Sap General Notes 14nov2007

M. Rajagopalan

SAP- Material Management (MM) Notes Module Functions: (MM) Materials Management - the module where (finished goods, raw materials and consumables) are managed for both quantity, price, month end inventory cutoffs and balance. Materials Management is inventory management, purchasing, invoice verification, warehouse valuation, Material master and materials planning.

 Organizational Elements (Structures) - Materials Management 1. Company Code 2. Plant 3. Storage Location 4. Material / Product Grouping

 Organizational Elements (Structures) - Procurement 1. Company Code: Represents an independent accounting unit with Balance Sheets and P&L Statements 2. Plant: An organizational element within a company. A plant produces goods and/or services. A plant can be a manufacturing for a distribution facility. 3. Storage Location: Unit that allow the differentiation of material stocks within a plant 4. Purchasing Organization: Unit structured to negotiate the general conditions of purchase for one or more plants or companies. Pricing conditions are set at this level 5. Purchasing Group key for a buyer or buyer group responsible for certain purchasing activities. Note: this element cannot be assigned to a purchasing organization. 

Documents and Transactions 1. Purchase Requisitions 2. Purchase Orders 3. Goods Receipts Postings 4. Vendor invoice Posting 5. Other

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Procurement Master Data 1. Material Master: Contains and defines all data to manage materials. Used as a source of purchasing information and inventory valuation. 2. Vendor Master: General, Accounting and Purchasing data necessary for processing business transactions and corresponding with vendors

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SAP- Controlling (CO) Notes Module Functions: Control - The module that manages cost reporting, analysis and control. This is the primary area for managing and evaluating financial performance. CO-PA: Profitability Analysis. That part of CO where operations will access its performance factors and profitability statements contain margins, standard cost variance, sales information, allocations and other related profit or loss data. This module helps analyze profitability of customers, markets and products at various levels of contribution margins. Profitability is measured down to the SD billing document line and is adjusted periodically against standard costs and other costs.

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Profitability analysis, like profit center accounting is another form of profitability accounting. However, it is incorporated in operative cost accounting, i.e. the profitability segments in CO-PA are accounting assignment objects and are thus directly integrated in the flow of data in cost accounting.

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In contrast to EC-PCA, where profits are found for areas of responsibility within the company, CO-PA lets you analyze the profitability of different segments of your operative business as defined according to products, customers, orders or any combinations of groups of these or as organizational units, such as company codes or business areas. The aim of CO-PA is to provide decision makers with information about the market.

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Master data and basic structures in CO-PA can be defined with sufficient flexibility to meet company specific requirements. This is done by choosing the objects for evaluation (characteristics) and key figures to create a company-specific multidimensional structure for analysis.

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Unlike EC-PCA, CO-PA lets you use an account-based or a costing based approach. In the costing based approach, define value fields for analysis. In account based the values are represented in accounts.

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EC-PCA and CO-PA should not be regarded as alternative components. They complement one another and jointly provide a flexible and comprehensive profitability accounting tool, allowing you both a market oriented view and a responsibility view.

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Data Source 1. Revenue Accounts 2. Expense Accounts 3. Allocation of Operating Expense (only across profit center) 4. Stock Transfers Across PCA 5. A/R Sub ledger (Month End Batch Job) 6. A/P Sub ledger (Month End Batch Job) 7. Other Balance Sheet Accounts

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Data Flows

CO-CCA: Cost Center Accounting determines where costs are incurred in the organization. Assigned to the sub area where they have the most influence. • By creating and assigning cost elements to cost centers, you make cost controlling possible, but also provide data for other components in CO such as Cost Object Controlling. Cost centers can use allocation methods to assign collect costs to other controlling objects. • Cost center structure can reflect the structure of the organization. It generally remains constant over time. • Cost Centers CO-OPA: - Internal Orders CO-PC: - Product Costing 14/Nov/2007

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M. Rajagopalan CO-OH: - Overhead

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SAP- Enterprise Controlling (EC) Notes Module Functions: EC-CS Enterprise controlling - Consolidations: The module where consolidations and elimination occur for both a legal entity (Company Code) and a management area (Profit Center). Consolidation gives you a reconciled view of your groups financial data and lets you create the reports required by corporate law (by group, company or business areas) as well as reports which reflect your company's internal management structure (by profit center or region). This is possible due to powerful consolidation functions built on top of flexible structures. The raw data can be transferred via interfaces with FI-GL (General Ledger), FI-AA (asset accounting), MM (Materials Management, SD (Sales and Distribution) and EC-PCA. You can also analyze the results of the consolidation immediately in ECEIS. DATA TYPES - i.e. CS Breakdown categories

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Company & Trading Partner controlled by FI are required to generate eliminations. Note: FI-GL/AR/AP line items always have Company in Document Header. Trading partner is in document line item where relevant

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Profit Centers & Partner Profit Centers controlled by PCA are needed to generate eliminations for Management Consolidation by line of business

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Consolidation Units and Partner Units controlled by CS are used to generate eliminations for various consolidations. Transaction data from CS-PCA updates Consolidation units and if appropriate stores the data by partner Unit.

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Transaction types controlled by FI are used for reporting of consolidated balance sheet flows in CS. Transaction Types are used by the Fixed Asset module to distinguish between beginning balance, additions, transfers, disposals and ending balances. Separate types are usefull to distinguish movements in equity holdings for financial investments.

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Functional Areas controlled by CO are used for reporting consolidated P&L Statements. Functional Areas combine accounts but distinguish balances by function (e.g. selling expenses, research & development costs etc.) o FI-AA Assets Module is the primary user of Transaction Types. Transactions made in FI-AA are stored with a Transaction Type which identifies whether it is an addition or disposal, etc. These Asset Transaction Types can be mapped into consolidation transaction types. o Data passing from PCA to CS populates a single field with either a Transaction type for selected Balance Sheet accounts or a Functional Area for selected P&L accounts. o Transaction types and Functional Areas are for Reporting.

EC-PCA Profit Center Accounting - Profit center accounting forms an interface between the operative controlling (CO) applications and the Enterprise Controlling (EC) module It reflects the actual and plan postings from operative controlling and settlements components with which it is in targeted in real-time. It then summarizes this data according to profit centers, which reflect the internal structure of areas of responsibility within the company code •

Each profit center is assigned to one controlling area

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Reason for Profit Centers 1. to analyze areas of responsibility 2. to delegate responsibility to different decentralized units

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Profit Centers can be set up 1. Product (product lines, divisions) 2. Geographical factors (regions, sites) 3. Function (production, sales)

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M. Rajagopalan Continues …

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Profit Centers are organized into an organizational hierarchy in which responsibility and incentive structures can be defined. Profit Center Hierarchy: o Node one (a) Profit Center one o Node two • Profit Center two (a). Revenue (b). Costs •

Profit Center three

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Planning can be done on a PCA

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In EC-PCA, the profit center is the lowest level at which you measure financial results

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Since CS-PCA is only complete at the end of the month, CS-PCA data in only rolled up to CS via FI-SL (Special Ledger) monthly.

Accounting Data Flows: 1. Real time data flows 2. Periodic data flows EC-CS - Enterprise Controlling Consolidations • Manual Entries • EC-PCA - Enterprise Controlling Profit center accounting o FI Balance Sheet Items (1). SD, MM, PP, FI Journal Entries 

FI Period End Update - Balance Sheet Sub Ledgers - SD, MM, PP, FI Journal Entries

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CO-OH o FI P&L - SD, MM, PP, FI Journal Entries CO-Allocations CO-PA o FI P&L External Revenue and Cost of Sales - SD, MM, PP, FI Journal Entries

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SAP- Sales & Distribution (SD) Notes Module Functions: (SD) Sales and Distribution: the module where order taking, pricing, invoicing, route selection and other customer billing activities take place I. Organizational Elements (structures) for SD Customer Order Mgmt 1. Company Code 2. Plant: A manufacturing facility, distribution center or office that stores inventory or renders services. 3. Sales Organization: Area responsible for distribution of goods and services, negotiating conditions or a sale. The level of reporting for sales figures and analysis 4. Distribution Channel: The channel to the customer i.e. retail, wholesale and direct sales 5. Division: Used for customer specific agreements i.e. partial deliveries, pricing agreements, special payment terms 6. Shipping Point: The shipping location. Each delivery is specific to a single point 7. Warehouse Number: Physical location within a plant that has inventory. II. Main Documents (transactions) 1. Presale - quotation or inquiry document 2. Sales Order Document 3. Inventory Sourcing Document 4. Delivery Document 5. Invoice Document 6. Remittance advice III. Master Data 1. Material Master: Contains and defines all data to manage materials, sued as a source of purchasing information and valuation of inventory. 2. Customer Master: All customer related data for processing orders, deliveries, invoices & customer pmts. The customer master is broken into general data, company code data and sales and distribution data 3. Condition (pricing records) - Predefined prices, discounts, surcharges, freight rates and taxes

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SAP- Finance (FI) Notes Module Functions: The module that performs most of the traditional legal entity accounting functions, reporting by company, income statements and balance sheets. This is the module where you will find the A/R and A/P sub-ledgers and their open items along with the Asset Accounting Ledger. Organizational Elements (Structures): • • • • • • •

Chart of Accounts - contains all account numbers and some general control data. Company Code - an independent balancing / legal accounting entity. each company code is assigned to one Chart of Accounts Functional Area - Classify operating expenses according to of cost-of-sales accounting by production, admin, S&D marketing, R&D, etc. By breaking costs into functional areas costof-sales accounting shows why costs accrue and indicates the economic purpose of the expense. Trading Partner Operating concern - the central organizational element in profitability analysis. It represents the environment within which a market or (customer defined) segment of the business can be monitored and profitability analyzed. 1:n relation to controlling. Controlling area - identifies a self-contained unit for which the management of costs and profits can be performed. Only one chart of accounts is allowed within a controlling area. However, (FI-AA) Asset Accounting - Depreciation (both book and tax), net book values, transfers and retirements

Document Posting Principles: Each posting is in the form of a complete document. It must contain: • • •

Basic account assignment data (i.e. document date, posting date, document type, posting key, account number and amount. Entries must be made in all required fields. Debit and credit balances must be equal.

Every document contains a document header and at least two or more line items. • •

The header contains information valid for the whole document (i.e. document date and type). Line items contain transaction specific data (i.e. posting key, account number and amount).

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M. Rajagopalan Document header:

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Document Date is the date that the transaction took place. (Must be on or before the Posting date ?) Posting Date determines the posting period (the system will enter this date if not provided?) Document Number is normally assigned b the system from a range predefined for each document type. (Not an input for g/l doc types {S} Reference and Document Header Text is descriptive data Period is the accounting period. Normally numeric (1 to 16?) Document type, a two character alphanumeric field. This field determines the document number range and the valid account types which may be used. • • • • • • • •

A df Fixed Assets D df Accounts Receivable K df Accounts Payable R df Logistics (MM & SD) S df G/L T df Treasury W df Material Management Z df Sp0ecial purpose

Line Items: •

Posting Key is a two character numeric • • • • •

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Together with the account number controls posting at item level Controls valid account type (D,K,M,A) Defines a Debit or credit entry Controls fields required optional or suppressed Valid FI posting keys o 01-09 DR Customer o 11-19 CR Customer o 21-29 DR Vendor o 31-39 CR Vendor o 40 DR G/L o 50 CR G/L

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