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Business Blueprint

Submitted

To

X GROUP

By

KPIT CUMMINS INFOSYSTMS

Fin!n"i!l #""ountin$

%e"ember& '()*

+ersion (,(


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Print Document Financial Accounting

PRF#C

Purpose o5 t2is %o"ument

!"e purpose o$ t"is document is to record t"e #usiness process re0uirements o$ X

CompanyGroupand outline t"e re0uirement mapping in *AP.

Intended #udien"e

!"e intended audience $or t"e Financials Blueprint is t"e employees o$ X

CompanyGroup and ot"er persons aut"ori/ed #y X Company )"o are in any )ay

related to Business Processes inoling Financial Accounting.

Rel!ted %o"uments1 Re5eren"es

Documents re$erred to prepare Financial Accounting Business Blueprint Document are

as $ollo)s:

Sl,No,

Title +ersion

#ut2or

Con-dential 2o$


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Si$n O6

Role N!me Si$n!ture %!te

Functional Consultant

&r.

Gajanan&an3es")ar3

ar

Project &anager4 5P+!

Cummins +n$osystems

6td.

&r.7aic"andra

Business Process

%)ner &r. 8ayapra3as"

Project &anager4 X

Company Group&r. Padma 5umar

Con-dential 9o$


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ORG#NI7#TION OF T8IS %OCUMNT

!"e FinancialsBlueprint consists o$ 1 c"apters in t"e order as mentioned #elo):

1. %rgani/ation *tructure: !"at descri#es t"e organi/ation

structure to #e con-gured in *AP.

,. &aster Data: +t descri#es t"e master data in Financials. +t

includes creation and maintenance o$ master record.

2. G6 Accounting: !"is process descri#es arious G6

Accounting tas3s done #y accounting department.

9. Accounts Paya#le Accounting: !"is part descri#ed arious

actiities #usiness transactions in connection )it" customer postings

;. Accounts 7eceia#le Accounting: !"is part descri#ed arious

actiities #usiness transactions in connection )it" customer postings.


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T!ble o5 Contents

AC7%'(&*....................................................................................................................... ?

GNR#- XP-#N#TION,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,)(

), S#P ORG#NI7#TION STRUCTUR 9IT8 RFRNC TO FI MO%U-

))

),), COMP#NY,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,))

),', COMP#NY CO%,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,))

),*, C8#RT OF #CCOUNTS,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,)*

),:, CR%IT CONTRO- #R#,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,):

),;, SGMNTS,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,);

),,,,,,,,,,,,,,,,,,,,,,,,,,,,,,)?

', M#STR %#T# FOR FI,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,'?

',), GNR#- -%GR,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,'?

',', #SST,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,**

',*, B#NK M#STR,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,*,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,:,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,;=

*,;, G#P #N#-YSIS>,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,;=

*,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,=

;,*, C8#NGS TO XISTING ORG#NI7#TION PROCSS>,,,,,,,,,,,,,,,,,,,,,,??

;,:, SPCI#- ORG#NIS#TION CONSI%R#TIONS>,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,??

;,;, G#P #N#-YSIS>,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,??

;,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,??


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=, C#S8 #N% B#NK #CCOUNTING,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

=,), GNR#- XP-#N#TIONS@ 0#S IS3>,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

=,', SO-UTION IN S#P,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

=,*, C8#NGS TO XISTING ORG#NI7#TION PROCSS>,,,,,,,,,,,,,,,,,,,,)(*

=,:, SPCI#- ORG#NIS#TION CONSI%R#TIONS>,,,,,,,,,,,,,,,,,,,,,,,,,,,,,)(*

=,;, G#P #N#-YSIS>,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,)(*

=,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,)(*

?, PROFIT CNTR #CCOUNTING,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,)(:

?,), GNR#- XP-#N#TIONS@ 0#S IS3>,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,)(:

?,', SO-UTION IN S#P A 0TO B3>,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,)(:

?,*, C8#NGS TO XISTING ORG#NI7#TION PROCSS>,,,,,,,,,,,,,,,,,,,,)(;

?,:, SPCI#- ORG#NIS#TION CONSI%R#TIONS>,,,,,,,,,,,,,,,,,,,,,,,,,,,,,)(,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,)(

@ac" o$ t"e document types de-ned )ill "ae an identi-cation num#er. !"e *AP

system uses prede-ned num#er ranges $or t"is purpose. !"e num#er ranges are

assigned to t"e document types. !"e num#er ranges may #e de-ned as internal t"at

is i.e. automatically generated #y t"e system in c"ronological order or as external i.e.

t"at is entera#le at t"e time o$ t"e transaction.

Con-dential 1>o$


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X Company "as decided to "ae internal num#ering $or all t"e documents. !"e

num#er range )ould #e year dependent.!"e $ollo)ing Document !ypes are identi-ed

$or use $rom *AP *tandard.

%o"u,

Type

%es"ription No,

R!n$e

From

Number

To

Number

Dter

n!l

Re.erse

%o",Type

AA Asset posting 11

1????????

AA

ABAccountingdocument 1

1

1????????

AB

AF Dep. Postings 22

2????????

AF

DGCustomer creditmemo 1

!"is is data releant to t"e purc"asing organi/ation o$ your company. For

example re0uests $or 0uotations purc"ase orders and inoice

eri-cations are stored in t"is section.

Con-dential 21o$


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Data in endor master records controls "o) transaction data is posted

and processed $or a endor. !"e endor master record also contains all

t"e data you re0uire to do #usiness )it" your endors.

@ac" master record "as a uni0ue num#er. (ou need t"is num#er to

display or c"ange t"e master record and to post to t"e endor account.

endors are generally classi-ed as:

Gener!l .endor>

General endor means a regular supplier )"o )ill #e rendering eit"er

goods or serice $rom )it"in t"e country or outside country. *ince "e is

ery $re0uent endor )it" )"om company is )illing to "ae long time

relations"ip in *AP 72 all t"e master in$ormation suc" as name

address #an3 details payment terms etc. s"ould #e made aaila#le att"e time o$ endor master creation.

One time .endor>

%ne time endor means a endor )"o does ad"oc serices to t"e

company and )ill not "old long term relations"ip. *ince "e is not a

$re0uent endor in *AP 72 it )ill not expect endor master details at

t"e time o$ master creation. +t )ill only expect t"e name address and

#an3 details at t"e time o$ payment transaction.

#""ount Groups>

!"e account group is a classi$ying $eature )it"in endor master records.

+t determines t"e $ollo)ing

K"ic" screens and -elds are necessary $or entering master data

Fields can #e de-ned as optional or mandatory at creation o$ master data

o) master record num#ers are assigned Iexternally #y you or internally

#y t"e systemJ and t"e num#er range $rom )"ic" t"ey are assigned

K"ic" partner $unctions are alid

K"et"er t"e #usiness partner is a one4time endor

!"e $ollo)ing endor account group )ill #e maintained.

Sr, No, +endor #""ount Group From To

1 endors Domestic 7&1

1??????

?, endors Domestic P& , ,??????

Con-dential 2,o$


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?

2 endors +mports 7&2

2???????

9 endors +mports P&9

9???????

; endors *erice ;

;???????

< endors 6ogistics


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!"e a#oe operations may #e underta3en at t"e generalcompany code

leel t"e sales area leel or centrally against #ot" leels.

+t is anticipated t"at t"e X C%&PA'( accounts receia#le account

maintenance )ill #e centrali/ed and t"e creation o$ any ne) accounts

)ill go t"roug" an approal process.

Account Groups. !"e account group is a classi$ying $eature )it"in

customer master records. +t determines t"e $ollo)ing:

K"ic" screens and -elds are necessary $or entering master data

Fields can #e de-ned as optional or mandatory at creation o$

master data

o) master record num#ers are assigned Iexternally #y you orinternally #y t"e systemJ and t"e num#er range $rom )"ic" t"ey

are assigned

K"ic" partner $unctions are alid

K"et"er t"e #usiness partner is a one4time customer

Con-dential 29o$


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#""ount Groups>

Sr,No, Customer #""ount Group From To

1 Customer domestic 1 1???????,

Customer export,

,???????

2%ne time customer

2

2???????

9Project customers

9

9???????

%!t! in t2e "ustomer m!ster is stored in * .ie4s>

Gener!l %!t!>Data t"at applies to all company codes and sales areasIe.g. customerNs name addresses language and telep"one dataJ.

Comp!ny Code1#""ountin$ %!t!>Data t"at is speci-c to a company

code Ie.g. t"e reconciliation account num#er payment terms and

dunning areaJ.

S!les #re! %!t!>Data speci-c to t"e sales area o$ t"e company Ie.g.

sales oSce sales district pricing in$ormation as )ell as in$ormation

relating to s"ipping and #illingJ.

Customer Re"on"ili!tion #""ount

Customer 7econciliation account is t"e G6 account $or a group o$

customers in F+4A7 module. !"e num#er o$ Customer 7econciliation

accounts )ill depend on t"e grouping o$ t"e customers in F+.

!"e $ollo)ing reconciliation accounts are to #e used #y X C%&PA'(.

G- #""ount %es"ription

,2 Accounts receia#le4Domestic

customers,21 Accounts receia#le4@xport

Customer,2, Accounts receia#le4%ne time

customers,22 Accounts receia#le4Project

customers

P!yment Terms>

Con-dential 2;o$


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Payment terms ena#le t"e system to determine t"e re0uired terms o$

payment automatically. !"e speci-ed terms o$ payment are assigned

using a 3ey. !"is 3ey can #e:

*tored in t"e master record o$ t"e customerendor account Iin t"e

purc"asing or sales ie) and in t"e accounting ie)J

@ntered )"en t"e F+ document is created Ior c"angedJ

@ntered )"en t"e logistics documents Iin t"e purc"ase order sales

order and incoming inoice or in t"e order and t"e outgoing inoice $or

exampleJ are created Ior c"angedJ

!erms o$ payment include settings $or t"e payment terms t"e day limit

t"e #aseline date $or payment and installment payments. Baseline date

determines t"e date $rom )"ic" payment terms )ill #e calculated. !"e-nal deadline $or payments can #e summari/ed in a $ormula:

Payment Deadline U Baseline Date V Payment !erms

Payment terms )ill #e de-ned in system and )ill maintain in Customer

master. *tandard *AP payment terms are: 4

Key %es"ription

1 Paya#le +mmediate

'!= Paya#le in = days'!1; Paya#le in 1; days

'!2 Paya#le in 2 days

'!9; Paya#le in 9; days

'!

Create@ditDisplay Credit &aster Data I7is3 Category !otal Credit

6imit 7eie) period etcJ

Con-dential 2


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%erie) o$ Credit 6imit usage

*ales and Deliery documents #loc3ed due to Credit &anagement

7eleasing Process o$ Bloc3ed documents

Con-dential 2=o$


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*, BUSINSS PROCSSS@ G- #CCOUNTING

*,),GNR#- XP-#N#TIONA0#S IS3>

X Company accounting team per$orms $ollo)ing actiities under G6

Accounting

a. Postin$ ourn!l ntries: As a part o$ day to day accounting actiities and

mont" year end closing journal entries are posted #y t"e accounting

department.!"e entries are reie)ed #y t"e superisor periodically and

necessary corrections are made i$ re0uired. Printout $or t"e journal entry

ouc"ers are ta3en and are -les time to time. *ome entries o$ recurring

nature are posted during mont"ly closing. *alary posting is also done #y

passing a journal entry. Also journal entries are passed to adjust t"e C@'A!

credits.

#. G- !""ountin$ 5urt2er 5un"tions: !o meet #usiness re0uirements X

Company team does $oreign currency aluation or interest calculations

manually. Also as a part o$ process t"e G7+7 accounts and ot"er proision

accounts are cleared periodically.

c. G- reportin$: !"e accounting team uses G6 Ac #alance item )ise reports

$or internal analysis.

d. Fin!n"i!l st!tements:

!"e accounting team dra)s -nancial statements at legal entity leel.

Depending upon t"e legal statuses o$ t"e legal entities t"e -nancial

statement reporting $ormat is c"anged. !"e 6imited and Priate limited

companies use ne) sc"edule + $ormat $or statutory reporting. And ot"er

proprietary and partners"ip -rms use diLerent $ormats.

Also some reports are generated to analyse t"e pro-ta#ility per

locationdiision.

As on date t"e consolidated -nancial statements are prepared $or X

Company group manually using excel.

*ummari/ed expectations $rom t"e ne) system:

A#ility to manually process 8ournal entries

*ystem to $acilitate t"e par3ing o$ transaction and to #e posted on

speci-c approals

+ntegration to ot"er modules )it" real time

Financial statements as and )"en re0uired

Con-dential 2>o$


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Consolidation at group leel

Processing o$ $oreign currency transactions

Foreign exc"ange transaction )it" gain loss in$ormation is re0uired

%n4line data entry alidation and correction $acility

*ystem to $acilitate t"e posting and reersal o$ proisional entries #y t"e

system

*ystem to $acilitate t"e automatic posting o$ recurring entries

!o $acilitate t"e mont" closing actiities

!o $acilitate t"e smoot" and proper closure o$ #oo3s at t"e end o$ t"e

accounting year and carry $or)ard o$ #alances to ne) accounting year

*,',SO-UTION IN S#P A0TO B3>

O.er.ie4> General ledger is a compre"ensie -nancial management solution t"at

dramatically en"ances -nancials controls data collection in$ormation access and

-nancial reporting t"roug" t"e organi/ation. General ledger is t"e central repository o$

all t"e accounting in$ormation o$ t"e organi/ation. &ost o$ t"e transactions )ill #e

"andled in respectie su#4ledgers and su#se0uently consolidated and posted to

General 6edger. o)eer t"e module s"all proide speci-c $unctions o$ passing journal

entries I&anual Proisional 7ecurring and 7eersal 8ournalsJ and posting t"em )"ic"

)ill #e purely recti-cation and proisional in nature.

!"e o#jectie is to maintain accurate and complete #oo3s o$ accounts in compliance

)it" t"e proisions o$ +ndian GAAP as 6eading 6edger and +F7* as non 6eading

6edger .Also ensuring compliance )it" statutory guidelines )it" t"e proisions o$ t"e

Companies Act 1?;


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!"e *AP system ad"eres to t"e document principle. !"is means t"at eac" posting is

al)ays stored in t"e $orm o$ a documentO eac" document "as a document type )"ic"

is generally used to identi$y t"e source and nature o$ t"e transaction Ie.g. AP +noice

A7 De#it &emo etc.J and a uni0ue document num#er. @ac" document remains in t"e

system until it is arc"ied.

%nly complete documents can #e posted in t"e *AP system. RCompleteR means t"at

t"e #alance $rom t"e de#it and credit items is /ero. Furt"er conditions $or posting a

document are t"at you must enter t"e #asic document data suc" as document date

posting date document type posting 3ey account num#er and amount. (ou must

ma3e entries in all t"e re0uired -elds It"ese are de-ned as Rre0uiredR during system

con-guration o$ Field *tatus GroupsJ.

K"en you enter documents t"e system c"ec3s )"et"er t"ese conditions "ae all

#een met. +t also c"ec3salidates t"e entries t"emseles. For example i$ you "ae

entered a 3ey t"at is not de-ned in t"e system t"e system issues an error message to

t"is eLect. +$ t"is is t"e case you can only continue processing a$ter you "ae

corrected t"e error. !"ese system c"ec3s alidates t"at all t"e re0uired data is

entered into t"e system in complete and in error4$ree $orm.

+$ you are interrupted on entering a document and )ant to sae t"e in$ormation you

"ae already entered you can do so #y using t"e old $unction. %n t"e ot"er "and

you cannot post t"e document as account assignments are missing or somet"ing is

unclear you can use t"e preliminary posting $unction to par3 t"e document until you

are ready to complete it.

*,',', P#RK #N% POST GNR#- -%GR %OCUMNT

An incomplete document may #e par3ed and t"en posted at a later dateO t"is may #e

done #y t"e same or a diLerent user.

Generally t"e documents are par3ed )"en t"e user is )aiting $or an approal $rom t"e

superior. *u#se0uently t"e user can #oo3 t"e same as a G6 document.

%ne adantage o$ par3ing is t"at you can ealuate t"e data in documents online $or

reporting purposes $rom t"e moment t"ey are par3ed rat"er t"an "aing to )ait until

t"ey "ae #een completed and posted.

A list o$ par3ed documents can #e generated in t"e *AP $or t"e #ene-t o$ t"e

superisormanager. !"e document can t"en #e c"ec3ed and corrected #y t"e user.

!"is document can t"en #e posted in t"e General ledger. Par3ed documents can #e

modi-ed or deleted #e$ore posting.

!"e documents are entered in to t"e system and depending on t"e aut"ori/ationsO

t"e documents are par3ed and posted later.

!"e user )ill par3 all t"e documents in 72. !"en t"e designated approer )ill ie)

t"e list o$ all t"e par3ed documents and post t"e par3ed documents #e$ore t"e end

o$ t"e day.

Con-dential 91o$


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*,',*, POST1%ISP-#Y1C8#NG GNR#- -%GR %OCUMNT

%o"ument Postin$

eader in$ormation li3e company code posting date document date

currency is entered.

+tems details li3e general ledger account amount tax code cost

assignment )ill also #e entered $or eac" line item.

'e) line items can #e added.

A line item #e$ore posting may #e deleted i$ re0uired.

An automatic internal num#er )ill #e created $or eac" document posted in

t"e system.

Document display in accounting document )ill allo) ie)ing all t"e

"eader and line item details.

Document c"ange o$ t"e accounting document )ill allo) c"anges to t"e

eader text re$erence and line item next and assignment -eld.

Post $ener!l led$er do"uments

!o ma3e general ledger #usiness transaction aaila#le you must post t"em to

t"e general ledger account. !"e system creates t"e document and ma3es t"e

data aaila#le in accounts.

K"en you carry out t"e postings to G6 accounts you enter t"e document "eader

data and line items data. pon simulation o$ t"e document t"e system carries

out t"e consistency c"ec3s #e$ore posting t"e data. +$ t"e error exists t"e data

)ill not #e posted and proposes error in$ormation. %nce t"e data is error $ree

t"en t"e system updates t"e document -le and G6 accounts amount may #e

posted.

!"e expense G6 account is made mandatory to input a cost centre.

8ournal creation )ill #e mainly used $or adjustments o$ incorrect postings ad4"ocentries or period4end adjustments. All G6 transactions $rom ot"er modules )ill

#e generated automatically )it" t"eir o)n document types and num#er ranges.

+n addition t"e standard journal creation program proides $or t"e creation o$ an

Account Assignment !emplate. At any time during t"e creation o$ a document

t"e user may sae t"e document as a template $or $uture use. !"e template may

contain any num#er o$ indiidual line items Iup to t"e *AP maximum o$ ???J and

any com#ination o$ G6 account assignments and indiidual line item alues.

!"e alues posted to t"e G6 accounts appear in t"e !rial Balance )"ic" )ill

proide -nancial statements li3e Balance *"eet Pro-t and 6oss *tatement.

Con-dential 9,o$


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Con-dential 92o$


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*,',:, %OCUMNT R+RS#-

+t is possi#le $or a user to ma3e an input error. As a result t"e created )ill

contain incorrect in$ormation. +n order to proide an audit o$ t"e correction t"e

user must -rst reerse t"e document in error and t"en capture t"e documentcorrectly.

!"e system proides a $unction to reerse G6 A7 and AP documents #ot"

indiidually or in mass.

K"en reersing a document a reersal reason code must #e entered to explain

t"e reersal. !"e reason code also controls i$ t"e reersal date is allo)ed to #e

diLerent $rom t"e original posting date.

Documents )it" cleared items cannot #e reersed. !"e document must -rst #e

reset.

o)eer it needs to #e noted t"at reersal o$ any document )ill aLect t"e allocation

cycles in case i$ t"ese processes are completed. +t )ill #e re0uired to re4run all t"ese

cycles once again a$ter reersing t"e document.

*,',;, OPN ITM C-#RING

%pen items reTect un-nis"ed transactions. For example a 6ia#ility t"at "as not

#een settled remains in t"e 6ia#ility account as an open item until it is settled.

!"e open items o$ an account can only #e cleared once you post an identicaloLsetting amount to t"e account. +n ot"er )ords t"e #alance o$ t"e items

assigned to eac" ot"er must e0ual /ero.

During clearing t"e system enters a clearing document num#er and t"e

clearing date in t"ese items.

%pen items can only #e cleared i$ t"ey are posted to accounts t"at are

managed on an open item #asis. %pen item management is automatically set

$or customer and endor accounts. For G6 accounts "o)eer you "ae to set

t"e open item management option in t"e master record.

%pen item management )ould #e set $or t"e $ollo)ing G6 accounts:

o C"ec3 clearing accounts I#an3 clearing accountsJ.

o Goods receiptinoice receipt.

o %t"er General 6edger Balance *"eet Account

Con-dential 9;o$


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%pen items o$ an account can #e cleared manually using t"e Account Clearing

$unction or t"ey can #e cleared automatically #y t"e system. Automatic clearing is

especially use$ul $or clearing accounts in t"e G6 account area.

sers )ill clear open items $rom G6 accounts #y running t"e clearing program.

!"is program uses prede-ned criteria to group toget"er open items per

account. +$ t"e #alance o$ t"e group o$ open items e0uals /ero in local or $oreign

currency t"e items are mar3ed as cleared.

!"e clearing program is used to automatically clear open items #ased on

prede-ned criteria. &anual clearing o$ open items is t"ere$ore not usually

necessary.

Automatic clearing Ii.e. clearing #ased on *AP4de-ned -elds suc" as

assignment amount re$. -eldJ.

&anual clearing Ii.e. matc"ing o$ amount per$ormed #y usersJ.

Kit"in t"e general ledger module account clearing s"all #e per$ormed using

t"e $ollo)ing $unctions:

o Account clearing Iad "ocJ.

o Automatic clearing Ipart o$ closing actiitiesJ.

o Post )it" clearing Iduring t"e course o$ posting a documentJ.

*,',


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Project xxxxxx Blue


K"en t"e session is processed an F+ document t"at corresponds to t"e original

document is posted and t"e date o$ t"e next posting is c"anged accordingly in

t"e recurring entry original document.

Con-dential 9=o$


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Project xxxxxx Blue


*,',=, S#MP- %OCUMNTS

*ample documents )ill #e used as re$erence documents entered speci-cally $or a

purpose. *ample documents )ill "ae a separate num#er range. K"en suc"

documents are entered and posted as a sample document t"e system stores t"e

document #ut does not update any transaction -gures.

During document entry data could #e $rom anot"er document de$aulted. !"e items

$rom t"is re$erence document )ill #e:

!rans$erred )it"out c"anges

sed $or reerse postings

C"anged

+n contrast to an accounting document sample documents do not update transaction

-gures. !"ey sere merely as data sources $or an accounting document. !"eir

adantage )ill #e t"at c"ange or en"ancements are possi#le. !"ere$ore a sample

document )ill #e used rat"er t"an an accounting document )"en a re$erence

document "as to #e de-ned.

*ample documents )ill #e used as a re$erence document )"en allocation to more t"an

one cost center is de-ned. +$ allocation is to #e made to ot"er cost centers t"e alues

in t"e sample document need to #e c"anged.*ample documents )ill #e entered )it" a special $unction to ensure t"at t"ese

documents cannot #e accidentally posted as accounting documents.

*,',?, FIX% %POSITS 9IT8 B#NKS

&a3ingBrea3ing&aturity o$ Fixed Deposits+nestments

!"e company operates -xed deposits o$ arious alues )it" seeral #an3s. !"oug" t"e

deposits made $or a -xed period )it" a de-ned maturity date t"ese )ill #e #ro3en

#ased on t"e #usiness needs.

As on t"e date o$ maturity a manual entry )ill #e posted $or recording t"e interest

due on t"e deposit.

*,',, OURN#- +OUC8R

ere all adjustment entries related to endors or customers is to #e passed t"roug" F+

I8J. +t coers $ollo)ing:

1. endor customer reconciliation entry.

,. G6 recti-cation 8.

2. Accrual 8Ns

Con-dential 9>o$


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Project xxxxxx Blue


*,',)(, PRIO%IC PROCSSING

Closin$ Pro"edures>

Apart $rom t"e normal day4to4day transaction processing t"at is underta3en )it"in

*AP t"ere are many processes t"at re0uire completion on a periodic #asis. !"ese

include t"e regrouping o$ customer credits and endor de#its and unmatc"ed inoice

receipts and material receipts realuing o$ $oreign currency items and mont"4end

accruals and de$errals.

6ist o$ period close operations in *AP:

N

o,

#re

!%es"ription Business Pro"ess %es"ription

1 F+ Boo3 all proisions @nter Accrual De$erral Document $or t"e period

2 F+ Depreciation 7un

!"is process inoles execution o$ mont"ly

depreciation run and )ill #e centrally executed in

X C%&PA'( on a pre4de-ned date. +t "as to #e

ensured t"at #e$ore execution o$ t"is process all

asset capitali/ation entries must #e completed.

9 F+ Ban3 7econciliation!"is process is $or running automatic #an3

7econciliation $or X C%&PA'(

; F+

Clearing o$

G6Customerendor

accounts

!"e program I!4code F.12J)"en executed at t"e

re0uired periodicity )ill clear all t"e matc"ing

open items in t"e G7+7 account so as to retain

items )"ic" )ill #e t"e open Goods 7eceipt

Credits $or )"ic" t"e +noice eri-cation "as not

yet #een done Ior +noice not yet receiedJ. !"is

Process I!4Code4F499 endor F42, CustomerJ

+noles clearing o$ endor +noice against

unmatc"ed payments adance de#it credit

note or 8 passed in t"e endor account.

< F+Kit""olding !ax

Proision

!"is process discuss a#out Proision o$

)it""olding !ax against t"e eac" Goods 7eceipt

'ote IG7'J $or )"ic" +noice not yet posted.

= F+%pen next F+ Posting

Period

!"is process "as to #e centrally controlled in X

C%&PA'( and "ence is releant to Finance and

Accounts )"ic" )ill control t"e opening and

closing o$ t"e posting periods. *AP permits

selectie opening and closing o$ posting periods

$or arious types o$ accounts

> F+ Financial *tatement

!"is process is $or generating t"e -nancial

statements suc" as Pro-t and 6oss *tatement and

Balance *"eet $or X C%&PA'(. Financial

*tatement ersions )ill #e created $or externalreporting.

Con-dential 9?o$


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Project xxxxxx Blue


F+4C% +ntegrationICompany code G6 accountsJ

F+4*D +ntegration IGeneral data Company code Distri#ution C"ainJ

F+4&& +ntegration IGeneral data Company code Purc"ase areaJ and F+4AA

F+47 +ntegration ICompany codeJ

Con-dential ;1o$


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Project xxxxxx Blue


:, #CCOUNTS P#Y#B-

:,),GNR#- XP-#N#TIONS 0#S@IS3

Currently X Company accounting team along )it" t"e purc"asing team per$orms

$ollo)ing actiities under Accounts paya#le Accounting

PO b!sed Bills pro"essin$ 0Re.enue E Ser.i"e3>

X Company purc"ases t"e ra) materials -xed assets production consuma#les

serices etc. #y placing a purc"ase order to t"e endor. !"e centrali/ed purc"ase

department caters to t"e need o$ all ? legal entities. As per t"e process t"e ordered

goods are deliered to t"e plant4store or desired place. !"e stores person #oo3s t"e

goods receipt. sually t"e inoice is accompanied )it" t"e goods deliery. +n case t"e

inoice document arried at plant t"e stores people send t"e inoice copies toPurc"ase department in "ead oSce. !"e purc"ase department eri-es t"e inoice and

passes it on to accounts department $or $urt"er processing.!"e accounting

department posts t"e endor lia#ility and processes $or payment.

*ometimes i$ t"e expenses incurred at indiidual #ranc" t"e inoice is $or)arded to

purc"ase department in "ead oSce. !"e purc"ase department eri-es t"e inoice and

passes it on to accounts department $or payment. X Company also imports some

materials. +n t"ese cases t"e inoices are #oo3ed in +'7.

+$ in case any discrepancy seen #et)een deliered 0uantity and inoice 0uantity a#oe

tolerance limit su#se0uent de#it note is issued to t"e endor. !"e endor is paid only$or 0uantity actually receied V allo)a#le tolerance 0uantity.

nplanned deliery cost i$ any is identi-ed as separate expenses.

#""ountin$ 5or Pur"2!se @ Ot2er T2!n PO

+n case o$ endor inoices )it"out Purc"ase %rder *erice %rder Contract )ould

#e #oo3ed #y t"e Finance endor inoice. And lin3 )it" t"e releant department at

t"e time o$ transaction.

+n t"e F+ endor inoice G6 account is to #e entered $or t"e de#it posting. Due

date payment terms is pic3ed up $rom t"e endor master #ut t"is can #e modi-edi$ re0uired at t"e transaction leel.

P!yment to .endors>t"e endors are usually paid t"roug" c"ec3s. *ome times

7!G* or DD are used $or payments. !"is -le is t"en s"ared )it" #an3 $or c"ec3

printing.

endors are usually paid t"roug" c"ec3s. !"e payment re0uest is raised #y respectie

#ranc" Ii$ procurement does not "appen $rom %J along )it" inoice. +n case o$ c"ec3

payments manual payment entry is posted into t"e system )"ic" o)ns a c"ec3

num#er. X Company "as got c"ec3 num#ers receied $rom t"e #an3. At a particulartime interal a -le IM.csN $ormatJ is generated )"ic" includes t"e in$ormation

Con-dential ;,o$


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Project xxxxxx Blue


:,',), PO B#S% BI--S PROCSSING 0R+NU E SR+IC3

+n t"is process Purc"ase %rder is raised )it" re$erence to Purc"ase 7e0uisition )"ere

accounting "as no impact itNs only a commitment item. K"en t"e goods are receied

$rom t"e endor #ased on t"e P% )e execute &+G% )"ere goods receipt is posted and

#ot" &aterial document and F+ document is generated.

Con-dential ;9o$


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Project xxxxxx Blue


&aterial document )ill #e $or accounting stoc3 into stores and F+ entry )ill

+nentory *toc3 Ac Dr.

G7+7 Clearing Ac Cr.

ere G7 +7 clearing account is a clearing account and gets 3noc3ed oL at t"e time

posting t"e inoice I&+7% executionJ.

All t"e +ncoming +noices are eri-ed in terms o$ t"eir content prices and arit"metic

and t"e inoice is posted t"e data is saed in t"e system. !"e system updates t"e

data saed in t"e inoice documents in &aterials &anagement and Financial

Accounting.

A$ter t"e inoice "as #een posted t"e document appears as an open item in t"e

endor account. IPayment proposal listJ.

#""ountin$ ntries 42en in.oi"e is posted 4ill be>

GR1IR #1" %r,

CN+#T Cle!rin$ #1" %r 0i5 !ppli"!ble3

+#T Cle!rin$ #1" %r 0i5 !ppli"!ble3

+endor #""ount Cr,

In "!se o5 Ser.i"e PO 5ollo4in$ entry 4ill be tri$$ered>@

Goods Re"eipt>

Dpense !1" %r,

Ser.i"e GR 1 IR #1" CR

In.oi"e Postin$>

Ser.i"e GR1IR #1" %r,

+endor #""ount Cr,

%eli.ery "osts "!n be di.ided into>

Planned deliery costs

nplanned deliery costs

Con-dential ;;o$


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Project xxxxxx Blue


G7+7 AC Cr

Custom Clearing Ac Cr

(The custom duty portion of value is loaded to the inventory and the Customs clearing

a/c will get nullied)

%urin$ In.oi"e +eri"!tion>

G7+7 Ac Dr

endor Ac Cr

:,',', %IRCT BI--S PROCSSING 0NON PO B#S%3

Accounting Document is generated manually #y de#iting t"e expense and creditingt"e endor. K! is also deducted at t"is stage )"ic" )ill #e called up automatically.

endor inoices )it"out && purc"ase order )ould #e #oo3ed t"roug" F+ endor

inoice and "as no impact on t"e stoc3. +n t"e F+ endor inoice G6 account is to #e entered $or t"e de#it posting. Due

date payment terms is to #e mentioned in t"e inoice.

:,',*, +N%OR %O9N P#YMNT E C-#RING

P!yment 1 Re"eipt pro"ess 0#d.!n"e E Re$ul!r3>

Adance Payment: %nce t"e AP7 IAdance Payment 7e0uestJ receied $rom

Purc"ase +ntending department AP user )ill cross c"ec3 t"e re0uest )it" P%

$or compliance.

For all t"e purc"ase #ased adances P% num#ers )ill #e re$erredattac"ed to

prepayment ouc"er. *o system )ill allo) to pay t"e adance al)ays less t"an

or e0ual to t"e adance amount mentioned in t"e P%. &ore t"an one P% can #e

re$erred $or a single pre payment against eac" endor.

#d.!n"e P!yment>

A Do)n Payment re0uest is raised #y t"e aut"ori/ed person re0uesting $or payment.

Based on t"e re0uest a do)n payment may #e released to t"e particular endor and

re0uest item is cleared. Do)n payment re0uest is a noted +tem special General 6edger

account )"ic" )ill not #e displayed in t"e Balance *"eet. +n *AP processing o$ a do)n

payment inoles a num#er o$ steps:

Do)n Payment re0uest a notational item recorded against t"e endor

&a3e payment against t"e payment re0uest

Post t"e inoice )"ic" re0uired t"e do)n payment Clear t"e do)n payment against t"e inoice and

Con-dential ;>o$


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Project xxxxxx Blue


&a3e -nal endor payment t"e #alance o$ t"e inoice.

!"e accounting entry $or ma3ing t"e do)n payment )ill #e:

endor account I*pl. G6: Do)n PaymentJ Dr

Ban3 Ac Cr

:,',:, IN+OIC BOOKING E STT-MNT OF #%+#NC

!"e concept o$ aut"ori/ing t"e document entry can #e ac"ieed #y t"e standard *AP

$unctionality creating and aut"ori/ing t"e payment re0uest. Payment re0uest )ill #e

created #y one person and aut"ori/ed #y anot"er person to 3eep t"e control.

+t is also possi#le to post inoices $rom F+ )it"out t"e necessity o$ purc"ase order. !"at

can #e used to $ul-ll t"e re0uirement o$ postings li3e miscellaneous payments

employee related payments trael agent payments "otel #ills and consultancy

payments.

*ettlement o$ do)n payments to t"e endor account and clearing o$ +noice

againstDo)n Payment

endor Ac Dr

endor Ac I*pl. G6: Do)n PaymentJ Cr

K"ereer K! is applica#le t"e K! )ill #e deducted at t"e time o$ do)n4payment

to t"e endor and )ill #e adjusted at t"e time o$ settlement o$ adances.

:,',;, CR%IT PRIO% FOR +N%OR P#YMNTS>

!erms o$ Payment )ill #e de-ned #y t"e Company )"ic" )ill #e updated in t"e endor

&aster $or eac" endor and )ill #e de$aulted in t"e P% and +noice leel. K"ere t"e

payment terms "ae #een c"anged in t"e inoice leel t"e due dates )ill oer4ride

t"e original due date Icalculated #ased on Purc"ase %rderJ. !erms o$ payment )ill

de-ne t"e credit period due date and cas" discount i$ applica#le. !"e due date )ill#e calculated $rom a #aseline date as per t"e payment terms )"ic" )ill #e eit"er o$

t"e $ollo)ing dates:

Document Date

Posting Date

'o De$ault

Con-dential ;?o$


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Project xxxxxx Blue


:,',

!"e payment program is designed so t"at you can pool and process outgoing

payments. !"e payment program processes domestic and $oreign payments $or

endors and customers. +t creates payment documents and supplies data to t"e

Con-dential


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Project xxxxxx Blue


C"ec3 is prepared manually i.e outside t"e *AP system and t"en c"ec3 details are

updated to t"e payment document )"ic" updates t"e c"ec3 register.

:,',, +N%OR FORIGN P#YMNT

+n case o$ +mport materials Purc"ase orders )ill #e processed and sent to t"e selectedendor )it" all terms and conditions. pon t"e receipt o$ t"e goods in t"e customs

area t"ey )ould #e released a$ter t"e payment o$ duty. +n *AP t"e customs aut"ority

)ould #e considered as endor and a lia#ility to)ards customer duty )ould #e

recogni/ed in t"e system. !"is )ould #e called as customs inoice eri-cation. !"en

a$ter payment o$ su#se0uent duties goods )ould #e released $rom t"e customs area.

Goods receipt )ould #e #oo3ed once t"e goods are receied in companyNs storage

location. !"en import endors commercial inoice )ould #e #oo3ed in t"e system.

+$ goods receied are as per t"e P% order 0uantity Goods receipt )ill #e posted )it"

re$erence to purc"ase order )"en material is p"ysically receied. +noice eri-cation

)ill #e processed )it" re$erence to goods receipt and endor inoice receipt as per t"e

payment terms stated in purc"ase order. endor payment )ill #e processed )it"

re$erence inoice eri-cation posted in &aterials &anagement #y Financial

Accounting. For suc" an +7 t"e exc"ange rate is pic3ed up $rom t"e P% in )"ic" )e

"ae de-ned a -xed exc"ange rate.

All import purc"ase orders are to #e raised in $oreign currency #ut t"e transactions are

to #e recorded in +'7. !"e import endor inoice )ould #e #oo3ed in t"e system in

$oreign currency. *ystem )ould pic3 up t"e exc"ange rates maintained in t"e system

$or t"e currency pair $or e.g. *D to +'7. !"e exc"ange rate can #e c"anged in t"e

document i$ re0uired. At t"e time o$ payment t"e system )ould automaticallycalculate t"e exc"ange gainloss and #oo3 it to releant G6 Ac.

:,',)(, %BIT NOT E CR%IT NOT

All t"e supportreleant documents )ill #e su#mitted #y purc"ase to generate t"e

de#itCredit note on t"e identi-ed process li3e discounts on t"e 0typurc"ase.

Cross Functional )it" &&:

Credit Memo>

A credit memo can #e entered )it" re$erence to a purc"ase order or a goods receipt.

Purc"ase DeptAccountsDept enter a credit memo $or a purc"ase order item )"en t"e

goods are returned to t"e endor. First &+G% is to #e posted $or t"e return 0uantity

and t"en credit memo to #e posted in &+7% $or t"e return P%.

Accounting @ntries )ill #e $or Credit &emo Ireturned goodsJ

Goods Re"eipt @ MIGO

G7+7 Ac Dr

+nentory Ac Cr

Con-dential


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Project xxxxxx Blue


Posted $or t"e returned 0uantity stoc3 alue 0uantity is reduced.

In.oi"e Postin$ A MIRO

endor Ac Dr

G7 +7 Ac Cr

A! 7eceia#le Ac Cr

:,',)), #%USTMNT 1 C-#RING PROCSS

%pen items reTect un-nis"ed transactions. For example a 6ia#ility t"at "as not

#een settled remains in t"e 6ia#ility account as an open item until it is settled.

!"e open items o$ an account can only #e cleared once you post an identicaloLsetting amount to t"e account. +n ot"er )ords t"e #alance o$ t"e items

assigned to eac" ot"er must e0ual /ero.

During clearing t"e system enters a clearing document num#er and t"e clearing

date in t"ese items.

%pen items can only #e cleared i$ t"ey are posted to accounts t"at are managed

on an open item #asis. %pen item management is automatically set $or customer

and endor accounts. For G6 accounts "o)eer you "ae to set t"e open item

management option in t"e master record.

%pen items o$ an account can #e cleared manually using t"e Account Clearing

$unction or t"ey can #e cleared automatically #y t"e system. Automatic clearing is

especially use$ul $or clearing accounts in t"e G6 account area.

sers )ill clear open items $rom G6 accounts #y running t"e clearing program.

!"is program uses prede-ned criteria to group toget"er open items per account.

+$ t"e #alance o$ t"e group o$ open items e0uals /ero in local or $oreign currency

t"e items are mar3ed as cleared.

!"e clearing program is used to automatically clear open items #ased on

prede-ned criteria. &anual clearing o$ open items is t"ere$ore not usually

necessary.

Automatic clearing Ii.e. clearing #ased on *AP4de-ned -elds suc" as assignment

amount re$. -eldJ.

&anual clearing Ii.e. matc"ing o$ amount per$ormed #y usersJ.

:,',)', CORRSPON%NC

All ealuations and reports sent to #usiness partners are considered as

correspondence. Correspondence $or #ot" customers and endors includes:

Con-dential


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Project xxxxxx Blue


Account statements and open items lists in letter $orm

+ndiidual letters and standard letters

Balance con-rmations

Document extracts

*ince standard reporting $ormat o$ a#oe correspondence does not meet X C%&PA'(

re0uirement need to #e deeloped

Con-dential


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Project xxxxxx Blue


+endor m!ster "re!tion

Con-dential


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Project xxxxxx Blue


P!r/ !nd post .endor in.oi"e>

X C%&PA'( re0uires day to day accounting o$ t"e transactions t"at ta3e place in t"e

organi/ation. !"is application component is re0uired $or entering endor inoices t"atarise in t"e accounts paya#le module o$ -nancial accounting.

+n case )"ere materials management is inoled t"e entering o$ t"e inoice is done

in t"e logistics inoice eri-cation o$ t"e materials management.

Con-dential


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Project xxxxxx Blue


+endor do4n P!yment

X C%&PA'( "as to pay during t"eir course o$ transactions adance payments to t"e

endors. Adance payments are 3no)n as do)n payments in *AP. Do)n payment

re0uest can #e created #y t"e materials management department and t"e same can

#e ie)ed #y t"e accounts paya#le person. A$ter c"ec3ing t"e purc"ase order termst"e do)n payment is made #y t"e accounts paya#le person.

!"e system posts t"e do)n payment transaction as a special general ledger

transaction in t"e endor account. ence it )ill not appear in t"e regular #alance #ut

only in special general ledger #alance. %nce t"e do)n payment is cleared against an

inoice t"e #alance is s"i$ted $rom t"e special general ledger #alance to t"e regular

endor account #alance.

At t"e time o$ document entry t"e appropriate special general ledger indicator needs

to #e c"osen.

Flo4 di!$r!m 5or .endor do4n p!yment

Con-dential


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Project xxxxxx Blue


Flo4 di!$r!m +endor P!yment Pro"ess

:,*,C8#NGS TO XISTING ORG#NI7#TION

PROCSS>

'.A.

:,:,SPCI#- ORG#NIS#TION CONSI%R#TIONS>

'.A.

:,;,G#P #N#-YSIS>

'.A.

Con-dential o$


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Project xxxxxx Blue


:,

F+4&& +ntegration

Con-dential


70/109

Project xxxxxx Blue


;, BUSINSS PROCSSS @ #CCOUNTS RCI+#B-S

;,),GNR#- XP-#N#TIONS 0#SIS3>

!"e $ollo)ing ta#le summari/es t"e sales #usiness lines o$ t"e indiidual legal

entities. As a #usiness practice usually t"e sales inoice is created #y t"e sales

team. Based on t"at t"e accounting team post t"e accounting entry periodically.

Sr,

No, N!me o5 t2e "omp!ny Distin$ -ine o5 business

1 X Company PaintsCorporation 6td.

MX Company Paints Corporation 6tdN. is t"e

manu$acturer and sellers o$ paints t"inners

)ood -nis"es putties and ot"er materials. As on

date MX CompanyPaint sales t"eir productst"roug" *p"inax C"emicals.X CompanyPaints

earn t"e primary reenue t"roug" t"is sale.

o)eersoon X Company is going to sale t"eir

products directly into t"e mar3et.

,*p"inax C"emicals Pt.

6td.

As on date *p"inax C"emicals Pt. 6td. actsas

mar3eting Company $or X Company Paints. !"e

acts as carrying and $or)arding agent $or X

Company Paints 6td.*p"inax C"emicals sales t"e

-nis"ed products o$X Company Paints in t"e

mar3et.*p"inax raises inoice on X CompanyPaints$or commission. A mont"ly inoice is raised

#y t"e -nance department.

2 *"een)orld *erices 66P

*"een)orld team promotes t"e sales $or

*"een)orld diision o$ X Company Paints 6td.

Based on t"e sales reenue recogni/ed $or t"e

diision $or a particular period I$or a mont"JO an

inoice is raised on X Company Paints

Corporation 6td. !"is inoice is currently raised

#y t"e Finance team. o)eer management iso$ t"e ie) t"e *"een)orld serices )ould "ae

t"eir o)n #ranc" oSces Isame as *p"inax

C"emicals Pt. 6td.J at diLerent locations. And

*"een)orld )ould "ae its o)n sales t"roug"

t"ese #ranc"es.

9 X Company Auto

*olutions

MX Company Auto *olutionsN is in t"e trading

#usiness. !"e imports some auto paints and sale

t"em into domestic mar3et. !"ey earn t"eir

reenue t"roug" t"e trading actiity. o)eer

management is o$ t"e ie) t"e X Company Auto*olutions )ould "ae t"eir o)n #ranc" oSces at

Con-dential =o$


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Project xxxxxx Blue


diLerent locations Isame as *p"inax C"emicals

Pt. 6td.J. And X Company Auto solutions )ould

"ae its sales t"roug" t"ese #ranc"es.

; !ec"*erices

M!ec" *ericesN are manu$acturers o$ some

material. !"ey "ae a contract executed )it" MXCompany PaintsN under )"ic" t"ey sale t"e

material to MX Company Paints Corporation 6tdN.

!ec" *erices raises inoices $or t"e sale o$

material and earns t"eir reenue. As on date

t"ey t"e sales is made only MX Company Paints

Corporation 6td.N

< *p"inax +n$o *ystems

M*p"inax +n$o *ystemsN is an +! serices

company.!"ey render +! serices to ot"er sister

concern companies in t"e X Company Group. +!

serices $ees are c"arged to eac" sister #ased

on t"e num#er o$ users. +t is li3ely possi#le t"at

*p"inax )ould sale some computer perip"erals

to t"e sister concerns companies as a part o$

serice contract.

=*p"inax %rganic

researc" P. 6td.

M*p"inax %rganic and researc" P. 6td.Nis into

agriculture actiities. !"ey "ae procured some

$arming land and t"ey cultiate crops t"ere. !"e

$ood grains t"us $armed are sold into local

mar3et. 7eenue is earnedt"roug" crop sale.

>X Company Financial

serices

M*"eelac Financial *ericesN are into #usiness o$

lending $unds to ot"er sister concern companies

in t"e group. !"ey c"arge interest to t"e loan

proided and t"e reenue is recogni/ed.

?X Company 6an3a Paint P.

6td

MX Company 6an3a Paints P. 6td.N is in t"e trading

#usiness. !"e imports paint $rom X Company

Paints 6td +ndia and sale t"em into local mar3ets

o$ *ri 6an3a. !"ey earn t"eir reenue t"roug" t"e

trading actiities in t"e *ri 6an3an local mar3et.

Among t"e entities listed a#oe almost all t"e entities post t"eir inoices t"roug"

*ales and Distri#ution module. %nly in case o$ X Company Financial serices it is

proposed to #oo3 t"e inoices directly t"roug" Financial Accounting.

#R Credit1debitnotes>+n case o$ M*p"inax C"emicals Pt. 6td.N t"e material is sold

t"e distri#utor and primary sale is considered at t"is point. Depending upon t"e

mar3et situation t"e distri#utor may sale t"e X Company products at a discounted

price. %r distri#utor may sale t"e X Company products at a premium price. +n t"issituation to adjust t"e customer Idistri#utorJ account #alance *p"inax c"emicals

Con-dential =1o$


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issues a credit note or a de#it note to t"e distri#utor. As on date a distri#utor sales

report is pulled $rom anot"er system and #ased on t"e report credit or de#it note

entries are posted into t"e accounting system.

+n case o$ ot"er legal entities depending upon #usiness re0uirement t"e credit notes

are issued to t"e end customers. !"e sales team posts t"e credit notes into t"esystem. sually at t"e mont" end t"e accounting team posts t"e accounting entry

$or t"e same.

#R Sundry In.oi"es:%t"er direct sales inoices ot"er sundry +noicesli3e sale o$ an

asset and scrap miscellaneous receipts etc.)ould #e posted directly t"roug"

-nancial Accounting. +n case o$ scrap sales !C* is not collected.

In"omin$ p!yment re"eipts> +n case o$ *p"inax c"emicals Pt. 6td.t"e customer

payments are usually collected t"roug" c"ec3. *ometimes ot"er medium li3e DD

7!G* or ery rarely cas" are accepted. !"e customer payment is collected #y t"e

local #ranc" team and deposited into *p"inax c"emicals Pt. 6td. C&* ICas"&anagement *ystemJ DFC #an3 Ac. @ac" #ranc" "as a C&* #an3 Ac code. !"e

#ranc" also in$orms t"e accounting team in t"e "ead oSce a#out t"e details o$

payments receied. !"e credits $or t"e payments deposited #y t"e #ranc"es are

reTected into % DFC Ban3 Ac. Based on t"e credits in t"e #an3 Ac and t"e

in$ormation receied $rom t"e #ranc"es t"e accounting department posts t"e

payment receipt to t"e customer account.

+n case o$ ot"er legal entities in t"e group t"e customer payments are usually

collected t"roug" c"ec3s. *ometimes ot"er medium li3e DD 7!G* or ery rarely

cas" are accepted. Based on t"e payment receipts t"e accounting team posts t"ecustomer payment receipt in t"e system.

+t is also practiced t"at customer payments are receied in adances. And

sometimes in partial amounts.

X Company also "olds some security deposits $or t"e distri#utors. !"is deposit is not

adjusted against t"e inoice outstanding.

Corresponden"e 4it2 t2e "ustomer>X Company accounting team sends

reminders to t"e customer in$orming t"e outstanding inoices. Besides t"is as a part

o$ year end closing #alance con-rmation re0uests are also sent to customers.

Interest "!l"ul!tions>Currently t"e X Company accounting team does not $ollo)

t"e practice to calculate interest on customer outstanding.

Credit limit>X Company customers enjoy some credit as #usiness partners. !"e

credit limit may diLer $rom customer to customer. For dealers t"e credit limit starts

$rom 7s.;5 and goes in multiple o$ 7s.;5. +n case o$ *5 X Company "olds a

deposit $or a particular amount. Credit limit is oLered to t"e extent o$ 9 times o$ t"e

deposit amount. !"e credit limit is legal entity speci-c. !"e customer outstanding $or

t"e purpose o$ calculating t"e credit is not cumulatie across t"e across company

codes

Con-dential =,o$


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Credit period>X Company uses credit period o$ = days or 2 days. A$ter t"at t"e

inoice is considered as oerdue.

Reports> $or t"e purpose o$ A7 analysis t"e accounting team ma3es use o$ customer

#alance customer line item reports. !"e customer ageing report is also used $or

analysis purpose.

T!Des !nd duties> All t"e legal entities "ae indiidual taxduties registration

depending upon t"e line o$ #usiness. All t"e taxes compliances are $ollo)ed

meticulously #y t"e legal entities. !"e taxduty lia#ilities are recogni/ed in t"e

accounting entries posted #y t"e accounting department.

;,',SO-UTION IN S#P A 0TOB3>

O.er.ie4>!"e Accounts 7eceia#le module records and administers accounting datao$ all customers and is also an integral part o$ sales management.

All postings in Accounts 7eceia#le are also updated in t"e General 6edger. DiLerent

G6 accounts are updated depending on t"e transaction inoled I$or example regular

inoice posting adance paymentsJ. !"e system contains a range o$ tools t"at can

use to monitor open items customer account #alance analysis ageing analysis. !"e

correspondence lin3ed to t"ese tools can #e indiidually $ormulated to suit t"e

re0uirements. !"is caters to t"e re0uirement o$ sending payment notices #alance

con-rmations account statements and interest calculations.

Accounts receia#le also proides t"e data re0uired $or eLectie credit managementIas a result o$ its close integration )it" t"e *ales and Distri#ution componentJ.

Accounts receia#le su# module o$ -nancial accounting also ena#les to post customer

inoices directly t"roug" -nancial accounting.

!"is also caters to t"e re0uirement o$ dealing )it" outgoing taxes on customer

inoices.

Accounts 7eceia#le is not merely one o$ t"e #ranc"es o$ accounting t"at $orms

t"e #asis o$ ade0uate and orderly accounting. +t also proides t"e data re0uired

$or eLectie credit management Ias a result o$ its close integration )it" t"e*ales and Distri#ution componentJ

All postings in Accounts 7eceia#le are also recorded directly in t"e General

6edger. DiLerent G6 accounts are updated depending on t"e transaction

inoled I$or example receia#les do)n payments and #ills o$ exc"angeJ. !"e

system contains a range o$ tools t"at you can use to monitor open items suc"

as account analyses alarm reports due date lists. !"e correspondence lin3ed to

t"ese tools can #e indiidually $ormulated to suit X C%&PA'(Ns re0uirements.

!"is is also t"e case $or payment notices #alance con-rmations account

statements and interest calculations.

Con-dential =2o$


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!"ere are ranges o$ tools aaila#le $or documenting t"e transactions t"at occur

in Accounts 7eceia#le including #alance lists journals #alance audit trails

and ot"er standard reports. K"en dra)ing up -nancial statements t"e items in

$oreign currency are re4aluedO customers )"o are also endors are listed.

;,',), CUSTOMR M#STR %#T#

!"e Accounts 7eceia#le application component records and manages accounting

data o$ all customers. All postings in Accounts 7eceia#le are also recorded parallel in

t"e General 6edger. DiLerent G6 accounts are updated depending on t"e transaction

inoled I$or example receia#les do)n paymentsJ. !"e system contains a range o$

tools t"at can #e used to monitor open items suc" as account #alances reports and

due date lists.

+n X Company Customer )ill #e created t"roug" *ales and Distri#ution &odule F+

&odule jointly.Customer &aster is created centrally in sales and distri#ution and

-nancial accounting )it" t"eir respectie ie)s

Flo4 di!$r!m 5or "ustomer m!ster

Con-dential =9o$


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;,',', IN+OIC POSTING

X Company re0uires recording o$ customer inoice transactions. !"is application

component is re0uired $or entering customer inoices t"at arise in t"e accounts

receia#le module o$ -nancial accounting. Generally t"e customer inoice is raised in

sales and distri#ution module and is released to accounting.

o)eer in some circumstances t"e inoice is raised in accounts receia#le module

itsel$. Accounting executie enters t"e inoice and par3s t"e inoice. !"e par3ed

inoice is c"ec3ed #y Accountantaccounting manager and i$ "e is aut"ori/ed "e )ill

complete t"e document and posts it. +n case "e is not aut"ori/ed t"en "e )ill

complete t"e document and "is superior )ill post t"e document.

Con-dential =;o$


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P!r/ !nd Post Customer In.oi"e

Con-dential =


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-OC#- S#-S PROCSS

1. Rele!se Billin$ %o"ument to #""ountin$ 0+F()1+F('3> 4 +$ t"ere is a

Posting Bloc3 actiated to t"e Document !ype t"en it )ill not get released to

Accounts automatically. +n t"at case an aut"ori/ed person )ill go to c"ange

Billing Document and release it to Accounting. As a result o$ )"ic" CustomerAccount )ill get de#ited and 7eenue Accounts )ill get credited in t"e system.

Customer Ac Dr

*ales Ac Cr

A! Paya#le Cr

%t"er taxes paya#le Cr

(The above process is same for Raw aterial / !crap !ales "rocess)

;,',*, %BIT MMO E CR%IT MMO

Price diLerence can #e addressed directly in *D #y creating De#it &emo

re0uestDe#it memo #y re$ereeing sales orderinoice

X Company team desires to "ae a tool to post t"e de#it or credit notes to t"e

distri#utor Ac. A Tat -le )ould #e imported into *AP system )"ic" )ouldautomatically post t"e de#it or credit notes into respectie customer Ac. !"is

actiity is usually done at t"e mont" end. A customi/ed tool )ould #e gien $or

t"is process.

Besides t"e tool option is al)ays aaila#le to t"e -nance department to pass

manually entry $or t"e traction.

;,',:, %O9N P#YMNT RCI+% #N% C-#RING

Do)n Payment is a $unction t"at uses *pecial G6 indicators. *pecial G6 !ransactions

allo) t"e user to post t"e document to an alternatie G6 account instead o$ normalE

customerNs reconciliation account. !"ey are de-ned in Customi/ing $or Customers

reconciliation accounts. !"is Process inoles receipt o$ Adances $rom customers

against orders. !"e $unctionality can #e triggered eit"er #y recording a do)n payment

re0uest or #y actually receiing a do)n payment. !"e sales order re$erence no. is to

#e mentioned "ere.

!"e eent )ill al)ays ma3e t"e system prompt t"at Do)n payments $rom customers

exist )"eneer inoices are raised. !"e Do)n payment Clearing Functionality )ill #e

used to clear existing Do)n payments.

Con-dential ==o$


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Adances are receied $rom t"e customer:

Ban3 Account Dr

Adanced Payments CustomerCr.

!"ese adances are later adjusted against t"e -nal inoice raised on t"e parties and

adance can #e adjusted against more t"an one inoice at t"e time o$ clearing o$ t"e

inoices against adances.

Adjustment o$ adances is done as $ollo)s:

Adanced Payments Customer Dr.

Customer Account Cr.

;,',;, CO--CTION PROCSS 0POST INCOMING P#YMNT3

!"is $unction allo)s user to record receipts $rom customers in t"e system and adjust

t"em against inoices and de#it memos.

+n t"e case o$ receipts receied against inoices t"e user can enter t"e inoices

to #e adjusted.

@lse "e can record t"e receipt as an %n AccountE receipt and lin3 to one or

more inoices later. But t"is )ill lead to manual clearing.

+noices adances and de#it memos can #e settled to t"e extent o$ t"e

outstanding amount.

+ncoming payment can #e cleared partially or residually depending on t"e

situation.

+n case t"e receipt currency is not t"e local currency t"e same is conerted into

local currency $or accounting purposes. !"e exc"ange rates maintained as on

t"e alue date )ill #e used $or conersion. o)eer t"e receipt details are

stored in t"e entered currency #ut can #e ie) in local and $oreign currency asand )"en re0uired.

Con-dential =>o$


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Customer In"omin$ P!yment Pro"ess 0Re$ul!r1#d.!n"e1#d2o"3

Con-dential =?o$


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#J Automatic +ncoming Payment Processing

Automatic incoming payment processing $acility can #e used to process

incoming payments. *tandard incoming payment met"ods suc" as C"ec3

Deposits Ban3 trans$ers s"all #e aaila#le. !"e incoming payment "o)eer

needs to matc" t"e inoice $or a clearance to #e eLected #y t"e posting rule $or

suc" clearances. +n t"e eent o$ an exact matc" not #eing aaila#le an on

account posting can ta3e place t"roug" a separate statement posting rule $or

suc" on account payments.

;,',?, CR%IT CONTRO- PROCSS

Credit control area is an organi/ational unit t"at represents t"e area )"ere customer

credit is a)arded and monitored.Credit control area )ill #e de-ned at company code

leel and )ould #e updated in customerNs master record.

Credit limits can normally #e speci-ed in t"e indiidual customer master records at

sales organi/ation leel. !"e credit limits at t"e control area leel are c"ec3ed during

sales order processing.

*imple Credit c"ec3 is esta#lis"ed during sales order #y maintaining Credit master

Data )ill #e captured in *D. !"e customer can #e #loc3ed $or t"e #illing #y using

deliery#illing #loc3 -eld in sales order.

+t is also desired #y t"e X Company team to "ae customer processing #loc3 #ased on

t"e days o$ oerdue inoices.

;,',, RST#TMNT OF FORX RCI+#B-S

!"is process per$orms t"e realuation o$ all $oreign currency open items primarily in

customer and endor accounts using t"e mont" end exc"ange rate maintained.

!"is process carries out $oreign currency aluation $or accounts managed on an open

item #asis. aluation ta3es place according to t"e single aluation principle. !"is

means t"at indiidual open item on t"e 3ey date only are ta3en into consideration $or

t"e aluation.

*AP selects open items $or customers endors and G6 accounts posted in $oreigncurrencies. Based on t"e exc"ange rate on t"e 3ey date exc"ange rate diLerence is

calculated automatically and aluation document is posted.

!"e #alance o$ t"e $oreign currency #alance s"eet accounts i.e. t"e #alance o$ t"e

G6 account managed in a $oreign currency $orms t"e #asis o$ t"e aluation. !"e

exc"ange rate pro-t or loss $rom t"e aluation is posted to a separate expense or

reenue account $or exc"ange rate diLerences.

;,',)(, RCONCI-I#TION E MIS

Con-dential >,o$


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Con-dential >9o$


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T2e Ded !sset re$ister is m!int!ined in D"el !nd t2e

Depreciation is calculated in excel. sually t"e depreciation calculation and posting

ta3es place at -nancial year end closing actiity.

#sset s"r!p>!"e scenario o$ asset scrapping o$ )rite oL is not yet ta3en place.

Assets are o)ned and managed per legal entity. !"ere is no cross company or

s"aring o)ners"ip in t"e assets. Assets o$ one legal entity may #e used #y ot"er legal entity $or )"ic" rent or

re0uired c"arges are paid to t"e o)ing company code. X Company )ould li3e to "ae depreciation calculations as per companyNs act

and income tax act only. !"ey re0uirement is post depreciation as per company

act into G6 Ac.


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Project xxxxxx Blue


done on t"e concept o$ su# ledger 4 all postings made to any asset are updated in t"e

G6 account and t"ere is neer any diLerence #et)een t"e alues as s"o)n #y t"e

asset reports and t"e G6 #alances.

!"e depreciation calculation process is also automatic and depreciation is posted to

t"e #oo3s o$ accounts at pre de-ned periodical interals Igenerally mont"lyJ.Depreciation can #e calculated according to diLerent principles $or t"e same asset

#ased on #usiness re0uirements. For example t"e depreciation rates $or accounting

purposes and $or tax purposes can #e diLerent.

!"e asset master contains all t"e important in$ormation re0uired and t"e depreciation

calculation postings to cost centers etc. depends upon t"e assignments made in t"e

master data.


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Project xxxxxx Blue


system )ill ta3e care o$ all t"e #ac3ground processing li3e calculating t"e net #oo3

alue lossgain on sale o$ asset etc.

Asset retirement can "appen #y )ay o$ sale o$ an asset to a customer sale )it"out

customer de#iting customer account $or loss o$ asset and also #y )ay o$ scrapping. +n

case o$ scrapping t"e asset scrap )ill #e )it"out customer and t"is can also #e )it"and )it"out reenue.

!"e asset retirement consists o$ any o$ t"e $ollo)ing:

*ale o$ asset )it" customer: 4 An asset is sold resulting in reenue #eing

earned. !"e sale is posted )it" a customer Kit"out customer: 4 An asset is sold resulting in reenue #eing earned.

!"e sale is posted against a clearing account Ino customer record needs

to #e maintainedJ *crapping o$ an asset: 4 An asset "as to #e scrapped )it" no reenue

#eing earned +nter4unit trans$er $rom one Pro-t Center to anot"er Pro-t Center or $rom

one location to ot"er location Posting reenue loss on asset sale or scrapping o$ asset

Pro-t or loss on disposal )ill #e automatically calculated and posted to

t"e releant general ledger accounts. 7etirement may inole a single multiple or partial assetIsJ.

For partial retirement o$ an asset t"e alue 0uantity or percentage o$ an

asset can #e entered )"en posting t"e retirement. !"e pro-t or loss $rom retirement )ill #e assigned to separate general

ledger accounts.

Con-dential >>o$


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Settlement o5 #ssets under Constru"tion

Con-dential ?o$


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Retirement o5 #ssets

Con-dential ?1o$


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Project xxxxxx Blue


%epre"i!tion postin$ pro"ess

Con-dential ?,o$

7eie)

Planned

Depreciation

7un Batc"

7ecalculatio

n Program

Per$orm

Depreciation

7un in !est

&ode

(es

'o

7eie)

7esults and@rror 6og

CorrectAmen

d @ntries

7un

Depreciationin Actual

&ode

'o

(es

7eie) and

7elease

Batc" Post4

process

@rrors

7un 7eports

and 7eie)

Postings

*tart

@nd

Per$orm Batc"

7ecalculationQ

Amend+temsQ


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'.A.

'.A.

'.A.


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=, C#S8 #N% B#NK #CCOUNTING

=,),GNR#- XP-#N#TIONS@ 0#S IS3>

B!n/ !""ountin$>@ac" legal entity "olds o)n set o$ #an3 accounts. !"ey do t"e

#an3ing transactions independently.

X Company as a part o$ #an3 transactions includes depositions c"ec3DD payments

out)ard remittances inter#an3 trans$ers oerdra$t $acilities etc. All t"e #an3 accounts

in +ndia are maintained in +'7 currency. %nly t"e #an3 account $or *ri 6an3an entity is

maintained in 657.

*p"inax C"emicals and X Company Paints 6t. also enjoy c"ec3 printing $acility $rom

one o$ its #an3ing partner DFC. DFC Ban3 issues c"ec3 num#ers to X Company

)"ic" are updated into payment ouc"er at t"e time o$ payment.

*p"inax also uses Central Cas" &anagement $acility $rom DFC #an3. nder t"is

$acility a main #an3 Ac is "eld in t"e name o$ %. And a C&* code is gien to eac"

indiidual #ranc". !"e c"ec3s deposited #y t"e indiidual #ranc" into t"e C&* code

Ac. !"e c"ec3s are cleared locally and credit is passed to % main #an3 Ac

immediately Inext dayJ. Currently t"e #an3 reconciliation is done manually $or t"e

C&* code Ac as )ell as $or t"e main #an3 Ac.

C!s2 !""ountin$> @ac" legal entity and eac" indiidual #ranc" "as its o)n pettycas" #oo3. @ac" indiidual legal entity does t"e p"ysical cas" #alance count eery

day. +n case o$ indiidual #ranc"es t"e p"ysical cas" count is ta3en per )ee3. And t"e

same is reported to % accounting team. !"e indiidual #ranc" raises a re0uest to t"e

% in case o$ cas" re0uirement.

sually sundry expenses on ad "oc #asis are made $rom t"e potty cas". All t"e cas"

payments are approed #y t"e appropriate aut"ority.

=,',SO-UTION IN S#P A 0TO B3>!"e o#jectie is to ensure compliance and standardi/ation o$ procedures across all

locations so as to eLectiely manage Cas" and Ban3 transactions and to #uild ro#ust

controls and coer ris3 exposure associated )it" cas" and #an3 transactions

=,',), C#S8 #CCOUNTING>

=,',),), C#S8 OURN#-

All t"e cas" transactions )ill #e "andled t"roug" cas" journal. Cas" Account )ill

not #e aaila#le $or direct posting t"roug" F+4G6 or t"roug" any ot"er module.

Con-dential ?;o$


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A M.csN -le )ould #e generated using automatic payment program. !"e same t"en

)ould #e sent to #an3 $or c"ec3 printing.

%7

&ultiple c"ec3 lot )ill #e maintained in t"e system. For c"ec3 printing in t"e system

t"e payment document num#er c"ec3 lot num#er c"ec3 date and c"ec3 num#er )ill

#e entered.

Along )it" t"e Ban3 proided c"ec34printing stationery t"e c"ec3 payment adice )ill

#e printed I$ormat proided #y clientJ.

=,',',*, C8CK C#NC--#TION PROC%UR

X Company )ill cancel t"e c"ec3 p"ysically and )ill mention c"ec3 cancellation reason

in t"e system. !"e cancelled c"ec3 )ill #e -led separately $or $uture re$erence.

!"e re$erence o$ cancelled c"ec3 )ill #e mentioned in t"e narration o$ t"e reersal

entry. Fres" c"ec3 )ill #e issued in t"e same manner as applica#le $or ot"er payments.

=,',',:, B#NK C8#RGS #N% INTRST

Ban3 c"arges and interest accrued )ill #e on account o$ DD c"arges trans$er c"arges

6C opening c"arges Ban3 Guarantee c"arges and interest on )or3ing capital etc.

=,*,C8#NGS TO XISTING ORG#NI7#TION

PROCSS>

'.A.

=,:,SPCI#- ORG#NIS#TION CONSI%R#TIONS>

'.A.

=,;,G#P #N#-YSIS>

'.A.

=,

F+4&& +ntegration

F+4*D +ntegration

Con-dential ?=o$


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?, PROFIT CNTR #CCOUNTING

?,),GNR#- XP-#N#TIONS@ 0#S IS3>

Currently X Company "as exclusie set o$ G6 Accounts per location #ranc". !"e

expenses pertaining to t"e speci-c location #ranc" are posted to t"e G6 Account

speci-cally maintained $or t"at location#ranc". Also sales entries are passed #y

selecting t"e location#ranc". Based on t"is an incomeexpense statement is deried

in t"e system. Also as and )"en re0uired a trial #alance report is extracted #y t"e

system at t"e location leel.

?,',SO-UTION IN S#P A 0TO B3>

Pro-t center accounting )ill #e used $or speci-c reporting purposes. As Pro-t Center

Accounting )ill #e actiely used in X C%&PA'( some 3ey aspects o$ t"is $unctionality)ill #e discussed in detail.

Pro-t center is a management oriented organi/ational unit in *AP used $or internal

controlling purpose. @nterprise )ill #e diided into pro-t center units. +t ena#les you to

analy/e t"e pro-ta#ility o$ t"e 7esponsi#ility areas and to delegate 7esponsi#ility to

suc" units.

Pro-t center )ill #e o$ Products Iproducts or product linesJ Geograp"ical areas

Iregions sites oScesJ or $unctional areas Iproduction salesJ

Pro-t Center Accounting I@C4PCAJ "elps to analy/e t"e operating results o$ t"e internalorgani/ational units. Pro-t center reporting is used to control t"e results o$ t"e

indiidual areas o$ 7esponsi#ility Ipro-t centersJ )it"in t"e organi/ation.

Broad o#jecties o$ t"e pro-t center accounting are to get Pro-t and loss account and

#alance s"eet $or t"e eac" pro-t center )ise.

7eenue sales deductions postings )ill #e made using pro-t center.

@ac" cost center )ill #e mapped to a pro-t center.

P6 and Balance s"eet )ill #e generated at t"e pro-t center leel.

7eenue related A%P data )ill need to #e migrated to pro-t center structure.

sing t"e module Pro-t Center Accounting in addition to t"e ot"er modules in

controlling inoles little additional )or3load on #usiness users. %nce set up correctly

)e can #ene-t $rom reporting in Pro-t center )ise almost automatically.

&ain reason is t"at Pro-t Center Accounting generates ery $e) transactional postings

itsel$ relying instead on t"e data #eing generated #y ot"er sources suc" as goods

moements t"roug" production and receiing and #illing documents t"roug" sales.

!"ese external transactions update PCA t"roug" o#ject assignments. !"e pro-t

centers are central o#jects reTecting all costs and reenues $rom all cost o#jects in t"e*AP system.

Con-dential ?>o$


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+t is necessary to assign *D sales orders to pro-t centers in order to reTect sales

reenues and sales deductions. !"e pro-t assignment is passed on $rom t"e sales

order 4W deliery note 4W goods issue 4W #illing document. By de$ault it ta3es t"e pro-t

center $rom t"e material master.

!"ere$ore t"e dominant lin3 in t"e *AP system t"at )ill #e used #y X C%&PA'( is t"eone #et)een material and pro-t center. !"roug" t"is assignment t"e majority o$ t"e

PCA postings )ill occur. Kit" a single assignment on t"e material master record $or

eac" material plant com#ination you )ill "ae identi-ed $or *AP t"e de$ault pro-t

center $or all sales orders process orders goods moements material trans$ers and

p"ysical inentory adjustments.

K"en creating a process order $or -nis"ed goods material costs )ill #e posted to t"e

process order and at t"e same time to t"e Pro-t Center o$ t"e material con-rmation o$

actiities )ill credit a manu$acturing cost center and de#it t"e process order and t"e

Pro-t center o$ t"e material. Goods receipt o$ t"is -nis"ed product into )are"ouse )ill

credit t"e process order and t"e Pro-t center o$ t"e material. +$ a #alance exists on t"e

process order due to more t"an #udgeted usage o$ ra) materials $or example t"en

t"is #alance )ill also #e isi#le on t"e pro-t center o$ t"e material.

RPORTING RUIRMNTS

7eports prede-ned #y *AP are aaila#le $or Pro-t Center Accounting. !"e prede-ned

reports are arranged in a *tandard report tree. !"e reports ena#le you to ealuate t"e

posted data according to arious criteria.

!"e report s"o)s ena#le to dra) Pro-t loss account #alance s"eetO G6 account

#alances per pro-t centers.

?,*,C8#NGS TO XISTING ORG#NI7#TION

PROCSS>

'.A.

?,:,SPCI#- ORG#NIS#TION CONSI%R#TIONS>

'.A.

?,;,G#P #N#-YSIS>

'.A.

?,

'.A.

Con-dential ??o$


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, PROCSS M#PPING

Sr, Pro"essN!me

#s@IS Pro"ess To@Be Pro"ess 9#1G#P System

) G6 4

Accounting

),

)

G6

Accounting:Do

cument

processing

As a part o$ day

to accounting

and mont"ly

closing X

Company

Accounting

team posts

some journal

ouc"er

entries ma3es

mont"ly

proisions

entries etc.

G6 Ac master data

G6 Accounting

Document par3ing

Document posting

Document editing

Document reersal

*ample Document

ouc"er printing

N,#, S#P

),

'

G6 4

Accounting :

Furt"er

$unctions

!o meet

#usiness

re0uirements X

Company team

does period end

closing $oreign

currency

aluations

interest

calculations

manually. Also

as a part o$

process t"e

account

#alances

clearing done

regularly.

Period end closing

7ecurring document

Foreign currency

aluations

+nterest calculations

%pen item clearing

N,#, S#P

Con-dential 1o$


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Project xxxxxx Blue


1.2 G6 Accounting

reports!"e accounting

team uses G6

Ac #alance

item )ise

reports $or

internal

analysis.

G6 Account #alance

report

G6 Account line item

report

G6 Account master

data report

N,#, S#P

),

:

!axes and

duties Passing 8 $or

C@'A! credit

set oL

@xcise 8

8ournal ouc"er entry

' #""ounts

p!y!ble

',

)

endor

inoice

document

postings

endor inoice

eri-cation

re$erence to P%

endor inoice

eri-cation

non4re$erence

to P%

endor inoice

posting

endor

De#itcredit

note

endor credit

period

endor master record

P% #ased inoice

eri-cation

endor inoice

par3ing

endor inoice

posting

andling deliery

costs

endor creditde#it

notes

N,#, S#P

',

'

endor

payment

credit period

Depending

upon

understanding

)it" #usiness

partner t"e

credit limit is

utili/ed $or

releasing t"e

payments.

Payment terms N,#, S#P

Con-dential 11o$


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Project xxxxxx Blue


',

*

%utgoing

payments &anual c"ec3

payment entry

C"ec3 lot

trac3ing

Generation o$

M.csN -le

C"ec3 printing

$acility $rom

#an3

%ut)ard

remittances

&anual payment

entry

7egular payment

Payments in $oreigncurrency

Adance payment

Adance payment

settlement

Automatic payments

Payment #loc3

Generation o$ M.csN

-le

endor open item

clearing

N,#, S#P

',

:

Communicatio

ns )it"

endors

endor #alance

con-rmation

letters

Paymentadices

Account statements

Balance

con-rmations

Payment adices

N,#, S#P

',

;

Accounts

paya#le

reports

X Company

team uses

endor

#alances

endor open

inoices and

endor ageing

analysisreports.

endor Account

#alance report

endor Account line

item report

endor Account

master data report

N,#, S#P

',

=1,1>< Customer )ise *ales Customer )ise *ales *AP *tandard

*A67>=1,1


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