SAP business planning & consolidation

overview
31st July, 2015

Agenda

Key financial terms

Financial statements
SAP BPC objects
Business planning process in BPC
Financial consolidation in BPC

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SAP Business Planning and Consolidation Overview

Key financial terms

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SAP Business Planning and Consolidation Overview

General ledger

Complete record of all business transactions of a company, and is used to aggregate

information into the financial statements of the company.

Comprised of all the individual accounts (represented by GL codes) needed to record

the assets, liabilities, equity, revenue, expense, gain, and loss transactions of a
business

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SAP Business Planning and Consolidation Overview

Legal entity

An organizational unit for which financial statements must be created.

Example of Legal entities structure

ABC Tech
INDIA

ABC
UK

ABC
UAE

ABC
Germa
ny

ABC
Canada

ABC
Service
s Ltd,
India

AB
C
BV,
NL

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Proyec
ta

ABC
Ins.
Tech
UK

ABC AG
Switzerl
and

ABC
Media
Tech.
JV
60%
Own

ABC
Singap
ore

ABC
USA

NSS
India

ABC
Healthcar
e
Technolog
ies Inc.

ABC
Japan

ABC
Austral
ia

SAP Business Planning and Consolidation Overview

ABC
GIS
India

ABC
Manila
Branch
HK
Branch

Types of accounts

Assets
Items of value owned by a company (ex: Cash, Inventory, etc.)

Liabilities
Obligations of the company to transfer something of value (an asset ) to another party; Acts as a
source of fund for the company (ex: Loans, Bonds, etc)

Equity
Owner's value in an asset or group of assets. Value of the assets contributed by the owners

Equity = Assets - Liabilities

(Also known as Net Worth, Capital & Shareholders Equity)

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SAP Business Planning and Consolidation Overview

Types of accounts

Revenue
Money the company earns from its sales of products or services, and interest and dividends
earned from marketable securities

Expenses
Money the company spends to produce the goods or services that it sells (e.g. office supplies,
utilities, advertising)

Profit (or Loss) = Revenue Expenses

(Also known as Net Income and Bottom Line)

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SAP Business Planning and Consolidation Overview

Debit (Dr) / Credit (Cr) entries

Debits and Credits are entries made in account ledgers to record changes in value resulting from
business transactions.

A debit is an accounting entry that either increases an asset or expense account, or decreases a
liability or equity account. It is positioned to the left in an accounting entry.

A credit is an accounting entry that either increases a liability or equity account, or decreases an
asset or expense account.

Example : The owner brings cash from his personal account into the business
Cash (an asset) is increased thus debit Cash
Owner capital (an equity) is increased thus credit Owners' Capital

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SAP Business Planning and Consolidation Overview

Trial balance

Report run at the end of an accounting period, listing the ending balance in each account

Primarily used to ensure that the total of all debits equals the total of all credits

Acts as the first step in the preparation of financial statements. It is a working paper that
accountants use as a basis while preparing financial statements.

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SAP Business Planning and Consolidation Overview

Financial statements

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SAP Business Planning and Consolidation Overview

Balance sheet

A statement of the assets, liabilities, and capital of a business or other organization at a particular
point in time

Also known as statement of financial position

Gives the snapshot of a companys financial condition

A standard company balance sheet has three parts: assets, liabilities, and equity

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SAP Business Planning and Consolidation Overview

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SAP Business Planning and Consolidation Overview

Income (P&L) statement

A financial statement that summarizes the revenues, costs and expenses incurred during a specific
period of time - usually a fiscal quarter or year.

Also known as statement of financial performance or statement of operations;

Shows managers and investors whether the company made or lost money during the period being
reported.

A standard company income statement is divided into two parts : income & expenses

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SAP Business Planning and Consolidation Overview

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SAP Business Planning and Consolidation Overview

Cash flow statement

A statement that provides aggregate data regarding all cash inflows a company receives from both
its ongoing operations and external investment sources, as well as all cash outflows that pay for
business activities and investments during a given period

Also known as statement of cash flows and is concerned with the flow of cash in and out of the
business

Shows how changes in balance sheet accounts and income affect cash and cash equivalents, and
breaks the analysis down to operating, investing and financing activities

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SAP Business Planning and Consolidation Overview

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SAP Business Planning and Consolidation Overview

Schedule VI reports

Designed by Ministry of Corporate Affairs; Applicable for all Balance Sheet made after 31st March,
2011

Amalgamation of Balance Sheet, P&L Statement, Cash Flow Statement and various notes to
accounts required to support the numbers in these financial statements

Usually published at the end of financial year by every listed company while declaring their year end
results

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SAP Business Planning and Consolidation Overview

SAP BPC objects

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SAP Business Planning and Consolidation Overview

Environment

Starting point to build models in SAP BPC

Group of models; Set of dimensions that may be shared amongst its models

Functional area designed to include the models associated with a business process
(Planning/Consolidation)

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SAP Business Planning and Consolidation Overview

Model

A functional unit used for a particular purpose

Example : A model for sales applications and another model for head-count planning.

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SAP Business Planning and Consolidation Overview

Dimensions

Dimensions represent the master, text, and hierarchy data for each of the business entities (e.g.,
accounts, company codes, and categories).
Are required for mapping the complete data from backend (usually ECC) in BPC cubes
Dimension properties

Provide additional meaning to the dimension

Example: an account dimension can include an account type property to indicate the type of
account (whether it is an income account or an expense account).

Can be used as selection/filter criteria while reporting

Dimension members

Each dimension member record represents master, text, and hierarchy data associated with
the key of a dimension.

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SAP Business Planning and Consolidation Overview

Rules

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SAP Business Planning and Consolidation Overview

Business planning process in BPC

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SAP Business Planning and Consolidation Overview

Planning across different lines of

business
Finance

Financial Planning

Financial Budgeting

Enterprise Strategy
Management
Profitability and Costing
Analysis

Human Capital

Compensation Planning

Strategic Workforce
Planning

Operations

Supply Network Planning

Production Planning and

Detailed Scheduling

Corporate
Strategy

Capital Expenditure
Planning
Maintenance
Budgeting

Investment Planning

Sales & Marketing

Sales Order Management

MRP/Resource Planning

Resources

Key Performance Indicators

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Trade Promotion
Management

Global ATP/CTP

Campaign Management

APO/NW BW

Trade Fund Management

SAP Business Planning and Consolidation Solution Overview

Business planning process

Opening Activities
Load previous year actuals data
Upload current rates
Perform Business Planning
Revenue Planning
Quantity planning
Rate Planning
Direct cost planning Linked to the quantity to be produced
Indirect/Operational cost(OPEX) not linked directly to the production
Capital expenditure planning (Capex)
Human resource expenses planning
Headcount planning opening balance, recruitment, attrition
Payroll cost planning
Currency Conversion
Generate Financial Statements

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Consolidation Tool s overview for Infosys

Planning process & BPC objects

Opening Activities
Load previous year actuals data
Upload current rates
Perform Business Planning
Revenue Planning
Quantity planning
Rate Planning
Direct cost planning Linked to the
quantity to be produced
Indirect/Operational cost(OPEX) not
linked directly to the production
Capital expenditure planning (Capex)
Human resource expenses planning
Headcount planning opening
balance, recruitment, attrition
Payroll cost planning
Currency Conversion
Generate Financial Statements

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Flat File Load / data extract from BW

In Rates Model; Flat File Load / Input
template

Presentation title

User input through Input templates

Perform calculations using logic
scripts / member formulas / BADIs

Currency Conversion Business Rule

EPM reports

Business planning activities affect on financial

statements

ABC Company
Statement of Profit & Loss
Revenues
Cost of Sales
Gross Margin

Expense
Planning
Module

$5,000
3,000
2,000

Module

Operating
400
Payroll
300
SG&A
250
Depreciation
50
Operating Profit
1,000

Operational
Headcount

S&OP
Planning
Module

Application

Interest Expense
Net Income

IT/ Project
Planning
Module

50
$950

Liquidity
Planning
application

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Sales
Planning

SAP Business Planning and Consolidation Solution Overview

B
Capital
Planning
Module

Financial consolidation

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SAP Business Planning and Consolidation Overview

Financial consolidation & reporting in a

business
Group Financial
Consolidation

Financial
Management
review

Data submission
to GROUP

rs
e
d
ol
h
areControlling

Sh
tive ent
u
ec em
x
E nag
Internal Audit
Ma

External
Financial
reporting
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/
s
r
o
dit ators
u
A gul
Re

Consolidations

E
NC
A
IN

GL
AR

Sales

ry
a
i
sid
b
Su A

Local Close
cycle
Presentation title

GL
AR

Sales

ry
a
i
sid
b
Su B2

Intercompan
y
Reconciliatio
n

Financial consolidation process

Opening Activities
Carry Forward Balance
Currency rates
Update Ownership
Data collection
Load SAP Data
Load non SAP Data
Input Notes to Account Data
Report Individual Schedule VI Financial statements
Group Level Activities
Run Currency conversion
Run Controls
Run Consolidation
Submit Journal Entries
Review, Finalize consolidation
Publish Final books of account

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SAP Business Planning and Consolidation Overview

Consolidation process & BPC objects

Opening Activities
Carry Forward Balance
Currency rates
Update Ownership
Data collection
Load SAP Data
Load non SAP Data
Input Notes to Account Data
Report Individual Schedule VI Financial
statements
Group Level Activities
Run Currency conversion
Run Controls
Run Consolidation
Submit Journal Entries
Review, Finalize consolidation
Publish Final books of account

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Carry Forward Business Rule

In Rates Model; Flat File Load / Input template
In Ownership Cube; Flat File Load & Ownership Manager
Flat File Load / data extract from BW
Flat File Load / Input Template
Input Template
EPM 10 reports
Currency Conversion business rule
Validations/Controls in Controls Monitor
Elimination Business rule; Through DMP or Consol Monitor
Journal Entries

Presentation title

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SAP Business Planning and Consolidation Overview

Thanks

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SAP Business Planning and Consolidation Overview