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Hello everyone! We are back with yet another post on SAP. This time we will speak about the most spoke about topic “Conversion of SAP ECC to S/4 HANA” Conversion is a step by step process, majorly divided into various stages, or we can say milestones. To start with, let’s first try to understand the various phases that we have to go through during this process. Please note that we will speak about SAP S/4 HANA release 1709 in this post. Pre Conversion Checks Technical Migration (SUM – Software Update Manager) This activity is performed by our BASIS colleagues and is purely technical in nature Preparing Customizing Post Conversion Data Migration Post conversion Post Migration Activities Above activities are to be done at least three times as below: First Mock Run Second Mock Run Final Migration in Production System We will discuss about all of the above in detail in the coming posts. Till then thanks a lot.
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SAP S/4 HANA 1709 – Part IV – Custom Business Transaction Types Further to our previous post, we would like to let you know about a new feature introduced in 1709. In the new release of SAP S/4HANA 1709 a new feature is introduced by SAP which is intended to help improve financial reporting. The feature contains new Custom Business Transactions. Lets see how it helps. Custom Business Transaction Types This feature enables us to improve the classification of journal entry items based on the type of business transaction that triggers a journal entry posting. This results in more detailed insights into the origin of financial KPIs. This feature has been implemented in the following ways: Additional Details We can use the business transaction type to break down KPIs or amounts in analytics according to the types of business transactions that trigger journal entry postings. While sufficiently detailed business transaction types have been available for Logistics and Controlling, many Financial Accounting transactions have used business transaction type RFBU (FI Postings) in the past. In order to get at least some information about the origin of Financial Accounting data, you had to use the document type or the transaction code (at document […]
CO-PA Reset Value Fields We all have been looking into flow of values in CO-PA along with their mapping to Value Fields. The mapping helps us store values from various modules into CO-PA. This mapping helps us perform analysis and extract various reports. Going forward, it is important to understand that in every situation, we do not want the values to flow to CO-PA. Or in certain cases, we want only certain values flowing to CO-PA. Resetting Value/Quantity Fields helps in reconciling CO-PA with FI Sales Invoicing As an instance, if we consider Sales Invoicing, with regards to CO-PA mapping, we assign Sales Condition Types to CO-PA Value Fields using Transaction Code KE4I. But, if we look a little deeper, the sales condition types mapped by us to COPA Value Fields, are the same in majority of the billing types. This means for e.g. a Condition Type of MRP “ZMRP” is available in both the sales document types i.e. Normal Sales Invoice, Stock Transfer Invoice and Debit/Credit Note. Now this mapping will every time post value of MRP to COPA value field “VV101” during postings of Sales Invoice, Stock Transfer Invoice and Debit/Credit Notes. The above value pf “MRP” may not be […]
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SAP S/4 HANA 1709 – Part IV – Effect on COGS Posting in FI After the previous post, in this part of the series of posts we will try to see the improvements in SAP S/4 HANA 1709 that have Effect on COGS Posting in FI. Splitting the Cost of Goods Sold 1709 has come up with some improvements in recording the cost component split of cost of goods sold in Financial Accounting (FI). Business Add-Ins for Splitting COGS Two Business Add-Ins (BAdIs) are now available for refining the Customizing activity Define Accounts for Splitting the Cost of Goods Sold: Additional Details FCO_COGS_SPLIT_RELEVANCE This BAdI allows you to override the standard COGS splitting logic. For example: FCO_COGS_SPLIT_BASIS With the SAP standard logic for splitting the cost of goods sold, the split must be based on either the unit cost estimate for the sales order item or the standard cost estimate for the material/plant combination. This BAdI enables you to use a different basis for the split. For example, you could use a past or future standard cost estimate or the actual cost estimate of the previous year. Additionally, if no basis for the split was found by the SAP standard […]
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SAP S/4HANA 1709 – changes in CO-PA In the previous post, we had gone through some of the changes in various areas. But there is one specific change which impacts FI/CO guys as this change relates to CO-PA i.e. Profitability Analysis. Lets see what has changed and how it will affect us. Changes to Profitability Analysis in Controlling Module Storage and Numbering of Profitability Segments The way in which profitability segments are stored and numbered in the system has been modified. A separate type of profitability segment is now stored in table CE4XXXX_ACCT (XXXX denotes the operating concern). Just as with the profitability segments in table CE4XXXX, those in table CE4XXXX_ACCT assign a unique number to each combination of characteristic values. However, in table CE4XXXX_ACCT a new number is assigned for each new business process. Furthermore, characteristic summarization is not applied to this table. Additional Details Profitability segments contain a combination of characteristic values for a business process to be posted. Each of these combinations is assigned a unique number which is used throughout the system to transfer this information, for example from a billing document to Accounting. The assignment between profitability segment numbers and the corresponding characteristic values is […]
What’s New in SAP S/4HANA 1709? In our previous post, we have learnt about features of the newly introduced SAP S/4 Release 1709. In this post, we will try to look deeper into the new release and try to understand what this new release has in store for us. SAP S/4HANA 1709 has various new improvements introduced as listed below: Maintenance Operations New app “Report and Repair Malfunction” You can use this app to easily report that a technical object has a malfunction, plan the required repair work, as well as document and confirm the maintenance work when it’s done. Three tiles are provided for this app: The Report Malfunction tile for creating malfunction reports, the Manage Malfunction Reports tile that provides a list of malfunction reports that have already been created, and the Repair Malfunctions – My Job List tile that provides a list of all work items assigned to you or to your team. Environment, Health, and Safety Introduction of New Apps “Incidents – Detailed Analysis” With the Incidents – Detailed Analysis app, you can analyze incidents, near misses, and safety observations that have been recorded in incident management. You can use the app to: Incident Management Enhancements […]
S/4HANA 1709 And SAP never stops surprising us…………… It is the introduction of S/4 HANA by SAP that brought synergy in its already accomplished ERP. As a part of a never ending endeavour, SAP has come up with yet another innovation. Innovation, part of SAP’s strategy, has now been a regular part of our story. Introduction Let’s come back to the point, about 1709. On 15th Sep 2017, SAP introduced it’s next release in SAP S/4 HANA where they have done a lot in an attempt to simplify things lot more. The new release is already generally available and you may go through video that formally introduced 1709. What’s New? So…… what’s new about the new release? Let’s briefly go through some of the highlights of this new release. Architectural evolution This release runs on SAP HANA 2, the second generation of SAP’s in-memory database platform, which supports scale-out and usage of active-active for added performance. Progress has been made in Stack Consolidation. So we are now experiencing innovations even in the database platform…….. Expanding the core Embedded transportation management. Previously, this required two systems and the corresponding integration. This helps to reduce data redundancy enabling customers to run simple. Introduction of Catch Weight Management. […]
FI – Validation of Account Assignment Combinations Background This function prevents postings with invalid account assignment combinations from being posted and thereby ensures the consistency of your reporting. You can define your own validation rules and use them to check whether different account assignment combinations are useful from a business point of view and, where necessary, prevent invalid postings. You can also extend the check to include an account assignment combination of G/L accounts and cost centres and prevent postings with this account assignment combination. Why? This function can be used instead of “Validation in accounting document” (OB28) and has distinct advantage over it. Before we go for Validation of Account Assignment, following points should be considered: Validation of Account Assignment Does not require any custom table and combination of account assignments can be defined as part of standard function Has distinct advantage over Validation OB28 Has one shortcoming where we use custom message for the error Has provision to specify valid/invalid account assignment combinations for periods Different Strategies can be designed for different account assignment object combinations and does not require separate strategy per combination Validation of Accounting Document (OB28) Requires separate steps for each combination to validate (unless […]
Result Analysis In the previous post we had an overview of how we will be going about our understanding of of Result Analysis in SAP. Here, in this article, we will try to conceptually understand how the Valuation Method “01 – Revenue-Based Method with Profit Realization” works. This article will deep dive into the calculations performed by SAP when we use this Valuation method. (01) Revenue-Based Method with Profit Realization The calculations used in this method are based on the actual revenue booked for Project. It calculate proportionate cost based on plan cost/plan revenue in order to calculate Cost of Sales. System then calculates if the Cost of Sales is different than the actual cost, if yes, posts difference to adjust the project cost, this helps achieve the planned profitability throughout the lifespan. But at the end, when we perform Technical Completion (TECO) and Closure of project, system reverses the calculated cost so as to have actual revenue and actual cost appear in the financials. In order to understand this Method properly we will use an example which will give us better view of calculations performed by system. Example Assumptions: We are considering following values for the example: Overall Plan Values Before we go […]
Result Analysis in SAP In the previous article, we tried to know the way system would behave if we do not use “Result Analysis” for Project. The article helped us understand how not using “Result Analysis” can cause inconsistency in profits. In this article, we would start looking into the “Result Analysis” function available in SAP. We will start this with understanding what “Valuation Methods” are available for us to work with. Types of Valuation methods As we all know, SAP is an ERP that is used all over the globe. It hence becomes important on SAP’s part to provide solution that can be used throughout the world. It is due to this fact, SAP has provided various “Valuation Methods” as part of standard solution. The various methods available can be used to meet the business requirements. Given below is the list of available “Valuation methods” All the above methods are readily available a part of standard solution delivered by SAP. Conceptual understanding of “Valuation Methods” will help understand the way they work. This makes easier to configure them in the system What Next? We will try to look into as many Methods as possible in detail so that we can work […]
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Result Analysis in SAP – an Overview Result Analysis is a month end activity in SAP that helps business ensure they do not over/under book the profits arising from the ongoing Sales Order / Internal Order / Projects. It helps business align either their Costs or Revenue to maintain the profit ratios that are acceptable as per the applicable legal requirements. In this chain of articles, we will focus on Result Analysis for Projects. Before going into the configurations required, we we first try to conceptually understand more about the Result Analysis in SAP: Why is RA required? Result Analysis, based on the Valuation Method selected, helps account for the unaccounted Revenue / Cost so as to enable consistency in values accounted and profits/losses caused. This also helps account proportionate revenues / costs in periods so as to have the values spread over project lifespan in consistent and pre-planned way. In order to understand the above fact, we would have to understand the following example. The project considered in the following example will be run for 4 months and will have milestone billing. Milestone billing Planned Values No Result Analysis Let’s see how my accounts will look like in absence of Result Analysis […]
Asset Shutdown to stop depreciation Asset Accounting has always been under prime focus of accounting fraternity. This may be due to the fact that it produces something called “Depreciation”. This is an expense that is booked to recognise wear and tear of the asset to be spread across years. The depreciation at times can be little contentious as it causes notional decline in the company profits. In other words, depreciation can have impact on the profitability of an organisation. The term depreciation is also subject to various laws that need to be adhered to. For e.g. in certain cases, as per legal requirements, the depreciation should not be charged. This restriction can be applicable either for a shorter period or for longer period till certain event in future. Now when we speak about SAP, we use Depreciation Keys to depreciation assets periodically based on certain parameters. SAP is flexible enough to accommodate various methods for depreciation: Apart from the above, SAP also has possibility to meet various other legal requirements. In this case we will discuss in detail about the possibility of restricting an asset from depreciation either permanently or for a certain period. The requirement can be achieved by […]
Actual values flowing to CO-PA CO-PA has been the most important part of Management Information System for SAP. It does not just collect information, but is capable of processing presenting it faster than other application components. In this post we will try to understand the Flow of Actual values to COPA. This component collates data from various functions to help view a consolidated result. In order to do this, CO-PA needs data from various sources. There are many application components in SAP that provide data to CO-PA. In this post we will try to see which components provide data to SAP. Sales and Distribution This is the most important source for data. Majority of the incoming data in CO-PA comes from this component. The data is posted as explained below: Costing Based COPA – While posting of Sales Invoice Account Based COPA – During accounting document generation Using mapping of SD Condition Types to Value fields and Characteristics Derivation, we can determine what information flow to CO-PA (Costing Based). Given below is the list of some of the data that can be captured from SD: This and lot of other information derived from SD Module prove to be critical for sales data analysis. Controlling We are […]
Standard Process for Bank to Bank Transfer – Part II In previous post we have seen what configuration/Repetitive Code is required to perform Bank to Bank Transfer. In this part we will see how the transfer is actually performed. Performing actual Transfer Creating Payment Request Transaction Code: FRFT_B SAP Menu => Accounting => Financial Accounting => Banks => Outgoings => Payments with Repetitive Code => FRFT_B – Carry Forward Bank Accounts We are navigated to the following screen: Enter following information After entering the requisite information as above, click on Create Payment Request and the program will show following information message: The system has created a payment request No.1 for the transfer. Release of Request The request so created can not be used immediately for transfer of amount. It has one more level of authorisation required i.e. Release. System shows list of requests created in this way but are pending for Release as below: Select the request to be paid and click on Release and program shown information about release of the request: Now the request has status as released as opposed to the request which is still pending for release Payment Now the request is ready for making payment. Select the request and click […]
Standard Process for Bank to Bank Transfer – Part I Bank to Bank Transfer has been one of the important process of every business. We have been doing business day in and day out. The business regularly performs transactions, as a result involves receipt and payment of money. Business needs cash management to effectively manage funds. Every business has own way of managing cash and as a result of which many end up opening multiple bank accounts. This is done to control the flow of funds (receipt in one bank account and payment from other). This process helps business manage cash flow, but also sets up a challenge of making funds available whenever and wherever required. It obviously involves transfer of funds from one bank to other and also one account to other. This transfers can at times be difficult to manage. At the same time it becomes important to ensure flow of funds in a certain way due to business reasons. It is due to this, the authorisation of funds transfer becomes a must in order to avoid any problems. In order to meet all of the above requirements, SAP has come up with a standard solution where we can perform Bank to Bank Transfer […]
We have already gone through the need and structure of Planning Framework in the previous post. In this post we will see how to setup the Planning Framework. Implementation Consideration Transaction Code: KEPM System navigates us to the following screen In the above screen we have to create the structure required for Planning in CO-PA. In this structure the first part is creation Planning Level. For this, right click on Planning Level and click on Create Planning Level and the system will ask us to enter the Code and Description as below: In the above screen enter the Code for Planning Level with it’s description and the system will navigate us to the following screen As we can see, in the above screen the system by default assigns fields Period/Year, Record Type, Version to the left side of the screen under Characteristics. This means SAP suggests these fields as mandatory and other fields can be assigned as per our requirement. Currently I will assign some fields and we will move ahead to the next tab i.e. Selection and see what information is required there I want to plant at certain granularity so I selected additional characteristics as seen above i.e. Company […]
SAP CO-PA Derivation for Parent Items Background During our working we face many issues and then try to find appropriate solution. In absence of any standard solution we have to go for enhancement or custom development. I had been through one such instance where the client gives promotional items free with their regular items. In such case the main question in front of us was about getting the profitability of Parent Item (Regular item) after deducting the cost of promotional item as well. In Sales Order the SD guy created separate line item for the promotion item and hence we were finding ways and means to club it with the parent item. After a lot of research it was discovered that the requirement can be met with standard CO-PA Derivation. Given below are steps following which we can do this. Creation of Steps in derivation The configuration requires creation of two Derivation Rules, both using “Table Lookup” Strategy. Before going ahead would like to elaborate on the example: The Item Category for Promo Item is “ZDP1” and remaining have other categories. This is going to be the basis to identify the line items for Promo Material. Note: System stores Parent Item […]
Planning Framework In the previous post we have briefly gone through the Purpose and Features of Planning in SAP CO-PA. In this post we will go a step further and understand what is Planning Framework and how it works. What is Planning Framework? The planning framework is the main working environment for sales and profit planning. Firstly, this framework contains all the possible settings for building your planning architecture. Secondly, you can carry out planning from this framework screen. Structure Planning level You use the planning level to determine the level at which planning is to occur. You do this by specifying the characteristics for planning. Planning package You specify characteristic values in a planning package. In this way, you determine the market segment for which planning is to take place for a particular period. A planning package can thereby be seen as a work package that determines which planning objects are relevant to a specific planner. Planning method Planning methods are functions with which planning data can be entered and changed Parameter set A parameter set contains all the settings necessary for executing a planning method . You can use personalization profiles to produce a user-specific view of the […]
Planning in Profitability Analysis Purpose Planning is an integral part of any analysis based system. Planning plays a vital role for an organisation when it comes to deciding upon the Growth aspect. Planning for sales helps in many ways like estimating efforts of logistics, production, distribution etc. required to meet the target. Features of Planning in CO-PA What Next? In this series of post we will try to look into various aspects of planning in CO-PA. We will deep dive into the Planning Framework required for Planning in CO-PA. In the Planning Framework we will try to see the following: With above which is the basic structure we will also try to understand how data can be maintained for Planning and how reports can be drawn for the same. To understand all of the above, please keep up with us as we are coming up with posts on this and many more.
SAP CO-PA Valuation using Material Cost Estimate – Part IV Once we are through with assignment of Costing Keys to the relevant characteristics next step is to assign value fields. In this post we will see how this can be done. IMG Path: Controlling > Profitability Analysis > Master Data > Valuation > Set Up Valuation Using Material Cost Estimate > Assign Value Fields In this transaction the system will ask to enter Operating Concern and Cost Component Structure. Enter the relevant Operating Concern/Cost Component Structure and press enter and the system will navigate us to following screen: Click on new entries and the system allows us to maintain various information as explained below: Point of Valuation This is the point of valuation where the value field assignment is being done. Given below is the list of available options for selection: 01 Realtime valuation of actual data 02 Periodic revaluation of actual data 03 Manual planning 04 Automatic planning Cost Component Number This is the number of cost component in the CCS. Fixed / Variable Indicator In this indicator we have to maintain if the fixed portion of the cost, variable portion or both are to be flown to the Value field assigned. The fixed/variable […]
SAP CO-PA Valuation using Material Cost Estimate – Part III In our previous post we have gone through creation of Costing Key which plays central part in whole Valuation using Material Cost Estimate. Now in this post we will get into details of options available for assignment of Costing Keys for recording of valuation in CO-PA. IMG Path: Controlling > Profitability Analysis > Master Data > Valuation > Set Up Valuation Using Material Cost Estimate > ????? Here it would be interesting to mention about the changes done by SAP in the IMG Node in ECC6 and S/4 HANA. Following image shows difference between both of them: As appearing in the above image, the options of assigning Costing Keys to Products and Material Types are removed in S/4 HANA and SAP has provided assignment of Costing Keys to Any Characteristics only. Actually speaking both the options were kind of redundant as assignment to any characteristics would have taken care of the the possibilities. But in our this post we will look into all the three options. Assign Costing Keys to Products Click on the Transaction and system navigates us to the following screen where clicking on New Entries will help us maintain the Costing Key to […]
Creating new Company Code by Copying Company Code is the basic Enterprise Structure required for Financials Module in SAP. Company Code acts as a legal entity which is required for Statutory Reporting. In this post we will try to see how we can create a new company code by copying an existing company code. Implementation Consideration IMG Path: Enterprise Structure > Definition > Financial Accounting > Edit, Copy, Delete, Check Company Code System navigates us to the following screen: Double click on Copy, Delete, Check Company Code and the system will navigate us to the following screen: Click on Copy org. object and the system will ask us to enter the From Company Code and To Company Code as appearing in the following screen: In the From Company Code, enter Code of existing Company Code and in To Company Code enter the Code of new Company Code that you wish to create. Press OK and the system will ask us if we want to copy the General Ledger Company Code assignment as in the following screen: If we say Yes, the system will copy Company Code assignment of General Ledger account from the source company code to new company code. […]
SAP CO-PA Valuation using Material Cost Estimate – Part II In the previous post we have gone through the creation and assignment of Valuation Strategy which is first step in Valuation using Material Cost Estimate. Now in this post we will look what steps are required to be performed thereafter. Creation of Costing Key IMG Path: Controlling > Profitability Analysis > Master Data > Valuation > Set Up Valuation Using Material Cost Estimate > Define Access to Standard Cost Estimates Once we click on this, system will navigate us to the following screen: Under this, click on New Entries and the system will allow us to create new Costing Key which is basic requirement in the configuration. The screen for creating Costing Key looks as below: In the above screen we have to maintain various information, we will go through each of them one by one: Costing Key Enter the Costing Key Code (Z01) and Description to identify the Costing Key (Costing Key). Determine Material Cost Estimate Under this section SAP has provided following three options (radio button) out of which we need to select one cost estimate type which is relevant for our scenario. The list is self explanatory: Once we select the relevant Cost Estimate […]
SAP CO-PA Valuation using Material Cost Estimate – Part I CO-PA is used for viewing the profitability of any organisation. The profitability report majorly contains following components: Out of the above components, Cost of Sales plays critical part in the Profitability. In case of Retail Industry (Trading Business) the business is more interested in total Cost of Sales. Whereas wen we speak about the Manufacturing Industry the total Cost of Sales is to be substantiated with complete break-up of the cost. This break-up of cost is available in the form of “Cost of Goods Manufacture” which stores the details of the break-up or Cost Component Split under the “Cost Component Structure”. The Cost Component Structure typically contains the particulars of fixed and variable cost like Material Cost, Labour, Power, Depreciation, Overheads, External Processing etc. SAP has two options to capture Cost of Sales In this series of posts we will try to look into the configurations required for Cost of Sales with Cost Component Split. Implementation Consideration Valuation Strategy The configuration starts with creation of a Valuation Strategy. Lets look further into the same: IMG Path: Controlling > Profitability Analysis > Master Data > Valuation > Valuation Strategies > Define and Assign Valuation Strategy System will navigate us to […]
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CO-PA Characteristics Derivation Types – Part III In our last post we tried to go through “Table Lookup” which is one of the COPA Derivation Type. Although it is majorly used Derivation Strategy, there are few more derivation types that can be used as per the business requirement. In this post we will try to work ahead with next Characteristics Derivation Type i.e. “Moves” lets dive into this type and try to understand how it is configured. Implementation Consideration Using Transaction Code KEDR we can maintain “Moves”. After using Transaction Code KEDR, the system takes us to following screen: Select “Move” here and click on OK button to proceed further. Creating Step with “Move” After selecting “Move” system will take us to the following screen: Definition Tab If we look closely into the screen, we can find that the tab “Definition” basically has two options (radio buttons) available for selection i.e. Source Field and Constant. At the same time system also requires Target Field. We will look into details of both the available options one by one. Source Field To understand this options, lets have a look at the following image and try to understand how this works: In the above screen we have […]
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CO-PA Characteristics Derivation Types – Part II Lets go ahead in this post and try to find out next Derivation Type which is Table Lookup. This type of Derivation Type is about fetching the data from Tables based on certain characteristics available from the transaction. This is mostly used Derivation Type in all the available types. Table lookups let you read individual records of any table to determine characteristic values. Here the source fields must make up the key of a specific table, from which the system can copy certain contents to the target fields. When you generate the environment for your operating concern, the system automatically generates table lookups for all characteristics that you choose from predefined SAP tables. Implementation Consideration Using Transaction Code KEDR we can maintain Table Lookup. After using Transaction Code KEDR, the system takes us to following screen: Select Table Lookup here and click on OK button to proceed further. Creating Table Lookup After selecting Table Lookup, the system will take us to the following screen: Above screen is divided into two parts: Source Fields In the above image we can see that following information has to be maintained explained below: Origin (Table Name) and Origin […]
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Derivation Types in CO-PA – Part I In the previous post we have seen what Characteristics Derivation means with more information on various aspects of the Derivation. Now in this post we will look into the various types of Derivation strategies available in SAP. Implementation Consideration Derivation Types can be defined using Transaction Code “KEDR”. System navigates us to the following screen where we can maintain various Derivation Types: Using this transaction code we can define all types of Characteristics Derivations. In this post we will try to understand about “Derivation Rule” which one of the derivation strategy. Derivation Rule A Derivation Rule is commonly used Derivation Type which works on “if then” principle. This derivation type works on source and target field mechanism. In KEDR click on Create Step and the system will present following options for selection Select Derivation Rule and click on OK button and the system will navigate us to the following screen: On the above screen we can see the first tab “Definition” where we have to enter the source and target field. In the above example we have entered field Plant as Source Field and a User Defined Field WW100 as Target Field. This step will allow […]
SAP CO-PA Characteristics Derivation We have already gone through the Characteristics in SAP CO-PA. Characteristics are dimensions available for Profitability Analysis. Characteristics are part of the basic structure of Operating Concern or CO-PA as a whole. They contain information which is generally derived from various master data. For e.g. Customer Partner Function, Material Type etc. During transaction processing there are certain characteristics that are automatically transferred from the originating module to CO-PA. Characteristics Derivation is a process that helps us to determine other information which some how is linked to the already transferred characteristics. In this post we will try to understand this basic yet very important feature of SAP that helps us get tremendous amount of information by putting in a little effort. Purpose The basic purpose of Characteristics Derivation is entry of minimal entries manually and automated derivation of remaining characteristics based on defined logic. The inflow of data for CO-PA can be bifurcated into following: How Derivation helps Lets see what kind of data is included in both of the above Manual Account Assignment In the case of Manual Account Assignment only a few characteristics are to be entered manually. Based on these manually entered characteristics, system will fetch many […]
Storing Multiple Currencies in SAP CO-PA Structure Till now we have been discussing about how CO-PA is structured. We have also discussed in brief about the Operating Concern, Value Fields, Characteristics. All these discussions and briefings were about the configuration or basic structure required for making CO-PA operational. Now in this post we will discuss about the actual postings. Currencies We all are aware of the various currencies that we can post our transactions in Financials. We may use the Group Currency, Company Code Currency, Transaction Currency etc. All these currencies make it possible for us to prepare statutory reports. All the Statutory reports are prepared for submission to the statutory authorities (Government). The requirement of statutory reporting is generally restricted to the General Ledger accounting and hence are not more flexible in nature and may be required in Group currency for an organisation with presence in multiple countries. Reporting When we go little further of the Statutory reporting, we start thinking about the various reports which are required internally by the management. These reports may contains information on various costs incurred on Cost Centres, Project Costs etc. There is one particular report which is required by Management the most i.e. […]
SAP – CO-PA Tables for Transaction Data In our previous post we saw how the structure of Profitability Analysis (CO-PA) in SAP. Now in this post we will try to see about how the data is stored. In other words we will see the structure of tables available for CO-PA in SAP. List of Tables for CO-PA Given below is the list of Tables available in SAP for Costing Based Profitability Analysis (CO-PA ) (In the above table names XXXX = Operating Concern). For e.g. if we have created an Operating Concern “9000” then the system will create tables as CE19000, CE29000, CE39000 and CE49000. Contents of the Table Now we will try to see what information is stored in each table: Table CE1XXXX This table contains Actual Line item data which is posted in CO-PA Table CE2XXXX This table contains Plan Line item data which is posted in CO-PA Table CE3XXXX This table contains information of Values posted in the Segment. This table contains total for segments for the period. Table CE4XXXX This table contains information of Characteristics maintained in the Profitability Segment. Following image will help us understand how these tables are structured Following image will give more information about COPA Tables References Please visit […]
SAP Acquires Altiscale Yes you are absolutely right………. SAP makes one more deal………..a master stroke……….. A solid step towards a stronger and a much better cloud experience…….. After Ariba, Field Glass, Concur and Success Factor now it’s Altiscale. About Altiscale Altiscale provides a high-performance, scalable Big Data-as-a-Service (BDaaS) solution that uniquely includes full operational services. Headquartered in Palo Alto, Calif., Altiscale has been named a leading provider of BDaaS by Forrester Research. Altiscale will operate as a focused and integrated BDaaS offering from SAP to help accelerate and operationalize Big Data deployment in the enterprise. Key factors that drove this acquisition: Above five reasons made SAP acquire Altiscale which will help SAP achieve many more milestones in Big Data Cloud. Additionally there are many use cases for Altiscale in the following areas and industries: Internet of Things Uses include manufacturing, utilities, transportation, smart cities, and more. Financial services Applications include fraud detection, cybersecurity, and achieving a 360-degree customer view. Media Examples include advertising optimization and recommendation engines. Ad tech and marketing analytics Uses include multi-channel analytics and advertising attribution. Pharmaceutical Drug research, market segmentation, and supply chain optimization are all examples. Telecommunications Altiscale can be used to optimize billing and facilitate […]
SAP – Profitability Analysis – Structure In order to use the Profitability Analysis tool of SAP Controlling Module we need some structure in place. Given below is the list of configuration that is required to start with the CO-PA under SAP. Operating Concern This is the basic configuration required for using CO-PA. An Operating Concern is a separate entity that contains data for Profitability Purpose (MIS). While creation of the Operating Concern we have option to select if we will be using “Costing Based CO-PA” or “Account Based CO-PA“. Before creation of the Operating Concern it becomes important to know the difference between these two. Once we decide about the method to be used for Profitability Analysis we can create the Operating Concern. This is the first step towards implementing Profitability Analysis. We can assign multiple Company Codes to one Operating Concern to have a holistic view of the Group profitability. Characteristics After creating the Operating Concern, we need to decide upon creation of Characteristics. Characteristics under CO-PA capture various dimensions which are required for granular reporting. For e.g. Customer, Product Hierarchy etc. Various Characteristics are already available as a part of standard solution, but we can create additional custom characteristics […]
SAP Best Practices – Baseline Package (Part – VII) In the previous post we have seen the documentation available till Forms Sub-section. In this post we will continue our understanding of the Baseline Best Practices Further. Sub-section: Reports / Section Business Info This sub-section speaks about the Reports available and has following information on the webpage: Monitor and Control your Company Processes SAP Reports SAP Best Practices packages provide report information in different areas for you to monitor and control your company processes. The package includes the top reports in business process documents. In addition, all Business Process Documentation provides information about reports that are relevant to each specific process. Further reports can be found in other SAP Best Practices packages. The Reports part under this sub-sections is basically divided into Accounting and Logistics Reports. We will try to understand what each of them has for us: Accounting SAP ERP Reports for Accounting When we click on the above link, the page navigates us to a new webpage that contains following information: The reporting tools and existing reports can be used to satisfy reporting requirements in most cases. In the area of accounting, various reports can be used to get information about all […]
SAP – Types of Profitability Analysis Profitability Analysis (CO-PA) as we saw in the previous post is one of the most important tool available in SAP for MIS reporting. The Profitability Analysis in SAP is divided into two methods which have their own way of working. Given below is the list of methods available in SAP: In this post we will try to understand about both the methods in brief. Account Based Profitability Analysis Firstly we will try to look into the Account Based Profitability Analysis. Following explanation will help us understand how it works: What SAP says about this method This type of profitability analysis enables you to reconcile cost and financial accounting at any time using accounts. In contrast to costing-based profitability analysis, this type uses cost and revenue elements, which gives you a unified structure for all of accounting. The system posts all revenues and costs to both Financial Accounting and Profitability Analysis at the same time and using the same valuation method. This means that the cost of sales is posted to Profitability Analysis at the point of goods issue. What does it mean? Under this method all the amounts are posted in Finance as well as CO-PA at […]
SAP – Profitability Analysis Profitability Analysis in SAP Controlling Module (CO-PA) is a widely discussed and used tool available for very detailed analysis. CO-PA provide effective tools for analyzing profitability in your organization. We can find a lot of information about CO-PA on web as well as on SAP’s help website. Profitability using SAP Financials (FI) Now someone may debate that profitability is available in Financials Module then what is the need for a separate tool (CO-PA) for the same? To answer this question let us try to find out the levels at which Profitability can be derived using FI Module. These are the four levels using which we can derive profitability from Financials (FI) Module. Now just imagine about your market, at how many levels do the Marketing Manager need Profitability? Do you think the above four levels can help him make decisions about which product should be promoted more and which in which region? The answer is big big NO……… To meet the requirement of your Sales / Marketing / Management we need to have CO-PA available as part of our reporting. So to conclude, reporting from Financials are useful, no doubt, but they are designed from Financial and Statutory Reporting stand point. Hence Financials reports […]
Open SAP Many of us may not even have heard about any such thing. But yes this thing exists. Open SAP is an Enterprise MOOC platform for massive open online courses, or MOOCs. It is provided by SAP and hosted at the Hasso Plattner Institute in Potsdam, Germany. Everyone can enroll in openSAP courses, which are provided free of charge. Open SAP is a place or video repository of various courses offered by SAP free of cost. Yes you do not have to pay anything for this, only enrollment is sufficient. Now let’s see how Open SAP can help us. To know further lets visit open.sap.com When we visit the webpage we can see a video which says OPEN SAP. Click on this and view the video which is just 1:37 minutes long. This video introduces us to Open SAP. The webpage has few menus, lets understand about them About open SAP Click on this menu and you are navigated to the page which contains information about Open SAP. The information in this page is basically divided into following parts: Each section speaks more about openSAP. Channels This section is divided into following two parts: What does it contain? This page […]
Customer Digital Journeys It’s not always about SAP saying about being Faster, Simpler and Smarter. They always corroborate their claims with substantial amount of information / evidences. As a part of their methodology to corroborate their success they have brought forward three of their many customers who have tasted the sweet fruits of innovations provided by SAP’s latest technology. This was not done at any SAP’s internal meetings to prove their worth but at the SAP TechEd which is the premier technology event for learning, networking, training, and education on the SAP platform. This time SAP has brought forward Lenovo, Epsilon and Noble Drill who shared how SAP HANA / BW4HANA helped them transpire and run simple during SAP TechEd 2016 in Las Vegas, USA while discussing with Irfan Khan – general manager and global head of Database & Data Management at SAP. Irfan Khan first explained how how the in-memory technology SAP HANA has provoked industry-wide disruption, initially simplifying IT architecture and now featuring a host of new capabilities including the recently announced SAP BW/4HANA and SAP HANA, express edition. After this he invited the three customers to explain further about their experience with SAP. Given below are the experts of their conversation: […]
Yes! Gender Equality in SAP……. SAP Becomes First Multinational Technology Company to Receive Global Gender Equality Certification SAP SE (NYSE: SAP) today announced that it is the first multinational technology company to be awarded the worldwide Economic Dividends for Gender Equality (EDGE) certificate, recognizing its global commitments and actions in achieving and sustaining gender diversity and equality in the workplace. For many this may just be another news, but for those who really care about equality this is really an amazing feat achieved by SAP. Till now we all know SAP as the leading ERP company, but SAP is much more beyond that. This news is a prudent example showing what SAP is all about. SAP has always shown the right path to many not only in terms of accounting / logistics / finance but also socially. This news has been just the tip of an iceberg which we are yet to understand. The EDGE Certification is the premier standard and methodology for evaluating a corporate commitment to gender equality. Launched at the World Economic Forum, the EDGE assessment methodology is distinguished by its rigor and business impact. SAP Leads the Way for Tech Industry, Based on Commitment and Achievements […]
SAP Best Practices – Baseline Package (Part – VI) In the previous post we have seen the documentation available till Your Master Data Sub-section. In this post we will continue our understanding of the Baseline Best Practices Further. Sub-section: Forms / Section Business Info This sub-section speaks about the forms required for printing and has following information on the webpage: Your Print Form Solution SAP Smart Forms is an easy, robust print form tool. It allows you to create and modify forms using a graphical design tool, and enables more functionality and color options. You can use the preconfigured SAP Smart Forms delivered with SAP Best Practices processes, or with some minor adaptations, customize them for use by your business. The processes delivered with SAP Best Practices use SAP Smart Forms whenever possible. For some areas, standard and preconfigured SAP Smart Forms are not available. In these cases, SAPscript forms are used (standard SAPscript forms, preconfigured SAPscript forms). An overview of the currently available preconfigured SAP Smart Forms, and preconfigured SAPscript forms, is provided here. This Sub-section has following links containing various information about Forms. List of Forms This is a link that navigates us to a webpage which contains Examples of Preconfigured Forms […]
SAP Best Practices – Baseline Package (Part – V) In the previous post we have seen the documentation available till Preconfigured Processes Sub-section. In this post we will continue our understanding of the Baseline Best Practices Further. Sub-section: Your Master Data / Section Business Info This sub-section speaks about the Master Data belonging to Best Practices and has following information: Make It Your Business SAP Best Practices delivers standard values for different key areas. These default values allow you to test the business processes without having to create your own master data. If you want to test the business processes with customized values for specific material or organizational data, you can create this data in your SAP system. SAP Best Practices provides you with detailed step-by-step instructions telling you how to do this, creating your master data for a specific purpose. Go to the Master Data Areas, on the right, to navigate to detailed master data for each particular area. This Sub-section has one link to a webpage that has more information about Master Data Areas. Master Data Areas Click on the link “Master Data Areas” appearing on the page and we will land on a webpage that contains further information on […]
SAP Best Practices – Baseline Package (Part – IV) In the previous post we have seen the documentation available till Business Blue Print Sub-section. In this post we will continue our understanding of the Baseline Best Practices Further. Sub-section: Preconfigured Processes / Section Business Info This sub-section speaks about the predefined business processes belonging to Best Practices and has following information: Predefined business processes that handle the most important business requirements, covering key functional areas of the related SAP products. All preconfigured business processes belonging to the SAP Best Practices package are listed in the Preconfigured Processes. See this page for overviews, process flows and details of individual processes. This section is little different than the other sections we have seen till now. This information available under this section is divided into following: More on SAP.com This is a link to the Best Practices main page in case any further information is required other than available under Preconfigured Processes. More on Service Marketplace This is a link to the Best Practices main page in case any further information is required other than available under Preconfigured Processes. Preconfigured Processes This is by far the most interesting and important part of the whole SAP Baseline Best Practices. Click […]
SAP Best Practices – Baseline Package (Part – III) Till the last post we had fair idea about the Baseline package of Best Practices and a brief on documents available under the first Sub-section Overview under Intro section. In this as the next posts we will try to find out what documents are available under every Sub-section. So lets go one by one through each of them. Sub-section: Concepts / Section Intro This sub-section speaks about the flexibility and has following information The building blocks that comprise SAP Best Practices are reusable tools and documents that allow you to assemble a solution to meet your needs. The building block concept grants a high degree of flexibility. Alone, a complex building block can be a solution element. Combined, simple building blocks can form a process. A combination of building blocks can be used to modify an existing solution or process. List of documentation available The documentation available under this sub-section is explained below: Authorisation Concept This is a link which diverts you to SAP’s web page that speaks about SAP AUTHORIZATION CONCEPT. It firstly briefs following: Purpose of Authorisation How authorisation works in SAP How Function list can help Place where further information can be […]
SAP Best Practices – Baseline Package (Part – II) In the previous post we understood in brief about the Baseline Package of SAP Best Practice. In this version we will try to go further in understanding the Baseline Package. Versions of Baseline Package SAP as we all know have been evolving in every front. For e.g. we had SAP R/2 then came SAP R/3 followed by SAP ERP and now the latest buzz in the market newly introduced SAP S4 HANA. With such an innovative team of highly prolific intellectuals how could SAP not have improved upon the Best Practices? SAP has been continually working on improving the Best Practices and the latest version available on site is 3.607 Is one global template available for the Best Practices? How can we even think about such a thing? SAP has global presence and always comes up with things that are specific to countries for e.g. Country India Version or Brazil country version for taxation etc. In case of Baseline Package of Best Practices as well SAP has provided various country specific Best Practices. The localisation documentations is available in various languages other than English as well. Given below is the list of […]
SAP Best Practices – Baseline Package (Part – I) In the previous post we have already gone through the brief information about SAP Best Practices. In this post we will try to go a little further and understand more about the Baseline Package. What is a Baseline Package In our previous post we read that SAP Best practices are the basis for SAP solution. They provide basic structure for deployment of SAP. The Best Practices are available in Baseline and Industry Specific. The Baseline Package provides generic core scenarios that support the most important business needs. The Baseline package is available in 50+ localized country versions and is developed in accordance with the legal requirements and country-specific needs of the target country. Which modules does SAP Best Practice cover? The solid foundation for SAP Best Practices Baseline is the SAP ERP 6.0 application. Industry-generic SAP Best Practices are available for: Documents available under SAP Best Practices Some of the documents available under Best Practices are listed below: Configuration Guide As the headline suggests a Configuration Guide contains steps to be followed to configure the process. This is step-by-step guide provided by SAP. This is a word file available for download. Business Process […]
SAP Best Practices Comprehensive, Integrated Industry Solutions to Power Your Business End-to-End What is SAP Best Practice? SAP Best Practices packages provide a solid foundation for SAP solutions. Through years of expertise and best practices in more than 50 countries with well over 10,000 customers, SAP Best Practices address the business needs of customers better than any other. Based on SAP software, such as SAP Business Suite and SAP BusinessObjects, SAP Best Practices packages are developed to help companies of all sizes benefit from proven best practices defined for a wide range of processes and topics which can be leveraged to rapidly ensure a quick return on investment. What does SAP Best Practice include? SAP Best Practices include clear methodologies and step-by-step approaches. Every package has extensive reusable documentation for self-study, evaluation, as well as for project team and end-user training. SAP Best Practices provide complete pre-configuration settings that give you everything you need to run specific key processes with minimal installation effort. Are SAP Best Practices generic in nature? The answer to this question is a big big NO………… SAP Best Practices are available as below: – Baseline Package – Industry Packages – Cross Industry Packages What are these SAP […]
Cost Element Group Hierarchy in SAP Controlling What is a Group Hierarchy? Group Hierarchy is a tree structure of any object defined for various purposes like: For e.g. Cost Element Group Hierarchy appearing under Image 1.01 is self explanatory how Cost Element Group looks like. The hierarchy is created based on Cost Elements created in a Controlling Area. How is it structured? The Groups are divided into following segments: Top Nodes are levels which are at the top of the hierarchy. End Nodes are levels which are at the end of the hierarchy. No End Nodes are levels which are neither on top nor at the end, which means in a hierarchy this kind of nodes are between top and end nodes. How to Create a Cost Element Group Hierarchy? Transaction Code for Creation: KAH1 After entering Transaction Code KAH1, the system may ask us for the Controlling Area and then will navigate us to the screen appearing under Image 1.02 On the screen please enter some suitable code for Cost Element Group. This group will be identifier for the structure and can be used at various places. After entering some name, press enter and the system will navigate us to the next […]
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Business Partner The buzz word SAP S/4 HANA is slowly and steadily getting into our lives……… Now lets get ahead of just the initial talks and videos about the technical advancements of S/4 HANA. To break the ice, we will start with the “Business Partner” a new concept introduced by SAP. The Business Partner is introduced as a replacement for the followings: This innovation of SAP ensures that the Master Data Team now does not have to use two different Transaction Codes for creating Customer and Vendor masters. With SAP S/4 HANA the Customer/Vendor master data has been transpired into role based management rather than the following views: Many Business Partner Roles are available in SAP for using. Given below is the list of a few relevant roles Customer related roles Vendor related roles Really speaking, SAP has replaced the various views of SAP ERP with roles. (Refer Image 1.01 for Vendor Master screen in SAP ERP) As you can see in the above screen and remember about the various information that used to be maintained by us. The following chart shows which views from ERP are replaced by which role in HANA: Apart from the above it is interesting to note […]
Customers get what they want with SAP’s next-generation data warehouse. Imagine you are a global bicycle retailer and all your relevant data is stored in cubes in a structure like a Rubik’s Cube. You notice that sales have increased in Modesto, California, but you don’t know why. Could it be the weather, the topography, the income levels? Inserting a new ‘cube’ of demographic information would help you understand the local environment, so you could further increase sales. “Inserting a new info cube in your current data warehouse would be like inserting a new cube into a Rubik’s Cube. It would be impossible without taking the entire cube apart and actually replacing one of the existing cubes, because the structure is inflexible and does not allow you to make changes easily,” said Bernd Leukert, member of the Executive Board of SAP SE, Products & Innovation, while addressing the crowd at the SAP BW/4HANA launch at the Terra Gallery in San Francisco. “But if you were managing your data with SAP’s new data warehouse solution, SAP BW/4HANA, you could add new data sources in minutes, run simulations, analyze the outcomes, and make decisions based on the insight you acquired. For example, you […]
ARIBA A cloud based network that brings buyers and suppliers together in an efficient and effective way. Ariba can you help you with…… Spend and Supplier Management Ariba provides Spend and Supplier Management Solution. This solution, with the help of experience over the decades is empowered to:- Financial Supply Chain Management Helps you turn your payables into strategic assets which further helps you to:- E-Commerce and Account Management A trillion dollar business commerce network that is more than just a supplier network to help you:- Do not forget to read the encouraging story of behind Ariba Network which was formed by with just a crayon in hand.
Many would have already heard about ARIBA…. But how many of us know about the story behind this gigantic empire? Let’s read it at the very authentic source that is currently available in the market “SAP”. Shocked? Surprised? What is SAP to do with ARIBA? Lets have little glimpse of what Ariba is. Seven business colleagues sitting together over sandwiches discussing over the complexities involved in purchase had put in their mind to utilise the then (1996) newly introduced concept of “Internet” to phase out the paper based tedious process. The concept of “Internet” linked all the computers thereby making the transaction processing faster and also helped businesses in making better decisions. The concept is known as Ariba, which is a network that helps you procure and also do relevant transactions on the cloud. Yes Ariba was started by seven likeminded business colleagues with a greater vision in mind. The small idea written in crayon a few years back has transpired in a huge empire which was acquired by an equally gigantic corporation (SAP) in a multi million deal. Also do not forget to read the next post that discusses further on Ariba. Click here to know the the story of […]
We all are very well aware of the new initiative by SAP known as SAP S/4 HANA. HANA has been a revolution in analytics, data processing, quick decision making and so many other things which are just out of the box and overwhelming for someone as simple as us. 😉 This is why it is coming with simple solutions. Going forward, SAP is taking huge leap in the same direction by introducing SAP BW 4HANA. It is a next-generation data warehouse application for running a real-time digital enterprise. With SAP BW/4HANA, customers will have a much simpler and more powerful way of achieving real-time analytics through a new foundation for logical data warehousing that provides the interactivity with historical and live data residing in a diverse IT landscape, whether within or outside the enterprise. To answer demand for open, highly scalable IT systems, SAP BW/4HANA will provide an open data warehousing environment for rapid application development, a modern user interface, advanced multitemperature data handling and support for cloud-ready offerings including AWS and SAP HANA Enterprise Cloud, with other third-party cloud platforms expected to follow. Main features of BW 4HANA Making Businesses More Agile Increasing Versatility in the Cloud Defining the Next-Generation […]
We have already seen the various Transactions under OBYC i.e. FI-MM Integration. But in the previous posts we have not seen the Transaction GBB which is used specifically for Offsetting Accounts under various transactions. In this post we will see how the Transaction GBB is configured. The Transaction GBB is basically divided into various logical General Modifiers which are explained below: AUA This General Modifier is used for order settlement. In case of Production/Process Order General Ledger account under this General Modifier is debited or credited based on whether the Production Variance is debit or credit. General Ledger under this General Modifier is to be created as Primary Cost Element i.e. category “1” AUF This General Modifier is used when FG/SFG production entry is posted. In other words this General Modifier comes into picture in case of goods receipts for orders (without account assignment) and for order settlement if AUA is not maintained. General Ledger Account under this General Modifier is credited and Inventory Account (under Transaction BSX) is debited. BSA for initial entry of stock balances. This General Modifier is used for initial stock entry specifically during Go Live phase. In order to avoid misuse, the General Ledger accounts […]
We all have been amazed with the new introduction by SAP which is known to become a new trend setter for the way SAP has been helping businesses to grow. S/4 HANA is that buzzword…….. There has been a lot of gossip about this SAP S/4 HANA and it’s newly introduced Simple Finance.S/4 HANA is a new Business Suite introduced by SAP. This will replace the SAP ERP to revolutionise the whole world with the time and again proven capabilities of SAP with modern day software to speedup your business to an awesomely new peaks which were nothing more than a dream just a few years back. Now with this lets try to understand what this new concept is all about. S/4 HANA You would find a lot of information (tsunami of information) about this new innovation by SAP. But we will try to understand it in simple terms that even a layman can understand: It would be interesting to know the advantages of SAP S/4 HANA, given below are just a tip of a huge ice burg: Yes…..Yes…..the old grey colour rigid screen is an affair of past…………… All of the above could become possible only due to the modern day […]
Click here to know what “Vendor Master” is replaced with in SAP S/4 HANA In the previous post we discussed about the General Data part of the Vendor Master, in this post we will look into the company code part of the Vendor Master. After we maintain all the information as explained in the previous post, the system navigates us to the screen as appearing under image 1.06 Image 1.06 – Accounting Info This screen contains some more important fields as explained below: Recon Account Vendor accounting follows Subsidiary ledger and General ledger concept of accounting. Under this concept, a vendor account acts as a sub-ledger and in traditional accounting all the entries were initially posted to the sub-ledger and at period end used to transfer to the general ledger. But in SAP this transfer is done on real time basis. In order to make the transfer to general ledger in real time SAP has provided this field where we enter the general ledger account. All the entries posted to the vendor account are posted to this general ledger at the same time. This negates are requirement to reconcile sub ledger and general ledger. The General Ledger assigned here are […]
Click here to know what “Vendor Master” is replaced with in SAP S/4 HANA The Accounts Payable application component records and manages accounting data of all vendors. The vendor master records are maintained in sub-ledger and are used in Financial Accounting and Materials Management. By storing vendor master data centrally and sharing it throughout whole organisation, it is only needed to enter it once. It gives an ability to prevent inconsistencies in master data by maintaining it centrally. Vendor Master is the central part of Account Receivable component of SAP Financials. Vendor Master Data plays a vital role in making payment. This is the reason why in this post we will go through the important fields available in Vendor Master Data in this post. This post will work as a base for understanding the posting of documents and payment transactions in accounts payable. Before going ahead it would be important to understand that the Vendor Master data is divided into following three parts: In this post we will look into the General Data part of the Vendor Master. Creation of Vendor Master Transaction Code: FK01 System will navigate you to the screen as appearing in Image 1.01 The screen has […]
Settlement as already discussed in our previous posts is an important part of Period End activities. To enable settlement of Internal Order we need to maintain Settlement Rule in the Internal Order. The Settlement Rule is governed by the parameters maintained under Settlement Profile. In other words, we define a range of control parameters for settlement in the settlement profile. The settlement profile must defined before maintenance of settlement rule for a sender (Internal Order). Settlement parameters (Rule) cannot be maintained during settlement to a receiver, one must save the settlement profile either in the order type or in the model order or reference order. Definition Settlement Profile contains various parameters which are copied to the order automatically. It is due to this you do not have to enter same values every time in the order. Implementation Consideration System will navigate you to the screen as appearing in Image 1.01 below: Image 1.01 SAP provides various standard Settlement Profiles that can be used for our purpose or the existing settlement profile can be used (copy function) to create a customised Settlement Profiles. Now we will go through one of the Settlement Profiles. For our understanding purpose we will double click on Settlement Profile “20” i.e. Overhead […]
Quantity Structure Control We have been going through various components of Costing Variants. As explained earlier all these components constitute to the Product Costing in Controlling Module. The Quantity Structure Control is a component which controls parameters of Quantity Structure like Bill of Material (BOM) and Routing/Recipe. Definition Used in cost estimates with quantity structure to specify for each plant how the system searches for valid alternative BOM and alternative routing to create a quantity structure for multilevel BOM. Implementation Consideration System will navigate you to the screen as shown in the image 1.01 For understanding the structure we will select Quantity Structure “PC01″ and double click on the same to navigate further to screen as shown in image 1.02 Image 1.01 Image 1.02 On the above screen, we can see the configuration is divided into two parts i.e. BOM and Routing. We will first go through the BOM tab. Bill of Material Tab (BOM) The BOM tab has option to select the BOM Determination application as per our requirement. Refer image 1.03 below Image 1.03 Given below is the list of available BOM Determination applications: Inventory Management Configuration Control External Batches Plant Maintenance Costing Process Manufacturing Production – General […]
Internal Orders are one of the CO Object provided by SAP for various purposes. They are normally used to plan, collect, budget and settle the costs of internal jobs and tasks. The SAP system enables to monitor internal orders throughout their entire life-cycle; from initial creation, through the planning and posting of all the actual costs, to the final settlement and archiving. Tools for Analysis in CO Before going ahead with the I/O, lets first try to see what are the various tools of analysis provided by SAP in Controlling module, few of them are listed below for our understanding: Cost Centers A Cost Centre is the physical location in the organisation that spends organisation’s resources. This tool keeps track of where the cost is incurred. Cost Elements There are two different types of Cost Elements (a) Primary (b) Secondary. Purpose of Cost Elements is to record the nature of expenses incurred. Internal Order As explained above, Internal Order is used to trace the various costs incurred, plan, control etc. Combination of these 3 axes provides the financial data with the needed level of details. Use of Internal Order Internal orders can be used for following purposes: Monitor the costs of short-term […]
Definition The name in itself suggests, Value fields contain values which flow from various modules during document posting. Value fields are only required in costing-based Profitability Analysis. These are the fields that contain the currency amounts and quantities that you want to analyze in CO-PA. They represent the structure of your costs and revenues. The Characteristics with Value Fields form Profitability Segment. Background We have already gone through how Characteristics under CO-PA helps management get various reports which are not possible with Financial Reporting. This report (CO-PA) has various dimensions recorded using Characteristics like Profit Centre, Customer, Sales Organisation, Product Hierarchy etc. Value Fields in this reporting help us by recording various values like Sales Quantities, Revenue, Discounts allowed, COGS etc. The value fields by storing all the values help us draw the profitability report as per our requirement. We can also match the CO-PA Profit & Loss with Finance Profit & Loss for instance. Implementation Consideration Creating Value Field SAP comes with standard Value Fields already provided by SAP, many of these help us in mapping many fields from Sales & Distribution and also for Assessment from Cost centre to CO-PA. Some of the standard Value Fields are like Sales Quantity, Revenue, […]
Definition As the name suggests, this field represent various characters (Criteria) in Profitability Analysis. Characteristics help us to plan data, book actuals and present both of them in Profitability Analysis. The Characteristics with Value Fields form Profitability Segment. Background Characteristics play a very important role when it comes to reporting of corporate profitability at dimension which are not possible in various Financial Reports available. For e.g. The financial reports can give you profitability at Profit Centre, Business Area and Company Code level, but these three dimensions do not suffice when it comes to Management Information System reports (MIS). The reports required by management require far more details than what financial reporting system can provide. For e.g. the management may want to see the budget versus actual sales for a particular region for a period. Then going further may want to compare the same over last year and find the variance in order to take decisions related to the marketing strategy to be devised. In order to fulfill many such requirement of management, SAP has provided Characteristics in Profitability Analysis. Now we will see how to create the Characteristics. Implementation Consideration IMG Path: Controlling > Profitability Analysis > Structures > Define Operating Concern > Maintain Characteristics […]
Activity types Classify the activities produced in the cost centers within a controlling area. Use To plan and allocate the activities, the system records quantities that are measured in activity units. Activity quantities are valuated using a price (allocation price). In Overhead Cost Controlling, costs based on the activity quantity of an activity type are posted separately in fixed and variable portions. When you divide the activities of a cost center into activity types, you should consider whether the costs can be allocated effectively to the activity types. In an internal activity allocation, the quantity of the activity, such as a number of consulting hours, is entered into the SAP system (manually or automatically). The system calculates the associated cost based on the activity price and generates a debit to the receiver and a credit to the sender for both the quantity and costs. The internal activity allocation is carried out using secondary cost elements, which are stored as default types in the activity type master data. You can restrict the use of the activity type to certain types of cost centers by entering the allowed cost center categories in the activity type master record. You can enter up to […]
Calculation Base in Costing Sheet Costing Sheet is a part of Overhead under Product Cost Planning under Controlling Module of SAP. A Costing Sheet helps us in adding cost incurred on manufacturing of a product which is not possible using Activity Types. A Costing Sheet can be used in various purposes, but here we will be only looking into the creation of Costing Sheet and components required for the same. A Costing Sheet is made of various components, these components in together form a Costing Sheet. Hence understanding of the Costing Sheet is to start with understanding of following components involved in the Costing Sheet: We will go through all of the above one by one, now in this post we will try to see the first component i.e. Calculation Base. Implementation Consideration Defining Calculation Base This is the first component of Costing Sheet which works as an identifier of the base to calculate the amounts i.e. the value under Cost Elements which will be used to calculate costs. Once we click on the above, the system will navigate us to the following screen SAP by default provides Calculation Bases in the standard system, we can use them in order to configure […]
Overhead Rates in Costing Sheet Welcome to the next post in the series of Costing Sheet and it’s components. This is the second part where we will be looking into the “Overhead Rates” component of Costing Sheet. This component is used to define the rate at which the amount is calculated on the base amount (Calculation Base). The overhead rates are divided into “Percentage Based” and “Quantity Based”, in this post we will see how both ot these are defined. Percentage Overhead Rates This is one of the two options available for defining the rates to be used for calculation of costs on the values available under Calculation Base. Under this option we can specify the values as percentage of the Calculation Base. System navigates us to the following screen as appearing in Image 1.01 Image 1.01 In the above image 1.01 we can notice that SAP has provided many Percentage Overhead keys which can be used by us to define the percentages for calculation. But if we carefully look on the screen, we should try to take a moment to look into something called Dependency. A dependency is nothing else but a key which helps us maintain the rate for various […]
Credits under Costing Sheet This is third post in the series of configuring Costing Sheet. In this post we will discuss about “Credits” which is the next component of Costing Sheet. It is important to understand that Cost allocation is part of the process of determining overhead rates. If this leads to an object being debited with actual costs, another object in Cost Accounting must be credited at the same time. This can be either a cost center, order or a business process. This type of posting is recorded under a secondary cost element of cost element category 41 (overhead rates) in the SAP System. This component i.e. “Credits” ensures that the amount of overhead while getting debited to a process / production order is credited to a CO object. (For your reference, please note that in case of Activity Type i.e. direct manufacturing overheads, the amount is debited to process / production order, at the same time is credited to a Cost Element and Cost Centre which is maintained in the Activity Type master data) The system navigates us to screen as appearing in Image 1.01 Image 1.01 For the purpose of our post, we will select the first […]
Creating costing Sheet This is fourth and the final part of the series of posts related to creation of Costing Sheet. In the previous three posts we have already understood about creation of various components required for maintenance of a Costing Sheet. Now in this post we will see how all those components in combination help us to create a Costing Sheet. Implementation Consideration IMG Path: Controlling > Product Cost Controlling > Product Cost Planning > Overhead > Basic Settings for Material Costing > Define Costing Sheets System will navigate us to the on the screen as appearing in Image 1.01 Image 1.01 Before above screen, the system will ask us to maintain Controlling Area as shown in Image 1.02 below: Enter your Controlling Area here and press enter. For our understanding purpose we will select the Costing Sheet PP-PC1 and double click on “Costing sheet rows” tab on the left side of the screen, this will navigate us to the screen (refer image 1.03) where we can maintain all the details. Image 1.03 On the screen under Image 1.03 we will have to first understand about the various columns available for input and their meaning/importance before we proceed further. Once we […]
SAP Costing Variant We have already gone through the series of posts explaining about the Costing Sheet previously. Hopefully, it helped you understand product costing a little more. SAP as we know is an ocean and now let me take your some time to discuss more on product costing part which is the essence of SAP. In this post we will discuss about Costing Variant which forms a very important part of SAP’s product costing. A Costing Variant is the main element of SAP’s configuration which plays vital role in Cost Estimates. We will see how. Standard Cost Estimate Before we go ahead, we will first see how a Screen of Creating a Material Cost Estimate looks like (refer Image 1.01 and 1.02) We all are very familiar with the above screens. The above screens are part of our periodic process of creating and saving the Standard Cost Estimates for Materials. Here in the Image 1.01 we can see that we have entered the Costing Variant. After entering the Costing Variant when we go to the next screen (Image 1.02), we find some dates already provided by the system. This and many other parameters are controlled by Costing Variant. A Costing […]
SAP Costing Type So as discussed in the earlier post, we will go further into this post for understanding Costing Variant. If we carefully give a look at the screen of Costing Variant (refer Image 1.01), we can easily notice that the Costing Variant is basically divided into 6 logical tabs (or parts, we may say). SAP has done this in order to simplify and at the same time to provide more flexibility in product costing. With discussion under this and upcoming posts, we will try to look into every component under all the tabs separately to facilitate deeper understanding. Now lets start with the first component “Costing Type” For our understanding and analysis purpose, we will be considering the Costing Variant PPC1 and will try to discuss about others, once we are through with PPC1. Costing Type In this post, as heading of this post suggests we will look into the Costing Type component of Costing Variant. Before we go ahead, first let’s go through the IMG Path required to be followed for creation of Costing Type Implementation Consideration We will start with the brief understanding of what is a Costing Type? But before that we will first understand how […]
SAP Valuation Variant In this part of the post, we are going to discuss about the Valuation Variant component of Costing Variant. This component is the most important of all due to the information controlled by this component in a Cost Estimate. We will first see how this component looks like: IMG Path: Controlling > Product Cost Controlling > Product Cost Planning > Material Cost Estimate with Quantity Structure > Costing Variant: Components > Define Valuation Variants We are once again onto a structure with multiple tabs to divide the component into various logical parts. This as explained earlier plays a vital role in granular level of configuration required to meet client’s requirement. Before we go ahead, it would be interesting to understand the priority part which appears in most of the tabs. This is nothing other than the strategy or access sequence for determining the relevant object. We will see this in detail under explanation of each tab. Now since we have seen how a Valuation Variant looks like, lets move ahead on understanding every tab one by one which will give us detailed understanding of every option available for use. Tab: Material Val. This tab as appearing in the above image helps […]
Date Control Welcome back, in the last three posts, we have discussed and tried to understand about Costing Type and Valuation Variant. In this post we will continue our discussion and take up next component of Costing Variant i.e. Date Control. IMG Path for Date Control: Controlling > Product Cost Controlling > Product Cost Planning > Material Cost Estimate with Quantity Structure > Costing Variant: Components > Define Date Control Before we get into the details, first let us see how this date control looks like In the above image we can see that the date control contains various dates. So first lets understand that the Date Control component of Costing Variant controls the dates on which the quantity structure and the value structure are created. The Date control is used to control followings: Validity of the Cost Estimate Costing Date From and Costing Date To Under these two options, we can configure what would be the period of validity of the cost estimate. Select the appropriate Valid From date here, usually Current Date and proceed further to selection of Valid To date, usually End of current posting period. This will make sure that the cost estimate is valid for […]
Use We use Cost Center Accounting for controlling purposes within your organization. The costs incurred by your organization should be transparent. This requires that all costs be assigned according to their source. However, source-related assignment is especially difficult for overhead costs. Cost Center Accounting lets you analyze the overhead costs according to where they were incurred within the organization. Dividing an organization into cost centers allows you to follow several goals, depending on the cost accounting method. Assigning costs to cost centers lets you determine where costs are incurred within the organization. If you plan costs at cost center level, you can check cost efficiency at the point where costs are incurred. If you want to assign overhead costs accurately to individual products, services, or market segments, you need to further allocate the costs to those cost centers directly involved in the creation of the products or services. From these cost centers you can then use different methods to assign the activities and costs to the relevant products, services, and market segments. This enables you to valuate semi-finished and finished products in Product Cost Controlling (CO-PC) Expense Budget Planning Cost centre planning involves entering plan figures for a particular costs […]
Cost Elements play a very important role in the reconciliation/alignment of costs and postings between Financial Accounting (FI) and Management Accounting/ Controlling (CO). There are two types of cost elements such as Primary Cost Elements, Secondary Cost Elements and Revenue Cost Elements all which have a specific purpose. The category set for a Cost Element at the time of creation will determine the transactions that can utilize the cost element. Due to the integrated nature of SAP Systems there is a requirement to create expense accounts in Financial Accounting with corresponding primary cost elements in Controlling. Cost elements capture costs incurred within a particular accounting period. This ensures that expenses in Financial Accounting and primary costs in Management Accounting can be reconciled. Cost Elements are closely related to the general ledger accounts used in FI-GL. The SAP terminology defines two different categories of Analytical Accounts (Cost Elements) as below: o The Primary Cost Elements o The Secondary Cost Elements Primary Cost Elements: The codification and description for “primary cost elements” is same as the General Ledger accounts. Primary cost elements can be automatically created when we have a new G/L account in the CoA. Or we also have an option to keep the cost […]
Definition A Controlling Area is an organization unit used for Cost accounting purpose. A controlling area can be assigned to multiple company codes at the same time. Controlling Area is a very important organization unit in SAP Controlling. This organization unit contains the most important configurations required for whole controlling module. Use Controlling Area receives primary costs from other modules like Finance, Sales & Distribution, Material Management, Production Planning, Project Systems etc. Controlling Area has its own processing of values, which is done using Cost Elements. These costs are broadly known as Secondary Costs. Implementation Consideration IMG Path: Controlling > Controlling > Organization > Maintain Controlling Area > Maintain Controlling Area Here we can create a new Controlling Area. Upon creation of Controlling Area, following assignments/settings are to be done for the same Name Enter the appropriate name for the Controlling Area. Person Responsible Here we can assign the User ID of the person responsible for this Controlling Area. CoCd -> CO Area (Allocation Indicator) Here we specify whether The controlling area will be assigned to multiple company codes The controlling area will be assigned to single company codes. In this case, the code of Company Code and Controlling Area […]
The creation of Controlling Area is further divided into Activation of Components and Assignment of Company Codes. Activation of Components In this section, we have to activate the relevant components as explained below: Cost Centres The cost centre accounting is activated here. We have following options with regards to CCA activation Inactive CCA is not activated Active CCA is activated without limitations and cost centres can be used as account assignment objects Active with validation CCA is not active. Cost centers are validated against the cost center master. The cost centers can be used as account assignment objects but the relevant CO files are not updated on posting. If CCA is implemented at a later date, you can subsequently post the cost-relevant business transactions in cost centers to the relevant CO files. Active for existence checks Same as Active. The only difference is that the cost centers are not created in full, but only in part using the “Rough entry” function. Account Assignment Activity type Active This indicator controls whether the activity types can be used as account assignment objects for actual postings. If this indicator is selected, actual primary costs can be assigned directly to the activity type of a […]
Definition The chart of depreciation contains the list of defined depreciation areas. It also contains rules for the evaluation of assets that are valid in a given country or economic area. Each company code is allocated to one chart of depreciation. Several company codes can work with the same chart of depreciation. The chart of depreciation and the chart of accounts are completely independent of one another. Depreciation is a non cash expenditure which is allowed to be charged to Profit & Loss Account. In India, the depreciation allowed under companies act and the Income tax act are different. This requirement can be met by creating two different depreciation areas.Implementation Consideration SAP supplies typical reference charts of depreciation for each country. They have different depreciation areas and depreciation keys depending on that country’s specific requirements. You cannot use these charts of depreciation directly. You must create your own chart of depreciation by copying the reference chart of depreciation. Delete any depreciation areas that are not needed. Creating Chart of Depreciation IMG Path: Financial Accounting (New) > Asset Accounting > Asset Accounting (Lean Implementation) > Organizational Structures > Copy Reference Chart of Depreciation/Depreciation Areas It is important to know that we […]
Definition Depreciation Areas are are used to calculate different values in parallel for the same asset. This may be required for legal requirement, management report, cost reporting etc.The Depreciation Areas help us to manage assets with different depreciation terms i.e. depreciation key, useful life, expired useful life. This helps us to meet many statutory requirements and also to evaluate assets as per multiple parameters. The Depreciation Areas are divided majorly into Real Areas and Derived Areas. Here we will discuss about the Real Depreciation Areas. We will come up on the derived depreciation areas very soon.Implementation Consideration The Depreciation Areas are available in standard and you should copy the same. (Please note that when we copy the country specific Chart of Depreciation, system also makes available the standard depreciation areas for the specific country). IMG Path: Financial Accounting (New) > Asset Accounting > Asset Accounting (Lean Implementation) > Organizational Structures > Depreciation Areas > Define How Depreciation Areas Post to General Ledger Once you enter here, system shows the available standard depreciation areas (here you can’t create new chart of depreciation from scratch). Use the existing depreciation area by copying to create a new depreciation area. The depreciation area contains following: Number Enter the number […]
Asset Class is an important part of asset accounting in SAP Financials. An asset class acts as backbone of the asset accounting. They help us in structuring the asset accounting as per the client’s requirement. The Asset classes play a vital role in General Ledger Account determination and screen layout. Asset classes are very important organisational structure and hence need to be decided carefully as it becomes difficult to accommodate one after going live though not impossible.Features Controls Screen Layout Helps in G/L Determination Determines the Number Range Tab Layout assignment is at Asset Class level Applicable throughout the company codes in the client Implementation Consideration IMG Path: Financial Accounting (New) > Asset Accounting > Organizational Structures > Asset Classes > Define Asset Classes The Asset Class has following fields Asset Class Define the number of Asset Class in such a way that it becomes easy for the master data team to recognise it easily (Yes, description is also available) Long Text Enter relevant description to identify the asset class Short Text Enter short text to identify the asset class Account Determination Enter the relevant account determination code created. This key links all the G/L accounts to the asset master through asset class. […]
It is the structure of various fields available while creation/change of Asset Master Data. The screen layout becomes important in order to ensure completeness of data while while creation of asset. Before we move ahead towards understanding the field status in screen layout, we first need to understand about the logical field groups. The logical field groups are division of various fields into logical screens i.e. groups. The groups contain list of relevant fields. The status of fields is maintained per field group.Implementation consideration Before we go ahead on screen layout, we must first understand the same is maintained at following levels: Asset Master Data Asset Depreciation Areas Screen Layout at Asset Master Data Level IMG Path: Financial Accounting (New) > Asset Accounting > Master Data > Screen Layout > Define Screen Layout for Asset Master Data Once we double click on the above, we have to first create screen layout rule, for that select following option Create Screen Layout Rules for Asset Master Record Enter the code for screen layout and it’s description Once we create a screen layout, we should move ahead for maintaining the field status Double click on the option Define Screen Layout for Asset Master Data After this, the […]
We all are very well aware of the real time integration of SAP with various modules. We all are also aware of the sap functionality to post accounting documents automatically. This applies even in the case of Asset Accounting. The Account Determination in case of SAP Asset Accounting is based on Asset Classes. We will get into details one by one. Implementation Consideration The Implementation is divided into following parts Defining Account Determination Assigning Account Determination to Asset Class Maintaining G/L Accounts for the Account Determination We sill look into the above step by step. Step I Defining Account Determination IMG Path: Financial Accounting (New) > Asset Accounting > Organizational Structures > Asset Classes > Specify Account Determination click on the above option and system will navigate you to the following screen: Defining Account Determination Create Account determination as per the nature of assets and accounting requirement i.e. whether same G/L account to be used in case of multiple asset classes or unique G/L account to post in case of every asset class. As far as possible, if every asset class is to be posted to different G/L accounts, create Account determination code same as Asset class code. This will avoid confusion. Step II Assign […]
Account Group in Accounts Payable component of Finance Module plays important role as far as Vendor Masters are concerned. Importance Now when we have understood the importance of vendor numbering, we must also accept the fact that in practical scenario the business can have multiple types of Vendors. For e.g. Domestic vendors, Import Vendors etc. With the different nature of vendors, it becomes important to provide different number range for both the Vendors. Use The Account Groups are used to determine: Interval for the account numbers Whether the number is assigned internally by the system or externally by the user (type of number assignment) Whether it is a one-time account Which fields will be displayed, editable, suppressed or mandatory while creating/changing Vendor Master Data The configuration for Vendor Account Group is divided into: Definition Number Range Maintenance Assignment of Number Range Definition IMG Path Financial Accounting (New) > Accounts Receivable and Accounts Payable > Vendor Accounts > Master Data > Preparations for Creating Vendor Master Data > Define Account Groups with Screen Layout (Vendors) Fields in the Account Group Account Group This is 4 digit code that identifies the account group Meaning Description of the account group, for e.g. Domestic Vendors, Import Vendors One […]
The term field status appears in many configurations. In case of Accounts payable it works for the vendor master data. When we speak about field status in accounts payable we have to first understand what it means. Definition Field status in SAP parlance is a term which is used to control what fields would be available for users to work on a particular functionality. Once we have understood what a field status means, it becomes important to understand what options are available for field status Suppress The field does not appear on the screen Required Entry in the field is mandatory and system does not allow to process the transaction without entry in this field Optional Entry in the field is optional and data entry is not mandatory Display The field appears on the screen, but not available for entry Use Now we will go ahead and understand how this field status is relevant in Master data of Accounts Payable component. The field status in master data controls what fields will be available for users when they create a vendor master data. Features Reduces the appearing of unwanted fields during master creation Helps user to concentrate on the essential data […]
Payment term is a part of accounts payable component that helps you keep track of your payable amounts more effectively. They play a vital role in identifying the exact payable amounts as on a particular date Background Any business operates as you very well know on revenue. But procuring the material to sell is equally important. The money against material that we purchase has to be paid on a particular date which is decided upon mutually. It becomes very important to pay the vendor in time, else vendor may penalise for the delay in payment. Definition A payment term is a key that contains configuration regarding calculation of date on which payment becomes due to the vendor based on certain prerequisites. The payment term calculates something called net due date which is nothing but the date on which payment is to be done to the vendor. Use The payment term not just helps to keep check on the payment of amounts but also helps in drawing many trends like payment payable to vendors in next 30 days, 60 days, 90 days etc. In other words it helps to prepare Vendor Ageing report which assists business to draw a cash flow […]
House Banks Payment to vendor against various invoices after deduction of appropriate taxes (withholding taxes etc.) or any discounts / adjustments is one of the prime responsibilities of Accounts Payable function in an organisation. When we discuss about the payment to vendor, we speak about a huge volume of checks / online transfers which are made either daily or periodically by the organisations. In bigger organisations this number is humongous and printing of every check / preparing bank letters for each and every payment manually becomes literally impossible task. In order to overcome this and many other difficulties, SAP has provided by SAP called Automatic Payment Program (APP) which automatically makes payment to various vendors at the same time. In this series of posts we will try to find out what configurations / transactions are to be done in order to use APP. The series will look into all the aspects as given below: In this post we will start with configuration of House Bank Implementation Consideration T Code: FBZP System will navigate us to the screen under Image 1.01 In the image 1.01 we can see the House Banks tab available for us to use. Click on the same […]
Click here to know what “Customer Master” is replaced with in SAP S/4 HANA The Accounts Receivable application component records and manages accounting data of all customers. Creating Customer Master Data Customer master records are maintained in sub-ledger and are used in Sales and Distribution as well as Financial Accounting. By storing customer master data centrally, it is enabled to be accessed throughout the whole organisation, and avoid the need to enter the same information twice. It gives also the ability to avoid inconsistencies in master data by maintaining it centrally. If one of the customers changes his or her address, it is only necessary to enter this change once and accounting and sales departments will always have up-to-date information.The customer master record contains: General Data: Data for communication with the customer, such as address, fax, region, country and telephone numbers Company Code Data: Dunning procedures and the date of the last dunning notice, reconciliation account, grouping, tax data Sales Data: Order processing, shipping, and billing data The Customer Account Groups can be created as per the requirement. Editing & Blocking & Deleting Customer Master Data Editing The account group cannot be edited The account assignment cannot be edited Blocking A customer account […]
Account Group in Accounts Receivable component of Finance Module plays important role as far as Customer Masters are concerned. Background Each master record has a unique number assigned to it. This number is needed identify the customer and also to call up the master record or to post transactions. This number plays very important role and has lot of significance. Importance Now when we have understood the importance of customer numbering, we must also accept the fact that in practical scenario the business can have multiple types of customers. For e.g. Domestic Customers, Export Customers etc. With the different nature of customers, it becomes important to provide different number range for both the customers. Use The Account Groups are used to determine: Interval for the account numbers Whether the number is assigned internally by the system or externally by the user (type of number assignment) Whether it is a one-time account Which fields will be displayed, editable, suppressed or mandatory while creating/changing Customer Master Data The configuration for Customer Account Group is divided into: Definition Number Range Maintenance Assignment of Number Range Definition IMG Path Financial Accounting (New) > Accounts Receivable and Accounts Payable > Customer Accounts > Master Data > Preparations for Creating Customer […]
The term field status appears in many configurations. In case of Accounts receivable it works for the customer master data. When we speak about field status in accounts receivable we have to first understand what it means. Definition Field status in SAP parlance is a term which is used to control what fields would be available for users to work on a particular functionality. Once we have understood what a field status means, it becomes important to understand what options are available for field status Suppress The field does not appear on the screen Required Entry in the field is mandatory and system does not allow to process the transaction without entry in this field Optional Entry in the field is optional and data entry is not mandatory Display The field appears on the screen, but not available for entry Use Now we will go ahead and understand how this field status is relevant in Master data of Accounts Receivable component. The field status in master data controls what fields will be available for users when they create a customer master data. Features Reduces the appearing of unwanted fields during master creation Helps user to concentrate on the essential data […]
Payment term is a part of accounts receivable component that helps you keep track of your receivables more effectively. They play a vital role in identifying the exact receivable amounts as on a particular date Background Any business operates as you very well know on revenue. The revenue is what helps any business grow and prosper exponentially. Inability to grow revenue hampers business. This must be true, but apart from revenue, there is one more thing that is as important as revenue for any business, COLLECTION. It means, it is not just important to sell any product, but also to recover money from the customer.The business, everyday, lures its customers by throwing many offers / schemes for buying more and more, but if the money is not collected against this sale, then the business may face a big cash crunch. Hence, it becomes utmost important to get money from customers in time and Payment terms help us in this matter. Definition A payment term is a key that contains configuration regarding calculation of date on which payment becomes due from the customer based on certain prerequisites. The payment term calculates something called net due date which is nothing but the […]
Untitled Document In Accounts Receivable components we can assign G/L Accounts for many transactions. Today we will discuss about following: Accounts for Cash Discount Granted Accounts for Exchange Rate Differences Accounts for Bank Charges Accounts for Cash Discount Granted Definition Cash Discount is a special type of discount which is offered to customers for paying before net due date. This is a techique employed by many businesses to recover money earlier and avoid cash crunch. The percentage of cash discount depends on the number of days payment is made before the net due date. This percentage can be maintained in Payment Terms along with the number of days. When we configure any percentage of cash discount in payment term, the amount of cash discount is deducted from the amount receivable and debited to the expense account. This account is to be maintained in the configuration which we are about to discuss. Implementation Consideration IMG Path: Financial Accounting (New) > Accounts Receivable and Accounts Payable > Business Transactions > Incoming Payments > Incoming Payments Global Settings > Define Accounts for Cash Discount Granted After clicking on the above, system will ask us to enter the Chart of Accounts. After entering the COA, enter the G/L Account which […]
What is an Operating Concern? An Operating Concern represents a part of organization for which the sales market is structured in a uniform manner. It is an organization unit in accounting which structures an enterprise from the Profitability Analysis point of view. It is the basic configuration required in SAP for Profitability Analysis tool of Controlling module. Without Operating Concern we can not have Profitability Analysis available in SAP. What does it help us with? In order to understand Operating Concern better, we need to know what is Profitability Analysis (PA), PA which is also known as CO-PA i.e. Controlling Profitability Analysis, is a very important tool provided by SAP for the top management to have a bird’s eye view of their business. Before we move further, lets first try to analyse what management may require to decide on further course of action for e.g. Sale of a particular product in a particular region for the quarter Margin in a business vertical and the break-up of cost, this helps to identify the type of cost to optimise Performance of a particular SBU in terms of plan v/s. actuals over the last 3 years Year to Date apple to apple comparison of top 100 SKUs so […]
Definition A Chart of Accounts represents set of General Ledger (G/L) Accounts in SAP. SAP provides country specific Chart of Accounts in standard configuration. These standard COA’s should be considered while creating your new Chart of Accounts. Importance As we are aware the G/L Accounts are the backbone of any accounting system. They are the medium for recording all the transactions to be posted. We can’t even imagine about booking any transactions without G/L Accounts. This is the reason why the COA which carries enterprise structure level configuration of G/L accounts, becomes very important in SAP. Hence, it is imperative to define appropriate structure for Chart of Account from the beginning of a project. Considering above facts about COA, utmost care should be exercised during finalisation of Chart of Accounts. Implementation Consideration Creating Chart of Accounts IMG Path Financial Accounting (New) > General Ledger Accounting (New) > Master Data > G/L Accounts > Preparations > Edit Chart of Accounts List While creation of Chart of Accounts, following fields need to be configured carefully Description Enter appropriate Description of your Chart of Accounts. This description will be displayed whenever we opt for search option. Maint. Language The Maintenance Language is mostly EN i.e. English. Length of G/L […]
Account groups Definition Account Groups play an important role in G/L Account numbering and structuring. The Account Groups are groups of G/L Accounts where we can assign Number Range to the G/L Accounts. Account Groups are one more important part of Chart of Account which acts as a separator between various types of G/L Accounts. This helps us differentiate the G/L accounts according to their nature. Account Groups are created considering the nature of G/L Accounts. Following are the majorly used categories for account groups: Liabilities Assets Income Expenses Purchase Accounting The numbering of Account Groups should be designed carefully based on client requirement. A detailed discussion should be made before finalising the number ranges for Account Groups. Further it is better to ensure enough availability of number range for General Ledgers in future. Run through the images of sample Account Group, the will be helpful for you to understand the numbering logic for Account Groups: Account Group – 1 Account Group – 1
Definition In Financial Accounting the financial statements can be drawn monthly, quarterly, semi annually or annually. The financial statements are drawn after various adjustments, provisions etc. In order to ensure that the financial statements drawn are same though it is essential to restrict any posting of documents in the period for which statements are done. SAP has provided a special provision in the form of Posting Period Variant. The purpose of Posting Period Variant is to restrict the posting of documents to appropriate period. Implementation consideration Defining of Posting Period Variant IMG Path: Financial Accounting (New) > Financial Accounting Global Settings (New) > Ledgers > Fiscal Year and Posting Periods > Posting Periods > Define Variants for Open Posting Periods Assignment to Company Code IMG Path: Financial Accounting (New) > Financial Accounting Global Settings (New) > Ledgers > Fiscal Year and Posting Periods > Posting Periods > Assign Variants to Company Code Info ahead Posting Period Variant can be centralized or deccentralised Centralised assignment of Posting Period to Company Code is done when the periods for all the company codes are to be closed together and posting periods do not differ for various company codes. Decentralised assignment is done when periods […]
Document splitting is a feature introduced by SAP in New G/L Accounting. This feature was introduced to do away with the users’ requirement to transfer the balances of Balance Sheet items at period ends. Document Splitting automatically splits the line items based on the dimensions configured or to effect zero balance setting. It creates additional lines for the same. Given below is the list of dimensions that can be set for splitting: Segments Profit Centres Business Areas The document splitting helps in drawing financial statements at above dimensions on real time basis. For e.g. the Balance Sheet can be drawn at Business Area level, which may be one of the requirement of Management. Implementation Consideration The functionality of Document Splitting needs following assignments/configurations Step I Specifying the characteristics for which splitting is to be performed IMG Path: Financial Accounting (New)>General Ledger Accounting (New)>Business Transactions>Document Splitting > Define Document Splitting Characteristics for General Ledger Accounting This is the first and most important step in document splitting. In this step we define the characteristics for which document splitting needs to be done. Here we have to define the following Fields Business Area/Profit Centre/Segment Zero Balance Activating this indicator will check the transactions […]
Continued from Part I Step VI IMG Path: Financial Accounting (New)>General Ledger Accounting (New)>Business Transactions>Extended Document Splitting>Define Document Splitting Method In this activity we create document splitting method. This method determines how individual item categories are dealt with. Standard methods provided by SAP are generally sufficient. Step VII IMG Path: Financial Accounting (New)>General Ledger Accounting (New)>Business Transactions>Extended Document Splitting>Define Document Splitting Rule This is a very important setting to understand. Here we assign the item categories to the combination of Document Splitting Method, Transaction and Variant. This setting works in two parts, Item Categories to be edited and base item categories. Item categories to be edited are the item categories (G/L Accounts) which do not have the account assignment object (Profit Centre/Business Area) and depend on the item categories (G/L Accounts) assigned under Base Item Categories. Base Item Categories are the items in the item categories (G/L Accounts) which have account assignment object (Profit Centre/Business Area) and they pass it to the item categories to be edited. For e.g. the combination of Splitting Method “0000000012” Business Transaction “0300” and Transaction Variant “0001” i.e. Vendor Payment have following Item Categories that can be edited: 01100 Company Code Clearing 01100 Company Code Clearing […]
The G/L Account Master data is divided into following two parts: Chart of Accounts Data This part contains information about G/L Account that will not change from company code to company code and will be constant for all. Company Code Data This part contains information about G/L Account that will be relevant to Company Code. This can be maintained separately for every company code after extension of G/L Account. Note: Refer Chart of Accounts 1 & Chart of Accounts 2 before starting on G/L Account Master Data The Chart of Accounts data includes: Account Number Enter the appropriate G/L Account number as per numbering maintained for Account Groups. Account Group Select the appropriate Account Group from drop down list available. Nature of Account Select if this is Profit & Loss or Balance Sheet Account Short Text Maintain short text for the G/L Account. Please maintain some logical text here as many reports show this text against the G/L account number. Long Text Enter complete description of the G/L account. The Company Code data includes: The Account Currency G/L account will be posted with currency assigned in master data only. In case of G/L with foreign currency will be posted in […]
This feature is available in New G/L Accounting in SAP Financials. In General Ledger Accounting, you can perform parallel accounting by running several parallel ledgers (general ledgers) for different accounting principles. During posting, you can post data to all ledgers, to a specified or to a single ledger This feature helps to maintain different sets of ledgers in one Company Code. This feature becomes very useful when financial reporting is to be done with different accounting standards. SAP recommends that you implement this parallel ledger approach if the number of general ledger accounts would be unmanageable for the scenario using additional accounts.Advantages You manage a separate ledger for each accounting principle. You can use standard reporting for the leading ledger and all other parallel ledgers. With this solution scenario, you can portray different fiscal year variants. The number of general ledger accounts is manageable. Disadvantages The use of parallel ledgers increases the volume of data. Before we proceed further on the parallel ledger accounting, we must first understand certain terminologies involved in parallel accounting: Leading Ledger The leading ledger is based on the same accounting principle as that of the consolidated financial statement. It is integrated with all subsidiary ledgers and is […]
Definition Document Type is a key that distinguishes the business transactions to be posted. The document type determines where the document is stored and specifies the account types to be posted. Document Types are codes created in SAP to differentiate transactions into categorise. They help us in many places not just to identify the transaction but to control them through various settings available under configuration. Use It allows you to differentiate between the business transactions to be posted. The document type tells you what sort of a business transaction it is. This is useful, for example, when displaying line items for an account. The assignment of document types to business transaction variants is of central importance in document splitting (see Making Settings for Document Splitting ). It allows you to control how postings are made to account types (vendor, customer, or G/L accounts). The document type determines the account types to which postings can be made with that document type. It allows you to assign document numbers. A number range is assigned to every document type. The numbers for the documents you create are taken from this number range. The original documents from one number range should be stored together. […]
This is first part of the series of posts discussing the FI-MM Integration where automatic determination of G/L accounts (for Material Management) is maintained in the system. Definition When we speak about SAP, we must also talk about integration as we all are familiar with the integrated nature of SAP. Hence, today we will discuss about the integration of Material Management (MM) with Finance (FI) module. In order to understand the integration, we first need to find answers of some questions: A) What are automatic postings in MM-FI Integration? Postings are made to G/L accounts automatically in the case of Invoice Verification and Inventory Management transactions relevant to Financial and Cost Accounting. Example: Posting lines are created in the following accounts in the case of a goods issue for a cost center: o Stock account o Consumption account B) How does the system find the relevant accounts? When entering the goods movement, the user does not have to enter a G/L account, since the ERP system automatically finds the accounts to which postings are to be made using the following data: Chart of accounts of the company code If the user enters a company code or a plant when […]
Definition The company code is an organizational unit used in accounting. It is used to structure the business organization from a financial accounting perspective. The company code represents a legal entity for financial reporting purposes. This means that in all the financial transactions and master data definitions the company code must be identified. Importance Company Code plays a very vital role in SAP Finance. It is the backbone of all the accounting. It works as the central organisational unit in the whole accounting. Implementation Consideration SAP has provided country specific templates for using in creating Company Codes. Using Transaction Code EC01 the templates can be used to create new Company Codes. Tips The Company Code is four digit number. Please use all the four digits i.e. you may use numbering like below: 1000 Company code A in India 1100 Company Code B in India 2000 Company code C in UK 2100 Company Code D in UK 3000 Company Code E in USA 3100 Company Code F in USA The numbering should be decided after considering the facts like geographical location etc. In the above example I have use series of number as below: Starting with 1 for all company codes in India Starting with 2 for all […]
Accounting all over the world are done and reported for a specific period. This period of accounting and reporting financial statements is known as Financial Year or Fiscal Year. The fiscal year may differ from country to country as per the prevailing rules and regulations. Given below is the list of some fiscal years: January to December April to March July to June Every fiscal year has 12 months, these months are called Periods in SAP. Definition Fiscal Year Variant is the code that contains the number of posting periods in a fiscal year and number of special periods. This is required to be assigned to Company Code and Controlling Area. IMG Path: Financial Accounting (New) > Financial Accounting Global Settings (New) > Ledgers > Fiscal Year and Posting Periods > Maintain Fiscal Year Variant (Maintain Shortened Fisc. Year) Assignment The fiscal year variant is to be assigned to the Company Code IMG Path: Financial Accounting (New) > Financial Accounting Global Settings (New) > Ledgers > Fiscal Year and Posting Periods > Assign Company Code to a Fiscal Year Variant Background Before we proceed to creation of Fiscal Year Variant, it is important to understand certain SAP terminologies related to […]