The document discusses the finance module of an ERP system. It describes key components of the finance module including financial accounting, general ledger, accounts receivable, accounts payable, asset accounting, legal consolidation, and controlling. It provides examples of each. The finance module helps manage payments, financial reports, credit data, and other financial activities in an integrated manner. It provides benefits like improved reporting, performance, closes, governance, cash flow, and process integration between finance and treasury functions.

1. ERP MODULE “FINANCE”
Present by:
Maheshwari Ashok

2. WHAT IS ERP?
 Enterprise Resource Planning
 ERP programs are core software used by
companies to coordinate information in every area
of the business
 ERP programs help to manage company-wide
business processes, using a common database
and shared management reporting tools.

3. ERP MODULES

4. WHAT IS FINANCE?
 The management of large amounts of money,
especially by governments or large companies.
 The science of the management of money and
other assets.
 The management of money, banking, investments,
and credit.
 The supplying of funds or capital.

5. A/F
Customer HR
SCM M/S
Payments
Legal requirements
and job information,
payroll and benefit
expense data
Invoices and
credit memos
Sales data and
manufacturing
cost analysis
Production plans,
materials, and
inventory data
Sales order
data
Cost/profit
analysis
Hiring needs and
personnel
information

6. WHAT ARE THE I/O ?
 Input for A/F include:
 Payments from customers
 Account receivable data
 Account payable data
 Sales data
 Production and inventory data
 Payroll and expense data
 Output for A/F include:
 Payments to suppliers
 Financial reports
 Customer credit data

7. FINANCE
 Finance is the study of how investors allocate their
assets over time under conditions of certainty and
uncertainty.
 Finance measures the risks vs. profits and gives an
indication of whether the investment is good or not.
 Finance can be broken into three different sub
categories:
 public finance
 corporate finance
 personal finance

8. PERSONAL FINANCE
 Personal finance refers to the financial decisions which
an individual or a family unit is required to make to
obtain, budget, save, and spend monetary resources
over time, taking into account various financial risks and
future life events.
 Debit card
 Employment contract
 Commission
 Employee stock option
 Health insurance
 Pay check
 Salary
 Insurance
 Retirement plan

9. CORPORATE FINANCE
 Corporate finance is the area of finance dealing
with monetary decisions that business enterprises
make and the tools and analysis used to make
these decisions.
 The primary goal of corporate finance is to
maximize shareholder value.
 Balance sheet analysis
 Financial ratio
 Business plan

10. PUBLIC FINANCE
 Public finance is the study of the role of the government
in the economy.
 The purview of public finance is considered to be
threefold: governmental effects on
 efficient allocation of resources,
 distribution of income
 macroeconomic stabilization
 Central bank
 Tax
 Industrial policy

11. THE FINANCE MODULE OF MOST ERP SYSTEMS
WILL HAVE THE FOLLOWING SUB SYSTEMS

12. 1. FINANCIAL ACCOUNTING
 for company wide control and integration of
financial information that is essential to strategic
decision making.
 It provides ability to centrally track financial
accounting within an international framework of
multiple companies, languages, currencies and
charts of accounts.

13. EXAMPLE OF FINANCIAL ACCOUNTING

14. 2. GENERAL LEDGER
 The GL is essential both to financial accounting
system and to strategic decision making.
 The GL supports all the functions needed in a
financial accounting system.
 This includes flexible structuring of the chart of
accounts at group and company level, distributed
application scenarios, real time simultaneous
update of sub ledgers and the GL, elimination of
time consuming, and parallel views of data in both
GL and managerial accounting applications.

15. EXAMPLE OF GL

16. EXAMPLE OF GL

17. 3. ACCOUNTS RECEIVABLES
 records all account postings generated as a result
of Customer sales activity.
 These postings are automatically updated in the
General Ledger .
 The Accounts Receivable Module also integrates
with the General ledger, Sales and Distribution, and
Cash Management Modules.

18. EXAMPLE OF ACCOUNTS RECEIVABLES

19. 4.ACCOUNT PAYABLE
 records account postings generated as a result of
Vendor purchasing activity.
 Automatic postings are generated in the General
Ledger as well.
 Payment programs within SAP enables the
payment of payable documents by check,
EDI(Electronic Data Interchange), or transfers.

20. 5. ASSET ACCOUNTING
 for company’s fixed assets management.
 It is sub ledger to GL, providing detailed information
on asset related transactions.
 SAP allows you to categorize assets and to set
values for depreciation calculations in each asset
class.
 Asset accounting also provides integration with
plant maintenance for management of machinery
and equipment, management of leased assets and
assets under construction, and interactive reporting

21. 6. LEGAL CONSOLIDATION
 Using different valuation methods , company can
plan balance sheet strategies to suit its
requirements.
 The sub system is closely linked to the financial
accounting system, permitting direct data transfer
from individual statements into the consolidated
statements required by the law
 These statements provide an overview of the
financial position of the company as a whole

22. 7. CONTROLLING
 controlling system gathers the functions required for
effective internal cost accounting.
 It offers a versatile information system with
standard reports and analysis path for the most
common questions.
 In addition there are features for creating custom
reports to supplement standard reports

23. SAP ERP FINANCIAL BUSINESS BENEFITS
 Improve financial and managerial reporting:
 SAP ERP Financials gives you the flexibility to report
performance by business unit, organization, or cost
center.
 Improve corporate performance:
 SAP ERP Financials provides the foundation to quickly
read, evaluate, and respond to changing business
conditions with accurate, reconciled and timely financial
data.
 Achieve faster closes:
 With SAP ERP Financials, you can streamline
accounting, consolidation, process scheduling,
workflow, and collaboration.

24. SAP ERP FINANCIAL BUSINESS BENEFITS
 Improve corporate governance and transparency:
 SAP ERP Financials provides broader support of accounting
standards, federal regulations, and improved administration of
internal controls.
 Improve cash flow and liquidity:
 SAP ERP Financials automates dispute, credit, and
collections management – and offers electronic invoicing and
payment capabilities that supplement traditional accounts
receivable and accounts payable functions to accelerate and
manage cash flow.
 Optimize global cash management:
 With SAP ERP Financials, you can report, analyze, and
allocate cash in real time, and establish in-house banks or
payment center.

25. SAP ERP FINANCIAL BUSINESS BENEFITS
 Improve process integration between finance
and treasury:
 With SAP ERP Financials, you can integrate risk and
treasury transactions with core accounting and financial
reporting processes.
 Reduce overall finance costs:
 SAP ERP Financials helps you operate effective
shared-services, collaborate with customers or
suppliers, and streamline operations to reduce costs
and resource demands.

26. CHARACTERISTICS OR FEATURES OF FINANCE

27. INVESTMENT OPPORTUNITIES
 Investment can be done by:-
 Creating physical assets with the money (such as
development of land, acquiring commercial assets,
etc.),
 Carrying on business activities (like manufacturing,
trading, etc.), and
 Acquiring financial securities (such as shares, bonds,
units of mutual funds, etc.).

28. PROFITABLE OPPORTUNITIES
 In Finance, Profitable opportunities are considered
as an important aspiration (goal).
 Profitable opportunities signify that the firm must
utilize its available resources most efficiently under
the conditions of cut-throat competitive markets
 Profitable opportunities shall be a vision. It shall not
result in short-term profits at the expense of long-
term gains.

29. OPTIMAL MIX OF FUNDS
 Finance is concerned with the best optimal mix of
funds in order to obtain the desired and determined
results respectively.
 Primarily, funds are of two types, namely,
 Owned funds (Promoter Contribution, Equity shares,
etc.), and
 Borrowed funds (Bank Loan, Bank overdraft,
Debentures, etc).

30. SYSTEM OF INTERNAL CONTROLS
 Finance is concerned with internal controls
maintained in the organisation or workplace.
 Internal controls are set of rules and regulations
framed at the inception stage of the organisation,
and they are altered as per the requirement of its
business.
 However, these rules and regulations are monitored
at various intervals to accomplish the same which
have been consistently followed

31. FUTURE DECISION MAKING
 Finance is concerned with the future decision of the
organisation.
 A "Good Finance” is an indicator of growth and
good returns. This is possible only with the good
analytical decision of the organisation. However,
the decision shall be framed by giving more
emphasis on the present and future perspective
(economic conditions) respectively.

32. REFERENCES
 http://www.thefreedictionary.com/finance
 http://en.wikipedia.org/wiki/Finance
 http://www.sap.com/solutions/business-
suite/erp/financials/businessbenefits/index.epx