L20 Sapr3 Process2
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L20 Sapr3 Process2

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L20 Sapr3 Process2 L20 Sapr3 Process2 Presentation Transcript

  • Business Processes (FI/CO) and Organization Structure
  • Agenda
    • Obtain an Understanding of the Customer’s Key Business Processes
    • Define the Client’s Organization Structure in SAP based on those Business Processes
    • Define the Organizational Elements in SAP based on the Company’s Business Processes and Reporting Requirements
    • Document the Company’s SAP Organization Structure
    • Company’s Mission Statement
    • Markets
    • Customer Base
    • Products and Services
    • SAP Implementation Drivers
    Business Overview Integrated Business Process Review
    • What are the legal entities that constitute your business?
    • Do you produce legal financial statements for each one of these legal entites and do they have separate Federal Id Numbers?
    • Which one of these entities are true operating companies
    • Of these legal entities, which ones are Holding Companies?
    • How do these legal entities relate to each other?
    Legal Entity Structure Integrated Business Process Overview
  • Integrated Business Processes Overview Finance / Asset Management Procurement Logistics Planning Sales Logistics Production
  • Integrated Business Process Overview Sales Logistics Inventory Sourcing Delivery Billing Sales Order Processing Pre-Sales Activities Financial and Managerial Reporting and Analysis G/L COS / Inventory AR Invoice / GL Revenue Customer Payment FI SD
  • Integrated Business Process Overview Fore-cast Sales Oper Planning MPS MRP Order Settlement Costing Inventory Manufacturing Execution Capacity Financial and Managerial Reporting and Analysis Production
  • SD FI Integrated Business Process Overview Requirement for Goods / Services Purchase Order Goods Receipt Invoice Verification Financial and Managerial Reporting and Analysis Procurement G/L Inventory / GRIR G/L GRIR/ Expense AP Invoice Vendor Payment
  • ACCOUNTS RECEIVABLE ACCOUNTS PAYABLE ASSET MANAGEMENT COST CENTER ACCOUNTING (CCA) INTERNAL ORDER ACCOUNTING (OPA) PROJECT ACCOUNTING PRODUCT COSTING PROFIT CENTER ACCOUNTING (PCA) PROFITABILITY ANALYSIS (PA) FINANCIAL ACCOUNTING (FI / AM) FINANCIAL REPORTING (FI) MANAGEMENT REPORTING (CO) GENERAL LEDGER NATURAL ACCOUNT Finance Management /Accounting & Reporting SD MM
  • Organizational Structure Review 3000 US #1 02 Motorcycles 90 Accessories 3000 New York 4000 Seattle 3000 US Sales 02 Motorcycles 02 Motorcycles 90 Access. 03 Retail 90 Assess. Business Area Purchasing Organization Division/ Plant Distribution Channel Division Sales Organization Organizational Structure 3000 Motor Sports International, Inc US 4000 Motor Sports International, Inc Canada Motor Sports International
  • Motor Sports International The Client Organizational Elements -Client
  • Organizational Elements - Client
    • Highest Hierarchical Level in SAP(e.g. a corporation)
    • Can be Used to Differentiate between a Development, Quality Assurance, and Production System within R/3
    • All Areas of an Organization that are to be Integrated into the SAP R/3 Production System should be Included Under one Client
    Client Characteritics
  • Organizational Elements - Client (Cont.)
    • Common Set of Rules
      • Common Tables
      • Common Master Files
      • Common Data Bases
    • Standardized Data Across the Client
      • a vendor number and name is common across the client
      • a customer is common across the client
      • a general ledger number and description is common across the client
      • a material number and description is common across the client
    Client Characteritics
  • Motor Sports International 3000 Motor Sports International, Inc US (Company) 4000 Motor Sports International, Inc Canada (Company) Company Organizational Elements - FI
  • Organizational Elements - FI
    • Represents a legal/tax entity - Where do you legally represent the financial events of transacting business?
    • Arms Lenghts Transactions
    • Level of External Reporting or Legal Sets of Books
    Company
  • Organizational Elements - FI
    • A Company is Assigned to:
      • Credit Management Area to allow for either Centralized or Decentralized Credit Management(Credit Control Area)
      • Financial Management Area-Treasury
      • Departmental Accounting/Cost Center Area to allow for Centralized or Decentralized Departmental Reporting(Controlling Area)
    Company Assignment Considerations
  • Motor Sports International 3000 Motor Sports International, Inc US (Company) 4000 Motor Sports International, Inc Canada (Company) Business Area Organizational Elements - FI 02 Motorcycles (business area) 90 Accessories (business area)
  • Organizational Elements - FI
    • Subset of Companies
    • Used for Segment Reporting in Accordance to law
    • Represents a Separate Area of Operations or Responsibility within an Organization
    • Could be Shared Across Companies or Specific to a Single Company
    • Lowest Level within FI that an Internal Balance Sheet and Profit and Loss Statement can be Developed
    • Typically does not Have Shareholder Equity
    Business Area
  • Organizational Elements - FI
    • There are Three Chart of Accounts Concepts in SAP
      • Operating Chart of Accounts
      • Country Chart of Accounts
      • Group Chart of Accounts
    Chart of Accounts
  • Organizational Elements - FI
    • G/L Account Master Records Required in One or Several Company Codes
    • Postings are Made to these Accounts
    • Maximum of a 10 Digit Code
    • A company Must be Linked to One Operating Chart of Accounts
    • An Operating Chart of Accounts can be Linked to Many companies
    Operating Chart of Accounts
  • Linking of Chart of Accounts to Company Codes Organizational Elements - FI OPERATING CHART OF ACCOUNTS Motor Sports International, Inc. US 1 Company Codes are linked to Chart of Account 1 Motor Sports International, Inc. CA 1
  • Organizational Elements - FI
    • Represents the Account Structure Prescribed under National Regulations
    • Optional Usage in SAP
    • Could be the Same as the Operating Chart of Accounts or the Operating Chart of Accounts at the Company Level can be linked(mapped) to the Country Chart of Account
    Country Chart of Accounts
  • Organizational Elements - FI
    • Could be used for:
      • Consolidation Chart of Accounts
      • Corporate Group Rollup
    • The Operating Chart of Accounts Master(not Company) is Assigned to a Corporate Chart of Accounts
    • Optional Usage in SAP
    Group Chart of Accounts
  • Linking of Chart of Accounts to Company Codes Organizational Elements - FI OPERATING CHART OF ACCOUNTS COMPANY CODE 1 1 Company Codes are linked to Chart of Account 1 COMPANY CODE 2 1 The Operating Chart of Accounts is Linked to the Group Chart of Accounts GROUP CHART OF ACCOUNTS 2 2
  • Organizational Elements - FI
    • Different from a lot of other Financial System Applications in that the G/L account is strictly comprised of the natural account code.
    • The management reporting structures (i.e. cost centers, divisions, regions, and job orders) is not embedded within the chart of accounts.
    • In SAP there is a relative relationship between the chart of accounts profit and loss natural account code and the cost centers.
    Operating Chart of Accounts = General Ledger
  • Organizational Elements - CO 02 Motorcycles 90 Accessories Business Area Controlling Area 3000 Motor Sports International, Inc US Company Operating Chart of Accounts Controlling Area 4000 Motor Sports International, Inc Canada
  • Organizational Elements - CO
    • An organizational unit within a corporation in which comprehensive independent management accounting can be performed.
    • Allows you to group companies from a Cost Accounting View.
    • It links the financial accounting module (FI) to the management accounting module(CO) in SAP.
    Controlling Area
  • Organizational Elements - CO
    • The Operating Chart of Accounts Links Financial Accounting(General Ledger) to Management Accounting in the following way:
      • A Company Code is Linked to the Operating Chart of Accounts
      • The Controlling Area is Linked to the Operating Chart of Accounts
      • A Company Code then can be Linked to any Controlling Area as long as they are both Linked to the Same Operating Chart of Accounts
    • Several Companies can be Linked to a Single Controlling Area regardless of the Companies Functional Currency. AGAIN, THE ONLY REQUIREMENT IS THAT ALL COMPANIES WITHIN THE CONTROLLING AREA MUST USE THE SAME OPERATING CHART OF ACCOUNTS .
    Linking of FI and CO
  • Organizational Elements - CO
    • Highest Reporting Level under Cost Center Accounting across which Information can Shared and Viewed within the Controlling Module
      • Departmental Cost Information withing a Single Controlling Area can be Viewed using the Standard Cost Center Reports in CO.
      • Departmental Cost Information Across Controlling Areas can be viewed by Building User Definable Reports in the Special Ledger
      • Interdepartamental Cost Allocations can only be performed in CO across Companies in the Same Controlling Area.
    Controlling Area
  • Organizational Elements - CO 02 Motorcycles 90 Accessories Business Area Profit Centers 3000 Motor Sports International, Inc US Company Operating Chart of Accounts Controlling Area 4000 Motor Sports International, Inc Canada Profit Center Hierarchy Paint Pumps
  • Organizational Elements - CO
    • Used to Calculate the Profit of an Area of Responsibility within the Organization(e.g. Division)
    • The Areas of Responsibility(Profit Centers) could be Based on Regions, Functions, or Products.
    • Supports Calculating Operating Profit using the Cost of Goods Sold P/L Format and/or the Period Accounting Method
    • A Profit Center can also be Viewed as an Investment Center since it is Possible to Transfer at Period End the Balance Sheet Positions for Assets, WIP, AR, AP, and Inventory
    Profit Center Accounting
  • Organizational Elements - CO
    • A Profit Center is not an Independent Account Assignment Object at the Moment of Entering a Transaction in SD or MM;It is Derived from Existing Objects
    • As a Default, Revenue and Costs for Profit Centers are Derived as follows:
      • Sales Order Line Item based on the Product being Sold
      • Direct Costs Based on the Assignment of Production Orders and Direct Costs. The System Proposes the Profit Center Based on the Profit Center of the Material Being Produced.
      • Overhead Costs Based on the Assignment of the Cost Center or other Cost Object
    • Substitution Rules can be Used to Change the Default Derivation
    • Supports both Actual and Planned Data
    Profit Center
  • Organizational Elements - CO 02 Motorcycles 90 Accessories Business Area Cost Centers 3000 Motor Sports International, Inc US Company Operating Chart of Accounts Controlling Area 4000 Motor Sports International, Inc Canada Cost Center Hierarchy Sales - Paints Information Systems Marketing Profit Center Hierarchy Paints Pumps
  • Organizational Elements - CO
    • Departmental Breakdown of your Legal Entity Structure
    • Lowest Level of Organization where you want to Collect and Analyze Costs/Departmental Performance
    • Departmental Budgets and Expense Analysis of P & L Accounts
    • Interdepartmental Cost Allocations
    • Each Cost Center is Assigned to a Company Code, Business Area and Profit Centers
    • Cost Centers are Structured into Organizational and/or Functional Hierarchical Groups
    Cost Centers
    • Can Create Physical Hierarchy for Operational Management (ie.. Phila or Atlantic City)
    • Can Create Multiple Alternate Hierarchies for Functional Management (i.e. Accounting department in Stanford and the Accounting department in East Alton can be grouped together to form the corporate Accounting department or the operations accounting department)
    • Can Get Selected Balance Sheet Items at the Cost Center Level if the Right Modules have been Installed, specifically Fixed Assets(AM) . In the Fixed asset master record you can cross reference the asset to the cost center and see historical cost, accumulated depreciation and depreciation expense.
    Organizational Elements - CO Cost Centers - Hierarchies
  • Organizational Elements - CO
    • In SAP, a Cost Account is either Linked or not Linked to a Cost Center
    • The Linking is Performed by Creating the G/L Cost Account as a Cost Element under the CO Module
    • All Cost G/L Account Numbers can be Linked to One or Many Cost Centers(Depatment Codes)
    Linking the G/L P/L Accounts to Cost Centers
  • Motor Sports International 3000 US #1 3000 New York 3400 Seattle 3000 Motor Sports International, Inc US 4000 Motor Sports International, Inc Canada Purchasing Organization Plant Purchasing Organization and Plants Organizational Elements - MM
  • Organizational Elements - MM
    • Responsible for Procurement for One or More Plants
    • Responsible for Negotiating Pricing and Delivery Terms with Vendors
    • Purchasing Organization is Assigned to A Company where Inventory is Legally Tracked or Costs are Legally Incurred.
    Purchasing Organization
  • Organizational Elements - MM
    • Usually a Manufacturing Facility, Warehouse, or a Location that Stocks , Manages, and Valuates Inventory
    • May be a Physical Site with Multiple Manufacturing/Production Lines
    • May be Multiple Manufacturing/Production Lines at One Physical Site
    • Can be a Physical Location(cost centers may or may not be associated to a plant i.e. administrative vs. manufacturing cost centers)
    • SD Availability Checking is Normally Done at the Plant Level
    Plant
  • Organizational Elements - MM
    • Links to Production (PP), Materials Management (MM), and Sales and Distribution (SD)
    • A Plant is Assigned to A Company
    • Purchasing Organization are Assigned to Plants
    Plant (Cont.)
  • Organizational Elements - MM
    • A Location within a Plant where Inventory is Stored
    Storage Location
  • Organizational Elements - SD Sales Organization, Distribution Channel and Division 02 Motorcycles Division 3000 US Sales 03 Retail Sales Organization Distribution Channel 3000 Motor Sports International, Inc US Motor Sports International 90 Accessories 4000 Motor Sports International, Inc Canada
  • Organizational Elements - SD
    • Legal Selling Unit Responsible for Revenue and Product Liability
    • Sales Orders belong to One Sales Organization(Header Level Assignment).
    • Master Data Maintenance for Customers, Pricing at Sales Organizatin Level
    • Sales Organization Assigned to a Company where Sales Revenue is Recognized(Links SD & FI)
    • Plants Assigned to a Sales Organization
    Sales Organization
  • Organizational Elements - SD
    • Breakdown within Sales for Different Product Disbursement Methods, such as Wholesale vs Retail or National vs International
    • Master Data Maintenance for Materials, Pricing, at Sales Organization/Distribution Channel
    • Sales Order belong to one Distribution Channel (Header Level Assignment)
    • Distribution Channel assigned to a Sales Organization
    Distribution Channel
  • Organizational Elements - SD
    • A way of Grouping Materials, Products, or Services
    • Sales Orders belong to One Division (Header Level Assignment)
    Division
  • Organizational Elements - SD
    • Sales Area is a Combination of:
      • Sales Organization
      • Distribution Channel
      • Division
    • Used to View Sales-Related Master Data
    • Sales Orders belong to One Sales Area (Header Level Assignment)
    • Links the Order Entry System(SD) to the Financial/Managerial System(FI/CO)
    Sales Area
  • Organizational Structure 3000 US #1 02 Motorcycles 90 Accessories 3000 New York 4000 Seattle 3000 US Sales 02 Motorcycles 02 Motorcycles 90 Access. 03 Retail 90 Assess. Business Area Purchasing Organization Division/ Plant Distribution Channel Division Sales Organization Complete Organizational Structure 3000 Motor Sports International, Inc US 4000 Motor Sports International, Inc Canada Motor Sports International