std. template bbp fi

SAP ERP Implementation

Business Blue Print

Finance

Record of Release

Version No.

Modified By Reviewed By Authorized By Release Date Modifications Done

1.02.0

2.1

IT CO LOGO Business Blue Print- Finance CLIENT LOGO

TABLE OF CONTENTS ....................................................................................................................

1 ORGANIZATION STRUCTURE.............................................................................................7

Chart of Account.............................................................................................................................................8

Company Code................................................................................................................................................8

Ledger…..........................................................................................................................................................9

Fiscal year variant........................................................................................................................................10

Posting period Variant.................................................................................................................................10

Document number range for Company Code............................................................................................10

Document type & number range.................................................................................................................11

Field status Group........................................................................................................................................12

Tolerance group for users............................................................................................................................12

Currency........................................................................................................................................................12

Posting Keys..................................................................................................................................................13

2 MASTER DATA............................................................................................................................15

a) General Ledger Accounting....................................................................................................................15

General Ledger master.................................................................................................................................15

Account Group..............................................................................................................................................16

Reconciliation account..................................................................................................................................16

Retained earning account.............................................................................................................................17

Number Range..............................................................................................................................................17

b) Accounts Receivable Accounting...........................................................................................................18

Customer Master data..................................................................................................................................18

Terms of payment.........................................................................................................................................18

c) Accounts payable accounting..................................................................................................................19

Maximum exchange rate difference............................................................................................................19

Vendor Master data......................................................................................................................................19

Tax calculation procedure...........................................................................................................................19

Tax codes.......................................................................................................................................................20

Terms of payment.........................................................................................................................................20

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IT CO LOGO Business Blue Print- Finance CLIENT LOGOd) Asset Accounting......................................................................................................................................21

Chart of Depreciation...................................................................................................................................21

Asset Class.....................................................................................................................................................21

Asset Master.................................................................................................................................................22

Asset sub number.........................................................................................................................................22

Depreciation Key..........................................................................................................................................22

e) Bank Accounting......................................................................................................................................23

3 BUSINESS PROCESS...................................................................................................................24

GENERAL LEDGER ACCOUNTING......................................................................................................24

3.1.1 Cash Transactions...............................................................................................................................24

3.1.2 Bank Receipt........................................................................................................................................26

3.1.3 Funds Transfer.....................................................................................................................................31

3.1.4 Dishonor of Instruments.....................................................................................................................33

3.1.5 Bank payment......................................................................................................................................35

3.1.6 Electronic Payments............................................................................................................................37

3.1.7 Demand Draft/ Pay order...................................................................................................................39

3.1.8 Reversal Entries...................................................................................................................................41

3.1.9 Bank Reconciliation Statements.........................................................................................................43

3.1.10 Bank Deposits.....................................................................................................................................46

3.1.11 Term Loans / Cash Credit................................................................................................................48

3.1.12 Journal Entries – Intra Branch........................................................................................................50

3.1.13 Journal Entries-Inter Branch...........................................................................................................52

3.1.14 Taxes-Excise......................................................................................................................................54

3.1.15 Taxes-Sales Tax..................................................................................................................................59

3.1.16 Taxes-Service Tax..............................................................................................................................63

3.1.17 Taxes-Entry Tax................................................................................................................................66

3.1.18 Taxes-TDS..........................................................................................................................................68

3.1.19 Tax Deducted at Source (Asset)........................................................................................................72

3.1.20 FBT & Advance Tax.........................................................................................................................74

3.1.21 Work Contract Tax...........................................................................................................................76

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IT CO LOGO Business Blue Print- Finance CLIENT LOGO3.1.22 Job Work Accounting........................................................................................................................78

3.1.23 Hospitality..........................................................................................................................................80

3.1.24 Stock Transfer-Raw Material...........................................................................................................82

3.1.25 Stock Transfer-Finished Good.........................................................................................................84

3.1.26 Accruals..............................................................................................................................................86

3.1.29 Technical Fee......................................................................................................................................88

3.1.30 Expenses Reimbursable to XYZ LIMITED....................................................................................90

3.1.31 Marketing Compensation.................................................................................................................92

3.1.32 Prepaid expenses................................................................................................................................94

3.1.33 Proof Sheets........................................................................................................................................96

3.1.34 Valuation - Raw Material/Packing Material/Fuels & Lubricants................................................98

3.1.35 Stock Valuation - Finished Goods..................................................................................................100

3.1.36 Stock Valuation - Depot Stocks......................................................................................................102

3.1.37 Stock Valuation - Stock in Transit.................................................................................................104

3.1.38 Stock Valuation - Obsolete / Damaged Stock................................................................................106

3.1.39 Discount on Bitumen.......................................................................................................................108

3.1.40 Excise Differential (RTP) XYZ LIMITED....................................................................................110

3.1.41 Cash Flow Statement.......................................................................................................................112

3.1.42 Payroll...............................................................................................................................................114

3.1.43 Issue of Bank Guarantee.................................................................................................................116

3.1.44 RBI Return for Foreign Investments.............................................................................................118

3.1.45 Transactions with Associated Concerns........................................................................................120

3.1.46 Security Deposits Received or Paid in excess of Rs.20, 000.........................................................122

3.1.47 Sample documents...........................................................................................................................124

3.1.48 GL document parking & posting...................................................................................................126

3.1.49 Document Split functionality..........................................................................................................128

3.1.50 Valuation of Foreign Currency item..............................................................................................131

3.1.51 Clear GL accounts...........................................................................................................................133

ACCOUNTS RECEIVABLE:-..................................................................................................................135

3.2.1 Advance Receipts...............................................................................................................................135

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IT CO LOGO Business Blue Print- Finance CLIENT LOGO3.2.2 Receipts against Credit Supplies......................................................................................................138

3.2.3 Bank Guarantee / Letter of Credit for Credit Supplies.................................................................141

3.2.4 Bill Discounting (BOE).....................................................................................................................143

3.2.5 Inter Branch Receipt Accounting.....................................................................................................145

3.2.6 Interest on Delayed Payments..........................................................................................................147

3.2.7 Debit & Credit Notes........................................................................................................................150

3.2.8 Sales Returns......................................................................................................................................152

3.2.9 Bad Debts & Provisions.....................................................................................................................154

3.2.10 C-Forms from Customers..............................................................................................................156

3.2.11 Supplies to SEZ/EOU & Exempted Supplies under Not: 108/95................................................158

3.2.12 High Seas Sales.................................................................................................................................160

3.2.13 Customer Invoice document holding & posting...........................................................................163

ACCOUNTS PAYABLE............................................................................................................................165

3.3.1 Purchase of Material Bill Processing...............................................................................................165

3.3.2 Payment Process................................................................................................................................168

3.3.3 Bank Guarantee from Vendors........................................................................................................172

3.3.4 Letter of Credit..................................................................................................................................174

3.3.5 Payment against Document..............................................................................................................176

3.3.6 High Seas Purchases..........................................................................................................................178

3.3.7 Inter Office Payments........................................................................................................................181

3.3.8 Purchase Bill Processing – Imports..................................................................................................183

3.3.9 Payment processing– Imports after credit period..........................................................................185

3.3.10 Exchange Fluctuations - Capital / Revenue...................................................................................187

3.3.11 Payment of Duty on Imports..........................................................................................................190

3.3.12 Service Vendor Payments:-.............................................................................................................193

3.3.13 Capital Vendor Payments...............................................................................................................196

3.3.14 Invoice processing without Purchase order..................................................................................198

3.3.15 Credit Memo/Note with Purchase Order......................................................................................200

3.3.16 GR/IR account maintenance...........................................................................................................202

3.3.17 Bill of Exchange...............................................................................................................................204

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IT CO LOGO Business Blue Print- Finance CLIENT LOGO3.3.18 Vendor Invoice document holding & posting...............................................................................206

ASSET ACCOUNTING.............................................................................................................................208

3.4.1 Acquisition Process............................................................................................................................208

3.4.2 Depreciation Accounting...................................................................................................................211

3.4.3 Transfer of Assets..............................................................................................................................214

3.4.4 Disposal of Assets...............................................................................................................................216

3.4.5 Physical Verification of Assets..........................................................................................................218

3.4.6 Insurance of Assets/Stock..................................................................................................................220

3.5 Month End Process...............................................................................................................................222

YEAR END PROCESS..............................................................................................................................224

3.6.1 Year End Process – FY......................................................................................................................224

3.6.2 Year End Process – CY................................................................................................................227

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IT CO LOGO Blue Print Document –Finance CLIENT LOGO

1 Organization structure

Attached below is the Organization structure:-

System Configuration Considerations

1. The controlling area created in controlling module will be assigned to operating concern.2. The company code created in Finance will be assigned to controlling area.3. The sales organization created in SD module will be attached to company code.4. The purchasing organization created in MM module will be attached to company code. 5. The plants created in material management module will be assigned to company code. That

means all the transactions taking place in the plants are posted to the attached company code in FI.

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Chart of Account

Chart of account serves the following two purposes:-1. Permits recording of transactions to the level of detail required by business.2. Preparation of Balance sheet & Profit and loss statement in compliance with the statutory

regulations.

One Chart of Account will be created for BPE.

Below values will be defined while configuring Chart of Account:

Field NameChart of Account BPEDescription BPE Chart of AccountMaint. Language EnglishLength of GL account 6 (Numeric)Controlling integration Manual creation of Cost

element

Cost element can be created in SAP in two ways:-1. Automatic creation of cost element:-Whenever a GL account is created, cost element will be created automatically in the background.2. Manual creation of Cost element:-Once GL account is created, cost element will be created manually through a separate process.

For BPE, Cost element will be created manually, to have control over creation of cost element.

Company Code

Company code is the basic organizational unit in SAP FI for which the balance sheet and profit & loss can be drawn from the legal requirement point of view.

One Company code will be created for BPE.

Below values will be defined while configuring Company code:

Field ValueCompany Code BPECompany Name Bull Power Electronics

LimitedCity MumbaiCountry IndiaCurrency INRLanguage EnglishAddress

Company code created will be assigned to the Chart of Account created in above step.

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Ledger

Ledger Concept: -

1. Possible to perform parallel accounting for different accounting principles

2. Separate ledgers can be defined for the different accounting principles

3. Documents can be posted in these ledgers or group of ledgers to fulfill the accounting requirement

4. All company codes are assigned to a leading ledger ‘0L’ for each client. Only one leading ledger for each client.

5. Only values from leading ledger are posted to CO

New GL accounting will be implemented for BPE. Below mentioned Ledger will be created for BPE:-

Ledger Description0L Leading LedgerH1 Colas reporting ledgerL1 Local GAP LedgerU1 US GAP LedgerI1 IFRS Ledger

Accounting for the BPE financial year April to March will be done through Leading ledger 0L and non leading ledger H1 will be used for reporting as per the Colas, France financial year January to December. Fiscal year variant V3 (April to March) will be assigned to leading ledger 0L, and non leading ledgers except H1. Fiscal year variant K4 (Jan to Dec) will be assigned to the non leading ledger H1.

Above Ledgers are created to report according to different accounting principle requirements. Ledger 0L is the leading ledger. Ledger L1 is the non leading Ledger which represents the Local GAP reporting requirements. All the Finance postings in the Leading ledger 0L will flow automatically to all the other non leading ledgers. Posting specifically made to any of the non leading ledger to adhere to the respective accounting principle requirements will not flow to any of the other ledger.

As per SAP IFRS requirement can be handled through non leading ledger. A non leading ledger I1 will be created for IFRS requirement.

Fiscal year variant

Fiscal year variant defines the number of posting period and special period in SAP. BPE will be having the financial accounting period as April to March. BPE will be having 12 posting periods and 4 special

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periods. The month will start from 1st day of the month and will end on the last day of the month. We will be selecting the SAP standard fiscal year variant V3 for BPE. Fiscal variant created will be assigned to Company Code.

Special periods are created for the year end postings. Once the last month of the Fiscal year is closed, all the adjustment postings for that Fiscal year can be posted in those special period. The postings will be done in the last period of the Fiscal year using the special period.

Posting period Variant

In this activity variant will be defined for open posting periods. Posting period variant is basically used in opening and closing of posting periods. One posting period variant BPE will be created for BPE. This will also be used for controlling the postings at the month end. Posting period variant created will be assigned to Company Code.

For example for the few days after the end of the month we can allow postings only the Journal postings and disallow the postings related to Customers & vendors. This can be achieved by keeping open the Journal ledger posting and closing the customers & vendors related postings with the help of posting period variant.

Posting to any period is controlled through period opening & closing. Once the period is closed, no transaction can be posted in that closed period. Period opening & Closing activities is done in Material Management & Finance module. In Finance module period open/closing activity can be separately controlled for the Assets, Customers, Vendors, GL accounts, Materials. Once the period is closed, it can be reopened either for all the transactions are for only few for example GL accounts. If only GL account is opened then only transactions having effect to the General ledger can be posted, no transactions can be posted for the Customer, vendor, assets or materials. Back date entry is possible in the open period, but in case period is closed, back date entry cannot be posted.

Period opening /Closing will be at the company code level. It can not be controlled at the plant level.

Document number range for Company Code

Number range is created for the documents. One or more document type is assigned to each number range. If year dependent number range is selected then same number range interval can be used several times for different “to fiscal year”.

If year independent number range is selected then select 9999 in the “to fiscal year” field. For BPE all the number range will be year dependent only i.e no number range will be year independent. Every year the number range for all the document type needs to be defined. Number range can be copied from earlier Fiscal year to the new fiscal year. If required new number ranges can also be added.

The number interval must not overlap. The number range can be copied from one fiscal year to another fiscal year using the transaction code OBH2.

As per the BPE requirement the number range will be location specific i.e. each location will have its separate number range.

Document type & number range

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Document type is a key that is used to classify accounting documents and distinguish between business transactions to be posted. The document type is entered at the header level of the document.

In this activity document type are created for General ledger, Customer, Vendor & Asset related business transactions in Financial accounting. SAP standard document type can be used. Number range is specified for each of the document type. Document numbers are chosen from this number range. One number range can be used for several document types.

For BPE Plant wise separate number range will be defined for each of the document type. A new document type can be created later on also as per the requirement or the existing document type can be changed to the new document type through Configuration. For Sales Invoice & Excise Invoice number plant specific number range option will be explored through ABAP development. For all the other documents, plant entry will be made mandatory.

Below mentioned are the few of the SAP standard document type:-

Document Type DescriptionAA Asset postingAB Accounting documentAF Dep. postingsAN Net asset postingC1 Closing GR/IR acctsDA Customer documentDB Cust.recurring entryDG Customer credit memoDR Customer invoiceDZ Customer paymentEU Conversion diff.EuroKA Vendor documentKG Vendor credit memoKN Net vendorsKP Account maintenanceKR Vendor invoiceKZ Vendor payment

The above list is not exclusive. For example new document type can be created for Cash receipt and Cash payments based on the BPE requirement etc.

Field status Group

Field status group determines the screen layout for document entry.Fields can have the following statuses:Optional entry - you can enter data in the field

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sapevent:DOCU_LINK%5CDS:GLOS.3526B8A9AFAB52B9E10000009B38F974


Mandatory entry - you must enter data in the fieldSuppressed - the field does not appear on the screen

I.e the field status group determines which fields are ready for input, which are required entry fields and which are hidden during document entry.

Field status group are maintained in each of the GL master data. Field status group for vendor & Customer are determined through their respective reconciliation accounts. All the field statuses are grouped in to one field status variant and that field status variant is assigned to the Company code. For BPE field status variant will be created with the name BPE.

Tolerance group for users

We need to predefine the various amount limits for the users with which we determine:-

1. Maximum document amount the user is allowed to post.2. Maximum amount the user can enter as a line item in a customer or vendor account.3. Maximum cash discount percentage the user can grant in a line item.4. Maximum acceptable tolerance for payment differences for the user.

Payment differences are posted automatically within certain tolerance groups. This way the system can post the difference by correcting the cash discount or by posting to separate expense or revenue account.

Currency

Reporting Currency:-In addition to the one currency defined in the above step, two more currencies can be defined for the company code. Additional currencies are defined for the reporting purposes only. Through additional currency, the reports can be seen in those currencies also other then the company code currency. For BPE we will be defining only one currency “INR”.

Transaction currency:-

Although the transaction can be posted in any currency like USD or Euro, through exchange rate table all the foreign currency transactions will be automatically converted in to INR by the system. Exchange table is maintained at the monthly basis as per the RBI guidelines. Exchange rate can be maintained on daily basis also, based on the Business requirements.

Posting Keys

Posting key is defined while entering the line item. The posting key controls how the line item is entered and processed.

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For each posting key, following are defined :

1.Which side of an account can be posted to,2.Which type of account can be posted to, and3. Which fields the system displays on the entry screens and whether an entry must be made (field status).

Posting Key Name Debit / Credit Account type1 Invoice Debit Customer

2Reverse credit memo Debit Customer

3 Bank charges Debit Customer4 Other receivables Debit Customer5 Outgoing payment Debit Customer

6Payment difference Debit Customer

7 Other clearing Debit Customer8 Payment clearing Debit Customer9 Special G/L debit Debit Customer11 Credit memo Credit Customer12 Reverse invoice Credit Customer13 Reverse charges Credit Customer14 Other payables Credit Customer15 Incoming payment Credit Customer

16Payment difference Credit Customer

17 Other clearing Credit Customer18 Payment clearing Credit Customer19 Special G/L credit Credit Customer21 Credit memo Debit Vendor22 Reverse invoice Debit Vendor24 Other receivables Debit Vendor25 Outgoing payment Debit Vendor

26Payment difference Debit Vendor

27 Clearing Debit Vendor28 Payment clearing Debit Vendor29 Special G/L debit Debit Vendor31 Invoice Credit Vendor

32Reverse credit memo Credit Vendor

34 Other payables Credit Vendor35 Incoming payment Credit Vendor36 Payment Credit Vendor

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difference37 Other clearing Credit Vendor38 Payment clearing Credit Vendor39 Special G/L credit Credit Vendor40 Debit entry Debit G/L account50 Credit entry Credit G/L account70 Debit asset Debit Asset75 Credit asset Credit Asset80 Inventory taking Debit G/L account81 Costs Debit G/L account

82Inventory difference Debit G/L account

83 Price difference Debit G/L account84 Consumption Debit G/L account85 Change in stock Debit G/L account86 GR/IR debit Debit G/L account

89Stock inward movement Debit Material

90 Inventory taking Credit G/L account91 Costs Credit G/L account

92Inventory difference Credit G/L account

93 Price difference Credit G/L account94 Consumption Credit G/L account95 Change in stock Credit G/L account96 GR/IR credit Credit G/L account

99Stock outwd movement Credit Material

2 Master Data

Master data consist for following sub modules:

a) General Ledger accounting

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b) Accounts Receivable accountingc) Accounts Payable accountingd) Asset accountinge) Bank accounting

a) General Ledger Accounting

GL master contains the data that is always required by General ledger to determine the account’s function. GL account master controls the posting of accounting transactions to G/L accounts and the processing of the posting data.

General Ledger master

The GL master in SAP has two segments:-

1. Chart of Account segment-The Chart of account segment is at client level. Any company code wishing to use the GL code can extend it and create a company code view.

2. Company code segment-A company code intending to use the GL code from Chart of account has to create the company code view so that it can post to GL code.

Chart of Account segment-Following information is contained in the chart of account area of a GL master:-

1. The Chart of account name2. The account number & account name (Long & short text)3. The indicator that specifies whether the account is a balance sheet account or a P&L statement.

Company Code segment:- Following information is contained in the Company code segment of a GL master:-

1. Account currency-Indicates the currency in which account is held. If the account is held in Company code currency, then transaction can be posted in any currency for that GL account, but if currency other than company code currency is maintained in the GL master, then transaction will be allowed to be posted in that currency only for that GL account.

2. Tax category-Indicates whether account is relevant for Tax. For example “only input tax allowed” tax category is entered, then system allow only input related tax codes in that GL account.

3. Posting without tax allowed indicator- Indicates that account can be posted without tax code. 4. Reconciliation account - Reconciliation account ensures the integration of a subledger account

into the general ledger5. Open item management- Items posted to accounts managed on an open item basis are marked as

open or cleared. 6. Line item display- Indicates that line item display is possible for the account. 7. Field status group- Explained in page 128. Post Automatically only-No direct posting is possible to this account. It indicates that this

account can be posted by the system only.

There are two methods of creating GL codes in SAP:-

1. One step creation:- Both the Chart of account view and company code view are created in one step using transaction code FS00.

2. Two step creation:- In this first chart of account view is created and then the company code view using transaction code FSP0 & FSS0.

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For BPE, we will be creating the Chart of account view and company code view through one step. GL accounts related to Purchases, sales & customer will be created under XYZ LIMITED hospitality company code

Account Group

With the account group, similar accounts are grouped together and control the creating and changing of master records. They control

The account number interval in which the account number must lie.

The screen layout for creating G/L accounts in the company code-specific area. This means that you can define whether fields require an entry, may have an entry, or are hidden when creating or changing a master record in the company code-specific area.

Type of GL Account Group

Fixed asset account ASTLiquid Fund Account CASGeneral G/L Account GLAMaterial management Account MATIncome Account. INCExpense Account EXPFBT Account FBT

Reconciliation account

Below mentioned reconciliation account will be defined for Vendors:-

Type of AccountDomestic-Revenue non MSME-Govt. Domestic-Revenue non MSME-PrivateDomestic-Capital non MSME-Govt.Domestic-Capital non MSME-PrivateForeign –CapitalForeign –RevenueDomestic-Revenue MSME-Govt.Domestic-Revenue MSME-PrivateDomestic-Capital MSME-Govt.Domestic-Capital MSME-PrivateEmployeesOne Time Vendor

Below mentioned reconciliation account will be defined for Customer:-

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Type of AccountDomestic-Govt. –S. DebtorsDomestic-Private-S.DebtorsExport-S. DebtorsOne Time Customer-S. DebtorsTolling Customer-Tolling

Retained earning account

Retained earnings account is assigned to each P&L account by specifying the P&L account type in Chart of Account area of each P&L account in SAP. At the end of Fiscal year, the system carries forward the balance of the P&L account to the retained earning account of the SAP. One or more P&L statement account type can be created in Chart of account.

At the year end the balance in the P&L accounts are transferred to the retained earning account using the transaction code F.16.

Number Range

Number range for all document types will be location wise. Through User exit/enhancements separate number range coding will be done for all vouchers such as Bank Payments, Receipts, Journal Vouchers, Credit & Debit Notes, Bank Payment Voucher for withdrawal of cash, Tax payment through Electronic payment etc.

b) Accounts Receivable Accounting

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The Accounts Receivable (AR) application component records and manages accounting data for all customers. It is also an integral part of the receivable system and is closely integrated with the Sales and Distribution Module. The system automatically triggers postings in response to the operative transactions. All Deliveries and invoices are managed according to customers. AR is a sub-ledger of the General Ledger and hence all postings in AR will be automatically recorded in the General Ledger.

Postings are made to the accounts receivable module from various sources:

Automatic postings made by accounts receivable programs Manual postings made within the finance department. E.g. invoice entry (Customer Invoice

directly through Finance using the Transaction code FB70). I.e. in this option the customer Invoice does not have to be routed through SD module, it can be posted directly through Finance module.

Each customer master is linked to a Reconciliation account in the general ledger. This Reconciliation account serves as a Control account for all Customers related transactions emanating in the AR Module. There can only be a single Reconciliation account and once linked, the link cannot be changed. All postings to the customer account are made simultaneously to the reconciliation account as also to the Sub-ledger. It is not possible to post to a reconciliation account manually by passing a Journal Voucher. This ensures that the AR ledger always agrees with the reconciliation account.

Customer Master data

Customer master data controls how transaction is posted & processed for a Customer. It contains the following data at the company code level:-

1. Bank detail2. Reconciliation account3. Interest indicator4. Account control data like the number of the GL reconciliation account for the Customer account.5. Payment method & terms of payment.6. Withholding Tax information

All the information like Name, address, Tax details, Zone, District, Excise registration number etc. are maintained in the General data and the Sales area data section of the master data. They are covered in detail in the SD BBP document.

Terms of payment

Payment terms are maintained in the Customer master data. In payment term rules are defined defining the terms of payment. The payment term is proposed while entering the customer document.

Below mentioned is the examples of the payment term:-

Customer payment term:- Receivable from customer within 45 days, if paid within 15 days 1% discount will be paid. Payments by way of DD, Cheque, Bank Guarantee, Post Date Cheques etc. c) Accounts payable accounting

The Accounts Payable application component records and administers accounting data for all vendors. It

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is also an integral part of the purchasing system. Postings made in Accounts Payable are simultaneously recorded in the General Ledger where different G/L accounts are updated based on the transaction involved (for example payables and down payments).

The system contains due date forecasts and other standard reports that you can use to help you monitor open items. Vendor payment due date is calculated based on the payment term entered in the document. Below mentioned four options are available for default for base line date:-

1. No default date 2. Posting date 3. Document date 4. Entry date

Payment terms will be maintained in the configuration phase.

Maximum exchange rate difference

The Foreign currency amount entered in the document will automatically be converted in to company code currency. The conversion will take place through foreign exchange table. Foreign exchange rate table will be maintained on monthly basis as per the RBI guidelines.

If the exchange rate for a particular currency is not maintained in the exchange rate table, then document cannot be posted in that currency. Any number of currencies can be maintained in the exchange rate table.

While document entry, the exchange rate defaulted by the system from the exchange rate table can be changed by the user. How much maximum exchange rate difference can be between the exchange rate entered in the header of the document and the exchange rate stored in the exchange rate table is defined in this step. If the deviation is more than the percentage defined, a warning message appears.

Vendor Master data

Vendor master data controls how transaction is posted & processed for a vendor. It contains the following data in the Company code view:-

1. Tax number2. Bank detail3. Account control data like the number of the GL reconciliation account for the vendor account.4. Payment method & terms of payment.5. Withholding Tax

All the other details like Name, address, purchasing data are maintained in the General Data & Purchase org data. It has been explained in detail in MM business blue print document.

Tax calculation procedure

Tax calculations are available in SAP for most of the countries. TAXINN is a tax calculation procedure for country version India and it supports condition-based excise determination.

Tax procedure TAXINN will be defined for BPE. Tax applicable to BPE will be assigned here along with the condition type.

Tax accounting procedure has been explained in the General ledger accounting, Accounts Receivable & Accounts Payable sections in the respective business processes.

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Tax codes

Various tax codes applicable to BPE like input tax, output tax etc. will be created here along with the tax rates. These Tax codes will be maintained at TAXINN level mentioned above. GL accounts will be assigned here for each of the Tax code.

Terms of payment

Payment terms are maintained in the Vendor master data. In payment term rules are defined defining the terms of payment. The payment term is proposed while entering the vendor document.

Below mentioned is the examples of the payment term:-

Vendor payment term:- Payable to vendor within 60 days, if paid within 30 days, 2% cash discount will be availed. Payments by way of Cheque, Demand Draft, Bank Guarantee, Letter of Credit etc.

d) Asset Accounting

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The asset accounting module is used for managing & supervising the fixed assets. In Financial Accounting, it serves as a subsidiary ledger to the FI general ledger, providing detailed information on the transaction involving fixed assets.

As a result of the integration in the R/3 System, Asset Accounting (FI-AA) transfers data directly to and from other R/3 components. For example, it is possible to post from the Materials Management (MM) component directly to FI-AA. When an asset is purchased or produced in-house, you can directly post the invoice receipt or goods receipt, or the withdrawal from the warehouse, to assets in the Asset Accounting component. At the same time, you can pass on depreciation and interest directly to the Financial Accounting (FI) and Controlling (CO) components.

The Asset Accounting component consists of the following parts: Traditional asset accounting Asset under Construction Depreciation Calculation Information System

Traditional asset accounting encompasses the entire lifetime of the asset from purchase order or the initial acquisition until its retirement. The system automatically calculates, the values for depreciation, between these two points in time, and updates this information in the Asset Management Module.

Assets under construction require their own asset class. Choosing the depreciation key ‘0000’ ensures that depreciation is not calculated for the asset under construction in depreciation areas that are posted to the balance sheet. Assets under construction is shown separately in the balance sheet. For grass root projects, the asset class would be AUC account. After completion of the project, individual activity will be identified and will be settled to the respective asset classes.

In the Information system section, various SAP standard reports are available. For example Asset Balances report (FA Register), depreciation report etc.

Chart of Depreciation

Chart of depreciation is the list of depreciation area arranged according to business & legal requirement. The chart of depreciation enables to manage rules for the valuation of assets in a particular country. Chart of depreciation is assigned to the company code. Chart of depreciation BPE will be created for BPE. Separate depreciation area will be created for Book depreciation , Income Tax Depreciation & Depreciation as per IFRS calculation. Depreciation rate as per company law will be maintained in the Book depreciation area and depreciation rate as per Income tax will be maintained in the Tax depreciation area.

Asset Class

An Asset class serves as a criterion for classifying Fixed Assets according to legal and management reporting requirements. e.g. Land, Buildings and Plant & Machinery etc. Each asset master record must be assigned to one asset class.

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The asset classes proposed to be used in BPE are as follows:

Asset Class Description

1100 Land

1200 Buildings

1300 Plant & Machineries

1400 Motor Vehicles

1500 Equipments

1600 Furniture’s & Fittings

1700 Computers & Peripherals

1800 Capital WIP

Asset Master

A fixed asset is defined as an individual good that it is recognized in the balance sheet at the time of closing, and is in the long-term service of the enterprise.

Information contained in the asset master can be categorized under the following heads

Technical master data (eg. Make, serial number, quantity etc.)

Organizational allocations (e.g. Cost Centers, Plant etc)

Depreciation terms

Before creation of an Asset master record the appropriate Asset class to which the asset block pertains to needs to be specified.

Asset sub number

A unique number that in combination with the main asset number identifies an asset in the SAP System. Fixed assets are identified by means of the main asset number. An asset sub number can represent each individual part of the asset, or subsequent acquisitions.

Depreciation Key

Depreciation key contains the calculation method of depreciation. The rates at which the assets are to be depreciated are defined in the depreciation key.

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e) Bank Accounting

In bank accounting master data of all the banks are maintained. This includes the information like Bank name, Bank account number, SWIFT code etc.

There are two main factors to be considered while managing bank accounts in SAP system:1. House banks 2. Bank accounts

For every company code house bank needs to be defined. These are an equivalent of the “real” banks that the company operates with.

For every house bank there are defined one (or more) bank accounts - these are simply bank accounts per house bank.

The bank account data contains the number of the account at the bank, the account currency and the G/L account which reflects the postings on bank account in the general ledger.

For each bank account, a G/L account must be created. This G/L account is assigned to the bank account. Both accounts have to have the same account currency.

For domestic banks, bank number is entered in the "bank key" field and for foreign banks, SWIFT code is entered in this field.

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3 Business ProcessGeneral Ledger Accounting

3.1.1 Cash Transactions

Business Blueprint DocumentFor SAP R/3 Implementation at BPE

Date : Sr. No of To-BE document 3.1.1Ref. Sr. No. of AS-IS document 3.1.1 Cash transactionsName of Business Process : General Ledger AccountingModule Finance Submodule GL- Cash TransactionsVersion no of document: 2.1 Date : Flow Chart of Business Process :

General Requirements/Expectations DescriptionCash withdrawal from bank for the day to day utilization purposes is not accounted directly in to the books of accounts. The cash withdrawal is treated as Cash imprest in the hand of Assistant commercial Plant.

Detailed Process Description, Process Variations and ExceptionsOnce the expense voucher accumulates to Rs. 15000/-, the expenditure will be booked in to the system.Also at the month end the expenses will be booked in to the system. As a year end activity imprest will be grouped to cash in Hand.

Following Journal entry (Document type SA) will be passed for booking of such expenses:-

Expense A/c ………… .….Dr

Bank A/c. ……….…….…Cr If the Cheque is to be printed from SAP, then this transaction will be routed through Vendor account.

Through identified voucher series, identification of payments in excess of Rs. 20000/- , the filter “>20000” will be put in the amount field of respective GL line item report.

Controlling of cheque isuue more then Rs.15000/- can be done through setting the tolerance limit for the user. Process Step Explanation, variations and exceptionsFB01 / FB50 Enter G/L account document

Potential Gaps:None

Potential Gap Resolution:None

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System Configuration ConsiderationsNone Reports required related to business process Report for all such expenses can be withdrawn using the transaction code FBL3N or FS10N.

Outputs required for this business process Expenses Vouchers can be printed through SAP

Data Interface

Whether data records of current business process would be transferred to system other than SAP R/3 : No

User Roles and AuthorizationsCash expenses transaction booking authorisation will be given to only limited set of users.

Technical Considerations – Forms, ReportsNone

Technical Considerations - Conversion RequirementsNone

Technical Considerations – Interface RequirementsNone

Technical Considerations – Enhancements None

Technical Considerations – Workflow requirementsNone

Business BenefitsEven without maintaining the cash register separately, the cash expenses will be accounted in a proper way.

Sign-off (Approval) for this document :

Name of Team member Organisation/Bus. Unit Signature

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3.1.2 Bank Receipt


Date : Sr. No of To-BE document 3.1.2Ref. Sr. No. of AS-IS document 3.1.2 Bank ReceiptName of Business Process : General Ledger AccountingModule Finance Submodule GL- Bank ReceiptVersion no of document: 2.1 Date : Flow Chart of Business Process :

General Requirements/Expectations Description

All the bank transactions (Incoming & Outgoing) should be accounted in SAP.

Detailed Process Description, Process Variations and Exceptions

Advance receipt from customer will be entered in to SAP using special GL indicator. Receipt from customer against credit supplies will be cleared against the customer open invoices. The Customer ledger will show the detail of the receipt document along with the reference of the Invoice against which the payment is received. It will also show the mode of payment like Cheque, DD etc.

The detailed procedure for accounting of incoming payment has been explained in detailed in section 3.2.1 & 3.2.2.

Following entries will be passed on receipt of payment from Customer using the transaction code F-28 (post incoming payments):-

Bank clearing (receipt) account ………… ….Dr

Customer A/c………………… ……….…….…Cr

In case the detail is not available along with the receipt, that payment is received against which Invoice, then open item of the customer will be cleared on FIFO basis.

If the bank upload functionality explained below is not used then on receipt of the bank statement, the below mentioned entry will be passed:-

Bank A/c……………….. ……………………… ….Dr

Bank Clearing (receipt) Account.……… ………Cr

Advance received from customer will be entered in SAP along with the special GL indicator with a separate reconciliation account.

Bank Clearing (receipt) Account……………………… ………Dr

Customer A/c (with special G/L)……………….. ………… ….Cr

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Receipt like EMD for tenders will be handled in SAP with the help of special GL indicator.

If the customer deposit the amount in to bank directly, in that case the amount deposited will be credited to customer account on receipt of the bank statement. Following entry will be passed:-

Bank. A/c………..………….… ….Dr

Customer A/c…………… ………Cr

If the post dated cheque is received from the customer, a statistical entry will be passed.

On due date, receipt accounting will be done as follows:-


Customer A/c …………………..……………….. ………… ….Cr

Once the cheque is deposited in to the bank on the due date, upon receipt of credit for the same, below mentioned entry will be passed:-

Bank A/c……………….. ………… ….Dr


If the payment receipt entry is passed wrongly, that entry will be reversed through transaction code FB08.

Post date cheques can be eneterd in the below mentioned two ways in to the system:

1.Posting as statistical entry:- Cheques will be posted into the system immediately on the receipt of the cheque. The document date will be entered as cheque date with the posting date as the current date. On the due date bank deposit slip will be generated by the system automatically (through development), actual posting will be done manually for the payment received. This will ensure factual credit position of the customer as well as MIS reporting.During period closures, the cheques in hand which are not deposited in to the bank, will be accounted and the credit will be given to the Customer. The cheques in transit from depots will be considered as cheques in hand and will be accounted into the system. During BDS generation, those cheques will be excluded from the Bank deposit slip by selecting the same. An option will be provided in the bank deposit slip report to display the exclusion list.

2.Actual credit to the customer immediately after receipt of the cheque:-

If the post dated cheque is received from the customer, credit will be given to customer through below mentioned entry:-


Customer A/c …………………..……………….. ………… ….Cr

Once the cheque is deposited in to the bank on the due date, upon receipt of credit for the same, below mentioned entry will be passed:-

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Bank A/c……………….. ………… ….Dr


The original entry and the reversal entry will be knocked off through open item clearing functionality.

If the item is already cleared then it will be reset using FBRA.

Bank statement upload functionality:-

For uploading the bank statement in to SAP, the bank has to provide the bank statement in the SAP acceptable format. For this a format will be provided to the bank. Bank will send the bank statement through the agreed media like through E-mail. Bank statement will be uploaded in to SAP using the transaction code FF_5.

Below mentioned entry will be passed by the system automatically on upload of the Bank statement :-

Bank A/c……………….. …………………….. ….Dr


The above entry will have the reference of the Cheque number.

Bank clearing account is maintained as open item managed account. The above mentioned entry will automatically clear the respective open entry passed at the time of accounting the receipt of the cheque from the Bank (Entry is mentioned below again for ready reference):-


Customer A/c …………………..……………..….. ………… ….Cr

All the Cheques and Invoices received from the depot will be accounted at the respective parent locations. At the month end, those Invoices & Cheques can be entered in the previous period, if previous period is open.

Process Step Explanation, variations and exceptionsFF_5 Import Bank Statement FB01 Enter G/L account documentF-28 Post Incoming paymentsFB08 Reverse documentFBRA Reset itemsFCHN Cheque registerFF67 Manual bank statement entry FF68 Manual check deposit

Potential Gaps:1. System does not provide a report for the number of days for delayed credit by considering the difference of date of deposit and actual clearing date.2. For depositing the cheques received from customer, there is no standard advice slip available in the SAP.

3. In case of Post dates cheques, on the due date the bank deposit slip is not printed automatically

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Potential Gap Resolution:

1. A new report will be developed to provide a report for the number of days for delayed credit by considering the difference of Date of Deposit and actual clearing date.

2. Bank deposit slip report will be created in SAP.

3. Functionality will be developed to generate the bank deposit slip automatically on the due date for the post dated cheques along with the option of exclusions for in transit receipts accounted.


1. Configuration for uploading the bank statement in to SAP.2. Reason code configuration for reversing the documents.

Reports required related to business process 1. Cheque register- It can be generated using the transaction code FCHN.2. FBL3N-GL line item report3. FS10N-GL balance summary4. FBL1N-Vendor line item report5. FBL5N-Customer line item report

Outputs required for this business processNone

Data InterfaceWhether data records of current business process would be transferred to system other than SAP R/3 : NoIf Yes, Describe in details and attach the format in which data would be stored in the other system :

Output from this business process sent to other functions, ( if any ) :

User Roles and AuthorizationsBank transaction posting authorisation will be given to limited set of users only.





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Business BenefitsBank transactions will be posted in SAP regularly. Once all the clearing items are cleared, balance as per SAP matches with the bank statement. This way there will be better control over the funds. Sign-off (Approval) for this document :


3.1.3 Funds Transfer


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Date : Sr. No of To-BE document 3.1.3Ref. Sr. No. of AS-IS document 3.1.3 Funds Transfer

Name of Business Process : General Ledger AccountingModule: Finance Submodule GL- Funds TransferVersion no of document: 2.1 Date : Flow Chart of Business Process :

General Requirements/Expectations DescriptionOn the basis of arrangement with the bank surplus balances are transferred at the end of the day to the main accounts at Mumbai (Pooling accounts) and vice versa for effective utilisation of funds.

Detailed Process Description, Process Variations and ExceptionsFor example, SBI bank account of Chennai is having surplus fund. Bank will transfer the surplus fund from Chennai branch to HO branch Mumbai.

Once the bank statement is uploaded by the Chennai Plant, below entry will be passed by the system automatically:-

Bank Clearing A/c……………..Dr

SBI Bank Chennai A/c..……….Cr

On receipt of the bank statement, reconciliation will be done by the Chennai Plant and below mentioned entry will be passed manually:-

SBI Bank Mumbai Chennai A c..….Dr

Bank Clearing A/c……………..Cr

Once the bank statement is uploaded by the Mumbai HO , below entry will be passed by the system automatically:-

SBI Bank Mumbai (HO) A/c..….Dr

Bank Clearing A/c……………..Cr

On receipt of the bank statement, reconciliation will be done by the Mumbai HO and below mentioned entry will be passed manually:-

Bank Clearing A/c……………..Dr

SBI Bank Mumbai (HO) A/c..……….Cr

Process Step Explanation, variations and exceptionsFF.5 Bank Statement uploadFB01/FB50 Enter GL account document

Potential Gaps:None


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System Configuration ConsiderationsNone Reports required related to business process Using the SAP standard transaction code the account balance can be viewed at any point of time. FBL3N-GL line item reportFS10N-GL balance summaryFBL1N-Vendor line item reportFBL5N-Customer line item report


Data InterfaceWhether data records of current business process would be transferred to system other than SAP R/3 : No

User Roles and AuthorizationsDocument posting authorisation will be given to limited set of users only.






Business BenefitsWe will have better control & utilisation on Inter branch fund transfer.



3.1.4 Dishonor of Instruments


Date :

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Sr. No of To-BE document 3.1.4Ref. Sr. No. of AS-IS document 3.1.4 Dishonor of InstrumentsName of Business Process : General Ledger AccountingModule Finance Submodule GL- Dishonor of InstrumentsVersion no of document: 2.1 Date : Flow Chart of Business Process :

General Requirements/Expectations DescriptionThe bank gives credit for the DD/Cheques deposited into the bank on the Day 1 as per the CMS arrangement irrespective of the instrument being cleared. If the instrument is dishonored, the appropriate accounting entries should be passed for the reversal.


If the open invoices has already been cleared and the cheque is dishonoured, first those items will be reset using transaction code FBRA and incoming payment entry will be reversed:-

Customer A/c……………………………………..Dr

Bank Clearing A/c……………… ……………….Cr

Reversal reason codes are to be assigned for reversal of the incoming payment entry.

In SAP first those bank charges will be booked as expenses after receipt of the bank statement by passing the below mentioned Journal voucher:-

Bank charges A/c………………….………..Dr

Bank A/c……………… ………………..….Cr

A separate debit note will be raised manually to customer for the bank charges debited by bank for dishonor of the instrument using the transaction code FB70.

Customer A/c………………….…………..Dr

Bank charges A/c.…… ………………….Cr

A report on dishonur of Instruments can be derived from the SAP system through transaction code FBL5N by putting the reversal reason code in the selection criteria.

Customer blocking and change of payment terms from Cheque to DD will be done at the sales area level manually.

Process Step Explanation, variations and exceptionsFB08 Reverse DocumentFBRA Reset cleared itemFB01 / FB50 Enter GL account documentFBL5N Customer Line item report

Potential Gaps:Dishonored cheques are not attached to the document as part of correspondence in standard SAP.


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Through enhancement dishonored cheques will be attached to the document as part of correspondence.

System Configuration ConsiderationsReversal reason codes will be configured in SAP.

Reports required related to business process

Using the SAP standard transaction code the account balance can be viewed at any point of time. FBL3N-GL line item reportFS10N-GL balance summaryFBL5N-Customer line item report

Outputs required for this business processNoneData InterfaceWhether data records of current business process would be transferred to system other than SAP R/3 : No

User Roles and AuthorizationsDocument reversal authorisation will be provided to limited set of users only.

Technical Considerations – Forms, ReportsNoneTechnical Considerations - Conversion RequirementsNone


Technical Considerations – Enhancements NoneTechnical Considerations – Workflow requirementsNone

Business BenefitsDishonoured instrument can be accounted for and tracked in SAP.Sign-off (Approval) for this document :


M Harikrishna Bull Power Electronics Limited

3.1.5 Bank payment


Date :

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Sr. No of To-BE document 3.1.5Ref. Sr. No. of AS-IS document 3.1.5 Bank payment (Non Vendor)

Name of Business Process : General Ledger Accounting

Module : Finance Submodule GL- Bank payment (Non Vendor)

Version no of document: 2.1 Date : Flow Chart of Business Process :

General Requirements/Expectations DescriptionThe bank payments for non vendor based (Expenses like Electricity, Statutory dues, Customs, Tel & Fax, Printing & Stationery, Travel Expenses, Telephone Deposits, Electricity Deposits, Other Deposits, Subscriptions, Trainings, Rent, Staff welfare, Salaries etc) are processed from HO & plant locations respectively. Appropriate accounting entry is to be passed for such payments (non vendor).


Separate vendor code will be created for the above mentioned transactions. Payment for such type of payment can be done either through automatic payment run or through manual payment. If payment is done manually then cheque series has to be manually updated in SAP.

Please refer section 3.3.2 for Vendor Payment process.

Detail of the cheque lot received from the bank will be updated in to the system.

Cheque register can be generated using the T.code FCHN. Cheque register shows the list of all the cheques received from Bank, Cheques issued along with the list of the Void cheques leaving the balance cheques list as stock in hand. Balance cheques in hand information would be available through T.Code FCHI.

Cheque Void functionality is also provided by SAP. Issued cheques can be void at the below mentioned three stages:-

1. Unused Cheque (T. code FCH3)2. Issued Cheque (T. code FCH9)3. Cancel Payment (T.code FCH8)

Void reason codes have to be given at the time of voiding the Cheque. Below mentioned are the some of the SAP standard Void reason code:-

1. Page overflow2. Ripped during printing3. Printed incorrectly4. Destroyed/Unusable5. Stolen

Process Step Explanation, variations and exceptionsF-07 Post outgoing paymentsFCH5 Manual check creation

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FCH1 Display cheque informationF110 Automatic Payment Run

Potential Gaps:None


System Configuration ConsiderationsAppropriate G/L accounts to be defined for booking such expenses (non vendor) to appropriate heads. Reports required related to business process FBL3N-GL line item reportFS10N-GL balance summary

Outputs required for this business processNoneData InterfaceWhether data records of current business process would be transferred to system other than SAP R/3 : No

User Roles and AuthorizationsBank related transaction posting authorisation will be given to limited set of users only.Technical Considerations – Forms, ReportsNone

Technical Considerations - Conversion RequirementsNoneTechnical Considerations – Interface RequirementsNoneTechnical Considerations – Enhancements None

Technical Considerations – Workflow requirementsNoneBusiness BenefitsNon vendor expenses can be booked separately than the vendor transactions.




3.1.6 Electronic Payments

Business Blueprint Document

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For SAP R/3 Implementation at BPEDate :

Sr. No of To-BE document 3.1.6Ref. Sr. No. of AS-IS document 3.1.6 Electronic Payments

Name of Business Process : General Ledger AccountingModule Finance Submodule GL- Electronic PaymentsVersion no of document: 2.1 Date : Flow Chart of Business Process :


The Excise liability, TDS liabilities of the individual manufacturing locations is paid to the credit of tax department by E-payment. Such payments are made by the personnel who are authorized to logon to the Internet Banking facility and make the payment as per the due dates.

Detailed Process Description, Process Variations and ExceptionsA new document type will be created for such type of payments. First the payment document will be created in SAP as per the process explained in the section 3.1.5 and then through Internet the payment will be done. For example below mentioned payment document will be generated on deposit in to PLA account:-

PLA on Hold A/c……………………..……………Dr. Bank clearing A/c………………………………….. Cr.

If bank upload functionality is used, the below mentioned entry will be passed by the system automatically:-

Bank clearing A/c………………………………….. Cr.Bank A/c..................................................................Dr.

If the bank statement upload functionality is not used, then the above entry will be passed manually. Following entry will be passed on the TDS payment :-

TDS payable A/c……………………..……………Dr. Bank clearing A/c………………………………….. Cr.


Bank clearing A/c……………………….………….. Dr.Bank A/c..................................................................Cr.

If the bank statement upload functionality is not used, then the above entry will be passed manually.

Process Step Explanation, variations and exceptionsFB01/FB50 Enter G/L account documentF-07 Post outgoing payments

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Potential Gaps:None


System Configuration ConsiderationsA new document type will be created in SAP for Electronic payments. Reports required related to business process FBL3N-GL line item reportFS10N-GL balance summary

Outputs required for this business processNone Data InterfaceWhether data records of current business process would be transferred to system other than SAP R/3 : No

User Roles and AuthorizationsBank transaction posting authorisation will be given to limited set of users.





Technical Considerations – Workflow requirementsNoneBusiness BenefitsThrough separate document type, all the E payments can be identified in the system separately.




3.1.7 Demand Draft/ Pay order


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Date : Sr. No of To-BE document 3.1.7Ref. Sr. No. of AS-IS document 3.1.7 Demand Draft/ Pay order

Name of Business Process : General Ledger AccountingModule Finance Submodule GL- Demand Draft/ Pay orderVersion no of document: 2.1 Date : Flow Chart of Business Process :


Certain payments of statutory nature are to be paid by way of DD/Pay Order. An advice in writing is provided to the bank signed by the authorized signatories requesting for the preparation of DD/Pay Order. The Bank is also authorized to debit the bank charges applicable directly to the current account.


The expenses will be accounted for in the system as explained in section 3.1.5.

Expenses/Vendor A/c………………….…Dr Bank clearing A/c…………………..……. Cr


Bank clearing A/c………………………………….. Cr.Bank A/c..................................................................Dr.

If the bank statement upload functionality is not used, then the above entry will be passed manually. The DD/pay order number can be updated into the system on receipt of the details through document change option.

Bank charges for issuance of Demand Draft/Pay order will be accounted in the system on the basis of the Bank statement.

Process Step Explanation, variations and exceptionsF-07 Post outgoing paymentFB01/FB50 Enter G/L account document

Potential Gaps:Generation of Bank wise serially numbered DD/Pay order requests through system is required. Standard SAP does not provide this request form.

Potential Gap Resolution:Bankwise serially numbered DD/Pay order request form will be created in SAP.

System Configuration ConsiderationsNone

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Reports required related to business process FBL3N-GL line item reportFS10N-GL balance summary

Outputs required for this business processNoneUser Roles and AuthorizationsTransaction posting authorisation will be given to limited set of users.






Business BenefitsAccounting will be done in SAP in proper way.




3.1.8 Reversal Entries

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Date : Sr. No of To-BE document 3.1.8Ref. Sr. No. of AS-IS document 3.1.8 Reversal EntriesName of Business Process : General Ledger AccountingModule Finance Submodule GL- Reversal EntriesVersion no of document: 2.1 Date : Flow Chart of Business Process :


Due to any reason, if the payment voucher is wrongly prepared for the wrong amount or any other reason, a reversal entry should be passed in SAP. Detailed Process Description, Process Variations and Exceptions

If the document to be reversed is already cleared against any other document, then first that clearing document is reset using the transaction code FBRA.

Debit and credit entry in original document will be reversed by passing the credit and debit entry in the reversal document. The reversal reason is to be mentioned in the reversal document. The reversal document will have the original document number in the reference field. Also the original will also be updated automatically with the reversal document in the reference field. Both such entries are cleared by the SAP if the accounts are open item managed account.

For example, below mentioned is the original document (document number 100020):-

Travel Expenses A/c………………..………DrExpensed accrued A/c…………………….. Cr

Once the above document is reversed using the transaction code FB08, the below mentioned will be the reversal document (document number 100328):-

Expenses accrued A/c………………..……DrTravel Expenses A/c……………. …….. Cr The original document number 100020 will be stored automatically in the reversal document number 100328 in the reference field. Similarly the reversal document number 100328 will be stored automatically in the original document number 100020.

Process Step Explanation, variations and exceptionsFB08 Transaction code for Reversing documentsFBRA Reset cleared items

Potential Gaps:None

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System Configuration ConsiderationsReversal reasons are to be configured in SAP which defines the reason for the reversal of the document.


Outputs required for this business processNone Data InterfaceWhether data records of current business process would be transferred to system other than SAP R/3 : NoIf Yes, Describe in details and attach the format in which data would be stored in the other system :

Inputs/ data received from other function for this process, ( if any ) :


User Roles and AuthorizationsReversal transaction posting authorisation will be given to limited set of users.






Business BenefitsReversal transaction will always have the track of the original transaction and vice versa.




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3.1.9 Bank Reconciliation Statements


Date : Sr. No of To-BE document 3.1.9Ref. Sr. No. of AS-IS document 3.1.9 Bank Reconciliation Statements

Name of Business Process : General Ledger AccountingModule Finance Submodule GL- Bank Reconciliation

StatementsVersion no of document: 2.1 Date : Flow Chart of Business Process :


The bank reconciliation is done by the Commercial Officer for all the banks that are attached to their respective HO & Plant locations. The process is done by obtaining a Bank Statement (soft copies as well as hard copies) on regular intervals from the respective Banks.

Detailed Process Description, Process Variations and ExceptionsBank account in SAP will be reconciled with the bank statement received from bank. Incoming payment clearing & Outgoing payment clearing account will be cleared manually with main account on the basis of the bank statement. Bank charges not accounted in the SAP as per the bank statement will be accounted for in SAP.

For uploading the bank statement in to SAP, the bank has to provide the bank statement in the SAP acceptable format. For this a format will be provided to the bank. An interface will be developed with the bank for receiving the bank statement. Bank statement can be uploaded in to SAP using the transaction code FF_5.

Bank will send the statement on the daily basis in the required format through the media agreed with the Bank for example through E-mail. Below mentioned entry will be passed by the system automatically on upload of the Bank statement :-

Bank A/c……………….. ………… ………………Dr


The above entry will have the reference of the Cheque number.

Bank clearing account is maintained as open item managed account. The above mentioned entry will automatically clear the respective open entry, passed at the time of accounting the receipt of the cheque from the Bank (Entry is mentioned below for ready reference):-


Customer A/c …………………..……………….. ………… ….Cr

If some of the cheque issued to Vendor are not presented for clearing by Vendor for a very long period

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of time, than those cheque payment entries are reversed manually. The accounting document generated is:-

Bank clearing A/c………………………….…..DrUnclaimed cheques A/c…. .. ………………. Cr

Process Step Explanation, variations and exceptionsF-32 Post incoming paymentsF-53 Post outgoing paymentsFB01/FB50 Enter G/L account document

Potential Gaps:1. No functionality is available in SAP for preparing the bank reconciliation statement directly from the system in the traditional format.

2. No SAP standard report is available to provide a list of instruments of stale nature pending clearance over 6 months for deposits both for payment & deposits.

Potential Gap Resolution:1.In SAP three bank GL accounts will be configured :-

1. Main Bank Account2. Incoming payment clearing account3. Outgoing payment clearing account.

Bank reconciliation statement can be prepared by combining the above mentioned three accounts.

Also, a new report can be developed to provide the bank reconciliation in the traditional (Legacy) format.

2. A new report will be developed to provide a list of instruments of stale nature pending clearance over 6 months for deposits both for payment & deposits.

System Configuration ConsiderationsConfiguration of three accounts mentioned above.





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User Roles and AuthorizationsTransaction posting authorisation will be given to limited set of users.






Business BenefitsBank reconciliation statement can be prepared through SAP using the three accounts mentioned above.




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3.1.10 Bank Deposits


Date : Sr. No of To-BE document 3.1.10Ref. Sr. No. of AS-IS document 3.1.10 Bank DepositsName of Business Process : General Ledger AccountingModule: Finance Submodule GL- Bank DepositsVersion no of document: 2.1 Date : Flow Chart of Business Process :

General Requirements/Expectations DescriptionThe surplus fund lying in the bank would be converted to Fixed deposit for specific period after approval from authorities.

Detailed Process Description, Process Variations and ExceptionsSeparate term deposit GL accounts (Balance sheet type) will be created in SAP for each of the Bank. The Fixed Deposit will be accounted as follows:-

Term Deposit A/c ………..DrBank A/c …………………Cr

The detail entered in to the system (like Bank name, Custodian, Validity) at the time of passing the entry can be get from the system using the line item report (Transaction code FBL5N).

The interest calculation will be done through the system only for the statistical purposes. Actual interest received will be accounted as Income in SAP as follows:-

Bank A/c …………………………………DrTDS receivable A/c……………………..DrInterest Received A/c …………………..Cr

If the interest calculation is to be done through system, then separate term deposit accounts needs to be created for each of the term deposit. Rate of interest will be defined for the each of the term deposit.

Process Step Explanation, variations and exceptionsFB01/FB50 Enter GL account documentFF_1 Interest Calculation on GL account

Potential Gaps:None


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System Configuration ConsiderationsNone Reports required related to business process None





User Roles and AuthorizationsBank related transaction posting authorisation will be given to limited set of users.






Business BenefitsA better control on Term deposit accounts will be possible through SAP.




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3.1.11 Term Loans / Cash Credit


Date : Sr. No of To-BE document 3.1.11Ref. Sr. No. of AS-IS document 3.1.11 Term Loans / Cash CreditName of Business Process : General Ledger AccountingModule : Finance Submodule GL- Term Loans / Cash CreditVersion no of document: 2.1 Date : Flow Chart of Business Process :


Term Loans are taken from Banks for funding Capital and Other commitments against security of Stocks and Plant. Proper accounting is to be done in SAP for the Term loan & interest thereon.


Separate term loan GL accounts (Balance sheet type) for Term loan will be created in SAP for each of the Bank. Interest on term loan will be booked to Interest on Term Loan account (P&L account).

The following accounting entry will be passed into the system for Term Loan availed:-

Bank A/c ………………………..DrTerm Loan A/c …………………Cr

Interest calculation on term loan will be done only for the statistical purpose through the system. Following accounting entry will be passed into the system for the actual interest on Term Loan availed:-

Interest on Term Loan A/c …………..………………………DrTerm Loan A/c ………………………………………………..Cr

While doing the entry for the Term loan, all the details like Interest rate, repayment period, Installments detail etc will be filled in. All those details can be generated from the system later on using the GL line item report.

Process Step Explanation, variations and exceptionsFB01/FB50 Enter GL account documentFF_1 Interest Calculation on GL account

Potential Gaps:None

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System Configuration ConsiderationsRequired configuration has already been covered in the above processes. Reports required related to business process FBL3N-GL line item reportFS10N-GL balance summary











Business BenefitsAccounting for Term loan and & interest there on will done in SAP in proper way.




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3.1.12 Journal Entries – Intra Branch


Date : Sr. No of To-BE document 3.1.12Ref. Sr. No. of AS-IS document 3.1.12 Journal Entries – Intra Branch

Name of Business Process : General Ledger AccountingModule Finance Submodule GL- Journal Entries – Intra BranchVersion no of document: 2.1 Date : Flow Chart of Business Process :

General Requirements/Expectations DescriptionTransactions within the branch should be recorded separately.

Detailed Process Description, Process Variations and ExceptionThese transactions are posted to transfer the expenses/balances from one GL account to another GL account within the branch. In SAP these transactions are posted through Journal entry. Document type SA can be used for posting such transactions in to SAP.

For Eg: If the Telephone Expense is wrongly debited to Electricity Expense a/c, then the Journal Voucher for rectification of the same will be passed as follows:

Tel & Fax A/c ……..Dr

Electricity A/c …….Cr

Process Step Explanation, variations and exceptionsFB01 / FB50 Enter GL account document

Potential Gaps:None


System Configuration ConsiderationsNone Reports required related to business process FBL3N-GL line item reportFS10N-GL balance summary

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Business BenefitsWrongly booked transactions will be corrected using the Journal entry feature of SAP.




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3.1.13 Journal Entries-Inter Branch


Date : Sr. No of To-BE document 3.1.13Ref. Sr. No. of AS-IS document 3.1.13 Journal Entries-Inter BranchName of Business Process : General Ledger AccountingModule Finance Submodule GL- Journal Entries-Inter BranchVersion no of document: 2.1 Date : Flow Chart of Business Process :

General Requirements/Expectations DescriptionInter branch transactions are required to be posted in to the system to effect adjustment entries among inter location GL accounts.


In the line of the document, the Cost center of the branch/plant for which the expenses has been incurred will be entered.

Profit Center is assigned in the Cost center master data. The profit center in the Expense line item will be derived through the cost center mentioned in the Expense line item. The second line item will automatically derive the profit center from the expense line item profit center.

For example, if the Vashi plant has incurred expenses on behalf of Chennai plant, while entering the Journal entry at the Vashi branch, Chennai Cost center will be entered in the line item. Those expenses will be reported in the Chennai Plant Profit & Loss account. The following accounting entry will be entered at the Vashi Plant:- Cost center Profit Center

Office Exp A/c ……..Dr Chennai Chennai

Vendor A/c ………...Cr Chennai

There will be no need of the inter office adjustment account.


Potential Gaps:None


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None

System Configuration ConsiderationsRequired configuration has already been covered in the above processes. Reports required related to business process FBL3N-GL line item reportFS10N-GL balance summary










Business BenefitsInter branch transactions can be recorded and controlled through Profit center functionality in a better way.




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3.1.14 Taxes-ExciseBusiness Blueprint DocumentFor SAP R/3 Implementation at BPE

Date : Sr. No of To-BE document 3.1.14Ref. Sr. No. of AS-IS document 3.1.14 Taxes-ExciseName of Business Process : General Ledger AccountingModule Finance Submodule GL- Taxes-ExciseVersion no of document: 2.1 Date : Flow Chart of Business Process :


For individual Manufacturing Location total Excise liability for the individual month should be calculated at the month end.


Excise duty related posting will automatically flow in to FI module through MM & SD module after doing the required CIN configuration in all the three modules. Separate GL accounts will be defined and configured in SAP for each of the excise element for example excise payable, Edu Cess, SHE Cess, Cenvat credit receivable-Revenue (RG23AII) a/c, Cenvat credit receivable-Capital (RG23CII) a/c, Edu Cess on service tax, SHE cess on service tax , PLA a/c etc.

Three different excise registers will be maintained in SAP:-1. RG23A & RG23C-For Raw materials & capital items respectively.2. RG23D-For Depot item3. RG1 register4. PLA

RG 23A & RG23C Part I shows the quantities of the materials.RG 23A & RG23C Part II shows the amounts of excise duty on the materials, and how much you have transferred to the CENVAT accounts.

The above mentioned registers are updated on real time basis through MM & SD module.

In SAP, the excise liability will be arrived through the below mentioned formula:-

Output tax liability of Excise- Opening Credit balance of Excise-Current months credit = Liability or Nil Liability.

In SAP, while arriving at the Excise duty liability at the time of month end, credit will be taken for the excise paid at the time of purchase which is setoff against the excise duty liability at the time of sale.

In SAP 50% excise credit on capital items will be transferred to the next year by the system automatically. In the next financial year credit can be taken for that 50% carried forward from the previous year against the excise liability for the year.

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Any excise liability after taking the credit of available excise credit will be paid through PLA a/c in SAP.

In SAP any service tax credit available will be adjusted to the excise liability. In this case the balance in the service tax credit will be transferred to the Cenvat, Edu cess and SHE cess as applicable.

The excise duty on storage loss or on the material used for testing will be accounted as duty loss.

In the case of captive consumption (excisable goods used for own consumption), the excise duty will be calculated on the quantity consumed at the applicable excise rate on the cost of production + 10%.

Advances paid to Excise/Custom dept for any demands raised by them will be accounted in to separate GL account. For financial disclosure it will be treated as contingent liability.

Below mentioned accounting entries are passed at the time of domestic procurement of Raw material:- During GR:-

Material Stock ……………Dr.

GR/IR clearing………………Cr.

During Excise Invoice Credit:-

Cenvat Account……………..Dr.

Cenvat Clearing……………Cr. During Invoice Verification:-

Cenvat Clearing …………….Dr.

GR/IR Clearing…………….Dr.

Vendor Payable……………Cr.

For Excise Duty Reversal through Excise JV

Cenvat Clearing …………….Dr.Cenvat Account…………….Cr.

Below mentioned accounting entries are passed at the time of domestic procurement of Capital Goods:-

During GR:-

Material Stock …………Dr.

GR/IR clearing…………Cr.

During Excise Invoice Credit:-

Cenvat Account ………..Dr. (50%)

Cenvat On-hold………. Dr. (50%)

Cenvat Clearing………. Cr.

During Invoice Verification:-

Cenvat Clearing ………..Dr.

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GR/IR Clearing……….. Dr.

Vendor Payable………. Cr

In the next year, below mentioned entry will be passed by the system for transfer of Cenvat on Hold to Cenvat account:-

Cenvat Account………. Dr. (50%)

Cenvat On-hold………. Cr. (50%)

Below mentioned accounting entries are passed for Import Procurement of Raw Material:-

During Customs Duty Clearing invoice

Custom Clearing……….Dr.

Custom Payable………..Cr.

During GR

Material Stock………… Dr.

GR/IR clearing……….. Cr.

During Excise Invoice Credit

Cenvat Account………. Dr.

Custom Clearing……… Cr.

During Invoice Verification

GR/IR Clearing………. Dr.

Vendor Payable……… Cr.

Below mentioned accounting entries are passed at the time of Sale of Finished Goods from Plant:-

During Billing Document

Customer Account……………………Dr.Sales Account………………………..Cr.Cenvat Suspense Account…………Cr.Sales Tax Payable account………..Cr.

During Excise Invoice Creation

Cenvat Suspense Account…………Dr.Cenvat payable……………………..Cr.

For GAR-7 Challan

PLA Account……………………….Dr.PLA on hold Account…………….Cr.

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During monthly Utilization

Cenvat payable……………….. Dr.Cenvat Account………………. Cr.PLA Account…………………… Cr.

Below mentioned accounting entries are passed at the time of Stock Transfer through SD:-

No Accounting entry is passed for Performa Billing Document

During Excise Invoice Creation

Cenvat Suspense Account…… Dr.Cenvat payable……………….Cr.

For GAR-7 Challan

PLA Account…………………. Dr.PLA on hold Account………… Cr.

During monthly Utilization

Cenvat payable……………….. Dr.Cenvat Account………………. Cr.PLA Account………………….. Cr.

The excise liability would be set off against service tax credit available in the service tax receivable account through excise JV.

All the required detail for filling up the ER-1 return will be provided, return will be prepared manually.

On the basis of the Vendor Masters, a report consisting of the Vendor Name, ECC number, Manufacturer or Dealer category, Product Name, CETH number, Qty etc needs to be generated through the SAP system.

The tax movement summary with details such as Opening Balance, Credits debits during the period and Closing Balance will be provided for individual locations for the individual months through the Excise GL accounts.

More detailed explanation will be provided during the User testing & User training phase of the Project.

Potential Gaps:None



1. Excise related GL accounts will be assigned through MM & SD account determination.2. Various Excise related Tax codes will be configured.

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Outputs required for this business process










Business BenefitsThrough CIN all the excise accounting will be done in close integration of MM, SD & FI module.




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3.1.15 Taxes-Sales Tax


Date : Sr. No of To-BE document 3.1.15Ref. Sr. No. of AS-IS document 3.1.15 Taxes- Sales TaxName of Business Process : General Ledger AccountingModule Finance Submodule GL- Taxes- Sales TaxVersion no of document: 2.1 Date : Flow Chart of Business Process :


All Manufacturing plants are registered with the Sales Tax dept and are under the regime of Value Added Tax. The tax liability should be calculated for the month and paid to the credit of the tax dept as per the due dates.

Detailed Process Description, Process Variations and ExceptionsOutput Tax:-Sales Tax related posting will automatically flow in to FI module through SD module after doing the required configuration in SD & FI module. Separate GL accounts will be defined and configured in SAP.

Various applicable Sales Tax codes will be created in SAP to calculate the sales tax at different state rate and for the concessional tax, for example in case of C form.

The sales tax will be calculated at the rate defined in the Tax codes in SAP.

Sales Tax liability will be calculated in SAP as per the below mentioned formula:--

Output tax liability of Sales tax- Opening Credit balance of Sales Tax-Current months credit = Liability or Nil Liability. Input tax credit will be derived from the purchasing module and output tax credit will be derived from Sales and distribution module. Separate GL accounts will be created for Local Sales tax & Central Sales Tax.

SAP has provided standard Sales Tax register. This can be generated any time from the system using transaction code J1I2.

In the case of Deferment of Sales tax (IFST) liability for a specified period and specified amount will be accounted in a separate GL account “IFST Deferral A/c.” It will be paid as per the due dates. Tracking of the due date will be manual.

Sales tax register showing all the credits availed during the period with details such as Vendor Name, Tax Invoice No, TIN Number, Assessable Value, Tax Rate, Tax Amount and percentage will be generated from SAP.

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Sales Tax registers will be maintained as depot in similar way as maintained at the plant, however it will be only the output tax liability at depot.

The Sales tax movement summary with details such as Opening Balance, Credits and Debits during the period and Closing Balance will be provided by SAP for individual locations for the individual months.

All the required detail for filling up the Sales tax return will be provided, returns will be prepared manually.

Sales tax code for both the input & output tax will be created. Sales tax eligible for set off will be accounted in separate GL account. The amount which is not eligible for set off will be included in the Inventory cost. A certain percentage of vat credit will be reversed on purchase of fuels and added to the cost as per the resp. state acts which is ineligible.

Below mentioned accounting entries are passed at the time of Sale of Finished Goods from Plant:-

During Billing Document

Customer Account……………………Dr.Sales Account………………………..Cr.Cenvat Suspense Account…………Cr.Sales Tax Payable account………..Cr.

Input Tax:-Input tax is calculated as per the tax code mentioned in the purchase order.

If a part or the entire input tax is nondeductible, you can post the tax amount to a separate expense account or distribute it to the G/L account. You enter the tax percentage rates for the input tax portion and the nondeductible portion to a shared tax code. If the entire input tax is nondeductible, you must specify for the tax code that zero percentage input tax is to be calculated.

You have to post an incoming invoice amounting to INR 1,200. The tax amount of INR 200 (20 percent) comprises 12 percent input taxes (INR 120) and a nondeductible portion of eight percent (INR 80). You can now post the nondeductible portion to a separate account (see the following figure, example A) or distribute it to the G/L account (see the following figure, example B).

If the entire input VAT amount is non-deductible, no input VAT posting is made; the non-deductible input tax can be posted to a separate account (see the following figure, example C) or be distributed between the G/L account and assets line items.

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Sales Tax liability will be paid as per the due date. There will be no automatic prompt for payment of liability on the due date. Sales tax receivable (excess credit) at the end of the FY will not be carried forward to the subsequent FY. The receivable amount will be transferred to Sales Tax Receivable A/c and shown in the BS.


Potential Gaps:None


System Configuration ConsiderationsSales tax related tax codes will be configured. Reports required related to business process Sales Tax register











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Business BenefitsSales tax related accounting will be done in SAP in proper way.




3.1.18 Taxes-TDSBusiness Blueprint DocumentFor SAP R/3 Implementation at BPE

Date : Sr. No of To-BE document 3.1.18Ref. Sr. No. of AS-IS document 3.1.18 Taxes-TDSName of Business Process : General Ledger AccountingModule Finance Submodule GL- Taxes-TDSVersion no of document: 2.1 Date : Flow Chart of Business Process :


TDS is to be deducted on any payment to contractors, Brokers, professionals or on payment of Rent, Salaries etc at predefined rate. Such TDS are to be accounted for in SAP under the appropriate heads.


Country Version India offers two solutions for handling withholding tax (also known as tax deducted atsource or TDS):-

1. Classic Withholding Tax - The withholding tax for an invoice or a down payment is calculated at header level. That is, only one withholding tax code can be used for a down payment or invoice. This implies that an invoice cannot contain items with different withholding tax rates. It can, however, contain one or more items with the same withholding tax rate and one or more items with no withholding tax. This can be handled by specifying the base amount on which withholding tax is to be calculated. On account of calculation at header level, companies have to instruct their suppliers not to include items with different withholding tax rates in a single invoice, but issue separate invoices for

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different tax rates.

2.Extended Withholding Tax-Multiple tax codes can be used in one Invoice

Extended withholding tax will be activated for BPE.

You are required to calculate taxes either when you enter an invoice or when you make any sort of payment (incl.advance), whichever comes first.

When you enter a vendor invoice or make a down payment that is liable to withholding tax, the system automatically creates line items for the appropriate taxes, including surcharges. Since different taxes need to be remitted on due dates, depending on the section of the Income Tax Act, the system also calculates and records each line item's due date. At the year end closing, TDS liability as on 31 st March, will be cleared by 31st May.

If you first make a down payment (and withhold tax on it) and then enter the vendor invoice later on, you have to clear the invoice against the down payment so that you do not withhold tax on the same item twice.

Various types of TDS accounts will be maintained in SAP for various types of payments. All the TDS accounts will have the separate limit and separate rates. Below mentioned are the few of the examples:-

Key Description

194A Income other than Securities

194C Payment to Contractors

194D Insurance

194I Rent

194J Professional services

195 Other Payment to Non-residents

TDS will be accounted in to the system as TDS payable at the time of booking the vendor invoice or at the time of payment whichever is earlier, through configuration. TDS will be calculated at the rate mentioned in the tax code. Tax code is maintained in the vendor Master data. Tax code maintained in the master data is defaulted to the document automatically. Employee whose TDS has to be deducted will be created as Vendor in SAP.

TDS amount for NRI payments (Colas) will be grossed up and the liability will be accounted. The calculation for the same will be done outside the system.

TDS certificates for the vendor will be generated from the SAP. PAN number detail of the vendor will be defaulted from the Vendor master.

For each withholding tax type, two entries will be created as follows:-

Recipient type Text

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CO CompaniesOT Others

If, after you have entered and cleared a vendor invoice and you have discovered that you have posted thewrong amount of tax or that you have posted the tax using the wrong official tax key, you have to enter aJournal voucher (JV) to correct the error.

Type of change Debit CreditTax refund to vendor (tax already remitted)

Loss account Vendor account

Tax refund to vendor (tax not yet remitted)

Tax payable account

Vendor account

Tax increase, payable by vendor Vendor account Tax payable

TDS (Work Contract Tax) for Service Orders will be calculated and deducted.

The following entry will be passed on booking the Vendor Invoice:-

Expenses Account………………..DrVendor Account………………….Cr TDS payable Account………… Cr

SAP will provide a report on TDS payable for the deductions made during the month for all locations with a clear segregations under various category of deductions with details such as Voucher reference no, Date of Deduction, Vendor Name, PAN Numbers. TDS will be paid as per the due date.

TDS codes will be defaulted in the Invoice from the master data. TDS defaulted can be compared with the Vendor actual invoice. Appropriate action can be taken for the differences, if any.

TDS Certificates will be generated and printed through SAP for various categories of services at the year end for all the Vendors. More detailed explanation will be provided during the User testing & User training phase of the Project.

Potential Gaps:None


System Configuration ConsiderationsBelow are the configuration to be done for TDS:-

1. Country key for withholding Tax2. Withholding Tax keys3. Reason for Exemption 4. Withholding Tax type5. Withholding Tax codes6. Withholding Tax base amount

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7. Minimum & Maximum amounts8. Surcharges9. Define GL accounts10. Certificate numbering











Business Benefits1.TDS related transaction and outstanding liability detail can be derived from the SAP quickly.2. TDS certificates will be generated from SAP.




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3.1.19 Tax Deducted at Source (Asset)


Date : Sr. No of To-BE document 3.1.19Ref. Sr. No. of AS-IS document 3.1.19 Tax Deducted at Source (Asset)Name of Business Process : General Ledger AccountingModule Finance Submodule GL- Tax Deducted at Source

(Asset)Version no of document: 2.1 Date : Flow Chart of Business Process :

General Requirements/Expectations DescriptionThe Tax is Deducted at Source on receivable such as Job Work, Hospitality charges reimbursements and Interest on Bank Deposits, Electricity Deposits etc. are to accounted in the system on receipt of confirmation from the deductor.

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On receipt of confirmation from the tax deductor, the tax will be accounted for in the system. Such type of TDS will be accounted for in SAP. The year to which the TDS certificate pertains to, will be entered in the text field of the document. This will help in identification of the certificates year wise.

Following accounting entry will be passed for TDS (Asset):-

TDS receivable account…………… Dr Customer Account……………….. . Cr

A separate GL account will be maintained for the TDS receivable account. Manual reconciliation will be done for the TDS certificate received from the customer against the TDS entries posted in to the system. More detailed explanation will be provided during the User testing & User training phase of the Project.


Potential Gaps:None


System Configuration Considerations None






User Roles and AuthorizationsTDS Transaction posting authorisation will be given to limited set of users.


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Business BenefitsTDS receivable accounting will be done in SAP in proper way.




3.1.22 Job Work Accounting


Date : Sr. No of To-BE document 3.1.22Ref. Sr. No. of AS-IS document 3.1.22 Job Work AccountingName of Business Process : General Ledger AccountingModule Finance Submodule GL- Job Work AccountingVersion no of document: 2.1 Date : Flow Chart of Business Process :


The Job Work to XYZ LIMITED and other Customers is done by BPE under Sub Contract basis at all BPE manufacturing locations. BPE does Job Work of only Crumb Rubber Modifier Bitumen to XYZ LIMITED and also does other grades of Modified Bitumen to other Customers.

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As per the Job Work arrangement for manufacture of Modified Bitumen between XYZ LIMITED/Customer & BPE, BPE avails input tax credit of Excise on the stock transfer made by XYZ LIMITED/Customer for duty paid Bitumen as Job Work input.

The entire flow of excise transaction in Finance will be from MM & SD.

The following will be the accounting treatment in SAP:-

1. BPE will avail tax credit of Excise on stock transfer made by XYZ LIMITED for duty paid Bitumen as Job work input.

2. Duty paid on excisable modifier will be availed as input credit.

3. On the finished product Modified Bitumen the excise duty will be paid by BPE.

4. The differential duty will be recovered by BPE from XYZ LIMITED.

The Job Work Processing Charges will be calculated and accounted in the system for individual manufacturing location by multiplying the Job work sale quantity in Metric Ton’s for the month with the agreed process charges per MT. TDS will be deducted by XYZ LIMITED on job work. The job work qty. information will be available from the SD module. The excise differential workings would be provided by MM.

The below mentioned accounting entry will be passed in to the system through SD module:-

XYZ LIMITED – Job work Reimbursible A/c ……………….DrJob Work Charges A/c ……….……..Cr


Potential Gaps:Job work differential duty calculation will not be done by the system automatically.

Potential Gap Resolution:New report will be developed for the Job work differential duty calculation in MM module.

System Configuration ConsiderationsCIN related configuration will be done in MM, SD & FI module. Reports required related to business process FBL3N-GL line item reportFS10N-GL balance summary




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Business BenefitsJob work related accounting will be done in SAP in proper way.




3.1.24 Stock Transfer-Raw Material


Date : Sr. No of To-BE document 3.1.24Ref. Sr. No. of AS-IS document 3.1.24 Stock Transfer-Raw MaterialName of Business Process : General Ledger AccountingModule Finance Submodule GL- Stock Transfer-Raw MaterialVersion no of document: 2.1 Date : Flow Chart of Business Process :


The Plant to Plant stock transfer of Raw Material will be handled through the Material Management module.

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The system automatically passes the accounting entry through Inter office adjustment account. The sending location will pay the duty on the stock transferred and the receiving location will take the Cenvat credit.

Excise duty will be passed on by the sending location to receiving location on FIFO basis. This process is covered under MM module. Please refer MM BBP document.


Potential Gaps:None



1. Cenvat credit receivable GL account will be configured.2. Excise payable GL account will be configured.

Reports required related to business process Stock report

Outputs required for this business process None







Technical Considerations – Interface Requirements

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None



Business BenefitsProper accounting treatment will be given in SAP of the Stock transfer.




3.1.25 Stock Transfer-Finished Good


Date : Sr. No of To-BE document 3.1.25Ref. Sr. No. of AS-IS document 3.1.25 Stock Transfer-Finished GoodName of Business Process : General Ledger AccountingModule Finance Submodule GL- Stock Transfer-Finished

GoodVersion no of document: 2.1 Date :

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Flow Chart of Business Process :

General Requirements/Expectations DescriptionThe Plant to Depot stock transfer of Finished Goods will be processed through Material Management module.


When routed through this Material Management module, the system automatically passes the accounting entries.

This process is covered under MM module. Please refer MM BBP document.


Potential Gaps:None



1. Excise payable GL account will be configured.2. Expense on stock transfer GL account will be configured.

Reports required related to business process Stock report






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Business BenefitsProper accounting treatment will be given in SAP of the Stock transfer.




3.1.26 AccrualsBusiness Blueprint DocumentFor SAP R/3 Implementation at BPE

Date : Sr. No of To-BE document 3.1.26Ref. Sr. No. of AS-IS document 3.1.26 AccrualsName of Business Process : General Ledger AccountingModule Finance Submodule GL- AccrualsVersion no of document: 2.1 Date : Flow Chart of Business Process :


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Accruals and Prepayments are some of the common period-end processes. Expenses incurred during the period under review in respect of which invoices have not been received have to be accrued. Similarly, a proportionate part of the prepayments has to be expensed during each period. This entry may be reversed at the start of the following period.

Detailed Process Description, Process Variations and ExceptionsAccrual can be booked in SAP in two ways:-

1. Posting the accrual at the month end and reversal in the next month:-Accrual transactions need to be accounted for in the books of accounts so as to portray a true and fair view of the financial status of any organization. These entries may however be reversed in the subsequent period to nullify the original entry.

SAP facilitates automatic reversal of accrual entries. When the accrual entry is posted, the user has to indicate that the entry has to be reversed in a subsequent period. In the next period, by running a specific program, the original entry is automatically reversed.

Transaction type ‘Recurring Journals’ can be used to amortize prepayments if the amount of amortization is the same for each period. If the amount varies in each period, the amortization has to be done manually.

Note that the reversal entry gets generated and Posted into the next period, provided the future period is open.

2.Posting of accrual through Journal voucher:-A journal voucher can be posted for the accruing the expenses at the month end. In this case, the accrual booked will not be reversed in the next period. The difference between the accrual amount and the actual expenses will be booked separately.

BPE will be booking the Accrual through Journal vouchers. Appropriate TDS will be deducted on the accrued expenses.

Process Step Explanation, variations and exceptionsFBS1 Post accrual document

Potential Gaps:Accrual upload functionality is not available in SAP.

Potential Gap Resolution:Accrual upload functionality will be provided through development

System Configuration ConsiderationsAuthorization to execute a recurring transaction



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Business BenefitsAudit trail of accrual transactions and their Reversal status can be maintained.




3.1.29 Technical Fee


Date : Sr. No of To-BE document 3.1.29Ref. Sr. No. of AS-IS document 3.1.29 Technical FeeName of Business Process : General Ledger AccountingModule Finance Submodule GL- Technical FeeVersion no of document: 2.1 Date : Flow Chart of Business Process :

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General Requirements/Expectations DescriptionA liability for Technical Fee is created and paid to one of the promoters COLAS for specified amount in foreign currency as per agreement.

Detailed Process Description, Process Variations and ExceptionsTechnical Fee document can be posted in any foreign currency for which a currency key is defined in the system. If a G/L account is managed in a foreign currency, for example a bank account, transaction can only be posted to this G/L account in the account currency, that is, the foreign currency.

An accrual in EUR currency will be made by HQO during the financial closure through transaction code FB60. The system will convert EUR to INR based on the exchange rate maintained in the system. The TDS on the same @ 10% is grossed up manually and paid to the Tax authorities as per the scheduled due dates. The entry in the system would be as follows:

Technical Fee A/c …………………………Dr

TDS Payable (195) A/c ………..................Cr

Vendor(Technical Fee Payable) A/c ………………………….…….Cr

While the actual payment is made, the exchange gain/loss will be calculated by the system automatically.

Vendor(Technical Fee Payable) A/c………. …………………………Dr

Foreign Exchange Gain/Loss......................Cr/Dr

Bank Clearing A/c ………….……………..Cr

As per the BPE current practice, the TDS deducted on Technical fee is treated as expenditure. The Foreign exchange gain/loss method is explained in the section 3.1.51.

The R & D Cess on amount to be remitted to the promoter (in INR) is calculated at the specified rate and paid before the remittance of amount to the promoter.

The Service Tax is also calculated on the gross of amount at the specified rate (Less R & D Cess amount) and paid before the remittance of amount to the promoter. Service tax credit will be posted through JV.

Process Step Explanation, variations and exceptionsFB60 Enter Vendor Invoice

Potential Gaps:None


System Configuration Considerations1. For automatic calculation of foreign exchange gain / loss, Foreign exchange gain/loss account

will be configured in the system. Reports required related to business process FBL3N-GL line item reportFS10N-GL balance summary


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None










Business BenefitsSystem will automatically convert the amount in foreign currency in the document to the INR amount.




3.1.31 Marketing Compensation


Date : Sr. No of To-BE document 3.1.31Ref. Sr. No. of AS-IS document 3.1.31 Marketing Compensation

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Name of Business Process : General Ledger AccountingModule Finance Submodule GL- Marketing CompensationVersion no of document: 2.1 Date : Flow Chart of Business Process :


During the book closure activity, an accrual is made for the amount payable for marketing support provided by XYZ LIMITED for sale of BPE products. The compensation is derived on the basis of a slab system for the quantities of sale during the year.


Total qty. sold information will be generated through SD module. The calculation for marketing compensation will be done outside the system. The amount arrived on basis the slab will be accrued in to the system through vendor Invoice and a corresponding Tax will be deducted at Source.

Process Step Explanation, variations and exceptionsFB60 Enter Vendor invoice

Potential Gaps:None







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Technical Considerations – Interface RequirementsNone Technical Considerations – Enhancements None






3.1.32 Prepaid expenses


Date : Sr. No of To-BE document 3.1.32Ref. Sr. No. of AS-IS document 3.1.32 Prepaid Expenses

Name of Business Process : General Ledger AccountingModule Finance Submodule GL- Prepaid ExpensesVersion no of document: 2.1 Date : Flow Chart of Business Process :

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Some of the expenses like Annual Maintenance Charges, Insurance, and Subscriptions etc are paid in advance for a specific period.


Such expenses will be booked in the “Prepaid expenses” account (Balance sheet item).

Prepaid Exp A/c ..…..……………………Dr

Bank clearing A/c ……………..................Cr

On upload of the bank statement, below mentioned entry will be passed by the system automatically:-

Bank clearing A/c ……………..................Dr

Bank A/c…………………………………….Cr

A journal entry will passed periodically by the system automatically to transfer the balance in the Prepaid Exp A/c to Respective Expense A/c of respective Cost Centre on completion of the period proportionate to the actual total coverage period. The entry would be as follows:

Expense A/c ………………Dr

Prepaid Expenses A/c ……Cr

Process Step Explanation, variations and exceptionsFB01/FB50 Enter GL account document

Potential Gaps:None






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Technical Considerations – Interface RequirementsNone Technical Considerations – Enhancements None






3.1.33 Proof Sheets


Date : Sr. No of To-BE document 3.1.33Ref. Sr. No. of AS-IS document 3.1.33 Proof SheetsName of Business Process : General Ledger AccountingModule Finance Submodule GL- Proof SheetsVersion no of document: 2.1 Date : Flow Chart of Business Process :


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The Proof Sheets are prepared for all the Balance Sheet items at regular intervals to identify the open items by scrutinizing the GL of the Balance Sheet items.


SAP standard transaction codes are available to check/confirm the balances of General ledger balances. Open item balances can be seen at the summary level (T. code FS10N) or at the line item level (FBL3N). The summary report can be drilled down further to the line item level. This information from SAP will be used for balance confirmation as well as for tracking any incorrect postings.

The above mentioned statement/summary report can be generated at any time/date as well as on the monthly basis.

Process Step Explanation, variations and exceptionsFS10N GL balance period wiseFBL3N GL line item detail

Potential Gaps:None








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Business Benefits1. Balance confirmation can be done easily for any accounts.2. Incorrect entries can be tracked down easily.




3.1.34 Valuation - Raw Material/Packing Material/Fuels & Lubricants


Date : Sr. No of To-BE document 3.1.34Ref. Sr. No. of AS-IS document 3.1.34 Valuation - Raw Material/Packing Material/Fuels & LubricantsName of Business Process : Valuation - General Ledger AccountingModule Finance Submodule GL- Valuation - Raw

Material/Packing Material/Fuels & LubricantsVersion no of document: 2.1 Date : Flow Chart of Business Process :


Physical Stock valuation will be done on periodical basis for all Raw Material/Packing Material/Fuels &

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Lubricants obtaining a Physical Verification Stock Statement of the concerned official which is compared with the Book Stocks (Monthly Plant Report) for the individual respective Plants.


The Stock of various Raw Material/Packing Material/Fuels & Lubricants will be valued by system automatically at moving average price. The detailed process is explained in the MM TO-BE document.

Report on consumption of raw material will be generated from SAP system.


Process Step Explanation, variations and exceptionsMCBA Stock valuation report

Potential Gaps:None


System Configuration ConsiderationsRequired configuration has already been covered in the above processes.

Reports required related to business process Stock Valuation report








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Business BenefitsAccounting will be done in SAP in proper manner.




3.1.35 Stock Valuation - Finished Goods


Date : Sr. No of To-BE document 3.1.35Ref. Sr. No. of AS-IS document 3.1.35 Stock Valuation - Finished GoodsName of Business Process : General Ledger AccountingModule Finance Submodule GL- Stock Valuation - Finished

GoodsVersion no of document: 2.1 Date : Flow Chart of Business Process :


Physical Stock valuation will be done on periodical basis for all Finished Goods at Plants, Finished Goods at Depots by obtaining a Physical Verification Stock Statement of the Plant Manager which will be compared with the Book Stocks (Monthly Plant Report) for the individual respective locations. A

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Marketing Personnel is deputed to verify the physical stocks at Depots who confirms the same in a prescribed format with the signature of the Depot In charge.


The Stock of various Finished Goods will be valued at standard price by the system automatically. Standard price for the Finished good will calculated at monthly basis. The detailed process is explained in the MM TO-BE document.


Process Step Explanation, variations and exceptionsMCBA Stock Valuation report

Potential Gaps:None


System Configuration ConsiderationsRequired configuration has already been covered in the above processes. Reports required related to business process Stock Valuation report








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3.1.36 Stock Valuation - Depot Stocks


Date : Sr. No of To-BE document 3.1.36Ref. Sr. No. of AS-IS document 3.1.36 Stock Valuation - Depot StocksName of Business Process : General Ledger AccountingModule Finance Submodule GL- Stock Valuation - Depot

StocksVersion no of document: 2.1 Date : Flow Chart of Business Process :


Stock valuation will be done on periodical basis for all Finished Goods at Depots by obtaining a Physical Verification Stock Statement from the Marketing Personnel deputed to verify the physical stocks at Depots will confirm the same in a prescribed format with the signature of the Depot In charge.

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Detailed Process Description, Process Variations and ExceptionsThe Stock of various Depot Goods will be valued at Moving average price. Moving average price is the moving average of the standard price of the sending manufacturing plant. Moving average price is updated with each receipt of the material. The detailed process is explained in the MM & CO TO-BE document. More detailed explanation will be provided during the User testing & User training phase of the Project.

Process Step Explanation, variations and exceptionsMCBA Stock Valuation report

Potential Gaps:None












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None







3.1.37 Stock Valuation - Stock in Transit


Date : Sr. No of To-BE document 3.1.37Ref. Sr. No. of AS-IS document 3.1.37 Stock Valuation - Stock in TransitName of Business Process : General Ledger AccountingModule Finance Submodule GL- Stock Valuation - Stock in

TransitVersion no of document: 2.1 Date : Flow Chart of Business Process :

General Requirements/Expectations DescriptionThe valuation for Stock in Transit is done for those goods which are sent by one location but not received by the destiny location.

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Detailed Process Description, Process Variations and ExceptionsThe Stock of various in transit Goods will be valued at Moving average price. Moving average price is the moving average of the standard price. Moving average price is updated with each receipt of the material. The detailed process is explained in the MM & CO TO-BE document. More detailed explanation will be provided during the User testing & User training phase of the Project.

Process Step Explanation, variations and exceptionsMCBA Stock Valuation Report

Potential Gaps:None












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3.1.38 Stock Valuation - Obsolete / Damaged Stock


Date : Sr. No of To-BE document 3.1.38Ref. Sr. No. of AS-IS document 3.1.38 Stock Valuation - Obsolete / Damaged StockName of Business Process : General Ledger AccountingModule Finance Submodule GL- Stock Valuation - Obsolete /

Damaged StockVersion no of document: 2.1 Date : Flow Chart of Business Process :


The obsolete / damaged stock is valued at Zero value or at the net realizable rate that can be fetched from the market.


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The obsolete / damaged stock will be scrapped at net realizable value or nil value as the case may be through Material management module. The detailed process is explained in the MM TO-BE document. Separate GL accounts will be defined for the loss/gain on Stock revaluation and Capital items.


Process Step Explanation, variations and exceptionsMB1A (551 Movement type)

Good issue

Potential Gaps:None












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3.1.40 Excise Differential (RTP) XYZ LIMITED


Date : Sr. No of To-BE document 3.1.40Ref. Sr. No. of AS-IS document 3.1.40 Excise Differential (RTP) XYZ LIMITED

Name of Business Process : General Ledger AccountingModule Finance Submodule GL- Excise Differential (RTP)

XYZ LIMITEDVersion no of document: 2.1 Date : Flow Chart of Business Process :


Majority of Bitumen/SKO sourcing is made from XYZ LIMITED. When Bitumen/SKO is sourced from XYZ LIMITED Terminal other than a refinery location, sometimes the Cenvat benefit may be lesser

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than amount of excise duty recovered in the price charged by XYZ LIMITED. Due to pricing difference at Terminal compared to refinery, there is a difference in the Excise Duty which is charged in the commercial invoice which is on higher side as compared to actual cenvat document which is for lower amount.


Excise duty will be entered as per the excise document. If the excise amount proposed by the system is higher then the actual excise invoice, then that proposed amount will be overwritten manually. The detailed process has been explained in the MM TO-BE document.

Also, Excise JV functionality can also be used for posting the Excise differential.

Accounting entry for Excise Duty Reversal through Excise JV

Cenvat Clearing……………….Dr.

Cenvat Account……………….Cr.

More detailed explanation will be provided during the User testing & User training phase of the Project. Process Step Explanation, variations and exceptionsJ1IH Excise JV

Potential Gaps:None


System Configuration ConsiderationsCIN related configuration has already been explained in the above sections. Reports required related to business process FBL3N-GL line item reportFS10N-GL balance summary





User Roles and Authorizations

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Excise invoice posting authorisation will be given to limited set of users.






Business BenefitsCorrect excise duty will be entered in the SAP.




3.1.41 Cash Flow Statement


Date : Sr. No of To-BE document 3.1.41Ref. Sr. No. of AS-IS document 3.1.41 Cash Flow StatementName of Business Process : General Ledger AccountingModule Finance Submodule GL- Cash Flow StatementVersion no of document: 2.1 Date : Flow Chart of Business Process :

General Requirements/Expectations DescriptionCash Flow statement should be prepared at all the locations reflecting Cash inflow, outflow and balance.

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Cash Flow statement is not readily available in the SAP systems. This is a GAP.

Potential Gaps:Cash Flow statement is not readily available in the SAP systems.

Potential Gap Resolution:A new report will be developed to get the Cash flow statement.

System Configuration Considerations Reports required related to business process Cash Flow statement










Business Benefits

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Accounting will be done in SAP in proper way.




3.1.42 Payroll


Date : Sr. No of To-BE document 3.1.42Ref. Sr. No. of AS-IS document 3.1.42 PayrollName of Business Process : General Ledger AccountingModule Finance Submodule GL- PayrollVersion no of document: 2.1 Date : Flow Chart of Business Process :

General Requirements/Expectations DescriptionThe Payroll processing is done through a separate outsourcing agency. Basis the inputs provided by the HR dept the outsourced company prepares the salary register.


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The salary will be entered in the SAP system through journal voucher. TDS will also be accounted for along with the ESIC & EPF. The employees portion of EPF & ESIC will also be accounted along with the salary.

Separate GL account will be created in SAP for each of the salary item like Professional tax payable, ESIC payable, EPF payable etc.

If the advance to employees is to be shown employee wise, then separate vendor code needs to be created in SAP to whom the advance is given and advance will be entered in the system through special GL indicator. Interest will be calculated for the advances as per the interest indicator mentioned in the master data. First all the expenses will be accounted in SAP through Journal voucher and once salary is paid, the liability will be discharged through Bank entry.

Salary-BPE A/c DrTDS on Salaries A/c CrProfessional Tax Payable A/c CrESIC Payable A/c CrEPF Payable A/c CrAdvance to Employees A/c CrSalary BPE Payable A/c Cr

The payment entry in SAP will be as mentioned below-

Salary BPE Payable A/c……………. DrBank A/c……………………………….. Cr

If the payments to some of the employees are to be done through system generated cheques, then vendor code will be created for those employees. Payment will be generated for them as per the process explained in section 3.2.2


Potential Gaps:SAP does not provide the functionality of Payroll upload.

Potential Gap Resolution:Necessary enhancement will be done to upload the Payroll in SAP.



Data Interface

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Whether data records of current business process would be transferred to system other than SAP R/3 : NoIf Yes, Describe in details and attach the format in which data would be stored in the other system :



User Roles and AuthorizationsJournal voucher transaction posting authorisation will be given to limited set of users.






Business BenefitsSalary will be accounted in to the system along with all the components like TDS, EPF, ESIC etc. Sign-off (Approval) for this document :



3.1.43 Issue of Bank Guarantee


Date : Sr. No of To-BE document 3.1.43Ref. Sr. No. of AS-IS document 3.1.43 Issue of Bank GuaranteeName of Business Process : General Ledger AccountingModule Finance Submodule GL- Issue of Bank GuaranteeVersion no of document: 2.1 Date : Flow Chart of Business Process :

General Requirements/Expectations DescriptionDuring the setup of new plants in the process of expansion at various states, as per the respective states

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VAT Act, for obtaining registration with the Tax Depts., a Bank Guarantee for the specified amount needs to be provided in favour of the respective Tax Depts. Also, in some instances, the Bank Guarantee may be required to be submitted for any demand raised by the tax depts. during the assessments.


The Bank Guarantee is secured by the Fixed deposit in the Bank. Accounting entry will be posted in the SAP for the Fixed deposit. Interest accrued thereon will be accounted separately.

The party in whose favour bank guarantee is issued will be created as Vendor. Interest indicator will be maintained in the vendor master data. The interest calculation will be done in the system only on the statistical basis. Interest calculated by the system on the basis of interest indicator can be compared with the actual bank interest.

The details like Custodian name, beneficiary name, Bank name, amount, expiry period etc. will be available through GL line item report.


Potential Gaps:None








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Technical Considerations – Workflow requirements : None

Business BenefitsFixed deposit related accounting will be done in SAP in proper way.




3.1.44 RBI Return for Foreign Investments


Date : Sr. No of To-BE document 3.1.44Ref. Sr. No. of AS-IS document 3.1.39 RBI Return for Foreign InvestmentsName of Business Process : General Ledger AccountingModule Finance Submodule GL- RBI Return for Foreign

InvestmentsVersion no of document: 2.1 Date :

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A report should be generated in the form of return (as required by RBI notification) giving information of Foreign Direct Investments & Other Investments like Trade Credit. The return is filed on or before 31st July for the pervious FY.


RBI return for Foreign Investment is not available in SAP. This is a GAP. All the details required for RBI return will be available in SAP.

Potential Gaps:No option in available in SAP to generate the form of return as required by RBI notification giving information of Foreign Direct Investments & Other Investments like Trade Credit..

Potential Gap Resolution:All the details required for RBI return will be available in SAP. Return will be filled in manually.


Reports required related to business process None

Outputs required for this business processRBI return in Prescribed format (not available in SAP)




User Roles and AuthorizationsReport execution authorisation will be given to limited set of users.


Technical Considerations - Conversion Requirements

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None




Business BenefitsRBI return will be generated through SAP.




3.1.45 Transactions with Associated Concerns


Date : Sr. No of To-BE document 3.1.45Ref. Sr. No. of AS-IS document 3.1.45 Transactions with Associated ConcernsName of Business Process : General Ledger AccountingModule Finance Submodule GL- Transactions with Associated

ConcernsVersion no of document: 2.1 Date : Flow Chart of Business Process :

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A report should be available to generate the information on International Transactions with associated concerns whether in respect of Raw Materials, Spares, Capital Equipments, Technical Assistance etc. It contains information in respect of items Purchased/Nature of services received, amount in Foreign Currency, Exchange Rate for converting into Indian Currency, Custom valuation, Method of Determining the arms length price, the comparables of the other companies or details of the similar items sold by the associated concern to any other concern in India.


Associated concern will be created in SAP as Customer/Vendor. By running the transaction code FBL1N- Vendor Line item display or FBL5N-Customer line item display, the detail of all the transactions with the associated concern can be generated.

Detail in the format of gross amount and taxes & duties separately can be derived from the Material Management report. The detail for the same is covered in the MM BBP document.

Process Step Explanation, variations and exceptionsFBL1N Vendor line item displayFBL5N Customer line item display

Potential Gaps:No report is available in SAP which shows the comparison of the item sold by associated concern to any other concern in India with the Item sold to BPE.



Reports required related to business process FBL3N-GL line item reportFS10N-GL balance summaryFBL5N-Customer line item reportFBL1N-Vendor line item report



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User Roles and AuthorizationsNone





Technical Considerations – Workflow requirements None

Business BenefitsAll the Foreign currency transactions & reports can be viewed through SAP. Sign-off (Approval) for this document :



3.1.46 Security Deposits Received or Paid in excess of Rs.20, 000


Date : Sr. No of To-BE document 3.1.46Ref. Sr. No. of AS-IS document 3.1.46 Security Deposits Received or Paid in excess of Rs.20, 000/Name of Business Process General Ledger AccountingModule Finance Submodule GL- Security Deposits Received

or Paid in excess of Rs.20, 000/Version no of document: 2.1 Date :

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A report will be generated giving details of those Vendors from whom Security Deposits are received or to whom Security Deposits are repaid for an amount of more than Rs.20, 000/- in aggregate. The report contains information like name of Vendor, PAN number, amount received or paid against Security Deposit during the FY, Max amount outstanding and the mode of payment etc.


Security deposit entry will be done in SAP through special GL indicator. Corresponding GL will have a separate reconciliation account. Reconciliation account will be created with the option of line item display. Report on the security deposit received or paid in excess of Rs. 20000/- can be generated by putting greater than 20000/- condition in the amount field of transaction code FBL3N for the reconciliation account mentioned above.

Security Deposits report- Party wise opening balance, receipts, repayments and closing balance will be provided by the system.

Process Step Explanation, variations and exceptionsFB01 / FB50 Enter GL account documentFBL3N GL line item display

Potential Gaps:None





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3.1.47 Sample documents


Date : Sr. No of To-BE document 3.1.47Ref. Sr. No. of AS-IS document : NoName of Business Process General Ledger AccountingModule Finance Submodule GL- Sample documentsVersion no of document: 2.1 Date :

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If same natures of documents are used quite frequently without change, sample document can be used as reference document.

They serve merely as data sources for an accounting document.


In contrast to an accounting document, sample documents do not update transaction figures. They serve merely as data sources for an accounting document. Their advantage is that you can change or enhance them. You therefore use a sample document rather than an accounting document.

Below mentioned is the process for posting the document with reference to Sample document:-

Determine the use of sample document

Determine the type of transaction and accounts for which sample document can be created

Create sample document

Approve/Authorize sample document

Use post with reference function

Enter the sample document number

Change the document if required

Simulate the document to see overview before posting

Post the document

Sample document can be treated as template.


Potential Gaps:None





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User Roles and AuthorizationsEstablish Authorization for creating account assignment model.






Business BenefitsUsing the sample document functionality repetitive efforts in putting the similar type of data can be avoided.




3.1.48 GL document parking & posting


Date : Sr. No of To-BE document 3.1.48Ref. Sr. No. of AS-IS document :NoName of Business Process General Ledger AccountingModule Finance Submodule GL- GL document parking &

posting

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Document parking is used to enter and store (park) incomplete documents, without carrying out extensive entry checks. Parked documents can be completed, checked and then posted at a later Date if necessary by a different data entry clerk.


Parked documents can be posted either individually or via a list. On receipt of missing information such as a narration, business area, cost centre assignment call up the parked documents and do the final posting.

When documents are parked, data is not updated.

There are two methods for parking a document

From the GL Document entry

Directly entering the document to be parked

The data entered in the parked document is available for evaluation.

Park document can be deleted using the SAP transaction code FBV0. But once park document is posted, it cannot be deleted.

User preparing the Journal voucher entries, Bank payments & Bank receipts entries will have authorization for the Parking the documents only. They will not have the authorization for posting those documents. Postings will be done by the authorized users only.

Process Step Explanation, variations and exceptionsFV50 Park GL account documentFBV0 Delete parked documentFB01 / FB50 Enter GL account document

Potential Gaps:None


System Configuration ConsiderationsNone Reports required related to business process FBL3N-GL line item report

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FS10N-GL balance summary




User Roles and AuthorizationsPark document functionality will be given to limited set of users.






Business BenefitsUsing the park document functionality, the entered data will be saved and while posting the document, there is no need to enter all that data again. Sign-off (Approval) for this document :



3.1.49 Document Split functionality


Date : Sr. No of To-BE document 3.1.49Ref. Sr. No. of AS-IS document :NoName of Business Process General Ledger Accounting

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Module Finance Submodule GL- Document split functionality



In BPE each of the plant will be treated as Profit center. To generate the Plant wise Profit & loss account and the Balance sheet each of the line item of the document should have the profit center.


– New functionality under New General Ledger in SAP

– Organizes line items in the financial documents according to selected dimensions like profit center

– For each financial accounting document, line items are split on the basis of predetermined entity such as profit center in real time

– Financial statements can be created at profit center level.

Types of Document Split -

– Passive Split -During clearing the account assignments of the items to clear are inherited to the clearing line items. Eg during payment

– Active Split - System splits the documents on the basis of document Splitting Rules

– Zero Balance indicator - The System creates clearing lines automatically to achieve a split.

Financial accounting document has two views – Entry view – How a document also appears in the subledger

Vendor Invoice

Expenses……………….Dr Pctr01 1000


Vendor…………………Cr 1500

General Ledger View – How a document appears only in GL view.

Vendor Invoice

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Vendor…………………Cr Pctr01 1000 Vendor…………………Cr Pctr02 500

Profit Center is assigned in the Cost center master data. In the above example, the profit center in the line item will be derived through the cost center mentioned in the Expense line item. The Vendor line item will automatically derive the profit center from the expense line item profit center.

Potential Gaps:None


System Configuration Considerations Reports required related to business process None









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Business BenefitsEach of the line item of the document will have the profit center. Profit center wise Balance sheet and Profit & loss can be easily derived through this functionality.




3.1.50 Valuation of Foreign Currency item


Date : Sr. No of To-BE document 3.1.50Ref. Sr. No. of AS-IS document :No

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Name of Business Process General Ledger AccountingModule Finance Submodule GL- Valuation of Foreign

Currency itemsVersion no of document: 2.1 Date : Flow Chart of Business Process :


At the end of each month Foreign Currency item has to be revaluated.


Below mentioned three types of accounts maintained in the Foreign currency are to be revaluated at the end of every month:-

1.Balance Sheet items

2.Customer balances

3.Vendor balances

In the customization, GL accounts are maintained for realized gain/loss and unrealized gain/loss. All the open items at the month end will be revaluated and the unrealized gain/loss on revaluation will be posted according to the GL account maintained in the customization.

Whenever the Foreign currency items are paid off, the gain/loss is booked in to the realized gain/loss account maintained in the configuration.

The exchange rate is maintained in the exchange rate table on the monthly basis as per the rates published by the RBI.

Process Step Explanation, variations and exceptionsF.05 Foreign Currency valuation

Potential Gaps:None





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Business Benefits




3.1.51 Clear GL accounts


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Date : Sr. No of To-BE document 3.1.51Ref. Sr. No. of AS-IS document :No

Name of Business Process General Ledger AccountingModule Finance Submodule GL- Clear GL accountsVersion no of document: 2.1 Date : Flow Chart of Business Process :


GL accounts needs to be cleared on periodic basis.


GL accounts maintained on the open item management account needs to be cleared on periodic basis which is a manual process. GL accounts can be cleared on the basis of the below mentioned criteria:-1.Amount2.Document number3.Posting date4.Reference5.Document type6.Tax code7. Others

Process Step Explanation, variations and exceptionsFB1S Clear GL accounts

Potential Gaps:None





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Business BenefitsGL accounts can be cleared on periodic basis.




Accounts Receivable:-

3.2.1 Advance Receipts


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Sr. No of To-BE document 3.2.1Ref. Sr. No. of AS-IS document 3.2.1 Advance ReceiptsName of Business Process : Accounts ReceivableModule Finance Submodule AR- Advance ReceiptsVersion no of document: 2.1 Date : Flow Chart of Business Process :


The customer makes the payment on advance basis (normally by DD, occasionally by cheque as per the authorizations in LAM) before the supply is taken.


In SAP advance receipt is called as down payment. Down Payment in SAP allows to post to another GL account which is called as Down payment from Customer. This amount is shown separately under Balance sheet as Liability through that account. This is possible due to SAP functionality of Special GL indicators. This allows the user to post the document to an alternative GL account instead of “normal” customer’s reconciliation account. They are defined in configuration for Customers reconciliation accounts.

The down payments are used for

Short term or medium term financing Shown separately on the balance-sheet as liability Reminds by the system when entering the invoice

An accounting entry will be passed in the system by debiting the Bank a/c and crediting the Customer a/c with special GL indicator as follows:

Bank clearing A/c ……………………...Dr

Customer A/c …………………Cr

The Customer a/c will show a credit balance till the delivery of material is made by BPE by way of an invoice. When the supply will be made, the advance cash receipt punched earlier will be adjusted against the invoice delivered.

Once the Invoice is entered in to the system through SD module, both the documents (Payment and Invoice document) will be open. Both the open item can be cleared using transaction code F-32.

The customer ledger will show the advance receipt document and the Invoice entered subsequently. Once both the items are cleared, the advance receipt document will be updated with the Invoice document number and the Invoice document will be updated in the advance receipt document in the reference field.

Customer aging report will also be available from the system.

Process Step Explanation, variations and exceptionsF-29 Down payments

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VA01 Enter Customer Sales Order (Done in SD module)VF01 Enter Customer Billing document (Done in SD module)F-32 Clear Open Items

Potential Gaps:None


System Configuration Considerations1. Special GL indicator configuration2. Alternative GL account assignment instead of normal reconciliation account.


1. FBL5N-Cutomer line item report2. FD10N- Customer balance report

.Outputs required for this business processNone Data InterfaceWhether data records of current business process would be transferred to system other than SAP R/3 : No








Technical Considerations – Workflow requirements :None

Business Benefits1. Down payments are identified separately from the normal payment.

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2. System prompts the message while entering the Invoice, that down payment is already received.




3.2.2 Receipts against Credit Supplies


Date :

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Sr. No of To-BE document 3.2.2Ref. Sr. No. of AS-IS document 3.2.2 Receipts against Credit SuppliesName of Business Process : Accounts ReceivableModule Finance Submodule AR- Receipts against Credit

SuppliesVersion no of document: 2.1 Date : Flow Chart of Business Process :


The receipts from customers against the supplies made on credit basis will be accounted by way of a receipt voucher tagging to the individual outstanding invoice on FIFO basis.


Once the customer Invoice is entered in to system through SD module, the accounting entry will be posted automatically in the Finance module.

Incoming payment from customer received later as per the credit terms will be accounted for in SAP using the T. Code F-28:

At the time of posting the above transaction, the open invoices will be selected and Invoice against which the payment is received will be cleared, against the incoming payment.

If the incoming payments are entered without clearing the open item, both the open items (Invoice & payment document) can be cleared manually using transaction code F-32.

Separate GL accounts needs to be defined for the discount given to the Customers. Discount given will be shown separately in the financial statement.

Customer can be cleared separately based on one of the criteria mentioned below:-

1. Amount

2. Document number

3. Posting date

4. Document type

5. Dunning area

6. Reference

The details of Bank Guarantee & Letter of Credit will be maintained in the Customer master data.

The Customer Ledger/Statement showing the details of Invoices raised & payment received will be provided through the SAP system. The customer ledger will show the Invoice document and the Payment receipt document. Once both the items are cleared, the receipt document will be updated with the Invoice document number and the Invoice document will be updated in the payment receipt document in the reference field.

The system will provide the detail on the nature of payment received from Customer e.g. Cheques, D.D.

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etc.

Customer ageing report will be based on the date of invoice.

Process Step Explanation, variations and exceptionsF-28 Post Incoming paymentsF-32 Clear customerFB1D Clear customer

Potential Gaps:None


System Configuration ConsiderationsFollowing are to configured in the SAP:-

1. Terms of Payment2. Payment method3. Tolerance group4. House Bank5. Dunning procedure6. Dunning Clerk

Reports required related to business process FBL5N-Customer line item reportFD10N-Customer balance report








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None



Business BenefitsOpen Invoice documents can be cleared immediately at the time of posting the incoming payments. After clearing the open item, only the Invoices against which the payment is due can be seen in the system by selection the option “open items only” in the customer line item report.




3.2.3 Bank Guarantee / Letter of Credit for Credit Supplies


Date : Sr. No of To-BE document 3.2.3

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Ref. Sr. No. of AS-IS document 3.2.3 Bank Guarantee / Letter of Credit for Credit SuppliesName of Business Process : Accounts ReceivableModule Finance Submodule AR- Bank Guarantee / Letter of

Credit for Credit SuppliesVersion no of document: 2.1 Date : Flow Chart of Business Process :


The Credit Supplies to the Customers will be secured either by a Bank Guarantee or a Letter of Credit for a specified amount.

Detailed Process Description, Process Variations and ExceptionsThe Bank Guarantee received from the customer will be entered in the SAP with a special GL indicator as a statistical entry. Corresponding reconciliation will have a separate GL account. GL account will be created with the option of line item display. Report on the Bank Guarantee or a Letter of Credit can be generated using transaction code FBL3N for the reconciliation account mentioned above. The supplies will be affected to the Customer to the extent of these specified limits and no supplies would be honored beyond the same. The Bank Guarantee / Letter of Credit are invoked to settle the outstanding dues before the due date by sending a demand to the respective Bank along with the required documents.

If the Customer had been provided a credit period, then an interest will be posted for the delayed payments and the same will also be considered before releasing the supplies for the Customers inline to the Bank Guarantee limits.

A report on the Bank Guarantees received from Customers will be provided through the system. The report will have all the details entered at the time of document posting such as Bank name, Amount, due date, claim period etc.

Interest indicator will be maintained in the customer master data. Interest will be calculated on the Customer level. and will be posted as statistical entry.

Process Step Explanation, variations and exceptionsFD32 Customer credit limit managementFBL3N GL line item displayFBL5N Customer line item reportFD10N Customer balance report

Potential Gaps:1. Interest factor consideration for credit limit check without passing the Interest entry in the

system is not possible in the SAP. 2. Before the due date of the bank guarantee, prompt message is not provided by the SAP.

Potential Gap Resolution:1. Interest factor consideration for credit limit check without passing the Interest entry in the

system is not possible in the SAP. Credit limit has to be checked manually in that case.2. Development needs to be done to provide the early message of the bank guarantee expiry due

date.


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1. Define the special GL indicator for Bank Guarantee & Letter of Credit. Special GL indicator G & L defined in standard SAP can be used for Bank Guarantee & Letter of Credit respectively.2. Alternative GL account is to be configured for Customer. Reports required related to business process FBL5N-Customer line item reportFD10N-Customer balance report








Business BenefitsSAP will always check the Credit limit of the customer before releasing the delivery.




3.2.4 Bill Discounting (BOE)


Date : Sr. No of To-BE document 3.2.4

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Ref. Sr. No. of AS-IS document 3.2.4 Bill Discounting (BOE)Name of Business Process : Accounts ReceivableModule Finance Submodule AR- Bill Discounting (BOE)Version no of document: 2.1 Date : Flow Chart of Business Process :

General Requirements/Expectations DescriptionIn some instances, the payments for credit supplies are received by an arrangement between Customer and BPE and mutually agreed Bank. After the supply is made, a letter is addressed by BPE to the Customer along with the details of supplies to release the payment for the same within the due date (Credit Period extended) to the Bank and an acceptance for the same is obtained from the Customer. Under this arrangement, immediately after the supply is made or within the credit period extended to the Customer, the bills along with the acceptance letter of Customer to pay to the Bank are submitted to the Bank for discounting the same at an agreed rate.

Detailed Process Description, Process Variations and Exceptions The payment received from the bank will be accounted into the system through the procedure mentioned in the section 3.2.2. The bill discounting charges will also be accounted for.

Once the payment is received from the bank on behalf of customer, the customer open item will be cleared.

Once the customer Invoice is entered in to system through SD module, the accounting entry will be posted automatically in the Finance module. The master bill of exchange document will be prepared for all the invoices for the respective customer. This master BOE will be identified by a separate number.

Contingent liability can be posted in to the system through statistical posting using special GL indicator. If the Customer does not pay to the bank as per the due date, Customer master can be blocked at the sales area level, so that no further supply can be made to that customer. The Block has to be put manually in the customer master data.

Journal entry will be passed for the Bank charges absorbed by BPE and the Bank charges recovered from the customer.

Customer wise BOE detail can be generated from the system using the Customer GL line item report.

Process Step Explanation, variations and exceptionsF-28 Post Incoming paymentsF-32 Clear customer

Potential Gaps:None


System Configuration ConsiderationsNone Reports required related to business process

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FBL5N-Customer line item reportFD10N-Customer balance report










Business BenefitsCustomer account will be managed in better way through Bill discounting related postings and clearing of outstanding.




3.2.5 Inter Branch Receipt Accounting


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Date : Sr. No of To-BE document 3.2.5Ref. Sr. No. of AS-IS document 3.2.5 Inter Branch Receipt Accounting Name of Business Process : Accounts ReceivableModule Finance Submodule AR- Inter Branch Receipt

AccountingVersion no of document: 2.1 Date : Flow Chart of Business Process :


The Customer at rare instances, provides the payments to locations, where actually the supplies were made by some other location.


Such payments will be deposited into the receiving locations Bank account as normal cheque deposits are done. But while accounting for the receipt, the profit center will be entered of the location from whom the supplies were made. Through this the receipt from Customer will be reflected in the location on behalf of which payment is received. Please refer section 3.1.13 for detailed explanation.

Incoming payments will be accounted for in the system as per the procedure mentioned in the section 3.2.2.

Process Step Explanation, variations and exceptionsF-28 Post Incoming paymentsFB01 / FB50 Enter GL account document

Potential Gaps:None


System Configuration ConsiderationsRequired configuration has already been covered in above processes. Reports required related to business process FBL3N-GL line item reportFS10N-GL balance summaryFBL5N-Customer line item reportFBL1N-Vendor line item report

Outputs required for this business processNone Data Interface

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Whether data records of current business process would be transferred to system other than SAP R/3 : No









Business BenefitsCustomer will receive the credit even if the payment is received at some other location and net balance of the inter branch adjustment account will always be nil.




3.2.6 Interest on Delayed Payments


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Sr. No of To-BE document 3.2.6Ref. Sr. No. of AS-IS document 3.2.6 Interest on delayed paymentName of Business Process : Accounts ReceivableModule Finance Submodule AR- Interest on delayed paymentVersion no of document: 2.1 Date : Flow Chart of Business Process :

General Requirements/Expectations DescriptionInterest at specified rate should be calculated on the outstanding amount beyond the credit limit period specified.


Terms of payment will be maintained and assigned in the customer master data. Payment terms will have the payment due date.

For calculating the interest on the overdue payment Interest indicator and interest cycle will be defined in the customer master data.

The balance interest calculation program is controlled using the following specifications:

1. Data from Account Master Record

2. Specification stored under interest indicator

3. Specifications made for interest calculation run

Interest Calculation Period:

The determination of interest calculation period can be in two ways

1. Manually for every interest calculation run

2. Automatically - In this case, the system determines the period according to rules you have specified. You can define these rules either per account or per interest indicator.

Interest will be calculated by the system only for the customer, in whose master data Interest indicator is maintained.

Interest will be entered in to the system only when it is received :-

Customer A/c ………...DrInterest received A/c ….Cr

Interest calculation can be done for single customer or for all the customer together. Interest rates are time bound i.e. Interest rates are defined in the system with respect to the validity date.

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Process Step Explanation, variations and exceptionsFINT Item Interest calculation

Potential Gaps:SAP provides the interest calculation output format in the standard format.

Potential Gap Resolution:A new report will be developed to provide the Interest calculation report in the BPE format.

System Configuration Considerations1. Define payment terms2. Define interest indicator3. Define interest calculation cycle











Business Benefits

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Accounting will be done in SAP in proper way.




3.2.7 Debit & Credit Notes


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Date : Sr. No of To-BE document 3.2.7Ref. Sr. No. of AS-IS document 3.2.7 Debit & Credit NotesName of Business Process : Accounts ReceivableModule Finance Submodule AR- Debit & Credit NotesVersion no of document: 2.1 Date : Flow Chart of Business Process :

General Requirements/Expectations DescriptionThe Debit Notes & Credit Notes are given to the customer a/c’s when the Basis Rates on the invoice are under/over charged, wrong charge of taxes, freight etc.


In the integrated SAP system the credit memos are created in SD (Sales and Distribution) module in case of sales return and sent to Accounts Receivable component of Financial Accounting (FI-AR).

Credit memos can be posted directly through Finance module in case of rate differences. But in that case it will have only the amount related adjustments and will not have any quantity effects.

In certain cases of delivered supplies, if the customer acknowledges a shortage in material supplied, a credit note will be given to the customer proportionate to the invoice value & the same will be recovered from the Vendor (Transporter) A/c. The payment to the transporter for transportation will be made for the net quantity delivered at Customer’s site. Proportionately the service tax is taken care off.

If the Customer doesn’t provide the Form-C the differential tax along with the interest will be recovered from the customer by raising the debit note to the customer . The debit note will be raised from the Finance module. Subsequent supply to the Customer will be done at the full rate through change in the Customer master data & Sales order (through SD module).

Please refer SD BBP document for detailed explanation.

Process Step Explanation, variations and exceptionsFB75 Customer Credit memoFB01 / FB50 Enter GL account documentFB65 Vendor Credit memo

Potential Gaps:None


System Configuration ConsiderationsRequired configuration has already been covered in above processes.


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User Roles and AuthorizationsTransaction posting authorization will be given to limited set of users.






Business Benefits1. Appropriate accounting treatment will be given to the customer & vendor account.2. Appropriate accounting treatment will be given to the CST.




3.2.8 Sales Returns


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Sr. No of To-BE document 3.2.8Ref. Sr. No. of AS-IS document 3.2.8 Sales ReturnName of Business Process : Accounts ReceivableModule Finance Submodule AR- Sales ReturnVersion no of document: 2.1 Date : Flow Chart of Business Process :


The Sales returns from Customers would effect due to quality complaints or any other issues such as lack of storing capacity at Customer’s site. A reversal for the quantity of sales will be made in the system which reverses the entire entry of sales by crediting the customer and debiting the Sales A/c, Excise Duty, VAT etc.


Sales will be reversed through Sales & Distribution module. Sales order (type RE) and Billing document (type G2) will be created for reversal. Reversal Billing document will have the reversal accounting entries.

If the Customer does not return the entire quantity and does not pay for the quantity retained by him, the same can be booked as bad debts after getting the required approval.

Please refer SD BBP document for detailed explanation.

Potential Gaps:None


System Configuration ConsiderationsNone Reports required related to business process




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3.2.9 Bad Debts & Provisions

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Date : Sr. No of To-BE document 3.1.39Ref. Sr. No. of AS-IS document 3.1.39 Bad Debts & ProvisionsName of Business Process : Accounts ReceivableModule Finance Submodule AR- Bad Debts & ProvisionsVersion no of document: 2.1 Date : Flow Chart of Business Process :


The debit balance in the customer accounts are provided by the Finance dept and reviewed by the Marketing Dept. On the basis of the inputs and approvals received, the entries for bad debts are accounted in the system inline to the company’s policy.

The Provision for Doubtful Debts is passed in the system basis the ageing report of the customer accounts through manual Journal voucher. The report is reviewed at the time of Book Closure and the entries are journalized in the system.


Bad debts will be accounted in SAP through Journal vouchers.

Bad Debts A/c ……………………...Dr

Customer A/c ……………………...Cr

Bad debts written off will be posted as noted item in Customer account to keep a track on the Customer. Noted items can be seen through customer line item report FBL3N by selecting the option Noted item display.


Potential Gaps:None




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3.2.13 Customer Invoice document holding & posting


Date : Sr. No of To-BE document 3.2.13Ref. Sr. No. of AS-IS document :NoName of Business Process : Account ReceivableModule Finance Submodule AR- Customer Invoice

document holding & postingVersion no of document:2.1 DateFlow Chart of Business Process :


While entering the Customer Invoice directly through FI , you may be interrupted, or you may not have all the data you need for entering a document, functionality should be available in SAP to store the entered data in SAP, without giving the financial impact.


In this case, you can temporarily save the data you have entered, and then continue with the document entry at a later time. If you want the system to hold a document, it does not have to be complete. Account balances are not updated and the document data is not available for evaluation. A document number is not assigned.

Process Step Explanation, variations and exceptionsFB70 Enter Customer Invoice

Potential Gaps:None



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User Roles and AuthorizationsHold document functionality will be given to limited set of users.






Business BenefitsUsing the hold document functionality, the entered data will be saved and while posting the document, there is no need to enter all that data again. Sign-off (Approval) for this document :



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Accounts Payable3.3.1 Purchase of Material Bill ProcessingBusiness Blueprint DocumentFor SAP R/3 Implementation at BPE

Date : Sr. No of To-BE document 3.3.1Ref. Sr. No. of AS-IS document 3.3.1 Purchase of Material Bill ProcessingName of Business Process : Accounts PayableModule Finance Submodule AP- Purchase of Material Bill

ProcessingVersion no of document: 2.1 Date : Flow Chart of Business Process :

General Requirements/Expectations DescriptionThis sub-process covers the processing of vendor invoices (entering, matching and posting) in the SAP system.Invoices with PO are processed through the ‘Logistics Invoice Verification’ sub-module of Materials Management.During invoice entry, when the PO number is entered, the system brings up the individual line items of the PO. The person entering the invoice will then have to confirm or change the value of the individual line items.

The invoice can then alternatively be “Parked” or “Posted” into the system.


Logistic Invoice VerificationIt is a procedure through which Vendor Invoices are booked in the system by performing a match between the PO rates and the Invoice values. Facilities like loading any additional costs to a material stock account or to an expense GL code are supported by the standard system. Additional functions like booking “Subsequent Debits/Credits” are also provided for.

Vendor liability is created in the system by means of booking an Invoice. Data pertaining to payment terms, payment method, discounts etc get defaulted from the Vendor Master. These values are however modifiable at the invoice level. The invoices can be either “Parked” or “Posted. Incase, if the tolerance limits are exceeded then the Invoice gets blocked by default.

If the invoice as entered fully matches with the GRN, the system gives a suitable message. In the event of discrepancies or non-receipt of goods, the system gives a message that the invoice is blocked for payment.

Tolerance LimitTolerances for acceptable level of variances between the actual and invoiced quantity values etc. can be predefined in the system. Unless there is a complete match between the invoice amount and the GRN(s), the system will block the invoice i.e. it cannot be paid. Some instances whereby variances will arise are: 1.Rate variances2.Quantity variances

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3.Delivery Date

An authorized employee will have to scrutinize all blocked invoices on a periodic basis and take corrective action to un-block the invoices.

The system provides a facility for setting up tolerance limits for invoice matching by employee or employee groups. If the discrepancy is within the specified tolerance limit, the system posts the difference to a pre-defined ledger account and posts the invoice as ready for payment. The tolerance amount will be posted as discount to the vendor.As per the schedule VI requirement, Purchase of raw material should also be shown in the P&L statement. For this, the purchase account functionality will be activated through valuation class in MM module. At the time of GR, following entry will be passed by the system automatically:-

Raw material purchase A/c …….……...Dr

Change in stock A/c ……………………...Cr

Releasing of blocked InvoicesBlocking of invoices can be categorized into the following:

1. System generated Blocks during Invoice verification2. Manual Blocks entered during document entry.

A listing of all such blocks can be extracted from the system and the same may be released for payment at one go.

An authorized employee has to monitor blocked invoices on a regular basis and take necessary action to resolve the same.

This could either be accepting the difference or getting a credit note from the vendor. Once the discrepancy is resolved, the system removes the block and the invoice becomes free for payment. Since parked documents are not posted in FI, a list of parked documents will be extracted from the system at the end of each accounting period and the relevant expenses accrued.Any variances, which occur during Invoice verification, will result in the following

a. Debit/Credit to the Stock accounts b. Debit/Credit to the Price Difference account in case of inadequacy of Stocks

Subsequent Debit note to vendors are adjusted with the original Invoice.

A new report will be developed in MM module to provide the information w.r.t Purchase order v/s Invoice qty & value information

Please refer MM BBP document for detailed explanation.

Process Step Explanation, variations and exceptionsF-53 Post outgoing paymentF-48 Post Vendor down paymentF.13 Automatic clearingFB65 Credit memo

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Potential Gaps:Requirements of 145A of IT Act for grossing up of CENVAT, excise duty & VAT

Potential Gap Resolution:New report will be developed for requirements of 145A of IT Act for grossing up of CENVAT, excise duty & VAT.


Payment term configurationTax code configurationDocument type configuration Reports required related to business process FBL1N-Vendor line item reportFD10N-Vendor balance report










Business Benefits

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Streamlining the process of Invoice booking Adherence to the Purchase Order rates is maintained through the 3 way matching

process. Variances if any, get routed to the stock or Price Difference accounts




3.3.2 Payment Process


Date : Sr. No of To-BE document 3.3.2Name of Business Process : Accounts PayableModule Finance Submodule AP- Payment ProcessVersion no of document: 2.1 Date : Flow Chart of Business Process :


The Payment to the respective Vendors are released as per the due dates mentioned in the payment terms. The payment can be done through manual process or through automatic payment process. Detailed Process Description, Process Variations and Exceptions

Manual payment process:- Manual payment can be done to vendor using transaction code F-53. Open invoices are cleared against the payment entered.

There are two options within this sub-process.

The cheque can be written out manually instead of being printed through the system. The transaction is then posted as an FI document. Each payment has to be entered as a separate transaction.

The other option is to use the Payment run and specify the payment method as ‘Manual Cheque’. At the end of the payment run, the system posts the transactions in FI, but does not print a cheque. Subsequently, the cheque is written out manually. Manual cheques needs to be updated in to the system to keep track of cheque number.

A separate transaction needs to be executed for linking the payment document number with the cheque issued to the Vendor.

Options for voiding of unused, damaged or issued cheques are available in the above methods of payment.

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The accounting entry would be as follows:

Vendor A/c ………………..DrBank clearing A/c ………..Cr

Automatic payment process:-

An automatic payment program in SAP is a useful tool and the most effective time saver in settling various vendor invoices due for payment. The term “invoices due for payment” are those matched invoices processed in MM and those approved/unblocked invoices processed under FI-AP Module. The system proposes Invoices for Payment based on user defined criteria e.g. Vendor range, due date, payable amount range etc.

The payment document clears open Invoices, which are paid through the Payment Run.A single cheque for multiple vendor invoices can be generated or alternatively, each Invoice can be paid-off through individual cheques. Further, priorities of House Banks can be configured so that the appropriate bank gets selected during the Payment run.

The payment program consists of the following four steps:

Enter parameter specification – this includes inputs for company codes, vendors etc. to include in the payment run. This also includes the desired posting date, payment methods and date of the next payment run.

Creating the payment proposal – The system proposes a Listing of invoices for payment which meet the specified parameters.

Editing the payment proposal – This is a control step in the process wherein the proposal generated by the system is scrutinized by a Supervisor. Editing can take the form of adding or deleting invoices/vendors from the proposal, changing the bank, payment method etc.

Executing the payment run and payment media programs – The system posts the payments in FI i.e. the individual Vendor accounts and the Bank account is up-dated. The system also prints the cheque and remittance advice. Simultaneously the Cheque register is also updated in the system.

Down Payment:-

The down payments (advance payment) will be booked in the system through special GL indicator using the transaction code F-48.

Advance/down payment to Vendors is treated as Special G/L transactions in SAP. The Vendor control account in the General Ledger is split into two – one for the regular transactions and another for down payments. The control account for Down Payments can be classified as a ‘Current Asset’ in the Balance Sheet and the normal control account as a ‘Current Liability’. All transactions including down payments are posted to the individual vendors’ accounts; but these transactions are linked to two GL accounts, depending upon the nature of the transaction. The total of the Vendor sub-ledger balances will agree with the total of the two control accounts in the GL.

Down payments can either be made manually or automatically. A down payment request has to be created in the system if they have to be automatically included in the payment run.

No accounting entries are generated in FI whenever a Down payment request is posted in the system. After the proposed payment is authorized, it can be converted into an actual payment at which point

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accounting entries are posted.

When the invoice received from the Vendor is entered, the system displays a message that a down payment has been made to the vendor. The user has to then decide whether to adjust the down payment against the current invoice or not. If the down payment is set-off against the invoice value, the net amount of the invoice is included in the subsequent payment run.

Advance payment clearing:-

The down payment with the invoice can be cleared directly when payment is made. The payment program clears by subtracting the down payment amount from the corresponding invoice amounts and paying the difference. The program clears the down payment automatically.

If the payment to Vendor is only partial, then both the Invoice document & the partial payment document will be open till the further payment is done.

The Vendor Ledger/Statement will be generated through the SAP system showing the details of all the Invoices & payment made.

A register for total cheques (lot) received from the respective banks, utilisations and unused cheques in hand will be generated through the SAP system.

Cheque register is automatically updated through every cheque payment entry. Void cheque is also automatically updated in the cheque register and is shown separately. Cheques will be printed automatically on the predefined stationary.

Process Step Explanation, variations and exceptionsF-47 Down payment requestF-48 Post down paymentsF110 Automatic payment runFBL1N Vendor Line item reportFK10N Vendor Balance displayFCHN Display cheque Register

Potential Gaps:None


System Configuration ConsiderationsAs explained above Reports required related to business process FBL1N-Vendor line item reportFD10N-Vendor balance report


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Business Benefits Bulk printing of cheques through the system Automatic selection of Invoices by the system based on user defined criteria like Vendor

codes, due dates amount or date limits etc. Alternate payees can be used in case if the cheques are to be printed in the name of a vendor

other than the main vendor. Alternative payee is defined in the vendor master data. Priorities of banks in the Payment Run can be specified so that the appropriate bank gets

selected.




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3.3.3 Bank Guarantee from Vendors


Date : Sr. No of To-BE document 3.3.3Ref. Sr. No. of AS-IS document 3.3.3 Bank Guarantee from VendorsName of Business Process : Accounts PayableModule Finance Submodule AP- Bank Guarantee from

VendorsVersion no of document: 2.1 Date : Flow Chart of Business Process :


The Bank Guarantees from the Vendors are accepted as a precaution for safe guard of their performances. Normally, the Bank Guarantees are obtained for a specific amount from Transporters through whom the Finished Goods are transported to the Customer’s / Depot site. And the Bank Guarantees are obtained from Vendors of Capital Supplies for a specific amount to safe guard the performance of the Items supplied by them.


Bank guarantee will be entered in to the system as statistical entry using special GL indicator.

A report on the Bank Guarantees received from Vendors (Service contractors & project contractors) with the details of Custodian, Vendor name, Bank Name, Amount, and Validity will be provided through the system.

Potential Gaps:System prompt is not available for the Bank guarantee expiry notification.

Potential Gap Resolution:Prompt message for the the Bank guarantee expiry notification will be provided in advance through development.

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Business BenefitsVendor bank guarantee information will be available through the system, without any financial impact.




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3.3.4 Letter of Credit


Date : Sr. No of To-BE document 3.3.4Ref. Sr. No. of AS-IS document 3.1.39 Letter of CreditName of Business Process : Accounts PayableModule Finance Submodule AP- Letter of CreditVersion no of document: 2.1 Date : Flow Chart of Business Process :


Letter of Credit is arranged for foreign vendors who are not ready to accept the credit terms. It is issued by BPE Banker to the Foreign Vendor for guaranteeing payments against consignments sent by them at our request.


The payment is made by the Bank as per terms & conditions agreed in the LC which are debited to Bank A/c along with the Bank Charges after sending an advice to BPE.

In SAP accounting entry is passed in to the system through the procedure mentioned in the manual payment section of 3.3.2- Payment process. LC register can be derived through GL line item report will be available through SAP with the details such as Vendor name, amount, Bank etc. Also additional information required will be available through Vendor line item report (FBL1N) More detailed explanation will be provided during the User testing & User training phase of the Project.

Process Step Explanation, variations and exceptionsF-53 Post outgoing payment

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Potential Gaps:None



Reports required related to business process FBL1N-Vendor line item reportFD10N-Vendor balance report












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3.3.5 Payment against Document


Date : Sr. No of To-BE document 3.3.5Ref. Sr. No. of AS-IS document 3.3.5 Payment against DocumentName of Business Process : Accounts PayableModule Finance Submodule AP- Payment against DocumentVersion no of document: 2.1 Date : Flow Chart of Business Process :


In certain cases, the Vendor is agreed for payment against document terms instead of LC. In such case, as soon as the foreign vendor ships the consignment, the documents are sent to Banker for payment. The Bank in turn sends to BPE an import advice along with invoice copy and other documents to authorize them for debiting BPE account. BPE there after send an authorization letter stating the account details of the Foreign Vendor, exchange rate etc for debiting our account along with bank charges.

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Purchase from Foreign Vendor will be booked through MM module. The purchases will be booked in Foreign currency. Once payment is done by the Bank to the Foreign Vendor, Vendor account will be debited with credit to Bank clearing account and vendor open item will be cleared as explained in the section 3.3.2

LC related entries will be done in SAP using special GL indicator.


Process Step Explanation, variations and exceptionsF-53 Post outgoing paymentF-44 Clear Vendor open itemF110 Automatic payment process

Potential Gaps:LC Authorisation letter with the serial number is not available in SAP.

Potential Gap Resolution:Development will be done to provide the autorization letter serially numbered.

System Configuration ConsiderationsRequired configuration has already been covered in the above processes. Reports required related to business process FBL1N-Vendor line item reportFD10N-Vendor balance report








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Business BenefitsEffective Audit trail of the Bills of exchange liability to Bank.




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3.3.7 Inter Office PaymentsBusiness Blueprint DocumentFor SAP R/3 Implementation at BPE

Date : Sr. No of To-BE document 3.3.7Ref. Sr. No. of AS-IS document 3.3.7 Inter Office PaymentsName of Business Process : Accounts PayableModule Finance Submodule AP- Inter Office PaymentsVersion no of document: 2.1 Date : Flow Chart of Business Process :


There are certain payments, which are made centrally at HQO Mumbai for which services or material is received at one or the other location.


In such case, while posting the vendor payment entry, profit center will be entered of the plant of which the payment has been done. There will be no need of Inter office adjustment account. The payment made by one location on behalf of another location will be tracked through Profit center. This functionality is explained in the section 3.1.50.

The manual payment process as explained in the section 3.3.2-Payment process will be followed for such payments.

Process Step Explanation, variations and exceptionsF-53 Outgoing PaymentsF-28 Incoming payment

Potential Gaps:None


System Configuration ConsiderationsRequired configuration has already been covered in above steps.



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3.3.8 Purchase Bill Processing – Imports


Date : Sr. No of To-BE document 3.3.8Ref. Sr. No. of AS-IS document 3.3.8 Purchase Bill Processing – ImportsName of Business Process : Accounts PayableModule Finance Submodule AP- Purchase Bill Processing –

ImportsVersion no of document: 2.1 Date : Flow Chart of Business Process :


The Purchase Order on foreign Vendors is placed in foreign currency of the Country of supply. That foreign currency transaction needs to be booked in to system in currency INR as well.


The payment to foreign vendor will be done through the procedure explained in the process 3.3.2-Payment process.

Although the transaction can be posted in any currency like USD or Euro, through exchange rate table (maintained at the company code level) all the foreign currency transactions will be automatically converted in to INR by the system. Exchange table is maintained on the monthly basis as per the RBI guidelines. Exchange rate can be maintained on daily basis also, based on the Business requirements.

The exchange gain/loss will be calculated on the basis of difference between the document exchange rate & the month end exchange rate.

The system defaults the exchange rate from the exchange rate table based on the document posting date. Rate defaulted by the system, can be overwritten by the user booking the import with reference to IGM date. The system will display a warning message at the bottom for the exchange rate difference.


Potential Gaps:None



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3.3.9 Payment processing– Imports after credit period


Date : Sr. No of To-BE document 3.3.9Ref. Sr. No. of AS-IS document 3.3.9 Payment processing– Imports after credit periodName of Business Process : Accounts PayableModule Finance Submodule AP- Payment processing– Imports

after credit periodVersion no of document: 2.1 Date : Flow Chart of Business Process :


In some instances, the purchases are made on credit term basis. In such cases, the consignments are received and there after the payment is made after verification of all documents like BOL/ACN, Packing list, certificate of origin, Invoice & MRR. An authorization is given to the Bank specifying the foreign currencies to be paid by debiting the Current Account.


Payment to the Foreign vendor for the Import is done in two ways:-

1. Advance payment (down payment)

2. Payment after receipt of the goods

The process for both the payments has been explained in detail in the section 3.3.2 (Payment Process).

Payment to Vendor is done by the bank in the Foreign currency. Foreign currency amount will be the amount as per the purchase order. The exchange rate at the time of booking the Invoice may be different the exchange rate at the time of making payment. The difference payment due to exchange rate variation is booked as Foreign exchange gain/loss. The Foreign exchange gain/loss calculation process has been explained in the section 3.3.10.


Process Step Explanation, variations and exceptionsF-53 Post outgoing payment

Potential Gaps:None


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None

















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3.3.10 Exchange Fluctuations - Capital / Revenue


Date : Sr. No of To-BE document 3.3.10Ref. Sr. No. of AS-IS document 3.3.10 Exchange Fluctuations - Capital / RevenueName of Business Process : Accounts PayableModule Finance Submodule AP- Exchange Fluctuations -

Capital / RevenueVersion no of document: 2.1 Date : Flow Chart of Business Process :


There could be a difference between the value of goods imported (based on purchase voucher or credit note) and the payment made against the same due to exchange fluctuation between the date of IGM and the date of payment. The difference has to be accounted.


At month end, foreign currency valuation is carried out. This process valuates all transactions posted in foreign currency. To perform the valuation, enter an exchange rate for the end of the month.This valuation covers the following accounts and items:

1. Foreign currency balance sheet accounts2. Open items posted in foreign currency (Vendors and customers)

Below mentioned are the two options for the foreign currency valuation:a) Foreign currency valuation in local currency, (company code currency), b) Foreign currency valuation in parallel currency (for example, group currency).

Since BPE will be having only one currency, so Foreign currency valuation will be in local currency INR only.

Below mentioned three types of accounts maintained in the Foreign currency are to be revaluated at the end of every month:-

1.Balance Sheet items

2.Customer balances

3.Vendor balances

In the customization, GL accounts are maintained for realized gain/loss and unrealized gain/loss. All the open items at the month end will be revaluated and the unrealized gain/loss on revaluation will be posted

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according to the GL account maintained in the customization.

Whenever the Foreign currency items are paid off, the gain/loss is booked in to the realized gain/loss account maintained in the configuration.

The exchange rate is maintained in the exchange rate table on the monthly basis as per the rates published by the RBI.

The balance in the customer accounts at the end of each month will be revaluated using SAP standard program and gain/loss on foreign exchange valuation will be accounted accordingly. The revaluation entry will be reversed at the start of the next month since the revaluation is done just for the month end reporting. This process is continued until the balance is cleared. On clearance of the balance actual gain/loss will be booked into the system.

The payment to vendors will be done through the procedure explained in the process 3.3.2-Payment process. Process Step Explanation, variations and exceptionsF.05 Foreign currency valuationF-53 Post outgoing payment

Potential Gaps:Separate GL accounts for the exchange gain/loss on the capital purchases should be available from the system

Potential Gap Resolution:This functionality will be tested during the configuration phase.







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3.3.11 Payment of Duty on Imports


Date : Sr. No of To-BE document 3.3.11Ref. Sr. No. of AS-IS document 3.3.11 Payment of Duty on ImportsName of Business Process : Accounts PayableModule Finance Submodule AP- Payment of Duty on ImportsVersion no of document: 2.1 Date : Flow Chart of Business Process :

General Requirements/Expectations DescriptionThe payment of duty being independent to payment to supplier. It is to be accounted for separately.


The payment to vendors will be done through the procedure explained in the process 3.3.2-Payment process.

Below mentioned accounting entries are passed for Import Procurement of Raw Material:-

During Customs Duty Clearing invoice

Custom Clearing……….Dr.

Custom Payable………..Cr.

During GR

Material Stock………… Dr.

GR/IR clearing……….. Cr.

During Excise Invoice Credit

Cenvat Account………. Dr.

Custom Clearing……… Cr.

During Invoice Verification

GR/IR Clearing………. Dr.

Vendor Payable……… Cr.

On payment of Custom duty, below mentioned accounting entry is passed:-

Custom Payable………..Dr.

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Bank clearing A/c……..Cr.

On receipt of the bank statement or on the Bank upload, as the case may be following entry is passed:-

Bank clearing A/c……..Dr.

Bank A/c……………...Cr.

Basic Custom duty & cess thereon is added to the Inventory cost through condition types in purchase order in the Material Management module. Similarly CHA charges and port expenses are added to the inventory. The detail of CHA charges & port expenses will be available through respective GL accounts. Detailed process is explained in the MM BBP document.


Process Step Explanation, variations and exceptionsF-53 Post outgoing payment with clearingF-41 Post without clearing

Potential Gaps:None








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Business BenefitsImport duty booking/payment can be traced easily.




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3.3.12 Service Vendor Payments:-


Date : Sr. No of To-BE document 3.3.12Ref. Sr. No. of AS-IS document 3.3.12 Service Vendor PaymentsName of Business Process : Accounts PayableModule Finance Submodule AP- Service Vendor PaymentsVersion no of document: 2.1 Date : Flow Chart of Business Process :


The payments to Service Vendors like Transportation, Security Services, COD, C&F Agents, & Contract Labour etc are to be accounted for in the system. Detailed Process Description, Process Variations and Exceptions

Such expenses will be booked in to the system as per the procedure explained in section 3.3.14-Invoice processing without purchase order.

The payment to such vendors will be done through the procedure explained in the process 3.3.2-Payment process (manual). Inward/Outward Transportation :-

The transportation is used for following :

1. Procurement of material from Domestic Vendor2. Transport of goods cleared from port locations to plants3. Stock transport between various plants.4. Delivery of the material to Customer

The process will be as under: The contract will be created with freight vendor with validity. This would be quantity contract. Service order will be created against contract Purchase order will be placed on vendor for material. Inbound delivery will be created. Shipment document will be created after goods receipt against inbound delivery. The goods

receipt will be automatically posted. The shipment cost document will be created. The service PO will be entered. Service entry sheet

will get automatically created against service order as per the price maintained in condition record.

Transporter vendor’s payment will be processed against service entry sheet.

Material Inventory Valuation: Freight, will be defined as condition type and will be part of Pricing procedure to be used for

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material procurement. The price will be copied from the same price condition record used to calculate Freight cost .

There will be three types of payment process which need to be maintained for the transporter in the System.

1. Per Kilometer / Per Ton2. Per Metric Tone3. Per Truck Full Load

In case of BPE arranging the transporter for delivering material to their customer, system will automatically copy the price from the price master and the same price will be transferred to the purchase order for transporter payment.

In case of price change, if service order is settled with old rate, a separate debit/credit memo will be accounted through FI module.

In case of loss of material in transit, the transporter is debited for the loss of material and at the same time the customer will get credit with the amount which is derived by proportionate the total invoice value. The invoice submitted by the Transporter would be matched & knocked off with the system number and then the payment is released. Applicable TDS would be deducted while releasing the payment. The other service vendor payments like security, CFA, contract labour etc would be done as per the process explained in earlier business process.

The procedures of Quantity tracking, shortages, revision of the prices are covered in MM & SD BBP documents.

For detailed explanation on the transportation functionality, please refer the MM & SD BBP document.


Process Step Explanation, variations and exceptionsF-43 Enter vendor InvoiceF-53 Post outgoing paymentF110 Automatic payment

Potential Gaps:None


System Configuration ConsiderationsNone Reports required related to business process FBL1N-Vendor line item reportFD10N-Vendor balance report


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User Roles and AuthorizationsVendor invoice entry & payment transaction posting authorisation will be given to limited set of users.





Technical Considerations – Workflow requirements None





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3.3.13 Capital Vendor Payments


Date : Sr. No of To-BE document 3.3.13Ref. Sr. No. of AS-IS document 3.3.13 Capital Vendor PaymentsName of Business Process : Accounts PayableModule Finance Submodule AP- Capital Vendor PaymentsVersion no of document: 2.1 Date : Flow Chart of Business Process :


Capital purchases / expenses are to be accounted for differently than the normal purchases.


The capital purchases are routed booked through material management module as explained in the section 3.3.1 . The purchases will be booked as “Capital Work in Progress A/c” through Internal order. Internal order will be settled once the construction is completed.

The accounting entries will flow automatically from the Material Management module.

The balance 50% of input tax credit on capital items will be used in the next year. While making the payment to the Vendor a/c, a three way check will be done with the PO, Vendor Bill and the actual bill booked by way of a credit note. The payment procedure is explained in the section 3.3.2.

The adjustments for Penalties, Retention Money as per PO terms are made by way of a Debit Note to the Vendor A/c.

Separate Tax codes will be defined for the composite tax. It will have the separate tax rates than the normal tax rates. TDS, TDS on WCT, service tax, has been covered as the separate business process in this Blue print document.

Through AUC settlement in CO, various assets will be booked in FI as per the rules defined in the AUC settlement rule.


Process Step Explanation, variations and exceptionsF-53 Post outgoing paymentFB01 / FB50 Enter GL account documentFB65 Vendor Credit memo

Potential Gaps:None

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Business BenefitsCapital purchases & payments will be accounted for in SAP properly.




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3.3.14 Invoice processing without Purchase order


Date : Sr. No of To-BE document 3.3.14Ref. Sr. No. of AS-IS document Name of Business Process : Accounts PayableModule Finance Submodule AP- Purchase of Material Bill

ProcessingVersion no of document: 2.1 Date : Flow Chart of Business Process :

General Requirements/Expectations DescriptionPurchase orders in SAP are created in the MM module. A Goods Received Note (GRN) is generated within the MM module. Hence the relevant invoice should also be posted in the MM module. This enables the system to link the invoice with the GRN and also updates the Purchase Order.

There are purchase transactions that do not follow this process (raising of PO and recording of receipt of goods or confirmation of service) e.g. telephone and electricity invoices, invoice for rent, school fees etc. Since these transactions have no link with the MM module, they have to be booked through the Accounts Payable (AP) module of FI. Vendor codes needs to be created for such transactions.


When an invoice is booked through the AP module, the system treats the invoice as approved when posted. It is therefore possible to include these invoices in the payment run, provided they meet the other parameters like due date.

There are two ways in which control can be exercised over these invoices.

Post the invoice, but block it for payment (manually). Park the invoice and block it.

Since blocking is a manual process, there is no control to prevent an inadvertent/deliberate omission.

Parking an invoice is the same as logging the invoice in the system. It does not create any accounting entries, however, but all parked documents are visible in the system. It is preferable to block the invoices when parking them, to prevent accidental posting of un-approved invoices.

After parking, the invoices can be sent to the relevant managers for approval. When the invoices are received back after approval, an authorized employee can remove the block and post the invoices.

At month-end, a listing of Parked invoices needs to be extracted and necessary accruals made for expenses covered by these invoices


Process Step Explanation, variations and exceptionsFB60 Enter Vendor Invoice (FI)F-48 Post Vendor down paymentF-53 Post outgoing paymentF.13 Automatic clearing

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Potential Gaps:None


System Configuration ConsiderationsDocument type configuration Reports required related to business process FBL1N-Vendor line item reportFD10N-Vendor balance report










Business BenefitsStreamlining the process of Invoice booking



M Harikrishna Bull Power Electronics

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Limited

3.3.15 Credit Memo/Note with Purchase Order


Date : Sr. No of To-BE document 3.3.15Ref. Sr. No. of AS-IS document Name of Business Process : Accounts PayableModule Finance Submodule AP- Credit Memo/Note with

Purchase Order


General Requirements/Expectations DescriptionCredit memos represent credits received from the vendor. Credit memos are generally issued to rectify a previously issued invoice. A Credit Memo could be either with or without a PO reference.


A Credit Memo with a PO reference is processed under MM-Logistics - Invoice Verification Module.

A Credit Memo can be processed either as a ‘Credit Memo’ transaction or as a ‘Subsequent Credit’ transaction.

A Credit Memo transaction is used if the quantity supplied needs correction. If the discrepancy is in the value and not the quantity, ‘Subsequent Credit’ transaction has to be used. Examples of subsequent credits include overpricing in the invoice, correction on freight charges etc.


Potential Gaps:None


System Configuration ConsiderationsDocument type configuration Reports required related to business process

FBL1N-Vendor line item reportFD10N-Vendor balance report

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Business BenefitsCredit memos can be linked to the original vendor invoice. At the time of payment, the net outstanding will be paid-off.




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3.3.16 GR/IR account maintenance


Date : Sr. No of To-BE document 3.3.16Ref. Sr. No. of AS-IS document Name of Business Process : Accounts PayableModule Finance Submodule AP- GR/IR account maintenanceVersion no of document: 2.1 Date : Flow Chart of Business Process :


The GR/IR account is an accrual account to which entries get posted when a GRN is created in the system. When the invoice received from the vendor is posted in the system, a debit entry is made in the GR/IR account.

Detailed Process Description, Process Variations and ExceptionsCredit entry in to GR/IR account at the time of GR is not cleared automatically with the debit entry in GR/IR account at the time of Invoice. GR/IR account clearing is done through separate process.

Following Entry is passed by the system at the time of Goods issue:-

Cost of Good Sold A/c………. Dr.

GR/IR …………….……… Cr.

At the time of Invoice GR/IR account is debited with the credit to Vendor Account.

An ‘Automatic Clearing Program’ should be executed periodically to set-off the matching debits and credits in the GR/IR account. The open items in the account will then represent either of the following:

Invoice posted, but goods not received- For BPE this is not applicable, as Invoice is entered only after GR.

Goods received, but invoice not posted. Goods received and invoice posted; but there is a discrepancy between the two. Invoices paid, but goods not received- For BPE this is not applicable, as Invoice is entered

only after GR.

A GR/IR account represents a Provision made in the books in respect of goods received pending receipt of Vendor Invoices. The liability gets created soon after posting a goods receipt transaction in the MM Module. It gets nullified when the Vendor Invoice is booked against the Purchase Order.

The GR/IR accounts are credited no sooner a Goods receipt is entered by the MM personnel. A corresponding debit to the GR/IR account will be generated during Invoice verification. At the year-end, a program needs to be executed so as to clear the open Debit and Credit balances.

Potential Gaps:None

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User Roles and AuthorizationsAuthorization for execution of the Automatic Clearing program for GR/IR accounts






Business BenefitsNo need to make any provision at the month-end in respect of goods received pending receipt of invoices. This entry is automatically generated by the system.




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3.3.17 Bill of Exchange


Date : Sr. No of To-BE document 3.3.17Ref. Sr. No. of AS-IS document Name of Business Process : Accounts PayableModule Finance Submodule AP- Bill Of ExchangeVersion no of document: 2.1 Date : Flow Chart of Business Process :


Bill of Exchange related transactions should be tracked through SAP.


Bills of exchange are handled as special G/L transactions in the SAP System. These transactions are thus maintained independently of other transactions in the subsidiary ledger and are posted to a special G/L account in the general ledger. This facilitates overview of bills of exchange receivable and bills of exchange payable at any stage.

Normally the Automatic Payment Program is used to post bills of exchange payable. All the subsequent postings, such as the payment of a bill of exchange by the bank and the cancellation of the bill of exchange payable and the bill of exchange liability, have to be made manually. When posting a bill of exchange payable, the payment program clears the open items and posts a bill of exchange payable to the vendor account and to the special G/L account for the bill of exchange payable.

The vendor calculates the costs arising from the bill of exchange charges and sends an invoice. It is posted and processed in the same way as any other invoice. After the bill of exchange due date is reached, the banker pays the bill of exchange. The payment of a bill of exchange is posted and simultaneously the bill of exchange payables on the vendor and special G/L accounts is cleared.

“W” denotes the special GL indicator used in respect of Bills of Exchange.

The detailed payment process is explained in the section 3.3.2.


Process Step Explanation, variations and exceptionsF-40 Bill of Exchange paymentFBW6 Check Bill of Exchange

Potential Gaps:None

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User Roles and AuthorizationsAuthorization for execution of the Automatic Clearing program for GR/IR accounts






Business Benefits




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3.3.18 Vendor Invoice document holding & posting


Date : Sr. No of To-BE document 3.2.13Ref. Sr. No. of AS-IS document :NoName of Business Process : Account PayableModule Finance Submodule AP- Vendor Invoice

document holding & postingVersion no of document:2.1 DateFlow Chart of Business Process :


While entering the Vendor Invoice directly through FI , you may be interrupted, or you may not have all the data you need for entering a document, functionality should be available in SAP to store the entered data in SAP, without giving the financial impact.


In this case, you can temporarily save the data you have entered, and then continue with the document entry at a later time. If you want the system to hold a document, it does not have to be complete. Account balances are not updated and the document data is not available for evaluation. A document number is not assigned.

Process Step Explanation, variations and exceptionsFB60 Enter Vendor Invoice

Potential Gaps:None





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User Roles and AuthorizationsHold document functionality will be given to limited set of users.






Business BenefitsUsing the hold document functionality, the entered data will be saved and while posting the document, there is no need to enter all that data again. Sign-off (Approval) for this document :



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Asset Accounting3.4.1 Acquisition Process


Date : Sr. No of To-BE document 3.4.1Ref. Sr. No. of AS-IS document 3.4.1 Acquisition processName of Business Process : Asset AccountingModule Finance Submodule AA- Acquisition processVersion no of document: 2.1 Date : Flow Chart of Business Process :


Asset acquisition for example implies the process of procurement of Machinery that is used to carry out the normal production related activities of an organization.


Transaction Type The transaction type identifies the type of business transaction. Using the transaction type, the system posts the transaction to the appropriate accounts of the given account determination. In case of any asset transaction, the Transaction type needs to be mandatory input.

The primary business process in asset accounting is the purchase of assets and/or the capitalization of in-house produced goods or services.

a. Assets under Construction

As per the generally accepted accounting principles “Assets under construction” (AuC), are not permitted to be capitalized and depreciated immediately. The costs are built up over a period of time and are later on capitalized on the day the asset is installed and commissioned.

SAP provides the functionality of Internal orders for tracking the AuC’s. The costs are accumulated using an Internal Order and subsequently settled to single or multiple Fixed Assets.

At the year-end, the AUC appears as a part of Capital Work in Progress under the Fixed Assets group. It will be shown in the Balance sheet as AUC asset.

b. Direct Capitalization

Direct capitalization refers to asset acquisitions that do not have an asset under construction phase. Instead, they are capitalized and begin depreciation immediately. For example:

-External Asset Acquisitions through FI

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-Processing Asset Acquisitions in Purchasing (FI-AA/MM) -Account assignment to an Internal Order -Account assignment to a clearing account, and transfer from this account to the final asset.

An external asset acquisition is a business transaction resulting from the acquisition of an asset from a business partner (in contrast to an acquisition from in-house production).

The blocking indicator can be indicated in the asset master record. Once the blocking indicator is set, one can no longer post acquisitions to this asset. The idea behind this, for example, is to prevent future postings to an asset under construction once the project is complete. Subsequent capitalization will be done through separate AUC order.

Block can be set at the internal order level also. If the Internal order is blocked, then no further acquisition can be booked to that order, until block is removed.

Low value assets will be defined in the system. Low value assets will not be capitalized and will be expensed in the year of purchase.

Spares procured to stock can be accounted in two ways:-1. If material master is created for the spares then spares will be issued from Inventory to Internal

order.2. If material master is not created for the spares, then it will be directly debited to the internal

order.

Fixed asset register is updated automatically on each asset postings.

Existing Asset Tag number for respective Assets will be captured in the system for easy identification with the legacy system.

All the Capital Procurements & Capital Projects will be identified by an AR number. Hence the series for the same would be external numbering.

Process Step Explanation, variations and exceptionsF-90 Acquisition of AssetAIBU AUC settlementABUMN Asset transfer within the company code

Potential Gaps:As per the Income tax rule, the exchange gain/loss on sale of asset should be capitalized and the corresponding effect should be given to the Asset block.

Potential Gap Resolution: This functionality is not provided in SAP. This calculation for Income tax purpose will be done outside the system. A new report will be developed to store the exchange gain/loss in the SAP, which will be added to the Asset block in the report so that ready information will be available in SAP for Income tax reporting.


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1. Asset classes configuration2. Depreciation area configuration3. Depreciation key configuration4. Account determination 5. Define transaction type for acquisition.





User Roles and AuthorizationsAsset acquisition transaction posting authorisation will be given to limited set of users.






Business BenefitsAsset acquisition will be properly identified and accounted as AUC or direct capitalization.




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3.4.2 Depreciation AccountingBusiness Blueprint DocumentFor SAP R/3 Implementation at BPE

Date : Sr. No of To-BE document 3.4.2Ref. Sr. No. of AS-IS document 3.4.2 Depreciation AccountingName of Business Process : Asset AccountingModule Finance Submodule AA- Depreciation AccountingVersion no of document: 2.1 Date : Flow Chart of Business Process :


Depreciation represents a measure of the wear and tear undergone by an Asset either due to its use in the normal production process or due to it becoming obsolete. Whether or not an Asset is used or not, depreciation will have to be charged on the same. Howsoever, to the sole exception of Capital WIP all assets are to be depreciated.

Normally assets are depreciated based on the useful life and the nature of the asset.

At the time of book closure, depreciation entry shall be made taking into consideration of capitalizations made during the year.


The Straight line method will be considered for the Financial Closings and WDV method will be adopted for Income Tax. Book depreciation areas will be defined for Financial closing and Tax depreciation area will be defined for Income Tax.

The system automatically determines the planned depreciation for the current fiscal year by means of the depreciation keys entered in the master record.

Depreciation entry will be posted in to the system using the transaction code AFAB. Depreciation will be calculated separately for the each of the depreciation area defined in the asset master.

Options are available for running the Depreciation program in a Test mode; subsequently the actual run can be executed. This will generate the requisite Financial postings.

The calculation of depreciation will be done on monthly basis (as part of month end closing activities) by the system at the preconfigured rate.

Depreciation A/c ……………………………………Dr

Provision for Depreciation A/c ……………………..Cr (Accumulated Depreciation A/c)

Depreciation rate for asset can be changed even after capitalization. For changing the depreciation rate, necessary changes has to be done in the depreciation key. The system will calculate the depreciation as per the revised rate and will post the difference for the earlier periods in the current month and from the current month onwards the depreciation will be calculated at the revised rate.

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If the Asset is acquired during the year, then depreciation will be calculated as per the depreciation start date mentioned in the asset master data.On addition to the existing asset also, the depreciation will be calculated as per the depreciation start date mentioned in the asset master data.

On sale/disposal of the asset, appropriate depreciation effect will be given by the system and gain/loss will be booked accordingly.A new report will be developed to provide the depreciation as per the Block concept of Income Tax.

Process Step Explanation, variations and exceptionsAFAB Depreciation calculation

Potential Gaps:SAP does not provide the depreciation report as per the Income Tax act Block concept.

Potential Gap Resolution:A new report will be developed to provide the depreciation as per the Block concept of Income Tax.

System Configuration Considerations1. Depreciation area configuration2. Depreciation key configuration 3. Account determination Reports required related to business process Asset Balance report








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Business Benefits Procedure for Calculation of depreciation is automated Simulation of Depreciation into future periods can be made




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3.4.3 Transfer of AssetsBusiness Blueprint DocumentFor SAP R/3 Implementation at BPE

Date : Sr. No of To-BE document 3.4.3Ref. Sr. No. of AS-IS document 3.4.3 Transfer of AssetsName of Business Process : Asset AccountingModule Finance Submodule AA- Transfer of AssetsVersion no of document: 2.1 Date : Flow Chart of Business Process :

General Requirements/Expectations DescriptionThe transfer of Assets (mainly Plant & Machinery) is undertaken from one location to another on requirement/replacement basis.


Using intracompany asset transfer, a fixed asset is transferred, or an asset component, to a different asset master record. Intracompany transfer may be necessary for one of the following reasons:

An asset was created in the wrong asset class.

Split up an asset or move part of an asset (transfer from asset to asset).

Settle an asset under construction and transfer it to a finished asset.

Asset transfer will be done in SAP using the transaction code ABUMN (transfer within company code). Excise Invoice for transfer of asset will be prepared through MM module. Cost Center will be updated in the Asset master data. The Invoice carries the Excise Duty for the specified Asset which is the reversal of initial credit availed (on transferred Asset) less 2.5% per quarter. The Excise Duty so paid by the sending location is claimed as Input tax credit by the receiving location.

Once the Asset is received by the receiving location, the Asset register is updated with the adjustment accommodating the movement of the Asset and the transfer of Gross Block of Assets and Accumulated Depreciation at the date of transfer in the books of accounts of the respective Locations.

Physical verification of the Asset will be done as per the process explained in the section 3.4.5


Process Step Explanation, variations and exceptionsABUMN Transfer of Asset within Company Code

Potential Gaps:None


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None


1. Define transaction type for transfer Reports required related to business process Asset Balance report




User Roles and AuthorizationsAsset transfer transaction posting authorisation will be given to limited set of users.






Business BenefitsProper treatment in the books of accounts will be given for asset transfer.




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3.4.4 Disposal of Assets


Date : Sr. No of To-BE document 3.4.4Ref. Sr. No. of AS-IS document 3.4.4 Disposal of AssetsName of Business Process : Asset AccountingModule Finance Submodule AA- Disposal of AssetsVersion no of document: 2.1 Date : Flow Chart of Business Process :


Asset disposal is called as Asset retirement in SAP. Asset retirement is the removal of an asset or part of an asset from the asset portfolio with revenue to a customer or without revenue. This asset retirement can be complete or partial on the percentage basis or quantity basis.


Depending on organizational considerations, or the business transaction, which leads to the retirement, one can distinguish the following types of retirement:

An asset is sold, resulting in revenue being earned. The sale is posted with a customer. An asset is sold, resulting in revenue being earned. The sale is posted against a clearing account. An asset has to be scrapped, with no revenue earned. An asset is sold to an affiliated company

The Capital Profit or Loss arising due to the retirement of an Asset is automatically calculated and Posted by the system.

Asset can be retired with revenue (T code F-92) or without revenue (T. Code ABAVN). On asset retirement, appropriate entry will be passed for the depreciation and loss or gain on sale/scrap of asset will be booked. Asset will be scraped in case of theft or loss due to natural calamity. Gain/Loss on sale of asset will be booked as per the Companies Act only Calculation as per the Income tax will be done separately in the report developed as per the Income tax act rules.

Process Step Explanation, variations and exceptionsF-92 Asset retirement from sale with revenueABAVN Asset retirement from sale without revenue

Potential Gaps:None


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1. GL accounts for gain / loss from asset sale Reports required related to business process Asset Balance report




User Roles and AuthorizationsAsset retirement transaction posting authorisation will be given to limited set of users.






Business BenefitsProfit/Loss on retirement of an asset is automatically calculated by the systemFlexibility for Complete/Partial Retirement and single/Mass disposals




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3.4.5 Physical Verification of Assets


Date : Sr. No of To-BE document 3.4.5Ref. Sr. No. of AS-IS document 3.4.5 Physical Verification of AssetsName of Business Process : Asset AccountingModule Finance Submodule AA- Physical Verification of

AssetsVersion no of document: 2.1 Date : Flow Chart of Business Process :

General Requirements/Expectations DescriptionThe Fixed Asset Register for individual Location is derived from the system and the same is forwarded to them for confirming on the physical verification of Assets.

Detailed Process Description, Process Variations and ExceptionsThe verification will be done and a physical verification report and any discrepancies in physical and book assets, surplus assets and damaged or obsolete assets are reported. Basis the approvals, the necessary adjustment entries in the books will be made.

There is no separate report for tagging the assets as per the books against the physical assets. A new physical verification report will be developed in the required format to provide the year wise information.

Asset transferred from location to another location, will be reported in the report at the location at which the asset is transferred. Tag number of the asset will remain same.

Employee detail will be put in the Asset master data for the asset lying with the employees, for example laptop.

Potential Gaps:Only Fixed asset register is available in the system, which will display the asset detail along with value as per the books. There is no separate report for tagging the assets as per the books against the physical assets.

Potential Gap Resolution:A new physical verification report will be developed in the required format.


Reports required related to business process Physical verification report

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Addition/change authorization in Physical verification report will be given to limited set of users.






Business BenefitsThrough new report the assets as per the books can be compared against the physical assets and appropriate action can be taken for the differences.




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3.5 Month End Process


Date : Sr. No of To-BE document 3.5Ref. Sr. No. of AS-IS document 3.5 Month End ProcessName of Business Process : Month End ProcessModule Finance Submodule Month End ProcessVersion no of document: 2.1 Date : Flow Chart of Business Process :


Monthly closure will be done of the books of accounts. Month end activity will be the list of various activities.


The Following are the Month End Processes followed at the respective Plants & HQO:

1. Posting of Recurring Documents.2. Posting Accruals or Provisions entries at month end3. Complete all postings related to expense booking, payments, stock transfer, inter office adjustments, Job work, Hospitality, Interest from customers, Taxes, Contingent liability etc. 3. Managing the GR/IR Account-Run the GR/IR Automatic Clearing4. Foreign Currency Open Item Revaluation-Revalue Open Items inGL ,AR & AP5. Maintain Exchange Rates6. Reclassify Payables and Receivables if necessary7. Run the Depreciation Calculation8.Transfer of Prepaid expenses to Expenses9. Run Financial Statement Version-Balance Sheet and Profit & Loss reports10. Open Next Accounting Period

Below mentioned month end activities/reports will also be done:-

1.Bank reconciliation statement2.Cash Flow statement3.Customer/Vendor reconciliation4. Proof sheets5. Statutory returns6. Tax movement related reports All the details for Schedule VI requirements like Capex Commitments, Contingent Liabilities, Earnings in Foreign Currency, Expenditure in Foreign Currency etc will be provided by SAP.

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Potential Gaps:None



Reports required related to business process As mentioned above









Technical Considerations – Workflow requirements : NoneBusiness BenefitsAccounting will be done in SAP in proper way.



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Year End Process

3.6.1 Year End Process – FY


Date : Sr. No of To-BE document 3.6.1Ref. Sr. No. of AS-IS document 3.6.1 Year End Process – FYName of Business Process : Year End ProcessModule Finance Submodule Year End Process – FYVersion no of document: 2.1 Date : Flow Chart of Business Process :


Yearly closure (FY) will be done of the books of accounts. Year end activity will be the list of various activities.


1. Posting of Recurring Documents.2. Posting Accruals or Provisions entries at month end3. Complete all postings related to expense booking, payments, stock transfer, inter office adjustments, Job work, Hospitality, Interest from customers, Taxes, Contingent liability etc. 3. Managing the GR/IR Account-Run the GR/IR Automatic Clearing4. Foreign Currency Open Item Revaluation-Revalue Open Items inGL ,AR & AP5. Maintain Exchange Rates6. Reclassify Payables and Receivables if necessary7. Run the Depreciation Calculation8. Transfer of Prepaid expenses to Expenses9. Calculation of XYZ LIMITED marketing compensation10.Calulation of Income tax, FBT & Deferred Tax11. Remittance of Dividends12. Run Financial Statement Version-Balance Sheet and Profit & Loss reports 13. Open Next Financial year period14. Fiscal Year Change of Asset Accounting15. Carry forward the balances to next year of General Ledger (Balance sheet items), Customers, Vendors & Assets, Transfer of P&L balances to retained earning. 16.Maintenance of number range for the next year


1.Physical verification of report2.Cash verification3.Cash flow statement4.Related party transaction disclosures

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5. Bank Reconciliation6.Customer/Vendor reconciliation7.Proof sheets8. Statutory returns9. Tax movement related reports All the details for Schedule VI requirements like Capex Commitments, Contingent Liabilities, Earnings in Foreign Currency, Expenditure in Foreign Currency etc will be provided by SAP.

Potential Gaps:None



Reports required related to business process As mentioned above










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3.6.2 Year End Process – CY


Date : Sr. No of To-BE document 3.6.2Ref. Sr. No. of AS-IS document 3.6.2 Year End Process – CYName of Business Process : Year End Process Module Finance Submodule Year End Process – CYVersion no of document: 2.1 Date : Flow Chart of Business Process :

General Requirements/Expectations DescriptionYearly closure (CY) will be done of the books of accounts. Year end activity will be the list of various activities.

Detailed Process Description, Process Variations and Exceptions1. Posting of Recurring Documents.2. Posting Accruals or Provisions entries at month end3. Complete all postings related to expense booking, payments, stock transfer, inter office adjustments, Job work, Hospitality, Interest from customers, Taxes, Contingent liability , transfer of prepaid exp.3. Managing the GR/IR Account-Run the GR/IR Automatic Clearing4. Foreign Currency Open Item Revaluation-Revalue Open Items inGL ,AR & AP5. Maintain Exchange Rates6. Reclassify Payables and Receivables if necessary7. Run the Depreciation Calculation8.Transfer of Prepaid expenses to Expenses9. Run the Bank Reconciliation10 Run Financial Statement Version-Balance Sheet and Profit & Loss reports11. Open Next posting period


1.Physical verification of report2.Cash verification3.Cash flow statement4.Related party transaction disclosures5. Bank Reconciliation6.Customer/Vendor reconciliation7.Proof sheets8. Statutory returns9. Tax movement related reports10. Colas Monthly Income Statement11. Colas B1 & B2 Budgeting12. Manufacturing Report for COLAS13. COLAS investment Budget14. Activity ReportAll the details for Schedule VI requirements like Capex Commitments, Contingent Liabilities, Earnings

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in Foreign Currency, Expenditure in Foreign Currency etc will be provided by SAP.

Potential Gaps:None


System Configuration Considerations Reports required related to business process As mentioned above









Technical Considerations – Workflow requirements : NoneBusiness BenefitsAccounting will be done in SAP in proper way.




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std. template bbp fi

Documents

general requirements expectations descriptionthere

general requirements expectations descriptionduring

general requirements expectations descriptionin

potential gap resolution

authorizationstransaction posting authorisation

technical considerations enhancementsnone

technical considerations forms

reports required related