. Parked documents can be modified or deleted before posting. The documents are entered in to the system and depending on the authorizations; the documents are parked and posted later. The user will park all the documents in R/3. Then the designated approver will view the list of all the parked documents and post the parked documents before the end of the day. 3.2.3. POST/DISPLAY/CHANGE GENERAL LEDGER DOCUMENT Document Posting  Header information like company code, posting date, document date currency is entered.  Items details like general ledger account, amount, tax code, cost assignment will also be entered for each line item.  New line items can be added.  A line item before posting may be deleted if required.  An automatic internal number will be created for each document posted in the system.  Document display in accounting document will allow viewing all the header and line item details.  Document change of the accounting document will allow changes to the Header text, reference, and line item next and assignment field.
  37. 37. Project xxxxxx Blue Print Document – Financial Accounting Confidential 37 of 97 Post general ledger documents To make general ledger business transaction available, you must post them to the general ledger account. The system creates the document and makes the data available in accounts. When you carry out the postings to G/L accounts, you enter the document header data and line items data. Upon simulation of the document, the system carries out the consistency checks before posting the data. If the error exists, the data will not be posted and proposes error information. Once the data is error free, then the system updates the document file and G/L accounts amount may be posted. The expense GL account is made mandatory to input a cost centre. Journal creation will be mainly used for adjustments of incorrect postings, ad-hoc entries, or period- end adjustments. All GL transactions from other modules will be generated automatically with their own document types and number ranges. In addition, the standard journal creation program provides for the creation of an Account Assignment Template. At any time during the creation of a document, the user may save the document as a template for future use. The template may contain any number of individual line items (up to the SAP maximum of 999), and any combination of GL account assignments and individual line item values. The values posted to the G/L accounts appear in the Trial Balance which will provide financial statements like Balance Sheet, Profit and Loss Statement.
  38. 38. Project xxxxxx Blue Print Document – Financial Accounting Confidential 38 of 97 Flow diagram:Document parking and posting Authorized to post? Accept? Yes No Authorized to Post? Yes No End GL document entered S Start Post the document S Park the document S Yes Authorized person accesses the parked document S Authorized person accesses the parked document S Post the document S Correct the document S Post the document S No
  39. 39. Project xxxxxx Blue Print Document – Financial Accounting Confidential 39 of 97 3.2.4. DOCUMENT REVERSAL  It is possible for a user to make an input error. As a result, the created will contain incorrect information. In order to provide an audit of the correction, the user must first reverse the document in error, and then capture the document correctly.  The system provides a function to reverse G/L, A/R and A/P documents both individually or in mass.  When reversing a document, a reversal reason code must be entered to explain the reversal. The reason code also controls if the reversal date is allowed to be different from the original posting date.  Documents with cleared items cannot be reversed. The document must first be reset. However, it needs to be noted that reversal of any document will affect the allocation cycles in case if these processes are completed. It will be required to re-run all these cycles once again after reversing the document. 3.2.5. OPEN ITEM CLEARING  Open items reflect unfinished transactions. For example, a Liability that has not been settled remains in the Liability account as an open item until it is settled.  The open items of an account can only be cleared once you post an identical offsetting amount to the account. In other words, the balance of the items assigned to each other must equal zero.  During clearing, the system enters a clearing document number and the clearing date in these items.  Open items can only be cleared if they are posted to accounts that are managed on an open item basis. Open item management is automatically set for customer and vendor accounts. For GL accounts, however, you have to set the open item management option in the master record.  Open item management would be set for the following GL accounts: o Check clearing accounts (bank clearing accounts). o Goods receipt/invoice receipt. o Other General Ledger Balance Sheet Account Open items of an account can be cleared manually using the Account Clearing function, or they can be cleared automatically by the system. Automatic clearing is especially useful for clearing accounts in the GL account area.
  40. 40. Project xxxxxx Blue Print Document – Financial Accounting Confidential 40 of 97  Users will clear open items from GL accounts by running the clearing program. This program uses predefined criteria to group together open items per account. If the balance of the group of open items equals zero in local or foreign currency, the items are marked as cleared.  The clearing program is used to automatically clear open items based on predefined criteria. Manual clearing of open items is therefore not usually necessary.  Automatic clearing (i.e. clearing based on SAP-defined fields such as assignment, amount, ref. field).  Manual clearing (i.e. matching of amount performed by users).  Within the general ledger module, account clearing shall be performed using the following functions: o Account clearing (ad hoc). o Automatic clearing (part of closing activities). o Post with clearing (during the course of posting a document). 3.2.6. POST RECURRING DOCUMENT For postings that recur on a regular basis, such as payments for rent or interest, legal fees, and property taxes, the recurring entry program can be used to have the necessary documents generated automatically. The recurring business transactions must be stored in the system as recurring entry original documents. Each recurring entry original document contains the date of the first and last posting, the frequency at which posting should be made, and the date of the next planned posting. The recurring entry program must be started at regular intervals within a specified period. The program selects all recurring entry original documents in which the date of the next posting falls within the specified period, and then generates a batch input session. When the session is processed, an FI document that corresponds to the original document is posted, and the date of the next posting is changed accordingly in the recurring entry original document.
  41. 41. Project xxxxxx Blue Print Document – Financial Accounting Confidential 41 of 97 3.2.7. SAMPLE DOCUMENTS Sample documents will be used as reference documents entered specifically for a purpose. Sample documents will have a separate number range. When such documents are entered and posted as a sample document, the system stores the document, but does not update any transaction figures. During document entry, data could be from another document defaulted. The items from this reference document will be:  Transferred without changes  Used for reverse postings  Changed In contrast to an accounting document, sample documents do not update transaction figures. They serve merely as data sources for an accounting document. Their advantage will be that change or enhancements are possible. Therefore a sample document will be used rather than an accounting document when a reference document has to be defined. Sample documents will be used as a reference document when allocation to more than one cost center is defined. If allocation is to be made to other cost centers, the values in the sample document need to be changed. Sample documents will be entered with a special function to ensure that these documents cannot be accidentally posted as accounting documents. 3.2.8. FIXED DEPOSITS WITH BANKS Making/Breaking/Maturity of Fixed Deposits/Investments The company operates fixed deposits of various values with several banks. Though the deposits made for a fixed period with a defined maturity date these will be broken based on the business needs. As on the date of maturity, a manual entry will be posted for recording the interest due on the deposit. 3.2.9. JOURNAL VOUCHER Here all adjustment entries related to vendors or customers is to be passed through FI (JV). It covers following: 1.Vendor/ customer reconciliation entry. 2.GL rectification JV. 3.Accrual JV’s
  42. 42. Project xxxxxx Blue Print Document – Financial Accounting Confidential 42 of 97 3.2.10. PERIODIC PROCESSING Closing Procedures: Apart from the normal day-to-day transaction processing that is undertaken within SAP, there are many processes that require completion on a periodic basis. These include the regrouping of customer credits and vendor debits, and unmatched invoice receipts and material receipts, revaluing of foreign currency items, and month-end accruals and deferrals. List of period close operations in SAP: No. Area Description Business Process Description 1 FI Book all provisions Enter Accrual / Deferral Document for the period 3 FI Depreciation Run This process involves execution of monthly depreciation run and will be centrally executed in X COMPANY on a pre- defined date. It has to be ensured that before execution of this process, all asset capitalization entries must be completed. 4 FI Bank Reconciliation This process is for running automatic bank Reconciliation for X COMPANY 5 FI Clearing of GL/Customer/Vendor accounts The program (T-code – F.13)when executed at the required periodicity will clear all the matching open items in the GR/IR account so as to retain items which will be the open Goods Receipt Credits for which the Invoice Verification has not yet been done (or Invoice not yet received). This Process (T- Code-F-44 Vendor & F-32 Customer) Involves clearing of Vendor Invoice against unmatched payments / advance / debit credit note or JV passed in the Vendor account. 6 FI Withholding Tax Provision This process discuss about Provision of withholding Tax against the each Goods Receipt Note (GRN) for which Invoice not yet posted. 7 FI Open next FI Posting Period This process has to be centrally controlled in X COMPANY and hence is relevant to Finance and Accounts which will control the opening and closing of the posting periods. SAP permits selective opening and closing of posting periods for various types of accounts 8 FI Financial Statement This process is for generating the financial statements such as Profit and Loss Statement and Balance Sheet for X COMPANY. Financial Statement Versions will be created for external reporting.
  43. 43. Project xxxxxx Blue Print Document – Financial Accounting Confidential 43 of 97 No. Area Description Business Process Description 9 FI Customer & vendor Balance Carry forward. These transactions carry forwards the Vendor & Customer balances to next fiscal year. For carry forwards of Balances the selection of data will be Company Code & Year. Before running the carry forward it can be run in Test mode. 10 FI GL Balance Carry forward These transactions carry forwards the GeneralLedger balances to next fiscal year. For carry forwards of Balances the selection of data will be Company Code &Year. Before running the carry forward it can be run in Test mode. 11 FI Asset Balance Carry Forward The process will close the asset master entries for the relevant fiscal year. After this process, SAP does not permit any postings to Fixed Assets for the closed fiscal year.This process should be carried out only when the final Fixed Assets Schedule is complete 12 FI Foreign Currency Revaluation Revaluation is done for all current assets (except stock) and current liabilities accounts. Foreign currency revaluation will be manually calculated and posted or automatically calculated and posted by SAP. For automatic calculation and posting, the standard valuation method is used. 3.3. CHANGES TO EXISTING ORGANIZATION PROCESS N.A. 3.4. SPECIAL ORGANISATION CONSIDERATIONS: N.A. 3.5. GAP ANALYSIS: N.A. 3.6. INTEGRATION CONSIDERATIONS SAP financial accounting module has a close integration with other modules in SAP. All the postings in other modules having financial impact would be directly posted to Financial accounting GL A/c in real time. In case of X Company the integration would be primarily as follows:  FI-CO Integration(Company code, GL accounts)
  44. 44. Project xxxxxx Blue Print Document – Financial Accounting Confidential 44 of 97  FI-SD Integration (General data, Company code, Distribution Chain)  FI-MM Integration (General data, Company code, Purchase area) and FI-AA  FI-HR Integration (Company code)
  45. 45. Project xxxxxx Blue Print Document – Financial Accounting Confidential 45 of 97 4. ACCOUNTS PAYABLE 4.1. GENERAL EXPLANATIONS (AS-IS) Currently X Company accounting team along with the purchasing team performs following activities under Accounts payable Accounting PO based Bills processing (Revenue & Service): X Company purchases the raw materials, fixed assets, production consumables, services etc. by placing a purchase order to the vendor. The centralized purchase department caters to the need of all 9 legal entities. As per the process, the ordered goods are delivered to the plant-store or desired place. The stores person books the goods receipt. Usually the invoice is accompanied with the goods delivery. In case the invoice document arrived at plant, the stores people send the invoice copies to Purchase department in head office. The purchase department verifies the invoice and passes it on to accounts department for further processing.The accounting department posts the vendor liability and processes for payment. Sometimes, if the expenses incurred at individual branch, the invoice is forwarded to purchase department in head office. The purchase department verifies the invoice and passes it on to accounts department for payment. X Company also imports some materials. In these cases the invoices are booked in INR. If in case any discrepancy seen between delivered quantity and invoice quantity above tolerance limit, subsequent debit note is issued to the vendor. The vendor is paid only for quantity actually received + allowable tolerance quantity. Unplanned delivery cost if any is identified as separate expenses. Accounting for Purchase - Other Than PO  In case of Vendor invoices without Purchase Order / Service Order / Contract would be booked by the Finance vendor invoice. And link with the relevant department at the time of transaction.  In the FI vendor invoice, GL account is to be entered for the debit posting. Due date, payment terms is picked up from the vendor master but this can be modified if required at the transaction level. Payment to vendors: the vendors are usually paid through checks. Some times RTGS or DD are used for payments. This file is then shared with bank for check printing. Vendors are usually paid through checks. The payment request is raised by respective branch (if procurement does not happen from HO) along with invoice. In case of check payments, manual payment entry is posted into the system which owns a check number. X Company has got check numbers received from the bank. At a particular time interval, a file (‘.csv’ format) is generated which includes the information pertaining to the check payments. This file contains the information about the vendor, invoice details, amount paid and checks number. This file is then shared to bank for check printing. Then check printing takes place at bank end. The printed checks are collected by X Company person. The checks are then couriered to respective vendors. All the legal entities pays to respective vendors form their own bank accounts.
  46. 46. Project xxxxxx Blue Print Document – Financial Accounting Confidential 46 of 97 Salary payments:As on date the net salaries for all the legal entities are paid from Sphinax Chemicals’ bank account. A consolidated file is uploaded to bank portal. A this point other legal entities are considered as receivables in the Sphinax chemicals books of accounts. Later on each legal entity reimburses the amount to Sphinax Chemicals Pvt. Ltd. Payment in cash:Some minor expenses are paid in cash. Communications with vendors:X Company sends payment advices to the vendors along with the check. This contains the information about the invoices paid. As on date the other formal correspondence with vendors is not followed particularly. However, as and when required requests for balance confirmations are sent to vendors. Accounts payable reports:X Company team uses reports like vendor open invoices, due date analysis, vendor balances etc. for analysis purpose. Taxes and duties:X Company deals with excise, VAT/ CST, service tax, customs duty, GTA as input taxes. The input taxes, where ever applicable, for eligible expenses are booked as current asset to avail the CENVAT credit. And the expenses which are not eligible for credit, the taxes are loaded to the expenses account. Also if applicable the withholding tax is deducted at the time of invoice posting or payment whichever is earlier. 4.2. SOLUTION IN SAP–(TOBE): Overview: The Accounts Payable application component records and administers 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 makes postings in response to the operative transactions. Payables are paid with the payment program. The payment program supports all standard payment methods. Postings made in Accounts Payable are simultaneously recorded in the General Ledger where different GL accounts are updated based on the transaction involved (payables and down payments, for example). The system contains due date forecasts and other standard reports that you can use to help you monitor open items. You can design balance confirmations, account statements, and other forms of reports to suit your requirements in business correspondence with vendors. There are balance lists, journals, balance audit trails and other internal evaluations available for documenting transactions in Accounts Payable. 4.2.1. PO BASED BILLS PROCESSING (REVENUE & SERVICE) In this process Purchase Order is raised with reference to Purchase Requisition where accounting has no impact, it’s only a commitment item. When the goods are received from the vendor based on the PO, we execute MIGO where goods receipt is posted and both Material document and FI document is generated.
  47. 47. Project xxxxxx Blue Print Document – Financial Accounting Confidential 47 of 97 Material document will be for accounting stock into stores and FI entry will Inventory / Stock A/c Dr. GR/IR Clearing A/c Cr. Here GR / IR clearing account is a clearing account and gets knocked off at the time posting the invoice (MIRO execution). All the Incoming Invoices are verified in terms of their content, prices and arithmetic and the invoice is posted, the data is saved in the system. The system updates the data saved in the invoice documents in Materials Management and Financial Accounting. After the invoice has been posted, the document appears as an open item in the vendor account. (Payment proposal list). Accounting Entries when invoice is posted will be: GR/IR A/c Dr. CENVAT Clearing A/c Dr (if applicable) VAT Clearing A/c Dr (if applicable) Vendor Account Cr. In case of Service PO following entry will be triggered:- Goods Receipt: Expense a/c Dr. Service GR / IR A/c CR Invoice Posting: Service GR/IR A/c Dr. Vendor Account Cr. Delivery costs can be divided into:  Planned delivery costs  Unplanned delivery costs
  48. 48. Project xxxxxx Blue Print Document – Financial Accounting Confidential 48 of 97 Planned Delivery Cost: Planned delivery costs are entered at item level in the purchase order. Planned delivery costs can be divided into:  Freight costs  Customs relevant  Insurance Planned delivery costs can be invoiced in the following ways:  Fixed amount, independent of scope of supply  Quantity-dependent amount  Percentage of value of goods to be delivered For planned delivery costs, the System makes postings to a clearing account at goods receipt. If the delivery costs in the invoice differ from the planned delivery costs, the System posts the differences in the same way as it posts normal price and quantity variances. In case of planned delivery cost such as Freight: Freight clearing A/c Dr Freight Vendor A/c Cr In case of planned delivery cost for Customs duty (Bill of Entry items), Customs clearing A/c Dr Customs Officer’s A/c Cr (Govt. Vendor) Unplanned Delivery Cost: Enter the unplanned delivery costs on the Extras tab page. The System distributes unplanned delivery costs among the items; it treats them in the sameway as price differences. However, it does not check the price after distributing the delivery costs. It does not list them separately in the purchase order history. They are only included in the invoiced value. Then accounting entries will be, Vendor A/c Cr Stock A/c (or) Price Difference Dr
  49. 49. Project xxxxxx Blue Print Document – Financial Accounting Confidential 49 of 97 Domestic Purchases (material) -- which includes fright,VAT During GR: Material Stock Dr GR/IR Clearing A/c Cr Freight Clearing A/c Cr During Invoice Verification: GR/IR Clearing A/c Dr Freight Clearing A/c Dr VAT A/c Dr Vendor A/c Cr Freight Vendor A/c Cr For Domestic Procurements of Capital Goods: During GR: Material (Asset) A/c Dr GR/IR Clearing A/c Cr During Invoice Verification: GR/IR A/c Dr Vendor Payable A/c Cr Import Purchases (material) -- which includes fright, Duty During Customs Duty Clearing Invoice: Custom Clearing A/c Dr Custom Officer A/c Cr Here Custom Officer is created as a vendor. During GR:
  50. 50. Project xxxxxx Blue Print Document – Financial Accounting Confidential 50 of 97 Material Stock Dr GR/IR A/C Cr Custom Clearing A/c Cr (The custom duty portion of value is loaded to the inventory and the Customs clearing a/c will get nullified) During Invoice Verification: GR/IR A/c Dr Vendor A/c Cr 4.2.2. DIRECT BILLS PROCESSING (NON PO BASED) Accounting Document is generated manually by debiting the expense and crediting the vendor. WHT is also deducted at this stage which will be called up automatically.  Vendor invoices without MM purchase order would be booked through FI vendor invoice and has no impact on the stock.  In the FI vendor invoice, GL account is to be entered for the debit posting. Due date, payment terms is to be mentioned in the invoice. 4.2.3. VENDOR DOWN PAYMENT & CLEARING Payment / Receipt process (Advance & Regular):  Advance Payment: Once the APR (Advance Payment Request) received from Purchase / Intending department, AP user will cross check the request with PO for compliance.  For all the purchase based advances, PO numbers will be referred/attached to prepayment voucher. So system will allow to pay the advance always less than or equal to the advance amount mentioned in the PO. More than one PO can be referred for a single pre payment against each vendor. Advance Payment: A Down Payment request is raised by the authorized person requesting for payment. Based on the request, a down payment may be released to the particular vendor and request item is cleared. Down payment request is a noted Item special General Ledger account which will not be displayed in the Balance Sheet. In SAP, processing of a down payment involves a number of steps:  Down Payment request, a notational item recorded against the vendor,  Make payment against the payment request,  Post the invoice which required the down payment,  Clear the down payment against the invoice, and
  51. 51. Project xxxxxx Blue Print Document – Financial Accounting Confidential 51 of 97  Make final vendor payment, the balance of the invoice. The accounting entry for making the down payment will be: Vendor account (Spl. G/L: Down Payment) Dr Bank A/c Cr 4.2.4. INVOICE BOOKING & SETTLEMENT OF ADVANCE The concept of authorizing the document entry can be achieved by the standard SAP functionality creating and authorizing the payment request. Payment request will be created by one person and authorized by another person to keep the control. It is also possible to post invoices from FI without the necessity of purchase order. That can be used to fulfill the requirement of postings like miscellaneous payments, employee related payments, travel agent payments, hotel bills and consultancy payments. Settlement of down payments to the vendor account and clearing of Invoice against,Down Payment Vendor A/c Dr Vendor A/c (Spl. G/L: Down Payment) Cr Wherever, WHT is applicable, the WHT will be deducted at the time of down-payment to the vendor and will be adjusted at the time of settlement of advances. 4.2.5. CREDIT PERIOD FOR VENDOR PAYMENTS: Terms of Payment will be defined by the Company, which will be updated in the Vendor Master for each vendor and will be defaulted in the PO and Invoice level. Where the payment terms have been changed in the invoice level, the due dates will over-ride the original due date (calculated based on Purchase Order). Terms of payment will define the credit period, due date and cash discount, if applicable. The due date will be calculated from a baseline date as per the payment terms, which will be either of the following dates:  Document Date  Posting Date  No Default
  52. 52. Project xxxxxx Blue Print Document – Financial Accounting Confidential 52 of 97 4.2.6. VENDOR NORMAL PAYMENT By using the SAP standard functionality all the check payments can be managed. The typical procedure under SAP with respect to check will be: a) Defining the check lots for house bank of X COMPANY b) Entering the vendor invoice c) Entering the vendor payment by clearing the open item created by invoice d) Attach check to the payment document number generated in step (C) e) Check the check register to see the check updated/3 Vendor Payments can be manual or automatic. The general aspects related to vendor payment are Terms of Payment, Method / Media of Payment, manual payment & Automatic Payment X COMPANY has to make payments to vendors during their course of transactions, vendors invoice due date is checked and if it is due, then the payment process begins. Prior to making any payment down payments if any are to be checked and cleared against the invoices. Only then Payment process can be carried out. The payment can be full payment or part payment or residual payment. In case of full payment, the system clears the open item. In case of part payment, the open item is not cleared and has to be cleared manually subsequently, when the entire amount is paid. In case of residual payment, the original invoice is cleared and the balance amount is created as fresh open item. Availability of the funds is checked before making the payment. In case funds are not available, after making the funds available, the payment has to be carried out. Payments can be made through automatic payment program or through manual payment. Check payment can be made through automatic payment program or through post plus print option transaction. In case of automatic payment program, the parameters have to be entered and the system prints the checks for all the vendors who are due as per specified parameters. In both cases, the check is printed. In case of post plus print option, the individual vendor has to be selected and payments are to be made by selecting the required open items and with that reference of payment document check can be printed. 4.2.7. AUTOMATIC PAYMENTS: The payment program is designed so that you can pool and process outgoing payments. The payment program processes domestic and foreign payments for vendors and customers. It creates payment documents and supplies data to the payment medium programs. These payment medium programs print either a payment list, payment forms (for example, checks). The payment program processes the open line items in three steps:
  53. 53. Project xxxxxx Blue Print Document – Financial Accounting Confidential 53 of 97  It determines the open items to be paid according to the parameters entered and creates a proposal list. You then have the ability to edit the proposed payments before the transactions are posted. Any items that you do not want to pay can be blocked for payment, however, if you need additional items to be included in the proposal list, the previous proposal must be deleted, the parameters changed to pick up the additional transactions and the payment program rerun.  The payment program makes the payments based on the edited proposal list. Only the open items contained in the proposal list are taken into consideration. The payment program posts documents, sets up data for the form printout (check), the remittance advice, and the payment summary as required.  Payment program will automatically update the check register (if used) and the relevant general ledger accounts and also clear the vendor invoice for which payment run is executed. Considering the need of paying multiple vendors at a time and generating ‘.csv’ file, automatic payment program would be used for X Company. The payment parameters that need to be specified include:  Company Code  Vendors to be paid (and customers for refunds)  Posting and document date for open transaction items that must be included in the proposal list  Defining the bank from which the payments will be made  Payment methods that are permitted (e.g. Check, EFT)  Currency During the payment run accounting document is generated clearing the vendor open item. 4.2.8. MANUAL PAYMENT With manual payments you can print checks without running automatic payment program. There are two ways of doing this:  You can print a check for a payment already posted. This may be necessary if a check is damaged during printing.  Check is prepared manually i.e outside the SAP system and then check details are updated to the payment document which updates the check register. 4.2.9. VENDOR FOREIGN PAYMENT In case of Import materials, Purchase orders will be processed and sent to the selected vendor with all terms and conditions. Upon the receipt of the goods in the customs area, they would be released after the payment of duty. In SAP the customs authority would be considered as vendor and a liability towards customer duty would be recognized in the system. This would be called as customs invoice verification.
  54. 54. Project xxxxxx Blue Print Document – Financial Accounting Confidential 54 of 97 Then after payment of subsequent duties, goods would be released from the customs area. Goods receipt would be booked once the goods are received in company’s storage location. Then import vendors commercial invoice would be booked in the system. If goods received are as per the PO order quantity, Goods receipt will be posted with reference to purchase order when material is physically received. Invoice verification will be processed with reference to goods receipt and vendor invoice receipt as per the payment terms stated in purchase order. Vendor payment will be processed with reference invoice verification posted in Materials Management by Financial Accounting. For such an IR, the exchange rate is picked up from the PO in which we have defined a fixed exchange rate. All import purchase orders are to be raised in foreign currency but the transactions are to be recorded in INR. The import vendor invoice would be booked in the system in foreign currency. System would pick up the exchange rates maintained in the system for the currency pair for e.g. USD to INR. The exchange rate can be changed in the document, if required. At the time of payment, the system would automatically calculate the exchange gain/loss and book it to relevant GL A/c. 4.2.10. DEBIT NOTE & CREDIT NOTE All the support/relevant documents will be submitted by purchase to generate the debit/Credit note on the identified process like discounts on the qtypurchase. Cross Functional with MM: Credit Memo: A credit memo can be entered with reference to a purchase order or a goods receipt. Purchase Dept/AccountsDept enter a credit memo for a purchase order item when the goods are returned to the vendor. First MIGO is to be posted for the return quantity and then credit memo to be posted in MIRO for the return PO. Accounting Entries will be for Credit Memo (returned goods) Goods Receipt - MIGO GR/IR A/c Dr Inventory A/c Cr Posted for the returned quantity, stock value & quantity is reduced. Invoice Posting – MIRO Vendor A/c Dr GR / IR A/c Cr VAT Receivable A/c Cr 4.2.11. ADJUSTMENT / CLEARING PROCESS
  55. 55. Project xxxxxx Blue Print Document – Financial Accounting Confidential 55 of 97  Open items reflect unfinished transactions. For example, a Liability that has not been settled remains in the Liability account as an open item until it is settled.  The open items of an account can only be cleared once you post an identical offsetting amount to the account. In other words, the balance of the items assigned to each other must equal zero.  During clearing, the system enters a clearing document number and the clearing date in these items.  Open items can only be cleared if they are posted to accounts that are managed on an open item basis. Open item management is automatically set for customer and vendor accounts. For GL accounts, however, you have to set the open item management option in the master record. Open items of an account can be cleared manually using the Account Clearing function, or they can be cleared automatically by the system. Automatic clearing is especially useful for clearing accounts in the GL account area.  Users will clear open items from GL accounts by running the clearing program. This program uses predefined criteria to group together open items per account. If the balance of the group of open items equals zero in local or foreign currency, the items are marked as cleared.  The clearing program is used to automatically clear open items based on predefined criteria. Manual clearing of open items is therefore not usually necessary.  Automatic clearing (i.e. clearing based on SAP-defined fields such as assignment, amount, ref. field).  Manual clearing (i.e. matching of amount performed by users). 4.2.12. CORRESPONDENCE All evaluations and reports sent to business partners are considered as correspondence. Correspondence for both customers and vendors includes:  Account statements and open items lists in letter form  Individual letters and standard letters  Balance confirmations  Document extracts Since standard reporting format of above correspondence does not meet X COMPANY requirement, need to be developed
  56. 56. Project xxxxxx Blue Print Document – Financial Accounting Confidential 56 of 97 Vendor master creation Yes Yes No Create Vendor Centrally ? Purchasing view created? Vendor is created No Start Decide the account group M Create vendor in that account group S Create accounting views S Stop Materials management process S Create Accounting ViewYes No
  57. 57. Project xxxxxx Blue Print Document – Financial Accounting Confidential 57 of 97 Park and post vendor invoice: X COMPANY requires day to day accounting of the transactions that take place in the organization. This application component is required for entering vendor invoices that arise in the accounts payable module of financial accounting. In case, where materials management is involved, the entering of the invoice is done in the logistics invoice verification of the materials management.
  58. 58. Project xxxxxx Blue Print Document – Financial Accounting Confidential 58 of 97 Authorized to post? Yes End Vendor invoice entered S Start Post the invoice S Yes No Park the invoice S Authorized person accesses the parked invoice S Accept? Yes Authorized to post? No Correct the invoice S Post the invoice S No Authorized person accesses the invoice S
  59. 59. Project xxxxxx Blue Print Document – Financial Accounting Confidential 59 of 97 Vendor down Payment X COMPANY has to pay, during their course of transactions, advance payments to the vendors. Advance payments are known as down payments in SAP. Down payment request can be created by the materials management department and the same can be viewed by the accounts payable person. After checking the purchase order terms, the down payment is made by the accounts payable person. The system posts the down payment transaction as a special general ledger transaction in the vendor account. Hence, it will not appear in the regular balance but only in special general ledger balance. Once, the down payment is cleared against an invoice, the balance is shifted from the special general ledger balance to the regular vendor account balance. At the time of document entry, the appropriate special general ledger indicator needs to be chosen. Flow diagram for vendor down payment Down payment to be made? Yes NoStop Vendor Account updated Down payment request from Purchase Department S Start Read the purchase order M End Make down payment through check/ transfer S
  60. 60. Project xxxxxx Blue Print Document – Financial Accounting Confidential 60 of 97 Flow diagram Vendor Payment Process Payment due? Funds exist? Yes Yes NoStop Down payment exists? Yes No No Full Payment? Vendor Paid Document generated Yes No Check the vendor due list S Start Wait for funds M Clear the down payment S End Part payment S 4.3. CHANGES TO EXISTING ORGANIZATION PROCESS: N.A. 4.4. SPECIAL ORGANISATION CONSIDERATIONS: N.A. 4.5. GAP ANALYSIS: N.A. 4.6. INTEGRATION CONSIDERATION: FI-MM Integration

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