Doc. No.

197/120/MS/105/00

Systems, Applications & Products

in Data Processing

FI/CO Module Overview

AGENDA

Accounting along with Integration Business Process Overview FI/CO Organisational Structure Briefing about the Sub-modules of FI-CO module

Accounting Integration
Accounting Alongwith Integration

Accounting Procurement Inventory Production Sales

Vendor

Customer

Controlling

Production Cost

Profitability 4

Integration Entries in Finance

At the time of Procurement Inventory A/c Dr. Gr/Ir Clearing A/c Cr. At the time of Invoice Verification Gr/Ir Clearing a/c Dr. Vendor Account Cr. At the time of Sales invoice Customer A/c Dr. Sales A/c Cr.

Business Elements

Business Scenarios: Main Elements

Organizational Unit Master Data Transaction/Activity Document

Report
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Data Within R/3

Accounting Data Within R/3

Master Records
2999

Records that remain in the system for an extended period of time.

2000 1999 1998

G/L G/L Customer Master Records Accounts Customer Master Records Accounts Vendor Master Records Vendor Master Records Bank Master Records Bank Master Records Asset Masters Asset Masters Profit Centers Profit Centers Cost Centers Cost Profitability segments Profitability segments Centers Internal Orders Internal Orders

Transaction Records
Journal Journal Invoice Entries Invoice Entries Payments s Payments s
1998

Records with a limited life within R/3.

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External and Internal Accounting

SAP Accounting: External/Internal

External Reporting External Accounting
Balance sheet Profit & Loss (P/L) Liquidity calcuation Retained earnings report

Internal Reporting Internal Accounting

Product costs reports

Cost center reports Profit center reports Profit margin

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Organizational Structure

Client
Chart of Accounts
Controlling Area

Co Code 1000

Co Code 2000

Plant 1100

Plant 1200

Plant 2100

Plant 2200

Plant 2300

Chart of Accounts

Chart of Accounts
Operating Chart of Accounts Provides definition of valid G/L Account Master Records

Each company code has only ONE operating chart of accounts

Chart of Accounts

Company Code

Company Code

Company Code

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Company Code

The Company Code

A company code is an independent accounting entity (the smallest organizational unit for which a complete selfcontained set of accounts can be drawn up). An example is a company within a corporate group.

INDEPENDENT ACCOUNTING ENTITY

COMPANY CODE

Assets Liabilities Revenues Expenses Profit/ Loss

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Financial Accounting

Accounts Receivable Accounting FI-AR Accounts Payable Accounting FI-AP Asset Accounting FI-AA Sales

General Ledger

Product Costs Overhead Costs Profit Center

B/S

P&L

Purchasing

SAP R/3 FI - Accounting Applications

FI-GL General Ledger Accounting

FI Financial accounting Modules

FI-AR Accounts Receivable

FI-AP Accounts Payable

FI-AA Asset Accounting

G/L Master Record

GL Account master Data

Balancesheet Account Profit and Loss Account Currency Open item management Tax category Reconciliation Account Line item display

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Sub ledgers in Accounting

The Reconciliation Account and Subledgers

Customer 1 1,000 Customer 2 500

General ledger Reconciliation account: domestic receivables 1,000 500

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Features of GL Accounting

Features of General Ledger Accounting:

View and Analysis of General Ledger Accounts Periodic Processing Activities. External Reporting Options

Accounts Receivable

SD

Incoming Orders

SD
Delivery

CO

Invoicing

CO

Payment Transactions Dunning

Customer Master Record

General Data - Name, Address, Tel no. Company code data Reconciliation Account Payment Terms Dunning Procedure Correspondence

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Features of Accounts Receivable

Features of Accounts Receivable

Integration with Sales & Distribution Importance of Special GL transaction features Significance of Reporting , Correspondence, interest calculations & Dunning..

Accounts Payable

MM

Purchase Order

MM

Goods Receipt

CO

Invoice Receipt/ Invoice Verification

CO

Payment Transactions Payment Program

Features of Accounts Payable

Features of Accounts Payable

Integration with Materials Management Importance of Special GL transaction features Features of Bank Payments Significance of Reporting , Correspondence, interest calculations

Asset Accounting

Asset Accounting
Assets
House Forklift

Asset Class

Chart of DeprecChart of DeprecDepreciation 1 < Land > iation 1 < Land > Trade Law Trade Law Taxation Law Taxation Law Costing Costing

Company Code

Building Vehicles

Controlling Area Company Code 1000

Asset: Forklift

Cost center Order

Vehicles

Cost Center Vehicles Depreciation Actual Plan

Trade law Taxation law Costing Interest

Order Actual Plan

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Features of Asset Accounting

Features of Asset Accounting: Integration with GL accounts Methods of Asset Acquisition Process Depreciation calculation Methods Other transactions like Retirements, Transfers,etc. Significance of Reporting

Taxes

TAXES: Income Tax Deducted at Source

Indirect Taxes (Integrated with MM & SD modules) Input Output

Reports In Financial Accounting

General Ledger Reports as on key dates / period / year Customers balance outstanding on key dates with arrears in days Vendors balance outstanding on key dates with arrears in days

Assets balances and depreciation forecast for the period

Controlling

Cost element accounting Cost Center Accounting Internal order Profit Center Accounting Product cost controlling Profitability analysis

Controlling Area

The Controlling Area

A controlling area identifies an independent organizational structure for which costs and revenues are collected. Each controlling area can have one or more company codes assigned to it (see below).

CONTROLLING AREA 1

CONTROLLING AREA 3

COMPANY CODE 1

COMPANY CODE 3

CONTROLLING AREA 2

COMPANY CODE 4

COMPANY CODE 2

COMPANY CODE 5

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Hierarchies

Hierarchies
One main hierarchy reflects the overall structure of a companys profit and cost center management, and is mandatory. This is called the standard hierarchy within R/3. Different perspectives on profit and cost center structures can be created using alternative hierarchies for reporting, planning and allocation purposes.
Standard Cost Center Hierarchy Standard Profit Center Hierarchy

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Cost Elements

Cost Elements within R/3

A cost element is used to classify and assign values to the consumption of productive resources.

FI uses G/L accounts to classify resources

CO uses cost elements to classify resources

General Ledger Account General Ledger Account Travel Expense #430000 Travel Expense #430000

Cost Element Travel Expense #430000

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Primary Cost Element

Primary Cost Elements

There are two types of cost elements, primary and secondary.

Primary cost elements are created within Controlling, but first must exist in the FI Chart of Accounts.

Controlling Area

Primary Cost Element Travel Expense #430000

General Ledger Account Travel Expense #430000

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Secondary Cost Element

Secondary Cost Elements

Secondary cost elements exist only in Controlling to facilitate internal cost movements, such as allocations.

Controlling Area
Cost Center A Secondary Account 635000 Cost Center B Secondary Account 635000

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Cost Center

The Cost Center

Cost centers are organizational units that collect the costs arising within areas of responsibility.

Purchasing

Administration

Manufacturing

Marketing

Finance

Catering

Graphic arts

Public Relations

Sales

Sourcing

Inventory

Cafeteria

Snack bar

Design

Printing

Public Relations

Sales

Cost centers
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Internal Order

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Product Cost Controlling

Material Cost from - BOM Activity prices - Resources (with combination of Cost centers) (Setup time, man hours, machine hours) - On percentage

Overheads

Period end activities - controlling

WIP Calculation Order Settlement Variance Calculation

Standard Cost estimates

Price Updates into material master

Profit Center

Profit Centers can be product groups / Geographical hierarchy / functions Management oriented Organization unit For internal reporting and better control Profit and loss A/c and Balance sheet can be drawn Postings through other modules and direct.

Profit Center

The Profit Center

Profit centers collect revenues, and costs from the cost centers for which they are responsible. Cost centers collect costs, but do not contain revenues, except statistically.

Profit center

Revenue

Marketing Marketing

= Costs
Public Public Relations Relations Sales and Sales and Distribution Distribution

Profit

Cost centers
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Profitability Analysis

Profitability Analysis Is a tool to identify profits Through PA we can define Characteristics like Sales office, division, product, business area etc. Can analyze each condition in PA through value fields At the time of each billing document releases to accounting Profitability document generated Reconciliation is possible for accounts and profitability analysis through value fields.

QUESTIONS???

ITS TIME FOR DISCUSSION..

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