AN INTRODUCTION
SAP – System Application and Products in Data Processing
ERP – Enterprise Resource Planning
What is the work of ERP ?
In an organisation we have multiple departments
HCM PP PM FI Legal MM SD QC
They integrate all the functions in the system of all the departments
ECC – third party data base like we have Oracle and SQL ( Microsoft
Product )
2000 onward SAP started developing their own data base which know
as Hana
2015 1510
2016 1610
2017 1709
2018 1809
2019 1909
2020
ECC – EHP8 – Enhancement pack 8
ECC – FICO ( Finance and
Controlling )
FI – We generate reports for external stake holders
Reports – Profit and Loss A/c, Balance Sheet, Cash flow statement etc.
Bank
Shareholders
Stock – Exchange – NSE BSE NYSE Nasdaq
Government
Local Authorities
CO – Internal purpose – Within the company management / Auditors
Hana : FI and CO merged together and have become Hana Finance – S4 Hana
Finance
Why Hana ?
It needs less hardware
Reports can be generated at a fly
Web based application is possible ( Fiori )
It can be operated from PC Tablet and Mobile
Hana on premise, cloud and Hybrid
Architecture
3 Tire Arc
1.Development – developers / functional consultants 100
2.Testing – Testers 101
3.Production – End users 102
Basis consultant – ECC
Hana Admin
They assign the software into clients to different level
Client – 000 to 999
Client > Company > Company code
Who are the
competitors of SAP
Oracle,
Bann, Finnacle, Salesforce
SAP market
share is 90%
There are 2
ways to navigate the SAP Software
1.By Path
2.
Transaction Code
Technical
consultant and Functional consultant - ABAP
Functional
Consultant – FICO SD MM
PP PM HCM etc
FI consultant - You generate reports
like Profit & loss Account / Balance Sheet, Cash Flow statement, Trial
Balance etc. These reports are shared with the external stake holders.
Who are the
external stake holders ?
Shareholders
of the company, Bank, Government, Tax Authorities and Stock Exchanges
CO – You generate MIS ( Management Information System) reports. These reports are not shared with
the external stake holders. Only for internal purpose for the management to
take important decisions
SD – You will be managing the customers
MM – You will be managing the vendors
You become a
super consultant by know more than one module
Types of
Project – 3 types
1.Green
Field Project – Virgin Project means that SAP software is being implemented
first in that organisation. Earlier they might be using some other software
2.Brown
Field Project – The company is already using the SAP software but they are
going to enhance or upgrade the SAP software
3. Migration
Project – A company is migrating from a SAP software from an old database to a
new product data base.
Oracle / SQL
> Hana data base
First you
will be learning on ECC and then you have to upgrade to Hana
What is the
function of an ERP ?
It
integrates the functions of all the departments of an organisation under one
system
Finance is
considered as the heart of an organisation
SAP software
is being divided into different clients like development testing production
000 to 999
Transport
Request
Development
Server to Testing Server to Production Server
T Code :
SE09 / SE10
SAP FICO - Frequently asked questions
What are the various organisational assignments to a company code ?
Company code is a legal
entity for which financial statements like Profit and Loss and Balance Sheets
are generated. Plants are assigned to the company code, Purchasing organisation
is assigned to the company code and Sales organisation is assigned to the
company code.
What is the relation between a Controlling Area and a Company Code
?
A controlling area can
have the following 2 types of relationship with a company code
a. Single company code
relation
b. Cross Company code
relation
This means that one
single controlling area can be assigned
to several different company codes. Controlling area can have one is to one
relationship or one is to many relationships with different company codes.
Controlling Area is the
umbrella under which all controlling activities of Cost Center Accounting,
Product Costing, Profit Center and Profitability Analysis are stored.
In the similar way
Company codes is the umbrella for Financial activities
How many Chart of Accounts can a company code have ?
A single company code
can have only one Chart of Accounts assigned to it. The chart of accounts is
nothing but the list of General Ledger Accounts
What are the options in SAP when it comes to Fiscal Years ?
Fiscal year is nothing
but the way financial data is stored in the system. You have 12 periods in SAP
and also four special periods. These periods are stored in what is called the
Fiscal Year Variant. There are 2 types of Fiscal Year Variant
a. Calender Year :
Jan-Dec, April – March
b. Year Dependent
Fiscal Year
What is a year
dependent fiscal year variant ?
In a year dependent
fiscal year variant the number of days in a month are not as per the calendar
month. Let us take an example : for the
year 2010 the period January ends in on 29th, February ends on 27th
and March ends on 29th. For
the year 2011 : January ends on 30th
, February ends on 26th and March ends on 30th. This
applicable to many countries especially USA. Every year this fiscal year
variant needs to be configured.
How does posting happen
in MM ( Materials Management ) during special periods ?
There is no posting
which happens from MM in special periods. Special periods are only applicable for
the FI module. They are required for making any additional posting such as
closing entries, provisions, which happen during the quarter end or year end.
How many currencies can
be configured for a company code ?
A company code can have
3 currencies in total. One which is called the local currency ( ie company code
currency ) and 2 parallel currencies can be configured.
When you do that the
system has the flexibility to report in the different currencies.
Do you require to
configure additional ledger for parallel currencies ?
In case 2 currencies
are configured ( Company code currency and a parallel currency ) there is no
need for an additional ledger. In case the third parallel currency is
configured and is different than the second currency, you need to configure
additional ledger.
If there are 2 company
codes with different chart of accounts how can you consolidate their activities
?
In this case you either
need to write an ABAP programme or you need to implement the Special
Consolidation Module in SAP. If both the company codes use the same Chart of
Accounts then Standard SAP Reports give you the consolidate figure
Give some examples of
GL accounts that should be posted automatically through the system and how is
this defined in the system
Stock and consumption
accounts are instances of GL accounts that should be automatically posted to.
In the G/L account master record, a check box exists wherein the automatic
posting option is selected called “ POST AUTOMATICALLY ONLY”
What is an Account
Group and where all is it used ?
An Account group
controls the data that needs to be entered at the time of creation of master
record. Account groups exist for the definition of a G/L Account, Vendor and
Customer master. It basically controls the fields which pop up during master
data creation.
What is a Field Status
Group ?
Field Status Groups
control the fields which come up when the user does the transactions. The
options available are one can have the fields only for display or one can
suppress it or make it mandatory. So there are three options basically. The
field status group is stored in the FI GL.
What is the purpose of
a “Document Type” in SAP ?
A Document type is
specified at the Header level during transaction entry and servers the
following purposes :
a. It defines the
number ranges for documents
b. It controls the type
of accounts that can be posted to eg Assets, Vendor, Customer and Normal G/L Accounts.
c. Document type to be used for reversal of entries
What is a Financial
Statement Version ?
An FSV ( Financial
Statement Version ) is a reporting tool and can be used to depict the manner in
which the final accounts like Profit and Loss Account and Balance Sheet needs to be extracted from SAP. It is freely
definable and multiple FSV’s can be defined for generating the output for
various external agencies like Banks and other Statutory authorities.
How are input and
output taxes taken care of in SAP ?
A tax procedure is
defined for each country and tax codes are defined within this. There is
flexibility to either expense out the tax amounts or capitalise the same to
Stocks.
What are Validations
and Substitutions ?
Validations/
Substitutions in SAP are defined for each functional area Example Assets, Controlling etc. at the following levels
a. Document level
b. Line item level
These needs to be
specially activated and setting them up are complex and done only when it is
really needed. Often help of the technical team is taken to do that.
Is it possible to
maintain plant wise different GL codes ?
The valuation group
code should be activated. The valuation grouping code is maintained per plant
and is configured in the MM module. Account codes should be maintained per
valuation grouping code after doing this configuration.
Is Business Area at Company Code Level ?
No, Business Area is at
Client Level. Which means other company codes can also post to the same
business area.
What are the different scenarios under which a Business Area or a
Profit Center may be defined ?
This
question is usually very disputable. But both the Business Area and Profit
Centers are created for internal reporting. Each has its own pros and cons but
many companies nowadays go for Profit Center as there is a feeling that
business area enhancements would not be supported by SAP in future versions.
There are
typical month end procedures which need to be executed for both of them and many
times reconciliation might become a big issue. A typical challenge in both of
them is in cases where you do not know the Business Area or Profit Center of
the transaction at the time of posting.
What are the problems faced
when a Business Area is configured ?
The
problem of splitting of account balance is more pertinent in case of tax
accounts. Also SA
Is it
possible to default certain values for particular fields ? For e.g. Company
code
Yes it is
possible to default for certain fields where a parameter id is present. Go to
the input field to which you want to make defaults. Press F1, then click
technical info push button. This open a window that displays the corresponding
parameter id ( if one has been allocated
to the field ) in the field data section. Enter this parameter id using the
following path on SAP Easy Access screen System > User Profile > Own
Data. Click on parameter tab. Enter the parameter id code and enter the value
you require to default. Save the user settings.
Which is the default exchange rate type which is picked up for all SAP transactions
The
default exchange rate type picked up for all SAP transactions is M (average
rate )
Is it
possible to configure the system to pick up a different exchange rate type for
a particular transaction ?
Yes it is
possible. In the document type definition of GL, you need to attach a different
exchange rate type.
What are
the Customizing pre-requisites for document clearing ?
Account
must be managed on the open item management. This tick is there in the General
Ledger Master Record called Open Item Management. It helps you to manage your
accounts in terms of cleared and uncleared
items. A typical example would be GR/IR Account in SAP (Goods Received /
Invoice Received Account)
Explain
the importance of the GR/IR clearing account
GR/IR is
an interim account. In legacy system if the goods are received and the invoice
is not received the provision is made in SAP as the Goods Receipt. It passes
the accounting entry debiting the Inventory and crediting the GR/IR Account.
Subsequently when an invoice is received this GR/IR Account is debited and the
Vendor Account is credited. That way till the time that the invoice is not
received the GR/IR is shown as uncleared items.
How many
numbers of line items in one single entry you can have ?
You can
enter 999 line items in one document or in one single entry.
In
Assignment Field in the Document you get some reference, which comes from where
?
This is
on the basis of Sort Key entered in the master.
How do
you maintain the number range in Production Environment ? By creating in
Production or by Transport ?
Number
range is to be created in the production client. You can transport it also by
way of request but creation in the production client is more advisable.
In
customizing “company code productive” means what ? What it denotes ?
Once the company code is live this check box helps prevent deletion of many programmes accidently. This check box is activated just before go live.
At What level are the
customer and vendor code stored in SAP
The
customer and vendor code are at the client level. That means any company code can use the customer and vendor
code by extending the company code view
How are vendor invoice
payments made ?
Vendor
payments can be made in the following manner :
Manual payments
without the use of any output medium like cheques etc.
Automatic
Payment program through cheques, Wire Transfers, DME etc.
How do you configure the
automatic payment program ?
The
following are the steps for configuring the automatic payment program :
First Step : Set up the following
Company
code for Payment transaction
Define
sending and paying company code
Tolerance
days for payable
Minimum %
for cash discount
Maximum
cash discount
Special
GL transactions to be paid
Second Step : Set up the following
Paying
company code for payment transaction
Minimum
amount for outgoing payment
No
exchange rate difference
Separate
payment for each ref
Bill/
Exchange Payment
Form for
Payment Advice
Third Step – Set up the following
Payment
method per country
Whether
Outgoing Payment
Check or
Bank Transfer or B/E
Whether
allowed for personnel payment
Required
master data
Document
types
Payment
medium programs
Currencies
allowed
Fourth Step : Set up the following :
Payment
method per company code for payment transactions
Set up
per payment method and Company Code
The
minimum and maximum amount
Whether
payment per due day
Bank
optimization by bank group or by postal code or no optimization
Whether
Foreign currency allowed
Customer
/ Vendor bank abroad allowed
Attach
the payment form check
Whether
payment advice required
Fifth Step : Set up the following
Bank
Determination for Payment Transactions
Rank the
house banks as per the following
Payment
method, currency and give them ranking nos
Set up
house bank sub account ( GL Code )
Available
amounts for each bank
House bank,
Account id, Currency, available amount
Value
date specification
Where do you attach the
check payment form ?
It is attached to the payment method per company code.
Payment terms for customer master can be maintained at two
places i.e. accounting view and the sales view. Which is the payment term which
actually gets defaulted in transactions ?
The
payment term in the accounting view of the customer master comes into picture
if the transaction originates from the FI module. If an FI invoice is posted
(FB70) to the customer, then the payment terms is defaulted from the accounting
view of the customer master.
The
payment term in the sales view of the customer master comes into the picture if
the transaction originates from the SD module. A sales order is created in the
SD module. The payment terms are defaulted in the sales order from the sales
view of the customer master.
Payment terms for
vendor master can be maintained at two places i.e. accounting view and the
purchasing view. Which is the payment term which actually gets defaulted in
transaction ?
The
payment term in the accounting view of the vendor master comes into picture if
the transaction originates from the FI module. If an FI invoice is posted
(FB60) to the vendor, then the payment terms is defaulted from the accounting
view of the vendor master.
The
payment term in the purchasing view of the vendor master comes into picture if
the transaction originates from the MM module. A purchase order is created in
the SD module. The payment terms are defaulted in the purchase order from the
purchasing view of the vendor master.
Explain the entire
process of Invoice verification from GR to Invoice verification in SAP with
accounting entries ?
A goods receipt in SAP
for purchased material is prepared referring a purchase order.
When goods receipt is
posted in SAP the accounting entry passed is :
Inventory A/c ………. Dr
To GR/IR A/c ………..Cr
A GR/IR ( which is
Goods receipt / Invoice receipt ) is a provision account which provides for the
liability for the purchase. The rates for the valuation of the material are
picked up from the purchase order.
When the invoice is
booked in the system through Logistics invoice verification the entry passed is as follows :
GR/IR Account …….. Dr
To Vendor A/c ………Cr
How are Tolerances for
Invoice verification defined ?
The following are
instances of tolerances that can be defined for Logistic Invoice Verification.
a. Small Differences
b. Moving Average Price
Variances
c. Quantity
variances
d. Price variances
Based on the client
requirement, the transaction can be “Blocked” or Posted with a “Warning” in the
event of the Tolerances being exceeded.
Tolerances are nothing
but the differences between invoice amount and payment amount or differences
between goods receipt amount and
invoice amount which is acceptable to the client.
Can we change the reco account in the
vendor master ? If so, and how ? What is the impact on the old balance ?
Reconciliation account
can be changed in the vendor master provided that authority to change has been
configured. Also any change you make to the reconciliation account is
prospective and not retrospective. The old items and balances do not reflect
the new account only the new transactions reflect the account.
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