Finance & Accounts DepartmentFICO Overview

Index : Table of ContentsGeneral LedgerSnapshot of Integration with MM & SD ModulesAccounts ReceivableAccounts PayableCash Accounting Bank Accounting Asset Accounting

SAP ECC Integration*Sales &DistributionSDMMPPQMPMHRFICOAMPSBASISISMaterialsMgmt.ProductPlanningQualityMgmt.Plant Maint.HumanResourcesFinancialAccountingControllingFixed AssetMgmt.ProjectSystemIndustrySolutionsECC

Financial Accounting and Controlling ** | *Financial AccountingLegal / Statutory AccountsStandard LedgersMaster Data Integrates with Controlling

ControllingManagement AccountsManage Budget Expenditure

*Financial Accounting Vs Controlling

Definition: External Accounting Internal Accounting

Purpose:Meets legal Meets internalrequirements requirements

Reports:External Reporting: Management Reporting:Balance Sheet, Profitability by Product,Income Statement Departmental Expenses, Order Commitments

Users:Shareholders,Managers, Business Analysts Tax Authorities, Auditors, Investors

Modules:G/L, A/R, A/PCost Center Analysis, Product Costing, Activity Based Costing FICO

*SAP FI ConceptsSub-Ledger accounts are the individual master records unique to each customer and vendor, where the details of all transactions are recorded

The financial data recorded in each sub-ledger is summarized in the general ledger, such an account called as a Reconciliation Account Ex: Sundry Creditors account.A/P: Summarizes the amounts owed to vendorsA/R: Summarizes the amounts due from customersAssets: Summarizes the amounts due from customers

Posting:Reconciliation Accounts are updated internally each time the sub-ledger account is posted to, by way of the Three-Way PostingAll direct postings (e.g., invoice entry) are done directly at the sub-ledger account level

A Group Hierarchical Structure

Chart of Accounts

CompanyChart of AccountsCompany CodesGVKPIL LTD GVK COAL LTDGVK INDUSTRIES LTD

GVK Group

Company Code** | *Company CodeIt is an independent accounting entity. A company code is assigned to a chart of accounts.Each company code in A Group uses the G/L accounts from only one chart of accounts for account validation. This is called the operating chart of accounts. A chart of accounts can be used by multiple companies provided they have the same basic account requirements.

Chart of Accounts** | *Chat of Accounts

Legal Entity 1Legal Entity 2Legal Entity 3The Chart of Accounts (COA)

Contains the definitions of all G/L accounts in an ordered formEach general ledger is set up according to a Chart of AccountsFor 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.

Chart of Accounts - Structure** | *Charts of accounts can have three different functions in the system:

Operating chart of accounts: The operating chart of accounts contains the G/L accounts that you use for posting in your company code during daily activities. Financial Accounting and Controlling both use this chart of accounts. You have to assign an operating chart of accounts to a company code.

Group chart of accounts The group chart of accounts contains the G/L accounts that are used by the entire corporate group. This allows the company to provide reports for the entire corporate group. The assigning of an corporate group chart of accounts to a company code is optional.

Country-specific chart of accounts The country-specific chart of accounts contains the G/L accounts needed to meet the country's legal requirements. This allows you to provide statements for the country's legal requirements.The assigning of an country-specific chart of accounts to a company code is optional.

FI Financial Accounting Modules** | *FIGeneral Ledger

Table of Contents** | * GL Overview

Sub Processes

Master DataTransaction ProcessingAccount Analysis / ReconciliationPeriodic ProcessingReporting

General Ledger** | *

General Ledger Master Data** | *

In SAP, master data relates to individual objects that remain unchanged over an extended period of time. Master data Contains information that is used in the same manner for similar objects. Examples would be the master data of a supplier containing Name, Address and Banking information

or the master data of a user in the R/3 system, containing user's name, Authorizations and so on.

** | *General Ledger Master DataAccount Groups

Maintenance of General LedgerCreation at 2 Levels Chart of Accounts DataCompany Code Data

ChangeBlockDeleteCost ElementsCreationChange

*GL Master Records Two Levels

General Ledger (GL) Account GroupsChart of AccountsAccount GroupsNumber Ranges

Chart of AccountsA/C GrpFrom No.To No. Description1000SCAP112000001112009999Share Capital1000SDRS252000001252099991Sundry Debtors1000SECL345678901345678999Secured loans1000UNSL145678901145678901Unsecured loans1000CABK253000001253009999Cash & Bank Balances

General Ledger (GL) Master Record Item management Posting control... Currency Tax-relatedAcct number: 119430 :Description: Miscellaneous ExpsBal. sheet acct:Inc. statem. acct:Chart of accounts segmentCompany code segment(Balance c/fwd)Account group:Material MgmtBank account numberAut. Posting controlOther reference data

Balance P&LT T TT TT T TT TT T TT T

General Ledger Screenshot / Sample view

General Ledger - Blocking of GL Account G/L Accounts are blocked at two levels

Chart of Accounts level Company Code level

In Chart of accounts you block

A master from creating in the Company Code An account for posting

In Company Code you block

An account for posting

Note: You can set or cancel the posting indicator at any time

General Ledger Deletion of GL Account G/L Accounts are not physically deleted without taking preparatory steps

Mark it for Deletion Specify that record must be archived Archive the transaction data attached to that master record Execute the G/L deletion program

Cost Elements 9ControllingControllingRevenue elements123Assets4LiabilitiesEquityFinancial AccountingFinancial AccountingExpenseaccounts8Revenue1 Current financial assets & short term capital 2 Non operating costs, Revenue3 Material inventoryChart of Accounts - 1000PrimarycostelementsSecondarycost elements4 8

Cost Elements Primary cost elementsPrimary cost elementExternalorder settlementSecondary cost elementsInternal activity allocationAssessmentOverheadsInternal order settlementRevenue elementsRevenue elementSales deductionRevenue accountExpense accountsAccounts posted to directly, such as bank accountsAccounts posted to indirectly, such as reconciliation accountsBalance sheet accountsP & L accountsG/L accounts

General Ledger - Integration

General Ledger

General Ledger Transaction Processing In SAP, transaction data relates to daily activities, which is maintained frequently and eventually changed in a short period of time. Transaction Data contains dynamic information normally used for a single operation or process.

Examples would be the General Ledger postings, requisitions, purchase orders, and quotations

General Ledger Transaction Processing SAP R/3 supports the following ttransactions:

Journal (JV) ProcessingForeign Currency documents Parked documentsPosting with ReferenceReversing / Canceling documents

General Ledger GL Posting Activity Flow

General Ledger Accounting DocumentsHeaderLine itemsDocument No: 123456Date: 6/5/1000xCompany Code: 5200Currency: US$ ,,,,Each document consists of two segments: header and line items.After posting it receives a unique document number.A Grp. will use the standard document types of SAP. The system assigns the document numbers automatically.

Document HeaderDates:Document Date, Posting Date,Translation Date,Entry Date (Automatic),Period.Document TypeCompany CodeCurrencyAdditional information:Reference,Document Header Text.

Posting KeysPosting Key: Two character numerical Key that controls the entry of lien items. It determines Account Type (GL account, Vendor, Customer, Asset account), Debit/ Credit Postings, Layout of entry screens.

Line ItemsDuring document entry, certain fields need to be filled in. For example, when posting expenses, a cost center and tax information is usually required. Tax fields are only ready for entry if the general ledger account is set up as tax-relevant.

Posting a Document Document entered correctlyPosting functionsYou can now:Simulate your document - press the Simulate button: Or post it immediately - press Save button (F11)

Document Number Ranges000000000010000000002000000000300000000040000000005000000000600000000070000000008000000000900000000099999999990102Internal numbering defined per fiscal yearExternal numberingInternal numbering defined until fiscal year in the futureCurrent numbers2009Current numbers EX 02 SB 01 DR 00 201020112012...

Postings in Foreign CurrencyLocal currency - Functional currency of the company codeDocument currency - Currency of the documentGroup currency - Alternative currency for group reporting

For every Company Code theres defined a company code currency, i.e., every company code has a local currency.

Every document, posted in different currency than company code currency, is processed as a foreign currency document.

Accounting documents can be posted in a foreign currency.

The foreign currency is converted to local currency and both are stored in the document along with the exchange rate.

Postings in Foreign Currency1.3.2.1. Exchange rate can be entered manually,2. Or derived from Exchange Rates TableSystem automatically translates the foreign currency into CC currency.

Parking / Holding a DocumentAfter entering the document it is possible:To post it immediatelyTo park the documentTo hold the document

Reference DocumentsHeader: 01/03/2003 Comp. Code: 5200Document # 1 (Reference Document):Line Items:PKAccountAmount401230005000503455602000509079023000Document # 2:Line Items:PKAccountAmount401230005000503455602000509079023000Reference documents are either accounting documents or sample documents that are used as a reference to post an accounting document.

Reverse a GL Document

Document entered incorrectly

Document corrected by Reversal:Reverse with a standard reversal postingReverse with a negative posting

Document re-entered correctly

Mass Reversal of DocumentsMany documents may be reversed at the same time,Process may be scheduled to be performed in the background.Mass Reversal Procedure

General Ledger

Account Analysis/ Reconciliation SAP R/3 supports the following transactions:Display G/L account balanceDisplay G/L line itemsG/L account analysis functionsClear outstanding items on G/L account

GL Account: Display BalanceAccount balance Account Balances display Opening Balance (Carry forward Balance from previous year) Totals of all transactions for each posting period broken down for Debits and Credits

From these figures the system calculates the following for the account balance function Balance per posting period Accumulated balance for the account

GL Account: Line itemsLine items Line items can be displayed on G/L accounts which are managed with Line Item display Line items are displayed on-line Line Items can be totaled and sorted according to user requirements Additional fields can be added to the Line Item display screen Alternative custom defined Line Layouts can be defined

Account Analysis FunctionsFunctions supporting account analysis are grouped on the Application toolbar

Open Item clearing 123The balance of an open item managed accounts are the reconciliation items.Open items represent transactions that are incomplete. You can only clear open items for accounts that are open item managed.

Reversal of ClearingReversal of documents that were cleared before is not possible,First the clearing operation must be reset.Display cleared itemsReversal of clearing

General Ledger

Period end Processing SAP R/3 supports the following transactions:

Fiscal Year variants & Posting Period Clear open items, both manually and automatically Create, maintain and process accrual/deferral transactions Recurring Entries Revalue balances in foreign currencies Reconciliation of documents with monthly debits & credits Roll over of closing balances to form opening balances can be performed multiple times and after the beginning of the new fiscal year.

Posting PeriodEvery transaction that is posted is assigned to a particular posting periodV3Non-Calendar Fiscal YearShortened Fiscal Year

Company Code DataFiscal Year VariantsCompany Code0001FY VariantV3R1Calendar YearYear2012PeriodsFY VariantsMo.DayPeriodYear013110-1022811-1033112-1043001:123109PropertiesFY VariantsCalendar YearYear-DependentCNo. of Post. Per.12No. of Special Per.2V3V3

GL Account Clearing Bank StatementAutomaticPaymentA typical example of an open item is, for instance, a bank clearing account.A transaction is cleared when an offset value is posted to an item, so that the resulting balance of the items is zero.

Accruals & Deferrals

Accruals and deferrals can be handled automatically by the SAP R/3 system

Accrual/Deferral Documents are created on a monthly basis to record expenses/income which were anticipated but not yet realized

Once a transaction has been approved, it can be set up and run automatically each month.

The recurring entry program helps to maintain Accruals / Deferrals postingsStandard Journal PostingHas a reversing dateReversal Date can be any date in the futureMonthly job is scheduled to reverse all Accrual/Deferral Documents automatically

Recurring entry Document Posting ParametersFirst run on Last run onInterval in monthsRun DateRun Schedule 01/01/200212/01/20020115____03/01/2002_________________________________________________________02/01/2002_________________________________________________________01/01/2002_________________________________________________________Batch Input Session

Recurring entry Document - 2 Dates when the first and the last recurring entries are to be carried outDocument sHeaderLine items

General Ledger

Reporting Requirements Balance SheetIncome StatementCash FlowInternal ReportingExternal ReportingFICO

Reporting SAP system offers number of reports that help analyzing entered business transactions:

Financial Statement Version (Balance Sheet and P&L)Account BalancesLine ItemsDocumentsMaster Data

Report can be:Printed out directly to the printer,Saved as a local file (txt format, Excel file etc.)Sent by e-mail

Financial Statement Version Financial Statement Versions are set up to represent the balance sheet and P+L statement according to your own specific requirements Can be created for different legal entities Can be created in different Languages Are executed in desired currency i.e. Local, Group

Using the Financial Statement you specify Line items to be included in the Financial Statement Sequence the line items are displayed The COA and the accounts that are displayed in the Financial Statement The totals that are presented on the Financial StatementBalance SheetIncome Statement

New General Ledger

Leading Ledger | **There is one leading ledger for each client that is valid for all company codes. An important decision to make is which accounting standard to use in the leading ledger.

One can define only one ledger as the leading ledger. The leading ledger normally follows the same accounting standard used to draw up the consolidated financial statements.

New GL - Ledgers | **

New GL Posting to a Single Ledger | **

New GL Balanced Books for any Dimension | **

New GL-Balanced Books for any Dimension GL View | **

| **New GL Balanced books for any dimension (Online split)

New GL Derivation of Profit center and Segment | **

New GL Leading Leger | **A similar principle applies to integration with Asset Accounting (FIAA).The leading area in Asset Accounting (depreciation area 01) must be posted to the leading ledger.

INTEGRATION | **

Integration With Other Modules

| **SAP ECC Integration | ** | ** | ** | ** | **** | **Sales &DistributionSDMMPPQMPMHRFICOAMPSISMaterialsMgmt.ProductPlanningQualityMgmt.Plant Maint.HumanResourcesFinancialAccountingControllingFixed AssetMgmt.ProjectSystemIndustrySolutionsECCBASIS

| **Integration with Material Management (MM)OutlineAgreement

| **MM Business concepts | ** | **

| **MM Integration points with FICO | ** | **

*Data Flow in SAP | ** | **ConfigureSystemEnterTransaction DataCross ApplicationComponents* Configuration and Master Data must be set up to run Business TransactionsReporting, Workflow, etcEnterMaster DataOrganizationData (Ex. Company Code ,Pur org)Master DataTransaction DataMaterial Master

Customer MasterGL master Pricing (Trade Agreements)Sales Orders (Entry Summary)Invoices (Statements, Credit Memo)Vendor Master

| **SAP ECC IntegrationSales &DistributionSDMMPPQMPMHRFICOAMPSISMaterialsMgmt.ProductPlanningQualityMgmt.Plant Maint.HumanResourcesFinancialAccountingControllingFixed AssetMgmt.ProjectSystemIndustrySolutionsECCBASIS

| **SD Business Concepts Customer100 hockey sticks @ $XX each123678ShippingQuoteQuoteSalesOrderDeliveryDocumentTransferOrderBill ofLadingInvoiceExportPapersQuotationPost Goods Issue5InquirySales OrderDelivery 4Picking/PackingBillingPayment

| ** Accounts Receivable

| **Table of Contents Master DataCredit ManagementInvoice ProcessingCash Receipt / PaymentsAccount Analysis / ReconciliationPeriodic ProcessingReporting

| *Accounts Receivable Process OverviewProcess decompositions are the starting point for our process documentation. They summarise what is involved in a the AR process at a high level

| **Accounts Receivable Master Data Maintenance Creation 3 LevelsGeneral Data (name, address)Company Data (reconciliation acct, payment term) Sales Data (SO currency, inco-terms) ChangeBlockDeleteAccount GroupsIntercompanyOne-time customers

| **Accounts Receivable Master Data Maintenance

| **Master Data: Structure CustomerMasterGeneral dataAddressControl dataContact persons

Company Code dataAccount ManagementPayment TransactionsCorrespondence

Sales Area dataSalesShippingBilling documentPartner functions

| **Components of a Customer Master :Page 1Customer Master Data contains:

General DataDoes not depend on the company code or the sales and distribution organisation Applies to one business partner for all company codes, and in all sales areas, and includes:Company name Address Telephone number

Data that is unique to a customer, and shared by all departments

| **Components of a Customer Master :Page 2Company Code Data

Company code data only applies to one company code (Legal business). This data is only relevant to Financial Accounting.

If you edit a master record, you must specify the customer number and company code to access the screens containing company code data.

You can only invoice a Payer (partner function) if you have entered data in the Financial Accounting view.

| **Components of a Customer Master :Page 3Sales and Distribution DataThe data for one customer can differ for each sales area. The sales area is a combination of Sales Organization, Distribution Channel and Division. Some data is only relevant to Sales and Distribution, and includes:Pricing data Delivery priority Shipping conditionsIf you edit a customer master record, you must enter the customer number and the sales area in order to access screens containing sales and distribution data.You can only process sales and distribution transactions, eg: a sales order, after entering the sales and distribution data for a customer.

| **Master Data: Partner Functions

| **Customer Account Groups

| **Master Data: Intercompany

| **Master Data: One time CustomerWe use One-time Customers Master Record to avoid large number of unnecessary master dataEvery time we enter a business transaction, the systems stores the specific Master Data information separately in the document

| **Managing Customer Master DataBlocking / Unblocking For processing at various levels:Sales order processingDelivery processingBilling processingCredit control reasonsRequires validationNew customerCredit ControlBlock / UnblockBlock CustomerMaster record

| **Managing Customer Master Data: 2Flag for deletionFor processing at various levels:Sales order processingDelivery processingDuplication of dataRedundancy of useDuplication ofcustomer masterRedundantrecordsFlag for deletionDelete CustomerMaster record

| **Deleting a Customer Master RecordDelete all areasor data for a specific CCPrevents SAP from deletingthe general data or companycode and general data

| **Deleting a Customer Master Record: 2Pre-requisites for archiving a record:The account cannot contain any transaction figuresTransaction figures from prior years that have not been archived will prevent the system from deleting the account master recordThe account must be marked for deletion in its master recordExtracted fromdatabaseFlagPlacedIn a fileBlockCustomermasterrecord

Accounts Receivable: Process OverviewProcess decompositions are the starting point for our process documentation.

They summarise what is involved in a the AR process at a high level

| **Invoice Processing

SAP supports the following transactions:

InvoiceCredit/Debit NotesDown Payment

Parked DocumentsForeign Currency SD Billing Inter-company postings

| **Simulation and Posting a Document DocumentSimulationAfter entering the document it is possible:To post it immediatelyTo park the documentTo hold the document

| **Park Document Vs. Held DocumentParked document:Assigned number (according to document type)Document is available for editing for many users (depending on the authorizations in the system)

The parked document may be:Posted,Edited,Saved as completed,Deleted.

Held document:Internal document number (defined by the user)Document is available for editing only for the user who created it.

| **Payment TermsTerms of payment are arrangements made with a Customer governing financial settlement with respect to goods supplied and services performed, e.g. cash on delivery, payment within 30 days.Within payment terms, cash discounts and periods allowed for payment are defined.

| *Posting a Customer Down Payment Bank AccountCustomers Account10GL Down Payments1011The Customer pays A Ltd a down-payment: $10.000,- The down payment is booked on Customers account with Special GL indicatorThe amount of $10.000,- is shown on Customers account, but on different GL Account, instead of Customers reconciliation account10

| **Effect of Creating a Billing Document Updating the document flow Creating documents in Financial Accounting Updating the billing status Updating the Sales Information System Updating the credit account Forwarding data to Profitability Analysis Printed document / EDI to customerSales Order ProcessingInventory SourcingBilling processingCustomer PaymentDelivery & Shipping

| **Billing Document

| **Intercompany Processing

| **Posting in Foreign Currency1.3.2.Exchange rate can be entered manually,Or derived from Exchange Rates TableSystem automatically translates the foreign currency into CC currency.

| **Accounts Receivable: Process OverviewProcess decompositions are the starting point for our process documentation.

They summarise what is involved in a the AR process at a high level

| **Receipts from CustomerBusiness Transactions included in Process:

Customer ReceiptsManual ChecksClear Customer Accounts

| **Manual Check Deposit Slip

| *Accounts Receivable: Process OverviewProcess decompositions are the starting point for our process documentation. They summarise what is involved in a the AR process at a high level

| **Accounts Analysis/ ReconciliationBusiness Transactions included in Process:Display Customers account balance and line itemsClear outstanding items on Customers Post Customers documents with clearingPerform automatically clearing proceduresReverse documents

| **Display Customer : Display BalanceAccount balance displays totals of transactions, per month as well as cumulative valuesThe report may be printed or saved as a local file

| **Display Customer : Display Line ItemsLine items report displays particular transactions, It it possible to change the documents directly from this screen,The report may be printed or saved as a local file

| **Customer Open item Clearing Clearing an accountPost with clearingThe open customer items can also be cleared against credit memos or customer payments.Automatic clearing functionality can also be used, where by based on certain criteria the document are grouped together and then cleared.

| **Clearing Customer 1Customer invoice46,0002Customer invoice20,0003Customer payment26,000CustomerABC Inc.146,00046,0003CustomerABC Inc.320,00020,0002Bank326,000

| **Reversal of Clearing Reversal of documents that were cleared before is not possible,First the clearing operation must be reset.Display cleared itemsReversal of clearing

| **Reverse a Customer Document Document entered incorrectly: Sometimes the document may be posted with wrong amount, then in that case the document wrongly posted is reversed and a fresh document with correct amount is posted.

Document corrected by Reversal:Reverse with a standard reversal posting.Reverse with a negative posting.

Document re-entered correctly

| **Mass Reversals of Document Many documents may be reversed at the same time,Process may be scheduled to be performed in the background.Mass Reversal Procedure

| *Accounts Receivable: Process OverviewProcess decompositions are the starting point for our process documentation. They summarise what is involved in a the AR process at a high level

| **Period End Processing: Due Date Analysis The following columns are displayed in the Execute Due Date Analysis for Open Items:

Daily intervalsTotal of due itemsTotal of items not dueTotal of open items

| **Accounts Receivable: Process OverviewProcess decompositions are the starting point for our process documentation. They summarise what is involved in a the AR process at a high level

| **Reporting SAP system offers number of reports that help analyzing entered business transactions:Open Items ListCleared Items ListAccount ListAccount Balance List

Report can be:Printed out directly to the printer,Saved as a local file (txt format, Excel file etc.)Sent by e-mail

| ** Accounts Payable

| **Table of ContentsMaster DataInvoice ProcessingPayment / DisbursementsAccount Analysis / ReconciliationPeriodic ProcessingReporting

Accounts Payable: Process OverviewProcess decompositions are the starting point for our process documentation. They summarise what is involved in a the AP process at a high level

| **Vendor Master DataMaintenance Creation 3 LevelsGeneral Data (name, address)Company Data (reconciliation acct, payment term) Purchasing Data (PO currency) ChangeBlockDeleteAccount GroupsIntercompanyOne-time Vendors

| **Master Data: StructureVendor MasterGeneral dataAddressControl dataContact persons

Company Code dataAccount ManagementPayment TransactionsCorrespondence

Purchasing OrganizationPurchasing DataPartner functions

| **Vendor Account Groups

| **Blocking of Vendor Master DataVendor master record can be blocked in the following areas:Posting block,Purchasing block

In addition user may specify reason for blocking

| **Vendor Master Data: Mark for Deletion*All data in this master record is to be deleted.

Deletion is done by archiving program, provided that there is no dependent data on vendor account

| **Master Data: Intercompany

| **Master Data: One time VendorWe use One-time Vendors Master Record to avoid large number of unnecessary master dataEvery time we enter a business transaction, the systems stores the specific Master Data information separately in the document

| **Accounts Payable: Process Overview*Process decompositions are the starting point for our process documentation. They summarise what is involved in a the AP process at a high level

| **Invoice processing SAP supports the following transactions:

InvoiceCredit MemoDown Payment (Special G/L)Foreign CurrencyCancel/Reverse DocumentInter-company

| **Posting: Vendor Invoice DocumentEnter Company Code

Basic data to be entered while posting a invoice:

Vendor codeInvoice datePosting dateAmount Tax code Applicable VAT or Service TaxReference

| **Simulation and Posting DocumentSimulation

| **Parked Document Vs. Held Document Parked document:Assigned number (according to document type)Document is available for editing for many users (depending on the authorizations in the system)

The parked document may be:Posted,Edited,Saved as completed,Deleted.

Held document:Internal document number (defined by the user)Document is available for editing only for the user who created it.

| **Payment TermsTerms of payment are arrangements made with a Vendor governing financial settlement with respect to goods supplied and services performed, e.g. cash on delivery, payment within 30 days.Within payment terms, cash discounts and periods allowed for payment are defined.

| **Vendor Down payment Bank AccountVendors Account10GL Down Payments1011The Vendor pays A Ltd a down-payment: Rs.12,000 The down payment is booked on Vendors account with Special GL indicatorThe amount of Rs. 12,000- is shown on Vendors account, but on different GL Account, instead of Vendors reconciliation account10

| **Vendor Postings: Foreign Currency1.3.2.Exchange rate can be entered manually,Or derived from Exchange Rates TableSystem automatically translates the foreign currency into CC currency.

| **Accounting Entries: For Invoice With reference to POCost Element ObjectGR/IRAcc. PayableBank1. Goods received.

2. Invoice received.

3. Vendor paid.

4. Bank account credited/charged1.4.3.2.2.1.Bank Clearing Account3.4.

| **Subsequent Debit/ Credit100 pcs - 300 INRInvoice for PO 456100 pcs 300 INR1Invoice for PO 456 50 pcs 150 INR2Invoice for PO 456 50 pcs 30 INR3Subsequent costsPO History150 pcs - 450 INR150 pcs - 480 INR

| **Delivery CostsPurchase order 123100 pcs 10 INRFreight 1 INR/pc 100 pcs 1000 INR Freight 100 INRTotal: 1100 INRPurchase order 456100 pcs 10 INRFreight - 100 pcs 1000 INR Freight 100 INRTotal: 1100 INRDelivery costsUnplanned costsDeliveryDelivery costs can be divided into:Planned delivery costsUnplanned delivery costs

| **Planned Delivery Costs: Postings For planned delivery costs, the postings are made to a clearing account at goods receipt. There are separate accounts for costs of different origins. If the delivery costs in the invoice differ from the planned delivery costs, the differences are posted in the same way as for normal price and quantity variances. Invoice with reference to the POAccounting DocumentMIRO

| **Unplanned Delivery Costs: PostingsAccounting Document

| **Credit MemoGoods Receipt: 50 pcsPurchase order 123100 pcs 10 INR/pc 80 pcs 800 INR 30 pcs 300 INRCredit MemoPurchase order 123100 pcs 10 INR/pc 50 pcs 800 INR 50 pcs 300 INRSubsequent Credit

| **Accounts Payable: Process OverviewProcess decompositions are the starting point for our process documentation.

They summarise what is involved in a the AP process at a high level

| **Payments/ DisbursementsBusiness Transactions included in Process:

Manual payments

Automatic Payment Run (Covered under Bank Accounting Slides)

| **Manual Outgoing PaymentsThe user has to input the basic data like :-Document date-Posting dateReference TextBank Account Amount to be paid Vendor code After entering the data press the

| **Accounts Payable: Process OverviewProcess decompositions are the starting point for our process documentation.

They summarise what is involved in a the AP process at a high level

| **Account Analysis/ ReconciliationBusiness Transactions included in Process:Display Vendors account balance and line itemsClear outstanding items on Vendors Post Vendors documents with clearingPerform automatically clearing proceduresReverse documents

| **Vendor: Display BalancesAccount balance displays totals of transactions, per month as well as cumulative values.

The report may be printed or saved as a local file

| **Vendor: Display Line itemsLine items report displays particular transactions, It it possible to change the documents directly from this screen,The report may be printed or saved as a local file

| **Vendor: Open item Clearing Clearing an accountPost with clearingThe open vendor items can also be cleared against credit memos or customer payments.Automatic clearing functionality can also be used, where by based on certain criteria the document are grouped together and then cleared.

| **Reversal of Clearing Reversal of documents that were cleared before is not possible,First the clearing operation must be reset.Display cleared itemsReversal of clearing

| **Reverse a Vendor DocumentDocument entered incorrectly: Sometimes the document may be posted with wrong amount, then in that case the document wrongly posted is reversed and a fresh document with correct amount is posted.

Document corrected by Reversal:Reverse with a standard reversal posting.Reverse with a negative posting.

Document re-entered correctly

| **Mass Reversals of DocumentsMany documents may be reversed at the same time,Process may be scheduled to be performed in the background.Mass Reversal Procedure

| **Account Payable: Process OverviewProcess decompositions are the starting point for our process documentation. They summarise what is involved in a the AP process at a high level

| **Periodic Processing Business Transactions included in Process:

LIV invoice variancesInvoice differencesBlocked invoices

GR/IR Account Maintenance

Vendor CorrespondenceStandard LettersBalance Confirmation

| **Invoice Variances (AP-MM Integration)The system carries out the following checks for each invoice item:Quantity variancePrice variance Purchase order price quantity varianceDate variance

| **Goods Receipts/invoice Receipts (GR/IR) A/c Movements

| **GR/IR Quantity Variances100 pcs@ 10.00 INRPurchase orderGoods Receipt50 pcs80 pcs@ 10.00 INRInvoiceGoods Receipt30 pcsThe GR/IR clearing account is cleared for a purchase order item when the delivered quantity and the invoice quantity are the same. In this example the invoice quantity is greater than the delivered quantity, the system expects another goods receipt.

| **GR/IR Quantity Variances : (2)In this example the delivered quantity is greater than the invoice quantity, the system expects another invoice.Any differences in the GR/IR clearing account must be cleared. If the differences are not cleared by another goods receipt (or a return delivery) or by an invoice (or a credit memo), the GR/IR clearing account must be maintained manually.

| **Released Blocking InvoicesAn invoice is blocked for payment when you post it, because the Payment block indicator is selected in the vendor line item of the invoice document. Financial Accounting is then unable to pay the invoice.A blocked invoice can be released for payment in a separate step. This deletes the payment block.An invoice is also blocked when the variance between goods receipt and an invoice exceeds tolerance limits.The invoice will not be blocked if the variance is within certain tolerance limits.

| **Make selectionDefine processingAutomatic releaseManual releaseThe blocked invoices can be released. In the time between the blocking and releasing of an invoice, the cash discount period could expire. When you release an invoice, you have the opportunity to change the baseline date for payment.You can define whether you want to release the invoices manually or automatically via the field Automatic release.Released Blocking Invoices

| **CorrespondenceSAP provides the facility of printing Correspondence letters as follows:-

Periodic account statement Internal Document Payment Notices.

The above correspondence letters can be printed individually or collectively for many documents.

| **Accounts Payable: Process OverviewProcess decompositions are the starting point for our process documentation. They summarise what is involved in a the AP process at a high level

| **ReportingBusiness Transactions included in Process:

Standard ReportsOpen Items ListCleared Items ListAccount ListAccount Balance ListVendor EvaluationsAgeing analysis

| **Cash Accounting

| **Cash Accounting: OverviewCash Journal: The cash journal is a subledger of Bank Accounting. It is used to manage a company's cash transactions (Petty Cash).

The system automatically calculates and displays the opening and closing balances, and the receipts and payments totals.

One can run several cash journals for each company code.

Flexible enough to carry out postings to G/L accounts, as well as vendor and customer accounts.

| **Cash Journal: OptionsCash journal is a single-screen transaction. This means that you can enter, display, and change cash journal documents on one screen

The following options are available in Cash Journals

Entering, saving, and posting cash journal entries Displaying follow-on documents Defining cash journal business transactions Printing the cash journal Printing receipts Deleting cash journal entries saved Displaying all cash journal documents that have been deleted Changing the cash journal

| **Bank Accounting (FI- BL)

Financial Accounting (FI-BL) PurposeFeaturesBank Master Data

This component is used to handle accounting transactions that you process with your bank.

Purpose

It includes the management of

Bank master data, cash balance management (check and bill of exchange management), and the Creation and processing of incoming Payments Creation and processing of outgoing payments. It is possible to freely define all country-specific characteristics, such as the specifications for manual and electronic payment procedures.

Features

*Bank Accounting

Bank Accounting further divided in to Bank Master Data Check Management Payments Transactions

Bank accounting

The bank directory contains the bank master data. This includes the bank address data and control data, such as the SWIFT Code and Bank Groups.

Details for post office banks should be identified specially.

The bank directory must contain the master data for all the banks that you require for payment transactions with your business partners. This includes your banks and the banks of your business partners.

Bank Master Data

Setting Deletion indicators for Bank Master Data

One can archive bank master data that you no longer require then the data you selected is deleted from the database and stored in an archive file. You can then transfer this file to an archiving system.

In order that the master data for a bank can actually be physically deleted, no references can exist in the system for this bank. In short, this bank can neither appear in customer/vendor master records, nor must it be defined as a house bank.

Bank Master Data

| **Manual Check Deposit Slip This function is used to enter checks you receive. After the input is complete, you can access the additional functions to further process the entered checks

On the entry screen, the system will display different fields for each account assignment variant you choose. Depending on the number of account assignment fields in a variant, up to three lines are available for entering a memo record.

You can change the account assignment variant at any time during processing. If you have used more account assignment fields than are available in the current variant, the system will display this information in an additional field.

| **Payment TransactionThe following describes the functions of payment transactions:

Manual Account Statement Cash journal Automatic Payments

| **Payment Transaction: Manual Bank StatementWith this function, you can manually enter bank account statements you receive. Statement entry is usually a two-step process:

One can enter the account line items in the system individually as per the bank statement. Various fields can be selected as a variant and as per the requirement.

To post the line items you have entered.

One can create up to two postings for each line item.

A bank account posting (for example, debit bank account and credit bank clearing account)

A sub ledger posting (for example, debit bank clearing account and credit customer account with clearing)

| **Payment TransactionThe following describes the functions of payment transactions:

| **Automatic Payment ProgramAutomatic Payment program used to process payment transactions with customers and vendors.

The payment program is used by the following components:

Accounts Receivable (FI-AR), Accounts Payable (FI-AP), Treasury (TR), and Bank Accounting (FI-BL).

The standard system contains the common payment methods and the corresponding forms that have been defined separately for each country.

Other special features include:

Clearing open items of vendors Inter-company payments, that is one company code pays centrally for others Paying or clearing any type of open item, for example clearing down payments Restricting access to the payment program by assigning authorizations

| **Automatic Payment Program: Process Flow

| **Payment TransactionThe program processes open items in three steps

It determines the open items to be paid and creates a proposal list. You can process the proposal list on-line. Among other things, you can change payment methods or banks, block items, or cancel payment blocks.

The payment program carries out payment using the proposal list. The payment run includes only the open items contained in the proposal list. The payment program posts documents and provides the data for payment advice and the payment summaries.

It uses the print program to print the forms and create the data carriers.

Asset Accounting

| **Asset Accounting Asset Accounting (FI-AA) component is used for managing and supervising fixed assets with the SAP R/3 System.

It serves as a subsidiary ledger to the FI General Ledger, providing detailed information on transactions involving fixed assets. Asset accounting encompasses the entire lifetime of the asset from purchase order or the initial acquisition (managed as an asset under construction (CWIP) through its retirement.

SAP calculates and Post automatically, the values for depreciation and other purposes between these two points in time, and places this information in the Information System and summarizes values in the general ledger

This process provides a comprehensive framework for acquiring, maintaining and disposing of fixed assets

Asset Accounting: Acquiring ProcessAcquiring Fixed Assets

Process DescriptionThis process include activities that are required to record the acquisition of fixed assets.Master data is created by determining the correct asset class and company code in the asset master record. Once assets are created if no transactions have occurred, assets can be deleted. Additionally, assets can be blocked or certain fields changed Typically assets are acquired using purchase orders which are assigned to investment orders (if Any), then investment orders are budgeted and settled to assets under construction on a monthly basis.

Asset Accounting: Value and Tracking Value and Track Fixed Assets

Process DescriptionThis process address transactions and activities related to tracking assets and month and year end closing.Tracking activities includes transferring assets within the same company or to a different company if needed, and running reports for various purposes.Month end activities involve running a program that directly posts to the general ledger accounts and additional account assignment objects. Year end activities include month end processing in addition to running a couple of programs to open new value fields for each asset and to update the last closed fiscal year for each depreciation area

Asset Accounting: CWIP (Asset under Construction)Assets under construction (AuC) are a special form of tangible asset.

Assets under construction can be managed for summary settlement or by line item.

Asset Accounting: Dispose of Asset Dispose of Assets

Process DescriptionThis process address transactions and activities related to disposing of assets.Assets can be disposed off by processing a transaction to directly scrap the asset and automatically post it to the appropriate general ledger accountsOr they can be disposed by processing a transaction to record a sale with the appropriate gain or loss and automatically post to the appropriate general ledger accounts

Asset Accounting: Flow Chart Assets AccountantEventAsset ExplorerAsset Master Data Needs to Be CreatedFinance ManagerAsset AcquisitionRetirementsIntracompany TransferPost - CapitalizationWrite-upUnplanned DepreciationPeriodic ProcessingCheck ConsistencyInformation SystemAssets under Construction

Q&A

Thank you

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