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Overview of SAP Controlling Module

noreply@blogger.com (Author) — Fri, 20 Feb 2009 06:59:00 +0000

The Controlling (CO) component of SAP R/3 system contains all accounting functions necessary for effective controlling for businesses. Every organization normally have an external and internal accounting viewpoints. The external viewpoints is represented by Financial Accounting (FI) component and Controlling (CO) represents the internal accounting viewpoint. CO component of SAP system offers a broad selection of functional tools that can be used to provide management accounting information that are useful for management decision making. Do remember that Financial Accounting and Controlling are independent components of the SAP system. The data flow from the CO component to FI component takes on a regular basis.

Components of Controlling (CO)

A. Overhead Cost Controlling (CO-OM)

Cost and Revenue Element Accounting (CO-OM-CEL)

This provides the structure for assignment of CO data through the classification of transaction items in accordance with the nature of the cost or revenue posted to a CO object such as cost center, internal order, and etc.

This component is resposible for the structure of accounts where costs and revenues of an organization are automatically updated the CO objects.

Cost Center Accounting (CO-OM-CCA)

Cost Center Accounting provides information where costs occur in an organization. It tracks the sources of costs from the different organization of the company.

The design of cost center for each organization varies. However, the typical approach is to define a cost center for each low-level group or organizational unit that is responsible for managing costs.

Internal Orders (CO-OM-OPA)

Internal Orders in SAP system is normally a tool for planning, collecting, and settling the costs of internal jobs and tasks. This is a highly flexible CO tool that can be used for a wide variety of purposes to track costs and sometimes revenues within a specific controlling area.

Activity-Based Costing (CO-OM-ABC)

Activity-Based Costing application component of SAP system is helpful in allocating overhead costs to products and to other cost objects using the resource drivers. ABC allocation is more relevant and reliable compared with the traditional overhead allocation. In ABC approach, the resources consumed by the different business processes are assigned to the respective origin of costs.

B. Product Cost Controlling (CO-PC)

Product Cost Planning (CO-PC-PCP)

This area of Product Cost Controlling can use by companies to plan costs of materials without reference to any orders. It can be used also to set material prices and other cost object prices. Further more this can be used to plan and analyze the product costs e.g. material cost, service cost, and other add-on intagible costs.

PCP can be used to calculate the Cost of Goods Manufactured (COGM) and Cost of Goods Sold (COGS). COGM composes all the costs incurred to produce a product which includes material costs, direct labor and overhead costs. COGS is the sum of COGM and any direct costs incurred in selling the product to a customer.

It is very important to monitor efficiently and effectively the costs incurred to your producs. With SAP Product Cost Planning, the above goal can be achieved.

Cost Object Controlling

This area of Product Cost Controlling can be used to determine efficiently and effectively what are the costs incurred for each object.

This area is subdivided into; Product Cost by Order, Product Cost by Period, Product Cost by Sales Order, Cost for Intangible Goods and Services.

One of the basic common decision management normally dealt with is "Should we buy the materials or should we produce?". Normally, if everything is equal management will choose the decision that entails lesser costs.

Actual Costing/Material Ledger (CO-PC-ACT)

This component application accomplishes these basic objectives; Carry material prices in multiple currencies/valuations, and actual costing.

Normally, the values of material inventory (raw materials, semi-finished goods, finished goods) are reflected in the system in one currency which is the company code currency. With the material ledger there can be additional two currencies to manage the values of the materials in the system.

Product Cost Controlling Information System (CO-PC-IS)
This application component renders useful and extensive range of reports for Product Cost Planning, Cost Object Controlling, and Actual Costing/Material Ledger.

C. Profitablity Management

Profit Center Accounting (EC-PCA)

A profit center is a management-oriented organizational unit used for internal controlling.
For instance, you may treat each of your product group as profit center in the system. This enables you to monitor the revenues and costs attributable to each product group. You can do an evaluation on each profit center; profit and loss and balance sheet.

Profitability Analysis (CO-PA)

The profits and contribution margins for market segment of a company can be analyed using Profitability Analysis application component of SAP.

The objective of COPA is to support sales, product management, and corporate wide planning and decision making, using an external view from a market oriented perspective.

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Overview of SAP Financial Accounting Module

noreply@blogger.com (Author) — Fri, 20 Feb 2009 04:31:00 +0000

The Financial Accounting application component of SAP satisfies the requirement of the accounting department of your organization. Each Company is required to provide and submit financial statements to the government who has jurisdiction over the company's operation. The financial statements is a result of all financial transactions recorded by the company. The Financial Accounting component of SAP greatly helps the accounting department of your company to generate reliable, relevant and accurate financial information.

Components of SAP Financial Accounting Module

General Ledger

This serves as complete records of all business transactions;
This gives users free choice of level of financial reporting;
Reconciliation G/L account with subsidiary accounts are simultaneously and updated;
General ledger and cost accounting areas are simultaneously updated; and
There is a real-time evaluation of and reporting on current accounting data.

Accounts Receivable

This submodule records and manages all accounting data and transactions for customers;
Postings to customers (subsidiary account) are simultaneously posted to Accounts Receivable g/l accounts. No month-end reconciliation is needed;
There is an online open item (outstanding balance) processing;
Individual customer accounts can be monitored online;
Dunning procedures is available;
Seamless integration with the Treasury; and
It supports credit management for customers and liquidity planning for cash management.

Accounts Payable

This records and manages accounting data for all vendors;
Postings to vendors (subsidiary account) are simultaneously posted to Accounts Payable g/l accounts. No month-end reconciliation is needed;
There is a seamless integration of Accounting with Purchasing (MM) through Invoice Verification (could be the 2 way or the 3 way match);
There is a management of One-time accounts (one-time vendors);
There is an online processing of payment proposals;
It supports liquidity planning for Cash Management; and
There is a downpayment processing (via FI direct postings or with reference to PO).

Bank Accounting

This submodule manages accounting transactions processed with banks;
Posting to bank subsidiary accounts are posted directly and simultaneously;
Supports posting of cash flows such as incoming and outgoing payments;
There is the functionality of Bill of exchange (Post-dated checks); and
There is a cash journal (Petty cash fund).

Asset Accounting

This module records and handles fixed assets (Property, plant and equipment);
Postings to fixed asset subsidiary are simultaneously posted to Asset g/l accounts;
There is an integration with the Purchasing (MM);
There is an online calculation and posting of depreciation. Depreciation postings are transferred automatically to Controlling component; and
Leased assets and asset under construction (AUC) are handled.

Travel Management

This handles the request, the planning and the booking of trips, also the settlement of travel expenses and the transfer of settlement results ot other business functions ares; and
IT has 3 sub-components: Travel request, Travel planning, and Travel expenses.

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SAP Basic Navigation

noreply@blogger.com (Author) — Thu, 19 Feb 2009 10:39:00 +0000

This article is really helpful to all Beginners and to other Advance SAP Users and Consultants. Share these basic knowledge on Navigating the SAP system to others through referring this post.

A. Logging On to SAP R/3 System

The SAP R/3 system is a client system. Each user session has only access to data in the client specified by the user when logging on. Before a username can be used to access the SAP system, it must be created using transaction SU01 and stored in the user master record.

B. Password

During logging on, you're required to enter password that match with the password of the username entered as maintained in the user master record. The password is a combination of alpha-numeric characters. Password is very effective security and prevents other users from accessing or modifying (messing up) your work. The system does not display the password you enter during logging on.

Here are some points to remember about the Password:

It can compose up to 8 characters
No three (3) characters in a row the same

C. Logging Of from SAP R/3 System

Logging off from the system is the exact opposite of logging on. To log off, you may select the X button on the upper right hand of the screen just like your MS Office applications and other systems. Or you may use transaction codes as short cuts. If you want to exit immediately, use transaction code /NEX. If you want the "Log off" pop-up window confirmation to appear then use transaction code /NED.

D. SAP Easy Access

The SAP Easy Access is the initial screen in SAP system. Others sometime called the entry point of SAP system. It can be personalized to contain only those items a user frequently access on his daily tasks. It has also favorite folder to keep frequently access transaction codes.

E. SAP Window

The SAP window is the user interface to the SAP system. It composes these parts:

Menu bar
Standard tool bar
Title bar
Application tool bar
Status bar
Screens (screen header and screen body)
Input field

F. SAP Messages

There are different types of SAP messages and those can be categorized by the first character in the message code:

E or F - These indicate an error message. A user can not proceed with the next processing unless the error is corrected. The cursor usually highlights the field where the error occured.

W - indicates a warning message. It could indicate also that a possible error has occured and the system wants the user to check an entry before proceeding. If this message appears during processing, you can still continue with processing the transaction by pressing Enter on your keyboard.

I - This indicates an information message. This will assist the user that a specific event in the system has taken place. For instance, posting accounts receivable after selecting the Save button the document number created displayed on the bottom of the screen.

G. Tabs

This enables user(s) to enter, display, and jump between multiple screens. For transactions containing multiple screens, tabs really provide clearer overview. Furthermore, tabs enable user(s) to proceed from one tab page to the next without having completed all the data, unless required field(s). To jump to other tab, just select the corresponding tab header.

H. Radio buttons and Check boxes

Radio buttons and Checkboxes are sometimes serve as additional criteria or filter to enter transactions and display reports in an SAP system. There are instances that these are both present in teh selection.

I. Dialog Boxes

The system usually displays dialog box for these cases:

When the system requires more information before proceeding to the next processing.
When it provides information such as messages or specific information on your current system tasks.

Normally, you must choose an action (e.g. Yes or No) from the dialog box before you can proceed with the next processing. Example, when you log-off with the system, a dialog box pop-up to confirm whether you want log off with or without saving your data.

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Basic: Logging On and Logging Off to an SAP System

noreply@blogger.com (Author) — Fri, 23 Jan 2009 07:03:00 +0000

Before you can use the SAP system, you must log on. And when you are finish using the SAP system, you must log off. The first time you log on and at regular intervals thereafter, you must change your password.

Regardless of the tasks you are doing in an SAP system, you must always start up and shut down the system.

1. You start the SAP system by selecting the SAP Logon icon on your desktop.

2. You log on to the SAP system by double-clicking its icon on the Systems tab or highlight the system and click the Log on icon.

3. If it is your first time to log on, you must change the initial password provided by your system administrator. If this is not your first time logging on, you have to change your password in accordance with the security policies of your company.

4. When you are finished working with the SAP system, you must log off.

How to Log Off?

To log off from an SAP system from any screen, you can perform one of the following:

1. From the menu bar, choose System > Log off.

2. If you have only one session running, choose the pushbutton at the upper right corner of the screen.The Log off dialog box appears. It informs you that if you choose Yes, any unsaved data will be lost.

If you are not sure that you have saved all your data and you do not want to log off, choose No to return to the screen in which you were working, otherwise, choose Yes.

All your SAP system sessions are close. You have successfully logged off.

Alternatively, you can type in the Command field /nex to exit all sessions open.

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Reconciliation Accounts and Special G/L Indicator

noreply@blogger.com (Author) — Fri, 23 Jan 2009 06:59:00 +0000

Most SAP people might be asking, what is a reconciliation account and special general ledger indicator in SAP Financial Accounting? Well, my dear readers surely you will be enlightened by this article.

First, you must understand the definition of general ledger. General ledger is the main accounting record of a business which uses double-entry bookkeeping. In SAP, the central task of G/L accounting is to provide a comprehensive picture for external accounting and accounts. Transactions that have a financial impact are captured by the general ledger. The transactions could be orinated from other modules. Example, posting of goods receipt (MIGO) performed by purchaing personnel (MM module) have already a financial impact. It increases the inventory balance and increases the GR/IR clearing account. The accounting journal entry the transactions MIGO create is debit (dr) Inventory account (G/L) and credit GR/IR clearing accounts (G/L).

The general ledgers summarize all financial transactions of a Company. It is the the basis of the preparation of the Company's Financial Statements.

Now, let's dig it further. Reconciliation Accounts are G/L accounts that receive postings from a subsidiary ledgers. Meaning, transactions data are not posted directly to recon accounts. Example of recon accounts are Accounts Receivable, Accounts Payable and Fixed Assets G/L. For accounts receivable G/L the subsidiary ledger is the customer account. All transactions with the customers are posted directly to the customer account and the recon account is automatically updated. How this thing happen? Well, when you create a customer account you specify under the Company Code data the reconciliation account.

So, all normal transactions to the customer e.g. sale of goods are posted to the recon account defined in the customer master data. Next question would be, what G/Laccount should be updated for postings of customer down payment (advance collection)? For proper accounting, downpayment should not be posted to Accounts Receivable - trade. It should be posted to different G/L account e.g. Advances from customer. Well, how would the said transaction be posted to Advances accounts.

This is one of the cases where the idea of special G/L indicator comes in. With the use of special G/L indicator you can specify in the set-up what G/L account advances transactions be posted. Standard posting key of customer transaction with special G/L indicator are 09 (dr) and 19 (cr). The system will always require you to indicate the special G/L indicator when you use the said posting keys.

Cheers, more tips to be posted!

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