Sapfinancialsintegration

SAP FINANCIALS INTEGRATION
SAP FI ECC6.0 INTEGRATION WITH OTHER MODULES
Prepared By:
Ms.Pramila Nagaraj
First Class MBA Finance Graduate (2009-10)
Global Academy of Technology, Bangalore (VTU- Belgaum)
Trained up in SAP FICO @ SAPTAC Bangalore (FRESHER)
© 2010-2012 ALL RIGHTS RESERVED

SAP FI Integration with Other Modules
Overview
Financial activities from other SAP modules are integrated with FI
Overview – Business Process

SAP FI Integration with Material Management (MM)
Procure to Pay
• Purchasing Master Data
– Vendor Master
– Material Master
• Procure to Pay – Purchase Order
– Account Assignment
• Procure to Pay – Goods Movement
– Automatic account determination for goods movement (goods receipt, goods issue,
transfer)
• Procure to Pay – Invoice Verification
– Automatic account determination for invoice verification

Purchasing Data – Vendor Master

Purchasing Data – Material Master
• Pricing control of material: Standard price or Moving Average Price
• Valuation Class: determine G/L accounts which needs to be updated for goods movement

Purchase Order – Account Assignment
• Determine purchase order specification
– For example, what the purchase order is raised for, e.g., asset, non-stock, services
– Only for non-material purchase orders
– Nature of the account assignment (cost object), e.g., cost centre, sales order, project
– Indicates which account is used at goods receipt and invoicing
Purchase Order – Account Assignment (cont.)
– FI posting will be created automatically based on the account assignment and
account determination (for material purchase)
– Example:

Account Assignment = Blank (Material)
 Goods Receipt
Dr. Material
Cr. GR/IR
Account Assignment = A (asset)
 Goods Receipt
Dr. Asset
Cr. GR/IR
Account Assignment: Example
Enter Account assignment Cat here List of Account Category
Goods Movement – Account Determination (1 of 3)
– For example, what the purchase order is raised for, such as asset, non-stock,
services
– Only for non-material purchase orders
– Nature of the account assignment, for example, cost center, sales order, project

– Indicates which account is used at goods receipt and invoicing
• Determine purchase order specification (cont.)
– FI posting will be created automatically based on the account assignment and
account determination (for material purchase)
– Example:
Account Assignment = Blank (Material)
 Goods Receipt
Dr. Material
Cr. GR/IR
Account Assignment = A (asset)
 Goods Receipt
Dr. Asset
Cr. GR/IR
• Roadmap to Automatic Posting
– Valuation Class is maintained in Material Master – Accounting View
• For example, Material 100-401 with Valuation class 7900
– Account determination has been configured for movement type and valuation
class
• For example, Movement Type 101 (goods receipt) for valuation class 7900
is debited to stock account 304000

Account Determination – Example
Account Determination – Configuration

Invoice Verification
• When a vendor invoice is entered through MM invoice verification, automatic posting is
generated to FI
• If the Purchase Order is set with goods receipt, invoice verification is a 3-way matching (e.g.,
quantity from the goods receipt and price/invoice amount from the PO)
• Transaction code MIRO
Purchase Order from FI Invoice
• Purchase Orders can be drilled into from FI invoice and vice versa
– Transaction code FB03
– Enter the FI document number
– Go to Environment and select Original Document
– Click on Purchase Order number to display the PO

FI Invoice from Purchase Order
• Transaction code ME23N
• Go to PO History
• Click on the Invoice Receipt material document
• Click on FI documents button
• Double click on the FI doc number to display the accounting journal

FI Invoice from Purchase Order (cont.)

SAP FI Integration with SD
Sales Master Data – Customer Master

Customer Credit Management
• Credit limit is assigned per customer
We can determine when the checking is done: order, delivery, goods issued, etc.

Sales Order – Credit Check Example
• System checks customer outstanding balance against the credit limit allowed before a
sales order can be saved
Sales Order – Revenue Account Determination (1 of 3)
 Condition Type determines items included in the Sales Order, for example, material price,
tax, discount, etc.

Account key is assigned to condition type
Account key and other parameters determine GL accounts for automatic posting during A/R
invoicing

Condition type Sales Org Account key
Profit Center Assignment in Material Master
• Default profit centre is maintained in Material Master
• This profit centre will be taken to Sales Order and then to A/R invoice generated from the
Sales Order

Billing/Invoicing (1 of 3)
• When a billing document is created, the system automatically creates all relevant
accounting documents

• Display Billing document from FI Invoice:
– Transaction code FB03
– Enter the FI document number
– Go to Environment and select Original Document

SAP FI Integration with Controlling
• Controlling (CO) and Financial Accounting (FI) are independent components in the SAP
system but the data flow between the two components takes place on a regular basis
• All data relevant to cost flows automatically to CO from FI
• The system assigns the costs and revenues to different CO account assignment objects like:
• Cost centres
• Business processes
• Projects or orders
• All relevant accounts in FI are managed in CO as cost elements or revenue elements, which
enables one to compare and reconcile values from CO and FI
Transaction Type: Purchase

Transaction Type: Settlement
Transaction Type: Allocation

Accounting Documents
• Accounting documents consist of FI document, Special Ledger document, Profit Centre
document, Profitability Analysis document, and CO document
• Display Billing document from FI invoice:
• Transaction code FB03
• Enter the FI document number
• Go to Environment and select Accounting Documents

• List of Accounting docs:
– FI document
– Profit centre document
– Special Ledger document
– CO document

SAP Purchase to Pay Flow- SAP MM
SAP MM (Materials Management)
1. SAP MM (Materials Management) is a module of the SAP Enterprise Resource Planning
(ERP) package that is used for Procurement Handling and Inventory Management.
2. The module has two important master data – material and vendor.
3. Broadly, the various levels that can be defined for a SAP MM implementation are: Client,
Company Code, Plant, Storage Location and Purchase Organization.
4. This is the largest and most complex in all of SAP modules. It can be divided into five major
components. There are: materials management, plant maintenance, quality management,
production planning and control, and a project management system. Each is divided into
number of subcomponents.
5. SAP Materials management covers all tasks within the supply chain, including
consumption-based planning, planning, vendor evaluation and invoice verification.
6. It also includes inventory and warehouse management to manage stock until usage
dictates the cycle should begin again. Electronic Kanban/Just-in-Time delivery is
supported.
7. Material Management covers the functionality required to purchase goods and services,
manage inventory, and inspect incoming materials.
8. The Purchasing function includes creation of requisitions, requisition approval, purchase
order generation, and receipt of goods and services.
9. Inventory Management includes issuing and transferring inventory, inventory restocking,
and the inventory count and adjustment processes.
The basic of the purchase to pay flow is explained below.
1. Determination of Requirements
In this step, there is a requirement of material or service, which must be procured externally, from
the user. The requirement must be recorded as Purchase Requisition (PR) document in SAP MM.
Purchase Requisition (PR) is an internal purchasing document in SAP ERP that is used to give
notification to responsible department about the requirement of material/service and to keep
track of such requirement.
2. Determination of the Source of supply
After the PR has been created in the previous step, the responsible department must process it.
The buyer of the procurement department must determine the possible sources of supply of the
material/service specified in the PR.
3. Vendor Selection
If in the previous step, there are some outline agreements or info record documents that can be
used as references to create a PO, the buyer can select or choose which vendor that will be
appointed to provide the material/service at this time.

4. PO Processing
In the previous step, the buyer has selected the vendor which will provide the material/service
needed in PR. In this step, the buyer creates a Purchase Order (PO) based on the PR and the
reference document (that can be an outline agreement, an info record, or a quotation).
5. PO Monitoring
After the PO has been sent to the vendor, the buyer has the responsibility to monitor whether the
vendor delivers the material/service at the right time on the right place.
6. Goods Receipt
When the vendor delivers the material or perform the service, the responsible person of the
company must perform the goods receipt (GR) or service acceptance (SA) transaction. The GR/SA
will update the PO history.
7. Invoice Verification
After the vendor delivered the material/service, it will send the invoice to the person responsible
in the company. Invoice is a formal document issued by a vendor to the company to request the
payment for the material or service that the vendor has already provide to the company according
to the terms of payment agreed in the PO.
8. Payment Processing
After the Invoice Receipt (IR) transaction has been posted, the vendor’s account payable will
increase and the company must process the payment to that vendor as stated in the terms of
payment of the PO. The payment transaction will be performed in FI module. After the payment
has been posted, the vendor’s account payable will be debited and the cash or bank account will
be credited.
SAP MM stands for Materials Management and this is part of SAP Logistics includes:
1. Requisitions
2. Purchase orders
3. Goods receipts
4. Accounts payable
5. Inventory management
6. BOM’s
7. Master raw materials, finished goods etc
Some of the Main SAP MM Transactions are:
1. ME51N – Create Requisition
2. ME21N – Create Purchase Order
3. MIGO – Goods receipt a PO
4. MIRO – Create Invoice

One of the main areas covered by MM module is Purchasing/Procurement. The purchasing process
is initially started when there is a requirement of material/service from a user. If the
material/service cannot be obtained from company’s internal resource, the responsible person of
that company must find the vendor/supplier which can provide it on the required date. The
purchasing process is ended when the payment processing to the vendor that supply the
material/service has been done.
SAP Order to Cash Flow- SAP SD
SAP SD is simply Sales and Distribution
1. It’s all about selling goods & distributing them to relevant parties and gets the payments
for relevant parties.
2. Helps to optimize all the tasks and activities carried out in sales, delivery and billing.
3. Key elements are: pre-sales support, inquiry processing, quotation processing, sales order
processing, and delivery processing, billing and sales information system.
4. SAP SD application components fulfills many of the international requirements that
supports the sales and distribution activities with functions such as pricing and conditions,
customer order processing, delivery monitoring, billing, credit and risk management.
5. The SAP sales and distribution is part of the logistics module that support your customers,
starting from quotations, sales order and all the way towards billing the customer.
6. It is tightly integrated with the MM and PP functional modules. It allows companies to
input their customer sales price, check for open orders and forecast etc.
The most important basic functional features in the SD module are:
1. Pricing
2. Availability Check
3. Credit Management
4. Material Determination
5. Output Determination
6. Text Processing
SAP SD stands for Sales and Distribution and this is the module which is used to manage customer-
focused activities, from selling to delivery, including -
1. RFQ
2. Sales orders
3. Pricing
4. Picking (and other warehouse processes)
5. Packing
6. Shipping

Some of the main SAP SD transactions are:
1. VA01 – Create Customer Order
2. VL01N – Create a Delivery
3. VA03 – Display a Order
4. VL02N – Change Customer Delivery (F20 is to post a good issue)
5. VA05 – List Orders
6. VF01 – Create a Invoice
The Order to Cash flow roughly follows the following sequence -
1. A customer orders some items from your company by creating a sales order
2. Your company decides to deliver the items ordered by the customer.
3. This is recorded by creating a outbound delivery document
4. Once the items are available for sending to the customer, you post goods issue which
reduces your inventory and puts the delivery in transit. This will create a material
document.
5. You will post goods but the material document created will be stored in tables.
6. You will then create shipment document to actually ship the items.
7. You finally create a sales billing document.
8. This will have a corresponding accounting document created that will be in different
tables.
9. When customer pays to your invoice, it will directly hit your AR account in FI.

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