Lloyd steel Group GAP Analysis

Group Company : Lloyds Groups

Leagal Entities:

� Lloyds Steel Industries Ltd.,

� Lloyds Metal Engineering Ltd.,

Plants:

Under the Lloyds Steel Industries they have two plants

� Wardha

� Engineering Division

Under the Lloyds Metal Engineering Ltd., they have two plants

� Ghugus

� Murbaad

Even they have the Business between Legal Entities. It means Cross Company Code

Transaction.

They want to maintain separate set of books Legal Entities level and as well as Plant

level also. This actual scenario.

Now Existing System:

They are maintaining six Company Codes, instead of maintaining two Company Codes.

Where we have look in this structure.

2 Head Offices treating as : 2 Company Codes

4 Plants treating as a : 4 Company Codes

6 Controlling Areas : Each Company Code (One controlling Area) Costing

point of view.

It must be only one Controlling Area

• It is very difficult to maintain and implement Controlling Module with in existing

system.

• If they want to implement Controlling Module Lloyds Groups Structure has to be

change as SAP Standards.

• Even today they are not utilizing minimum SAP also. Every thing is maintained

in Excel Sheet only.

• They are not taking Legal Reports Directly.

Within the Existing System to be modified & Configured :-

Chart of Accounts: Chart of Accounts is Body structure of the Company. We need

check each GL Account , Account Group, Control Accounts, open item management,

Line item management, Field status etc., Few GL Accounts are different from

Company Code to Company Code. They have same chart of accounts to all company

codes. They have Business between Company Codes.

Bank Accounts:- They are so many house banks are created. We need check

thoroughly each house bank and assigning the GL Accounts. According to this

structure only we can develop Automatic Payment Program, Cash Journal (Petty

Cash), Payment Advice for Customer & Vendor & Cheque Printing etc.,

Extended Withholding Tax:- We have to implement totally, nothing is there in the

system.

Fixed Assets:- They have implemented. But still it is to be developed . Reports are

not generating as of now.

To be check All Asset Classes, All Depreciation keys, Depreciation Areas,

Depreciation Methods, and Account determination etc.,

GL / Vendor / Customer Statements:- To check and customize as per their

requirements.

Input / Output Tax:- Single report is not generating in the current system. We need

to Implement and generate the reports.

Vendor Payment Advice: Improvement

MIRO (Invoice verification) Tax amounts to be rounding

Report : ZFFR5N in selection option “from” Doc. Number is there. But to be add

“To” Doc. Number also required.

New Structure:-

Operating Concern:-Using this tool can determine contribution margin from a particular

Market Segment of an organization. The Market segment maybe a Product or Product

Group, Customer or Customer Group, Region, Division and Sales Organization any

segment of the Company

To determine to contribution margin of a particular profitability segment, We need to

collect the Data and store the Data. For this purpose the R/3 system provides the data

structures. Which contains Characteristics and Value Fields.

• The Characteristics represents the market segment and the base is for collecting

information.

• The values representing the characteristics called Value Fields

To this Data structure we need to specify the currency and fiscal year structure for the

updating the information. This Data structure can be created for a single client or make it

available for all clients.

All these are specifications specified in a “Operating Concern”. An Operating

Concern is used to determine the margin from segment of a the market segment and

Organization.

The Operating Concern is Highest Hierarchy in the Organization Structure

Controlling Areas:- Controlling is perform Cost Accounting. Its provides you with

information for management decision making. It facilitate co-ordination, Optimization

and monitoring of all Business Process in Organization.

This Including re-costing of consumption of production factors and services provide by

the organization.

The main task of controlling is planning. By planning you can compare the Plan Data

with Actual Data determine the variances.

The Data maintain by objective wise. These objects are maintained through the

following components of Controlling Area via Cost Elements.

• Cost Center Accounting

• Internal Orders

• Product Costing

• Profitability Analysis

• Profit Center Accounting

Controlling Functions:-

• Provides reports for monitoring the reconciliation of Controlling with Financial

Accounting by accounts

• It can identity and display value flows controlling across company codes,

Business Areas boundaries.

• Value flows can be used in financial accounting as a basis for summarized

reconciliation posting.

• Recon-Ledger reports provides an overview of the costs and are these for use full

starting point for Cost Analysis

Controlling Features:-

Cost Element Accounting: Cost & Revenue element accounting provides you with an

overview the cost and revenue that occur in a organization. Most of the values moved

automatically from Financial Accounting to Controlling. It is detailed recording of the

Data that forms base for accounting.

Cost Center Accounting: This used for controlling purposes to your organization. It is

useful for a source related assignment of overhead costs to the location in which they

incurred

• Cost Center: Recording costs with reference to plan values.

• Profit Center: Calculating the operating results

• Internal Order: Calculating return on Investment.

Internal Orders:- We can use Internal Orders to collect Data and control Data

according to the Job that incurred them. We can maintain Budgets for these jobs, which

system monitors to ensure that they should not exceeded.

Internal Orders are normally used to plan collect and settle the cost of internal jobs and

tasks.

Product Cost Controlling:- It calculated the costs that occur during manufacturing of a

product, or provision of secure. It enables you to calculate the minimum price at which a

product can be profitability marketed.

Profitability Analysis:- It analysis the profit or loss of an organization by individual

market segments. The system allocates the corresponding cost to the revenues for each

market segment. Profitability analysis provides a basis for decision making.

Example: For price determination, customer selection, conditioning types for choosing

the distribution channel.

It endless you to evaluate market segments, which can be classified according to

products, customers, orders or any combination of these.

Profit Center Accounting:- it evaluates the profit or loss individual independent areas

with an organization. These areas are responsible for their costs and revenue.

By using the R/3 system you can define each of the organizational units in your

organization from the respective of an SAP application Components.

The R/3 System has direct links between internal and external accounting. This means

that Financial and Controlling organization units are related.

Company Codes: we can create a company code according to tax law, commercial law,

and other financial accounting criteria. As a rule, a company code in the SAP system

represents a legally independent company. The company code can also represent a legally

dependent operating unit based abroad if there are external reporting requirements for this

operating unit, which can also be in the relevant local currency.

Business Blue Print:-

As per Business Blue Print and current system is not matching. They have not explain

from SAP point of view.

This is explanation of all Business Scenarios document from Lloydsteel. Nothing more

than that.

This is not a Blue Print. This is As Business Process.