sap org structure

8/6/2019 SaP Org Structure

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Organizational structure

and business transactions

in SAP R/3

Structure of the SAP R/3 System incommercial terms



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Organizational units in the

Financial accounting module

• Client

• Company Code

• Business Area

• Company

• Credit Control Area

• Funds Management Area

• Dunning Area• Chart of Accounts

• Controlling Area

Client

• Central organizational element

• Top-level structural element of a company

• Separate unit with its own separate master records

and complete group of tables

• To spesify the client in which the user want to

work they have to enter a Client Code when they

logs into the R/3 system



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Organizational structure of a client

Client

Company Code1 Company Code 2 Company Code 3

Company Code

• Client can be subdividet into one or more

Company Codes

• Represent legally independent companies

• Several Company Codes in each client allows you

to manage accounting data for different

independent companies at the same time



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Organizational structure of a Company Code

Company Code (Group)

Business Area 1

(North)

Business Area 2

(South)

Business Area• One company code can be divided into several

business areas

• One business area may also be used in multiple

company codes

• Only used to provide in-house information in the

SAP R/3 system



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Company

• The smallest organizational unit for which legal

financial statements can be prepared

• Can include one or more company codes

• Each one of a company’s company codes must use

the same Chart of Accounts

Organizational structure of a Company

Company

Company Code 1 Company Code 2 Company Code 3

Chart of

accounts1

Chart of

accounts1

Chart of

accounts1



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Credit Control Area• Organinzational unit in which all account

receivable from a customer are totaled

• Can be defined in such a way that it can be used in

several Company Codes

Organizational structure of a Credit Control

Area

Credit Control Area

Company code 1

(Subsidiary)

Company code 2

(Subsidiary)



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Funds Management (FM) Area• Used to plan the deployments of Funds

• Identical to the Company Code in broad terms

• Controls budget management in an independent

unit that draws up its own accounts

• You can assign several Company Codes to one

FM Area

Organizational structure of FM Area

FM Area

Company Code 1



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Dunning Area

• Dunning procedures are usually managed in the

accounts receivable and accounts payable

departments

• If dunning is managed independently in several

organizational units you must create Dunning

Areas

Organizational structure of DunningArea

Company Code

(Subsidary)

Dunning Area 1

(Division A)

Dunning Area 2

(Division B)

Dunning Area 3

(Division C)

DunningProcedure 1 DunningProcedure 2 DunningProcedure 3



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Chart of Accounts

• Contains all of a company’s General Ledger

accounts

• Used by both the Financial Accounting and the

Controlling modules

• 1-1 relationship between Chart of Accounts and

Company Code or Controlling Area

Organizational structure of Chart of Accounts



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Single-code system:

– internal and external accounting form one unit – all the postings are accountable

– you can only calculate a company’s net income after

determining the neutral expenditure and the neutrale

income

• Dual-code system:

– financial accounting and operating accounting are

carried out in two separate settelment areas

– each settelment is a closed unit

• The information in a Chart of account controlshow master records are created in the Company

Code

Controlling Area• Organizational unit in the Controlling module

• The information in Financial Accounting is

directed towards interested parties from outside

the company.

• Controlling does not have to comply with the legal

regulations for financial accounting.



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Overview of the organizatinal structures of

Logistics elements

Client =Group

Company Code 1 Company Code 2

Production Department Plant

Plant and Storage Locations

• Company’s productions locations and branch

offices are represented by Plants

• One Company code may contain several Plants

• The plant is the location at which goods are

manufactured or a service is performed

• A plant may consist of several physical Storage

Locations



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Organizational structure for plants and storage

locations

Warehouse 3

Plant 1

Production

Warehouse 3 Warehouse 3

Plant 2

Dept/Division

Warehouse 3 Warehouse 3

Plant 3

Distribution

Company code 1

Sales Organization DistributionChannel and Line

• Sales organization is the top organizational unit in

the Sales and Distribution module

• You can assign one or more Distribution Channels

to the same Sales Organization

• You can assign several Lines to the same

Distribution channel

• Lines represent various product groups



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Organizational structure for Sales

Organization, Distribution Channel and Line

Division 1 Division 2

Distribution Channel

(Wholesale)

Division 1 Division 2

Distribution Channel

(Retail)

Sales Organization

(In-Plant Sales Organization)

The structure of the FinancialAccounting module

• The task of financial accounting department

– is to record all business transactions systematically and

comprehensively

– enter all these transactions in the system, and document

them



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• Financial Accounting is subdivided into

– General Ledger

– Extended ledger

– Accounts payable

– Accounts receivable

– Asset accounting

– Consolidation

– Financial contolling

– Investment

– Funds monitoring

– Travel management

Components of the Financial Accountingmodule



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Connecting to other SAP modules• The Financial accounting module is linked to

almost all the others in SAP

• Business transactions are recorded as they occur in

the form of documents, and stored in a shared

database

The document principle

• All postings are always stored in the form of

documents

• Each document must be complete before it is

posted

• Each document must contain specific minimum

information (document date, document type,

posting key, account numbers, amounts)• Incomplete or inconsistent Documents cannot be

posted



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Real-Time posting• Ensures that all employees at different levels have

continous access to a current and uniform dataset

• SAP R/3 supports Real-Time processing by using

a combination of batch processing and dialogue

processing

Double-Entry Accounting

• Ensures that all the business transactions recorded

in subledgers are also posted to the relevant

reconsiliation account in General Ledger

accounting

• You can post data in the Controlling application

component at the same time



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General Ledger Accounting• Provide a comprehensive picture of the external

accounting process and the accounts involved in it

• Provides the following functions:

– Atomatic and simultanious posting of all subledger item

to the coresponding ledger accounts

– Simultaneous updating of the general ledger and

controllig data

– real-time evaluation and reporting of current postingdata in the form of account displays and closing

accounts with different financial statement versions

General ledger accounts

• Contain the increases and decreases that correspond

to the flows of goods and services used in the

Logistics module

• contains master records that controls how business

transactions are recorded and posted to the account

• The Master data record identifies whether an

account is a reconsiliation account

• Reconsiliation accounts groups together the value

items from the accounts of individual subledgers



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Documents in Financial Accounting• Document type is an importent control elememt in

the SAP R/3 system

• Document type is used to:

– identify different business transactions

– control how account types are posted

– assign document numbers

– determine whether a ’gross’ or ’posting’ is involved

• Posting key controls how documents are recorded

Financial statements

• Divided by time into daily, monthly and annual financial statements

• Daily financial statements:

– can be created immediately without any extra steps

– is sorted chronologically in a posting journal

• Monthly financial statements:

– carry out a number of closing tasks to create it

• Annual statments: – The annual accounts is designed to provide information

for internal and external recipients

– Business transactions need to be entered inchronological order



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• Structure of the Balance Sheet and the P&L

account:

– In SAP R/3 system you can create Balance Sheet and

P&L statements in various language and currencies to

meet the requirements of companies that operates

internationally

– you can select different classification schemes for

communications, tax and international reports

Subledgers

• Contain posting data information in detail

• The following subledgers are part of the R/3

system’s ledger:

– Account Receivable

– Account Payable

– Asset Accounting

– Inventory Accounting

– Personell Accounting

– Bank Accounting



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Account Receivable• Contains the accounting data for all the accounts

receivable that are present in the system

• Customer master data record:

– contains all the data that describes the commercial

relationship with a specific customer

– used by the Financial accounting component

– divided into a general section, a section for individual

campany codes and a section for sales data

• Outgoing invoices and credit memos:

– the system will automatically post invoice and credit

memos in the FI module when you create an invoice or

credit memo in SD

• Prcessing incoming payments:

– by computerized direct debiting or manually, by check

or bank order

• Dunning letters:

– to include a customer in the SAP R/3 system’s

automatic dunning process, you must first enter a

predefined dunning procedure in the customer master data record



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• Customizing background for defining thedunning program:

– Which company codes must always be included in

dunning

– Which dunning procedure is to be used

– Which dunning costs are to be charged

– The net data on which a specific dunning stage is

reached

– Which dunning letter is to be sent to the customer

Account Payable

• Manages all vendor accounting data

• Vendor Master data record:

– is created in the same way as the customer master data

record

– contains all the data required for handeling the business

relationship

• Incoming invoices:

– For MM and FI modules you enter this data in the

module’s Invoice Check Procedure function

– The Invoice Check Procedure checks the data of an

incoming invoice against the data of tha order and

delivery



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• Payments:

– SAP R/3 system can use the payment program to

handle cash transactions automatically

– Two-stage process

– The system uses the information in the documents and

master record to create a payment proposal list

• Customizing backgrund for defining the payment

program:

– Which company codes always take part in cash

transactions and which company codes are to handle

payments

– Which methods of payments are to be used in each case – From which bank account the payment is to be made

– The form to be used for payment

Assets Accounts

• administers and monitors a company’s fixed assets

• The following functions are integrated in it:

– Asset accounting and valuation

– Leasing management

– Consolidation preparation

– information system

• Linked to a great many other modules of the SAPR/3 system



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Bills of exchange• a contractual security whereby the person issuing

the bill places himself/herself or a therd party

under an obligatin to pay a certain sum within a

certain period

• Payee: recipient of the payer

• Drawee: person paying

• Anyone who signs a bill of exchange is liable for

the sum

• A bill of exchange merely documents the legal

aspects of payment claims

Bill of exchange strictness

• A bill oexchange can be written on any sheet of paper, but only counts as a bill of exchange if itmeets the legal requirements:

– Must appear in the text of the document

– in the language in which it is issued

– it must consist of som other components (certain sum of money, name of drawee, expiery data, place of payment,to whom the payment is to made, day and place of issue,

signature of the issuer)• The following variation can apply:

– The issuer can also be the drawee

– The issuer can also be the payee

– The issuer places itself under obligation



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Accepting a bill of exchange

• The obligation of the bill only comes about with

acceptance

• At least two people are always required to create

an obligation

Causal debt versus bill-of-exchange debt

• Debt relatinship is referred to as abstract because

the bill of exchange does not imply its legal reason

• In crontrast to bill of exchange, the legal reason in

the case of claim, is already included

• The bill of exchange also requires a reason



Payment and fulfilment• The owner of a bill of exchange can demand

payment on the due date

• Only payment to the legally entitled person counts

as fulfilment

• A bill of exchange protest is the formal

documentation stating that a bill of exchange has

not paid when due

• Regress (recourse) can be used in two cases:

– When the drawee does not pay

– When the drawee does not accept liability to pay