sap integration-fi mm sd

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.