SAP Financial Accounting (FI)

Mamunur Rahman,
Rahman CISA,
CISA EEE
Audit Lead Technology
Airtel
Email: mrahman2k4@yahoo.com; mamunur.rahman@bd.airtel.com
Cell: 01610006106, 01711007213
Version: 3.0
Last Updated: 2-Mar-2011

SAP Major Certification Areas for ERP

Procurement
(MM)

Production Planning
& Control (PP)

Sales &
Distribution (SD)

TSCM 50, 52

TSCM 40, 42

TSCM 60, 62

Financial Accounting (FI)

Financial Accounting : TFIN 50, 52

Management Accounting / Controlling (CO)

Management
g
Accounting
g : TFIN 20,, 22

How Participants are Benefited thru FI Knowledge

9 Finance Professionals
9 Knowledgeable & skilled staff
9 Know various options available in the system how the Financial processes
may be implemented
9 Preferred in recruitment in Finance streams

9 Auditors
9 Get a clear insight of the systems, processes & data
9 Know the control points and controls in the system
9 Know in advance clearly how data are processed & reported; what may go
wrong at which point

9 IT Professionals
9 Get a strong path into SAP-jobs
9 Get a very good exposure into business processes
9 Understand the objectives of the underlying technologies & BASIS

9 SAP Functional Consultants and enterpreneurs

9 Get the skill & understanding of the Core of SAP
9 Understand where to integrate other modules of SAP

9 Career Seekers
9 Get a very good job-opportunity in related fields
9 Understand various options/paths of career in the enterprises

Methodology

We would conduct the training as

9
9
9
9

PPT Slides, where necessary

Using a Model Company to understand the course better
Practising the Topics in an SAP system (IDES version)
Open Discussion to explain things better

SAP

Stepping into Day

Day-1
1 Contents

Introduction to SAP-FI and Org. Units

Topics to cover
9
9
9
9

Introduction to ERP (FICO & SCM)

Organization of SAP ERP Modules
Adopting a Model Organization to Explain SAP Features
FI Organizational Units

Part-1: Business Organization and Accommodation in SAP

Assumptions

Participants have moderate:

9 knowledge on financial accounting &

9 Skills on financial reporting

Concept Check : Basic Accounting Equation

The Accounting Equation,

Assets (A) = Liabilities (L) + Owners
Owners Equity (C)
A = L + C, [where C = I E + Cp]
A = L + I E + Cp
A + E = L + I + Cp
For simplicity,
A+E=L+I+C
Debit

Credit

Day-1: Introduction to SAP and a Case Study [Part-1]

Concept Check : T-Accounts

Debit

Credit

GL Head which will be debited 50,000.00 ...0.00

GL Head which will be credited...0.00 . 50,000.00

Or, simply,

Debit

Credit

GL Head which will be debited 50,000.00

GL Head which will be credited .............50,000.00

Day-1: Introduction to SAP and a Case Study [Part-1]

Concept Check : Accounting Journal

Journal No. ..
Date..................
Classification ..
Narration

..
.

GL Head

GL Description

Debit, Tk.

GL Head-1

Paper price

GL Head
Head-2
2

Freight-in
Freight
in

5 000/5,000/

GL Head-3

Labor charge

1,000/-

GL Head-4

Petty Cash

Credit,
Tk.

50,000/-

56,000/-

Extended
Fields

Concept Check : Trial Balance

Concept Check : Income Statement (P&L Account)

Concept Check : Balance Sheet

Concept Check : Cash Flow

Concept Check : Changes in Owners Equity

SAP

Overview of SAP

SAP Evolution
Recent Evolutions in SAP:
Builds on R/3
SAP R/3 Enterprise 4.7

mySAP ERP

2002

2003
I t d
Introduces
NetWeaver
N tW
Platform
Pl tf

SAP ECC 5.0

SAP ECC 6.0

(ERP Central Component)

2005

2004
R/3 is replaced by ECC

Organization of SAP ERP Modules

SD
Sales &
Distribution
MM
Materials
Mgmt.

PP
Production
Planning

FI
Financial
Accounting
CO
Controlling
AM
Fixed Assets
Mgmt.

R/3

PS
Project
OC System
Office &
CommuniC
Communi
iIS cation
Industry
Solutions

Client / Server
ABAP/4

QM
Quality
Mgmt. PM
Plant
M i t
Maintenance
HR
Human
Resources

Major SAP Modules

SD Sales & Distribution
MM Materials Management
PP Production Planning
PM Plant Maintenance
QM Quality Management
AM Asset Management
PS Project System
FI Financial Accounting
CO Controlling
HR Human Resources
WF Work Flow

Financial Modules

EC
Enterprise Controlling

TR

FI

CO

Treasury

Financial Accounting

Controlling

TM
CM
FM

Treasury
Management

Cash
Management

Funds
Management

GL

General
L d
Ledger

AP

Accounts
Payable

AR

Accounts
Receivable

AA

Asset
Accounting

CCA

Cost Center
Accounting

PC

Product
Costing

PA

Profitability
Analysis

IM Capital Investment & Financing

SAP

Enterprise Structure
- FI Organizational Units

Organizational Units in FI

9 Company
9 Company Code
9Business Area
9 Functional Area
9Credit Control Area
9 Dunning Area
9 Financial Management Area

Enterprise Structure

An enterprise can consist of several legally independent companies, for which

you need to create individual financial statements at the end of the year
year.

Enterprise Structure Mapping to SAP

z Client

Group
Company

z Company code

Affiliate

Site
z Plant

Factory
Sales department
Wholesale
Product line
Storage location

Product line

z Sales organization
Retail

z Distribution channel
channel
z Division
z Storage location

Client & Company

Client:
A commercially, organizationally, and technically self-contained unit within an SAP
System. Clients have their own master records and set of tables.

Company:
The smallest organizational unit for which individual financial statements are
created according to the relevant legal requirements, e.g., Sanofi Aventis, Novartis,
Avery Dennison, etc, enlisted under US SEC. It can include many individual
company codes (CC), e.g., Novartis BD, Novartis IN, Novartis PK, etc.

Company Code (CC)

CC is the smallest organizational unit of external accounting for which a complete,

self contained set of accounts can be created.
self-contained
created It is the central organizational unit
in FI. It is usually a legally independent company.
A CC could also be a separate, but not independent, commercial place of work,
e g offshore plants
e.g.,
plants, etc
etc. Sanofi Aventis Bangladesh Ltd is a CC.
CC Sanofi Aventis
Lanka is another CC.

Plant (Factory)

The plant is an operating area or branch within a company. A plant has its own
material master data. You can maintain data at plant level for the following views
on a material master record in particular: MRP, Purchasing, Storage, Work
scheduling, Production resources/tools, Forecasting, Quality management, Sales,
Costing.

Business Area
Corresponds to a specific
business segment or area of
responsibility in a company.
Business areas are used in
external segment reporting
(over and above company
codes), based on the significant
areas of operation of a company
(e.g., product lines, branches,
etc).
Financial statements can be
created for business areas for
internal purposes. SBUs may be
implemented as BAs.

Managerial Grouping
Financial Management Area:
It is an organizational unit within accounting which structures the business
organization
i ti from
f
the
th perspective
ti off Cash
C h Budget
B d t Management
M
t and
d Funds
F d
Management.

Functional Area:
A functional area is an organizational unit within accounting which structures your
business organization according to the requirements of cost-of-sales accounting.
Typical functional areas are Sales, Production, Marketing, Admin and R&D.

Credit Control Area:

It is an organizational
g
unit that specifies
p
and checks a credit limit for customers.
Within a credit control area, the credit limits must be specified in the same
currency.

Profit Center [Master Data in CO]

It is a management-oriented organizational unit used for internal controlling

purposes to determine profit for internal areas of responsibility. It lets us
determine profits and losses using either period accounting or the cost-of-sales
approach.

Cost Center [Master Data in CO]

An organizational unit within a controlling area that represents a defined location

of cost incurrence. E.g., Production, Service, Administration, Sales & Distribution,
etc. It is used to track where costs occurred within the Organisation (i.e., as a cost
collector)
*) A profit center differs from a cost center in that the cost centers merely
represent the units in which capacity costs arise, whereas the person in charge of
the profit center is responsible for its balance of costs and revenues.
*) The essential difference between a profit center and a business area is that profit
centers are used for internal control, while business areas are more geared toward
an external viewpoint.

Mapping Enterprise Structure to SAP

Mapping the organizational units to the R/3 organizational units could look like this, for
example:

SAP

SAP Document Structure

A Sample Document

Doc
Header
Line
Item

Posting Key & Transaction Code

Posting Key:
It works at the doc line item level. Posting keys serve three main functions in
SAP accounting:
ti
a. Controls which type of account the line item will be posted to.
posted as a debit or a credit.
b. Control whether the line item will be p
c. Lastly, helps in determining field statuses for additional details.
Default posting key values:
*) GL - "Debit" is posting key 40 and "Credit" is posting key 50.
*) Customer Invoices - "Debit" is posting key 01 and "Credit" is posting key 50.
*) Vendor Invoices - "Debit" is posting key 40 and "Credit" is posting key 31.

Transaction Code:
It is the short-cut to access a particular screen in SAP. For example, FB50 is the
Tcode for journal entry screen (transaction)
(transaction). In SAP
SAP, a transaction is a user
userinterface (screen) through which documents are entered or manipulated.

Fiscal Year
Fiscal Year Variant:
It is the object in which we define our fiscal year policy in SAP. A FY is an
accounting period over which financial reporting is mandatorily done. A FY consist
of several interim p
periods,, called Posting
g Periods. A FY usually
y includes 12 posting
p
g
periods and at least one special period.

FY Types:
a. FY same as CY, e.g., year 2009 as defined in calendar
b. FY dependent on CY & different than CY, e.g., FY only valid for
2009,2010
c. FY independent
i d
d t off CY & different
diff
t than
th CY,
CY e.g., Apr
A 01 Mar
M 31 with
ith
same period ranges
Posting
g Periods:
Used to post regular transactions during the year. These are usually months.

Special Periods:
Used for entries required after closing the year. Max 4 special periods are possible.

FY same as Calendar Year

The fiscal year begins on January 1.
Twelve posting periods are available.
The periods correspond to calendar months. You do not have to define the
individual periods. The system automatically uses the calendar months.

Year-Independent FY
The fiscal year begins on April 01 every time, for example.
It is not same as calendar year, i.e., Jan-Dec; rather Apr-Mar, for example.

Year-independent FY (period diff. than calendar months)

Year-dependent FY
It is valid for specific calendar years.
It does not begin & end on specific days of the calendar year every time .
It is the only solution when we want to have strictly 30 days for every month, for
example.
In FY 2009: Period-1 starts on Jan 01, 2009
In FY 2010: Period-1 starts on Dec 28, 2009

2009
Period

10

11

12

End
E
d off
Period

1/30

3/01

3/31

4/30

5/30

6/29

7/29

8/28

9/27

10/26

11/26

12/27

Year
Displ.

SAP

A Model Company for Practice

MR Batteries BD Ltd
Ltd.

Model Company MR Batteries BD Limited

For master data, please refer to

supplementary data sheets.

Introduction to SAP-FI
Hope that you enjoyed the class.

End of Day-1
Thank you
y

Day-1: Introduction to SAP and a Case Study [Part-1]