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    SAP R/3Business Blueprint

    Chapter 8

    External Accounting

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    External Accounting Reflects the changing relationship

    between companies and outside

    vendors or suppliers

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    Issues for the

    presentation Vendor handling

    Customer processing

    OTA vendor processing

    Creditor subsidiary/Head Office processing

    General ledger processing

    Special-purpose ledger handling Consolidation

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    Vendor handling The R/3 accounts payable manages the

    accounting data of all of a companys

    vendors. A vendor is companys business partner

    who has outstanding payables for receivedgoods or services.

    Key areas of accounts payable are: Integration of information

    Cash management

    Payment procedures

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    Vendor handling - II Vendor Master Record Processing

    Vendor Invoice Processing

    Down Payment Release

    Automatic Payment

    Manual Payment

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    Vendor handling III

    Vendor master record processing

    The basic data object is the vendor master

    record, and contains the link to the general

    ledger, information on each vendor and thepurchasing and accounting functions in the

    R/3 system

    The master record consist of:

    General data

    Company code data

    Purchasing organization data

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    Vendor handling IV

    Vendor master record processing

    General data Basic information such as company address,

    phone, etc Company code data

    Individual account information concerning thevendor

    The smallest org. unit for which a set of accountscan be drawn up for reporting purposes

    Purchasing organization data Information on request for quotation, purchase

    orders and invoice verification

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    Vendor handling V

    Vendor master record processing

    A new master record is made for eachindividual account group

    Two types exist: Internal: Created by the system itself

    External: Determined by the user

    All information for master records is entered

    through a customized UI A master record must be created in order to

    process transactions

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    Vendor handling VI

    Vendor invoice processing

    Involves data entry

    Invoices may or may not have a

    vendor master record

    If an invoice arrives from a vendor

    without a master record, it must be

    created before invoice data can beentered.

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    Vendor handling VII

    Down payment release

    The payment program generates downpayments to vendors

    The first step is to generate a request fordown payment and a due date, stored as adocument

    The system automatically creates the actual

    down payment, and pays the invoiceamount

    The system also reports the amountsaccurately in a balance sheet.

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    Vendor handling VIII

    Automatic payment

    Automatic payment is carried out in three

    steps:

    Create payment proposal Based on specifications in the customer master record

    Process payment proposal

    Editing, processing, triggering of payment

    Post payment documents Generation of payments with matching documents.

    Payable items are cleared and linked to the payments

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    Vendor handling IX

    Manual payment

    An additional option for processing

    payments

    The following information must always beentered manually:

    The general ledger account number for the bank

    The payment amount

    Any charges/fee

    The document number

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    Customer processing Describes how financial transactions are

    managed for standard customers

    Two general functions: Provides basic data for effective credit

    management

    Supports all traditional accounts receivable

    techniques

    The master record plays a central role here

    as well

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    Customer processing - II The master record has a three part

    structure:

    General customer data

    Address, phone, etc

    Company code

    Form of payment, etc Sales data

    Shipping, etc

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    Customer processing - III Companies want to get their money quickly,

    customer processing is therefore considered

    as a key process Faster payments lead to a more effective

    process and greater savings

    Customer remainders may be sent

    (dunning) Customer processing is integrated with

    other functions, such as sales logistics andbudgeting

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    OTA vendor processing Some suppliers deliver goods or services

    only once, and these are called one-time

    accounts (OTA) They are treated differently, with a more

    simplified approach to master data

    processing

    They have a common master data record

    One-step invoice processing

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    Creditor subsidiary/

    Head-office processing Designed for vendors with head offices

    and subsidiaries who are customary

    suppliers for services or goods Invoices made to the branch accounts

    automatically update the head officeaccount

    A separate set of master data aremade but they are linked together

    Modifications can be made as needed

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    General ledger

    processing A financial accounting ledger that

    provides clear structures for the

    organization and documentation ofaccounting, and highly automated

    processes for day-, month- and year-

    end closings Consists of company code, business

    area and a chart of accounts

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    General ledger

    processing - II Company code

    Business area

    Is used to analyse balance sheet items and profitand loss statements

    Chart of accountsA classification system and evaluation tool that

    records values or value flows

    Has three functions: Corporate chart of accounts

    Local chart of accounts

    Operational chart of accounts

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    General ledger

    processing - III The general ledger account postings

    are well organized and integrated with

    other areas

    It also contains a calendar that permits

    fiscal year flexibility, such as year-

    round closing capabilities

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    Special purpose ledger

    handling Provides an evaluation system for

    more specific areas.

    Gives numerous options for analyses

    and reports that supplement traditional

    accounting applications

    Key areas are: Integration, planningand reporting

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    Consolidation Is the process of collecting and

    reconciling the financial statements of

    companies into a single consolidatedfinancial statement that portrays the

    financial circumstances as a whole

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    Consolidation - II Deals with the way companies summarize

    financial information from different

    subsidiaries and joint ventures in variouscurrencies and countries

    Especially applicable to diversified

    multinational companies

    Supports a general understanding of how a

    business is working