2. SAP Over All Finance Presentation.pptx

SAP OVER VIEW
Finance & Controlling (FICO)
for
POWER O&M Company
ENDEAVOUR TECHNOLOGIES, INDIA

© Copyright Endeavour Technologies
Slide 2
Financial Accounting / Controlling
 Financial Accounting
• Legal / Statutory Accounts (External Reporting)
• Standard Ledgers, Sub Ledger’s
• Master Data Integrates with Controlling
 Controlling
• Management Reporting (Internal Reporting)
• Budget and Planning Management

Slide 3
FI - Finance
GL – General Ledger Accounting
AP – Accounts Payable
AR – Accounts Receivable
AA – Asset Accounting
BA – Cash & Bank Accounting
PCA – Profit Center Accounting
Financial & Controlling Components

Slide 4
Data Flow in Finance
Asset
Accounting
A
A
Accounts
Payable
A/
P
Accounts
Receivable
A/
R
Cash & Banking
B
A
G/
L
Finance
Payroll/Employee Transactions
Goods Receipt /Issues & Invoice Receipt
Revenue Direct Posting in FI
M
M
FI/
AR
H
C
M
P
M
Data from PM is not
directly flown in to
Finance it will be flown
through MM

Slide 5
Revenue
Books of Accounts
CO
General
ledger
FI
GL
FI
AA
FI
AP
FI
HCM
FI
BA
FI
AR
MM
Balance sheet
P&L
...
... ... Profit Center
Accounting
AR

Slide 6
Financial Accounting Sub Modules
 General Ledger: All business transactions (primary postings, settlements from
controlling module) are recorded in an integrated business software system. This
guarantees that the accounting information is complete and reconciled at all times.
 Accounts Payable: It is a sub ledger of vendors which records all business transactions
of suppliers. Much of its data is obtained from procurement (Materials Management).
 Accounts Receivable: It is a sub ledger dealing with customers recording all business
transactions of customers (including sales, payments, advance)
 Asset Accounting: FI-AA records all accounting transactions relating to the management
of assets as per legal and management requirements by which we can know the Net
Book Value of assets.
Net book value= Total value of the Asset - Depreciation
 Bank Accounting: This component is used to handle accounting transactions that you
process with your bank. It includes the management of bank master data, cash balance
management (check and bill of exchange management), and the creation and
processing of incoming and outgoing payments.
 Profit Center Accounting: It is basically management oriented and is used for internal
controlling purpose to analyze both revenues & Costs. And it acts like company in
company, and we can generate Financial statements at this Level.

Slide 7
CO – Controlling
CEA – Cost Element Accounting
CCA – Cost Center Accounting
PS – Project Systems
Controlling Components

Slide 8
Data Flow in CO
FI
AA
Personnel Cost (HCM)
Asset Accounting
Profitability
Analysis
CO-
PA
Product
Costing
CO-
PC
Overhead
Cost Controlling
COST CENTER’S
CO-
CCA
Controlling
Plant Maintenance Orders
Goods Receipts and Issues
G/L Expenses
MM
CO-
PCA
C
O
HCM
PM
Profit Center Accounting
Internal
Order
CO –
IO
Project Systems
PS

Slide 9
Overhead Cost
Overhead Cost
Controlling
Controlling
Profit Center
PrCtr 1
PrCtr 3
PrCtr 2
PrCtr 4
PrCtr 5
Cost
&
Revenue
Element
Accounting
Cost Center Acc.
Activity
Cost
PM Order
&
Internal Orders
Profit Center
Profit Center
Accounting
Accounting
CO Integration with Other Modules
Revenue Posted
through FI/AR

Slide 10
Overhead Cost
Controllin
g
Plant
Maintenance
Cost Center Acc.
Overhead
Order
Accounting
PM
Order
Activity
Types
FI AA
FI MM PM
HCM MM
Profit
Center
Acc
Profit
Center
PrCtr
PrCtr 1
1
PrCtr
PrCtr 3
3
PrCtr 2
PrCtr
PrCtr 4
4
PrCtr
PrCtr 5
5
Cost
&
Revenue
Element
Accounting

Slide 11
Document Database
Vendor
Customer
Human
Resources
Fixed
Assets
Material
Subsidiary
Ledger
General Ledger
Controlling
 Cost Elements
 Cost Center
 Internal order
 Profit Center
Accounting
Controlling - Integration

Slide 12
Controlling - Sub Modules
Cost Element Accounting: Cost and Revenue Element Accounting details which costs and
revenues have been incurred
Cost Center Accounting: Cost Center Accounting determines where costs are incurred in the
organization. To achieve this aim, costs are assigned to the sub areas of the organization
where they have the most influence (Cost Centers)
Internal Order: Overhead Orders are internal orders used either to monitor overhead costs
for a limited period, or overhead incurred by executing a job, or for the long-term
monitoring of specific parts of the overhead. Independently of the cost center structure,
internal orders collect the plan and actual costs incurred, enabling you to control the costs
continuously

Slide 13
Project Systems
The Project System consists of Project and WBS elements. A Project is a complex
structure of tasks within a Controlling Area. It is used to control and monitor the
schedule, resources, capacities, cost, revenues, and funds availability. A WBS (Work
Breakdown Structure) element is an individual structural element representing the
hierarchical organization of a Project. It describes either a concrete task or a partial one
that can be further subdivided.
Implication:
WBS elements are defined at client level under a Project. And can be use for
Monitoring and Control of Expenditure (both for Planning and Budget Controls)
Usage:
WBS elements are used for Capital Investments and Operating expenditure, which are
settled to Cost Centers (P&L) or Fixed Assets (B/S).

Slide 14
PROJECT
CAPEX Project 1 CAPEX Project 2 CAPEX Project 3
WBS Element 1 WBS Element 2
Purchase Requisition/
Purchase Orders
GR
Actual Cost
Partial
Settlement
Asset Under Construction
(AUC)
Final Asset
Final Settlement
Planning
&
Budgeting
CAPEX Investment and Project System Process

Slide 15
Detailed Overview
FINANCE And CONTROLLING
Finance . .
SAP
ECC
CO BUDGET MANAGEMENT

Slide 16
Budget Management
The budget is the approved cost structure This Budget Management can be
used based on Budget Object group or Account. Budget Management can
also be done through Project Systems and Internal Orders

Slide 17
Budget Management
The Budget Management for Balance Sheet Items and P & L Items
 We can maintain the budget based on Budget Items and use the same in PR and PO’s
for Procurement of Inventory and Operating Expenses. We can also maintain the Budget
based on the GL accounts also.
The Budget Management with Project Systems.
 The budget can be maintained for Capital Expenditure as well as Operating Expenditure
 In this Case of Capital Expenses the entry will be settled to the Asset and in the Case of
Operating Expenses the expenses will be booked on to P&L Items
The Budget Management with internal Order.
 As mentioned above in Project Systems the same can also be done through Internal
Order. Where in the final settlements can be posted on to Asset or Expense Account.

Slide 18
Finance Integration with Other Modules
Materials Management
SAP
ECC
FICO FICO INTEGRATION

Slide 19
FINANCE INTEGRATION
S
U
P
P
L
I
E
R
C
U
S
T
O
M
E
R
S A P ECC
Procurement
Plant
Maintenance
Service
Finance and Accounting
MM PM FI/AR
FI CO
Business Process Flow in Power O&M Plant
Process Flow
Human
Resource
HR

Slide 20
FINANCE INTEGRATION
PM
MM
FI
CO
Revenue
AR/FI
FI
Planned
Requirement
MRP
Requirement
on component
level
Purchase
Order
Goods
Receipt
Invoice
Verification
Accounts
Payable
Planned
PM Order
PM Order
PM Order
Completed
PM Order
Settlement
Calculation of
Invoice Amount
Accounts
Receivable
Invoicing for
Fixed/Variable Fee

Slide 21
MM Overview
Materials Management
SAP
ECC
MM MATERIALS MANAGAMENT

Slide 22
MM Overview
Material Requirement
Planning
External Procurement
Purchasing
Material/Spares
Received from Owner
(Zero Value)
Invoice
Verification Goods
Receipt
INVENTORY
MANAGEMENT
Goods
Issue
Transfer
Posting
Warehouse
Management
Accounting
For
Good/ Invoice Receipt
Accounting Entry will be posted
1. Good Issue to Cost Center (Inventory will be Cr. & Consumption Acc Dr. )
2. Good Issued to PM Order (Inventory will be Cr. & Consumption Acc Dr. )
3. Goods Issues for Repairs Order (Goods Sent out for Repair..and Received back)
4. Goods Scrapping (Inventory Cr. … Scrapping Acc Dr.)

Slide 23
A/P(Vendor) GR/IR
X X
A/P(Vendor)
X
Cash/Bank
X
Purchase
Requisition
(MM)
Purchase Order
(MM)
Goods
Receipt
(MM)
Invoice
Verification
(FI/MM)
Vendor
Payment
(FI)
Inventory
X
GR/IR
X
MM & FI INTEGRATION

Slide 24
PM Overview
Plant Maintenance . .
SAP
ECC
PM PLANT MAINTNANCE

Slide 25
Plant Maintenance
 Inspection: All measures which establish the actual condition of a technical
system
 Preventive Maintenance: All measures which Maintain the ideal condition of a
technical system
 Break Down Maintenance : All measures which Restore the ideal condition of
a technical system
 Other: Measures taken using the maintenance organization

Slide 26
Controlling Integration with Plant Maintenance
Cost Components
1. Stock Material/Spares Issue(Consumption)
2. External(Non Stock) Material/Spares (Consumption)
3. Internal Services (Man Power)
4. External Services
5. Miscellaneous
In Case of Points 1 and 2 the Cost will be derived from the Material or Spare, and in
case of Point 4 and 5 the cost will be posted on to PM order based on the Service
procured.
In case of Point 3 Internal Services (Labor) the cost will be derived form the Activity
Type.

Slide 27
Controlling Integration with Plant Maintenance
Find below the List of Activity Types maintained in Power Plant Maintenance and Operations.
Activity Types :-
1. Mechanical Man Force
Mechanical Supervisor - LMESU
Mechanical Engineer - LMEEN
Mechanical Skilled Labor – LMESK
2. Electrical Man Force
Electrical Supervisor - LELSU
Electrical Engineer - LELEN
Electrical Skilled Labor - LELSK
3. Instrumentation Man Force
Instrumentation Supervisor - LINSU
Instrumentation Engineer – LINEN
Instrumentation Skilled Labor – LINSK
Separate Activity Rate Per hour will be maintained for the each Activity Type, based on the Activity Hours
amount of Internal service will be automatically calculated and charged to the PM Order.

Slide 28
Text
Cost Display in the Plant Maintenance Order
Maintenance Order
Internal Processing
(Internal Labor)
Op. 10: ME 3hrs.
(Mechanical Labor)
Op. 20: EL 1hrs.
(Electrical Labor)
External Processing
(External Services)
Op. 30: External 1hrs.
Stock material
(Internal Material/Spares
:- Owner /Procured)
2 pcs. Material ABC
Non-stock-material
(External Material/Spares)
2 pcs. Material XYZ
Costs
Internal Processing: 300
External Processing : 75
Stock Material: 200
Non-Stock-Material: 300
Total Cost of PM Order: 875
The Amount will be calculated
based on the Activity type Rate
Maintained in the system.

Slide 29
Plant Maintenance - Overview
Create
Work
Orders
Notifications
Planned
Work Orders
Schedule
WO’s
Spare Parts
/Supplies
Labor
Preventive/Predictive
Maint. WO’s
Close & Sett
PM Order
Reporting
Special
Tools
Pre-defined
work steps
Emergencies
External
Services Material
Requisitions
Shop
Papers

Slide 30
Planning the Activity
Type
(CO)
PM Order Consumption:-
Internal
Labor/Material(Spares)
(PM )
Confirmation of the PM
Order once the
Activities are
Completed (PM)
Once the PM Order is
Technically Completed the
Actual Costs will be
Calculated (PM)
Settlement of the PM
Order to
COST CENTER
( FI/CO)
PM & FICO INTEGRATION

Slide 31
HCM Overview
Human Resources
SAP
ECC
HCM HUMAN CAPITAL MANAGEMENT

Slide 32
Cost Center Updation in
Employee Masters
(HCM/CO)
GL Account Assignment to the
HCM Wage Types (Accounts for
Basic Salary, HRA, Transport..and also
Provisions and Deductions )
(HCM/FI)
Execution of the Payroll in HR (In this
Process HCM Business Owner’s will update
the Attendance and Run the Payroll, system
will calculate the Amounts based on the
attendance and Over time as applicable .
(HR)
Release of Payroll in to Accounting
(Under this Process HCM Persons, on checking
and confirmation of the Amounts In the Payroll
will release the document’s to Accounting
(HR)
Finance GL Accounts Updation
(GL accounts will be updated once the
Payroll document’s are released to
Accounting, based on the GL assigned to
the respective Wage types..
( FI )
HCM & FICO INTEGRATION

Slide 33
Payroll
results
3,500
Salaries
3,000
350
350
Expenses
Legal Deductions
Salaries payable
Legal Deduction Payable
Payables
CO
CO
FI
FI
Cost center 1
Cost center 2
3,500
150
Salaries
Conveyance
Posting
document
Posting Payroll Results in Accounting
Posting
Document
Posting
Run
Execution
Payroll Run
in HCM
Conveyance Deductions
150

Slide 34
Detailed Overview
FINANCE & CONTROLLING
Finance . .
SAP
ECC
FI FINANCIAL ACCOUNTING

Slide 35
Organizational Structures
Management Accounting
(Profit Centers/Cost Centers)
Financial Accounting
Internal Logistics
(MRP)
(Maintenance Activities)
Inventory Management
Organizational Units
Client
Controlling Areas
Company Codes
Plants
Purchasing
Organizations
Valuation Areas
Storage Locations/Batches/Special Stocks

Slide 36
Components of FI
FI-GL
FI-AR
FI-AP
FI-AA
General Ledger
Accounts Receivable
Accounts Payable
Asset Accounting
FI-BA Cash & Banking

Slide 37
The Components of FI
Configuration
Organizational Structures
Company Codes
Profit Center
Organization of Accounting
Ledger/Sub-ledger
Chart of Accounts
Credit Control
Setting Credit Limits
Master Records
G/L Accounts
Customers
Vendors
Banks
Chart of Depreciation
Depreciation Areas
Assets
Extended General Ledger
Functionality
Documents/Transactions Fiscal Year
Posting Adjustments
Payment Terms Balance Sheets/Income Statements
Foreign Currency Closings
Taxes On-Line Display
Special G/L Transactions Interest Calculation
Planning Correspondence
Payment Program Fixed Assets
Reporting Analysis
Legal Consolidations
Modules
General Ledger Accounts Payable
Accounts Receivable Asset Accounting
Cash Management and Forecast
Treasury

Slide 38
General Ledger (FI-GL)
 Integrated with other application modules and FI Sub-modules
 Financial Data Entry
 Multiple Currencies
 Multiple Ledgers (Books of Accounts)
 Budgeting /Planning :- Based on Group/ GL Accounts
 User-defined Balance Sheet / Profit and Loss Statement
 Flexible Report Generator

Slide 39
GL - Business Transaction
 Chart of Accounts
 Fiscal Year Variant
 Document entry
- GL Account Posting
- Park document
- Post with clearing
 General Posting
 Change Document
 Reverse Document
 Clear
 Reset Clearing Document
 Recurring Document
 Periodic Processing

Slide 40
Chart of Accounts
A Chart of accounts provides a framework for the recording of values to ensure an orderly
rendering of accounting data.
Chart of Accounts
General Ledger Account
Account Group
Expenses:-
Maintenance Expenditures
Operating Expenditure
Administration Expenditures
Personal Expenditures
Sales & Marketing Exp
Other Expenditures
Incomes:-
Revenue
Other Revenues
Liabilities:-
Share Capital
Reserves & Surplus
Secured Loans
Unsecured Loans
Current Liabilities
Provisions
Assets:-
Fixed Assets
Investments
Current Assets
Loans & Advances
Inventory Accounts

Slide 41
Primary Cost Elements
Primary Cost Element
External Order settlement
Secondary Cost Elements
Internal activity allocation
Assessment
Overheads
Internal order settlement
Revenue Elements
Revenue element
Sales deduction
Revenue account
Expense accounts Accounts posted
to directly, such as
bank accounts
Accounts posted
to indirectly, such
as reconciliation
Accounts; AR, AP, AA
Balance sheet
Accounts
P & L
Accounts
G/L
Accounts
FI
FI
CO
CO
The GL Accounts/ Cost Element

Slide 42
GL - Reports
 Chart of Accounts
 General Ledger Account List
 Document Journal List
 Display Account Balances
 Display Account Line Items
 Budget/ Plan Actual Comparisons Reports
 Balance Sheet / Profit & Loss / Cash Flow Statements
- Actual / Plan Comparison
- Actual / Actual Comparison

Slide 43
Accounts Receivable (FI-AR)
 Real-time integration with the General Ledger
 Customer Invoice Processing
 Automatic Dunning Function
 Correspondence with Customer
 Credit Management
 Work Flow Approval Process for Customer Invoice Processing

Slide 44
Accounts Receivable Accounting
 Invoices and Credit memos
 Down Payments From Customer
 Handling Incomming payments
 Payment Run (Bank collection)
 Dunning
 Account Clearing
 Credit Control Management
Volume
Details
from
Plant
Invoice
Preparation
Payment Transactions
Dunning Notice
Invoice Posting/
A/R
Accounting
Document
Cash
Management
Account:
Customer

Slide 45
Volume of Power
Generated during the
Month
Calculation of Variable Fee
from the above details
Preparation of the Invoice for
the Month with below Details
1. Fixed Fee
2. Variable Fee
3. Other Expenses incurred
on behalf of Customer
X
Customer (A/R) Revenue
Invoice Postings
Invoice Sent to
Customer
X
Receive
Payment from
Customer
Customer ( A/R ) Cash/Bank
X X
Accounts Receivable Accounting

Slide 46
AR - Reports
 Document List
 Customer Master List
 Display Customer Balances
 Display Customer Open / Cleared line Items
 Due Date Analysis for Open items
 Invoice/ Credit Memo Printing

Slide 47
Accounts Payable (FI-AP)
 Real-time integration with General Ledger
 Integration with Materials Management (MM Module) as a part of the
Procurement Cycle
 Vendor Invoice Processing : with/ with out PO
 Vendor Down Payment Processing : with/ with out PO
 Vendor Correspondence
 Budget Approval Process while PO and PR based on Group or General
Ledger Accounts.
 Work Approval Process for Vendor Invoice Processing

Slide 48
Accounts Payable Accounting
Purchase
Order
Goods
Receipt
Payment Transactions
Payment Program
Cash Mgmt &
Forecast Date
Cash Mgmt &
Forecast Date
Invoice
Receipt/
Invoice
Verification
Cash
Management
Account:
Vendor
 Invoices and Credit Memos
 Down Payments
 Automatic Payment Run
(with creation of payment media)
 Outgoing Payments Manual
 Bank Reconcilation
 Account Clearing

Slide 49
A/P(Vendor) GR/IR
X X
A/P(Vendor)
X
Cash/Bank
X
Purchase
Requisition
(MM)
Purchase
Order
(MM)
Goods
Receipt
(MM)
Invoice
Verification
(MM)
Vendor
Payment
(FI)
Inventory
X
GR/IR
X
Accounts Payable Accounting
Budget
Control
Approval
Process
Approval
Process

Slide 50
AP - Reports
 Document List
 Vendor Master list
 Display Vendor Balances
 Display Vendor open / cleared line Items
 Due Date Analysis for open items
 Payment List
 Check Register
 Vendor Invoice Payment/ Debit Memo Printing
 Vendor Down Payment Printing

Slide 51
Fixed Asset Accounting (FI-AA)
Real-time integration with the General Ledger.
Batch Processing and posting of Depreciation expense, interest
and replacement values.
Integration with:
- Material Management (MM) - Procurement of Asset through PO
- Project Systems (PS) – Using WBS element for Asset Acquisition.
- Accounts Receivable (FI-AR) - Retirement/Sale of Asset
- Accounts Payable (FI-AP) – Procurement of Asset
- Cost Accounting (CO) – Every Asset is Assigned to a Cost Center
(Depreciation Posting )

Slide 52
AA – Business Transactions
 Postings
- Acquisition
- Capitalize Asset under construction
- Transfer
- Retirement
- Post Capitalization
 Periodic Processing
- Depreciation run
- Fiscal year change
- Year end closing

Slide 53
Asset Accounting is a subsidiary ledger of Financial Accounting. The appropriate General
Ledger accounts are updated each time you post.
AA as Sub- Ledger
Asset Master Vendor
Assets ( GL) Liabilities
General Ledger
1000 1000
1000 1000

Slide 54
PROJECT
CAPEX Project 1 CAPEX Project 2 CAPEX Project 3
WBS Element 1 WBS Element 2
Purchase Requisition/
Purchase Orders
GR
Actual Cost
Partial
Settlement
Asset Under Construction
(AUC)
Final Asset
Final Settlement
Planning
&
Budgeting
CAPEX Project System’s Module

Slide 55
AA - Reports
 Asset Register
 Asset Explorer
 Acquisitions
 Retirements
 Transfers
 Depreciation
 Asset Balance

Slide 56
Cash & Banking
CASH
 Cash Journals
In SAP we have Cash Journal Module to maintain all the Petty Cash Transaction in the
Organisation.
BANKING
 Payments & Receipts
Outgoing Payments:
We have two Options in out going Payments.
. Automatic Payment: In this Process the System will pick the invoices based on due
date an d Payment Terms mentioned in the Vendor invoice.
. Manual Payment : In this Process the Invoice’s will be picked randomly and Payment
will be made
Incoming Payments:
We have two Options in Incoming Payment.
. Automatic Receipt : This process will be used when we post the incoming Payment
through Bank Statement upload in to the SAP.
. Manual Receipt : In this Process the Incoming payment will be booked as and when
we receive the payment from Customer .

Slide 57
Cash & Banking
Bank Reconciliation
For Bank Reconciliation, in SAP we have three options
1. Automatic Process:- In this Process the Reconciliation will be done by
uploading the Bank Statement in to SAP.
2. Manual Process:- In this Process the Reconciliation items will be manually
selected and then the Reconciliation entries will be posted in the system.
3. Semi Automatic:- In this Process the Reconciliation items will be listed by the
system and only we need to select the Reconciliation items by seeing the
Bank Statement and then the Reconciliation documents will be posted on to
the System.

Slide 58
Cash & Bank Reports
CASH
 The Cash Flow Statements can be designed as per business Requirement
 Cash Book /Cash Journal can be prepared on line.
BANKING
 Report on Incoming and Out Going Payments
 Bank Reconciliation Report
 Cheque Register
Reporting:-
 Cash Journal
 Cheque Register
 Cash Flow Statement
 Bank Payment and Receipts Reports

Slide 59
Detailed Overview
Finance . .
SAP
ECC
CO CONTROLLING

Slide 60
Components of Controlling
 Cost Element Accounting
 Cost Center Accounting
 Profit Center Accounting

Slide 61
Organizational Unit’s & Master Data
Cost Centers Mech.
Maintenance
Elect.
Maintenance
Company Codes
Orders Cost Objects
General
Admin
Opera. Dep
Other Cost Objects
Controlling Area Controlling Area
Power
Plant
Desal
Plant
XYZ
Plant
ABC
Plant
Head
Office
(Corporate
Office)
Profit Centers
(Plant / Business Unit)
COMPANY CODE

Slide 62
Controlling Area: It is an organizational unit which represents closed system for
cost accounting purposes.
Cost Centers: Organizational unit within a controlling area that represents a clearly
delimited location where costs occur. You can make organizational divisions on the
basis of functional and/or responsibility-related standpoints
Profit Center: An organizational unit in Accounting that reflects a management-
oriented structure of the organization for the purpose of internal control
Used to plan, collect and settle the costs of internal jobs and tasks
Controlling – Overview

Slide 63
Overhead Cost Management
 The Overhead Cost Controlling component (CO-OM) helps you to plan, allocate, control,
and monitor overhead in your organization
 By planning in overhead areas, you can develop standards, that allow you to control
costs and valuate internal activities.
 Cost Centre Accounting
Cost Centre Accounting analyzes where overhead occurs within the organization
Costs are assigned to the sub-areas of the organization where they originated.
SAP offers a wide variety of methods for allocating posted amounts and
quantities.
 Internal Order Accounting
Internal Orders collect and analyze costs based on individual internal jobs.
SAP can monitor and automatically check budgets assigned to each job.

Slide 64
Overhead Cost
Overhead Cost
Controlling
Controlling
Profit
Center
PrCtr 1
PrCtr 3
PrCtr 2
PrCtr 4
PrCtr 5
Cost
&
Revenue
Element
Accounting
Cost Center Acc.
Activity
Cost
Revenue
Posted
through AR
PM Order
&
Internal Orders
Profit Center
Profit Center
Accounting
Accounting

Slide 65
Overhead Cost
Controllin
g
Plant
Maintenance
Cost Center Acc.
Overhead
Order
Accounting
PM
Order
Activity
Types
FI AA
FI MM PM
HR MM
Profit
Center
Acc.
Profit
Center
PrCtr
PrCtr 1
1
PrCtr
PrCtr 3
3
PrCtr 2
PrCtr
PrCtr 4
4
PrCtr
PrCtr 5
5
Cost
&
Revenue
Element
Accounting

Slide 66
Cost Element’s
 A cost element classifies the organization's valuated consumption of
production factors within a controlling area
 Primary Element - costs that originate outside the company; relate directly
to the income statement in FI and must be included in the FI Chart of
Accounts
 Secondary Element - costs that result from internal allocation activities; NO
relation to G/L accounts in FI. These accounts are exclusively for cost
accounting and are only maintained in CO

Slide 67
Financial
Accounting
•General Ledger
•Accounts Payable
•Accounts Receivable
•Fixed Assets
•Bank Accounts
Controlling
•Cost Centre Accounting
•Internal Orders
Cost Elements v/s GL Accounts
Chart
of
Accounts Balance
Sheet
Accounts
Adjustment
Accounts
Cost
Elements
Secondary
Cost
Elements
Income
Statement
Accounts
Primary
Cost
Elements

Slide 68
Cost Center Accounting (CCA)
 Responsibility Accounting for Overhead Costs
Depending on business Reporting design and Requirements the Cost Center’s
will be Created.
 The Cost Centers will be Assigned to Profit Center
 We can maintain the Planning values based on the Cost Element and Cost
Center

Slide 69
Cost Center Accounting - Actual Postings
 In actual cost postings, costs are mapped real-time into CO from the module where the
original posting took place.
- FI - Posting of primary costs through FI. Assignment to cost object at time of FI
posting.
- AA - Assignment of asset master made to cost center. Post to cost center at time of
depreciation or gain/loss calculation automatically.
- MM - Goods receipt can be assigned directly to cost object
 The original document in FI and a parallel document in CO that displays the data from a
cost accounting viewpoint
 Transaction based postings -
- Re-post Costs
- Re-post Line Items
- Manual Cost Allocation
- Direct Activity Allocation
- Sender Activities
- Statistical Key Figure

Slide 70
Cost Center Accounting – Period end Closing
 For the purpose of Overhead Cost Controlling, final costing and the
preparation of reconciliation period-end closing is usually executed on a
monthly basis.
 At End of the Month all the Costs in the Cost Object’s need to be Settled to
the Cost Center
Example:- PM Order, Internal Order, Project etc…

Slide 71
Cost Center Accounting – Reporting
 The information system within Cost Center Accounting enables to evaluate planned
and actual data according to various selection criteria.
 Online information available
 The report tree can be used to select reports in the information system. It is the
central collection point and hierarchical outline of all the reports in an application
component.
 The system provides many standard reports.
- Comparison reports
- Line item reports
- Planning reports
- Report for activity prices
- Master data reports
- Reports for variance analysis
- Document display
 Individual reports may be defined using the report painter.

Slide 72
Profit Center Accounting (PCA)
 Part of Enterprise Controlling module.
 Performs profit and loss analysis by-
- Region (plants, branch offices)
- Function (production, sales)
- Product (product line, product division)
 Entries posted on to Profit Center will happen as below
- Entries to P&L Item will be posted based on the Cost Center
- Entries to the Balance Sheet Items will be posted based on the derivation
rules or Document Splitting Rules.

Slide 73
EC - PCA – Reporting
 The information system within Profit Center Accounting enables to evaluate
planned and actual data according to various selection criteria.
 The report tree can be used to select reports in the information system. It is the
central collection point and hierarchical outline of all the reports in an
application component.
 User defined reports may be defined using the report painter.
 The system provides many standard reports.
- Comparison reports
- Line item reports & summary reports
- Planning reports
- Master data reports

Slide 74
Detailed Overview
Finance . .
SAP
ECC
FI/CO PERIOD END ACTIVITIES

Slide 75
Close
Close
G/L
G/L
FI
FI
Close
Close
AR/AP
AR/AP
FI
FI
Month End Closing Process
Old Month New Month
Foreign
currency
valuations
FI
FI
Open new
Open new
periods
periods
FI
FI
Accruals/
deferrals,
recurring
entries
FI
FI
Payroll
expenses
HR
HR
Maintain
GR/IR
MM
MM
Invoices
SD
AR/FI
Valuations
MM
MM
AUC
settlement,
depreciation,
interest
AA
AA
Month
Month -
- end
end
closing
closing
MM
MM
Project/
WBS
Element
CO
CO
Cost
Centers
CO
CO
PM Order
Settlement
PM
Financial
statement
adjustment
FI
FI
Controlling
CO
CO
FI
Documentation
Revenue/Purchases
Balance Sheet
Profit & Loss
Internal reports
CO

Slide 76

Year End Closing Process
Old Year New Year
Close FY for
Close FY for
AR/AP
AR/AP
FI
FI
GR/IR analysis,
regrouping of
receivables/
payables, other
adjustments
Lowest
value,
LIFO/FIFO
MM
MM
Valuations,
investment
grant
AA
AA
Physical
inventory
MM
MM
PM Order
Closer/Settlement
PM
Balance
confirm.
FI
FI
FI
FI
Balance
Balance
carryfoward
carryfoward
FI
FI
Open new
Open new
year
year
FI
FI Fiscal year
Fiscal year
change
change
AA
AA
Close FY
Close FY
for G/L
for G/L
FI
FI
Close old
Close old
year
year
AA
AA
FI
Revenues/purchases
Documentation
CO
Account
bals : Old FY
to new FY
FI
FI
Asset history sheet
Bal . Sheet/ P&L
Cum. bal . audit trail
Internal reports

2. SAP Over All Finance Presentation.pptx

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